The airline CEO putting Starlink on every plane

Talking to people like, I'm switching to flying a regional flight because it's got Starlink in it. I was like, holy. Free was never the value proposition. Fast is the value proposition. And there's only one option for fast in Starlink. That is the only option. Scott Kirby took over United Airlines in May 2020 at the height of the pandemic. Refusing to play defense, he's made massive bets on fleet expansion, premium seats and Starlink Wi-Fi, creating differentiation in the hugely competitive airline market. So you did a big fleet order during COVID that looks risky. Was it risky? You know, I didn't think it was. So back during COVID, every single expert in the world said travel demand is going to be down by 50% forever. That's like what everyone said. One other point, like you should ignore the experts in the outside of Two Sigma. In the tails, experts are terrible. And I just thought they were all wrong, that I thought COVID was going to be deep and last a long time and travel demand would recover. Everyone else around the globe was shrinking. So we did the biggest, the exact opposite. Like literally every global long haul airline in the world, except for United, permanently retired part of their wide body fleets. We looked at that and said, we think the premise is wrong. And it's just a huge opportunity to do the opposite, do the biggest aircraft order in history, which we did. And I remember telling our board when they asked, they said the same thing. This seems like a really big risk. Like everyone else is shrinking and you're going to do the biggest. How big was the order? 200 wide bodies. And then we did another several hundred narrow bodies. And those are airplanes that list for, that we get a big discount, but they list for like $400 million. And I told our board, like, this is one of those cases because everyone else is shrinking. We don't have to be right. We just have to be not totally wrong. So it's just one of those situations where the odds are so stacked in your favor. And like people out here in Silicon Valley do this kind of stuff all the time, where figure out something that, you know, you have a different view than everyone else and go big on it. And if it works, the returns are huge, you know, and the downsides are smaller. But this business cycle with large capital purchases is actually also a tech story that's relevant with memory. Like Samsung came to dominate memory by systematically investing into every downturn because it's very cyclical. And obviously, it's hugely beneficial today. The flip side of that is everyone wants to invest when it's at its peak. Have we gone full circle and now? Yeah. You want to invest when everyone else, when things are down and not invest when things are up. I mean, for us and probably for like memory, it's a little harder to because, you know, our assets are so long life. But for us, our assets are 30 year. I guess for a chip factory, it's less because the technology moves away, but it's 30 year life. So we're going to go through several recessions and we're going to go through several ups and downs. So it's a little harder to do that. But you get better terms, you get better deals. You know, like we got really good pricing, you know, for example, during the downturn. You're the only person ordering it. Because we're the only one in the world. And we sort of launched the market like, you know, for Boeing, they kind of could go to other customers and say, look, United believes you should too. Right. So I remember it's very striking. I remember that period of people over extrapolating COVID. It's like the tech version of that was companies deciding that they're going to be fully remote forever. And a lot of companies decided that. And then we're like, wait a second. No, that's that's not right. Why were people so wrong on the travel side of things? Because there are two things that are human nature that are mistakes. One is to extrapolate the current into the future. Assume that everything that's happening today is going to continue into the future. And two, trusting people on surveys. Surveys are the absolute worst way to figure out what's going to happen in the future. Because the reason travel experts travel, they did surveys and people were terrified, like everyone's dying. And you ask them, are you going to travel internationally again? No. But and that was true of what they thought at the time. But like once it was over, of course, they were going to go back to traveling again. So I ignore. And by the way, I said this earlier, like experts live in the world of two standard deviations. They force fit everything into things that they've already seen. And so when things happen outside two standard deviations, when the tails happen, which is where you create all the value in finance, the frequency of six sigma events is that's where I first started, you know, like, you know, very, you know, far valuation at risk is the dumbest model in history. It's stupid. Like, you know, things that shouldn't happen in the history of the universe happen once every five years because it's a dumb, dumb, fundamentally flawed mathematical model that assumes everything is normally distributed. It's not. And it's just the perfect, it's really where I had a debate when I was getting my master's degree back in the 90s. This was about Black-Scholes. You know, there's such a dumb model for valuing options, like, because it assumes a normal distribution. The world is not normally distributed. The tails are much fatter in everything that matters. And anyway, that applies to everything, but especially in a crisis. Black-Scholes has a lot of assume a spherical cow, like, yeah, it's, you know, assumptions baked into it. Okay. I love hearing you talk about the over-fixation on surveys. But, like, the travel industry, the airline industry loves surveys. You know, United probably surveys people up the wazoo. And definitely at Stripe, we find we need to deprogram people a bit because in tech, people love running things via metrics. And you can outsource your thinking to the dashboards and the metrics. And so we're trying to encourage people to, I mean, yes, your opinions should survive contact with reality, but the metrics are not going to tell you what to do. That sounds like... Yeah. So we use survey. I like surveys for how did people feel about stuff we've already done. I ignore surveys for what are we going to do in the future. Apple famously does not do a lot of focus group testing on the products. They just, like, build the products they want to build. That's the way I, you know, stuff that we're doing right now. Today, we rolled out a Starlink tracker. Like, we didn't ask anyone about that. Like, I sit on an airplane and talk to customers, and I know they're going to think that's cool. And they do think it's cool. Well, you're getting to the second thing, which is people try to over-measure tiny steps. And it's just like, do the Starlink tracker. If it's not useful, whatever. Like, it doesn't matter. Yeah. And that's like, and especially in a world of AI, you can do so much so fast. Like, it's really powerful. I have a different view of what we'll probably talk about, but I at least have a different view of where the value is going to be created in AI. But you can just try so much so fast. And some of it doesn't work, and people don't care. Like, like somebody do, like, it takes me, take more time to do a survey or a focus group and just do it, see if they like it. And if they don't, stop. And if they do, do it, more of it. How important is your ability to do these sorts of experimentation? We talked, you know, 10, 8 months ago, redoing your whole tech stack, so you could sort of put these things on top of it. Is that... So we, like, I've always been a big believer in technology. I have a computer science degree. You're one of us. Yeah, yeah. And, but 8 months ago when I talked to you, I not yet had my AI epiphany, but I've always wanted to get on modern platforms. And so during COVID, another thing we did, like in the middle of COVID, said when everyone else is cutting back at airlines, cutting everything, we're going to double down on technology investment. We started a several hundred million dollar project to get not just on the cloud, but get everything off of mainframes to build databases, you know, that are modern that we can, you know, access the data just to really modernize our tech stack. And there was no ROI, there was no payback, which is why companies don't do it. Like, it's really hard to do the ROI on something like that. But what it does is it enables you to move fast and do things, like we're doing stuff that other airlines frankly can't do because they don't have the right tech stack. And we can do them easy and do them fast. So we started that, you know, in 2020 in an anticipatory, and it's really paying off today. And so my AI epiphany that I think has happened within the last month, 8 months, is I don't think AI, like summarizing documents and all that kind of crap, I think it's like ridiculous. Like summarize my calendar, summarize my day. Like I can read my calendar, like I don't need to summarize my day. But the power of programming. So I hired a tutor and took three one hour sessions. And if you want me to tell you the stuff I did. No, we want to see the vibe coded out. So I went, so I'll just tell you what the first thing I did was. I've always been into gambling, for better or worse. It helps you make like big bets on aircraft, for example. But I, after three one hour sessions, completely by myself, got up on a Saturday morning, went down to the home gym, worked out, took my laptop down there. It took about two and a half hours of run time, but I did a full workout. Like I go type, you know, it takes time to run. Yeah. I did the exact same stuff at my gym. I actually have like an iPad with the keyboard there. And in between sets, I'm just typing prompts and it's like running. It's perfect. So that's what I did. Uh, and, um, and I, on my own in two and a half hours, create a webpage that drop down menus for what sport do you want? What dates do you want? What kind of bets do you want? So four or five drop downs. And then it would go off for sports books. Um, call she being one of not actually a sports book, but for sports book, it would pull up all the odds and you could just decide what you wanted to bet and put the dollar amount in. And then it would go to whichever sports book had the best odds and make the bet on my behalf. And I could do it with three hours of tutoring on my own could write a program to do that was an epiphany for me. And like, I got, I like, I think I called him on that Saturday, uh, you know, our team and like, we're all on this. At that point though, he did tell me when I asked him about it, they had this huge switch over coming the following week and it went off without a hitch. So I remember that was actually flying the next day. And we actually, that one, you know, we do for those is, I don't know. I think I told you, like we in just in case, like we canceled several hundred flights on that day. So, well, just in case something goes wrong, we're not putting customers in. And that was, that was a switch from one of the biggest, you know, one of our biggest, most critical mainframe systems. It's tied into everything. We felt really good about it. We thought, but you know, like those things are so big and complicated turning off a legacy mainframe system and turning on the new system. It did go off without a hitch, but we cancel several hundred. We just don't schedule flights, um, during that window so that in case something goes wrong, we're not putting customers in harm's way. How much of the airline issues have been a story of outsourcing? Like you look at sometimes what's needed is some good de-vendorization and bring the tech in-house. If you look at why Tesla was so successful, they realized that software was important to cars. And then, you know, the wing mirror and the wing mirror adjuster is made by the, uh, you know, the sub-vendor that does that. And so you can't centrally control it and you just need to own the tech stack. Have you guys been bringing more in-house? We are. Which subsystems in particular? We're bringing much more, uh, in-house. We have more in-house, I think, than any airline in the world. We're the only airline in the world that owns our own reservation system. Everyone else has outsourced, uh, Sabre and Apollo. You worked at Sabre, right? I did. Um, it wasn't Sabre then, it was called American Airlines Decision Technologies. But, you know, that's a mainframe system. And because we own our, it's a legacy, like, we lucked into it. Like, legacy decisions that we own our own mainframe. And because we owned it, and we're, because us, Copa uses it too, Copa Airlines in, uh, Panama, uh, uses it because they're a partner with us. We're the only two airlines in the world that use it. So, like, eventually it was EDS owned it and then someone else. And like, they didn't want to keep supporting it. So we had to, like, we lucked into it. Like, but we had to support it on our own, but it's been huge. And now we're taking over all kinds of other parts, um, of the tech stack, partly because we do things are, you know, it's so much more complicated at United than it is at most airlines, uh, around the world. Size and complexity, size and complexity is just much higher. Um, but I'll give you another example of one that we're taking over, um, that I got so frustrated about the seat back entertainment screens. Um, I didn't actually realize it until I started complaining about the maps. The maps are terrible. Like the map, like I just want a map to show up, like go into maps, go where I'm going. If I can zoom in, zoom out, if I want switches to the globe, like I know like approximately where I am on the globe. I don't need to see by the time you find the information you're looking for, it switches screens. What I want though, is cause you already know who I am. You log in, my name's airport and my birthday or whatever. I do nothing. We have the map on the whole time. I want to have my map preferences. So we're taking over the map software from Panasonic. Uh, they're taking over the whole software. And so there's all kinds of stuff we're going to, so like one is we're going to know Ben likes them. So it's just going to come up that you can get to other stuff. It's just going to pop up with the map on the screen. Another one, like these are little things, but they're what I've, we have started, it comes from this book, unreasonable hospitality. One of the things about that book is, um, that I took away from that book is try to create memories for people. Um, and so like, to me, this is another example of a cool thing, uh, which is when you're hitting your 2 million mile mark, the screen is going to pop up with a little thing in the bottom. They said, congratulations. Well, it's going to do a countdown. Like, Oh, 9, 9, 9, 9, 12, 13, like celebration. And the flight attendants are going to all know exactly when you hit 2 million, where over the country you hit. I mean, it's a little thing, but it's cool. Um, and you know, we could have never done that unless we took over, um, the surprise product touches are quite important. Yeah. And that's another one that AI makes possible to do things like that. That wouldn't have been possible to know who you are, you know, like, you know, know what you want to drink. You know, do you want a gin and tonic? You know, you want your normal gin and tonic wine selection? Yeah. Do you want to get it? I don't think we have to get us on the airplanes, but we'll work on that. I have a question on this surprise and delight thing, because that is a great thing. You show up and United delivers something I didn't expect. The question is, how do you handle that becoming a feature? So like I was traveling this summer and my flight was delayed out of Madison due to a maintenance issue, but I'm like, it's going to be super tight in Denver, but connection saver is going to save me. And I, the gates were next to each other. I wasn't, I was totally relaxed about it. And then I get there and the flight had already closed. I walked to the gate, they closed it early and taken off. I'm like, if American airlines does that, I don't care. It's my expectation. I was kind of crushed because I like feature, but I'd already internalized it as you do this amazing thing. And how do you, like, it's already, you know, we've, we, we have to get really good at communicating on it. A couple of things. First on something like that, we have to get really good at communicating. The seatback screens now are going to be helpful too. We're going to tell you that we're going to put it on the screen. So the seatback screen today is completely divorced from the app. Tomorrow, once we take it over, it's good. They're going to be the same. And so we're not going to just have to text you about your, we're going to text you and tell you exactly where it is. And if something changes, like what probably happened on that flight is it got delayed by air traffic control. And the time, we didn't have time to hold for it. Oh no, it was one of those things where I knew, I understand the complexity of airlines. It was just, I was kind of looking at myself, like, why am I disappointed here? I'm like, oh, you know. No, no, you shouldn't be disappointed. Because what we should do is communicate with you really well on that. Another cool thing that I hope we're gonna have rolled out actually, well, and we're gonna roll it out pretty soon. I've told them I want it done by Christmas, for Christmas travel, because of weather at Christmas, is normally if there's a weather delay coming on one of your flights, all airlines, including United, send you a text that says, oh, there may be weather in Denver tomorrow. And like, great. What are you supposed to do? Brush your fingers? Yeah, yeah, yeah. Like, what can you do? Yes, it's December in Denver. Yeah, I'm aware. Give you a little shot of anxiety before your trip. So what we're doing today, it already has started, is when we say that, we say, here's other options for flights that you can just switch to. You can stand by for this one if you want, or there's seats available on this one. What we're going to do is send you the info, on the screen it's going to say, your flight to Denver has a 41, we estimate it has a 41% chance of being impacted by weather. If you switch to the earlier flight, it's only a 12%. The later flight is a 3%, so that you can have some intelligence about making decisions. But the point on how do we keep wowing customers is a really important one. So two years ago, at the end of the year officer meeting, I told our officers that their job is wow. And they all looked at me like, what the hell does that mean? And like, we, our job is to do things that a customer gets, their frequent flyer gets on the airplane, it says wow, I've never seen that before. And by the way, we get credit for that one time, and then we owe them another wow. They should put that in the bank, and we should owe them. And it's a cultural that means like, you can't ever rest, you can't be complacent, you can't, like, what are you doing that's new, that's cool? Because I want every cool thing that we do, a customer to take that for granted, you should take it for granted, and we do something to surprise you in the future. And that's cultural to try to do. But Ben has a theory that I like, which is that all of the top global airlines lists are just totally missing the point. It's like people talk about benchmaxing in AI, where people are kind of optimizing for the wrong things. All the top global airlines, which feature heavily kind of the Asian and Gulf airlines, do so because they have like really nice meals, and very well-coiled flight attendants, and all these things. Whereas what you actually care about is the airline having really good tech, so you have things like Connection Saver, where it can rebook you if you- I'm 100% with you. I think those airlines do a good job. And like I say, schedule's the number one reason people pick an airline. But everything else matters for brand loyal customers, and it's service, product reliability, and technology. And the Asian and Middle East carriers do better than the U.S. airlines on product for sure, and probably service too. I think we do a really good job, but they have different cultures for service, so they do better on that. But I think technology is the differentiator. And United, that's why I now believe that United, in totality, is the best airline in the world. And it's because of technology. And it's exponentially getting better. Things like being able to do this for customers when there's a delay, and telling them what's going on. We started it this summer, and we'll get this, AI allows us to institutionalize this. But if you're gonna have a delay, sending customers weather radar maps. And in Chicago, there was a day where the weather was over the horizon, but you had to fly, it was sunny at the airport, but you had to fly through this line of thunderstorms, and so the routes were closed. You couldn't. And so we said- It's really quiet, it looks fine outside. We sent half the people the normal weather delay, which they think you're lying, because it's sunny outside. You must be lying to me. And we sent half of them a picture with the radar map, and you have to fly through this line of thunderstorms, and the route's closed because it's unsafe. The people with one hour delay, I think the numbers were negative 60 NPS on the normal way of sending it, plus 60 when we sent them a picture of the map. 120 point difference. It wasn't just that they weren't mad, they were actually happy. They were like, thank you for everything. Yeah, it was better than a long time flight. People can handle, they understand they don't wanna do something that's unsafe, but they don't like uncertainty. It's like a lot of what you're describing is expectation management and communication. It's being a key part of the experience, because this is high stakes for people. Yeah, I would leave the expectation management out of it. It's communication. People should expect that- We're gonna get expectations management. Why isn't it expectations management? Because I don't wanna use it as an excuse. Like, oh, sometimes weather happens, so you should expect it. Our job is to try to, it does, but our job is to try to figure out the way to make it the best possible for you. I'll give you another example for weather. Now, this one, we're gonna have to get the FAA to help us, but we started running simulations with AI for Denver in the summer. In Denver, there's a lot of pop-up thunderstorms that happen around the airport. Denver is really your benoir. Well, no, it's not. It's actually easier than Newark. Newark is the hardest. My two options are Chicago and Denver. It's just a roll of the dice. Yeah, yeah, yeah. But see, this will help, like Denver especially, because Denver, winter storms are actually pretty easy. Pop-up thunderstorms are what's hard. The reason is because if a lightning strikes within three miles of the airport, the ramp closes for 30 minutes. People are not allowed to be outside, which one is dumb. Like, if a storm is moving from the east to the west, and you have, or from the west to the east, which is usually what happens in Denver, from the west to the east, and it happens west of the airport, you should probably close it. But if the storm is moving west to east, and it happens three miles to the east of the airport, you don't need to close it. So anyway, using AI, so what'll happen is there'll be a forecast in the afternoon for there's gonna be thunderstorms. And so the FAA just takes the worst case. We don't know where the thunderstorm will be. They close, they limit all the corner posts, all the, and they just pull down the amount of traffic that's coming through the airport proactively. Take the worst case. But when you look at the data, well, sometimes the weather's to the southeast. But in most cases, you can keep, you can use different arrival routes and departure routes, but you can keep the airport running. Because there is nothing around Denver airport. Yeah. So you have lots of space to worry about. And you can keep the airport running. We can probably reduce 50 to 75% of the weather-impacted delays in Denver in the summer by using this kind of technology. I mean, it's just transformational. That's my point about expectation management. Instead of just saying, oh, weather, like my previous employer, I had told people, the operations team, anyone that says the word weather in my presence is going to get fired. Because I do not want to use weather as an excuse. I know weather happens. I know we have to, you know, we're gonna be safe. We're never gonna do anything that's unsafe. Weather does happen. But our job is to figure out how to minimize the impact of weather. And you can't use weather as an excuse. So that's my expectations management point. I want to have our culture be, we find ways to overcome the challenges. So trying to manage your expectations, we try to set high expectations and try to meet them. But we do communicate with you. What do you see as the biggest limiter of your business? Is it airport capacity? Is it air traffic control? It's by far air traffic control. Air traffic control is 90% of the issue. How do we finally, this is the great white whale, air traffic control modernization. Is there a path to, it's like a complex technical project, it's a complex social and political project. Can it be done? It can be done. And look, we have, the president is supportive. He's the most pro aviation, you know, he knows about aviation, likes talking about it. We have support from him. Secretary Duffy is great. I could text him right now and get a response, you know, unless he's an immediate, unless he's a, you know, a speaking or something, I would get a response within 30 seconds. Brian Bedford's best FAA administrator we've ever had, but it's the government. It's just so hard for the government to, just take the appropriations process. You know, these are the kinds of capital projects that, you know, are five to 10 years to get done. They do an annual appropriations project. So they start at the beginning of the year and it's often delayed because of the, you know, government shutdown stuff. So they may be starting two months into the fiscal year before the program, before the budget gets approved. Then they take three months to ramp up to start. And then they work for four months. And then they take the last three months to shut the project down because they don't have authorization passed all month. Like it is absurd, absurd. Could the airlines fund this to get around the- 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. You wouldn't need to privatize it. You could just have a user fee system where you're- 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 to fly private jets. They're a really powerful lobby. And I think that's probably the biggest impediment to modernizing the FAA. But the problem is anything that's done through the government, you go and the government's just not efficient at stuff. It is the best FAA, best DOT we've ever had. But the conversations they have on Capitol Hill is, well, how many jobs are you gonna put in my district? And so think about air traffic control. Air traffic controllers don't need to be at airports. They mostly sit in basements, look at screens. They can be 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 one wire gets cut. If you got one big facility, you get a backup and- As we saw. Yeah, you have 450 of them. Things happen all the time. And it just makes the system inefficient. It's just, it's- So you're- I'm not actually advocating for privatizing the FAA because it's so politically toxic. Yes. But it's, we're doing more than we've ever done. But it's gonna be hard for government to ever be leading edge on this. So, 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 in the movable object. It's, there's gonna be limited, there's gonna be fewer flights. So it's already happened in New York. The FAA has put on limits on number of flights in New York. It happened this summer in Chicago. It's gonna happen more and more places. Like 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 wanna 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. More progress would happen. No, more progress would happen. If we're allowed to run it, more progress would happen. Because you're not, because we're not constrained by politics. They're constrained by politics. Scott has spoken about how some flights take longer today than they did 50 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 1.5 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 kinds of topics and you wanna read more about AI and productivity or other research about the internet economy, go to stripeeconomics.com. You said something at the Cranes business lunch in Chicago in August. You've had this sort of battle royale with American Airlines. Very pertinent to me since I fly to Chicago the most. Where it would actually be better for consumers if United was the dominant airline at Chicago. I wouldn't use the word dominant, but. If you were the largest airline and had infinite capacity to expand, how is that? And is that just another articulation of the premium strategy? Because more routes is a benefit outside of cost. It's the basic, it's understanding of how networks work. So the real reason for that, there's a limited number of flights at Chicago. And so if you're gonna add one flight to Milwaukee from Chicago, that means you can't fly. 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, so 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. People aren't going from Milwaukee to Chicago and getting off the airplane to Chicago. They're connecting onto other destinations. And that's really important. And we have several hundred of those connected, catchment area flights for connecting customers within a few hundred 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 hundred of their flight possibilities on catchment area. They have half as many. In America, there's like 16 flights a day. They have half as many catchments. And so what happens instead of having 16 flights a day to Milwaukee, you have eight flights a day to Milwaukee on bigger airplanes, by the 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 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. And I think it's going to be, I mean, American's going to lose probably a billion and a half in Chicago this year. And I think it'll eventually get there. How much is your, you famously were from American, were sort of passed over, 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? And when are you going to actually start taking real aim at Delta? That's the question I'm looking for. So everyone thinks that it's personal for me. Like I get it. Maybe a little bit. But it really isn't. You know, there were, you know, in Chicago, there are big, so sort of been 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. 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, you know, I think that what's happening right now with Starlink is the biggest push. That's what we want to get to. Is Ed going to lose his job because of Starlink? He's not going to lose his job over it. And by the way, I have a lot of respect for Delta. I took inspiration from that. They were the first airline to start down this, building a brand. 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. And today we're at 48% of our flights are on Starlink. In the next week, it's going to be up to 50. Way fewer than your seat miles, though. Why did you start on the little planes and not the big ones? Because they were certified. This is the FAA process. You have to get the other airplanes certified. And so we've been getting them all certified. We're doing about three airplanes a day. In fact, it's going to go up by two points in a week and a half. That's all they've done. To this Asian airline point, you have a joint venture with ANA. And most people I know who fly over to the Pacific would often choose the ANA flights. And now going forward, of course they're going to choose United because of Starlink. 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 to get customers that have been loyal to other airlines that try us for Starlink and stay because the technology is better. So with Starlink, you know, we now have this moment where there's real differentiation between airlines that previously were closer. The differentiation has gapped out. The 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. And it requires, 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? It wasn't painful. It was, I thought it would be a big deal to customers and so I wanted to do it. Economics were, yes, it's more expensive, but it's a whole lot better. You often get what you pay for and that's true in this case. Usually in airlines, you look at this like these things are incremental and so it really takes time to put them on and the easiest way to put it on is to do it in a heavy check. So you got an airplane that's going to be down, you strip the airplane down and while you're working on it, you already got the airplane down, you know, put Starlink on. And that's how we started. And, you know, we had, you know, we're only going to do like 65% of our fleet because planes were retiring and, you know, and once we put it on the first aircraft, we realized like, I just like all these anecdotes, like I'm talking to people like I'm switching the flying a regional flight because it's got Starlink and I was like, holy. We got it. No, I was booking a flight this week and I was just thinking through it. I had to book around the Brewers game, whereas if I had known for certainty that my flight was going to have Starlink, I would have booked it during the game. Yeah. And there's such a huge gap between maybe there's Starlink. Congratulations, by the way. Not yet. We're not talking about it right now. Maybe there's Starlink versus there is definitely Starlink. Yeah. It feels to me like you actually haven't reaped any of the benefits yet because certainty is going to make it. I think you're right. I think we've got some, but, you know, getting to 50% matters. But you're right. So we were a tracker today that gives you a bunch more data. We're going to put in the app sometime soon the probability that there'll be Starlink on your flight. So at least know the probability for flights. And it'll be different. Like today, you know, it's if you're flying on a Max 8, if you're flying on a Max 8, it might be 25%, but if you're booking for Christmas, it's 36% because we know how many we plan to have done. And so we're going to have that. We also are going to have a bunch of premier markets that we're going to get to 100%. So our first hub, I'm not going to tell you the date yet, the first hub that's going to be 100% Starlink is Los Angeles. So sometime in the first half of next year, if you're in LA. And is that because that's the most competitive hub? It's a competitive hub, but it also like, it's also the kind of aircraft that fly there. So our only aircraft that are still a challenge, we have to get Boeing over the finish line on some of the certification work on the 787s. We will get there, but yeah, we will get there. But you know, if you've got a market like San Francisco that has a lot of 787s, it's going to take longer because Boeing is slower. Was the CAPEX or OPEX more painful in the economic model as you looked at it? The numbers aren't that big. Oh, really? But then like, why is Delta's strategy rational or do you think it's like completely mistaken? It was a mistake. Okay. I think at all airlines, even the ones that kind of, if you watch the other airlines that picked it after United had done it, they're sort of stepping into it gradually. That's just the way we've always done it in airlines. You know, everything is slow, like do an aircraft remodification takes eight years, like just like, that's the way we've done it. And so I think it's just the way everyone has done it and like, and if you're thinking that this is like an eight year project, okay, I'm a year behind on starting, but that's not that big deal. You know, United will be at 12%, you know, we'll be a year behind. Like it's not going to be enough to matter. Like it's a, you can, in a traditional way of looking at it, it can feel rational. I don't think people, we even didn't appreciate how big it was. I thought it was big, but then we put the pedal to the metal and SpaceX supported us and going. Is this going to be the biggest differentiator of all time? I think it is. I think it's the biggest competitive advantage. And it's temporary. It's not, everybody eventually is going to have high speed, low earth orbit, internet connectivity. It's going to be a must have. But does it speed up over time? But we are going to have a few years of being the only airline that has it at scale. And that's our mission is, I think we're going to convince customers that United is the best airline. And we're going to get customers to switch their loyalty to United, get our credit card, switch their loyalty to United. Not because of Starlink. They're going to try us for Starlink and they're going to stay because all the other technology and everything else is better. And the technology in particular is so much better than technology at other. And it's accelerating because we're out there at tech stack and because we're like our gap is getting wider and wider with our technology every day. You have a two to three year window to woo customers. Exactly. Yeah. That's exactly right. What do you think of Elon's strategy of requiring airlines to make it free? We're going to make it free anyway. So you know, free was going to be, although in fairness, free is not the value proposition. Fast is the value proposition. And the truth is like on, I've flown all three of my big competitors who have it free on the legacy systems and it's terrible. I've flown them each two or three times in the last year. It's terrible because there's not enough. It's physics. There's not enough bandwidth to make it free. I was sad when they started making it free. Yeah. Because I'm like, this is going to make my experience worse. It makes it unusable for almost everyone. Free was never the value proposition. Fast is the value proposition. And there's only one option for fast at Starlink. That is the only option. You can call it the other fast and free, but it's not. It's like dial-up internet. Yes. Yes. It's slower than dial-up internet. So you mentioned that in the long run, everyone will have Starlink. The technology stack. Or maybe Amazon, but they'll have Lowell's. Right. How do you think about in the long run where a reason people prefer, say, the Asian Airlines versus the American Airlines is they feel like the soft bits are better. Do you need to circle back around to that in the long run? I want us to be the best at everything. And I acknowledge that the Asian Airlines are really, Asian and Middle East carriers are really good at service and product. Now, it does help that they're quasi-state entities and subsidized. So we can't do it and lose money. If you get ahead, like you start to have exponential benefits, you can go faster and do more things. I think being in the lead and never being complacent, we're going to have to keep reinventing things and doing stuff to make it great for customers. But I think we'll have a big lead. And when you have a big lead, too, we'll have the resources to invest. Everyone else is mired in hitting the Wall Street number for next quarter. And the only way to do that is to cut your investments. They get mired in the short-termism and they don't invest. Our constraint on investing in technology is how much can we manage? It is not money. You've talked about airlines being run by operations people where taking cheese out of the pizza is the only move. That has given you more social permission with your investors, with your board, to do things like the bigger aircraft order during COVID. We're going to do Starlink. It feels like you have taken bigger swings. Is that just you've seen the future better, or do you somehow have more permission to take big swings? I think we're better at seeing the future. I don't know if we talked about it here, but I think reading as much as I do, I think people that do that, connect dots, can see the things in the tales better than others. It can spot the opportunity where other people don't. I have a great board who's been supportive. I spend a ton of time communicating with the board and keeping them involved. We talk about what's going on. I have a lot of support from them for doing that. From the external perspective, Wall Street almost always hates the big things we do. And I don't care. What are some big things they've hated? The aircraft investment. They don't say don't invest in technology, but they want your CASMX, which is your cost per available seat miles. We can't control airport fees are going up, and union contracts are what they are. The only way you can cut the budget is to not invest for the future. We're going to invest for the future. In the long run, it works out. I'll hear other CEOs complain about, oh, Wall Street is short term. What I say to them is, yes, they are. Stop complaining about it. And that is what it is. What you should do is invest for the long term and 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. 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. Yes, yes. We need more gamblers as CEOs. More gamblers. I mean, everyone in tech loves, or I think a lot of people in tech love airlines. It's super interesting. But the actual job, like how many employees does United have? 120,000. 120,000, which is 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 know, all the unions, all these types of things. I think being the CEO of almost any company, but certainly for me, is really 99% one thing. Create the right culture. I was in L.A. yesterday, and I told the whole team what I just told you guys, like the first hub that's going to get all Starlink, you're going to get a lot of people that are coming across the terminal, which is where Delta is, across the roadway there to United. They're going to try us, that are loyalists to another very good airline. Their 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 fun. People want to win. It's fun. Yeah. I 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, the famous Buffett line of, you know, a farsighted capitalist would have shot down Orville Wright as Kitty Hawk. Whereas 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. And now airlines are more robustly profitable. I think Berkshire owned at least some airline 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 for companies? Yeah. Well, yes and no. Yeah, it had gotten better. But, like, you look what's happening in the last 12 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, I talked about America earlier. America will lose a billion dollars, a billion and a half, probably going to lose about a billion and a half 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 not unique to that airline. There's basically every airline, almost every airline in the country has a place to really lose a bunch of money. Around the globe, you know. Like, some of the losses are, like, lots of places that airlines have more than negative 100 percent margins, which sometimes people think is, like, mathematically possible. Because it's revenue, it's possible. And 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 there are basically two winning airlines in the U.S., United and Delta. And we've created brand loyal customers. Customers fly us not just because of the schedule, which is the commodity part of the business, but because of all the other stuff we've talked about today. And so even now with oil prices, oil prices for us are up $8 billion this year. Our best year in history made $5 billion. We're not going to make as much this year as last, but we're solidly profitable. And it's just a completely different picture. But hang on. 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 kind of incoherent, irrational decisions based on ego? Yeah. It's probably not quite the Juan Trip, but there's still a lot of ego that's happening, where people are adding routes that, like, I started as a route planner. I can look like, you're going to lose, that's going to be a negative 40% margin, you know, between negative 30 and negative 50. How are you guys doing on routes? You've added a bunch of them. Yeah. We've added a route planner to the last week, all these, like, new cities and things that we've said before. Yeah. 10 new international destinations. This is very cool. How do you make the decisions? Like, when you launch Nuke in Greenland, like, is that, you have a vibe that it could work? Is it, like, actually very deregulated? Is it card counting or poker? That one, it's different. It's hiring a great, it's hiring great people, because I would have never picked Nuke, or known Nuke. But we've 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 Nuke has been really, really good as an example. Really? Yeah. People love it. It's a great place to go. Added, so across the Atlantic, by next summer, we'll have 53, we had 23 destinations 10 years ago when I got to United, we'll have 53 next summer. We've only had two that didn't work. But 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, like, I still like it. I think it sort of works, but it didn't. So we tried it, and you know, it lost a little bit of money. It's not that much. It lost a little, and we just stopped. That's the great thing. We can try stuff and stop. But so the fellow, Patrick Quayle? Patrick Quayle. Yeah, Patrick Quayle. How does he make the decision that nuke is a go? 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, but we added a couple of cities in Spain and Portugal that are, that I'd 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 pilgrims. They fly to one, and they walk, you know, to the pilgrimage to the other, a couple hundred miles apart, and then they fly out of the other city. Oh, so you have to add both of them at the same time. And so we've added, you know, and anyway, he went and like read, 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. This year, he took a trip to Uzbekistan and Kazakhstan. We can't fly there today, because we can't fly over Russia, but he's there like, you know. This could work. This could work down the road. So he's doing stuff like that, and his team is great. He'd be more interesting, maybe, for one of your podcasts in the future than me. Yeah, yeah, yeah, I'm very interested. Greenland, by the way, is fascinating. I love it. It's a country of 50,000 people, and they're just going gangbusters building airports, obviously. Well, it's the only way to get there, to places. Yes, but like, sure, it's the only way to get there, and so an international airport in Nuuk maybe makes sense. They just replaced us, and that's why the new route that you guys have. But they're replacing the airport in Narsarsuaq. There's already a perfectly good airport there, and they're building a new airport there in the south, full jet-capable international airport. They love these capital projects for a country of like 50,000 people. They've got like- They're also gonna spend their money on it, yeah. But it's such a cool, no pun intended, place to go, and it can drive the economy. 50,000 people, having people come in, and it can really drive the economy. I wanna talk about the tech for a second. So how should we feel about the last few decades of the actual airframe advances, where everyone likes to talk about the 737 first flew in 1967, it flew at Mach 0.78, and the 737 MAX today flies at Mach 0.78-ish. Now, it does burn 50% less fuel, the latest version, so that's like a significant improvement. It is 30 to 40 times safer, so that's a significant improvement. But at the same time, people feel like, again, it's one of those examples people trot out of stasis. How do you feel about the rate of technological improvements in airframes? It's maddening that we haven't done more. In fact, this book, where is it? Impossible Factory. It's a Scott Quartz book. I had not known there's a new Skunk Works book. Clarence Kelly Johnson, and developing the SR-71, the U-2, in a couple of years from start to finish. I think the fundamental problem is Boeing and Airbus have a global duopoly, and they have quietly, not officially agreed, but they have quietly agreed neither one of us will invest in new airframes. They're piecing the frontier. And if you don't have an option, we need a third aircraft manufacturer, to be blunt. Okay, so you think there's basically a breakdown of competition? Yeah, so neither one of them, their investors don't want to reinvest, and so they just won't do it. I've been begging them to both, for 20-something years, to build a 757 replacement. Begging them, and they just won't do it. I am on a 757, going back to Chicago. I'm a little nervous about it. Great plane, the takeoff's amazing. Yeah, it's a cool airplane. It's a cool airplane. Speed is obviously one thing, and obviously you guys are working with Boom, but speed is also hard, and it requires much more fuel. Other than speed, what improvements would you like to see? Well, a couple. The next generation, I think, of airframes, you could build on the current airframes. I think the biggest thing is probably gonna be blended wing bodies. So, think of the B-2 bomber. It's a much more efficient airframe for flying. And so, turning that, we're an investor in a company called Jet Zero, who's trying to- Is that an airport challenge, though, too, if you have to- There's airport challenges. It's bigger, so airport space. But that's really a gate challenge, so you gotta regate. I think that's an example of something. Engine technology, I think, can advance as well. Another cool thing, by the way, we're starting the Relaxro next, later this year, or next year, which is, in coach, you can put three seats, and a bed comes out, and you can lay down on them. But we have little United stuffies, airplane stuffies. I've already got some for my kids. My kids love them, but that's another cool United thing. Is that an example of, basically, a lot of the economic outcomes that you're looking for? And I sort of pushed you on this with the premium question, is how can you take a large fixed capital product and basically deliver infinite numbers of strata of pricing? Yes and no. I think of this as, I don't think of it that way. I think of, we are trying to build a brand. We're trying to build a great brand. And something like Relaxro, I think will be profitable, but it's gonna not even be a rounding error in our financials. But it's cool, and it's good to do stuff that's cool. Good for families. I also, I have seven kids, and I think of air travel through the lens of a parent traveling alone with a couple of young kids. How do we make it easy for them? If we can make it easy for them, we're gonna make it great for everyone. And Relaxro is perfectly consistent with making it easy. Starlink is great for them, seatback entertainment. I love walking through our airplanes when we have the seatback entertainment, which a lot of airlines went away from. And you'll see kids watching, and parents just totally relaxed, because their kids are watching Boeing. And it just makes, I don't know, so much better. I heard you can now watch Shaggy Pine on there. You can now watch Shaggy Pine on the in-flight entertainment. So it's pretty cool. So people are probably watching this. Maybe I'll watch this, I'll probably watch it. Exactly. You can just put it on there. Okay, so when you're saying things like Relaxro, social media has almost changed airline marketing, where there can be things that are maybe not the biggest from a ticket-booking perspective, but if it gets people broadly excited about United, that is valuable. Yeah, and I look at, we're trying to build a brand. All the Starlink stuff that's happening. Sure. You're feeding it. That's your backfire. I kind of feel bad for Ed, just kind of getting into a fight with him. But I love it for us. We were actually, we had a big push that was coming. Like, we were obviously prepared. I was gonna ask one. How'd you decide to run those ads, right? Because you only have 50% of the time you're ready to do this. We were waiting to actually, we're gonna cross the 50% threshold next Friday. And so we're waiting until then to sort of like, and we're gonna really push that going. So we're gonna do it anyway. But that was a moment to like, except our team is great. Maggie Schmarin, who's our VP, runs that. Like, it's awesome. And, you know, she did it. And one of the things, this is another advice to companies that she tells me, is like, she did it without, she didn't ask me. She knew she didn't ask me. Like, no approvals. She's awesome. I trust her. And that is, that creates speed. Companies that, you know, most companies, especially big traditional companies, you know, have 16 layers of approvals. You can't do stuff fast. Or creative, or fun, or interesting, because it just gets watered down. And she just went out and did it. Knew that she had support from everyone at the company to go do it, and did it. And, you know, I was at a CVS board meeting, because I'm on the board of CVS Health, and started reading about it. Like, well, this is pretty cool. And people are asking, actually, I didn't read it. People are asking, like, this is cool. Like, oh, what'd we do? Like, that's cool. As we think about the airline business in the United States, you know, pre-1978, everything was very heavily regulated. You know, United flew on routes set by, or approved by the government, with fares set by the government. So I think people don't realize when they look at those old-timey 60s photos of, like, you know, someone coming along with a lobster cart, and everything's so brilliant. It's because, at that time, airlines could not compete on price, and therefore competed on perks, and were much better off these days when you actually have, like, a real market and real price competition. One of the places where we have less of a free market in air travel is the slot system. Yeah. And there, we have a very limited number of slots in airports. I actually don't fully understand how slots are granted, but do we kind of have a breakdown of competition in certain airports, because you have this, like, wacky slot system? Yeah, but I think it's sort of at the margins. What's bad for customers is scheduling more flights than an airport can handle. That's what's really bad for customers. Well, did that happen in Chicago, though? It, eh, maybe it was gonna happen. It happened in Newark, historically. And we finally got it effectively slot-controlled in the airport. It's now the most reliable. Oh, you wanted slot control? Yes. Because it's bad for customers? It's horrible for customers. Like, I begged the FAA, and we finally did it. Well, but that's the contrast, right? In Chicago, you're making this move. They have this wacky law. Every year, they re-sort of- What's the wacky law? So, every year, they take all their flights previously and reallocate the gates. But it's kind of a weird thing, because it takes a while to move the gates. So, it's this weird time delay that's introduced into it. Yeah, it created a bad outcome. It's part of how American got to lose in a billion and a half. Because what happened in Chicago, American wasn't paying attention and lost six gates to us. But, like, they weren't paying attention? Like, they, it's like forgetting to renew the internet domain? It's like, they just- By the time the erosion was going on, they, United had added on so many flights. We hadn't done anything. We just, we went back to our normal pre-COVID schedule. And American was focused on the Sun Belt, and they talked about it public. You know, Phoenix, Dallas, Miami, you know, more demand, leisure demand. That's what they were focused on. So, they just didn't add back their schedules. And we didn't do anything special, but because they did it, they lost gates to us. You have to have slots for, you know, because it's the only way to manage a limited resource. And they're mostly grandfathered, which is probably fair. Like, you know, if you're British Airways, and you've invested billions of dollars in London to build facilities and stuff, and then they say, oh, we're going to take them away and give them to someone else. But there's a balance here. You both want people to earn a return, and you want Schumpeterian destruction, where British Airways should only be allowed to recoup so much investment, right? Yeah, I think the better answer is to change air traffic control and create more slots. Yeah. That's how you, you can create more slots with better air traffic control. And then you can allocate those in whatever way you see fit. But the other thing that's happened at all these big airports that have slot controls is the government entities that run the airports have made the cost so prohibitive that there's no low-cost carriers can afford to fly there. The New York airports are now $52 per passenger to fly at the New York airports. Spirit Airlines, before they liquidated, average price, average fare was $58. You had to be a rocket scientist to figure out if you're paying $52 out of 58 before you buy your fuel, before you buy your airplanes, before you pay your employees, before you do maintenance, that just mathematically doesn't work. The airport authorities, and the big airports in the country are up something like 70% of the expenses since pre-COVID to today. They've just priced low-cost carriers out of the market. Well, didn't you price low-cost carriers out of the market? We didn't price them out. You had the basic level, and you sort of did much more fine grain cutting up on the seats. The low-cost carrier business model is predicated on having a price advantage, being able to charge a lower price. We created a basic economy where we could profitably, and we up-gauge airplanes, so we could profitably be competitive on price most of the time. If we're competitive on price, there's no reason. My joke was, people may make the mistake of flying Spirit once, but they're not gonna do it twice. Why did Spirit go bust? Because they weren't charging as much as their cost. They were not able to charge enough. It's pretty, it's simple. It was simple. They weren't able to charge enough. And look, what's happening- Because of cost inflation, basically. Cost inflation, but there's a whole bunch of things. But fundamentally, what I think has happened to the low-cost carriers, there's really one still low-cost carrier successful airline in the world. It's Ryanair. I was gonna ask. The fundamental premise of a low-cost carrier is to fly to low-cost airports. Southwest, when they started flying here, they flew to Oakland, not San Francisco. San Francisco's too expensive. In LA, they didn't fly to LAX. They flew to Burbank in Ontario. LAX is too expensive. And Ryanair still does it. Ryanair doesn't fly to Heathrow. They don't fly to Charlottesville. They fly to secondary airports, because they're low-cost. So all these companies- And all in the US, every single one of them abandoned that, and then they went to fly into, I mean, it's, I don't know why. They run out of customers, right? So they have a lot of- Yeah, and they went into Chicago, and Newark, and San Francisco, and back to the New Yorker, you can't charge 58 bucks when you're paying the airport authority 52. You just can't. Is it a chasing growth story? I'm always very impressed by In-N-Out as a business, because they don't chase growth. They famously do everything within one day's drive of the refrigeration centers, and so they are distribution centers, and so they're only in the California West Coast-type area. And they don't feel the desire to go crazy on the menu, and like, we have the salad this, and we have the whatever that. It's good they keep the menu very narrow. And I feel like, maybe if they're a public company, they would try to chase growth, and we're gonna expand this way, and they just do the same thing exceptionally well with a cost advantage. Is the problem that as public companies, maybe, or as just like short-term oriented companies, they had this good thing, flying to Oakland, and flying to the secondary airports, and for whatever reason, they just got distracted from it? Yeah, I would actually say a little different than just chasing growth. I would say, know who you are, know what your strengths are, and stick to your knitting. Companies are not good at trying to be something they're not. And in the past, you know, this predated me, but all the big airlines, you know, American, Delta, Northwest, Continental, tried to go compete with Southwest by creating airlines within an airline that were gonna try to out-Southwest Southwest. And in Europe, they still do it. And in Asia, they still do it. They try to out low-cost carrier, low-cost carrier, and they're terrible at it. And every single one of them has been, nobody does it well, because that, and by the way, Southwest is now trying to be like us. They're not gonna be very good at that either. Um, like you've got to stick to the things that you're good at We aren't gonna ever go try to like right compete with the Legion Airlines and be a Legion Airlines because we'd be terrible They're better at a leader if they try to compete with us The low-cost works, but you have to understand you got out You got to stick to it and and you got to accept that there's limitations like, you know I'm not gonna be as big as United Airlines. I'm not gonna fly to Chicago. Oh here I have a great Legion is an example of Allegiant Airlines You know, it's mostly applies to Vegas they fall from small cities they they've done a great, you know They they're one of the four airlines is gonna be profitable this year. What else have you learned from Reiner? The guy is entertaining No, no, I would like to yeah and he's yeah and you'll get a few more swear words when you get out of me He knows his business exceptionally well. He's very impressive CEO, but they're also like in-house. They have avoided distraction where they're disciplined They always get asked about discipline A better way doesn't work because you don't get the low-cost advantage when you can write the number of turns be high enough Yeah, they get asked about Wi-Fi and the planes and it's like guys the flights are short Just look at your phone for an hour or something. You know, you don't you don't need it on an hour-long flight. He's disciplined Yeah, it's that's a better way of saying so getting outside. You have to be disciplined to be successful. Yeah and Companies, you know get stars in their eyes and they're not disciplined What's the version of discipline for you because it's easy like United's you guys are a huge global airline You fly big aircraft. You fly small aircraft to fly internationally you fly domestically and so it would be easy to want to do Everything where it's like we're competitive, but we have a great wine list. So what is your version of staying disciplined? For an airline business discipline is really about where you fly the foundation Our product starts with you fly routes that work money and fly places to make money Like every time I go like where where you less point-to-point in the domestic So we don't fly point-to-points, right? And like I hear it all the time in LA yesterday when I do stuff at San Francisco tomorrow the employees like they're always Asking what to fly, you know new routes and point-to-point routes and like it won't work for us We are airline that flies to our hubs. We find our hubs That's our strength and a whole bunch of reasons that works and we're not gonna go try to fly point-to-point routes But if you're not first your last maybe not first your last and that's true in the airline business And it is by market like it's not overall. Yeah Like, you know people in Dallas asked me like when are you not fired because we'd lose, you know American has too much network depth and if you know when they fly from Dallas to Los Angeles 75% of the people on the airplane are connecting from other destinations and if we're just flying down So like we can't compete like because we don't have any connections, you know compete for 25% of the market doesn't work Does that then mean like the little decisions you make are? Okay, should we fly from is it Newark to Greenland like that's a little decision The big decision is are we going to? launch a beachhead and take a new hub and How frequently do you make those decisions? Rarely is the last big hub up like Denver when you grew it hugely like we've but those were an existing hub that we chose to grow JFK in my 30 year career. I've closed three hubs and never opened a new one It's a hard decision to do. There's very rare that that's Lots of examples in the airline industry of that not working and almost none of that working in the post deregulation era and so do you think it's Basically impossible to launch a new hub these days. I'd like building a new airport. It just hasn't happened in the last 50 years Yes, it's a short answer So like take the southeast. Yeah, we it's the one part of the country where we're we're number three America because Delta has a hub in Atlanta America has a hub in Charlotte I'd like us to be bigger in the southeast. It doesn't matter to customers, but there's just simply no airport That's big enough where we can be competitive. We would need to have 600 flights a day to be competitive with American and Delta and you know, like the biggest city that sort of would work that's a big enough city. Maybe is Raleigh Durham But you couldn't the airports not big enough none of gates non runways like you couldn't have 600 flights a day Try to do something just because it's a cool vision like we don't do we're disciplined But this would be a big enough deal for a region that could you work with Raleigh Durham to expand the airport? Expanding airports in this country is like a Decade long process. Yeah more that's optimistic probably. Yeah. Yeah. Okay. So you think it just Yeah, I think it's just yeah, you know, okay, so discipline for you Do you it's possible someday will you know, at least experiment with going into a new airport? It's possible someday will you know at least experiment with going into more into you know a big city That's not really a hub for anyone but and Delta's done some of that, you know, it's been I think sort of breakeven ish But they've not did though. This is not a hub at all But way back in the day used to have a hub in Japan in the Rita Yeah and you've added a few like connecting flights and I'm Hong Kong to Thailand and And you're flying to Kaohsiung from from the Rita now, is that just more on the margins sort of things or It's on the margins, but there are places like in Tokyo we have connectivity with our partner, right? um, and so a lot of the people that and like Ulaanbaatar we realized that something like 12% of the people that were flying us into Tokyo were Ultimately trying to get to Ulaanbaatar and it was really hard It was the only in the summer but it was but it was a high percentage of people for vacation Yeah, am I missing something and I haven't been to Ulaanbaatar. Am I missing? I haven't been there in my mom with my mom travels a lot. She's my five benefits. It travels a lot But you know, so we'd seen that data and we added the flight but now it's a lot of the people that fly us into Tokyo connect on to Ulaanbaatar it was a particular flight that it was 12% You know at one time a day at that time a day But then we also have all the ANA connections and so they weren't fine at Kaohsiung's the same thing For us like a Sapporo. That's a little be fun. Sapporo is booking really well. It's It's gonna be that for skiing or skiing. Yeah. Yeah, but Japan has become like the hottest destination for tech people here in San Francisco people just love it and I even like in Dow like people love Japan like I have all kinds of friends that you know Like we went to Japan for spring break and they just they love the food. The people are great, you know They just love it. So what I'm taking away from this is that route selection Makes or breaks Airlines. Yes, it broke, you know spirit or the low-cost carriers it broke American and this, you know Fracka you guys had us. Yeah, they have accepted that it broke them, but it did But and then similarly success means a disciplined route expansion strategy that I'm just trying I mean look that's pretty insightful That's like I tell new CEOs which a minimum called talk to me I don't think any of them taking my advice yet, but I tell them the one thing I'll tell you I start with like the route the route network is the foundation if that's broken doesn't matter How good you do it everything else if you have bad routes that lose money, you cannot make the airline work. It is impossible and You're gonna hear you're gonna if you look through the route, you know What you should do you're gonna see a bunch of negative flying and when you ask people about it They're gonna say it's strategic. They're gonna have convincing excuses that well, they're gonna call it strategic Yeah, and if you hear the word strategic flying, you don't need to know what hub it is You don't need to know what route it is. You should cancel it You have to stop flight anything that if you default to it loses money But it's strategic like I have to cancel it and they don't do it. What are the lies people tell themselves to convince? Themselves to stay running a month. Like what does it mean to be strategic corporate customers something? Yeah, or credit cards like, you know, if we're not big in this city, then we just won't get that The biggest tail risk if credit cards ever go away is no, it's not nearly as big as people think but the perception amongst Yeah, the perception is big because people look at they can see the round of revenue that we get they say Almost all your profit is coming from your net profits go to credit card. Well, yeah, but there's a cost we carry over 50,000 people a day 50,000 people today will fly free on you not free on United Airlines by using their credit card miles So like nobody counts the cost so oh you're saying they just can't do an accurate contribution process All that we disclose is the revenue. Yeah. Yeah, it's a goal. Look at the revenue like 50,000 people a day are flying for free. There's a cost of carrying 50,000 people Okay, so the whole like Twitter meme of airlines or a credit card business with you know, it's just wall attached It's just they're holding the financial statements up to upside down. Well, they are don't ignoring half there They're looking at the revenue side Ignoring the outside. I mean, it's important. It's good. Yeah. Yeah, but but it's blown way out of port But it's blown way out of how do you think about changes the frequent flyer program? You just went to I think $32,000 or whatever you call it points Yeah, which I I appreciate getting rid of this segment one because I never qualified on that one So I appreciate the simplification, but is that a you in general just seem to want to keep the riffraff I wish like the Wi-Fi To be right below Years, I've always well exceeded 32,000 so it's no problem for me and I want empty your lounges. So it's all good But like what's the calculation in that like Delta obviously has gotten a lot of grief from my frequent flyers and the changes they've made Yours seem to go fairly. Well, like what do you think that was? So I don't think about it through the lens of the frequent flyer program I think about how do we build brand loyalty and the frequent flyer program is one of those things and And so really like if we're doing something that's going to detract from brand loyalty Like there's got to be a good reason to do it and you know clubs are you know How many people are global services member like people love being global service, but we limit it. It's an exclusive There was one year. I thought I was gonna make it January past Clubs are another example like this another thing like during kovat I I'm pretty sure we're the only airline that did this like we doubled down on club investment So we've doubled our square footage of club space from pre-code today more than doubled and it's gonna grow by another 50% Like it was the one time in history. If you close a club, it's complicated But you close a club like it makes customers mad in the short term like you have to do it Sometimes we expand it but codes like the one time in history like we had to spend money But like we had no customers so like we can get away with doing it. We could do it faster like So expanding club space is what we have a bit. We're gonna do more of that. But those are the kinds of things that were We're more focused on but any changes to the frequent flyer program are about trying to build loyalty And that is just we could deliver a better experience if there's yeah fewer people well, sometimes it's that you know, and and It you guess there's a only certain number. We're putting more first-class seats on but at any given time we only have so many, you know first class seats On airplanes and so we're calibrating the program existed to make it valuable to make it valuable, you know for Loyal customers you run the star lines Board not anymore. Well, you used to Carson And what's that like? It's kind of an interesting construct, right? It's one of these businesses where The airline business one of these businesses where these are competitive. I mean kind of Competitors, but you do run some overlapping routes, but it's better to work together But then you got to pick who you work together Like yeah, how much you picking based on you like the vibe of the other CEO versus it's strategic. How much does that change? So we're all kind of locked into alliances now. It's hard to switch And with the real value for customers is being able to connect on to places that we could we don't fly to you know So when we fly, you know We fly to Frankfurt in Munich and I think we have you know Four times as many flights into Frankfurt in Munich as American and Delta combined But it's because we have a partnership with Lufthansa and those people I think 60% of the people on our Frankfurt Munich flights are connecting beyond Munich And so they're going to Kazakhstan, you know all kinds of places that we don't fly to so that's the value for customers the downside is the experience Doesn't feel the same as on United and that's what we've been working to do And we've made a lot of progress like a few years ago Actually, I finally like I've asked and asked and asked other airlines about this and if I said if you don't have Seat assignments available for our customers. We're gonna turn off our partnership with you And I got everyone to do it like I've been begging it We've been begging them to do it for years But just wasn't a priority for them that other stuff wasn't their priority and we finally had to say we're gonna cut you off Unless you do it and so my focus on our partnerships has been How do we make the customer if if a United customer is flying on any of our partners? How do we make it feel to them like it is still United Airlines? and And I think the other airlines, you know ought to be doing is that the nature of the partnership you provide the most customers? And so that all yeah, we're by far that We're by far the biggest You know and the access to that, you know have the big hubs Lufthansa's second, you know across the Pacific You know a and a is big. There's several big partners, but some of the others are like one of my favorite Airlines is Croatian, you know, I love the people are small between one airplanes the one I love Croatia. It's a great country That's so fun. People are awesome. I like the CEO. I like the culture I like the people and like it doesn't drive a ton of economic value When we were when we try to do new stuff like we're gonna do new technology stuff like they're one of the smallest They raise their hand every time like and so I appreciate that I mean your career is very much defined by Consolidation and doing stuff together and you've been talking about all eyes We should just buy American Airlines or whatever it might be. Is there any is there any limit in your? belief in the power of consolidation and Consumer experience my I might I was gonna start with thank you for adding it My belief is delivering a better consumer experience works like we're not in a commodity business Maybe not true in steel because it's commodity but in non commodity businesses doing things that are good for your customers It's the one and the consolidation that I actually hadn't thought about this the consolidation dynamic that you're referencing. Is that ultimately? Eliminating duplicative flights in a capacity constrained Airport, which is all the major ones means that you can have more selection as That's the Chicago. That's the Chicago example, but it's not just that it's not just that like the American rationale is I would like to create an airline that Americans broadly are proud of that they think of as a flag carrier of the United States if you go to Dubai People are proud of Emirates They may complain about stuff but they're proud of Emirates and they recognize that Dubai The wealthy city-state exists because of Emirates like they're hand-in-hand Singapore same thing. Singapore is not yeah without Singapore Airlines And And I would like to create the same thing. We also have a massive trade deficit with international airlines. It's two thirds of the long haul seats into the U.S. are from our competitors, even though only 40% of the customers are coming from overseas. Because they're all state subsidized, there's a bunch of reasons for it, and I'm not complaining about those. But I would like to create an airline that can compete head to head with those airlines. And by the way, that doesn't craze me, good jobs in the U.S., like a whole bunch of reasons. I would create a great airline in the U.S. that can really compete head to head with state subsidized entities around the globe, on every, not just in totality, but on every factor. Anything we haven't covered? Well, he does have seven kids. He goes to soccer games, reads a lot of books, and apparently runs a global airline. Yeah. How do you pull that off? I'm very efficient with time management. Was this a post-kid thing? No, I've always been. Oh, you've always been. I'm like, I got a bunch of weird quirks, if you want to ask, but my wife can tell you that are time efficiency. Please, talk to the weird quirks. You can't set that up and then not share. So, the one that people find the most amusing, I think, is 90% of the time you use a fork, I use a spoon. And by the way, I use a serving spoon. Completely agree. It's so much more efficient, a salad. Like, eating a salad with a fork. But the lettuce will fall off, no? No, I cut it up, and then you can mix it all up, too. It's tastier, because you get all the little bits and pieces on the spoon. You get all the stuff, and it's like, I watch my wife eat, she's mad at me. She stabs a tomato and eats a tomato, then she stabs a piece of lettuce and eats a piece of lettuce. Like, it doesn't taste good, and it's faster. And like, a salad which has little nuts and cheese crumbles and stuff, you eat it with a fork, and all that's left, all this good stuff falls off and is left on the plate again. And I presume your wife loves you salad-splaining her like this and telling her how to do it. No, she gets super annoyed with me. But the bigger things are, I only have two to three hours of meetings a day. I limit myself to two to three hours. And I don't waste time. And in particular, I'm not on social media. I do write my own stuff for LinkedIn and Instagram, but I don't even know how to log on. And I watch other people on TikTok or YouTube and like, oh my god, what are you doing? It's such a time waste. I don't watch TV, really. I just don't waste time. And if you don't waste time, you've got time for a whole bunch of other stuff. And you have the sleep one, right? And I sleep eight and a half hours a night. Last night, I slept over nine. I do find the short sleeping contest in American business a very funny one because it's like very proven deleterious cognitive effects. Yeah, and you can watch people in meetings that don't get enough sleep and they're not technically asleep, but their brains are turned off. You can just see they're zoned out. And I've always slept a lot. But one of the other things I used to do is count cards. And I particularly realized it. When I'd go to Vegas to count cards, I would only sleep like three hours a night because I just wanted to maximize time at the table. And I realized that when I got tired, like- You lost count? Well, I was having to go back and check. I was like, normally I could just glance at a table. I'd done it so much, I'd see it. And then I was having to like, I realized this is, I'm probably making mistakes. I'm maximizing time and losing money. I've maxed, you know, when I get tired, I need to, and I stopped doing that. I started just going to bed and getting back to my eight and a half hour sleep. Are you still allowed back to Vegas, or are you blocked? I mean, I'm allowed to go, but I'm not allowed to play blackjack. I still, like, I went back for the Super Bowl when it was in Vegas, and I'd gotten a credit line set up to play poker. And so I sat down at the poker tables, had to give them my ID. And so they came back out and a manager came over. And like, it was like 15 years ago that I got barred at the Bellagio last time. The manager comes over and he's like, Mr. Kirby, you're welcome to play any game in the casino, but just so you know, still no blackjack. I wouldn't play it, David, okay. That is like, it's like when you get a little bit older and you buy some booze and they check your ID. That's like the platinum version of it. That's true, that's true, that's true, yeah. And with card counting these days in Vegas, are they- It's impossible today. Yeah, so are they blocking us with multiple decks and shuffling frequently or whatever? Well, they've also changed the rules. So that's what you're saying, right? The rules, it's like six to five blackjack. Like, the math is impossible. They've just subtly changed the odds, so you can- I don't think it's very subtle. I think it's very subtle. Apparently, people still do it. All righty. All right, this has been fun. This was awesome. I enjoyed it, yeah. Thank you. Yeah, thanks, John. Got deep into a lot of stuff. See you again.