E316 - Navigating the Skies: The Current State of the Aviation Industry with Dr. Jim Higgins

The aviation industry is currently facing significant challenges, primarily due to a shortage of aircraft and engine deliveries, which has slowed hiring across airlines. Dr. Jim Higgins and I delve into the state of the industry, discussing the implications of these shortages and how airlines are managing their workforce amid ongoing demand. We explore the impact of mergers, such as Alaska Airlines' acquisition of Hawaiian, and the cultural shifts that accompany such changes. Additionally, we touch on the evolving landscape for regional airlines and the importance of networking for aspiring pilots navigating this competitive environment. Join us as we unpack the complexities of the current aviation climate and what the future might hold for pilots and airlines alike.

Amidst a whirlwind of changes and challenges in the aviation industry, the latest episode of the Pilot to Pilot podcast features a compelling dialogue between Justin and Dr. Jim Higgins, a prominent figure in aviation academia. The episode opens with a stark analysis of the current hiring landscape, heavily influenced by the ongoing production delays from major aircraft manufacturers like Boeing and Airbus. Dr. Higgins elucidates how these delays have created a trickle-down effect, stunting hiring efforts at major airlines and thereby affecting regional carriers that rely on a steady influx of pilots. The discussion paints a vivid picture of an industry in flux, grappling with both supply chain issues and evolving consumer demands post-pandemic.

As the conversation continues, Justin and Jim delve into the complexities of mergers, particularly focusing on Alaska Airlines' acquisition of Hawaiian Airlines. The cultural implications of such mergers are critically examined, as both hosts highlight how the distinctive cultures of each airline can lead to friction and challenges in integration. Jim shares insights into how historical mergers have played out in the past, providing a context for understanding how Alaska might navigate its latest acquisition. The talk then transitions to the competitive landscape, where low-cost carriers like JetBlue and Spirit face mounting pressures, and the conversation reveals the shifting dynamics that could reshape the airline industry.

Takeaways:

• The current pilot hiring environment is heavily influenced by aircraft delivery delays from manufacturers like Boeing and Airbus.
• Airlines are facing challenges with a shortage of engines and aircraft, affecting their ability to hire pilots effectively.
• Despite recent hiring pauses, the long-term outlook for pilot demand remains positive due to upcoming retirements.
• Networking and building relationships within the aviation community is crucial for aspiring pilots seeking job opportunities.
• The potential for single-pilot operations in long-haul flights is being explored, although it's a complex issue.
• Alaska Airlines' recent acquisition of Hawaiian Airlines may lead to cultural shifts within both companies as they integrate.

What is Pilot to Pilot?

Pilot to Pilot is the podcast for anyone who flies — or dreams about it. Host Justin Siems sits down with airline captains, bush pilots, CFIs, and everyone in between for honest conversations about the path to the cockpit, the grind of the career, and the love of flying that keeps us coming back. Whether you're a student pilot chasing your first solo or a captain with 20,000 hours, there's a seat for you here. New episodes weekly.

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Jim Higgins, professor of
aviation at the University of North

Dakota.

Avia Nation what is going on?

And welcome back to the pilot
to Pilot podcast.

My name is Justin seems and I
am your host.

Today's episode is a state of
the industry with Doctor Jim Higgins,

and we really get into it.

We talk Alaska, we talk
Hawaii, we talk mergers.

We talk failed mergers.

We talk hiring and anything
and everything in between.

These are highly requested
episodes and I'm looking forward

to
doing them more often.

I know I say that all the time.

I do think that we're going to
be able to start churning these out

every two weeks or maybe even sooner,

depending on what's going on in the

news.

So I appreciate you listening.

Please share this.

Please share these episodes
with everyone you know.

Get more people aware of
what's going on in the industry and

asking more questions so we can try

to answer everything.

A lot of the questions I get,
some of them do have to do with international

operations.

We don't necessarily have the
best idea of what's going on outside

of
the United States.

It's kind of our
specialization, so we hope to add

that as well.

So stay tuned.

We'll see what we can do for
you there.

The hat winners will be
announced in my.

So make sure you go to Pilotspilot.

I'm going to announce all the
hat winners.

Hopefully at the time that
you're listening to this, we do.

We are giving away ten hats.

Just because you didn't win
one on this try doesn't mean you're

not going to win on the next one.

So how do you enter?

Go to pilotpilot Hq.com and
you scroll down and join our newsletter.

We're hoping to have something
pretty cool out here soon.

It's not your average
newsletter and it's going to be something

pretty awesome.

So I'm looking forward to that.

But aviation, I want to keep
you any longer.

So any further ado, here's the
state of the industry with Doctor

Jim Higgins.

Jim, what's going on?

Welcome back to the pilot the
pilot podcast.

Justin, always great to be here.

Thanks for having me back.

Yeah, it's been a couple weeks.

Been a couple months.

I've said this before, but I
had training.

I was trying to figure out my
life, how to get everything going.

But here we are in this
beautiful aloft hotel right by LaGuardia.

Before we started recording,
we were talking about your short

time
up here in LaGuardia and how you

really miss it and what you're still

doing.

Yes.

I lived in a crash pad with
about eight other flight attendants

and
pilots just across the street from

Runway LaGuardia.

Every morning I could look
through the bars on my apartment

we were renting.

Yeah, it wasn't, I don't know
how it is now.

It was not the safest area,
but the rent was right, you know,

so
that's how it worked.

It was very interesting to see
a bunch of pilots and flight attendants,

you know, occupy, you know, it's

amazing how many people you can fit

into a room.

I'm sure fire codes and
whatnot were violated routinely.

But the price was right.

Yeah, it's one of those things
just kind of you wonder, like why

or how this became acceptable, and

it just is what it is.

And for some reason, we just
jam a bunch of pilots and flight

attendants in this tiny little house

or room.

And is it legal?

Is it not legal?

I don't know, but everyone
just keeps their mouth shut because

it's, it's the price is right.

And you want to make sure you
don't spend money on hotel room like

I'm doing right now when your crash

bed doesn't have any room.

So, uh, short call reserve.

Yeah, it's it's definitely
taking me some time to get used to

it.

Quality of life with short
call reserve when I don't live in

New York isn't great.

If I lived in New York, it'd
be amazing.

For the first half of the
month, I didn't fly at all.

Probably had ten days on call
in New York where I was just sitting

in
this hotel or sitting in the crash

pad or going around the city.

So if you can live in base,
people have told me this a million

times, a living in base, it truly

does make a world of a difference.

I've done both.

I've commuted for half my
career and then I've lived in base

for half my career.

And absolutely, there's a lot
of hidden things when you can live

in base too, that maybe you think

about when you're a commuter.

One of the, in addition to
what you're saying, your quality

of
life, your ability to handle reserve

reserve actually becomes, in some

cases a better assignment for you

if you live in base than line flying.

But there's other little
things too.

You know, I look at my wife
who commutes and she bids, you know,

you give up a lot of seniority.

I'm just going to estimate
maybe ten to 20%.

Because if you're a commuter,
you have to bid lines, obviously,

that are
commutable, and not all lines are

built that way and not all pairings

are
built that way.

And so as a consequence, there
may be, let's say, I'll give you,

for instance, she really likes going

on caribbean overnights in the winter,

right?

But a lot of times those
aren't uncommutable pairings.

And so because she doesn't
live in base, she in essence, loses

ten to 20% seniority and has to take

what's available to her, which is

generally about half the lines.

I'm sorry, about half the pairings.

And so, yeah, I mean, there's
a lot of, a lot of good things and

bad things.

What I noticed when I, when I
moved in base is my life just simplified.

It just, the stress level went
way down.

I didn't have to worry about
making it to work, you know, using

the commuting policy, whatever the

case may be, it just simplified.

Well, I can't even imagine
what life was like without a commuting

policy.

Cause what, a couple, 1015
years ago, that wasn't really the

case, right?

I mean, it was either.

Hey, this is your base.

You live in Raleigh Durham and
you're based in New York.

It's like I don't really care
how you get here, but you got a trip,

you got an assignment, you gotta

be here.

You miss it, we'll find
someone else that can live in New

York City.

You know, it was very brutal
before the commuting provisions.

It was very brutal.

And I did operate in the time
when we didn't have any kind of commuting

provisions.

It all kind of came down to
your chief pilot, and that's, that's

the base chief pilot.

And if the base chief pilot
was kind of a cool person and, you

know, I mean, we had a chief.

I remember we had a chief
pilot that would go out and fly the

route for you if you were going to

be late, if you're going to miss

a turn.

Yeah, I mean, everyone loved
him, but.

But not every, not everyone's
like that, you know, and you're right,

they're back then, they expected

you,
just like anywhere, they expect you

to show up for work.

And they were pretty brutal
about it, especially back when there

were plenty of pilots to hire.

Yeah, yeah.

I'm just trying to think of
right now of a chief pilot being

like, no worries, man.

I got this trip for you.

I'd be like, oh, no, that's
not good.

Be like, I'm on a bad list
that do not want to be on.

And I'm guessing they made
crazy overtime for flying that, but

it's like, I don't know him to know

that.

Well, let's kind of dig right
into it.

No one really cares about my
life on short call reserve anymore.

They're more interested.

Interested in what you have to
say, what we have to say about what's

going on in the airlines right now

or just the aviation world in general.

One thing that we've talked
about before is it's not necessarily

the
lack of pilots or the lack of needing

to hire pilots.

It's really the lack of
engines, it's the lack of airplanes,

it's
a lack of Boeing, Pratt and Whitney

and
engine manufacturers of delivering

a
product that's keeping the airlines

from hiring.

Is that still what we're seeing?

Absolutely the case.

Certainly the consumer demand
has been good.

The inflation has hit the
airlines a little bit, but they've

been
able to counter that.

The rising expenses.

The big issue, of course, is,
like you said, just the inability

for
plane deliveries.

Of course, it's most prolific
with Boeing, but we also see some

of
that with Airbus.

And as you rightly mentioned,
upstream, we're seeing, and it's

not
just engines, there's other critical

parts, too.

But there's a big problem with
engine deliveries.

It's just the supply chain.

And yeah, it's a big deal.

There's a lot of airlines that
are waiting for the 321 Neos from

Airbus that aren't being delivered

on time.

And those are very fuel
efficient, of course.

And so, yeah, there is a
cascading effect.

I will say this, though,
historically speaking, we still are

seeing a healthy level of hiring.

I know for some people that
were used to the way it was a year

and a half, two years ago where everyone

was getting hired and big tranches

of
people, it could be a little disheartening.

There's no doubt.

But if you go back
historically, there were years where

we didn't hire anyone.

And there are a lot of people
on furlough, industry wide, we're

still good.

Certainly there are some
airlines that have stopped for the

foreseeable future, and it might

be a
while, they might be a little overstaffed,

but for the most part, we're still

looking at the height of retirements

coming
up in the next couple of years.

And so I know for you, Justin,
sitting on short call reserve, it's

no fun.

We've all been there.

It literally is horrible.

We can't get that hiring to go
fast enough.

But if you look at it, then
it's easy for me to say because I'm

not in the situation.

But if you look at it over the
next two to three years, you're going

to be fine.

And then you'll have those
stories about all the young people

getting hired and you'll say, hey,

man, I paid my dues.

Yeah, no, for sure.

And what I think is really
funny is me.

I don't even really want to
say I'm complaining.

I'm just kind of stating the
fact of where I am in my current

journey of being at an airline.

But if someone that was hired
in 2000, 920, ten, I don't even know

if there's hiring around those times,

but in a time when it was pretty

rough
around here or even early, two thousands

in the nineties, hearing me complain

about one month of short call reserve

in New York, they would probably

slap me
in the face and they'd be like, dude,

come on, that was like six years

of
my life or ten years of my life.

It's like I feel like me,
especially the younger generation,

has
really lost understanding of what

it
was like to be an airline pilot.

I should probably go tell some
more of those stories so they can

be like, dang, we actually have it

pretty good right now, even if it

has slowed, even if I am a CFI for

an extra year, it used to be way,

way worse.

And I'm not necessarily saying
that we should suffer.

They should suffer because the
past generation has suffered.

But I think it's kind of what
you were saying how, like if you

can take yourself out of the immediate

year, six months or nine months,

however long this is going to last,

and kind of look at the broader picture,

you're going to realize that overall

you're still doing pretty well.

And a lot of DM's I get are
from people that are like 22, 23

who have, what, 42 years possible

for a
career, quick math till 65.

I mean, if you don't get on at
a major airline until you're 25,

26, I think you're still doing okay.

You know, it's a lot of
people, I got hired at 34, I got

hired at my last job at 28.

I mean, it takes time sometimes.

And the realistic timeline,
maybe what we were seeing in the

past isn't necessarily a realistic

timeline forever, but I think it

is going to go back to the way it

was, maybe not en masse numbers,

it
might be a little bit more competitive.

But I definitely think that
we're going to go back to where you're

going to get a job pretty quickly,

maybe
not at the major airlines, but at

least the regional airlines and other

jobs as well.

No, I think that that's
absolutely correct.

We've said this before, and
I've said this for many, many years.

Whenever times are really good
from a pilot perspective and there's

lots of hiring going on, people think

that's going to be the new normal

forever.

And then whenever times are
really bad and there's a lot of furloughs

going on, a lot of people have hit

the streets.

Everyone thinks, oh, this is
the way it is, they'll never need

another pilot.

And what we found over time is
it's a term in statistics, right?

Everything regresses to the mean.

And the mean is there is a
long term need for pilots structurally,

just
because of the retirements and the

growth plans.

And so, yeah, we're going to
see these fluxes where there's all

kinds of hiring.

I mean, you remember right
after the COVID pandemic hit and

people were getting furloughed and

there was all these concessionary

contracts
and there were early buyouts at the

time, a lot of people were like,

I
don't know what I'm going to do.

Is this still a good career?

I mean, that wasn't that long ago.

Right.

And you and I have had many
conversations about that with pilots

that have felt that way.

And then we went through this
incredible upswing, and then now

we're kind of back to, to where we

still are historically high, but

it's tough to ride that.

I often tell my students that
this career is a little bit like

that.

I think it's better than it
was in the sixties, seventies, and

eighties, where a lot of times you'd

spend times on furlough strike or

whatever, but there still are ebbs

and flows, and for some people, it's

not fun.

That's why we have to remind
everyone, when you get into this

profession, you have to get in this

profession not necessarily for the

money and the benefit and maybe even

the lifestyle.

You got to get into it because
you love flying.

It's got to be your passion.

That's the only way you're
going to stick with it.

It's the only way, Justin,
you're going to be stuck in a hotel

waiting for the phone to ring over

and over.

Why?

Because this is your life's passion.

This is what you want to do.

And the payoff down the road
is going to be much better.

That's what I just want to
remind everyone.

We have to ride those ebbs and flows.

It's not as bad as it used to be.

We still have a very bright
future, and you got to get into flying

for the right reason.

For sure.

It's hard to remember what
those reasons are, especially when

you're seeing what were newly hired

Fo's at major airlines buying some

pretty cool stuff or maybe spending

recklessly to look cool on Instagram.

You know who you are.

You know who you are.

But I mean, it.

It's definitely in the past,
it's been, you know, it's been a.

How do I say?

I can't remember the word I
used to use.

But it's delayed gratification.

It's definitely been a delayed
gratification career, similar to

being a doctor, a lawyer.

You put in the work, and then
you eventually it pays off, pay off

your loans, and it takes a couple

years, and.

And I think that's okay.

And the person that I was
flying with last, not going to name

names, obviously, but he was hired

at
a regional in 2010.

Then he took him ten years to flow.

You know, it's not like, I
mean, the flow, I think, now is six

to seven, maybe eight years, maybe

a
little bit less if things start picking

up at certain spots.

Right.

Every airline is different.

Um, but I said it took him ten
years to flow.

He flowed over in 2010, or,
sorry, 2020.

And we all know how 2020 went.

So he thought it was the worst
possible time to get hired.

And he's like, I'm gonna get furloughed.

Like, this is the worst.

Like, I just got here.

Uh, but it actually turned out
to be a really good time to be hired

at an airline, especially a major

airline, because now in those four

years, there's over 6000 numbers

between him and me, and he upgraded

to
captain already.

So it's like, it's just insane.

Absolutely insane.

So just kind of pause a little
bit on the freaking out and thinking

that this career is over or it's

going to take you 100 years, because

it's probably not.

We just have to kind of enjoy
where we are right now.

Whether that's being a CFI,
whether that's aerial survey, which

I
know is hard, trust me, I did aerial

survey.

It was not the most fun job in
the world.

But there's me a time in your
career where you're going to look

back and you're like, man, I really

wish I could fly a 172 again, or

206 or 210.

And you're going to think that
when you're an airline pilot, you

have a ton of money to go do that,

but realistically, it's still very

expensive and you're just not going

to make time to do it.

So enjoy it while you can,
because it's probably the last time

you're ever going to fly those planes.

That's.

That's right.

Yeah.

Well, you know, my wife and I
are both pilots, and we thought many

times about going out and buying

an
airplane, but like you said, because

it
would make sense for us, maybe.

But like you said, when you
start, you know, looking at what

that costs and, you know, you got

kids coming up on college and pretty

soon you're like, nah, I don't think

that's going to work.

But, but, no, that's right.

That's good perspective.

I mean, you don't have to look
much further.

I know at united they have
what we call the double furlough

ease.

These were the folks that got
furloughed after 911 hit the street

for several years, got called back,

and then we went through the great

recession in 2008, 2009, they got

furloughed a second time.

Some cases, they were back at
united for a very short time.

These folks, it'd be
interesting to get their perspective

on,
you know, how things are going right

now because, I mean, there's examples

like that all over the industry where,

let's be honest, Justin, a lot of

it's luck.

Right?

What time when you graduate
from your college, when you hit the

industry, if you can get a job right

away, flight instructing, whatever

the
case may be, you know, have you kept

good, have you kept a good network?

Were you a decent human being,
you know, during your training, where

people's like, yeah, I know Justin,

he's a great guy.

You know, those are the kind
of things that kind of become important.

You know, maybe we lost sight
of a little bit, but I.

But, yeah, I mean, it's still
a great career.

I think if everyone just looks
at it from a historical reason perspective,

there's no reason to throw a panic

button at all.

Just understand there's going
to be natural ebbs and flows for

sure.

Definitely.

And it feels like, to me,
maybe I'm wrong, but it feels like

those ebbs and flows have kind of

shortened and they've been more.

They've increased where the
ebbs are really, really good and

the flows are really, really bad.

Like, this seems like the wave
has kind of tightened up a little

bit
where before it was more like a more

shallow, extended wave, but now it's

just like, oh, good, oh, bad.

Oh, good, oh, bad.

All within such a short period
of time.

That's also airline specific.

I mean, you look at spirit,
they're actually furloughing, which

is, you know, really sad to see.

Most companies have avoided that.

I'm sure some would like to
furlough, but, like, you know, I

think of FedEx because, you know,

they've already stated they have

an
overage of pilots, but their contract

makes it very difficult to furlough.

So for now, they're not
furloughing, but for the most part,

we're not seeing that.

You know, there was a time
when, you know, every airline was

furloughing, and, you know, that's,

those are just really dark times

when
you, you see that.

That's for sure.

Of course, at american, and
maybe there's some other places,

too,
you do have the flow back, or used

to have the flow back, so that there

was some furlough protection on there,

part of the flow through.

And I remember that happened
after 911.

There were several american
airlines pilots came back to American

Eagle, and they went right into the

left seat of the CRJ 700, which was

the biggest aircraft on the property

at
the time.

It wasn't what they were
making at american, but at least

they
were able to pay their bills.

Yeah, had a job.

Right.

But then it just kind of keeps
going down and down and down.

It's like, all right, well,
now the new hire, the eagle, is getting

furloughed.

So someone's eventually losing
their job or getting furloughed.

It's not ideal in any way at all.

No, not at all.

And that did happen.

Yeah, we had about 200 and
some furloughees that were out for

quite a while.

So let's talk about one of the
reasons that there is these hiring

freezes or hiring pauses for at least

the end of the year at most airlines.

A lot of this has to do with
Boeing, and this is no shit.

I'm Boeing.

I'm nothing whistleblower.

So please, if you're listening
this at Boeing, focus all your attention

on Jim and not on me.

No, I'm just kidding.

But what's the latest at Boeing?

I mean, we seems like we have
all these delays in manufacturing

issues and
everything that's going wrong.

And then now you add on top of
that, strikes and building airplanes,

and
they announced the 797 is going to

be built up in Washington.

But now they're like, what the heck?

Pay us more money.

So kind of give us a.

What's going on?

Give us the down low that, you know.

Well, I mean, it's kind of a
perfect storm, right.

You know, and it's just,
there's no way to put any kind of

good spin on what's happened at Boeing.

I mean, you know, not to get
way far afield, but I mean, you know,

there's a couple astronauts on the

International space Station that,

you
know, Boeing stranded, right.

That, I guess Elon Musk just,
just launched a capsule yesterday

or two
days ago to go rescue them.

I mean, this is just not a
good look for Boeing.

They do have a new CEO.

He did come in.

The first thing he did is he
got rid of the commercial space head.

And a lot of people think that
might be the beginning of change.

Time will tell.

They absolutely need to bring
in a revolutionary, what we call

a
cultural revolutionary leader.

There's been a few of them in
history that have come, and they

just kind of insert their will and

just say, look, we're going to get

back to our proud tradition.

I do get asked, perhaps you
get asked on occasion, is this the

beginning of the end for Boeing?

The answer to that is
absolutely not Boeing.

I mean, there's just not that
many aircraft manufacturers in the

world, right?

Boeing is not going anywhere.

Everyone knows it.

Don't think for a second if
the CEO's at these major airlines,

could
go and say, doc, on it.

Boeing, you really upset us.

We're going to go put our big
order in at Airbus.

You and I both know that's not
going to happen.

There's no way to do that.

So they're the only rides in town.

They're your only dates to the dance.

So they're not going anywhere.

So that just means everyone
has to focus and fix it.

And you are starting to see,
like you saw Kirby from United put

out a statement a couple weeks ago

saying he has full confidence in

Boeing, that they're making the changes.

I believe that he's sincere on
that, but he really has no choice

but
to say that.

Right?

Same with the other CEO's.

They have to say that because
there's no one else to do it.

Is the government going to
take it over?

How well would that work?

Can you imagine the government
running an aircraft?

I just couldn't even imagine.

So they're going to get it right.

It's just going to take some time.

But you are right, this has
absolutely caused tremendous problem

in
terms of hiring, expansion, growth,

places like united, american, Delta.

They would absolutely.

There is opportunity out there.

We are seeing some weakening
in the low cost carrier segment with

JetBlue and spirit, of course, and

we're seeing that there might be

some opportunities opening up.

These airlines, the big legacy
ones, would love to go in and fill

some of that.

There's some good opportunity
there for them, but they're not able

to.

Right now, what you are seeing
is you're seeing some down gauging

quite a bit, actually, where three,

four years ago, where you would see

regional jets on a route, you are

starting to see some of the smaller

mainline aircraft on those same routes.

So you're starting to see a
lot of bandwidth put into that.

But as soon as the floodgates
open, as soon as the strike that

Boeing is experiencing is solved,

hopefully that's soon, you will start

seeing some movement.

But you're still probably a
year, year and a half away from any

meaningful culture change.

There still are deliveries
going on, just so everyone understands.

They're just much slower than
what people, what people were hoping

for.

But the 737s are still being
delivered at, the 787s are still

trickling.

The neos are still trickling
as well.

So, I mean, there are some
things that are coming out.

And the 797, I mean, it's
great to put that on paper, but I

mean, it's going to be a little.

While before a decade away,
unless they've been working on in

secret that we don't know.

Yeah, right.

I did think it was interesting
that they chose to Renton or Seattle

area again, because that's a unionized

workforce.

I'm surprised that they
weren't going to go back down to

Charleston, where it is, non unionized

workforce down there, and they can

kind of do what they want to do down

there, you know, but it's definitely

good
for the Pacific Northwest that they're

going to be building it back up there.

It was just interesting on
their, their choice to do that, and

then the strike happens right after

that.

Maybe that was kind of like
their show of goodwill.

It's like, hey, we're going to
take care of you.

We're to make sure you can
build this airplane.

We're going to pay you less,
but we're still going to have a job

to build this airplane.

Right.

Well, it's interesting.

I mean, again, I have no
inside information on this, and I'm

not trying to cast any aspersions

on Boeing.

They say they're going to
build it in the Pacific Northwest.

I don't, you know, is there,
you know, that can maybe be part

of
the contract negotiations with the

labor union up there, you know, some

kind of letter of intent or something.

But I mean, it's, you know,
they can, they can go wherever they

need to go.

They could go to, I mean, I
don't think it would ever happen,

but
they could go elsewhere if they,

they
wanted to, even offshore for a lot

of it.

So that being said, yeah,
that's great to hear, and it is good

for the Pacific Northwest.

Look, when you hear the word
Boeing, everyone thinks Boeing field

in Seattle, everyone thinks about

their big facility there.

Certainly a lot of stuff going
on in South Carolina, and they've

done
tremendous things down there as well.

That being said, it is just
from those that are affectionate

of the
history of aviation, it is good to

see some stuff being mentioned about

where Boeing all started.

Absolutely.

Then what kind of transition
to the ultra low cost carriers, which

you mentioned a little before.

What's going on there?

What's the latest?

Well, we're starting to see
some pressure starting to unravel.

I don't want to use the word
expose, but I think some of what

was
relied upon in the past by some of

these ultra low cost carriers.

For instance, look at JetBlue.

I don't know.

I call them an ultra low cost,
but I certainly would call them a

low cost carrier.

I mean, there's differing
definitions out there.

We are starting to see them
shrink in some areas, and it's a

concept known as shrink to profitability.

When you're a little too
extended, it's very expensive to

run an airline.

You have assets all over the place.

You have employees all over
the place.

Even if you outsource, you got
your parts, your equipment, it's

just ad nauseam the amount of expenses

that accrue.

And so one of the ways you can
get back to profitability is you

can shrink back to the routes that,

you know, you're doing well at where

you have a lot of your critical infrastructure.

What an economist would call
an economy of density, it's called

an economy.

Instead of an economy of
scope, it's called an economy of

density.

And where you have those dense
functions that will help you make

money.

And so that's what they're doing.

It's probably going to make
the shareholders happy.

You know, you're seeing a
little bit with Southwest as well

because Southwest has got their own

issues with the, you know, with the

minority owner.

That's, yeah, yeah, that's true.

Yeah, that's, you know, but
they did just agree to bring the

ex
spirit CEO on the board I saw the

other day.

So.

Yeah.

Is that a good thing or a bad thing?

Do you want the ex spirit CEO?

Like, I mean, I'm no shade on
him, but how does spirit, how is

spirit left?

You know, it's, it's interesting.

I thought this, I had the same thought.

Not going to lie, Justin, when
I read that as well.

I think the concept is, is
they're trying to bring, well, you

know, these boards are interesting.

If you look at boards in any
organization around the, around the

country, any Fortune 500 company,

whether they're an airline or not,

the boards are often filled politically.

Right?

Like, I remember one time at
American Airlines, I'm sure he's

not
still on there, but I remember looking

at the board, you know, Roger Staubach

was on there, right?

He was a great, great
quarterback for the Dallas Cowboys.

But I mean, what does he know
about running an airline, right?

No, no shade on Roger Staubach.

He went to the Naval Academy.

I'm sure he's a very, very
bright guy.

But my point is, you do see
that a lot.

And then also you will see
professional board sitters.

These are people that will
just sit on several boards across

several industries, and that's kind

of what they do.

Ironically, you see the lot
with college professors, a lot of

college professors out there.

That's kind of their later career.

They'll just go because
they're not very controversial, but

they're well known in their industry

and
they'll go and sit on several things.

These aren't always the best
business minded people that will

help help shape the overall strategy.

And so the concept at
Southwest, at least through their

group, that's driving everything.

I forget their name, but I
think you just said it.

But by bringing in these
airline type folks, the idea at least

is as you get a board that understands,

that's been there, that maybe will

have a little more salient advice

and
demand things to hold their executives

a
little more accountable.

I don't know, but I think
that's the theory anyway.

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today's episode to hear from our

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And now back to today's episode.

And going back to JetBlue a
little bit.

Do you think JetBlue is on a
path that's similar to spirit?

Do you think that they're,
they're different and what their

outcomes will come?

Because it just seems like
every single time I read something

about
JetBlue, it's a little bit worse

and
a little bit worse and a little bit

worse.

I'm not sure if they're kind
of on a bad path or bad trajectory.

I mean, it's obviously not a
great one.

But do you see them being a
similar outcome to what we're looking

at as spirit, or do you think they

have a much better standing business

model that they're going to be okay?

JetBlue will be fine.

Certainly there's going to be
some local.

The strength to profitability
is a real thing.

I know it sounds like a
talking point, maybe that someone's

trying to put a spin on something

bad,
but it really is a well known phenomenon,

especially with airlines.

Anything that has assets that
are spread out geographically, it's

a well known concept.

I think JetBlue is going to be fine.

They're actually very well managed.

They're taking these moves a
little proactively.

But let's make no mistake, I
do think that JetBlue and Spirit

got a
really raw deal from the government

when
they were not allowed to merge.

Now, I don't know if that
merge would have been successful

or not.

You and I have talked about
this before.

Sometimes mergers don't work
well at all, and it causes a net,

very big net negative.

Oftentimes, though, you get
the best of both.

If it's done well, you can get
a very good result.

And we've certainly seen that.

That being said, they never
were given a chance, which was, you

know, again, it came down to the

judge, and, you know, I'm not trying

to get political here, and I could

care less one's politics, but no

offense to the judge that decided

to
uphold the DOJ's ruling on this,

but
what does a federal judge know about

running an airline and about the

airline industry?

Literally, he said, this will
be better for consumers.

Well, we're now seeing that
that's not the case, that this is

really too bad.

Interestingly enough, you have
Alaska now that's purchasing Hawaiian

that's been approved, which is really

interesting.

So when you go and you look at
that and you can say, well, those

are
two very, very dissimilar operations.

Well, certainly
geographically, yes, absolutely.

They cover a lot of different geography.

However, that West coast is,
you can make an argument that West

coast is going to get saturated.

And if you were going to go
back to the old JetBlue spirit complaint

from the DOJ, where consumers will

be disadvantaged in certain markets,

how
could you not say the same thing

about the west coast for an Alaska

hawaiian merger?

I think this is my own
personal belief.

I have no inside knowledge on
this, but I think that the government,

the
DOJ, realized they were a little

too
heavy handed on the JetBlue spirit

thing, because when you look at the

size of Alaska and Hawaiian, it's

very similar to the same size that

the combined JetBlue spirit would

have been.

Almost the same number of
aircraft, almost same number of departures.

Revenue figures are pretty close.

I mean, you can't say the only
thing that's dissimilar is where

they
primarily operate.

But again, if you live in Los
Angeles, you're going to have less

consumer options available after

this
merger goes through.

And that was exactly what the
DOJ said was the problem with JetBlue

spirit is the east coast is going

to
get saturated.

So my question for the
bureaucrats that are making these

decisions and deciding what airlines

get
to thrive and which ones don't, what's

the difference between a west coast

consumer and an east coast consumer?

Right now, I haven't looked at
this granularity with a lot of granularity,

so maybe there are some differences

I don't
recognize, but to me, it doesn't

really
pass the smell test.

I'm happy that Alaska and
Hawaiian are allowed to merge.

I think that's probably the
correct decision.

But it really, I really
scratched my head about Jetblue spirit

now because that doesn't seem, it

just seems like they just didn't

get a
fair shake.

Yeah.

Is, is this something, this
might be a dumb question, but is

this something that they could go

back and, like, revisit, be like,

hey, you just, you just approve of

this, and it's not much different

than
what we wanted to do.

And clearly your decision has
hurt both of our airlines.

It's, can we do this again?

Or would that just take way
too much money to go back into down

that road code?

Yeah.

Just even exploring a merger
is really expensive for a company.

It's not just the legal bills
and the lobbying bills and the time.

You literally have to take
about a third of your management

team away
from both carriers and they have

to
work out the merger plan.

And it's just even initially
can be very, very distracting.

In fact, if you go back and I haven't.

I should do this, I should see
if we can plot some data on this.

But if you go back at failed
mergers, mergers that were not allowed,

that were first proposed, I think

United us Air was one that was proposed

many, many years ago, and it was

not allowed, it would be interesting

to see
what the financial net effects were

because a lot of us in the industry

feel
that after a failed merger, there's

almost always a dramatic impact on

the carriers that failed.

Now, I'm not necessarily
saying it's completely caused by

the lack of merger, but one of the

thoughts in the industry is, and

I've read this before and I've heard

this from my friends that work in

the industry, there's a huge distraction

cost that everyone went through all

this distraction cost, and now they

got to go back to whatever they were

doing.

And certainly there could be a
lot of lost opportunities.

While you were busy trying to
merge, your competitors were solidifying.

It certainly has a dramatic effect.

Yeah, it distracts you.

You're distracted on this one
overall goal, and you're like, well,

hey, we'll worry about getting a

new route some other time, or we'll

worry about southwest doing that.

We'll worry about that in a year.

We get this going on, you
know, and that sets you back another

year.

And playing catch up is never fun.

You got to come up with
something new.

That's right.

So, yeah, I could definitely
see that.

And then another question I
had is, let's say it did go through.

Would you see a world where
they would not be struggling right

now, or do you think that you mentioned

that not all mergers are good mergers?

Do you see a similar play out
where they would merge, but it would

still be a tough road for both of

them to become one?

That's a really good question,
and it's complete speculation.

Nobody knows the answer to that.

Certainly the people at both
JetBlue and spirit did their due

diligence and thought that there'd

be a
net positive for sure.

And I will say, in recent
years, mergers have been.

There's a science to them now,
and mergers have gone better more

recently than they have in the past.

So if you told me I have to
make a beta on a combined JetBlue

spirit consortium syndicate and tell

me if it's going to be a lot more

profitable.

It's the synergy.

Are they better together than
they were as a sum of their parts?

I would say yes, probably they
would have.

They at least would have had a
fighting chance to not be in where

they're at now.

Would it have prevented the furloughs?

The truth is, the type of
passenger that a spirit of and a

jetBlue rely on is a different type

of passenger than, say, an American

or a
delta rely on, in the sense that

they're a lot more what we call price

inelastic.

In other words, those
passengers are a lot more sensitive

to price.

And so we did see a weakening,
and we are seeing a weakening in

that.

And so because of that, you
know, that's the wild card in all

this.

Would that have impacted the
combined carrier enough to still

cause problems?

I mean, it's like this.

Would it have been a home run,
you know, grand slam, walk off everything

great?

Probably not.

Would it have been
incrementally better?

That's my guess.

What would have still happened
long term to the carrier?

That's still a question mark.

And when we see two airline
struggle that are ultra low cost

or
low cost, do you think the kind of

legacies of the majors look at that

and see that as an opportunity to

kind of go after them even more?

I know they have their own
issues right now, but it seems like

there's an opportunity for them to

maybe either recap, capture some

of
that market or take some passengers

away
from them.

Do you see that happening?

Absolutely.

There's absolutely no doubt
that that's going on.

The CEO's of the major
legacies have all said they would

hate to be a low cost carrier right

now.

I mean, those are some direct
quotes because they feel the business

model is getting exposed.

Again, I don't think a
frontier or a spirit or even a JetBlue,

they're going to go anywhere, but

they could look different in a year

or two.

They are going to have to
figure their way out.

But if you recall, frontier
was through Indigo.

They were going to basically
double or triple in size with their

Airbus order.

A lot of these things are not
so clear anymore about this prolific

growth.

Even a year and a half ago,
Justin, myself included, we thought

that this low cost carrier, they

were immune to downturns in the industry

because of their ability to generate

ancillary income and just the ability

to operate a cost model that was

congruent with profitability.

But we're seeing that maybe
that's not the case.

Maybe there aren't as many
passengers as they thought.

Perhaps that's a function of
the inflation causing consumer demand

to go down a little bit.

Not to make this an economics
class, but there certainly was some

upward pressure on pricing and a

lot of people couldn't afford what

they could have even a year prior.

And for the types of
passengers that are targeted by these

low cost carriers, they're very price

sensitive, as I said.

And so that very much could
have a pretty profound effect.

Yeah.

And one airline that I don't
think we've ever really talked about

before.

So welcome to the show.

But breeze, you mentioned
before we started recording that

they're starting to show some profits

and they're starting to make a little

bit of a name for themselves and

the markets they are in.

And obviously, they're not
going to be everywhere.

I mean, I don't see them very often.

You hear them every once in a while.

But what do you got on breeze?

Well, you know, they're
founded by Neilman, who founded JetBlue,

who before that.

And he also founded carriers
both in Brazil and up in Canada before

that.

But then, of course, he was
known as Morissera, which was eventually

purchased by Southwest.

Look, this, you asked me this
years ago, what do I think of breeze?

I said I would never count
Nealman out.

I mean, the guy is, he does
things that are unconventional.

I mean, just look at what
Breeze is doing.

They're doing hub bypass.

They're doing point to point
with the 220, which is a highly fuel

efficient aircraft.

He was interviewed the other
day saying that he's not having problems

finding pilots.

I don't know.

I mean, I guess we'll see how
that bears out in the future.

I know he has to say that, but
they are turning a profit.

And again, if you look at a
traditionally run airline, even a

traditionally run low cost carrier,

what
breeze is doing should not work.

If you operate under those
business models, it should not work.

There should not be enough
passengers to go.

I forget some of the routes,
but there some really interesting

routes
where you just kind of hub bypass

these cities that are medium sized.

And, you know, I'm trying to
think of them maybe like Omaha to,

I don't know, like Charleston, South

Carolina.

You know, there's enough
passengers that want to take that,

but, you know, you know, there's

enough
pastors that don't want to go through

Minneapolis or Chicago or Dallas

or whatever.

They'll take that slightly,
maybe just a slightly higher fare.

Breeze is trying to call
themselves a luxury low cost carrier.

I don't know if you've heard that.

Sounds like the marketing team
there got together.

I don't know.

When you look at some of the
international business classes on

the legacy, it's going to be tough

for a 220 to compete with that.

That being said, I wouldn't
count this guy out.

The fact that he's turning a
profit already to me is pretty interesting

and he's got growth.

But again, it's the southwest
problem as well.

Ultimately, how many of these
little city pairs that are underserved,

existential, you know, and is the

competition just going to sit by

and let that happen?

You know, I mean, are they
going to just let, let him peel away

some of that market share?

I guess the other question is,
are these passengers that would not

have flown except for the fact that

breeze exists in their market?

I don't know.

And so we'll find out.

But again, if I was a betting
person, I would not bet against this

guy.

He knows how to build airlines.

He just knows how to do it.

He's had some successful
airlines and not everyone can say

they've started 12345, I don't know,

countless amount of airlines.

It's fascinating the brain
that you can have to have different

business strategies and be like,

hey,
well, this worked, but I think I

can do this a little bit differently,

make
it work for them.

What do you see?

Like 1020 year plan for breeze?

Do you think they're going to
be a prime kind of, I want to say

startup, but airline that gets bought

out for aircraft or pilots and if

they continue to be a little bit

profitable.

You know, like you said, they
could compete.

They could kind of, kind of
stomp their foot down on them and

force them into a corner.

Or do you see someone like, I
don't know, this is kind of crazy,

but
like Southwest or even jetBlue, uh,

frontier, any of those are trying

to
be like, hey, you know, this is working.

We need pilots, we need airplanes.

Um, they're showing that they
can create a good profit this way

and let's try our luck that way.

Yeah.

The only, the only thing
that's a little bit different here

is the route structure.

And the, the way that the, the
anti hubbing or the dehubbing works

at breeze is unlike a lot of the,

the legacy carriers.

So it would be a difficult
consolidation, in my opinion.

I mean, I'm not saying it
couldn't happen, but it'd be difficult.

Maybe you would see a little
more on the low cost carrier side

that maybe kind of do similar things,

you know, to that, but, but let's

take a look.

Even like an allegiant, I
mean, it's still outstation to, like,

major hubs like Las Vegas, Orlando,

Phoenix, you know, and so that's

a
different business model.

So I don't know.

I mean, I don't know.

Any, anytime an airline's
profitable and it looks like they're

going to be profitable for a while.

So certainly just by that
reason alone, they do become kind

of
a candidate for an acquisition or

a merger of some sort.

But when you look at it
operationally, it may be a little

more
difficult than previous mergers.

But again, I don't know, it'd
be interesting to be a fly on the

wall in Neilman's office.

I mean, this could be a labor
of love for him.

This could be something he
wants to build.

Remember, JetBlue is created
by him the day after his non compete

agreement expired at Southwest, literally

the day after JetBlue launched.

And it was a ten year non
compete, if I remember, after he

left.

And so I don't know, wherever
he goes, he seems to make a lot of

interest and JetBlue is still surviving

on his own.

So I don't know.

My guess is if I know him, he
wants to create some kind of a lasting

legacy.

Huge carrier, but we'll see.

Yeah, absolutely.

Time will tell.

We mentioned Alaska, Hawaii a
little bit, but let's talk more specifically

about them.

Like, what does this look like
for them in 1020 years?

What do you think the reason
why Alaska really wanted to buy Hawaii?

I mean, this is their second
merger in what, ten years, I'd say.

Right.

Yeah.

Virgin.

Do you think this is the end?

Do you think they're going to
try to find someone else to.

I don't know who else they could.

But what's the end goal here?

Well, certainly the time honored.

So in my opinion, Alaska
Airlines, their management philosophy,

and
I have met some of their higher management

in the past, they are known to be

a conservatively run airline.

Right.

And so there's some good
things with that.

Even during downturns, they
still tend to churn out some profitability.

There's really not been furloughs.

They've done a good job.

So it'd be like if you were to
invest, if you're a stock buyer and

you want to buy an airline that has

a little bit more of a safe record,

they would be, when you're, they'd

be
more of a value type stock that you

would, you would put your money in.

But they also traditionally
grow through consolidation, mergers,

which is also, it's like the eighties

called.

Right.

It's like the 1980s called.

They kind of want their
business plan back.

That's kind of the way they operate.

But it really works for them.

It really works for them
because they do these large jumps.

The question for Alaska, and I
think there's a lot of upside to

Alaska because even though they do

fly out east now, they do find some

eastern cities, they still have a

tremendous amount of territory that

they can grow into and connect their

network to.

And so I think it's generally positive.

The question to answer what
you're saying is would they look

at
some kind of an acquisition out east

to bolster their west coast operations

or
Midwest operations?

That's a very good question,
and that's something that we'll have

to watch.

But they've certainly shown a
propensity to grow through acquisition,

which, by the way, is one of the

fastest ways to grow.

Right.

If you pull your merger off
correctly, it's a very fast way to

grow.

And their last merger went
swimmingly, went great.

It didn't really cause any
problems like we've seen at other

carriers.

My guess is you will see
Alaska continue to be Alaska and

look for opportunities in certain

areas
to acquire and grow.

Yeah.

And one thing I do know about
the Alaska Virgin merger is that

there are two culturally different

airlines, and I feel like that's

the
same with Hawaii.

And I don't think the pilots
or the employees necessarily of the

older airlines that got bought out

by Alaska appreciate the new culture

that they're coming into just because

it's so different.

Like you said, very, very more
conservative and how they run things.

And I willing to see, I'm
really interested to see how that's

going to play out because Hawaii

is a
very specific culture and it works

because they're serving Hawaiians

essentially.

You know, they do obviously
have some big routes out of the lower

48, but they are there for hawaiian

culture and they're there for Hawaii.

And I'll be really interested
to see how they play with that.

I mean, I don't.

They might have announced this
by now, but it's like, are they going

to fully rebrand everything as Alaska?

Are all their big, wide bodies
gonna have Alaska on?

And now it's just gonna be
really interesting to see how the

island really kind of of takes onto

that.

And does that make bigger
growth for other airlines now that

they don't feel like they're flying

on
their flag carrier per se?

That's going to be really interesting.

You know, you saw a little bit
of that with the United Continental

merger
and a little bit of that with the

Delta northwest merger.

The truth is the surviving
carrier, sometimes it's kind of done

more for the internal cultural stuff.

So, for instance, at Unitedhe,
the name United survived.

But if you look at the
aircraft, they're still painted like

continental planes were, you know,

and so you will see some things like

that.

Certainly in this case, Alaska
is the surviving.

You know, they're going to be,
they're the ones acquiring.

So my guess is everything gets
branded to Alaska, you know, again,

I
could be wrong, but that would be

my guess as quickly as possible.

Culturally, there's definitely
going to be some cultural shift.

You know, people, the way
things are done locally, maybe at

some of the Alaska out stations and

training and whatnot, that's going

to
change over time.

My guess is the Alaska folks
learn quite a bit from their mergers

in
the past, and so they're going to

know, I would think, what temperature

to
keep it lukewarm, not too hot, not

too cold to find that right zone

to
bring everyone on board.

But again, we'll see.

Just keep in mind, Alaska,
this is the same airline.

Now, I know they don't do this
anymore, but I remember talking to

an Alaska recruiter in the early

two
thousands, and they told me that

one
of the things they did, they had

an essay.

So pilots had to hand write an essay.

Me either, but they had a
handwriting essay.

But one of the automatic
rejects was if you wrote the word

Alaskan Airlines because they felt

that you didn't understand, it's

kind of like the Delta Air lines

thing versus the one word thing.

But in Alaska, they took it to
a pretty big extreme.

And if you wrote that on your
essay, alaskan, that was an automatic,

we're not gonna hire you because

you shouldn't.

Yeah.

To me, little things like
that, I mean, they're not little

things that people, it's just, it's

really taking yourself pretty seriously,

and it is kind of a cultural thing.

And I can understand having
pride in your organization.

But, see, I wonder how, and I
don't think they do that kind of

stuff anymore, but I wonder how something

like that would play with a more

contemporary group of pilots coming

in.

And in this age where there's
not as many pilots available, especially

going forward, I don't know, it'll

be interesting.

So the point is, is that's
kind of how strict the company was

known to be.

They're kind of, kind of like that.

And so, you know, the question
is, what's going to prevail?

Is it going to be, and again,
I'm not trying to stereotype Alaska

or
hawaiian, but Hawaiian was definitely

known to be a little more of a chill,

you know, vibed airline, and Alaska's

not.

And so it'll be kind of
interesting to, to see how that makes

us definitely will.

There's a lot of timelines
that we need to pay attention to

to see how they play out.

A failed merger, a successful
merger, retirements and hiring Boeing,

Airbus engines.

Like, there's so much
uncertainty, I would say, of how

2025 could go.

Plans are to hire to be profitable.

Obviously, there's still, as
an investor, I'm sure they're still

a
little wary of how is this all going

to happen?

How are you going to hire, how
are you going to do this?

So if I could get maybe one or
two kind of bold predictions from

you for how you see 2025 playing

out,
that'd be great.

Yeah.

I think 2025 you are going to
see Boeing, Airbus, Pratt and Whitney,

the supply side.

You will see a good correction.

You will see some positive flow.

My guess is you're not going
to see that necessarily return to

normalcy, in my opinion, will not

occur to until 2026, especially now

with the strike of Boeing.

But you will start seeing
some, you're already seeing some

semblances of positive signs.

But I think Q two Q three of
2025, you will start seeing some

pretty good deliveries.

You're also going to see a lot
of the retirements kick in at a lot

of the legacies so I do.

And I think just historically
speaking, with the interest rates

coming down, my bold prediction is

you're going to see a fairly good

hiring environment for pilots in

at least Q three Q four of 2025.

That would be my prediction.

It'll be interesting to
revisit this and come back and see.

And then 2026, barring some
kind of horrible global event, I

think that you'll see a return to

where we saw just even a couple of

years ago because the fundamentals

are still
the same.

You're going to start seeing a
lot of hiring again.

Yeah, let's hope so.

That'd be great.

Great for my, my seniority.

Right.

I did ask a couple questions,
so we will answer a few of these.

It's hard for me to read
these, but let's see what we got.

I just had one Airbus.

They are currently in the
process of pushing, I would say,

of
showing that the idea of single pilot

is closer than you would want to

think.

And they're really kind of
pushing it for wide body long hauls

right now.

Where do you think we stand
with that?

Well, Boeing also, you and I
have talked about before, they did

initially indicate they may offer

something similar on the 797 when

it
rolls out, some kind of a single

pilot package.

Look, it's a problem.

It's certainly a problem from
a pilot point of view, from a regulatory

point of view.

It's going to be, I would say,
a decade or two away in the United

States where you're going to start

seeing it is you'll start seeing

it on
freight long haul for augmented operations.

You know, you're going to
start seeing what's with the concepts

known as remote pilot monitoring.

And so what's being bantered
about, and I think we've talked about

this before, but what's being bantered

about is this concept that you get

an aircraft that, quote, unquote,

is
certified, like this new Airbus or

the 797 or maybe retrofitted 787

or
something that's certified.

And so instead of having the
augmented crew, you have one person

sitting on the flight deck.

And then the thought process
is there's a remotely, there's somebody

back at a ground control station

back
in SLC or whatever.

That's basically the pilot
monitoring for several aircraft,

maybe
510 aircraft.

This is the thought tree right
now for this.

And then if an emergency
occurs, there's obviously a lot of

training that has to play out.

But the pilot on board
monitors that with the help of the

remote pilot.

In the meantime, there's some
kind of procedure to bring the sleeping

pilot, which, by the way, I think

has
tremendous physiological issues,

bring
a sleeping pilot from a dead sleep

into a full blown emergency.

But whatever, that, that all
has to be worked out, I guess.

But this is the thought, this
is the current thought process.

So you're going to see it very subtly.

It's not going to be a light
switch, as I said before, where one

day we're down to single pilot operations,

you're going to start seeing it on

the periphery, in my opinion, it'll

be long haul freight, where there

aren't passengers involved, and it'll

be with the augmented operations.

And then once, once, and if
that's allowed, and if that's showing

for a couple years, to operate problem

free, then you'll start seeing the

airlines push that again.

And so maybe in 2030 years,
you will start seeing, I've also

told you before, Justin, as the self

driving cars start making their way

into society, there is a sociological

shift,
I believe, amongst people.

I mean, I don't know if you've
been in the Bay Area, I was just

in
San Francisco, and I mean, we couldn't

get in Waymo, one of those self driving

cars because there was too long of

a list and they just released some

statistics that.

But it's three times less
likely to be involved in a fender

bender down there with the self driving

cars.

You see them all over the
place now in San Francisco.

So we are seeing a societal
shift towards that.

And so once that becomes more
mainstream with these incoming generations,

I think people will probably be a

little more accepting of being able

to fly with a single pilot.

So I think 20 years from now,
two decades from now, I think it

is possible.

And I know my friends at Alpa
are going to be upset at me for saying

this, because they should fight the

good fight.

And we need to make sure
there's a lot of, there's a lot of

questions that need to be answered.

But I think 20 years from now,
you will start seeing some, some

single pilot operations in certain

conditions will become a lot more,

you know, a lot more prevalent.

Yeah.

And when we talk about long
haul freight, I know FedExes would

love that.

They could be like, hey, come
on, please throw it on one of our

planes.

I'm sure Ups would too.

But especially with how the
FedEx and the union and their negotiations

are going, they would love the opportunity

to pass something like that right

now.

Yep.

And they have, I know for a
fact of FedEx, and certainly I'm

sure ups, they have stood up a business

unit there.

That is for automation,
automated flying, and, you know,

it's
at the managing director level.

I don't think it's gotten to
the VP level yet, but that, that

tells you they are putting resources

and
they're hiring, obviously.

Yeah, yeah, yeah.

I got another question.

Now.

It doesn't necessarily need to
get political, but the question itself

is, is this election influencing

what's
going on in the industry right now?

Do you think that some of this
has to do with an industry cycle,

or
do you think it's more of just a

wait and see of who's going to get

hired and how it's going to play

out?

That's a really good question.

I don't have any particular
insight into that.

The only thing I would say is
that if you go back historically

and you
look at elections, they don't tend

to, there doesn't tend to be any

kind of a correlation between industry

performance and an election.

You could certainly say that
there have been some presidencies

that were
considered to be more favorable to

managements or to labor, for instance,

over the years.

So maybe there's been some
correlation there.

But what I will tell you, I
will say one quick thing, and this

is not being political.

When Trump was first elected,
I was on an industry working group,

and our goal was to reduce general

aviation accidents.

That basically was our stated goal.

And so I was on this loss.

It was called the loss of
control working group.

And it was with a bunch of people.

You know, academia was there,
but it was industry, FAA.

And I remember this mandate
came down that said, hey, the FAA

no longer wants to really write rules.

They don't want to write
regulations per se.

The new philosophy is they're
going to deregulate, they want the

industry and academia and, you know,

the FAA folks, to kind of work out

their own solutions, you know, and

I remember thinking myself, I wonder

how this is going to work.

And again, I'm not making a
political statement, but I will tell

you, I do think it's a better result

when all the players, all the people

that participate in the industry

kind of
get to make their own rules and enforce

their own rules, then when the government,

in this case, the FAA, comes in and

says, okay, this is our new rule,

because, let's be honest, look at

next gen, right?

What the promise of this next
gen that just has not come to fruition.

And in my opinion, it's
because it's kind of been stuck,

you
know, in the FAA.

And in addition, I would say,
look at unmanned systems or uncrewed

systems right now.

Again, we're being dealt a
pretty big blow worldwide.

We're not keeping pace with it.

So I do think that the
philosophy of deregulating, which

seems scary at first, does seem to

work.

And I have noticed both
candidates now are saying that if

you listen to their messages, both

candidates now, I will say Trump

did
it because I was part of it.

He did it.

Say what you want, but I have
noticed that Kamala Harris is also

saying we need less regulation as

well.

And so that's kind of
interesting that no matter who gets

in there, you know, we'll see if

people keep their promises, but no

matter who gets in there, they're

both
kind of saying the same thing.

Yeah.

The really interesting part to
me with that is it all sounds great

at first.

Like you said, it's a little
scary at first.

And it might work for our
first couple of years until the airlines

are like, you know, we're pretty

safe.

Do we really need this regulation?

Like, we could all make
another billion dollars just by saying,

hey, we don't need to do 250 under

ten.

I mean, that's just like a.

I can't think anything else.

Good example.

Yeah.

If they just change something
just because, you know, this hasn't

ever caused an accident, so the chances

of it actually happening.

But that's just a slippery
slope where, I mean, we've seen it

with Boeing where they choose profits

over.

Over safety, and I just kind
of see that turning into me an issue.

That's the fear, that's the risk.

Absolutely.

So, yeah, we'll see.

It's all cycle, right?

Like, when we go the cycles of
over regulation, and then now we're

going down, it's like we have too

much.

We need to deregulate, and
then you get like, all right, we

need more regulation.

Someone help me, please.

Please.

But we can't do this on our own.

So, yeah, it's, uh.

I just wish we could live,
like, in a little meat happy medium

place with just little ebbs and flows,

but it's not like, stop, go, stop,

go.

Uh, anyways, absolutely.

Another question we have is
when do you predict the regionals

will be
hiring in and what kind of happened?

Um, I.

Me personally, I think it all
relies on the majors.

I think that there's the
whole, it's kind of like, think of

the major league, major league baseball.

You have all these systems to
get up to the top leagues, and that's

exactly what's going on and is when

the top stops taking from the bottom.

There's me, a backlog in the bottom.

And right now, there's just
too many pilots that they're waiting

to
go to the top, but that flow and,

and the hiring and getting up there

is kind of slow.

So it all depends on what's
going on with the majors.

Do you see the same.

That is absolutely correct.

And then there's also a little
bit of a spot difference as well.

We are seeing a lot of low
cost carrier pilots, even people

that
have been there for five years or

so, plus that are coming over to

united, american delta.

We didn't really see that in
the past.

And so I think then that gives
kind of a temporary lull then on

the regionals that feed in, like

the
United carriers, the american carriers,

the delta carriers, they are kind

of
having to kind of wait in place.

And also, as we all know, the
shortage at the regionals right now

is with the captains, also with the

line check airmen.

That's a big, big problem at a
lot of those places.

That's why you're seeing
people just make a lot of money in

those positions.

More than major, for whatever reason.

Yeah.

Well, when you get your czech
airmen letter at a regional, it's

almost like.

It's almost like chumming the water.

It's almost, almost instantaneously.

If you have your applications
out at Delta, American United, it's

almost an instant call.

And so we've talked about this
before, but it takes a long time

to
hatch check airmen.

I mean, I went through the
check airmen process at American

Eagle,
now envoy, and it took every bit

of
six months, but because you have

to
get all kinds of sign offs and training,

and then you have to be observed

by the FAA.

And, I mean, that's, you know,
it just.

It takes a.

Takes a lot.

And so then all of a sudden,
to lose that person, you know, a

month or two later, you know, it

really causes a backlog.

So.

So, yeah, and I think you,
with the down gauging at the main

lines now going into a lot of the

previous regional markets, I mean,

my
wife had a.

An overnight in Traverse city
the other day, and she hadn't, she

hadn't flown there since her.

Since her regional days.

And so, I mean, it just kind
of shows you how things are kind

of
changing a little bit.

Absolutely.

Here's a good one to end on.

It's.

How competitive do you think
hiring will be once it resumes?

I kind of mentioned this a
little bit earlier, but what do you

think?

Well, I think there's going to
be ample opportunity, but it behooves

everyone that wants to enter this

industry to kind of adopt a pre,

kind of adopt a mid 2013 to 2018

model where there was good hiring

going on but still had to keep your,

you still to keep everything clean.

Okay.

So that means, you know, do
the best you can with your checkrides,

do
the best you can with building your

records, do the best you can, make

sure you stay out of trouble, you

know, traffic wise, DuI wise, do

everything you can to put yourself

in
the best position.

And then what will happen then
is there will be opportunity for

you.

If you do everything you're
supposed to do, you'll have good

opportunity.

If you take a different route,
an alternative route where maybe

you
have some, some issues in there,

then
it might be a little, you're going

to
see the airlines will be, they will

have a little bit more ability to,

you know, before, I'm not saying

to
say they took everybody, but their

net was a lot wider.

Right.

And so I think the net's going
to be a little more realistic to

what we saw in the mid 2000 teens

where, you know, if you built a good

record, did well, you had good opportunity.

If you didn't, you maybe would
have to pick your spots.

So I'm still very bullish on
the industry.

From a hiring perspective, I
think it's.

Good, good to say.

And then I also think it's
good to say, make sure you're networking

and being involved and they kind

of
go hand in hand.

The more involved you are, the
bigger your network gets and the

more people you get to meet.

So don't just be okay with
maybe just flying at a regional.

Like, hey, if you want to go
somewhere else, you're going to have

to meet more people than just the

people you fly with.

You're going to have to go to
events, you know, maybe hang out

at
your local airport.

Look how you can be more
involved in things that matter to

you.

Could be in the union, it
could be in the airline, could be

in a lot of things.

But widen your network because
you never know who you will meet

and
be like, hey, yeah, dude, I am the

head of hiring at Delta.

I got you, you know, or I'm
the head of hiring an american.

You're great.

You're exactly what we want.

Or they can tell you, hey, you
need this, this and this.

And then this is the secret to
get, you know, it's just widen your

network, do more than you think you

should.

It's your dream job, right?

So do everything you can to
get there.

Sacrifice a little bit in the meantime.

So you can live the life that
you want.

Yeah.

Super good advice.

Absolutely good advice.

Put yourself in the best
possible position and networking.

I just, I've never heard a bad
story from someone that's networked.

The worst thing that's going
to happen to you is you're going

to
get a lot of friends, you're going

to
get a lot of people that you can

bounce decisions off of, decisions

you
have to make off of.

Get some advice from.

That's the worst thing that's
going to happen.

The best thing that's going to
happen is exactly what you say.

There's going to be more
opportunity for you and.

Absolutely right.

I guess I have one more
question, but it has to do with this.

Someone asked, do you think
you'll ever see the airlines require

a
four year degree again, I would say

probably not.

On paper, however, I do think
it's still a, if you don't have a

four year degree, you can certainly

get
hired at a major airline.

We've seen that.

And I think going forward you
probably will still see those opportunities.

However, you will likely have
to have something else that's kind

of big, that kind of offsets that

I
know for a while.

United before they, before
they dropped that, even when they,

even when they did drop it, if you

didn't have a four year degree, they

wanted to see something pretty big.

Like, I know if you were like
a chief pilot at a regional, for

instance, that was something that

they, that they would say, okay,

that
that's good.

You don't have to have a four
year degree.

You've demonstrated, you've
demonstrated that or something like

that, you know, and so if you have

something that kind of offsets that,

that's going to really help.

But certainly I do not think
you'll ever see a written minimum

out
there that says that you have to

have a four year degree.

Yep.

Agreed.

I don't think they'll ever
require it ever again, but I think

it
will be highly recommended.

And I think that will ebb and
flow with how the market and pilots

and what they need.

When they have a bigger pool,
they're going to want to see more.

And will that mean a four year degree?

I would say yes, just because
it shows that you can get things

done.

You can commit to something
for four years, you can put in the

work, you can get it done.

And essentially it's them
thinking that they can trust you.

Fly 200 people because you've
done hard things before and you've

passed, you've overcome a diversity.

You passed that's not to say
you don't overcome adversity by not

going to school.

You definitely do.

But it's, it's unfortunately
just a way for them to.

It's just another metric for
them to see.

And if you look at studies,
I'm sure it shows nine or 55% of

people have four year degrees do

better than this.

I mean, it's just unfortunate.

That's just what they believe.

So I do think that it's going
to be recommended and sometimes will

be highly recommended, but I don't

think it's going to be a killer for

anyone.

Like you said, if you have
something that helps you stick out,

then I think you'll be okay.

But at some points, you're,
you're probably.

I think you should err on
getting that degree.

If I agree.

There's one other little
nuance, too.

And it may not seem like much,
but, but later on in a person's career,

if they don't have that college degree,

but they still make it to a major

airline, you know, if you want to

go do something at that major airline,

like maybe you want to go in the

training department or maybe you

want to, to go to a chief pilot's

office or, you know, do something,

it's
competitive, right?

You have to compete against
your other pilots at that point,

and
most of them are going to have college

degrees.

And so that'll be another
thing that could, in theory, limit.

And the other thing I would
add, too, is getting a college degree

today.

I would argue there's a lot
more access to it because of all

the online capabilities.

This is going to sound really
easy for me to say coming from a

college.

I'm not saying you have to go
to an Ohio State or a und, or Emory

riddle or anything like that, but

I
am saying that you better have.

It's not going to make a lot
of sense to somebody if you're like

my age.

If you're 52 and you've had
all this opportunity to go to college

and now you're applying for director

of
training and you're up against three

other people that all have degrees,

what
are you going to say?

Oh, I haven't had time.

I mean, you have, you can get
it online now.

So, yeah, I think that it'll
keep doors open for you all throughout

your career as well.

And one benefit of going to a
bigger school is you more than likely

know the people that are hiring you

or, you know, people that know the

people that are hiring you.

Like, hey, I'm trying to do
this, like, oh, my buddy does that.

Let me see what you should do.

It goes to networking again,
and college can be a big networking

event,
and the friends you make, especially

in
such a small industry like we have,

it's just second to none.

You need to widen that network
however you can.

And if a four year degree can
do that for you, then go do it.

Yeah, well, I'm not going to
say his name because I don't have

his permission, but I guarantee you

you know who he is.

But there's a famous alum from
Ohio state who's one of my all time

favorite aviators.

That's like this incredible
czech airman at Southwest.

You probably know who I'm
talking about.

Yeah, I do.

And I love the guy.

I mean, to know him, he's
literally one of those people you

just want to fly with.

But he's very high up at
southwest in terms of having influence.

But what I love is on his
facebook page, he's constantly posting,

oh, here's someone from Ohio State

that I trained with, or here's somebody,

and now they're flying together,

or he's
checking them out to go to Hawaii

on
the etahegheende.

I mean, it's just really, it's
so that's.

You're absolutely right.

That's the kind of stuff that
you can't really put a.

But there's a lot of value to that.

Just going to getting a
college degree for that reason.

Those networks alone.

Yep.

And it's hard to say because
not everyone can afford going to

college.

Maybe it's not the best
decision for you to go to a big four

year degree or big four year school.

It's going to put you in the
negative when you got to pay for

flying on top of that.

So that's right.

It doesn't have to be Ohio State.

There's other smaller schools
or even 61 schools.

And you get, like you said,
get online where you can still create

a great network.

You just might have to be more
crafty in how you build your network.

It's just not all going to be
right there for you.

You're going to have to look
for it and you're going to have to

find it more on your own.

That's right.

Well, listen, when I was in
high school, that's what I did.

I would work all week.

I didn't come.

You know, my dad wasn't paying
for any of my flight training, and

so I ended up picking golf balls

at a
local golf course.

I'd work all week on the
range, picking up golf balls.

And I take my lesson on the
weekend, and that's how I got my

private pilot.

That's what sounds funny now,
that you'd work all week for an hour

or two on the weekends.

But that's what I did.

And so I get it.

I get it.

It's not fair.

But like you said, there's
always a way.

Whether it's a local community
college that's really dirt cheap,

there's some states, if you're residents

in some states, you can almost get

that for nothing.

You can at least get two years
of it done before you go on to a

bachelor's.

There's lots of opportunities
out there.

And I get it.

And again, like you said, it
is expensive.

And some people might be
listening to this saying, well, I

can't afford it.

What do these guys talking about?

I get that.

But I will say that if there's
any way you can make some progress

toward it, I think that will go a

ways for you that'll help.

It'll be beneficial.

Yeah, 100% agree.

Well, Jim, thanks for coming on.

I appreciate it.

It's always good to talk to you.

And, and hopefully in the next
time we talk, we'll be like, hey,

look, Boeing got it together.

Airbus is delivering airplanes.

We are hiring like crazy, and
everyone's getting hired again.

So I hope for those
conversations to come.

But until then, we're going
to, we're going to keep digging in

and talking about everything.

So I appreciate your time and
I hope you have a great day.

Sounds good.

Thanks, Justin.

Always nice to talk with you.

Always, always.

All right, man.

Have a good one.

Thanks, Justin.

Yeah.

Good luck on reserve, man.

Thank you.

I appreciate it.

All right, see ya.

That's a wrap on today's episode.

Thank you so much for
listening to this episode.

If you enjoyed it, make sure
you leave a, like, subscribe.

All that fun stuff.

And, you know, if you see your
dad's phone right there or your mom's

phone, take it, subscribe to the

podcast.

You never know.

Maybe they'll be like, hey,
let's go, Flydeh.

Can't hurt you.

Just go do it.

Seriously, do it.

No, I'm just kidding.

I hope you guys are having a
great day.

And as always, happy flying pilot.

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