00:23:22 · John Collison, Scott Kirby
[00:23:22] S1: Like it is absurd. The airlines fund us to get around the- [00:23:26] S0: If they would let us. I mean, it's super politically controversial to privatize the FAA and air traffic control. But it's the kind of thing that private enterprise, I think, could get done in two to three years. [00:23:38] S1: We wouldn't need to privatize it. Could just have a user fee system where you're...
00:23:42 · Scott Kirby
[00:23:42] S0: It's a user fee system today. The real issue is there's several political groups that are opposed to it. The biggest being private jets who today... Airlines pay 100% of the fees that... The FAA is airline funded. We pay 100%. And essentially it's free, 99%. Essentially it's free, you know, to fly private jets. They're a really powerful lobby and I think that's probably the biggest impediment to, you know, modernizing the FAA. The problem is anything, even anything that's done through the government, it's, you know, like you go and like the government's just not efficient at that stuff. Like, is the best FAA, best DOT we've ever had. But like the conversations they have are, you know, on Capitol Hill is, Well, how many jobs are you going put in my district? And so like think about air traffic control. Air traffic controllers don't need to be at airports. They mostly sit in basements, look at screens. Like being in a centralized facility anywhere in the country. Instead, they're like, There's an air traffic control facility in every single district for political reasons. And it makes it incredibly inefficient and like one wire gets cut. You know, you got one big facility, you get it back up and you know. As we saw. But you have, yeah, you have four fifty of them. Like things get happen all the time. And it just makes the system inefficient. I'm not actually advocating for privatizing the FAA because it's so politically toxic. Yes. But we're doing more than we've ever done. But it's gonna be hard for government to ever be leading edge on this.
00:25:20 · John Collison, Scott Kirby
[00:25:20] S1: But what'll happen? Because like already certain areas capacity wise are creaking at the seams and, you know, air capacity grows 5% a year. Just we have an unstoppable force and then move logic. [00:25:32] S0: Yeah. Gonna There's be fear of flight. So it's already happened in New York. The FAA has put on limits on a number of flights in New York. It happened this summer in Chicago. It's gonna happen more and more places like [00:25:44] S1: I guess we don't say [00:25:45] S0: we We hit the limit of what the FAA can manage and then that becomes the limit. That's the limiter. There's more space in the sky, but you've got to have a different air traffic control system and process. And they're trying to modernize it. Like they are making good progress. I don't want to be like --. I'm not trying to be totally negative. I'm not being negative. They're making more progress than has ever been made in my career. But they're never gonna get to the kind of like, if the people at Stripe were allowed to run it, like, they'd really increase [00:26:11] S1: More progress would happen. [00:26:12] S0: Yeah. More progress would happen. If we're allowed to run it, more progress would happen because we're not constrained by politics. They're constrained by politics.
00:26:12 · Scott Kirby, John Collison, Ben Thompson
[00:26:12] S0: Yeah. More progress would happen. If we're allowed to run it, more progress would happen because we're not constrained by politics. They're constrained by politics. [00:26:21] S1: Scott has spoken about how some flights take longer today than they did fifty years ago, despite planes flying a lot faster, all because of a bottleneck with air traffic control. Stripe Economics recently looked at a similar paradox with AI. So one study found that while AI can save workers one point five hours a week, those savings actually had little relationship with actual work output. It turns out making individual parts of the system faster doesn't always make the whole system more productive. If you're interested in these kind of topics and you want to read more about AI and productivity or other research about the Internet economy, go to stripeeconomics.com. [00:26:58] S2: You said something at the Cranes, business launch in Chicago in August. You've had this sort of battle royale with American Airlines. Very pertinent to me since I fly out Chicago the most, where it would actually be better for consumers if United was the dominant airline at Chicago. [00:27:13] S0: I wouldn't use the word dominant, but. [00:27:15] S2: If you were the largest airline, had infinite capacity to expand, how is that? And is that just another articulation of the premium strategy because more routes [00:27:23] S0: is a benefit [00:27:24] S2: outside of cost?
00:27:24 · Ben Thompson, Scott Kirby
[00:27:24] S2: outside of cost? [00:27:25] S0: It's the basic, it's understanding of how networks work. So, the real reason for that is there's a limited number of flights at Chicago. And so, if you're gonna add one flight to Milwaukee from Chicago, means you Shortest can't flight to [00:27:37] S2: rest, right? [00:27:37] S0: It's not the shortest, but it's short. You can't add somewhere else. And for a hub to work, you have lots of what's called catchment area flying. Flying from, United flies I think eight times a day from Chicago to Milwaukee on small airplanes. We're not carrying, people aren't going from Milwaukee to Chicago and getting off the airplane to Chicago. They're connecting on to other destinations. And that's really important. We have several 100 of those connected, you know, catchment area flights for connecting customers within, you know, a few 100 miles of Chicago. American has totally duplicative services on it. Those do nothing for the city of Chicago. They help support each of our two hubs. But by the way, the same exists in Atlanta and Dallas. Atlanta and Dallas are much smaller cities than Chicago. But they have more international service and more passengers. Like every metric you look at, they're bigger and they drive more economic activity for Atlanta and for Dallas. Single hub airports drive more economic activity. And this is the reason, because they don't have to waste several 100 of their flight possibilities on catchment area Bob and Madison, they have half as As [00:28:41] S2: go to America, there's like 16 flights a day.
00:28:41 · Ben Thompson, Scott Kirby, John Collison
[00:28:41] S2: go to America, there's like 16 flights a day. [00:28:43] S0: They have half as many, And so what happens is instead of having 16 flights a day to Milwaukee, have eight flights a day to Milwaukee, on bigger airplanes by way, so you carry the same number of passengers, and you add an extra flight to Paris and an extra flight to Tokyo. You get more long haul flying out of it. And so like I'm 100% sure. Like there's no Chicago should be the biggest airport in the world. It's not. And it's because of this. I'm 100% sure it's better for the city of Chicago. I think it's going to be, I mean, Americans are to lose probably a billion and 0.5 in Chicago this year. And I think it'll eventually get there. [00:29:17] S2: How much how much is your... You famously were from American. We're sort of passed over and came to United. How much is your competitive position versus American will drive some of your comments versus your sort of past will drive those comments? Yeah. And when are you gonna actually start taking real aim at Delta? The question So we're looking I... [00:29:36] S0: Everyone thinks that it's personal, know, for me, like, [00:29:39] S1: I get it. Maybe a little bit.