Delta Sets the Pace for Airline Earnings Season

0:00Jay Shabat: Hello and welcome to the Airline Weekly Lounge. I'm your host, Gordon Smith. I'm joined as usual by co-host Jay Shabat. In this week's show, we're crunching Delta's latest earnings.

0:26Jay Shabat: Hey, Jay, how's it going? All right, Gordon. How are you? Thank you. Doing really, really well, Jay. And we've had an interesting email in the inbox today. It's from Finnair. And it is doing something that we kind of didn't expect, given fuel prices are doing what they're doing. And that is upgrading its guidance. And you might be wondering, why are we speaking about Finnair? And it is fair to say that it's an airline that kind of punches above its weight in terms of prominence, given where it is. You think, well, it's just a sort of Nordic carrier that nobody really cares about. But it does have that huge intercontinental network, which previously relied on flying over Russia.

0:56Jay Shabat: Obviously not able to do that anymore, but still a reasonably prominent player and a reasonably innovative, Jay. Tell our listeners briefly before we go into Delta, what was Finnair saying?

1:07Gordon Smith: Yeah, that was interesting. So, so far, as we're entering the third quarter financial earnings season, Delta, which we'll talk about in a moment, is the only airline that's reported so far. They're always the early birds. but we did have not a full report from Finnair but as you just said they did kind of give a preview or an update and surprisingly maybe surprisingly to some I thought it was somewhat surprising given what's happening in the fuel markets they as you said Gordon they raised their financial guidance so they now said they're going to make during the third quarter that they made something like a 5 % to 6%.

1:51Gordon Smith: That was the range they gave operating margin, 5%, 6%. And that's, you know, would have been in line if that's indeed what it comes out to. That would match last year. In the third quarter, they had 6%. So despite all of the fuel inflation that airlines have seen, Finnair says This demand is actually, and I have the quote in front of me, air travel demand has continued to be stronger than previously anticipated, even though the impact of high fuel costs has partially been passed on to ticket prices. So you can see there, you know, fuel's going up. They're raising the fares. People are still paying.

2:39Gordon Smith: So that's kind of a good sign. And again, thin air is they're not the biggest airline in the world. And in that sense, I wouldn't call them a bellwether for the rest of the industry. But they are they're not small. I mean, they're a big player in the Europe to Asia market. They're reasonably big player in the transatlantic market and, of course, into Europe as well. So somewhat encouraging start to the earning season to go along with the likewise encouraging assessment that we got from Delta last week, which we'll go into now.

3:17Jay Shabat: Yeah, absolutely. Some encouraging music from Helsinki, Jay. And like you said, not entirely representative. And this is just one data source, but it is interesting. There will be listeners, viewers who will be thinking, is it just a case that maybe they were a little too pessimistic and they're just rowing back or have things genuinely improved versus their sort of steady-eddy approach. So it will be really interesting as we get more data sets from particularly across Europe to compare their peers within the coming weeks as Q3 earnings season continues, Jay. But yes, the focus of this week's episode is all about Delta because we're recording here on the 13th of October.

3:50Jay Shabat: And as anyone who watched or listened to the show last week knows we got the Delta numbers out on Friday. Let's strip it right back. in a sentence or two, what was your take on Delta's Q3 results?

4:04Gordon Smith: Sure. Well, I guess just in a very simple couple of words, I say they were very good, all things considered. Very positive. Very encouraging. I'll give some headline numbers so everybody's up to speed. So Delta had a 9.5 % operating margin. All of these numbers I'm going to give or excluding any kind of extraneous special items, accounting charges, things like that. Throw those out because they don't really have too much material impact. But all the clean number for them would be 9.5%. How does that compare to last summer? Well, it's not quite as good. Last summer, they had 11%. But again, last summer, they paid$2.25 a gallon for fuel.

4:52Gordon Smith: This year, they paid$3.61. So a huge, I think I can't do the math in my head, but I did write down, it looks like 60%. Is that a 60 % increase? So you can see they're just, they have to be, Delta has to be pleased that despite a 60 % increase in fuel costs, they still came within about two points of where they were last summer. So 9.5%, nobody's going to, you know, shed any tears over that as a pretty solid quarter. And they said, by the way, that in the fourth quarter, just an estimate at this point, it's obviously very early. We just started the fourth quarter. But their best guess at this point, based on what they're seeing, what they're forecasting, the fourth quarter, they're going to have a 7 % to 9 % operating margin.

5:44Gordon Smith: So another, you know, they're expecting more of the same, more goodness to come. And that's despite fuel going even quite substantially higher in the last couple of weeks and months. So it's somewhat even more encouraging to hear them say that they're going to have a solid 7 % to 9 % operating margin in Q4. I think we're a big piece of the puzzle here, and we can talk about different things going right for Delta. um one one very very big deal for delta let's call it is their oil refinery so they bought this oil refinery back i think in 2012 so it's you know it's been a while but they've had this thing and i've always found i don't know about you gordon and talking to people about delta just you know running into people at conferences and things like that people are always fascinated with the refinery do you get this sometimes when you're talking about delta especially so at times

6:41Jay Shabat: of high oil prices. It's sort of a quirky thing. We're used to airlines having maybe catering divisions or MRO divisions or cargo businesses or sort of quirky subsidiaries that have sort of all been patched together through mergers and acquisitions. But to have a sort of real heavy industrial plant, that's a sort of different level.

6:59Gordon Smith: Yeah, it is. Yeah. I don't blame people. I mean, it is fascinating. It's always been, people will ask me sometimes, has it been a really good move for Delta? Is this some brilliant move that they don't have to worry about fuel prices anymore. I wouldn't go that far. I mean, I think it's been, you know, there are times that it loses money. There are times that it makes money. I think it mitigates some supply risks for them in the Northeast. I think it's been, you know, overall, they're probably reasonably pleased with it. I wouldn't call it, you know, a huge competitive advantage for them over, you know, if you look at the time since they bought it.

7:37Gordon Smith: I wouldn't say that Delta would attribute that refinery to the reason why they're outperforming United and especially American. However, right now, it is a very, very big competitive advantage because of what's going on in the fuel markets, particularly the market, not necessarily for crude oil, but for refined crude products like jet fuel, diesel fuel. that market is there's such a constrained supply worldwide right now that if you're a refiner you're making a huge margins right now and delta uh expects to pay so last in the third quarter they estimated that their uh refinery i guess it's not even an estimate it's uh you know They flat out said that their refinery saved them 13 cents per gallon.

8:35Gordon Smith: Hope I got that right. While I'm talking, I'm going to double check myself. But there's 13 cents, which is, you know, that's meaningful. One three. Consider it. One three. Did you check that? Yeah. Okay, perfect. Great. Thanks for that. Well, this quarter, in the fourth quarter, they expect it to be four zero, a 40 cent benefit. So it's going to be a huge windfall. And if you multiply that -

9:01Jay Shabat: That sure adds up.

9:02Gordon Smith: That adds up. If you, and you can do the math. I mean, based on how many gallons of fuel that they burned in the third quarter, and if you just kind of, you know, do a simple math and apply that to the fourth quarter, it'd be something like half a billion dollars savings just from that refinery. So that alone is going to be a pretty big deal. Now, again, these are all estimates are all forecast. By the time this podcast comes out, everything we're saying could be completely out of date because fuel prices... Somebody opened a new refinery that increased supply by a million units. We don't really know what fuel price is going to be, obviously.

9:48Gordon Smith: We don't know what the refining spreads are going to be. But Delta's best guess right now, based on what's happening in the market right now, is that they're going to potentially have this half a billion dollar bonanza for the fourth quarter.

10:01Jay Shabat: Incredible stuff, Jay. And thanks for talking to us through those numbers. You do wonder if there's been any other boardroom discussions going back a decade or so where, should we buy a refinery? And then the ultimate decision has been, no, absolutely not. We'll just sort of play the markets. And which executives, retired or otherwise in service, are kicking themselves right now. But I think it's fair to say that it's not the sort of investment that pays off every year, every quarter, but this is certainly the time to be in that business, Jay. Let's just take a little bit of a step back from Delta's core business, because we mentioned the refineries.

10:36Jay Shabat: Cargo is doing very well as well. And I know we don't tend to go into much detail on the podcast generally, or even in the airline weekly issues around cargo, but it is a particularly fruitful part of the company right now. We've got some detail around that. And then also their MRO business as well, maintenance, repair, and overhaul. These are important subsidiaries that in times when passenger revenue is up and down and everything else can be really nice additional ways to steady the ship and get that balance sheet where it needs to be. We saw with Korean Air during the pandemic as an extreme example with their cargo business, but we are seeing that even in these slightly more normalized times with Delta and with the cargo and their MRO as well.

11:18Gordon Smith: Yeah, yeah. No, cargo, you know, just I think everybody has to recognize it's only about 1.5 % of Delta's total revenues. You know, it's pretty small, but it's growing a lot. And it's, you know, I'm sure they earn good margins on that. The maintenance business that you mentioned is more meaningful to their bottom line. I don't know if they break out the actual revenue, but it is a very profitable business and maintenance revenues just last quarter grew 28 percent so we know we talked about how there's a shortage of refined oil products in the world refined jet fuel there's also a shortage of maintenance services and we know that a lot of you know maintenance shops out there busy fixing engines and you know uh just there's a lot of um there's a lot of supply issues with with aircraft maintenance so it's it's it's kind of a good time to be an aircraft uh maintenance have an aircraft maintenance business too so they're um yeah doing fantastically well from that it sounds it sure sounds like that um and then you know you've got as I said, you know, maintenance revenues growing 28%.

12:35Gordon Smith: Cargo revenues are up 29%. Pretty small, but still small base, but still more significantly, you know, premium revenues up 18%. Non-premium, just sort of main cabin economy class revenues up 12%. Loyalty program revenues up 18%. Corporate revenues, they said up double digits. So, and this is an airline, remember, this is an airline that's not growing the it's basically flat the capacity that produced last year is up maybe half percent if that so they're getting all of this revenue growth without really working much harder so to speak in the sense that they're not producing uh anymore um and and that just goes to the fact that they are um you know just speaks to the success that they're having and passing their cost inflation, particularly fuel cost inflation, onto their passengers or onto their maintenance customers, whoever it may be, through either raising fares, raising fees, in some cases taking people that might have flown flu economy class before, now flying them in premium, more expensive tickets.

13:46Gordon Smith: So they're just doing a great job of that. And it just remains to be seen from forthcoming earnings calls. Is United doing this as well? Are they as successful in mitigating their cost inflation with revenue inflation? American hasn't done it as well. And of course, in the past, we'll see how they did this summer. Although I think there are some concerns based on earlier guidance that Americans third quarter might have produced losses. Well, you know, we'll see. That wouldn't be good. And then, of course, the low-cost carriers, they've had a much more difficult time in combating all of this cost inflation the industry is seeing.

14:36Gordon Smith: For sure.

14:37Jay Shabat: A few themes that we'll pick up in part two, Jay. A perfect way to get in the break, and I'll let you get a glass of water as well for your tickly throat. But before that, a quick reminder to send any questions or comments that you might have for us to podcasts at skiff.com that's podcast with nests at the end and please don't forget to follow or subscribe to the podcast whether you're listening or watching and if you are enjoying the show please rate us five stars leave us a positive review so we can continue to spread the word about the airline weekly launch don't go anywhere we'll be continuing our conversation about delta in part two hello and welcome back to the airline weekly launch i'm gordon smith joined as usual by co-host jay shabbat we are discussing delta this week because we got the numbers just out of them a few days ago.

15:14Jay Shabat: If you are looking for much more detail, much more than we can get into in the podcast, Jay had a fantastic feature in the most recent issue of Airline Weekly. You know the details by now, airlineweekly.com if you need to subscribe. And if you are an Airline Weekly subscriber, what are you waiting for? Get in and read that feature story, Jay. One of the areas that you do pick up on in the feature story this week is premium and is looking at just how Delta has positioned itself in the market. It is fair to say that it is probably easier to raise fares when you've got a sort of higher rate consumer who is maybe more accustomed and maybe is even expecting fares to rise in a more dramatic way than those hyper price sensitive customers at the very bottom of the market.

15:55Jay Shabat: But it is important maybe for listeners outside of the US, you don't fly with the big three, big four, call them what you will, that actually you can book Delta and you can book United and American and get a very sort of low fare style experience. And I'm careful what I say with low fare. I say low cost experience, maybe as opposed to low fare. So I'm doing some flying in the US next month and I'm looking at various airlines and those prices aren't what they used to be even just a year ago. They have gone up and you could call it the spirit effect or whatever, but there's definitely been some price inflation.

16:28Jay Shabat: But my broader point is that legacy carriers, including Delta, don't necessarily mean premium only. you can have a stripped back economy basic product that you know you don't get the seat until you check in you don't get uh boarding until group eight group nine there's various restrictions around refunds and credits and everything else there so there is a feeling that this was maybe part of spirits downfall and maybe putting a little bit of pressure on the traditional low-cost carriers in that they are taking the premium pie in that scooping up all of those travelers that are happy to pay pretty much whatever you want to get from A to B, but also the filling the back of the plane with those ultra-priced sensitive consumers on those very restrictive but relatively affordable tickets.

17:14Gordon Smith: Yeah, absolutely, Gordon. I mean, it's not just a premium game. I mean, if only premium was doing well right now and the back was horrible, then we probably wouldn't be saying such nice things about Delta's earnings. So yeah, they did Yeah, I mean, I think just the, I mean, everything is just, is performing well in terms of unit revenues because of, you know, sort of those multiple forces that we've talked about. The multiple reasons that we've talked about in the past, you mentioned the fact that supply is down because of spirit and other reasons. And then also just some of the economic factors that the economy is doing pretty well.

18:00Gordon Smith: In fact, I was just listening before we jumped on today. JP Morgan did their biggest or second biggest bank in the United States. so it's always a good um idea to listen to what they have to say um because they have a um kind of a wide lens on the economy they can see very clearly into what's going on because you know think about everybody's got a bank account with them and all that so they uh they seem to say that the economy still seems to be doing very well uh and you know as delta points out too it's you know their core customer and i think even their customers flying in economy class uh tend to be have above average incomes household incomes and that sector uh demographically has just uh that their wealth has increased a lot over the past call it you know post-covid um and delta sometimes put some numbers to that so uh but yeah i mean all around i don't think there's any areas of weakness.

19:01Gordon Smith: I mean, maybe you can find a market or two, a geography or two, but I don't think Delta had came up with any mentioned, any even geographical weakness. You know, usually they said everything's going good, but you know, it might have a little bit of weakness in Hawaii or whatever, but I don't think anything came up unless I'm, you know, misremembering, but.

19:19Jay Shabat: Because it is important and it's actually quite interesting, probably more than important to compare what you get from the very prepared, very structured printout, the market filing, the press release for media versus the earnings call, which is a little bit more conversational, let's say. And of course, the executive speaking, especially very experienced executives like you've got on the Delta board are very polished and they've got their talking points and they know where to talk about and where not to talk about. But you do just get a little bit more color. And you're absolutely right, Jay.

19:51Jay Shabat: You do sometimes get maybe an executive saying, well, you know, Mexico has been terrible this year or, you know, the Pacific's a little weak, you know, you get to that little crumb, which you can sort of drill into a little bit more. But yeah, I agree. There wasn't really any particular areas of notable weakness. Although there will be some people listening saying, well, what about Riyadh? Yes, we do have that Delta route that was due to launch October 23rd, just next week as we're recording here from Atlanta to Riyadh. And that was telegraphed many, many, many months in advance. they're obviously getting pretty close to Riyadh Air, the relatively new startup carrier based out of Riyadh, as the name would suggest.

20:29Jay Shabat: And if you've been following the news, either on Skift or more broadly, you will know that there have been some tragic attacks right across Saudi Arabia, including in the capital Riyadh in the past few days, deadly attacks, reports of 12, 13 killed plus hundreds injured at Riyadh airport in a single incident plus others right across the kingdom. So our thoughts are with everyone that is affected by that. And perhaps no surprise, we had Delta yesterday, October 12th, announcing that they are postponing that Atlanta to re-add non-stop route until March 2027. They didn't put an exact date on March 27, Jay, but I suspect they're going to align that to the start of the IATA summer period.

21:09Jay Shabat: So we're probably looking towards the very end of the month. But yeah, there were some people who were saying, well, this was a lousy route anyway. They were only doing it to keep various stakeholders happy. I think it was Meghna that was looking in at some of the loyalty redemptions you could get from the US to Riyadh, which is not a short flight, even if you're going nonstop for almost as few SkyMiles as if you wanted to go Transcon in the US. So that's never a sort of perfect indicator on supply and demand. But if any airline is offering you that much mileage for that many points, you can join the dots and suggest that maybe things were a little like there.

21:49Jay Shabat: But we wish them all the best. And this is obviously a troubling time for a lot of people in and around Saudi Arabia. So we know that we've got listeners and readers and viewers across the kingdom and in that part of the world. So we're keeping you in our thoughts, Jay. Let's take a step back from Delta, unless you've got anything else to add there, because there are a couple of other sort of elements in the US market that we're keeping an eye on. And it is important, again, to say that we don't have the numbers from anyone apart from Delta yet, but that will change in the coming weeks. There has been a lot of chatter around Southwest, and there was a Reuters report last week around possible wide-body order 787s.

22:27Gordon Smith: Yeah, interesting developments there now. Southwest, I don't think it was terribly surprising that they're talking to Boeing and I'm sure Airbus as well. I guess the Reuters report said they've kind of pinned down the 787. Um, I don't think by any means, I wouldn't, I wouldn't read that as any, you know, kind of imminent deal coming. I'm sure it's possible, but, uh, I kind of took, took away from that article that, that, yeah, they're engaged in talks, which, okay, that's, you know, you think they would be. Uh, so I, you know, I don't know. Are they, are they gonna, that, that's kind of a big plunge for them to, to buy, um, you know, to, to go into the wide body space, we talked about how Alaska went into it and, you know, stepped into quite a bit of risks.

23:14Gordon Smith: Their, uh, strategic, uh, predicament is, uh, or situation is, is much different than that of Southwest. Southwest obviously looks around and sees how popular international, uh, long haul international markets are right now and have been for the past couple of years. They look around and, you know, I'm sure, uh, with wide eyes and wonder, you know, how much money could we make from JPMorgan Chase and our credit card here if we were able to fly people to Paris? And, you know, they're obviously doing the lounges now that you can say. So you could sort of come up with, you know, three, four or five, six reasons why they would love to start overseas flights with wide bodies and why that would make sense.

23:59Gordon Smith: Now they could, you know, decide to kind of dip their toe in the water and try like a Airbus XLR or something like that. The disadvantage with that is that it's, you know, you're limited to a very few markets that can, even the XLRs, you know, there's not a ton of big Southwest markets that you can do.

24:22Jay Shabat: Yeah, I was going to say, you know, it's JetBlue that's got the 321LRs. They postponed their XLRs, I'm not even sure if they're coming at all now. But by definition, JetBlue is a East Coast heavy airline, and they are flying from New York and from Boston, transatlantic. And they are probably the two ideal US airports. If you were going to fly a 321LR across the Atlantic, like you said, those Southwest core cities where you would really want the feed, your Nashville's, your Chicago, Midway's, et cetera, they are much deeper into the continent and won't, frankly, get across to the parts of Europe that you may want to.

24:57Jay Shabat: You might be able to just about stretch it to Ireland or to Iceland, but to have a meaningful impact on the European network, you would want to be flying something a little larger there, Jay.

25:09Gordon Smith: Can I say one more thing about Southwest? Go ahead. Yeah. I just, you know, I want everybody just to understand that, you know, if they do fly 787s or, you know, let's say they go with the XLR. The XLR, you would consider what markets they would operate overseas flights from. And if you kind of go down the list, you know, Nashville is one, obviously, where they're putting in lounges. That's clearly a very strong market for them where they could probably support a flight to London or Paris or whatever. So, you know, maybe that's an XLR route for them. You can definitely find some. But then you think about, you know, Chicago.

25:52Gordon Smith: Well, they can't do wide bodies from Midway Airport. Dallas, you can't fly international from there. You know, you start thinking about their big markets. Phoenix, I mean, that's, you know, that's really at best. you're going to get inbound the outbounds probably growing but it's not that big i mean that's i don't think there's a lot of overseas potential there vegas i mean vegas is a struggling market uh baltimore okay maybe maybe a few uh but you know you you start to look a little bit um and i'm just doing the analysis off the top of my head here you know i'm not going through one by one but But I think Southwest overseas potential, I'm wondering if there's a whole lot there.

26:39Gordon Smith: Maybe they can do a handful of XLRs or even a handful of 787s, but at that point, does it become worth it? It's like you want a whole new fleet type, a whole new risk profile with the wide bodies or the overseas planes. So I don't know. I don't know.

26:56Jay Shabat: Is the juice worth the squeeze? We just don't know.

26:58Gordon Smith: Yeah, you can see where it would be for lounges, where it would be for, you know, some of the other things they've done, you know, extra legroom seats. Maybe they'll announce an actual first class seat. That's the other thing. I mean, if you're flying 787s to Europe or to Asia and you really want to get the big money that these other guys are making, you know, the Deltas of the world, you kind of have to have the live flat seats and the, you know, the fancy service and the Southwest really want to do that. Well, if they do that, you know, then they kind of have to have the fancy service or at least somewhat of a first class in their domestic network, too, because, you know, people are going to be connecting.

27:40Gordon Smith: You could see where they, I wouldn't be surprised if they kind of shied away from that. But then again, I don't know. We'll see what they have to say.

27:48Jay Shabat: Stranger things have happened, Jay. And I think if anyone was looking at sort of Southwest business model in 2018 and are looking at it today, they would already say, you must be kidding. You know, what would Herb Kelleher say? You know, two bags go free, assigned seating, all the sort of credit notes and all the other changes that have been made and are continuing to be made. Obviously, very, very helpful for the bottom line. We've seen some very encouraging numbers out of Southwest in recent quarters. and we expect that trend to broadly continue, even with the fuel shock as it is. But yeah, I completely agree.

28:21Jay Shabat: I think you have a little bit of a disconnect between Southwest's strongest domestic airports in the US and how those airports translate into meaningful international connectors. You know, you say Dallas Love Field, you say Chicago Midway, you know, these are facilities that are very, very powerful in the domestic scene, but trying to get that to London or trying to get that across the Pacific, maybe not quite so easy, Jay. but we will follow the various developments at Southwest in the coming days and weeks. You got something else to say on Southwest?

28:50Gordon Smith: Watch me do watch my transition here. You're going to be impressed. I'm going to go to JetBlue now. Southwest could potentially purchase JetBlue and get that foothold in Europe that way. Get an Airbus suite, get the, you know, like you said, they don't have the XLRs, they have the LRs. So, you know, I mentioned it just because your question is a good one. uh jet blue stock price we were looking this morning is now below what was it below four

29:18Jay Shabat: dollars um comfortably before or uncomfortably below yeah i'm comfortable so three dollars and

29:25Gordon Smith: 54 cents last i checked which is about uh you know we're talking we should always mention when we're talking tuesday morning it's uh yeah it's about about almost noontime here in the uh new york slash philly metro area um and uh we yeah and so jet blue is their stock price has gone down quite a bit just just in the patch i think even just this morning and they're that that's a manifestation no doubt of growing concern about their ability to navigate the fuel shock you know we saw the delta can do it no problem or with very little problem but can a jet blue do it you know they don't have a big maintenance business they don't have you know live flat seats go into asia they don't have um big cargo business so that's that's an open question so what is jet blue's fate can they turn things around on their own can they get lucky maybe fuel prices fall maybe some of this new.

30:31Gordon Smith: I think they just got these new slots from Spirit at LaGuardia Airport. Maybe they'll be immediately accreted to profits and will help out a little bit. You can't assume that would just be a huge game changer for them. But falling short of that, falling short of a turnaround on their own or a sudden reversal in fuel trends, are we talking, I hate to use the word, but are we We're talking about potential bankruptcy filing here. Are we opening the door to a potential merger here, whether it be Southwest or someone else, American? So it's got to be tough times for JetBlue, but we'll hear more from them, I assume, later this month.

31:12Gordon Smith: I don't have a date. But that is definitely one with a big red siren around it, I would say.

31:21Jay Shabat: Yeah, we will get a lot more detail from JetBlue later in the month. and they're not here to defend themselves, but I'm sure if they were, we would hear about the Jet Forward program, which is their transformation program and obviously their closer partnership with United and the Blue Sky agreements there. And I will just go back to what Joanna Geraghty said way back in April, actually, when there were some other, I don't recall them rumors swirling,

31:48Gordon Smith: because rumor sort of implies

31:48Jay Shabat: that there's a crumb of a fact somewhere. But I'd say just general speculation that the long-term health of the business might not be as it could be. Gareth said in a memo, it's no secret, quote, it's no secret that we believe that in today's airline industry, the decks are stacked against us, smaller carriers like us. I know how distracting and scary all this noise is in periods like this. It's important that we stay informed, but not distracted. Our focus needs to remain on what we can control and how we continue to execute. And of course, when JetBlue do reports in a couple of weeks' time, we will report that in full, Jay, in Airline Weekly and across Skift as well to give them their full right to reply.

32:26Jay Shabat: But we wish them well. It's never good to see an airline in distress.

32:30Gordon Smith: Yeah, and they did say, I mean, just to remind everybody, back in September, I just pulled it, September 10th, so not that long ago, you know, a month ago, they did say that demand for travel, quote-unquote, has remained strong throughout the third quarter, healthy booking trends continuing to September for peak and off-peak. there was no signs from Delta's call that anything industry-wide seems to have changed as far as demand strength. So it may just be that they will be able to weather the storm just with really, really strong revenue. To be continued. To be continued.

33:12Jay Shabat: Yeah, absolutely. We will be keeping well across that on Skift and Airline Weekly. Thank you for that, Jay, for our US roundup. And a quick reminder before we go that we're just a few weeks away from the Skift Aviation Forum. We are going to be returning to New York City, the TWA Hotel. We've got an opening reception the evening of 11th of November in New York City, Manhattan, I think. And then November 12th, the full day extravaganza at the TWA Hotel. From a US point of view, I know we've got Allegiant joining us, Nat Piper from American Airlines and a few others, not to mention plenty of international guests.

33:42Jay Shabat: So go to live.skift.com for the latest agenda. The speaker lineup is coming together very nicely indeed. And that reminder as well, if you're an airline with your subscriber, you get a special exclusive rate and that should be in your most recent issue and your emails in various other places. So look forward to seeing you there. Jay, thank you for that discussion and thanks as always to our producers, Jean, Monica, Kelsey and Will. And wherever you are in 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.

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