United Airlines Is Bullish. Should It Be?

Hello and welcome to the airline Weekly Lounge. I'm your host Gordon Smith and I'm joined as usual by Co-host Jay Shabbat. In this week's show, we're crunching United's latest numbers. Hi Jay, how's it going? All right Gordon and you do very, very well back from my travels as anyone who's watching as opposed to listening will be able to tell back in sunny Lisbon. I can just say use my platform unashamedly to say I've been on a lot of flights recently and one thing, despite all the innovation we've had in the industry that is still below par for what it should be. The bread. It's my age, you're still okay. Oh my god. I not on skift all over for anyone in the finance team has a heart attack. I was at a couple of flights and premium. I had some flights in economy and it was just everywhere. Didn't matter where you were flying, if on a Western carrier, on an Eastern carrier, on a Middle Eastern carrier, business class, premium economy. Economy, I covered it all over the past few weeks. The bread has been lousy everywhere. So listen, please improve the bread. Yeah, kind of feel your pain there because I am a bit of a bread snub myself. I like good bread. Yeah. Do you sort of one of those people you like? If I'm going to have the bread, all the carbs and all the processed stuff, you might as well make a good bread. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Like, you know, if it's eating a croissant, I don't want a good croissant. A little bit of a snout about it area. Credit worst to you, not on this latest itinerary, but I have actually once had an incredible bread. You're not going to be able to guess where it was. I'm going to ask you, Arizona, flying to Almaty, garlic bread was 10 out of 10, the best I've ever had on the ground or in the sky. So more power to you, Arizona, wouldn't go all the way to Kazakhstan for your garlic bread, but it was pretty good. Whoever knew Kazakhstan was famous for garlic bread. Okay. We know now. My understanding is that the former CEO Peter Foster was a big fan of garlic bread and they just kept it kept it going. So then if that's true, Peter, I know I think he stepped down last year, retired from aviation industry. Yeah. But hopefully hopefully the garlic bread lives on. Yes. And if I ever run an airline, it's going to have good pretzels. I really like good pretzels. And they can vary a lot, right? You know, you can get good quality pretzels and kind of the junk pretzels. So yeah, that's for anyone who is thinking about flying, you know, air J in the future, that's expect a good pretzel. Expect nothing less. Gordon airways pretzel free zones. I can't stand them. I've never I've never had a good one. Wow. I'm not sure. We can continue doing this podcast together because I'm kind of offended by that. Anyway, I'll overlook it for now. But the lines have been drawn. The lines have also been drawn in in United world as well, J, because there was some interesting coloring commentary as you might expect from Scott Kirby and company. We've just in the past 45 minutes wrapped up their earnings call recording here a little later than normal on the 21st of October. That's a Wednesday in order to be able to accommodate United earnings and their investor call. Jay, for anyone that missed it or maybe on the cock part of it, what was your feeling? What was the mood music coming out of Chicago and Kirby and Co. It was more the same. All things considered it was a very good set of earnings. Remember, we are kind of going through this. What's some I call a fuel shock, maybe even fuel crisis, mitigated in the US anyway, and elsewhere in the world to large extent elsewhere in the world by very strong demand. United's operating margin for the third quarter was about seven percent, just below seven percent, which again is good. Last year, same quarter did about 9 percent. I can see a little bit of a deterioration there. Delta, you'll remember we talked about them a couple of weeks ago. They had about 9.5. United seven, Delta 9.5. That's kind of consistent with what we've been seeing quarter after quarter. Delta up here, if you're just listening, not watching, I put my hand up in the air. Delta kind of up in the sky and then United, not too far behind. I was thinking about the analogy of the coyote trying to catch the roadrunner, but that's not quite the coyote because the coyote winds up falling on his face and getting hurt. That's not United all. That's maybe some other airlines that we'll talk about in future podcasts. But yeah, so to simple answer your question, it was a good solid quarter, all things considered. It was a good solid quarter. I listened to the colon fool as well. The feeling is, I don't know about you, Jay. We are having a beauty parade here and we are seeing some of the more beautiful candidates, let's say in our beauty parade, first and foremost. It's going to get ugly, frankly, as earnings season progresses, suddenly from a US point of view. You certainly got that from the executives in Chicago today. The impression that Delta and United are very much in a league of their own. It wasn't that hard actually to see Kirby when he was reviewing the successful carriers in the US and from a legacy point of view. He didn't name American airlines, but he also didn't name American airlines, that makes sense. He didn't say Americano doing really crap, but he completely excluded them for the most part when he was discussing successful operators. There was an interesting point of understanding is that at Bastion, he's due to receive recognition of the Wings Club in New York this week and he had some good words for at Bastion when he was asked from, I think, the Leslie Joseph's or one of the others on the call. That was all very interesting, plenty of respect. He said he'd taken inspiration, although he did interestingly say that he thinks United are now ahead of Delta. As you would expect, a little bit of camaraderie and tete-tete between the two big successful carriers there, Jay, but laying in pretty thick into American, and actually the industry more broadly in terms of in this high fuel environment, you can't wing it to pardon the pun. There is nowhere to maneuver when fuel is high and when it's staying high. Fuel prices are high. Kirby thinks they're going to stay high right through next year. He believes others are going to be in the fire line, changes are coming. This idea that there are operators out there, US operators that are on borrowed time. Again, not brand new commentary from Kirby, but it seems to be laying on particularly thick today. Was that your reading of it as well? Yeah, he definitely likes twisting the knife into American, which, as we know, hasn't quite performed up to United and Delta in terms of its profit margins over the past couple years. We know the history of Kirby was on track to become the chief executive of American. He was not chosen for that role. He wound up leading, going to United. Whatever the psychology might be behind some of these words, he clearly enjoys badmouthing American. He mentioned at one point, now I wasn't actually after I heard him talk about the Ritz Carlton comparison. You probably know what I'm talking about because he listened to the call, but he was talking about how just because you invest in a bunch of premium hard products, first class C, for example, it's not like you can just take a Ritz Carlton room, put it in a Motel 6, and it's automatically going to please all the customers. My initial reaction, I think he was talking about American and all its investment in premium. Then I was wondering if maybe he was talking about Southwest as well. I have to go back and look at the transcript. I don't know if you have any thoughts on that. However, he was talking about his point is that, and it's not the first time he said this, Kirby, that United has become, in his words, a brand loyal airline, and there are basically two brand loyal airlines United and Delta, and they're attracting the lion's share of corporate traffic, particularly in markets that where people have a choice. I don't think he's saying that if you live in Dallas, Fort Worth Metroplex, and you're flying all the time that you're choosing United, but if you're in a competitive market like Chicago or New York or Los Angeles, United is winning that game along with Delta. That's he continues to harp on that point. One very specific thing you can see he's United is very much, let's call it, a horse. It's really riding long mileage now is this Starlink service that they offer. They're really putting a lot of emphasis on that. United says that it's really making a difference in terms of the, as a decision factor when people are choosing which airline to fly when they have a choice. They do have this advantageous position where American will get Starlink, but they're quite a bit of a ways behind in terms of installation. And then Delta is, they didn't go with Starlink. all are going to go with Amazon's product, which isn't ready yet. So they're quite a bit behind. So, United is really, really emphasizing that point. They're using it in the marketing and, you know, insisting that they'll gain some market share because of it. Yeah, I think it's a great point. And if anyone wants to play a United Airlines drinking game, completely unofficial, unrelated to the airline of the start of the game. Well, for you and your drinking companion, it doesn't have to be alcohol. It can be orange juice or soda. But if you want to, if you want to. Can you need a pretzel? No, I'm not. I won't go there. I won't go there. Sorry. No. Come on. You can have a pretzel. You and your drinking companion, whatever you may be drinking. One of you does a shot every time Starlink was mentioned on I call your companion for brand loyalty, because I agree, Jay, they were the two mega buzzwords. Every question that was asked, somehow they were able to bring it back to Starlink and brand loyalty and this idea that it is, like you said, just United and Delta in Kirby and team's mind that have that stickiness. And this idea as well, you know, the turnaround strategies they were asked in the Q&A after the prepared statements. Kirby saying that hope is the strategy of a lot of U.S. airlines, when that frankly is not going to be good enough, you need to hold package, he said, and they, I don't know if you agree or disagree with this. I have some strong thoughts. Kirby thinks that they've got the best product in the Western world, airline wise. And he is mindful of saying, not just the hard product, but also the technology, the back end, he said they've been investing hundreds of millions with limited visibility in terms of what the ROI would have been going back five, six years on how it is actually going to affect customer behavior and everything else turnaround times, et cetera. And it is paying off very, very handsomely in terms of, you know, anecdotally, you hear the app is very strong. You hear the recovery times are better than what they otherwise would have been. So this idea that yes, you can put lipstick on a pig, you can put a fancy seat on an aircraft. You can have an airport launch. But if you don't have the entire package, which Kirby argues, United does and only really delta otherwise does in his view, then you're not going to have the brand loyal customers making that switch. We're not the American here to defend themselves, but one place that they will be defending themselves is at the aviation forum. We've got Nat Iber, the chief commercial officer of American Airlines. He'll be in conversation with us on stage. November 12th at the JFK hotel at CWA rather hotel at JFK go to live.skift.com. If you want to secure one of the last remaining tickets there. So looking forward to hearing what Nat's got to say with us on stage. But we will, even before that, here from American Airlines, they are publishing a results later on this week, Jay. So we'll get a broader picture there. What did you think around the Tokaron Chicago? Just bring it into American. There's obviously been a bit of a turf war between United and American Airlines at O'Hare. We won't go into the ancient history, but American kind of, I think it's fair to say sort of deprioritized O'Hare, a little bit maybe a harsh acquitting might say they took the ride off the ball. Chicago is one of those places where American is striving, as you just said, to gain back share that perhaps at one time had in the past Los Angeles, New York might be some other places. United insists that it's just winning there and that American doesn't have a chance. I think Andrew Nasella, Kirby's right hand man there, said that United has a 14 point unit revenue premium in Chicago and a unit cost advantage as well. You could take those numbers, you may not want to. I don't know if those numbers are for real. I can totally take them at his word, you never really know what the true answer is, but I think it's fair enough to say that they probably do. They surely do have revenue premium just because they have superior schedules there and they just offer destinations that American doesn't et cetera. American does, that is a tough market for them. United seems to think that spirit failure was not an isolated event and I don't think that anyone expects American to follow them into oblivion, but perhaps we all know what's happening with JetBlue and the financial fragility there will get a better sense of JetBlue situation in, is that this next week? Next week, yeah. Yeah, next week. But United said that other airlines will be, quote unquote, next up on the firing line, that was quote from Kirby, another quote, changes are coming unquote. So I think his sense is that spirit's collapse was a momentary reprieve for a carrier, perhaps like JetBlue, but ultimately there's a reckoning to be had if Jeff Yolk prices remain in the $4.80, $4.90, approaching $5 range. That's a very dangerous level. Now I thought it was something that Kirby said not in the call, but to in an interview with, I think it was CNBC, I might be wrong about that, asked about his assessment of the economy, and he seems to think that there is an artificial intelligence investment bubble and AI bubble, which is kind of the growing talk of corporate American Wall Street right now. You know, we have had healthy economic growth over the past couple of years. And a lot of that growth is very much tied to this enormous investment in data centers, which are just basically giant computers to enable all of these new a wondrous AI technology. He seems to think that there's a bubble there and that could collapse. Now if he's right, well, he's probably then not also right that fuel prices will stay high. You assume that if the economy somehow buckles for bubble reasons or otherwise, that fuel prices would come down as well because they'd be a lot of demand destruction. Now again, who knows maybe not because maybe the oil and fuel will stay high because of supply side issues, obviously we have refinery shortages and damage to refineries in Russia and Qatar and other places around the world. So my larger point is that to the heck knows, but it's impossible to predict fuel prices. I always, you know, anytime someone, even if it's some fancy investment bank that says, you know, we, we, we forecast fuel to average so and so next year, you know, I just kind of looked the other way because it's like, because nobody knows, but there's a copy does believe they're going to stay elevated into next year official. He seems to think that and he does seem to at the same time think that there's this AI bubble, which would, you know, potentially cause some damage. And he didn't elaborate that on that during the call that may have been just an off the cuff remark and in this interview I'm referring to. So it was, it was, it was interesting when he was asked by a couple of investors about various slightly thorny topics. He, he acknowledged, I think once at least he said, I've made enough headlines this week. I'm not going to say anything else. So I think he started, you know, maybe, maybe, maybe, uh, maybe I've already said enough. Right, right. What's it about? Maybe it was a different question, but someone asked him, are you going to merge your jet blue? Are you going to buy a jet blue? Yeah, you know, just, um, you know, without getting into the financial weeds, um, there was some changes to the, the sort of the financial levers that they've got available to them and they basically got more, more money to play with. If they, if they want it, I did a couple of billion, um, to a facility that they have. And then I think it was Mike, the, the CFO, he came and gave his, his, his answer then Kirby before the next question came in and said, don't you be thinking this is going to be for M and A activity? Absolutely not. When they first announced, you know, when I first heard that, that they had that additional credit line, you know, they seem to downplay the significance, you know, maybe they just, whatever they're, they're trying to angle for an investment grade reading for their balance sheet. And that, that may be just a way to help them in that regard or whatever, you know, that maybe, uh, we shouldn't look too much into it, but when fuel prices reach these very dangerous levels, you do start to see airlines, uh, you know, like a squirrel collecting nuts before the winter kind of thing, you know, like a, you do, you do see cash preservation, um, access, the ability to access cash become more of a priority. I think United did say that they're actually want to bring down their cash down eventually because, yes, hold, hold, you don't want to hold cash because it doesn't earn interest. It's not always, you know, it's, it's holding a lot of cash is good for safety, but it's bad for making money. So, uh, you know, you have to, you kind of have to do trade-offs, but, so I don't know that, but, but it is I remember, you know, during previous, uh, run-ups and fuel prices, certainly 2007-ish, 2008, you saw a lot of airlines tried to sequester cash, arrange additional credit lines and things like that. So, you know, these U.S. airlines, again, for Fortunately, they just have demand is so, so, so strong that the pressure is not quite as immense. At least for these, you know, as you mentioned before, we've seen like the earnings parade, the all the peacocks are at the head, but then kind of, you know, the uglier creatures are gonna, are gonna follow, we're gonna, we're gonna get them coming. So, the ugly ducklings are on their way. The ugly ducklings are kind of be marching in the back. - Yeah. - So, you know, and speaking of-- - Not even marching, they're supposed to be dragging themselves. - Yeah, and hopefully that won't die on the way, 'cause you know, there is that risk as well. I don't wanna be too morbid, but the fuel of $5 a gallon is, you know, that's pretty serious, any signs. And by the way, you know, you're starting to see little anecdotally, I know the interesting, by the time we hold our aviation forum in New York and is it in two, three weeks? It's coming up. - Absolutely, yep. - It's things are moving fast. I wonder how we'll be talking about the man at that point. I'm already starting to see, and I saw an article today from Japan that air travel is, volumes are down, tourism is down, because the prices are getting a little bit high. So, yes, fuel prices are up, the man's still strong, but these airlines, they're having to raise, you know, fairs quite a bit, raise fees quite a bit. So, you know, there's no guarantee that the man's gonna, you know, remain as strong as it currently is. And I don't want to call them or refer to them as an ugly duckling by any means. I mean, very stellar airline, but I do want to mention that Alaska Airlines did report. Yesterday, as we're speaking here on Wednesday, and yeah, go ahead Gordon, you were gonna say something. - Well, I was just gonna jump into the break, leave our listeners and viewers in suspense for just a moment. We'll return to that thought with Alaska Airlines immediately after the break, Jay. So, hang by, hang by for just one moment. Quick reminder, before we do begin to the break, any questions or comments that you might have for us, podcasts at skiff.com, podcastmanness at the end. That's the email address you need. Please don't forget to follow or subscribe to podcast. Whether you're listening or watching, and if you are enjoying the show, remember, please rate us five stars, leave us a pause for reviews and keep teed spread the word about the airline weekly launch. Don't go anywhere, we'll be picking up with Jay right after this. (upbeat music) Hello, and welcome back to the airline weekly lounge, I'm your host Gordon Smith, joined as usual by Coast, Jay Shabbat, at the end of part one, Jay, I had to cut you off 'cause we had to get into the break, but you were discussing Alaska Airlines 'cause we had the numbers out of them yesterday, after market closes, we're recording here on October 21st, jump straight back in, what are we gonna say? We have their numbers, they haven't done their actual call yet, what did it discuss the numbers? So, there's not a whole lot I'm gonna say right now, and in a difference of time as well, you can certainly read as much as you on about how they did in airline weekly and the upcoming issue, coming out on Monday. But I do have the numbers for everybody that's listening, and they weren't great, I mean it's, they had a 5% operating margin. So as I mentioned before, Delta was about 9.5 United 7, and Alaska only 5, Alaska traditionally does better, like significantly better than third quarter than other quarters, it's a very Q3 peaking type airline, and that comes back to the nature of its route network, the fact that Seattle is a very summer-centric kind of destination. So 5%, yeah, they can't be too happy about that. They actually had a net loss, even if you strip out some of these extraneous, accounting items, they still had about, a negative 1% net margin, so not too pretty of a picture. The only thing I'll say about why right now, for the moment, is what we're seeing in the US, and around the world, for that matter, is a much greater variance in what carriers are paying for their fuel than is normal. I mean, you'd always have some, Alaska would always pay a little bit more, West Coast fuel is just more expensive. Delta would always pay a little bit less 'cause they have the refinery, but that spread between different airlines is abnormally large, and I'll put some numbers to that. So Delta last quarter paid $3.61 per gallon, and we've talked about, I think in our previous podcast, or whenever it was, two weeks ago, we said how some of that comes back to the big savings that they're getting from the refinery. So 361, United Bay 390, it's quite a big difference. Alaska Bay 394, we'll see, you know, what some of these other airlines will see what American pay with Southwest paid, but you see, it's quite a big difference. You start to wonder if United was paying exactly the same for fuel as Delta would, you know, would it not look like the coyotes so much anymore, you know, maybe it would catch the roadrunner? I don't know, but that is a big difference, a very important difference to point out. - Yeah, absolutely, and for anyone that's new to the industry, new to the podcast, the reminder that fuel makes up the first or the second largest cost center. - 30 to 40% - 30 to 40%. So when we are talking about cents on the dollar here, it can sound kind of trivial, but when you are flying as much as these airlines are, and you have such a huge percentage of your overall costs and anchored in fuel, it really does add up J. Just a few final points from the United Col, the plightward, the sunset period of the contract with the existing loyalty partner and the banks there. And I think it was described as being a historic contract, which again is, you know, a plight diplomatic way of saying, it's an old fashioned contract, not accustomed to the realities of just how profitable these schemes are in the 2020s. So it'll be very, very interesting to see J, as those discussions continue, I'm sure, with a number of different partners behind the scenes, just how that shakes down. And there was a question as well about air Canada's aeroplane, Moatee Scheeven, regular listeners and viewers, or now that they gave 25% to a selection of private equity firms, I think led by Blackstone and Corvette Pension Fund and a few others, basically tapping out for cash, albeit with some options to buy back in six, seven, eight years time. But Mike, this year of United, he was very complimentary about what air Canada had done there with aeroplane, and he was basically asked in his main words, is that something that you would be considering for your own? And he said, no, no, no, not in the moment, primarily because they have got that historic contract. And I think he said they were in a holding pattern, sort of just letting that run its course before things change. But you did get the impression that the changes that had been made in Montreal with the aeroplane were maybe something that were not to be directly mirrored with United, you know, very, very different pieces in many ways. But there was definitely some appreciation, let's put it that way for what happened to aeroplane. Was that your reading as well? - Yeah, yeah, I thought that was interesting. I went back and looked actually that United deal that with Chase, J.P. Morgan Chase, the credit card deal. And less I missed, there may have been an update somewhere along the way, but that I'm forgetting about, you know, if you're listening or watching, definitely email if I missed this. But it looks like that deal is from right before COVID, like literally February of 2020. And it was a decade long deal that's gonna come do, you know, come expire in 2029. So you can see how the economics of that maybe a little bit tired or like whatever the word you was, you use their older, you know, just outdated. - Historic contracts and holding bets. - Yeah, historic. So, you know, that'd be interesting. I'll tell you something that I've been watching in the background. And, you know, I don't maybe think it gets enough attention. This, all this enormous, you know, money that airlines, U.S. airlines are earning from these frequent flyer programs, these co-branded credit card deals. It really rests on the simple fact that these credit card swipe fees aren't regulated in the U.S. So the banks, you know, the J.P. Morgan's of the world and American Express and, you know, Bank of America. They're able to make such enormous money themselves from these credit cards that they're just, you know, willing to just throw so much cash at these airlines. But there is a movement in Congress and even President Trump kind of got on this Ben Wagon for a little bit as well. I can't remember his last year, earlier this year, to, you know, start regulating the swipe fees. You know, merchants, you know, retailers, especially small businesses, they hate that. I mean, they have to, you know, pay these fees, these swipe fees. They hate them and they're on the phone with their congressman, you know, they're lobbyists. You know, you got to, you got to regulate this. They regulate them in most parts of the world. Now, I don't know the, you know, it'll take a political scientist to predict whether or not that regulation or that, you know, lack of regulation will persist. I don't know if Congress or the president will ever act on it, but it is something to watch because, you know, if there is a legislative change, you're talking about, you know, massive, massive amounts of money at stake here for the U.S. airlines. So, yeah, definitely something to watch. Now, I know, you know, I talked about how the retailers are persistently lobbying hard. I mean, the airlines, if there's a time, Remember a long time ago airlines themselves once he you know, lobbied hard against these fees because they have to pay them too, but of course on the other end, they're, you know, it's more than offset with how much they're collecting. But, you know, if you don't have a big frequent flyer program from tier or whatever, perhaps here, you know, you wouldn't mind some regulation to these swipe fees. But, you know, on the other side of that, there are a lot of political interests in favor of the lack of fees as well. You know, the visas and the, you know, master cards of the world love it. The airlines love it. Consumers love it because they're able to get all these perks. So it may just be a political, you know, monster that's too hard to topple. I don't know. But definitely something that's, you know, these guys got to watch. Definitely go to watch. And we've got, we've got a new Congress that's going to get elected in a couple of weeks here. So we don't know what it's going to look like, but we can assume pretty safely that at least one of the houses is going to change parties. So one of the branches of the legislature is going to change parties. So, you know, whether or not that will be a top priority, probably not, but I don't know. Yeah. Absolutely. I agree. There's, it feels like there's definitely an appetite in some quarters for change. And we don't have time to go into the weeds of this. But I would encourage if anyone wants to do some further reading on it. Check out what's happening in Australia just now because they've made some changes in the past couple of weeks to their into charge fees and their credit card, sort of some swipe fees, as you said, Jay. And a bit of a backlash, not just from companies, but also from some merchants and even from some consumers saying, oh, hang on a minute, that, you know, the little mom and pop shop who used to be okay with me using my credit card, now they're charging with fee and everything else. So they, it's more competitive than it looks. And before we consider the aviation and the airline impact, but it's fascinating for the reading very, very topical. It's still playing out in real time with Australia there. And then just from a, from a loyalty point of view, two interesting names that we've got joining us at the aviation forum. We've got Gilbert Ott, who's the director of loyalty at the one-way line. So he's joining us. And we've also got Tiffany Funk, who's the head of Flying Blue at the Air France KLM group as well. So obviously slightly different in terms of US exposure to his enormous programs, but some fascinating insights nonetheless. I'm sure from from Gilbert and from Tiffany at the aviation forum. You're going to add something else, Jay. Oh, yeah, just real quick. Sorry. I know we're going long here, but you mentioned, you know, our speaker from Flying Blue. We had a flight, I think it was a different person. Last year's event speak. And one thing that I learned among the, you know, the tons of things you learned at these these events are, but one was that Air France is actually marketing Air France KLM, marketing credit cards in the US. I mean, that's where they have, they're have a lot of growth potential. So it's not just the US airlines. I mean, that's where the big money is, but certainly like a British shareways and, you know, other foreign airlines definitely issuing their own co-branded credit cards in the US as well, taking advantage of these, you know, unique set of circumstances here. I just final point here, I believe that Visa is the most profitable airline, most profitable company in the United States. Someone can fact check me on that. But if they're not number one, they're real close. I mean, their margins are enormous. And, you know, maybe, maybe they don't want me to say that publicly. So, you know, they attract scrutiny. And, you know, some congressman may suddenly say, wait a minute, what? We need to regulate them. But they are, because I thought I always thought that, you know, the freight railroads were number one, but, or like a Microsoft or one of these silicon. But now, I think Visa has like 50% net margins that don't quote me on that, but they're, they make a pretty penny. They make a pretty penny. So much more we could get into Jay, but time is against us. But like Jay said, if you'll more detail, I'm not just on United, but also Air Mexico. We've had some interesting numbers out from and also Alaska Airlines, and even by the time you listen to this, we'll have new numbers out from American and others get into that latest issue of airline weekly dropping every Monday, go to airline.com for a session of scribe for free trial issue. And if you want to get involved in the, sort of, we don't like to call it a newsletter, but it is, for own sense, purposes, a sort of weekly news digest. We make sense of everything that has happened, and also empower you and inform you to know what to expect in the the weeks to come, Jay. Any final thoughts before we wrap up? I did pull it up here real quickly. Visa in their most recent quarter had a $6 billion net profit on about $12 billion in revenue. So you could do the math on the margins there. Yeah, you don't need to be Jay Shabbat to know that that is a healthy little number. Yeah, you can see why when you put the eye after team saying, oh, well, you know, the average profit per passenger is four years, five years. You can't even buy a cup of coffee in Geneva for that, et cetera, et cetera. And you know, you still think that's an airline trade body. Of course, they're going to be batting that drum. But when you do look at some other industries, you do sort of, you get the impression that, you know, we even heard from the United team today, this pursuit of double-digit margins, sustained double-digit margins. And you see that from time to time at various large airlines, even i.e. I'm thinking from a European point of view. But this idea that the industry as a whole is underperforming when it comes to margin compared to others, you know, that does seem to be a long-term trend. And one that I'm sure there are various representatives and lobbyists will be, will be pounding hard. But yeah, more on that when we get it. But it's a long-term issue. Extremely difficult business, the airline business, and part of the reason is just so subject all these shocks. As I say, you know, anything that happens bad in the world, the airlines are going to be on the front lines of it and get affected first. So, you know, fuel prices, terrorism, health scares, tornadoes, bricking, or anything. So, yeah, it's bad news. I don't know why, we, you know, we should, we probably have a more lucrative, lucrative careers, Gordon, if we started credit card weekly instead of airline weekly. Yes, maybe we should consider that. But no, but no pretzel weekly, that one's mine. That's not bad. That's all you want. Yeah, so looking at right back to our bread versus pretzels, you know, in an alternative parallel universe, when you've run an airline and I run an airline, I actually see it working perfectly in complete harmony. We don't need any cartels, no sort of murky joint ventures or anything. You take the pretzel loving passengers, I'll take the high quality bread, non pretzel, loving passengers, and that's how we will divide the industry. Both offering perfect exceptional experiences. There we go. Perfect. Yeah. And zero chance for a merger. Yeah, that would be tough, like tough integration, right? If we ever merged. Very, very, yeah, that would be a 10s, 10s one, but I think it would work. Stranger things happen. At least separately, yeah, competing separately. Indeed. Right. That's all we've got time for, but enjoy that conversation, Jay. Oh, disclosure, we have a lot more USA lines still to report, so don't expect this conversation to be going away anytime soon. And some foreign airlines, some overseas airlines as well. So we are very much still at the tip of the Q3 iceberg. So don't be taking everything that we've said in our conversation over the past 40 minutes or so, as gospel, fit world changes, we get further data points and data sets from competitors and peers right around the world. So more on that when we get it. Thanks, Jay, for joining us this week. Thanks, as always, to our producers, John, Monica, Kelsey, and Will. And wherever you are on the world, thanks for listening, and we'll catch you next time. Bye for now. Whether you're listening to us on Spotify, Apple, or wherever you get your podcasts, please remember to subscribe, rate us five stars, or leave us a positive review. This really helps us get the word out about the airline weekly launch, so you can continue to bring you this podcast every week, absolutely free of charge. And if you're watching us on YouTube, be sure to subscribe to the Skift channel and hit the notification bell to find out whenever a new video drops.