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.
00:29:39 · John Collison, Scott Kirby, Ben Thompson
[00:29:39] S1: I get it. Maybe a little bit. [00:29:41] S0: But it really isn't. You know, there were, you know, in Chicago, are, sort of been in a competitive battle there. But in, look at our market share gains, and our market share gains in Chicago, we went from having lower market share than American to basically having double the revenue share. Like those are unprecedented kind of share shifts. The market share shift that we've had against Southwest and Denver is even bigger. The market share shift we've had against Southwest and Alaska combined here in the Bay Area is even bigger. So it hasn't been directed at them. With respect to Delta, I think that what's happening right now with Starlink is the biggest push. [00:30:16] S2: That's what we want to get to is Ed's. Is Ed gonna lose his job because [00:30:20] S0: he's And lose not job over by the way, have a lot of respect for Delta. They've built, you know, I took inspiration for what they, they were the first airline to start down this building a brand loyal. I don't call it premium because I want to invest nose to tail for customers. Starlink applies to everyone. It's not a premium product. It's for everyone on the airplane. But they've done a lot of really good things. But Starlink, I think Starlink behind the schedule is the most important thing for customers to choose an airline now. We are going... Today we're at 48% of our flights are on Starlink. The next week, Way it's gonna be up to [00:30:55] S2: fewer than your seat miles, though. Why did you start on the little planes and
00:30:55 · Ben Thompson, Scott Kirby, John Collison
[00:30:55] S2: fewer than your seat miles, though. Why did you start on the little planes and [00:30:58] S0: not because This they weren't is the FAA process. You have to get the other airplanes certified. And so we're getting... We've been getting them all certified. We're doing about three airplanes a day. I mean, in fact, it's gonna go up by two points in a week and a half. That's [00:31:10] S2: What all can it could do this Asian airline point? Like, have a joint venture with ANA, and most people I know who fly over to the Pacific would often choose the ANA flights. Yeah. And now going forward, of course they're going to choose the United flight because of the Starlink. [00:31:21] S0: Customers are going to try United because of Starlink. And then they're going to realize the technology in particular is better than anything they've seen everywhere else in the world. And we're going get customers that are loyal to other, have been loyal to other airlines that try us for Starlink and stay because the technology is better. [00:31:36] S1: So with Starlink, you know, we now have this moment where there's real differentiation between airlines that previously were closer. The differentiation The is gapped fact that every airline has not chosen Starlink suggests to me that the economic deal for an airline was not like an obviously, oh, yeah, we must do this. It required, you know, there was a case you could have made to not do it because some airlines did not do it. Can you talk us through how you made the decision to do it? How painful was the decision...