The airline CEO putting Starlink on every plane

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 eight 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 business. And 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 in 2020 in an anticipatory and it's really paying off today. So my AI epiphany that I think has happened within the last eight months is I don't think AI, like summarizing documents and all that kind of crap, I think it's like ridiculous.

Summarize my calendar, summarize my day. 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 Vine Coded app. I don't know if you want it out right now. 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, which helps you make 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 time. You know, it takes time to run. Yeah. I do the exact same set of 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. And I, on my own, in two and a half hours, created a web page that had 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 four sportsbooks, Kalshi being one of them, not actually a sportsbook, but four sportsbooks.

And 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 sportsbook had the best odds and make the bet on my behalf. We're aggregating the switch points. We're blocking you pretty soon, yeah. 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 think I called him on that Saturday, you know, our team, and, like, we're all in a mess. On that point, though, he did tell me when I asked him about it, they had this huge switchover coming the following week, and it went off without a hitch.

So I remember that was actually flying the next day. It went off without a hitch. And we actually, that one, you know, we do for those, is, I think I told you, like, we, 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. That was a switch from one of the biggest, you know, one of our biggest, most critical mainframe systems that'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 during that window so that in case something goes wrong, we're not putting customers in harm's way.

you know like you know know what you want to drink you know do you want a gin and tonic you know. Do you want your normal gin and tonic? I want your excellent wine selection.

Do you want your gin and? I don't think we have gin and tonic 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 deliver something i didn't expect yeah 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 maintenance issue but i'm like it's going to be super tight in denver but connection saver is going to save me and 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 yeah i was kind of crushed because i like so you're surprising to like feature yeah but i'd already internalized it as you do this amazing thing yeah um and it's a large airline how do you like it's hard to have you know we've we um we have to get really good at communicating uh on it um a couple 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, they're going to be the same. And so we're not going to just have to text you about your connection. 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?

No, no, you shouldn't be disappointed. Because what we should do is communicate with you really well on that. But another cool thing that I hope we're going to have rolled out actually, well, we're going to roll it out pretty soon. I've told them I want it done by Christmas, for Christmas trouble, because there's 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? Can I do about that? Like, what can you do?

Yes, it's December in Denver. I'm aware. We'll give you a little shot of anxiety before your trip. So what we're doing today, already have 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 screen. On the screen, it's going to say, your flight. flight to Denver has a 41, we estimate 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 like, how do we like 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 and says, wow, I've never seen that before. And by the way, we get credit for that one time. I know. 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, you know, in the future. And that's cultural to try to do. 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 bench maxing 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, you know, do so because they have like really nice meals and very well-coyed flight attendants and, you know, 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. I'm 100% with you. I think those airlines do a good job. And like I say, schedule is 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, like sending customers weather radar maps and like 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 uh you couldn't and so we're like why we'll find outside we we sent half the people the normal weather delay which they think you're lying um because sunny outside like you must be lying to me um and we sent half of them a picture of 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 send them a picture of the map. 120-point difference. It wasn't just that they weren't mad. They were actually happy. They're like, thank you for everything. Yeah, it was better than an on-time flight. People can handle, like, they understand they don't want to 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 going to get expectations management. Why isn't it expectations management? Because I don't want to 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.

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 kind of topics and you want to 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've flown in 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. If you were the largest airline, had infinite capacity to expand. How is that? And is that just another articulation of the premium strategy? because more routes is a benefit outside of cost? It's the basic, it's understanding of how networks work. So the real reason for that is there's a limited number of flights at Chicago.

And so if you're going to 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. 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 and getting off the airplane to Chicago. They're connecting on to other destinations. And that's really important. And we have several hundred of those connected. you know, catchment area flights for connecting customers within, you know, 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 the re 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 they have half as many catch 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, there's no—Chicago should be the biggest airport in the world. It's not. And it's because of this. I'm 100% sure it's better for the city of Chicago.

And I think it's going to—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. We sort of passed over at King 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 we're 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, in Chicago, there's sort of been a competitive battle there.

But look at our market share gains in Chicago, we went from having lower market share than American to basically having double the revenue share. Those are unprecedented kind of share shifts. The market share shift that we've had against Southwest in Denver is even bigger. The market share shift we've had against Southwest in Alaska combined here in the Bay Area is even bigger. So it hasn't been directed at them. With respect to Delta, I think that what's happening right now with Starlink is the biggest push. That's what we want to get to. Is Ed going to lose his job? 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. They were the first airline to start down this, building a brand loyal. I don't call it premium because I want to invest nose to tail for customers. Starlink applies to everyone. It's not a premium product. It's for everyone on the airplane. But they've done a lot of really good things. um but starlink i think starlink behind the schedule is the most important thing for customers to choose an airline now and we are going 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 because they were certified this is the fa process you have to get the other airplanes certified um and uh and so we're getting we've been getting them all we're doing about three airplanes a day i mean in fact it's going to go up by two points in a week and a half.

That's all they've got to do. To this Asian airline point, like you have a joint venture with A&A. And most people I know who fly out to the Pacific would often choose the A&A flights. And now going forward, of course they're going to choose the United flights because of the 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 are loyal to other, 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.

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 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. 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 these 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. And like our constraint on investing in technology is how much can we manage? It is not money. You've talked about, yeah, airlines being run by operations people where taking cheese out of the pizza is the only move. What has given you more social permission with your investors, with your board to do things like the big 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 guess, I don't know if we talked about it here, but I think reading as much as I do, you know, we talked about the two, like I think people that do that, connect dots, can see the things in the tails 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 Chasm X, which is your cost per available seat mile, to be like, we can't control airport fees that are going up. Union contracts are what they are. Like the only way you can cut the budget is to not invest for the future. And like, we just, we're going to invest for the future. And in the long run, it works out. And like other CEOs, like I'll hear other CEOs. complain about oh wall street is short term and like like and what i say to them is like yes they are like that's like stop complaining about it and that is what it is but what you should do is invest for the long term do the right thing but by the way if it doesn't work you ought to lose your job and you ought to be comfortable with that you get paid a lot of money like make the big bet if it works great shareholders will like it but if it doesn't work you deserve to get fired and if you're not willing to take that risk then stop complaining about it 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. Yeah. But the actual job, like how many employees does United have? 120,000. 120,000, which a wide range of skills and abilities. Some are on the ramp. Some are doing route planning. How do you, in all this experience, like what is the key to managing that and getting people excited? You're dealing with unions, all these sorts 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 loyalist 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 fun. 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 at Kitty Hawk.

and 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. Has the structure changed? Presumably you think yes. And what has changed such that airlines are no longer the poster child? Yeah, well, yes and no. So, yeah, it had gotten better, but, like, you look at 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. They're 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, it's not unique to that airline. There's basically every airline, almost every airline in the country has a place where they 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 is 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. Well, 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? It's probably not quite the Juan trip, but there's still a lot of ego. that's happening um where people are you know adding routes that like i started as a route planner i could look like you're gonna lose that's gonna be a negative 40 margin you know between negative 30 and negative 50. how are you guys thinking about routes you've added a bunch

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. Where, 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 Nuke maybe makes sense. They just replaced it, and that's the new route that you guys have. But they're replacing the airport in Narsarskog. 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 It's for a country of, like, 50,000 people. Yeah, they're also going to spend their money on it. But 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, you know, it can really drive the economy. I want to talk about the tech for a second. Yeah. So how should we feel about the last few decades of, you know, 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 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 these examples people trot out of stasis.

How do you feel about the rate of technological improvement in airframes? It's maddening that we haven't done more. In fact, this book, where is it? Impossible Factory. It's a Skunk Works book. I want to read this. I had not known there's a new Skunk Works book. Clarence Kelly Johnson, and developing the SR-71, the U-2. know 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 pacing the frontier and if no one had they if you don't have an option you know like we need a third aircraft manufacturer to be blunt okay so you think there's basically a breakdown of competition yeah so like neither one of them their investors don't want to invest 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'm on a 757 boat, actually, Chicago. I'm a little nervous about a great plane. The takeoff's amazing. Yeah, 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 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 going to 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 JetZero who's trying. Is that an airport challenge, though, too? Here's airport challenges. It's bigger, so airport space. But that's really a gate challenge. So you've got to re-gate. 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 Relax Row 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. Oh, yeah. But we have little United stuffies, airplane stuffies. I've already got some from my kids.

My kids love them. But that's another cool United thing. Is that an example of like basically a lot of the economic outcomes that you're looking for? I sort of pushed you on this with the premium question. Yeah. is how can you take a large fixed capital product and basically deliver infinite numbers of strata, of like pricing? Yes and no. Like 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 going to not even be a rounding error in our financials. Right.

But it's cool. And it's good to do stuff that's cool. Good for families. I also, I said earlier, 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 going to make it great for everyone. And Relax Row is perfectly consistent with making it easy. Starlink is great for them. Seatback Entertainment. I love walking through our airplanes with 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 Bowie. And, like, it just makes hours so much better. I heard you can now watch Cheeky Pint on there. You can now watch Cheeky Pint on the Inflash Entertainment. Yeah, that's cool. That's pretty cool. So people are probably watching this. Maybe I'll watch this. Exactly. You can just put it on. Yeah. Okay, so when you're saying things like the Relax Row, social media has almost changed airline marketing where there could 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 do, I look at, we're trying to build a brand. You know, all the Starlink stuff that's happening. Sure. You know, I kind of feel bad for Ed. Just kind of, you know, getting into a fight with him. But like... Love it for us. Like, we were actually, we had a big push that was coming. Like, we were obviously prepared. I was going to ask one. How did you decide to run those ads, right? We were already prepared. You only have 50%. We were waiting to actually, we're going to cross the 50% threshold next Friday. And so we're waiting until then to sort of, like, we're going to really push, like, going.

So we were going to 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. 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 um or creative or fun or interesting because it just gets watered down um 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 you know i was at a cbs 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 do 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. 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 so brilliant. It's because at that time, airlines could not compete on price and therefore competed on perks. And we're 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. And there, we have 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 was, 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 controls because it's bad for customers? It's horrible for customers. Like, I bagged 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 a number of 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. It created a bad outcome. It's part of how American got to losing a billion and a half. Because what happened in Chicago, America wasn't paying attention and lost six gates to us. But, like, they weren't paying attention. It's like forgetting to renew the Internet domain. It's like they just. By the time the roads were going on, they had added on so many flights.

Well, no, we hadn't done anything. We just, we went back to our normal pre-COVID schedule. Yes. And America was focused on the Sun Belt, and they talked about it public, you know, Phoenix, Dallas, Miami, you know, more demand, leisure demand. And 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 it's 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 can create. more slots with better air traffic control and then you can allocate those in whatever way you see fit um but the other 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 there's no low-cost low-cost carriers can't afford to fly there the new york airports uh are now 52 per passenger to fly at the new york airports spirit airlines before they liquidated the average price, average fare was $58.

Like, you don't have 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. Like, they've just priced low-cost carriers out of the market. Well, did you price low-cost carriers out of the market? We didn't price them out. Well, you had the basic level. And you're sort of much more fine-grained cutting off of the seats.

We stocked, the low-cost carrier business model was predicated on having a price advantage, you know, being able to charge a lower price. And we created a basic economy where we could profitably, and we upgaged airplanes, so we could profitably be competitive on price most of the time. And, you know, if we're competitive on price, like, there's no reason, you know,

One of the lies people tell themselves to convince themselves to stay running a month. Like, what does it mean to be strategic? Corporate customers, something like that. Yeah, or credit cards. Like, you know, if we're not big in this city, then we just won't get any credit cards. Is that the biggest tail risk, if credit cards ever go away? No, it's not nearly as big as people think. Yeah, I was going to... The perception is big because people can see the amount of revenue that we get.

They say, oh, almost all your net profit is coming from a credit card. Well, yeah, but there's a cost. We carry over 50,000 people today will fly free on United Airlines by using their credit card miles. So, like, nobody counts the cost. Oh, you're saying they just can't do an accurate contribution process calculation for credit cards? All that we disclose is the revenue, and it's like, oh, look at the revenue. 50,000 people a day are flying for free. There's a cost to carrying 50,000 people. Okay, so the whole Twitter meme of airlines or a credit card business with airplanes attached, it's just they're holding the financial statements upside down.

Well, they're looking at the revenue side and ignoring the cost side. I mean, it's important. It's good. But it's blown way out of proportion. But it's blown way out of proportion. How do you think about changes to the Frequent Fire program? You just went to, I think, $32,000 or whatever you call it, points, which I appreciate getting rid of the 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 out, like with the Wi-Fi, with the... Ben wants to cut off to be right below Ben. Yeah, yeah, yeah.

That's right. I applaud these changes. I've looked back on the past few years. I've always well exceeded $32,000, so it's no problem for me. and I want emptier lounges, so it's all good. But what's the calculation in that? Delta obviously has gotten a lot of grief from my frequent flyers and the changes they've made. Yours seemed to go fairly well. 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 so really, if we're doing something that's going to detract from brand loyalty, there's got to be a good reason to do it.

And you know, clubs are, you know, how many people are global services members? Like people love being global service, but we limit it. It's exclusive. There was one year I thought I was gonna make it. I did this January past and everything, it's very sad. Clubs are another example, like this is another thing, like during COVID, I'm pretty sure we're the only airline that did this. Like we doubled down on club investments. So we've doubled our square footage of club space from pre-COVID 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, it makes the customers mad in the short term.

You have to do it sometimes to expand it. But COVID was the one time in history, we had to spend money, but we had no customers, so we could get away with doing it. We could do it faster. So expanding club space is where we're going to do more of that. But those are the kinds of things that we're more focused on. But any changes to the Frequent Flyer program are about trying to build loyalty. And that is just, we can deliver a better experience if there's fewer people. Well, sometimes it's that, you know, and, you know, yes, there's only a 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 to make it valuable, you know, for loyal customers. You run the Starlines board? Not anymore, fortunately. Oh, you used to? Carson. I see. What's that like? Because 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 competitors, I mean, kind of competitors, but you do run some overlapping routes, but it's better to work together, but then you've got to pick who you work together. How much are you picking based on the vibe of the other CEO versus it's strategic? How much does that change?

So we're all kind of locked into lines now. It's hard to switch. And the real value for customers versus being able to connect onto places that we don't fly to. So when we fly, we fly into Frankfurt and Munich and I think we have four times as many flights into Frankfurt and 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 and Munich flights are connecting beyond Munich and so they're going to Kazakhstan and 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 got asked and asked and asked other airlines about this. And I finally said, if you don't have seat assignments available for our customers, we're gonna turn off our partnership with you. And that got everyone to do it. Like I've been begging them, we've been begging them to do it for years, but it 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 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 I think the other airlines ought to be doing this. Is that the nature of the partnership? You provide the most customers, and so that ultimately gives you the answer. Yeah, we're by far the biggest, you know, and the access to have the big hubs. Lufthansa is second, you know, across the Pacific, you know, A&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. They're small, like 21 airplanes. One, I love Croatia. It's a great country. It's so fun. The people are awesome. I like the CEO. I like the culture. I like the people. It doesn't drive a ton of economic value. But when we try to do new stuff, like we're going to do new technology stuff, they're one of the smallest. They raise their hand every time. And so I appreciate that. Your career is very much defined by consolidation and doing stuff together. And you've been talking about, oh, we should just buy American Airlines or whatever it might be. Is there any limit in your belief in the power of consolidation and deliver a better consumer experience?

I was going to 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 a commodity, but in non-commodity businesses, doing things that are good for your customers is the winning formula. And the consolidation dynamic, 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 a consumer. That's the Chicago example.

But it's not just that? It's not just that. The American rationale is I would like to create an airline that Americans broadly are proud of, that they think of as a flight 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. They're hand-in-hand. Singapore, same thing. Singapore is not without Singapore Airlines. 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. 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, does it create as many 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, 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 the global airline yeah how do you pull that off I'm very efficient with time management I were you 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 my wife can tell you that are time efficiency please tell us the weird quirks alright you can't set that up and then Okay, 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. 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. And it's like, I watched my wife eat. She stabs a tomato and eats a tomato. Then she stabs a piece of lettuce and eats a piece of lettuce. It doesn't taste good. It does 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, all of its left, all of this good stuff falls off and is left on the tray plate.

And I presume your wife loves you salad-splaining her like this and telling her how to do this. 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. And I don't watch TV, really. I just don't waste time. And if you don't waste time, you got time for a whole bunch of other stuff.

And you have to 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 like, 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 that 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 the 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 and see it. And I was having to, like, I realized this is... I'm probably making mistakes. I'm maximizing time and losing money. I'm maximizing, 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 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. So they came back, and a manager came over. It's 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 wasn't playing it, but 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 this. That's true, that's true. And with card counting these days in Vegas, are they- It's impossible today. Yeah, so are they blocking this with multiple decks and shuffling frequently or whatever?

Well, they've also changed the rules. So that's pretty much the actual one. It's like six to five blackjack. Like, the math is impossible. They've just subtly changed the odds. They've changed the odds. I don't think it's very subtle. apparently people still do it alrighty this has been fun I enjoyed it thank you got deep into a lot of stuff