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?
00:45:32 · John Collison, Scott Kirby
[00:45:32] S1: Yeah, Patrick Quayden. How does he make the decision that nuke is a go? [00:45:39] S0: He has all kinds, you know, they're staying really connected to what's happening in the world. Another example, I forget the names of these cities, we added a couple of cities in Spain and Portugal that but I've never even heard of, and I don't remember them now, the names, that are part of pilgrimage trips. So people, Catholic, they're Catholic pilgrimage, they fly to one and they walk, you know, to the pilgrimage to the other, a couple 100 miles apart, then they fly out of the other city. Oh, so you have add both of them at the same time. So we've added, you know, and anyway, he went and somehow read about pilgrimages, went and got some data, how many people do it. Then he went and found data that said, Oh, I can see all these broken itineraries that somebody flew us into one of the cities and they flew another airline out of the other cities and we added them and they went gangbusters. He, this year, took a trip to Uzbekistan and Kazakhstan. Like we can't fly there today because we can't fly over Russia. All right. But he's there like, you know. [00:46:36] S1: This could work. [00:46:37] S0: This could work down the road. [00:46:38] S1: Kind of. [00:46:38] S0: So he's doing stuff, you know, he's doing stuff like that and his team is great. But... Be more interesting maybe for one of your podcasts in [00:46:46] S1: the future Yeah, than [00:46:46] S0: I'm very interested.
00:46:46 · Scott Kirby, John Collison
[00:46:46] S0: I'm very interested. [00:46:48] S1: Greenland, by the way, fascinating. Love it. It's a country of 50,000 people and they're just going gangbusters building airports where obviously... [00:46:57] S0: Well, it's the only way to get there to places. [00:46:58] S1: Yes, but like, for sure, it's the only way to get there, and so an international airport in Nuuk maybe makes They just replaced it, that's why the new route that you guys have. But they're replacing the airport in Narsarsquak. There's already a perfectly good airport there, and they're building a new airport there in the full jet capable international airport. They love these capital projects for a country of like 50,000 people. Yeah, so they spend their money on it. [00:47:19] S0: It's such a cool, no pun intended, place to go. And, you know, it can drive the economy. 50,000 people, having people come in and, know, it can The international economy is driving [00:47:28] S1: that is. [00:47:28] S0: Drive the economy. [00:47:29] S1: I wanna talk about the tech for a second. [00:47:31] S0: Yeah.