352 - Chris Sloan profiles Canadian North Airlines

0:27Dave Hilfman: Thank you. SoCal, so easy. FlyOntario.com. The Executive MBA in Aviation at the University of Colorado, Denver. Business.ucDenver.edu. And by Cerium, the world's most trusted source of aviation analytics. Cerium.com. We also welcome your business's support. Contact us at AirlinesConfidential.com.

1:00Chris Sloan: Welcome to Airlines Confidential. I'm Scott McCartney. Welcoming everyone to September. As we move towards Labor Day and the end of the dog days, I hope everyone has had a sunny season full of travel and fun and maybe a bit of relaxation. One big event of every summer is the Global Business Travel Association Convention. And this year, our very own Dave Hilfman was given the Luminary Award for Industry Impact from the GBTA Foundation. I will quote from GBTA. Dave's visionary leadership, integrity, and commitment to advancing the business travel industry has strengthened partnerships, elevated standards, and inspired those who worked alongside him.

1:48Chris Sloan: And I couldn't agree more. Congratulations, Dave. It's a delight to have such a luminary join us on the podcast this week.

1:57Dave Hilfman: Thank you, Scott. But I got to tell you, I was truly honored, humbled, and shocked about that luminary award. I mean, that means a great deal to me. GBTA, you know, had a wonderful time working with them through all these decades. You saved them, man.

2:17Chris Sloan: You became the interim that saved them.

2:20Dave Hilfman: Well, thank you for that. I just, you know, they mean so much to me. The industry means the world. I just love it. And so, hey, I was just trying to be like, you know, the Debbie Boone of the travel industry, lighting up your life. And again, many thanks to him. You know, I'm sure most of the airline's confidential listeners know GBTA does a great job representing the corporate travel industry, you know, and advocacy with governments around the world and education and certification of, you know, different programs, you know, networking and those big events. And then the GBTA Foundation is kind of their charitable and mission-driven arm, which focuses on people and the planet.

3:03Dave Hilfman: And they've got a lot of incredible initiatives going on in there. So, again, thanks to Suzanne Neufong, who's the CEO, and Delphine, and Bev, and Katie, and all the folks over at GBTA for that wonderful honor. Really, it meant the world, and I was very proud to receive that. And hey, if anybody else deserves that award, I'm going to try to cast a vote for you, Mr. McCartney, because you continue to do that in all these amazing shows. You and I were chatting earlier about there's so many issues going on in the industry. And you've been such a great advocate for improvements across the board, certainly as it relates to the airlines, but even beyond that.

3:43Dave Hilfman: So I just want you to know I'm voting for you next time, pal.

3:47Chris Sloan: Oh, well, thank you. Thank you.

3:49Dave Hilfman: So, hey, we have some really interesting and fun news to talk about this week.

3:54Chris Sloan: And just because it's been so hot in so many parts of the country, we're going to try to cool everyone off by taking you way, way up north.

4:04Dave Hilfman: Our roving correspondent, Chris Sloan, is going to report on some airline operations north of the Arctic Circle. Some audio chill for these hot summer days. Can't wait to hear that.

4:16Chris Sloan: It is a cool but hot conversation. I think it'll be fun for people to hear. Okay, Dave, we've got some significant news on United and JetBlue and TSA and other things. Let's start with your favorite, United. In what has become perhaps the most hyped annual event of the year, United announced its new international destinations for 2027. Now, new route announcements have always gotten outside media coverage, I think, in relation to their impact on the airline's bottom line. But it does matter a lot to the local communities that suddenly have air service and does matter to some travelers who are looking for new destinations or cheap deals on new flights because bookings are light or just easier, you know, get somewhere where you don't have to connect.

5:15Chris Sloan: So all important to some extent, all this is great free advertising. In this case, I think the, you know, the local communities involved don't get to watch Good Morning America and they don't have many residents. So I'm not sure how much impact there is, although it's certainly going to boost their tourism business. Anyway, super interesting this year, as it has been the last several years because of the creativity of Patrick Quayle, United's Senior Vice President, Global Network Planning and Alliances. This announcement has become an annual geography quiz. And this year, I would totally fail if it really was a quiz, all of which makes this fascinating.

6:01Chris Sloan: And by the way, me too.

6:02Dave Hilfman: I mean, they're amazing, these destinations. Most I was just not that familiar with. Would have flunked the airport or city codes for sure.

6:11Chris Sloan: Yes, no, and I'm about to flunk the pronunciation test of this as well. So United will add flights next year from Newark to eight new destinations in Europe. The destinations are in Italy, Spain, France, Portugal, Luxembourg, and Slovenia. Who knew, besides fans of basketball star Luka Doncic, that the capital of Slovenia is Ljubljana? Or that there was even a commercial airport in Albia, the fourth largest city in Sardinia, Italy. Not the first, not the second, not the third, the fourth largest city in Sardinia. Albia has a population the size of Utica, New York. Go figure. But Patrick Quayle is going to try and make it into a tourist destination for Americans.

7:01Chris Sloan: I applaud you for doing a beautiful job on those pronunciations.

7:05Dave Hilfman: I think you were right on the board. How would we know, really, Dave? We don't. We don't. But we'll probably hear back from some of the great listeners out there if we were even remotely closed.

7:13Chris Sloan: Yes. Well, you know, like Nuke Greenland, United's going to make it better known. So other destinations from Newark include Marseille, France, Ibiza and Valencia, Spain and Luxembourg. In addition to the Newark to Europe flights, United will also add Washington Dulles to Toulouse, France, which will certainly make Airbus employees happy and San Francisco to Okinawa, Japan. Some of these routes will be three days a week, some four days a week, some seven days a week. several will be flown with A321XLR aircraft, which as listeners I think know, a longer range single aisle plane that creates new opportunity to serve small cities long distance.

7:59Chris Sloan: The strategy is fascinating. This is part Allegiant, right? Serving small towns that don't have other service. And it's also part Instagram. Quayle even referenced the Instagram ability of these cities. People want that unique picture to post of their unique travels to a unique place. Instagram is having a big impact on tourism. And by the way, American Airlines, to much smaller fanfare, announced seven new international routes for 2027. The routes include New York to Amsterdam and Nice, France, and Philadelphia to Porto, Portugal, and Vienna. American will also use Airbus A321XLRs for a lot of the expansion.

8:45Chris Sloan: Those destinations are well-traveled and it kind of shows how American is playing catch-up these days. So Dave, have you already checked out the golf courses of Sardinia?

8:58Dave Hilfman: Sadly, Scott, I have not done my homework yet to check out the golf courses, but I'm sure they have a number of them and presumably beautiful. I have, however, checked out all those nightclubs in Ibiza with those bubble bath parties. So I'm sure our wives would be fine if you and I went over for kind of a fam trip over there just to check out all that activity. You know, and then Portugal, that's a big golf destination. And it just, it's incredible to see this list. I, you know, I got a chance to work with Patrick Quayle for a couple of years while at United. And he's a creative genius, a scheduling guru and all.

9:39Dave Hilfman: He's got a great team, of course. And it's amazing what they've done. And obviously enabled, as I know we've chatted about this before and you've talked with others during different shows about what that Airbus A321XLR does with the right number of seats where you can operate it profitably. You can take some chances. I mean, it's really, I think that is a game-changing aircraft. I'm sure it's still very early and trying to figure out just how much range they have and, you know, what it's going to do. But from all reports, from media and consumers, and I know social media influencers talk about Instagrammable, you know, it sure seems to be getting some rave reviews, at least on United's playing.

10:24Dave Hilfman: I'm sure Americans got a nice setup as well. You know, Scott, it reminds me a lot about the early days at Continental. And I just talked about that because you remember back in Gordon Bethune and Greg Brenneman, even Barry Simon, Bonnie Reitz, Glenn Hallenstein when he was at Continental and Bob Cortellew. And we were using the 757s with winglets, right? Out of Newark, because, you know, we knew that you could probably not, you knew you couldn't fly a wide body, a number of destinations and have a real hope of making money. Maybe not even the peak summer season, but certainly not in the off peaks.

11:04Dave Hilfman: And, you know, the advances with those winglets gave us a chance to use those 757s on some markets. And it ended up being a great template for, you know, future expansion and obviously these newer generation aircraft. But, you know, I just I remember that we used to call it the three ugly brothers, I think, was Amsterdam, Brussels and Zurich when we launched them in Newark on DC 10s. But we were able to get the seven sixes, which were far more efficient from a fuel perspective and had the right sizing of the aircraft and capacity demand. It was just amazing what we could do. So I you know, it's just kind of fun to see how that happened all those years ago.

11:45Dave Hilfman: And I know you remember it well. You were covering all this at The Wall Street Journal.

11:48Chris Sloan: Yeah, no, I wrote about it. The first person, you know, Greg Brenneman had said, we're going to we're making Newark into a European hub. And I thought, well, that it's, you know, New Jersey is not in Europe. What are you talking about? But that's exactly what this is. And, you know, the ability to connect in Newark to secondary and now third and fourth level European cities without having to go through a big European hub. Pretty cool.

12:24Dave Hilfman: Yeah, very cool. And you're absolutely right. Greg, who was, you know, he was always quite amusing. Tough to keep up with Mr. Bethune, of course. But you're right. He did say it was this is a European hub. And we were all like, well, what's he talking about? Oh, yeah. OK, we get it. You think we're going to fly to, you know, 40 cities there at some point. And, you know, I mean, yeah, they're going to get there. Maybe already past that and well beyond and all that. It's just it's pretty amazing what has transpired over the last few decades. And, hey, I'm excited. I haven't been on the A321XLR, but here's great things about it.

13:00Chris Sloan: Yeah, I mean, you know, I think we always have to keep in mind, look, it's not going to be the same experience as a wide body. And I've heard complaints about some of the business class lie flat seating, and it gets really tight. You know, the American flight attendants have dubbed theirs the coffin. And, you know, it's not as roomy a cabin. It's, you know, the difference between a long trip in a Subaru versus a suburban in some ways. So, look, I think it's not the same experience. On the other hand, if it's that or connect through London, Paris or Rome or Amsterdam or wherever, you know, I think it's going to be very attractive to people.

13:51Dave Hilfman: Couldn't agree more. And, you know, hey, listen, I connecting is can be fine for a lot of folks. And that's all great if you want to do that. But for sure, we know time is the most valuable thing we have. And certainly for business customers, I would argue a lot of folks just traveling on leisure. You don't want to risk, you know, any issues that might be involved in connection. and the vast majority of connections work just fine. But you love the nonstop, saving the time, reducing any issues. And you can, you know, it's a first world problem. If you're in business class and it's maybe not quite as swanky as the 777 or Dreamliner or 8-380 or 350, whatever.

14:28Dave Hilfman: Right. So your point, I think it's going to be magnificent for so many communities and customers. I'm excited about it for them. So I give United a lot of credit. Patrick, obviously Andrew Gisela, even after Mr. Kirby, who I know has been excited about all that. And just as a note, it is Mr. Scott Kirby's 10th anniversary, I think today or this upcoming week at United. Obviously, I was first there when he arrived in 2016 and reported to him over a couple of years, had an amazing time. He is quite extraordinary. Sorry to show my bias because I really enjoyed my time working with him. And as I know, you and I talk about his sister, Autumn Kirby Miller, used to work for me at Continental and United for a long time.

15:15Dave Hilfman: So big fans of that whole family. So pretty, pretty cool stuff. Hey, so on to other stuff. Some interesting news out of the Transportation Security Administration, TSA. The agency announced it was dropping. And I was kind of shocked since this has got such play last month. The TSA Gold Plus program, which was an effort to privatize more airport screening. You and Christina Kasotis, all-star in Pennsylvania, I know there, talked about this on last week's podcast. Christina had mentioned that Tampa International Airport and others were studying Gold Plus really hard, and everyone in the airport world was watching.

16:00Dave Hilfman: Well, Tampa International announced that it was dropping the idea. And then TSA said Gold Plus was dead. It's kind of fascinating. I know it had just been announced in May, but then TSA has a new administrator now, David Cummins, and he was sworn in August 7th. And he said he wants to expand TSA's existing privatization program, which is called SPP, Screening Partnership Program. And apparently, I guess there are about 20 airports already in that. So, Scott, I know you're kind of an expert in all this, and I'm sure you and Christina chatted about it extensively. What's your thoughts on the whole thing?

16:39Chris Sloan: Well, it wasn't clear from the beginning what Gold Plus was, other than an attempt to create headlines around privatization. And, you know, I think I think Tampa signed up for it to to get access to details on what all this was. And once they got in there, you know, wasn't wasn't to their liking. And Christina had mentioned a lot of issues. Who's paying for the equipment? Who's you know, who's maintaining it? Who's all kinds of stuff. So it's you know, it looks a little bit like fire ready aim. Let's just throw a program out there that's not well formed. But, you know, new administrator, let's hope he's got a lot of work to do at TSA.

17:27Chris Sloan: There needs to be a lot of modernization, a lot of keeping up with the threat at TSA. And I hope this isn't a sign of, you know, inefficient management. But we'll see.

17:43Dave Hilfman: Yeah, absolutely. Hopefully not. You know, they provide such a critically important function, as we know, and you just want it as efficient as we can. I was always wondering if it was essentially or the essence of all this was simply to avoid the scenario of government shutdown and, you know, putting the traveling public in, you know, such a bad way when people, you know, the screeners wouldn't show up. And those great professional TSA agents who shouldn't have this issue and shouldn't be working without paychecks, I just assumed that really was at the core of it all. But I was probably missing something.

18:23Chris Sloan: Yeah, well, I think, you know, I read it more as let's get people off the federal payroll and sort of a, you know, the TSA screeners are unionized. immunized. And, you know, if you can reduce the number of people in the union or whatever, I don't know if that was part of it, if it was intended to be a cost saving notion. I certainly hope not since we're all funding TSA with the passenger security fee. But, you know, who pays for what? That was a big issue with it. So who knows? You know, I'm glad I am glad they're focused on one program, if that's what it's going to be, and if airports find benefit to privatizing with TSA oversight and good standards and all, I think it's worked fine in San Francisco.

19:21Chris Sloan: With you all the way. No problem with that.

19:23Dave Hilfman: I wouldn't mind seeing it expanded, particularly if it's going to avoid any of the shutdowns that we've experienced in the past, but you've got to treat your employees fairly and pay them. And so I guess we'll just hope for the best, right?

19:35Chris Sloan: Yeah, yeah. All right, Dave, the JetBlue news, I found very interesting. Investor Carl Icahn has sold most of his stake he took in JetBlue back in 2024. He bought into JetBlue saying he thought it was undervalued. And now he's basically saying he doesn't think there's much more potential for a higher stock price. And that's not good news for JetBlue. Icahn did make a bit of money on the investment, it seems. We don't really know for sure. I saw some headlines saying he lost money. I don't think that's really the case. What we don't know is what he got from selling. And that's largely because nearly half of the 33.6 million shares he controlled were through futures contracts.

20:25Chris Sloan: He paid a small price. It was typically$1.40 to$1.50 or so a share. But that wasn't for the share itself. That was for the right to buy JetBlue shares in February 2027 at$4.25 a share. So he controlled those shares. And so they had to be reported. And he wanted them reported as such in the 13D filing that he had beneficial ownership of those shares. He did disclose what he paid for the investment, which was just under$120 million. But as I said, we don't know the sales price yet. Here's my back of the napkin math. It looks like he sold in early to mid-August when JetBlue's shares were basically over$6 a share.

21:15Chris Sloan: So by my calculation, he sold when his stake was worth about$134 million at$6 a share, by my rough calculations. The$134 million, that's more than the$120 million he paid. He didn't sell all of that. You know, the shares that he still owns are part of that$134 million. So he hadn't cashed them all out yet. Still owns about 13 million shares, which is 3.3 % of the company. So the final return is still pending. He also had to give up two board of directors seats he got when he had a 10 % stake, or it was 9.9%. The company said last week those two directors resigned. Bottom line, he's giving up on JetBlue, right?

22:10Chris Sloan: Not completely, but mostly, which is not reassuring news for the company. It could be simply frustration with the Iran war and high oil prices, and that's hurt airlines so much, particularly the weaker players. It could be that Carl Icahn suddenly remembered that airlines are a tough place to make money. He should have learned that lesson with TWA many, many years ago. But here we go again, or here we went again. It could be that he's got a better investment idea and wanted to redeploy the money that he had in JetBlue. Don't know, but interesting news. So two other notes, Dave. First one's disturbing.

22:52Chris Sloan: The second one, heartwarming. First, the FAA is moving to fire two air traffic controllers from the LaGuardia Tower, New York, who left work an hour early the night of the Air Canada regional jet crash into a fire truck. It's not clear if that would have made a difference in the accident if they had been in the tower cab or been in the break room, which is where they may have been. The controllers might have called them up because it was busy. We do know that the two overnight controllers who were in the tower cab did have a very busy workload because storms had delayed flights. And they probably could have used some help.

23:36Chris Sloan: Leaving early, apparently, we hear from controllers and others at the FAA, leaving early is a regular practice among some controllers. And the administration is moving to fire them all, not just these two, but apparently all of them for time card fraud. I think this is insane. It's a longstanding practice, sanctioned, tolerated, and tacitly approved by management within the FAA. We can argue over the merits of the practice. Yes, leaving work early is bad. Getting paid for an hour that you didn't work, that's bad. However, controllers are expected to work mandatory six-day weeks for the past several years, copious overtime hours because of management's inability to adequately staff facilities.

24:30Chris Sloan: Controllers have a high stress job and the shortage of workers has made it worse. And I get it. Sometimes, you know, they've got the break time that they didn't get to take during the day. So should they go sit in the break room for an hour? Maybe they should, because if things get busy, they can be called back up, but they've been taking their break time or whatever and leaving early. And by the way, controllers sometimes, somewhat regularly it seems, sometimes have to work without paychecks because their employer can't make payroll on schedule during government shutdowns. Maybe leaving early is not the best idea, but I would say fire the practice, not the people you let do it regularly.

25:22Chris Sloan: Big picture to this. Transportation Secretary Sean Duffy, who, by the way, seemingly left work early to film a reality show of him traveling with his family across the country. And by the way, the show was funded somewhat curiously or securiously around rules funded by companies he regulates. He already picked a fight with controllers, accusing them of calling in sick on a holiday weekend. I don't get it, picking a fight with air traffic controllers. U.S. controllers are the best in the world doing incredible work under horrifying conditions. The problem is management. The problem is not the workers.

26:01Chris Sloan: The problem is antiquated equipment, communications, technology breakdowns, and inadequate staffing. Fix those problems or fire the people responsible for those problems. And finally, the other item I wanted to mention, there are already 80 ,000 signatures on a petition to add Dolly Parton's name to Nashville International Airport. One state representative of Tennessee says he will introduce legislation to do just that, to honor eastern Tennessee's treasure. Dave, we will be, I think, we will be departing from Parton someday pretty soon.

26:42Dave Hilfman: I sure hope so, Scott. I'm a huge fan of Dolly Parton. I mean, what a treasure for the country, really the world. Whether you like country music or not, I mean, she broke through so many different barriers across the entertainment spectrum. Great singer, extraordinary songwriter, actress. I mean, we know she was one of the smartest people on the planet. I mean, she could play off like she was just a singer and fun and the blonde hair and all the great stuff. Dolly Parton would, would chat and make fun of herself about the man was she smart. I mean, I loved her quotes and the Dolly Parton isms almost like Gordon Mathune was, you know, he was just famous for that.

27:23Dave Hilfman: But she was just incredible. And a little bit like you and I chatted earlier, she was incredible for the economy. I mean, I mean, talk about the Dolly Parton effect, a little like that Taylor Swift effect between her concerts and all that she did and that Dollywood. I just have to say, I hope they honor her there. That would be spectacular.

27:45Chris Sloan: Yeah. Yeah, absolutely.

27:48Dave Hilfman: We'll see what happens with that. Hey, and I did, you know, I wanted to comment back just the other thing you were talking about, JetBlue. Yeah. Because I just recently took a flight on them. Actually, this week from Boston back to San Diego, I did pony up and paid for that mint product. And I had to say they they did a beautiful job. I think it was a newer version of their mint product that may have been the European one they use. But the staff couldn't have been nicer. The flight was right on schedule. It did a lovely job. The whole thing. I mean, they really did a good job. I sure hope JetBlue finds a way to get back to sustained profitability.

28:26Dave Hilfman: And, you know, whether it's a great investment or not, who knows? Obviously, Mr. Icahn, who's had a – I think he probably did just fine with TWA in the long run. I'm not the financial expert, but I have a feeling he figured a way. And I suspect he found a way to make some money on this JetBlue investment. But between JetBlue's product, their staff, and obviously that new partnership they have with United, I'd like to thank Joanne Wright and Marty St. George. I know you know a lot of these folks. I don't know them as well. But anyway, I hope they do well. You know, it was interesting that in the midst of a lot of that, I mean, hey, Berkshire Hathaway stepped up and invested a ton in Delta.

29:07Dave Hilfman: Right. So you can make money in the airline industry as an investor. You got to be pretty savvy. And, you know, nobody knows really how to time stuff. But I would say if Berkshire got in, granted, it wasn't with JetBlue, but with Delta and they invested previously some other airlines, you know, there's there's a way to make some dough. So I guess we'll find out how it all plays out over time. But I did want to comment on that. I thought JetBlue did a great job. And I'm hoping they'll continue to find a way to stay in the skies for long term and however it turns out.

29:36Chris Sloan: Yeah, yeah, totally agree. Amen. And I think they are making progress with their Jet Forward plan. But, you know, they're going to need some breaks, need some breaks in oil prices and other things.

29:48Dave Hilfman: Exactly. But, hey, back to Dolly, again, who I know we're both big fans of and the world will miss her. I mean, redoing those ICAO airport codes can be a little bit difficult, although obviously West Palm Beach did it recently. You know, Nashville is BNA. That stands for Berry Field Nashville. Guess Harry S. Berry. Didn't know him. I guess he was a little before our time, right? He was the WPA administrator who got the airfield built, and that became the first airport. He became the first airport administrator there. So what would Dolly Parton International Airport be? I mean, they don't always have to change that code.

30:27Dave Hilfman: Could be, I guess DPL is taken, right? And could be DNA, could be PNA.

30:33Chris Sloan: Dolly Nashville DNA.

30:35Dave Hilfman: I know, I love that. Or PTN, Parton Tennessee National, or who knows. But, you know, clearly they did it in Houston for President Bush and Reagan Airport in D.C. and Harry Reid up in Vegas. And so anyway, I really hope she gets her due. She was amazing for the for the country, for the world. Absolutely.

30:57Chris Sloan: Absolutely. All right. Time now to thank our sponsors for making this podcast possible. Thanks to RTX for its support of Airlines Confidential. At RTX, a century of aerospace and defense innovation shapes a unique perspective. It takes more than technology alone to rapidly advance the future of flight and strengthen global security. It takes a vision to see what's next, adapting expertise and scaling manufacturing capability to deliver where and when it matters most. Perspective is everything RTX. Visit rtx.com to learn more. And thanks to Infinity Flight Academy. Infinity Flight Academy is helping build the next generation of professional pilots.

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32:16Dave Hilfman: I am definitely checking out infinityflight.com. I've always been envious of you pilots and all the great experiences like you, Scott. I know you fly around. I know these guys do a great job. I might be a little late in my career, but I know I can pass a physical, so I'm going to do it. I'm checking them out. I knew they'd do a great job. Hey, in addition, thanks to Sirium for its support of Airlines Confidential, and we mean it. We appreciate all the great corporate sponsors here. As most folks may know, certainly in the airline industry, Sirium offers the most accurate and precise data and analytics to enable airlines to optimize their planning, operations, and passenger services.

32:56Dave Hilfman: The right intelligence drives operational efficiencies, enables you to predict market shifts, and helps airlines respond quickly to maximize revenue, manage costs, and seize commercial opportunities. So all of you out there, and especially you guys that have the budgets to spend on this, you're going to get a great return on investment. Visit Sirium.com for more. Okay, Scott, I'm curious to hear what Chris Sloan found in the Arctic. Tell me. All right.

33:26Chris Sloan: Put on your mittens and coats. Here we go. Chris Sloan, media producer, entrepreneur, aviation journalist, philanthropist, and our roving correspondent is back from roving just about as far north as you can roam in a commercial airplane, or at least one that lands up there. He profiled Canadian North Airlines in a delightful two-part story for Runway Girl Network. Check it out and do that after we welcome back Chris.

33:58Dave Hilfman: Great to have you back. It's great to be back. It's been a while and I've definitely been roving. Well, yes, you have.

34:06Chris Sloan: All right. So you went to check out Canadian North Airlines. I was not familiar with this carrier. Tell us about it.

34:15Dave Hilfman: Well, it was interesting, you know, being a Florida man, wait, I can't say Florida man, a Florida citizen, you know, it's hot here. So, you know, wanted to go have a cool vacation. So I'm like, you know, let's go, as they used to say, on that show SCTV, let's take off to the Great White North. And when I'm talking Great White North, it's like, let's go pretty much as far as you can go to the Arctic. So flew up there in July, which is actually, by their standards, pretty balmy. And it spreads some American goodwill and let them know that we don't have horns down there. There's still people who love them.

34:50Dave Hilfman: And so it was a two-parter and flying Canadian North. So Canadian North is a really interesting airline. And I have this kind of, I think, obsession for flying in the North. And I think people don't realize, you know, Canada is the second largest country in the world by land mass and only second to Russia. It's just massive. And with a population, I believe, only around 42 million. So what's really interesting is that 80 percent of population lives on the border. But there's about 150 ,000 that live in the same land span as the continental United States. But it's all in the north. And in Canada, you know, we all hear about Westshed or Porter.

35:32Dave Hilfman: Air Canada, but there's three large airlines up there that all have very unique missions as a lifeline. They basically fly routes into isolated communities, in many cases using jets, where there is no other way to get in or out. There's no roads. There may be some boats for the month or so that the ice is clear. And they're everything. They're lifelines. And what's interesting is I've flown two out of three of them. There's Air Inuit, which was the last operator in the 737-200 Combi, was on your show about three years ago. And there's Air North, which is kind of the Yukon and the Northwest. And then based in, again, weirdly enough, they're all based in kind of, these two are based in Ottawa or Canadian North and Air Inuit is Canadian North.

36:22Dave Hilfman: And Canadian north really to give you perspective uh pretty much the farthest south canadian north goes is flies down as to the balmy is to balmy edmonton or ottawa canada that's the tropics and uh so the idea just to give you a scale of ultimately in these two flights how far a distance north that is is from my home in miami to the canadian border well from is the same distance roughly as from the Canadian border up to the Canadian Arctic. So it was a long, arduous, and highly expensive journey. And so Canadian North, again, they deliver flying and locales unlike anything I've really experienced before.

37:07Chris Sloan: Yeah, so interesting. You had a great line in the story that you went to the top of nowhere, which was a great image, just flying to the top of nowhere. Is Canadian North a private company? Is it government supported since it is such an important lifeline into these remote communities? What are the finances like?

37:32Dave Hilfman: Yeah, it's a good question. It was actually the merger of two airlines, Canadian North and First Air back in 2019. And for many, many years, these were owned by the First Nations people. There's serving the Nunavik and I don't want to do justice, misjust, you know, but these indigenous areas. And then it's been taken over by a private corporation. So Canadian North is now privately owned. But actually, there was multiple, multiple airlines up in these parts. And it's a great question because they are performing, you know, a lot of services that, you know, in lieu of the government, I mean, we're talking medevac, we're talking necessary cargo, you know, all those types of things.

38:19Dave Hilfman: So they're, they're, they're very, very unique operations in pretty much every respect. And that's the thing is, there's not just one, there's three of them that are all substantial companies operating 737s, big jets. And on top of that, there's quite a few others that are just cargo only. And really just a side tangent, the main reason I went up there, I mean, I did want to go to the Canadian Stampede with the Calgary Stampede, which makes the Houston rodeo look like a small town rodeo. It's the largest rodeo in the world. But I was trying to fly the last Dash 7, basically, which has always been an airplane I've been obsessed with.

38:57Dave Hilfman: And I couldn't get on it, but I did get to see it. But that's also where, if you remember the show Ice Pilots, Buffalo Airways, well, there's an airport where the Canadian North operates out of, which is Yellowknife, which is basically like a flying museum of all these airlines flying Jurassic DC-3s and C-47s and Lockheed Electras and all this kind of equipment up all over the North. And so a 737-200, which you would never see down here, you kind of stand on the runway, you're going to see them in four different liveries. So that alone is one reason to, to that, you know, if you want to, you know, go eat as much Timmy Horton's honey crawlers as you can, those are another good reason to go up to Northern Canada.

39:39Chris Sloan: And do all these airlines compete against each other on the same routes or have they kind of carved up the regions?

39:48Dave Hilfman: Well, it's interesting. There have been, It has been, you know, the C word, consolidation. A lot of consolidation. There was Canadian North, which was a different Canada North, which was kind of an outgrowth of Canadian, which was taken over by Air Canada. And then First Air was a big play up there. And then there was Nord Air. And so they basically all, for the most part, kind of stay in their own lanes. There's a few routes that they compete on, but they're all doing essentially the same type of operation, but they are separate. But yeah, there are routes that they do compete on and they cover incredibly large masses.

40:25Dave Hilfman: I mean, what is it, Air North out of the Yukon? That's almost up around Fairbanks, Alaska, very close up there. And they have flights, one-stop flights all the way down to Ottawa and into Montreal and Quebec. So imagine the distance these airlines cover. And when we're talking, you know, a lot of these flights are, you know, four, it's like the old days, you're making three or four stops in a day, and you're flying extremely long distances to those destinations. And so they don't really compete. But they, they, I think they do compete in terms of government contracts, because beyond these, there are a number of cargo operators.

41:06And so it's interesting that people don't believe this.

41:10Dave Hilfman: There are more airlines, independent airlines in Canada than there are the United States. Yeah.

41:17Chris Sloan: Fascinating. All right. You rode a 737 Combi from Edmonton up to Yellowknife, something called a quick change Combi. Tell us about the flight. Tell us about the quick change.

41:32Dave Hilfman: Well, the quick change is, you know, I kind of joke, maybe it's kind of a Canadian hockey thing to joke. It's called the mullet plane because it's, you know, business in the front and party in the back. Another way of saying cargo in the front, passengers in the back. And what makes this one different is it is quick change is that you can actually move the bulkhead based on and you can you could have three quarters of the cabin freight, you could have the entire aircraft freight, or you can have the entire cabin, which they generally don't do, passengers, and that is adjustable, but it's got a big, huge Mondo cargo door on the side of it.

42:07Dave Hilfman: So that's what makes it a combi. But the quick change is where the combi, if you want to be really strict about it, is there's some that where the bulkhead really is fixed and doesn't move. But these aircraft have the ability to seat as many as 90 passengers in the rear cabin or as few as 18, and they can make that adjustment based on the load. And so the other side benefit, of course, is it's like flying the DeLorean, the time machine, back to the future, because you're flying 1980s vintage 737 classics. And I think, Scott, you and I were making jokes about architecture before we got on, but it's like we're of a certain age where we remember what they call a classic.

42:54Dave Hilfman: We're like two classics behind that. So, you know, we're like, oh, we're at the age when the 737, 300s, and 400s, which Southwest were the launch customers of in U.S. Airways, we're at the age. We remember that that was new cutting edge technology. Now that's two generations behind. And, you know, it feels like an 80s time warp. So, you know, you can't really do that in the United States anymore. So that was kind of the appeal. And Canadian North did fly, you know, what we all, I mean, literally people come from all over the world to fly these drones. Jurassic jets. And they, but you know, they're really a trip because they've, they really do keep them in a pristine state and it's not as rustic.

43:35Dave Hilfman: It is certainly weird, but it's not as rustic, at least the jets as you might imagine.

43:41Chris Sloan: I'm just curious, what do they do with seats in the combi when they, you take seats out, you put them in, do they have a store of seats up in Yellowknife as well as Edmonton? I mean, what happens?

43:56Dave Hilfman: They open the side door and they forklift them in and out. And these airlines, you know, do worldwide charters. So, yeah, I mean, they can. And that also goes with the overhead bins, too. They can move those as well because in the front, they're fitting huge pallets. So in this case, there literally is a bulkhead. And at the front of the bulkhead, there's a little door so you can actually, so the crew can actually go through the baggage hold because there has to be room for the crew, for the flight crews to be able to get to the front or back of the airplane in an emergency or in flight, though you never see those people.

44:35Dave Hilfman: But, you know, just like some of the things that are unconventional about that is that you board through the rear air stairs or a ramp. And the weirdest thing I've ever seen from boarding is, I don't know if you've ever had the pleasure or joy of boarding out of Calgary or Edmonton, but they have these special gates at the floor level. And they have, because it's so cold, they, instead of a jet bridge, because you walk into, but instead of making you walk, you know, 100, 300 feet through a tarmac, they have this long tunnel shed that goes on. It looks like the shiny, except there's no two weird girls on big wheels at the end going red rum, but it does feel like the shining.

45:17Dave Hilfman: And then you walk out and you're way in the distance on a 737 Combi and walking up the air stair. So that alone is kind of odd. There's no boarding sequence. There's no priority boarding. You're in a special zone, even the terminal is just for flights to the north. So in the lobby is all these pictures of polar bears and muskoxes and no tropical vacations. And everybody's group one. Everybody's group one. And I will note that these airports seem to be competitive like zoos because the baggage claim in Yellowknife is a polar bear. And then up in Cambridge Bay, it's a muskox. So across the north, it's like, what kind of big taxidermy deadly creature can they have to welcome you and not maul you?

46:05Chris Sloan: Yeah, awesome.

46:06Dave Hilfman: So, yes, a couple of things about the flight that make the planes really a time warp is that, number one, like the seats aren't like sitting on rocks. They're old school, 1980s. I think there might have been an errant cigarette butt maybe left over in one of them. But no, their planes are really clean. but they're old school padded. You know, that seems like a luxury to me. Yeah. And weirdly enough, when you're paying these extreme amount of money on all these Northern Canadian airlines are all very, very proud of the fact that they serve complimentary hot meals in economy. Well, there is no first.

46:39Dave Hilfman: So everybody gets a free hot meal. Wow. Domestically. So we make a big deal. That's a throwback. Right. And actually, here's another throwback. They're really tasty. And And in my case now, some of the airlines are dry because you cannot bring alcohol into the indigenous communities. But on the jets, they actually do. They'll give you one drink, but it's going to the indigenous communities. It's like if you're flying from Edmonton up to Yellowknife, they will actually offer you that. And that's pretty cool. And and the food is actually kind of creative. It's not like some kind of weird, you know, Arctic char.

47:16It's like, oh, we've got, you know, a vegetarian, a chili chicken with pasta.

47:21Dave Hilfman: And and then the other thing is they're very proud of the fact of they're they're very, very proud of their in-flight entertainment. And so there's a on all the flights. They have this sign that says in-flight entertainment. It's a big card. It pulls you out and tells you how to access it for free. And just says open. Turn to your left. Look out the window. Open shade. I'm not joking. Literally, it literally is their joke. They have an in-flight magazine, which I was like, when was the last time you saw that? Some of it's in English, too. That's kind of a bonus.

47:52Chris Sloan: And it's the same in-flight entertainment as on American Airlines.

47:55Dave Hilfman: Pretty much. Yes. Yeah. Pretty much. And but they do. So it's nice. There's no there's no no Y-Fly, no steaming, no streaming portal looking out at the skies. And so that so that was, by the way, that's the normal that's the normal flight. And that's flying from Edmonton up to Yellowknife. And Yellowknife is a remarkable place. Just so you know, it's the same latitude as Fairbanks, Alaska, but it's the cap of the Northwest Territory. So imagine a place that's bigger than Texas and California combined and only has 80 ,000 people in that entire space. And that's the airline's primary market. All right.

48:39Chris Sloan: From Yellowknife, you went two hours in an ATR turboprop to Cambridge Bay. And that's kind of a fascinating place, 240 miles north of the Arctic Circle, a place where I guess it's sort of the home base for Arctic researchers and also for radar early warning for Soviet bombers coming across or whatever it might be. Tell us about the turboprop service.

49:07Dave Hilfman: Well, don't forget, it's also the home of the world's northernmost Kentucky fried chicken. So if you want to have the privilege of paying$14 for a$6 McColonel Happy Meal, or$30 for a gallon of orange juice, this is your place. and it's like being on another planet. It's truly tundra. There is no grass really to speak of. There's no vegetation. It has kind of the charm of a mid-1980s Soviet work camp. It does have a golf course. They're also very proud of the world's largest golf course, but truly, literally, I'm not joking. David Wolfman will be all over that. Wait until he hears that. He should see it.

49:51Dave Hilfman: I've got pictures of him. I think we can get him a tea time. Okay. I don't think there was, there wasn't a lot of traffic in the, now I didn't, there's no grass. So I don't really know what the putting green, it's like putting gravel. And the holes are like a potholes basically that could swallow an SUV, but I mean, I'm sure Dave would do fine, but it's a, it's a, it's a very, very, that's a very, very unique experience. So why is it a unique experience? It really is a wonderful place. And in my case, I preface all this with that. I'm flying in the summer. I'm flying in the optimal time. The winter is a whole nother ball of wax.

50:26Dave Hilfman: But these airlines, in all sincerity, are lifelines. And so when you're on these airplanes, you think about the type of people on board. There's a lot of people. There's Medivac. There's people that are going down there for, you know, medical procedures because there are no hospitals. There's people that there's there's some contract, you know, government contractors. But what's interesting is that the cost of goods and especially when the airplane is the only way to bring the goods in, these airlines, it's very expensive. It's about I could have flown business class for the two hour flight on the ATR.

50:58Dave Hilfman: But again, the cost of operating in the north is so high. But for that money, there's no such thing as basic economy. Everybody gets two free bags and most people depart with empty bags and they come back with three or four bags because they go shopping. I mean, it's tough when a Costco run is 1 ,800 miles away. So that's a very interesting aspect. And so, yes, I wanted to fly an ATR because, you know, what fun is flying a JSX plush ATR from Scottsdale to Santa Monica when you can fly two and a half hours for$1 ,800 from Edmonton on the first leg up to Cambridge Bay? And some of the things that are unique about that is that, for one, something I've never seen, about a quarter of the plane is for cargo.

51:42Dave Hilfman: So they've actually built on about half the right side of the aircraft is this container, which is like a cargo container in the cabin. It's not a combi. They do have all freight aircraft. So this massive, like it's their own ingeniously engineered ATR cargo box. And in front of that is about 10 feet of just, I think it's a Pilates studio, but this unused space where you can kind of do whatever you want, which I thought was interesting. And, you know, two and a half hours on ATR. You can't really, what was interesting, you know, here in Florida, we no longer, really, there's not, turboprops in Canada are, you know, we're here.

52:25Dave Hilfman: it's basically taboo, except JSX, they are everywhere up there. And I think there's always reticence about the ATR because obviously there was the crash in 1994. It was, you know, there's the issues with de-icing, but the aircraft is incredibly reliable and they sorted through that. And the ATR is ubiquitous up at the North. And one reason that is, is because it is not only is it very sturdy, but it is a, is an absolute workhorse. And so one thing it can do is it lands on gravel runway. So that's a total grip. When you land on a gravel runway and there's like rocks, it looks like popcorn or literally it's like driving down a rusty road, an old road.

53:06Dave Hilfman: And that's kind of a, that's kind of interesting experience. And people have a little bit of trepidation about that. So every landing I took on that airline, there would be massive applause. I do want to emphasize these people are absolute looked at as heroes because if these planes aren't flying, these places are cut off from civilization. And that's cargo, that's people, that's life and the conditions that they have to deal with up north. And we're talking about tankering fuel and the weather, and this is uncontrolled aerospace, at least at these airports. I mean, this is very, very rustic flying.

53:43Dave Hilfman: And once again, another point is that even on the GTR. You get like, you don't just get a snack, you get like seven snacks, a big choice. And, but, but here's, here's the kicker. There's no room for ice. I guess they think it's cold enough, but there's no ice on board. And the reason they say is because, you know, food is so expensive. Why they have local fuel at most stops, they tanker in the food. So they may have five or six legs in a day, but they've got a tanker quote cater from yellow knife. And then, and then literally efficiently stack it up in the airplane. So a lot of little nuances.

54:19Dave Hilfman: And then when you land, I mean, they turn around very quickly. And it's like a, imagine like three U-Haul trucks come and unload cargo very, very quickly. And then the way you get from the airport into town is there is no Uber, there is no taxi, but there is a thumb for hitchhiking. or like me, you just walk in and somebody's like, get in the back of the cab. And so very, very friendly people. And the challenges these folks face in this inclement weather and they're, and they are incredible. What's fascinating is their completion rates are actually very, very high, but the airlines think so far ahead that if the weather turns, you can get stuck up there.

55:03Dave Hilfman: So they have made arrangements with, there aren't really hotels to speak of, but they've made arrangements with schools and in many cases, churches and residences. And like, remember the play, Come Fly Away or Come From Here? Come From Away, which we are going to talk about next week. Well, you remember that whole story where Nova Scotia embraced? And well, that, I think - That hospitality, and Gander, I'm sorry, but that kind of hospitality is built into these airlines where they actually have employee housing, employee operations where people live at bases or in the city and rotate in and out, but they also have made arrangements for like, because this does get routine in the winter when it's not so much the cold, that can be a problem, but you do get heavy snow, you get extremely high winds.

55:52Dave Hilfman: So these are incredible, incredible aviators. The airline really thinks about, basically, IROPs are regular ops up in this part of the world.

56:03Chris Sloan: So you mentioned$1 ,800. And I'm curious, do locals pay different prices than tourists?

56:12Dave Hilfman: Yes. In the East, they have these special subsidized fares called PARS fares, and you're given a certain amount of subsidized fares per year. And Canadian North, I think they also have certain vouchers. It's not like unlimited. I think there are certain limits, But also, but for things like that, that involved medical, you know, there are different options. So, you know, obviously people like myself, private contractors, those people pay a different freight, but there are obviously different fare structures for, particularly for a lot of the government contractors that are, that are up there, which is the main, the main business.

56:51Dave Hilfman: But if you want to, granted, because I didn't know, I mean,$1 ,800, you could have gotten the, quote, basic fare for like, well, I mean, that's a last minute, two day before ticket. But still$1 ,500,$1 ,300 is what you're looking at for two hours on ATR, which sounds insane. But if you put that in the perspective of the general costs of everything in the north, it isn't. The 737 flight was actually pretty competitive with two other airlines operating, again, monopoly versus competition. But again, on WestJet and Air Canada, you're not getting free bags, free seat assignments, free. I mean, it is old school.

57:30Dave Hilfman: And is that Canadian dollars? Yes, that is Canadian dollars. It sounds much more shocking to say.

57:37Chris Sloan: Yeah, no, it is a big difference these days. It's a lot of loonies. Yes. Yes. So an airline being an airline, I understand there are some labor issues now with flight attendants and Canadian North.

57:53Dave Hilfman: Yes. I mean, obviously, you know, just like here in the South in America, the labor unions have become emboldened. And a lot of the rates in Canada are not, you know, realistically as high. and the work regulations and flexibility are pretty different up there in many cases. And so there was a recent work stoppage. Well, there was a work stoppage about a year from Air Canada for flight attendants. And then WestJet, which lasted, I think, about 24 hours, but the recovery took about a week. Well, it's now Canadian North's turn. And so their flight attendants are not on strike, but the unions have filed a notice of dispute, which is now bringing in a third party mediator.

58:39Dave Hilfman: And contract talk started back in March. But the 200 flight attendants at the airline, you know, are, you know, same thing. It sounds like you've heard this before, low wages, unpaid work, bad schedules, tough working additions. Yeah. I guess the difference here is that you do wonder, you know, what happens if there would have to be government intervention, because in these places, it literally is the only connectivity. So freight is one thing, but if they had to stop operating passenger flights, I would have to imagine that there are provisions or that the government might intervene because you would have in the north, this airline service, I think 20-ish communities that rely on it, and they would be completely cut off.

59:26Dave Hilfman: And so that's a unique thing. And it's interesting when you speak to them, you would never know it. These are about the friendliest, prideful cab. And a lot of them, I spoke to four of them. And a number of them came from a regular Aircan WestJet. And they were like, we just wanted to try something different. And was that like for two years? And they're like, no, we've been here 15, 20 years. So it's in their blood and they have personal relationships. So when they started telling me that this was a possibility, they said, you know, we're very conflicted because we're on a first name basis with a lot of these people and we know how important what we do is.

1:00:04Dave Hilfman: So it's, it's not, it's a very personal dynamic. And that I think is different than a lot of the larger airlines.

1:00:13Chris Sloan: Well, Chris, it's been fascinating. Thanks so much. Now as a creator and keeper of the archive, do you want to tee up a mention of the archive?

1:00:24Dave Hilfman: Oh, you're letting me a shill for the archive? Yeah. Oh, well, thank you. Well, usually Charlie does it with a nice pre-recorded announcement, which I always like. The archive is the ultimate avgeek museum, and it's been a labor of love. It's free for 25 years now. And what makes it really fun and fascinating is we do kind of what the others don't, is you can have, we have virtually just every airline timetable, route map, the original brochures, airline cabins going back, you know, 30 years, 40 years that I've been taking photos and airports, like literally the terminals. So, and a lot of the first flights and inaugurals.

1:01:05Dave Hilfman: So I'm not really a plane spotting website, but we kind of, we call ourselves like a virtual avgeek web museum. So it's the archive.net. And I encourage everybody to go there. And, you know, again, everybody flies first class on the archive.

1:01:22Chris Sloan: All right. Thanks so much, Chris. All right. We have a couple of great letters in the mailbag this week. But before we do that, I want to thank Ontario International Airport for its support of Airlines Confidential. ONT just launched the ONT Bold Program, a proposed vision to transform the airport's facilities to streamline the passenger journey while also creating jobs, growing the regional economy, and building on ONT's legacy as a global gateway. The program includes plans for a new terminal, a multi-story parking garage, upgrades to existing terminals, enhanced roadways, and new utilities.

1:02:00Chris Sloan: The ONT Bold program is early in the planning phase. Visit flyontario.com slash bold, B-O-L-D, to learn more and join the journey to ONT's boldest chapter yet.

1:02:14Dave Hilfman: Yep, Scott. We love that ONT. I mean, I don't live too far away from there. And they really have made such headway over the years. So congrats to Ontario as they continue to advance into the future and now with that bold program. Thanks as well to the fabulous folks, the Executive MBA in Aviation at the University of Colorado Denver for helping make this podcast possible. The Executive MBA in Aviation at CU Denver is the first degree of its kind in the world, taught by industry experts and designed for ambitious leaders from across the aviation ecosystem. With classes located at Denver International Airport and week-long residencies in Washington, D.C.

1:02:56Dave Hilfman: and at airports around the world, students experience a hybrid, flexible course structure that balances in-person and online classes without career interruption. So go to business.ucdenver.edu to learn more. And one of those airports just announced is Pittsburgh International, which, of course, is led by the amazing Christina Kasotis. And our friend Christina will be hosting students for a week as they learn the airport business on the ground. Should be a ton of fun. And what a great education.

1:03:30Chris Sloan: So, yeah, absolute treat. I mean, great opportunity to learn at Pittsburgh. I think it's really going to be fabulous. Yeah.

1:03:40Dave Hilfman: And that amazing new facility there. And I know Christine is very proud of it, as should everybody in Pittsburgh and throughout Pennsylvania. But with that that MBA program, I know how you've been critical with that. And so hats off to you on that, Scott. And certainly I know Charles Duncan and just others. Yeah. What a great gig, right? You've been having fun doing it, right? I mean - Oh, absolutely.

1:04:04Chris Sloan: Absolutely. It's been a great group of students. Great group. The faculty is amazing. Oscar's part of it, but - Oh, yeah. Some of the - Become friends with some of the regular professors, if you will. and just people from all walks of the industry. They have done an amazing job putting together what I think is a really impactful program, much needed in the industry. And the graduates of that program, I think are gonna be really valuable for whoever's lucky enough to hire them.

1:04:46Dave Hilfman: I couldn't agree more. I mean, I know there's some great universities. It's Embry Riddles very involved right on the undergraduate programs. But to have this executive MBA, especially when airlines around the world are looking to hire people that, you know, obviously have some experience, but mostly you love it that they are they're familiarized with this business and have been taught. I mean, when you get the former chairman and CEO of United and you and, you know, Duncan's been so many great airlines. And anyway, it's just great. So I want to comment beyond the standard plug. They're just, that's a great program.

1:05:18Dave Hilfman: And I hope more and more people take advantage of it.

1:05:20Chris Sloan: Yeah, no, Sean. I mean, there's going to be another airport course. Sean Donahue's teaching it. I mean, he ran DFW. It's just a fabulous program.

1:05:31Dave Hilfman: Yes. And for anybody listening, not only are they great instructors or professors, but they have great connections to people that hire people. So if you're on the bubble and on the edge of that, thinking about getting an MBA, That's a great one to get. And you get networked into some amazing people. So anyway, thanks again, Scott. So, hey, in the mailbag, which is always cool to see all the great notes and letters you get. Michael, from somewhere in the air, had a comment on your American Airlines observations from last week. So Michael says, hi, Scott, I heard your in quote, it's that a parentheses or quotes rant about AA's lack of urgency in reconfiguring planes.

1:06:18Dave Hilfman: That's fair. And adding more extra legroom seats, whatever it was, he clearly felt you were very passionate about the situation. So he says,

1:06:57Dave Hilfman: I suspect CEO Robert Isom and the rest of the senior leadership team share the same view. They are cautious and conservative to a fall. They were the architects of the Oasis cabin, and they are willing to die on that hill. So he follows on. There is no question management needs to motivate and rally the troops, but they just can't seem to get out of their own way to make it happen. Their cost side anatomy is in their blood, and they pack the board of directors with like minded veterans. And he goes on to close out, love your podcast. Anyway, what do you think, Scott?

1:07:35Chris Sloan: Well, first of all, Michael, thank you for the letter. Very insightful, very interesting. I do think, you know, to the demand question of the K-shaped economy, and I've said this many times before, I do think there's a generational change in travel demand post-pandemic. The travel world really has changed. Travel is a much bigger priority in people's lives. As younger folks get more spending power, what they want are experiences, not goods. And that's how they're spending their money for the large population of retiring baby boomers who have a lot of disposable income. They want to travel for business travelers.

1:08:27Chris Sloan: You know, leisure has become routine. People want to travel. It is important to them. I just think it's a different priority in the pocketbook. And that has changed the industry where, you know, we've seen it this year. We've seen it in past years. I don't see why it won't continue. I think that that mindset is is different and airlines need to adjust to it. And certainly United and Delta and Southwest even already have. Will demand be different 10 to 15 years from now? So maybe, who knows? It's hard to predict what's going to happen three weeks from now, let alone 10 years from now. I'm not saying the industry is immune to recession and market swings.

1:09:20Chris Sloan: That's going to happen. But you can't manage a company for the downturn. You can't give up 10 or 20 good years for two bad years. I just don't think we're going back to the way it was in, you know, 20 years ago. All that aside, the best way to protect against change is to put as much money away as you can in the good years. If you run a business, especially in a turbulent industry like the airline business, you have to be nimble. You have to be open to change. But you have to be prepared for that change. And that means paying down your debt, having large cash reserves. And America's not getting that in the same way that United and Delta are getting that right now.

1:10:13Chris Sloan: Now, that's a big problem, I think. It is not easy to change a huge operation, but I don't think waiting for the world to change is the answer to this. What we know for sure right now, and likely for a long time to come, is that success in this industry is driven by revenue growth, not by cost cutting. This is a fundamental change from the airline industry that you and I and a lot of others, you know, came up through, if you will. So what I'd say to American, what I said before is spend the money to make this happen fast, because you got to spend money to make money. And look at what Delta and United and Southwest have done.

1:11:02Chris Sloan: Their revenue is much richer, stronger because of the changes they've made. And even if American is correct and the K-shaped economy ends, American will have, in the meantime, lost all kinds of corporate contracts, lost market presence in the three largest U.S. cities, lost international reach. And so even if they're right, they're wrong. They've lost. That's my feeling.

1:11:32Dave Hilfman: Yeah. And you make so many good points and never trying to be that hard on American, although sometimes we are, I think sometimes deservedly, because they did announce, like they announced the new international destinations. And I know they announced the, you know, doing the U-term now on, on putting, you know, more premium seats, uh, you know, on their aircraft and, and the new screens. But as I think you've articulated, well, I mean, you got to accelerate that and that's not easy. And that's nobody in the planning group or maintenance or anybody wants to do that, understand, but to catch up now, you can't just say it and then do it 10, you know, five, 10 years down the road.

1:12:11Dave Hilfman: Um, you got to move it fast. uh and i think that was the point you're trying to get to you guys accelerate that right no no i

1:12:18Chris Sloan: think it's the right moves um and you know um but uh if you're going to put a better product out there you got to get it out there fast otherwise you're just going to keep disappointing customers who say hey i heard you you know you got you got more extra legroom seats you got a new first class But I never see it. Well, where are they? Yeah.

1:12:40Dave Hilfman: No, you make the point great. And hopefully they're finding ways and you keep figuring out how to move faster. The bottom line is, and we always talked about this in the airline business and thankfully made huge strides over the last decade, even longer, is to not be a commodity. You know, I know obviously being cost efficient, whatever, is great. And you need that. And, you know, investors expect you to be cost efficient. But as you still put it out, it's in the revenue group, getting more premium revenue. And that's the issue. You want people to be not just buying it because it's the cheapest all the time.

1:13:17Dave Hilfman: It's because you've got real value. You add value. You've got great product. Yeah, of course, people want good pricing, but they're willing to pay 10, 20,$100 more, some cases thousands more for the kind of product. And that's always the concern when you see people that are not spending on a product that just, I don't know, this is not really a commodity business anymore. I don't know that it ever was, but it was operated like that. And things have changed, I think, for the long run. So just hitting your point, Scott, they got to move faster.

1:13:48Chris Sloan: Yeah. All right, Dave, here's one from Ben in Wyzada, Minnesota. A longtime senior airline executive who you may have worked with at Continental, I think maybe. Anyway, I love that Ben is listening and writing in. He says, hi, Scott. I was disappointed to hear Henry fall into the trap of thinking that, quote, without the Amex revenue, Delta would be losing a phenomenal amount of money, end quote. It's true that American Express paid Delta$8.2 billion in 2025, which was$2 billion more than Delta's pre-tax operating profit. However, absent the Amex deal, the seats now occupied by passengers flying on Amex Sky Miles would be available for sale.

1:14:35Chris Sloan: The amount of revenue Delta would generate in the market from these seats, compared with what American Express pays for them, is hard to estimate from publicly available information. Delta doesn't disclose many specifics about its Amex traffic, such as passenger counts, seat mix, revenue passenger miles, etc. However, given the sophistication of Delta's revenue management systems and the shift in the market toward premium sales, I would be surprised if Delta couldn't replace the Amex revenue through sales and the market if, for some reason, the Amex agreement ceased to exist. This is not a case of the tail wagging the dog.

1:15:16Chris Sloan: What do you think, Dave?

1:15:18Dave Hilfman: Well, I think it may be Ben Hurst that wrote that, who was obviously a big-time high roller at Northwest. And then, yeah, I think Continental Previously, I was just that frontline sales guy. I didn't get to work that close with Ben, but I know he was an all-star. He still is. Yes, you are correct.

1:15:37Chris Sloan: And few know the business as well as Ben Hurst.

1:15:40Dave Hilfman: Yes, a legendary figure in the biz. So I think Ben made a great point that Amex obviously knows how much value to get out of this deal. Delta does, too. It's been a great partnership. Bottom line, though, Delta would figure out. If that deal didn't exist for whatever reason, Delta clearly could replace the vast majority, in my opinion. Henry, I know, is smart as hell, and I love him. And, you know, maybe he makes a point that maybe Delta wouldn't be as profitable, but I think they'd be highly profitable even without it. You know, some way, somehow. That would be Mr. Bastion and the whole team over there.

1:16:21Dave Hilfman: I mean, I think it's a little different scenario. For example, when we talked about, it's not an exact analogy, but when we talked about Southwest, if they had not hedged properly through a lot of those years, they really would have lost money, right, on the airline operation. Oh, right.

1:16:38Chris Sloan: Yeah.

1:16:39Dave Hilfman: You report on a lot. They made their money on the financial hedging transactions, and they really wouldn't have made dough just based on the economies at the time. And they literally made billions off that hedging policy, which was unique. But yeah, back the other way, I'm pretty confident that Delta would find a way. And, you know, give credit for both those companies, though. Amex and Delta find a way to, they clearly figured the solution in extracting as much value from each other as they can. And so anyway, interesting point, Ben, and I'm sure Henry, I can't wait because he'll argue with us vociferously that he is right.

1:17:19Dave Hilfman: And most of the time he is. In this case, maybe they're both right. But bottom line is, I think both, I think Delta figured a way to make some dough. Yeah.

1:17:28Chris Sloan: Well, yeah. I mean, I think what you said is right. Look, there's exaggeration in what Henry said, but I think the bottom line is Delta would be worse off without Amex. It's certainly still profitable, but maybe not as much as today. I mean, it's not just selling seats, right? Amex revenue, which is 10 % of Delta's revenue, It's hugely significant. And Amex is also paying for check bags and paying for lounge access and, you know, other revenue. I mean, there may be 30 % or so of the whole Amex deal that comes not from selling miles from other elements of it, the whole branding and co-branding.

1:18:21Chris Sloan: And Ed Bastian talked about this on the show of how important brand association was. So, yeah, it is, you know, as Ben says, it's all hard to know. Right. But, you know, would Delta be losing money? Well, probably not. But would it be as profitable? Probably not.

1:18:41Dave Hilfman: Yeah. And that, you know, like you said, it's beyond the seeds and that's huge. But they have a comprehensive arrangement. marketing, right? Just so many different elements. And, you know, again, credit for both companies for developing a great relationship. I know it's the same, I think, you know, United would chase, right? Southwest also, you know, has developed their new relationships and what Americans with Citi, I think.

1:19:08Chris Sloan: Yeah, no, and American renegotiated Citi deal, and it'll start paying off more, the closer Delta thing. You know, the other thing about this, and Glenn Hauenstein talked about this some when we had him on. But I think selling miles to American Express, they come with a big margin. And, you know, yeah, you could put people in those seats. I'm not sure it'd be, you know, they're selling those miles for something. And we, you know, again, we don't know, but two to three cents a SkyMile. And if you're selling something at three cents and what's the value when it gets redeemed? It's about a penny. So, you know, that's a high margin sale, a good business to be in.

1:19:55Chris Sloan: And I'm not sure you'd get that selling tickets on Expedia.

1:20:00Dave Hilfman: Yeah, no, there's no question the margins have been healthy. And I think, you know, they've found ways that the financial institutions, the banks that have been involved, they're smart people too. They found ways to do just great with this. That's why they spend the kind of dough they do with all the airlines. And, you know, the always big concern was that some of that legislation that's been proposed on whacking away at some of that.

1:20:24Chris Sloan: It would be the end of it. Yeah. Yes, be the end of it.

1:20:26Dave Hilfman: So I guess we'd probably get into that subject down the road. I know we've already touched briefly on it from time to time.

1:20:32Chris Sloan: All right. Well, another time. That's all for this week. I'll be back next week with a very special episode commemorating the 25th anniversary of the most horrible day in aviation history, September 11th, 2001. Doug Parker and I will talk with Beverly Bass, the American Airlines captain at the center of the deeply moving and wonderfully entertaining Broadway hit, Come From Away. Beverly was the first female captain at American, true pioneer, co-founder of the International Society of Women Airline Pilots. And she happened to be flying a 777 from Paris to Dallas when planes hit the World Trade Center in New York.

1:21:13Chris Sloan: She and 37 other flights were diverted to Gander, Newfoundland. And that experience with a small town instantly caring for 7 ,000 or so refugees helped restore our faith in humanity. It should be a great conversation, and I'm really grateful to Doug for the idea for making it happen. Don't miss that episode. Yeah.

1:21:35Dave Hilfman: And by the way, I'm glad you mentioned that. And I'm not going to miss that one. In fact, I'm going to be at a similar kind of a, well, I'm going to be at an event recognizing the events of September 11th here in San Diego. It's on the USS Midway. And I know a lot of folks from, from American and United and retirees are going to be there just to again, honor, you know, the, the teammates they lost back in, in 2001. So anyway, I'm so pleased you mentioned that whole thing and for that idea and obviously what you're doing with that.

1:22:08Chris Sloan: Beautiful tribute. All right. Thanks for listening, everyone. Have a great week. Thanks for having me on, Scott.

1:22:15Dave Hilfman: To all the listeners, appreciate the opportunity to be part of this. Have a great week as well.

1:22:33Thank you.