00:39:30 · John Collison, Scott Kirby, Ben Thompson
[00:39:30] S1: What are some big things they've hated? [00:39:31] S0: The aircraft investment. They, you know, they don't say don't invest in technology but they want your CASM X, which is your cost per available seat mile, be low. And the only way you can, like, we can't control, like, airport fees are going up and like, you know, union contracts are what they are and like, The only way you can cut the budget is to not invest for the future. And like, we're going to invest for the future. And in the long run, it works out. And like other CEOs, like I'll hear other CEOs complain about, Oh, Wall Street is short term. And and what I say to them is like, Yes, they are. Like, stop complaining about it. That is what it is. But what you should do is invest for the long term, do the right thing. But by the way, if it doesn't work, you ought to lose your job and you ought to be comfortable with that. You get paid a lot of money, like make the big bet. If it works, great, shareholders will like it. But if it doesn't work, you deserve to get fired. And if you're not willing to take that risk, then stop complaining about it. [00:40:29] S1: Yeah, yeah, yes. [00:40:30] S2: We have more gamblers as as CEOs. [00:40:32] S0: More gamblers. [00:40:32] S2: I mean, it's... Everyone in tech loves... Or I think a lot of people in tech love airlines. It's super interesting. Yeah. But the actual job... Like, how many employees does United have? [00:40:41] S0: 120,000.
00:40:41 · Scott Kirby, Ben Thompson
[00:40:41] S0: 120,000. [00:40:42] S2: 120,000, which a wide range of skills and abilities. Some are on the ramp, some are doing route planning. How do you, in all this experience, like what is the key to managing that and getting people excited? You're dealing with unions, all these [00:40:56] S0: I sorts of think being the CEO of almost any company, but certainly for me, is really ninety nine percent one thing, create the right culture. I was in LA yesterday and I told the whole team what I just told you guys, like the first hub that's going get all Starlink, you're gonna get a lot of people that are coming across the terminal, which is where Delta is, across the roadway there to United. They're gonna try us that are loyalists to another very good airline. Your mission is make sure they know United is the best airline in Los Angeles. And they're all like, Yeah, we can do it. It's fun. People want to win. It's I
00:40:56 · Scott Kirby, John Collison
[00:40:56] S0: I sorts of think being the CEO of almost any company, but certainly for me, is really ninety nine percent one thing, create the right culture. I was in LA yesterday and I told the whole team what I just told you guys, like the first hub that's going get all Starlink, you're gonna get a lot of people that are coming across the terminal, which is where Delta is, across the roadway there to United. They're gonna try us that are loyalists to another very good airline. Your mission is make sure they know United is the best airline in Los Angeles. And they're all like, Yeah, we can do it. It's fun. People want to win. It's I [00:41:33] S1: want to come back to Wall Street. So, you know, you talked about investor perception. Historically, airlines were the canonical example of a bad business. You know, famous Buffett line of, you know, a farsighted capitalist would have shot down overwrite And as Kitty the fact that airlines had cumulatively lost money until 1992, I think, like the entire industry since Kitty Hawk had lost money on an aggregate basis. That is no longer true. It seems to have really changed. Yeah. And now airlines are more robustly profitable. Think Berkshire owned at least some airlines stocks for a while recently. What has changed? Has the structure changed? Presumably you think yes. And what has changed such that airlines are no longer the poster child Yeah, for
00:42:18 · Scott Kirby
[00:42:18] S0: yes and no. Yeah, it had gotten better, but like you look at what's happening in the last twelve months and things have gone back. This year six of 10 U. S. Airlines are going to lose money. And much of it's structural. You know, talked about America earlier. America will lose a billion dollars, a billion and 0.5. They're probably going to lose about a billion and 0.5 in Chicago this year. And like, the golden rule of airlines is you can't fly places that lose money. Like, you know, any business, like, if something loses money and it's structural, like, you have to stop losing money. This is it's not unique to that airline. There's basically every airline, almost every airline in country has places where they lose a bunch of money around the globe, you know. Some of the losses are like astronauts. Lots of places that airlines have more than negative 100% margins which sometimes people think is mathematically possible because it's revenue, it's possible. Yet they still fly it. So ego is still big. And ego is the reason those things I think have happened in the past. Ego still exists. But the structure of the industry that's different today is they're basically two winning airlines in The United and Delta. And we've created brand loyal customers. Customers fly us not just because of the schedule, which is the commodity but part of the because of all the other stuff we've talked about today. So even now with oil prices, oil prices for us are up $8,000,000,000 this year. Our best year in history, made 5,000,000,000. We're not going make as much this year as last, but we're solidly profitable. And it's just a completely different picture. But hang on.
00:43:41 · John Collison, Scott Kirby, Ben Thompson
[00:43:41] S1: So you think we're still in the Juan Trip era of aviation where it's not being run by bean counters at every airline and they're making of incoherent, irrational decisions based on ego? I [00:43:55] S0: wouldn't explain not quite the one trip, but there's still a lot of ego that's happening where people are, you know, adding routes that like... I started as a route planner. Can look like, you're going to lose... That's going be a negative 40% margin, you know, between negative 30 and negative 50. [00:44:12] S2: How are you guys thinking about routes? You've added a bunch of... You just added a bunch of... Of last week of all these new cities and [00:44:16] S0: all Yeah. That there were several new international destinations. Actually This very cool. [00:44:19] S1: How do you make the decisions? Like, when you launch Nuke in Greenland, is that you have a vibe that it could work? It actually Is it card counting or poker?
00:44:19 · John Collison, Scott Kirby
[00:44:19] S1: How do you make the decisions? Like, when you launch Nuke in Greenland, is that you have a vibe that it could work? It actually Is it card counting or poker? [00:44:31] S0: That one, it's different. It's hiring great people because I would've never picked Nuke or known Nuke. We got a guy named Patrick Quell and a great team that are really creative and they go look for things that are different and outside the norm, not in the data. We talked about data earlier. That aren't in the data because no one's ever done it. So there's no data to support it. And NUC has been really, really good as an example. Really? Yeah, people love it. It's a great place to go. We've added, so across The Atlantic, by next summer we'll have 53 destinations. We had 23 destinations ten years ago when I got to United. We'll have 53 next summer. We've only had two that didn't work. We're also disciplined about it. When they don't work, we stop. Like that's the great, you know, our assets are fungible. Like Bergen Norway didn't work. Like, I think Norway's awesome. It's still like incredible. I think it should have worked, but it didn't. But so we tried it and you know, it lost a little bit of money. It's not that much. Lost a little, and we just stopped. That's the great thing. Like we can try stuff and stop. [00:45:30] S1: But so the fellow, Patrick Quayden? [00:45:32] S0: Patrick Quayden. [00:45:32] S1: Yeah, Patrick Quayden. How does he make the decision that nuke is a go?