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Airlines Confidential Podcast
331 - Guest Co-Host Dave Hilfman, Guest: Dave Harvey, Founder, Harvey Global Advisory
01:34:08
Guest Co-Host Dave Hilfman, Guest Dave Harvey, Fo…
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- [00:04]
A
Airlines confidential with Scott McCartney is made possible with support from RTX Collins Aerospace, Pratt and Whitney and Raytheon. Connecting and protecting our world. RTX.com infinityflight the leader in Cadet Academy flight training programs. Infinityflight.com Ontario International Airport in Southern California state SoCal so easy. FlyOntario.com the executive MBA in aviation at the University of Colorado, denver business ucdenver.edu and by Cirium, the world's most trusted source of Aviation analytics, cirium.com We also welcome your business support. Contact us at airlinesconfidential.com welcome to Airlines Confidential.
- [00:59]
B
I'm Scott McCartney and happy April, everyone. It's the 1st of April and a time to celebrate freedom and Passover for those who believe or resurrection and Easter for those who believe. It's a time to celebrate Major League Baseball and college basketball for those who still believe. Happy Passover. Dave Hilfman, and happy April 1st.
- [01:22]
C
Well, thank you, Scott. So good to be back with you. Happy Passover. Happy Pesach. You know, a nice Iowa Jewish boy, I was never schooled too well, but I know you've helped me out over the years and I'm going to keep working on that. But to all our listeners, welcome aboard. And again, if you're celebrating, yes, Happy Passover. Hey, you know, I'm so excited this week to bring our listeners a fun conversation that we had with the amazing Dave Harvey, the esteemed sales genius, formerly of Southwest Airlines, where he served in that chief sales officer role and more recently the chief commercial officer at Delta's Wheels up, you know, Aircraft, that private subsidiary. And now he's he's got his own global advisory firm, Harvey Global Advisory. And he is very involved with sales and distribution, technology and AI in the airline world and much more. You know, Dave is such a good guy, so knowledgeable and he's had a fascinating career, two of the most innovative organizations in our business. So I think our audience is really going to enjoy hearing from him.
- [02:32]
B
SCOTT yeah, just a smart guy who can bring a lot of clarity to stuff. And, you know, there aren't aren't many people who got to work for people like Herb and Richard Anderson and Ed Bastian. And I think it'll be, it'll be really insightful and I should mention and work for Gary Kelly. And I actually saw Dave Harvey this morning at a celebration for Gary Kelly. Southwest named an airplane for him. So a really cool event. He's finally getting some of the recognition for 20 plus years of really shaping that airline and growing that airline and, and really democratizing air Travel in the United States. Gary Kelly was hugely impactful and hope we will have him on the podcast sometime in the future.
- [03:30]
C
I'm so happy you mentioned that, Scott. I mean you and I have talked about, you know, all the Southwest has been through and the whole Elliott investment management stress and obviously they made a lot of changes and, and I'll give them credit, they speeded a lot of things up over the last year and a half. But, but Gary Kelly really, he very impactful figure right figure for them. I mean he made such a difference. I know not everybody agree with him. Listen, not everybody agrees with all the CEOs and decisions they make, but he, he really was a genuinely good guy. Know that. And you know, continues on do things in the Dallas area. I know you've known him well and I just, I wanted to say congrats as well. I know he, I think you said they, they named an airplane after him.
- [04:11]
B
Right.
- [04:12]
C
And yeah, yeah, good deal.
- [04:13]
B
Yeah. No, they've only done that for Herb and Colleen and now Gary. They'll have three out there in the fleet. So Dave, speaking of Southwest, all kinds of breaking news here on the 1st of April. Southwest, it turns out, has many customers who miss the cattle call and so they're taking action. Those customers long to look closely at the ungroomed neck hairs in front of them and read the text messages of the stranger ahead of them in line. And Southwest has been, well, how can we accommodate them? And so they've come up with a new revenue generating plan. It's called cattle class. Each gate will have a roped in area branded the stockyard. It'll cost each customer $25 extra to be in the cattle rush to join the cattle drive, if you will. And, and what you get is a chance to claim an empty extra legroom seat. Once all the people with assigned extra legroom seats have boarded, the stockyard gate is opened and there's a stampede down the jet bridge to claim an open seat. Southwest. Yeah, talk about innovation. Southwest chief operating officer Andrew Waterson says tests have shown that cattle class will shave about one minute off boarding a 737 Max 8, which saves the company millions and is expected to generate an extra 500 million a year in revenue from those fees to get into the stampede. It'll win back customers who have left Southwest for the cattle rushes. You find jockeying for position at the front of an American or United or Delta boarding group line these days. Dave, this is also paired. I mean Southwest, they have really been thicken overtime. Also paired With a new Southwest dating app. Another reason that customers missed the lining up by group number was that it led to lots of hookups and marriages. Apparently, it turns out people flew Southwest just so they could walk up to someone they found attractive in line and say, what's your number? And if that person in line likewise found the other person attractive, apparently they shared more than boarding numbers. They shared phone numbers. Who knew in the dating world, it was apparently quite an effective icebreaker. Well, now that will be automated and monetized for another $10 per flight. You can use the Loveline Luv, the Loveline section of the Southwest app, to message a fellow traveler and ask, what number are you? Wink, wink. Don't you know Herb would love all of this. I can just hear Herb saying, we don't sell travel, we sell relationships. And now they'll collect $10 on every one of those relationships.
- [07:09]
C
Oh, man, this sounds extraordinary. I mean, Herb was a genius, so I know he would love that, as you mentioned. And hey, I think Herb always said love is a high margin business. I mean, love is in the air and mile high club, you know, all this kind of stuff. So that's. That's incredible, Scott. I. I applaud those guys at Southwest. What a couple of amazing new developments. Hey, but I. I gotta tell you, that really wasn't the biggest news of the week.
- [07:40]
B
How can that not be the biggest news?
- [07:41]
C
Oh, no, I promise you right now, I mean, the shocker is news that United States chief executive officer Scott Kirby, My old boss, Mr. Kirby, is leaving United to take the top. Yeah, he's leaving United to take the top job at Spirit Airlines. I mean, I can't believe you didn't hear it already. Anyway, it's a shocker because Mr. Kirby has been outspoken for years, of course, saying for some time now that he thought the low cost carrier model was toast. I mean, I'm talking burnt toast crumble. Yeah, stale toast, just toasted. However you want to say that. Well, apparently, I don't know, Scott. Apparently Mr. Kirby, who really, apparently really likes toast now, because he says he was. He was just kidding with all that stuff about the ULCC model being dead. So now he claims that Andrew Nosella dared him to say that stuff. You know, Andrew, brilliant chief commercial officer and good friend of Scott. I mean, he dared him and he did just that for the dare. So now Kirby says he believes the future of air travel really is in cheap. So with a slumping economy and air travel will soon turn back into a commodity product, Mr. Kirby says that, hey, I gotta go on the low end. So, sure, he said fares could double with higher oil prices, but as you know, Scott Kirby is kind of an economist in ways besides being a brilliant strategist CEO. And he knows if demand drops with economic weakness, travelers won't be buying all those fancy extras that United's been putting on there. And the cycle will then swing to the bare bones. So as usual, Mr. Kirby wants to be out in front of that trend. Wow. So I'm kind of amazed. So Scott says he hasn't changed. It's the economy that has changed, you know. Mr. Kirby, who is extraordinarily intelligent and a student of data and history, now believes the K shaped economy has departed and what is arriving is the L shaped economy. So the K shaped economy, and I know you're kind of an economist, Scott, so he says the K shaped economy had divergent economic fortunes for upper income versus the lower income. So that upper leg of the K funded a lot of premium airline purchases.
- [10:03]
B
Sure.
- [10:03]
C
Now Scott Kirby says we have an L shaped economy, which means flat for everyone going forward, you know, Makes sense. Yeah.
- [10:12]
B
No, I'm not. Don't disagree.
- [10:15]
C
So low cost is king in an L shaped economy. And now Mr. Kirby wants to be king of the ULCCs. Plus, as you know, his favorite color is yellow. So anyway, Kirby will begin his run as CEO of Spirit Airlines today, April 1st. I mean, amazing news, my friend.
- [10:35]
B
Amazing. And all of to all of that, we say April Fools. We made it up, folks. April Fool's jokes, all of it.
- [10:47]
C
But we were having so much fun. I mean, it sounds good. I mean, hopefully it was reasonably entertaining. You were always right. The best stuff, pal.
- [10:56]
B
Well, we can't air the third one I wrote, but maybe someday
- [11:04]
C
we'll do the late hour podcast, the midnight version, I'm sure.
- [11:09]
B
Yeah, everyone's Confidential after dark.
- [11:12]
C
Exactly.
- [11:12]
B
No, no. April. April Fools is a long tradition at the school newspaper. I worked on of the April Fool's edition and so wanted to bring it back to Airlines Confidential. And since the the show drops on April Fool's Day, what better time? Dave, wonderful, wonderful job. And you know, I'm not sure you and Mr. Kirby aren't right about that L shaped economy. We'll see. It does. It does make sense. L follows K, right?
- [11:44]
C
Yes. Yes, it does. I do know My old boss, Mr. Kirby, is having a spectacular time at United. I suspect he might consider that jump over to Spirit would just be one way too adventuresome. And he's having a ball at what he's doing. So yes, yes. I suspect the Spirit CEO would be happy to swap places with him, but that ain't gonna happen.
- [12:06]
B
All right. In all seriousness, Dave, we do have some important real news to talk about, and nothing really is more serious than a fatal accident. Once again, a preventable fatal accident that shows just how rickety our air traffic control system is. I'm referring, of course, to the LaGuardia collision of an Air Canada Jazz regional jet and a New York, New Jersey Port Authority fire truck. The pilots of the Air Canada flight were killed. More than 40 people were taken to hospitals. We know a lot about this accident, but we don't yet know, of course, how the National Transportation Safety Board will assign blame. There's a lot of it to go around. And we know, as we do in every serious accident, that the accident is caused by a chain of events. Not a single mistake. Let's start with the fire truck, which was responding to a United flight that reported strong odor in the cabin. The truck was leading a response group of several vehicles and asked for permission to cross Runway four at intersection Delta. One of the two air traffic controllers in the tower at the time, which was shortly before midnight, cleared the truck to proceed across Runway four. That was about 20 seconds before the collision. And the aircraft, by the way, was a little bit more than 100ft off the ground at the time that the truck was cleared. The truck read back the instruction nine seconds before the collision, just as the aircraft's wheels were touching down. The tower told truck one to stop and and repeated that four seconds before the collision. It's not clear if the driver even heard the stop order. The truck wasn't on the Runway when the first call went out, so maybe they had a chance to stop in time, but we don't really know they'll play out in the investigation. What's most puzzling to me is why the truck went into the Runway without seeing the landing jet. Everyone who drives on an airfield goes through training. And that training includes, just as it does for every Cessna 150 pilot and everybody on up, imperatives, that you never cross a Runway without first looking one way and then looking the other. Clear left. Clear right. You gotta do that. And that's what I don't understand. Visibility wasn't great, but they certainly should have been able to see the lights of the jet as close as they were. The system is designed to to operate on more than eyeballs, however, and here again is a failing. The truck did not have an active transponder on board that would have specified its location for the controller and would have made the truck more identifiable for the airport surface detection equipment installed at LaGuardia. That's a ground radar system designed to prevent Runway incursions just like this. The lack of a transponder is crucial. Ground radar has a hard time distinguishing between objects amid clutter. A transponder on a vehicle does a handshake with the radar so it's clear what it is and what it's doing. From the preliminary information, the NTSB released the ASDE X system, that's the ground radar system, did an alarm to the controller. The trucks may have only appeared on the surface display as two blobs. According to ntsb, on a dark night with rain, mist and fog and visibility of only 4 miles, the controller sure could have been helped by a good display, especially if it had alarmed to the impending danger as it's designed to do. Also, we don't know the status of the Runway intersection lights. At the intersection of Runway 4 and Taxiway Delta lights embedded in the taxiway pavement are supposed to turn red when the Runway is occupied. A visual cue to other aircraft and vehicles when it's not safe to cross. Controller instructions can override Runway status lights. And there's some evidence that the lights were not red when the truck crossed. And there may be technical reasons for that. In short, it's just not clear what was happening with the lights and whether or not the truck went through red lights. But I hope we get answers to that and improvements as a result of what we learned from it. First lesson I think, however, is quite clear. It's unconscionable that the Port Authority had not equipped its fire trucks with transponders. This has been an faa, an NTSB recommendation, but not a requirement. And shame on the FAA for that too. Why the heck wasn't it a requirement? Even so, shame on the Port Authority. You could have voluntarily done this and it just would be smart and safe. You've got a very busy, very crowded airport and you can't spend $5,000 on a transponder so that your million dollar fire truck can be seen accurately and save lives. Shame. Okay, how about the control tower? There were two controllers in the tower cab at that time. Normal staffing. The FAA says the midnight shift. The other controller cleared the Air Canada flight to land about two minutes prior to the accident. There will be of course questions about coordination between the two controllers. More importantly, I think will be questions about the staffing level and the workload they had. Normally, arrivals and departures slow down at night. Overnight, thus reduced tower staffing on the overnight shift. On that Sunday night, March 23, traffic was apparently still pretty heavy at LaGuardia at 11:30pm and that happens. Of course, flights get delayed all day. 11:30 at night can still be very busy. But here's the thing. The administration, Trump administration, like others before it has, have insisted that the system is safe, even with old equipment and a shortage, a huge, serious shortage. We even talked about this in the mailbag last week. Huge shortage of air traffic controllers, because what they say is they will slow traffic to meet safe staffing levels. So if we're short controllers, we're going to slow traffic to make sure we're not overloaded. And except in this case, they didn't. Daytime staffing would have twice as many controllers, if not more, in that tower. But you have a busy Sunday night and you go ahead and reduce staffing. Seems to me that you have to live by the safety principle you preach, the promise you made to all of us, the assurance you gave. Either you need more controllers in that tower on a busy Sunday night, at least for a while, until things slow down, or. Or you need to meter out that traffic to an appropriate level for only two controllers. And by the way, those two controllers were also dealing with an emergency with the United flight. Right. Those things happen, and staffing should anticipate that. So don't tell us you're going to safely match traffic to staff and then don't do it. It's not the controller's mistake. It's the mistake of the people managing this rickety system. Little early in the show for one of my rants, Dave, but this one is really infuriating. Pilots, controllers, travelers, firefighters, we all deserve better.
- [19:52]
C
We do, Scott, and your rant is completely appropriate and spot on. And I know both of us think about the lives lost with those pilots and of course, all that, the people that were on board the airplane and all that they went through and the injuries, obviously, the firefighters that were involved, everybody. I mean, yeah, it's just unconscionable that we continue to have this dialogue. I know we've made some progress and, you know, it takes forever, seemingly, to get things done, but it just shouldn't take this long. And I know I ran about that from time to time. I just. Urgency of action is always what I'm thinking, especially when we keep repeating some of the same mistakes. And I know you've been on your bully pulpit and appropriately so, whether we've been talking about staffing on air traffic next gen. Right. The Modernization the equipment, whether that's, you know, controlling the airplanes in the sky or on the ground or the vehicles. And I'm just glad you continue to bring it up, and I hope you don't have to anymore. Right. It'd be nice if we could get some additional huge funding beyond what's already been allocated to the FAA on modernizing our systems to include more of the equipment on the ground and all the other things that you have articulated here. We just shouldn't have any more of this happen. And I, I know that's a wish and a fervent prayer we all have. So let's hope for the best. Do you feel like we're making some product progress? I mean, we heard that It's Jennifer Homaday, I think isn't. I think that's.
- [21:23]
B
Yes. Chairwoman of the ntsb.
- [21:25]
C
Yeah. I mean, she seems very passionate. I've been impressed. I don't know her personally. I bet you do. But it seems like they continue to do a good job in the evaluation. They make these recommendations. And I know she's working all the administration in Capitol Hill and others. Again, it's not happening fast enough or people are not putting into action what they recommended. What's your thoughts about it?
- [21:49]
B
No, and some of this is there's so much that you can do that's common sense, like putting a transponder on a fire truck that's going to be running around taxiways and runways or making sure that you have the appropriate staff in the tower for the rate of arrivals and departures you're going to have, at least for a couple hours. I think Jennifer Amde's done a terrific job at identifying problems, raising issues and expressing frustration, because I think there's enormous frustration with the lack of action, with excuse making, with reluctance to change. The FAA is still fighting with the army about helicopters around Reagan Airport, which is insanity. This has to happen again before you're going to do something about it. I think she is understandably frustrated with what happened at DCA a year ago, what's happened at LaGuardia. And, you know, the NTSB, they've got a really tough job figuring all this out, compiling effective reports, putting together, you know, effective recommendations, being fair to everybody involved, all of that. But they also deal with families. And it's so hard and, you know, you can't help but, you know, just get so angry that yet again, people have to die before we, we start taking action. Yeah. Yes, the US Is behind on a lot of stuff, but there's also a Lot of stuff we can do today and it doesn't cost billions of dollars. And you know, and at the same time, you know, I worry that there's going to be another funding fight in Congress and all of that. And, you know, we, man, I can't think of. There are very few national priorities where you don't get more, more bang for the buck, not just in terms of safety, but in terms of economic growth from increasing the capacity of the air travel system in this country because it's, it's shrinking right now. And that's not a good thing.
- [24:11]
C
Absolutely. And you're right, the roi, I mean, we all look about that return on investment, economic growth, whether it's moving passengers around cargo, the efficiency we've talked about. And I know this got such a great, educated, informed audience that listen, listens to airlines confidential, but knows about we could be saving so much jet fuel by, you know, all these things that just make so much sense for the industry and the United States in every possible way with the improvements in the system. And it wouldn't take that much. You keep coming back to that common sense part of it. And I'm hopeful that, you know, with Brian Bedford and others there, we really accelerate some of these things. You know, not trying to point, blame, right. We just want them to get things done. There's no reason we have the money, we show that we have, have the ability to make investments. It just shouldn't be like Alvin say, it shouldn't be an act of Congress. In this case, it probably will be, but we just got to get it done, you know. Other important news. Scott speaking in Congress. It does look like TSA agents will finally start getting paid this week. Of course, it will be no help of Congress. It was a presidential directive, at least in this case, for the moment. Hoping that that eases the absurdly long lines at airports as quickly as possible. I mean, the news coming out of Houston, George Bush Intergalactic Airport, you know, all the other places, New Orleans, there were so many airports.
- [25:38]
B
Atlanta. Yeah.
- [25:39]
C
Yes, Atlanta, of course. I mean, incredible lines that it's unconscionable that we are in that situation and these hardworking Americans working at TSA just trying to do their job, you know, reminds me of that 1995 movie, the American President. I probably quoted it before, but when I think of Congress on this, when the president, I think it was Michael Douglas said, I'm so busy keeping my job, I forgot to do my job. In this case, I cannot believe Congress. Let's have responsible adult conversations. I Get it? There's all the issues relative to ICE and CPB and all that, but you can't tie in all that TSA stuff. And they're using, you know, the American taxpayers, taxpayers and voters and donors as like these ponds out at the airport making people wait, not paying your tsh. I mean it's just, I just can't believe we're still dealing with this. And I know, well, if the, if
- [26:38]
B
the president could order them paid, why didn't he do it a month ago? I mean, why were you making these people suffer? It makes absolutely no sense.
- [26:47]
C
And boggles of mine, boggles of mine. I know, sorry, I'm on my soapbox about it and I just, anyway, hopeful that this continues and all of the TSA folks get their back pay and get paid going forward and one way that this actually this funding issue gets figured out and resolved. So. Hey, there was also a report this week from Semaphore, a media website, that JetBlue hired advisors to evaluate a possible sale of the company and specifically handicapped the regulatory approval issues with potential merger partners United Alaska or Southwest. And I know we pontificated on this in the past. Many between you and I and Oscar had talked about this. I know, Charles, many of your other fabulous co hosts. But that report caused JetBlue's stock to jump about 14%. But then it looks like the market really discounted the report came back to its senses and JetBlue ended the week almost exactly where it began in the week, just a bit above $4 a share. So you know, I think that's fascinating. I know we gotta have to have further discussion on that one and I think we will. One last thing I do have to mention. My fabulous former employer and alumni airline, United said it will start installing three seat couches in the coach cabin of its wide body airplanes. I know the Dreamliners and some of the larger 777s. Presumably maybe the 777-3002. It'll be called the United Relax Row. Similar to what Air New Zealand and A and A already do. It's big foot rest folds up and fills the gap between the seat cushion and the row in front of you. So it's more comfortable for lying down, presumably great for a parent traveling with the child, for example, I guess could be a couple lying down. I mean I thought it was very creative. I didn't even realize Air New Zealand was doing this and or ANA until you told me, Scott. But I mean, I guess in addition to that reconfiguration and what they're doing in the coach, those rows that they're going to have, you get a pillow and maybe some bedding, even a teddy bear for the kids, I guess. I mean, I do see a lot of mile high club possibilities here. But anyway, bottom line is, you know, you like these creative ideas coming from the carriers and I guess we'll see if it works.
- [29:22]
B
Yeah, yeah. Yeah. All right. Well, the flying Futon, I did a story on Air New Zealand sky couch nearly 15 years ago, so it's been around a while and I was by no means the first to write about it, but we called it Cuddle Class. Cuddle Class, yeah. And it seems like a great idea. But here's the problem. A coach seat is basically either 17.3 inches wide or 18 inches wide, depending on the airplane. Let's go with 18. Three of them give you 54 inches. That's 4 foot 6. So for most adults, you have to scrunch up to go to sleep. And you may fall asleep with your knees up in your chest, but you may stretch out in your sleep as people do. I tend to kick off the covers. But when you do, if you're taller than 4 foot 6. 6. Your feet end up sticking into the aisle. And then when someone goes to the bathroom, as people do on, on overnight flights, they hit your feet. So you keep getting woken up all night long. Plus, a coach row is less than three feet wide, right? So from one seat to, you know, the, the back of your seat to the, the one in front of it, so you and your partner, you gotta snuggle pretty close and. And same for you and your squirmy child. All that said, obviously Air New Zealand and ANA have experience with this and they are Star alliance partners with United. So I'm sure United will know what kind of added revenue they've been generating with this. I think there may be some Star alliance standardization going on here. You know, if this, this becomes a thing within the Star alliance and something they can market, certainly. So kudos to United for being creative. But if you're interested in the United Flying Futon, just remember it, you're bet you're better off if you're short, which
- [31:45]
C
I probably qualify for that category, so.
- [31:47]
B
Well, yeah, Dave, I think you're going to be happier in your business seat, as most people will. And you know, that is, that is the point, right? You don't want to make it so nice that people don't have to pay for business class. This is far from that. But, you know, you got A, you know, a four year old kid or three, two year old kid or whatever. This can be really, really helpful. Okay, I want to say a few things on JetBlue. I think Scott Kirby basically put JetBlue in play when he responded a couple weeks ago to a question about possibly buying JetBlue by saying JetBlue just had to ask. Right. So JetBlue would logically think, you know, well, maybe we start better start thinking about this and, and there may be things going on that where they're more interested in a sale. Although everything I heard from the JP Morgan conference, Joanna Garrity was, was upbeat about their turnaround plan and how things were going. And you know, then of course oil hit $117 a barrel today. So you know, who knows what's going on. But you know, you got to, you got to handicap especially the experience JetBlue had with the, with both American losing out on the American deal that they had and then losing out on, on the offer to buy Spirit, both because of Justice Department dislike of deals on antitrust grounds. So JetBlue is smart to handicap what the antitrust implications of any kind of deal might be. Honestly, I think the airline that most needs JetBlue is the one that wasn't mentioned on the list. American, American and JetBlue joined forces in what they called the Northeast Alliance. But you know, as I mentioned, the federal court ruled it anti competitive. So maybe everyone is rightfully assuming those two can't try again because they already lost on antitrust grounds. I think the Northeast alliance was different. It was up and running, it was working for both of them. And you know, heck, United has much the same deal with JetBlue now that American had. American has gotten a lot weaker in New York and could really use JetBlue's customer base, employees, aircraft, JFK feed to better compete against Delta and by the way, against United which has what, 70% of Newark. So maybe this Justice Department under Attorney General Pam Bondi would look at an acquisition by American of JetBlue just as harshly as the Biden administration did. I don't think so, and I'm not a lawyer, but the Northeast alliance case seems to me to be very different from a full blown merger. In fact, some of the objections to that alliance deal were that the two airlines were basically colluding, working together without merging, without the scrutiny that a merger would get. You know, sort of route by route. You know, are we preserving competition here and there? The, the Northeast alliance kind of skirted all of that scrutiny. So maybe a Merger with a lot of scrutiny and some kind of divestment of slots or gates or things, particularly New York and Boston, maybe it would have an easier time getting approval. I don't know if JetBlue losses continue. It hasn't made money since before the pandemic. Maybe JetBlue goes in arguing that it's a failing carrier and the law is different for failing carriers. It could make for easier approval. United can say it. United is, is the best merger partner because United doesn't have any presence at jfk and American already has a hub there. An American can say, we're the weaker player in New York, and United as a fortress hub at Newark, and that's only about 20 miles away. So, you know, we should be the one. I'm not sure Alaska wants to take on a huge transformation, adding JetBlue while it's still digesting Hawaiian. And I'm really not sure Southwest wants to start hubbing at JFK, not to mention adding a second aircraft type or third aircraft type because JetBlue has both a 220s and a 320s. And, you know, Southwest still busy remaking its own business. So I, I'd say a big maybe to both of those, but, you know, who knows? Stay tuned. I do think the market reaction was interesting. The market's basically saying you don't have to tune in too closely right now.
- [36:48]
C
I think you're correct on that, Scott. The market does have a funny way of kind of resetting everybody's expectations and bringing some rational mind to it or thoughts to it. I will say I'm not. And I'm not an M and A expert. I wish I was. And of course, I also delude myself into thinking I am. But your comments, yeah, American probably does need it the most, but I still think they would have an extraordinarily difficult time getting that approval based on what they already have at jfk. Could be totally wrong. United, I think they would have a challenge as well. Although obviously it's like kind of embedded in with their new deal. Their, you know, their big hub is over at Newark Liberty. But I know they look at, you know, they look at the overall metro area right between New York, Jersey, Connecticut and all this. So hard to tell if they could get approval for a pure, you know, true buy, you know, a merger and approval for acquisition. And then I always come back to Alaska, who I think would love to have that presence and get that East Coast. So I know you often talk about how it's hollow in the U. In the center of The US but they'd have the west coast and then they'd have a pretty significant size on the East Coast. I know they're still digesting the whole Hawaiian thing, but, but I always think that would be the likely if anybody was going to get approved just based on sheer size and where the current presence, their presence is. I was. I'd always think Alaska would have the best shot at it. Again, nothing may happen and maybe it's better for everybody just to continue on. But like you said JetBlue, which I can't believe won't make it, but you know, it's possible and if oil continues at this level, maybe they do end up in that failing carrier scenario. I hope not because they have, you know, great brand and wonderful employees and I know a lot of, lot of loyal customers. But you know, maybe we'll see that tested out if things don't get resolved with the Middle east and our oil situation.
- [38:44]
B
Right, yeah, well, and Spirit too, you know, don't forget about that situation. There are a lot of dominoes here. I mean, JetBlue is making a big push in Fort Lauderdale and I would guess that's a bet that Spirit, you know, is at least, you know, Spirit's clearly shrinking. It's half the airline it used to be. But if Spirit with higher oil prices were not able to come out of bankruptcy and would have to liquidate, well then JetBlue could be sitting pretty in Fort Lauderdale, so.
- [39:20]
C
Oh, you're absolutely right. And the economics could be a whole lot better for them. And yeah, you know, maybe they end up getting, well, they wanted to do it the first time, right. And that got all whacked, that whole deal and maybe it'll all. Who knows? I mean, it's funny how all this stuff comes about. Interesting enough, we might have the future of JetBlue and Spirit or all of this M and A or even Cuddle. Class travel could be the topics of discussion at the fabulous University of Colorado Denver's Executive MBA program. I think we're getting into the sponsor side of this, but it's all true. Yes, I know how key you are involved in all this great program. The Executive MBA in Aviation at CU Denver is the first degree of its kind in the world. Tied 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. and at airports around the world, students experience a hybrid flexible course structure that balances in person and online classes without career interruption. Which sounds like a magnificent thing for A lot of people and I hope everybody takes advantage of that. Go to business ucdenver Edu to learn more.
- [40:39]
B
Yeah, definitely. And they're starting to put together the next cohort which would start in January. So if you're interested, now's the time to reach out and start learning more.
- [40:52]
C
By the way, Scott, because I know you've been instrumental in that. I know you. I think Mr. Duncan's had a chance to speak at some of this and you've had other really great folks involved.
- [41:02]
B
Yeah, no, Charles Duncan is going to teach one of the courses. Several other people involved in the podcast have gotten involved. Oscar Munoz is sort of the og.
- [41:13]
C
Oh yeah, that's right, Oscar. Yeah.
- [41:15]
B
No, Oscar was the one who was advising on the advisory board and, and brought me in, brought others in. And is. Is not only. I mean Oscar's amazing. And not only teaching a class though at the end of the, of the program, but also mentoring individually with students. He's actually right now with the first cohort having individual meetings with them. So it's just a really fabulous program.
- [41:44]
C
Well, having Oscar as a mentor is about as good as it gets. That's great to hear. And I should know with Oscar's background at USC and then Pepperdine. And I know how big he is on education and loves the aviation industry and continues to make such a huge impact. And not only aviation, I know other industries and things he's involved with on venture capital and, and I always love his post. Like Dave Harvey, pretty prolific LinkedIn guy. Right? That's some great stuff, but great to hear. He is leading the way there. Well, congrats on that.
- [42:16]
B
All right, a couple other notes before we get to Dave Harvey. We also want to thank RTX for its longtime sponsorship of Airlines Confidential. RTX rallies more than 180,000 innovators around a powerful vision to create a safer, more connected world. With industry leading tools and technology. The RTX global team works across market leading businesses, Collins Aerospace, Pratt and Whitney and Raytheon to drive progress for generations to come together. RTX pushes the boundaries of known science and finds new ways to connect and protect our world. Visit rtx.com to learn more. And thanks to Infinity Flight Academy, the leader in cadet academy training programs for helping us bring the podcast to you. Whether you're looking to build a custom pipeline or strengthen your existing cadet program, Infinity Flight delivers consistent airline ready results. And for those of you listening who have always dreamed of flying or know someone who has, Infinity Flight has trained thousands of students, many now flying for major airlines around the world. Learn more@infinityflight.com Infinity Flight Academy, where future airline pilots take off. And before we bring in Mr. Dave Harvey, one other news note. Dave Hilfman, San Diego Dave, so many Daves. On Monday, Air Canada CEO Michael Rousseau said he was retiring. He's been CEO for about five years and joined Air Canada about 19 years ago as CFO. Air Canada said in January it had started working on succession planning since Rousseau is 68 years old. But it looks like retirement plans got sped up because Rousseau was under intense pressure from Quebec after he delivered company condolences over the loss of two pilots in the LaGuardia accident. In English, not in French. Canada has two official languages, English and French. If you fly Air Canada, you know that announcements get made in both English and French. If you call Air Canada, you know the phone recordings are English and French. Everything is English and French. Rousseau says his French isn't very good. So delivering the difficult and emotional messages about condolences of the loss of two pilots, he didn't feel comfortable doing it in French. He only did it in English. There are language police in Canada and even the prime minister was calling for him to step down. So it's au revoir, Mr. Russo.
- [44:59]
C
Yes, indeed.
- [45:00]
B
All right, let's bring in Mr. Dave Harvey. David Harvey is founder of Harvey Global Advisory and very much a legend in the business travel world. He's a 25 year veteran of Southwest Airlines where he was chief sales officer, vice president of corporate sales and distribution and and the former head of Southwest business. He's also former chief commercial officer of Delta's wheels up private jet venture. Business Travel News named Harvey to its most influential list four times. Dave, it's great to have you with us on Airlines Confidential and great to do it with the other legendary sales guy, Dave. You and Dave Helfman, I'm sure, competed and cajoled and carried on. I'm sure you have lots of stories to tell about each other, but first, the Ben Baldanza question. How'd you get into this crazy business?
- [45:57]
D
Well, Scott, it's thank you. First, I've listened to many of the airlines Confidential and thrilled to just be a part of it. And Hilf, yes, we've got many stories we don't want to derail here, but a lot of fun times. Nobody can work a room like Mr. Hilfman there, there.
- [46:18]
C
I said the same thing about you, Mr. Harvey, but and there's some of these stories that clearly are probably not, I don't know, would you say appropriate to broadcast? But, but we can work around them. I know.
- [46:31]
D
Indeed. Yeah, we'll. We'll have to have some creative editing here. We'll see what. What Scott can do at the end of the day. But yeah, you know, when I, When I think about this crazy business and 27 years, which is. Is hard to believe, I. I didn't necessarily seek it out or pick it. It does feel like it kind of chose me. And then once you get the. The jed a in the veins, it's. It's really hard to. Hard to leave. I. I do think where it all kind of started for me. I. My, my grandpa hip and steel, good strong German name there for you. Was a full colonel in the Air Force and flew the B17 in World War II. His last position was actually Colorado Springs there in Norad. And then he retired not too far from you Hill. Your U.S. you know, point of destination there in, in San Diego at Miramar. So I many, many times as a young boy kind of going across the freeway there at Miramar, Fighter town usa, getting my flat top commissary, hitting some golf balls, but seeing all those just amazing machines, you know, fly. I think that that really kind of kind of got the whole thing started. And then coming out in the late 90s with a technology degree, Management Information Systems, if you could spell technology, you had about seven different jobs. It kind of feels the same way here this many moons later. But as a lot of my buddies were doing consulting, kind of Big four, Big five, there was just something about the culture of aviation. My curiosity, when I just thought about the complexity and serving customers and how you brought the whole system together, I was just kind of hooked early and hook, line and sinker. Here I still am.
- [48:18]
C
Well, it's great, Mr. Harvey. And you have had an extraordinary career. I know Scott just rattled off all the great things that you have done over your decades in the biz and have impacted so many people. So all those places, the variety of places with the legendary leaders that you work with, what did you learn from the different places you've been and the bosses that you've had?
- [48:43]
D
Oh man, there's a lot there. From Herb and Colleen to Gary to then, you know, Bob Jordan, who's currently leading the airline at Southwest. You know, Tom Nealon, I have to give a special shout out, a mentor. And then really getting to see Delta with Ed's leadership and George Matson at Wheels up. And then, you know, the beauty of this business, it's highly competitive. Like we kind of teed up, you know, Hilfman and I Competed vigorously, but so much respect and, you know, there's so many learnings along the way. You know, I can go all the way back with Herb. If you rest on your laurels, you're going to get a thorn in your ass. To Colleen Barrett. At the end of the day, we're all in the customer service business. We just happen to fly airplanes. Gary just really strikes a chord because he was all about creating clarity, and it was about teamwork and communication and understanding where we're going, how we're going to get there, what are the priorities? You know, I love, you know, seeing Ed and at all levels, all the way down to the front line and the break rooms and connecting at a. On a human level with the hundred thousand strong at Delta. So, so many lines.
- [50:11]
B
So you're talking about Gary Kelly and Ed Bastian?
- [50:13]
D
Yeah, sorry, I. Yeah, Gary Kelly and I know actually Southwest is about to do a big fun send off for. For Gary kind of last rodeo, so that'll be fun to wish him well. But so many learnings. But I think at the end of the day, we're in the people business. That's what makes this thing really, really tick. It's complex systems. Every day is a Super bowl event. The big four airlines are moving over half a million people a day. And a good day, you're running 80% on time. Performance. So just complex systems, a lot of pressure, all the, all the elements, and it just. It's what gets us out of bed each and every day.
- [50:58]
B
Yeah, yeah, yeah.
- [50:59]
C
Beautifully said. Hey, I. So I do have a question back to, you know, Herb was so legendary, and Scott and I have had many, you know, shows where, you know, he always comes up or there's something he did or said or. But, Dave, did you ever have like one of those famous drinking sessions with him? I'm not saying maybe Rip Roaring night, but at some juncture, did you ever have a time where you got to sit down and just yuck it up with Herb?
- [51:27]
D
Oh, yeah, no, I did. He did have some legendary all nighters that I never got to experience that personally. So I, you know, I'm kind of kicking myself. I didn't. Didn't get to partake in one of those. The guy just somehow he found the fountain of youth. You know, he'd kind of burn it on both ends, you know, like to smoke and liked his, like, his drink and just so charismatic and so personable. And it really was the people of Southwest that gave. Gave the pep in a step.
- [51:58]
B
Yeah.
- [51:58]
D
Did have a neat opportunity sometimes. Actually, I had a closer relationship with Colleen, and sometimes she would just on a moment's notice, bring Herb along. So we had a few lunch meetings where a cocktail or two may have gotten served. And those are, those are literally some of my fondest memories in the business.
- [52:19]
C
Great. Now, thanks for sharing that because that is, you know, especially when you look back and obviously those two are, you know, running the Heavenly Airlines now, but, you know, just amazing to get that chance to be with such extraordinary leaders. And, you know, I think that when I've been blessed to have those times with Gordon Bethune and, you know, others that I've always admired so much that. That just, it has a real impact on you. Doesn't.
- [52:47]
B
Does.
- [52:48]
D
And you. You want to, you want to do everything for the broader industry to kind of keep that legacy alive. It's some of what makes this special as well, that we have such incredibly broad shoulders that have come before us. And, you know, now it's, it's. It's. It's our turn and our responsibility to, to leave these, these businesses in a better place.
- [53:13]
B
Well, it kind of leads into my next question of how you've seen corporate travel and the airline business evolve. Obviously, a whole lot of change. Where do you think it is right now?
- [53:27]
D
Yeah, it's a great question. Probably could do a whole episode on this as I think it really was about schedule and price and, you know, trying to, trying to basically optimize your fleet, your fleet mix, you know, gauge and, you know, about creating points of strength. And then, you know, you kind of tag on revenue management and inventory control, you know, kind of early, early days of that. Now it is so much more about the, the data the customer offers, you know, how you leverage distribution and channels, wrapping around credit card and all these other ancillaries. It's much more surgical. You know, it feels like you used to be able to use a hammer with schedule and price, and that would carry the day. And now there's just so much more to it. And I think that kind of the scalpel and the surgery versus swinging a big bat is so much how it's changed over the last 25 plus years.
- [54:40]
B
Interesting.
- [54:40]
D
I know. Hilfman, what's your take on that one? I'd love to hear. Clearly you go back even further. Love to get your take on some of the big evolutionary changes in the business the last few decades.
- [54:55]
C
Yeah, well, as you said, technology and data has taken over in so many ways as appropriate. Although I would always argue, and I think you'd agree, none of that matters if you don't have the personal human relationships with those business partners. And so you know, we've seen how distribution has changed and I'm going to ask you a question about that shortly. But you know, from my perspective it's how to blend all the great new powerful technological tools and, and the ability to gather, as you said, in the airline business it's just massive volumes. Whether it's humans flying the ultimate revenue, where that is coming from, through what channel, but being able to synthesize all that raw data into actual, usable, actionable nuggets of information and knowledge and then applying that to, you know, how ultimately we grow market share and how you get higher yielding business and do it more efficiently. But that all doesn't matter unless you've built those personal relationships with your key buyers or your sellers and distributors. And so I mean, I think I know I'm making like you said you could talk for hours on this. I'm synthesizing that into a couple of minute answer. But it's how do you do both, how do you use all that technology and all that great new information and then apply it? And a lot of it, while it's complicated, in the end it needs to be as simple as it can be for everybody. And ultimately it's just about driving new business. And whether you're stealing share or you're creating, you know, creating a bigger pie by what you're doing and that all is about the people involved and are you doing a great job delivering for your customers and whether that's on the product or the service side, whatever you can do, certainly from our sales perspective you're trying to understand those customers needs and whatever it is, and whatever segment, leisure or business, how do you apply all that great technology and then ultimately actually deliver some successful results? And you've always been good at that, Dave, I know you delivered for each of the companies you've worked for in the different roles and maybe we could tag that into the next slide. So thanks for asking a question to me. I like you said, I have a few more years on you pal, a few more gray hairs, all that kind of stuff. But you know, it was always, I love that this industry still do today of course, and always privileged to be a part of Scott's show and you know, which Ben started all these years. So and just I'm excited every day about the industry even though I'm not in it into the 247 grind like I used to. But from a commercial strategy perspective, you know, it's A very hot topic these days. I mean, you can go into what was arguably American's $2 billion mistake. I think it was higher. But others might argue that and now recovery. You can see Delta and United's premium strategy all the way to Southwest Airlines, who you love and know so well, all the radical changes given up a lot of its uniqueness for more revenue and perhaps more business travel loyalty. Your perspective on all these changes of the past couple years, I'd be interested what you'd see and I maybe there's only certain things you can divulge on Southwest, but I know we've had some conversations. It's been fascinating to see these big commercial strategy changes over the last couple of years. Or maybe you could even say United would argue they've been working on it 10 years. Maybe Delta would argue the same things. Southwest is clearly more of a recent development. What's your thoughts on all this going on, Dallas?
- [58:38]
D
Dave yeah, no, thank you. Thank you, Hilf, and I appreciate you weighing on that last one. I'm going to hit one other note on Scott's question about the evolution and talk more about the corporate market and then I'll kind of weave it straight into what's going on with premium and latest with with Southwest. You know, Scott, just to put a bow on that, you know, in the corporate market, it used to be about qsi. You've got your seat chair, you'd set up some sort of point of sale discount with a lot of the big buyers, medium sized buyers, depending on how far you wanted to go down from a segmentation. And then you would, you know, you would take care of them and you'd run the, run the PRISM report and are you kind of on plan, off plan and do you need to tweak it? But now when you think about the travel managers out there that are representing these companies big and small, the agency community, there's so many different stakeholders within Those companies, from CFOs to chief people officers, chief HR officers to supply chain and procurement to data to safety with duty of care, those travel managers are pulled in so many different directions. And I didn't even mention keeping the travelers safe and having a great experience flying, you know, the various airlines. So that job has gotten immensely more stretched and more complex. So you know, the airlines have to have the product, they have to have the schedule, they have to have the timings. But it's almost back to the data and the, the care and the service that you wrap around that both people care and digital care to support them in an efficient way. That is just the last decade, it's just been amazing to see all the needs. You know, we haven't even talked about sustainability and carbon footprint and just all the things that they're being asked to kind of stay on top of. So I think it's go ahead and,
- [60:40]
B
and just to take a step back a little bit for those who may not be, you know, all that familiar. You know, basically what, what you're talking about is the relationship between a corporation and the airline where in exchange for discounts, the corporation is on the hook for a certain percentage of their travel with the airline or market by market, you got to deliver this many tickets, all those kinds of things, and you get incentives and those tensions within the company, the cfo, the corporate travel manager, the individual traveler who, you know, hey, I want to take this flight. No, you got to take that flight because that's our preferred carrier or that kind of thing, right?
- [61:25]
D
Yeah, absolutely. When you think about a Fortune 100, Fortune 500 company, beyond the costs for labor, their people, their employees, T and E, which you know, airline seats make up a big piece of, the piece of can be a lot of annual spend. So you know, they, those CFOs and supply chain, they want to optimize that. They want to pick partners that are going to run on time and give them the best value and loyalty and experience and the list goes on and on and on. So you have to be able to project and educate all those various stakeholders via the key to all this is the travel manager and making their lives easy. But understanding the total value prop that the airline is bringing to their business and moving things forward. So. Yes, that's exactly right, Scott.
- [62:21]
B
Okay, so to Dave's question about Southwest, American, United, Delta, commercial strategy in general, what is your perspective?
- [62:33]
D
Yeah, it is. It's interesting. If you look over the last few decades, premium has always been very cyclical. You've seen a lot of carriers at the high end of the business cycle when things are really juicy, lean in and do more. And then there's some sort of shock to demand and you see a shift. There's the last call it almost decade. This may be the longest premium trend we have seen over the last 30 or 40 years. You have to kind of take a step back and look at. Well, why is that? I mean, I do think overall some blinking lights with the economy and the macro backdrop right now. But overall the economy and I think everybody understood during the pandemic kind of the whipsaw down and then back up There was all that pent up demand and actually that probably drove new entrants into the premium space as people were very focused on just health and hygiene and space and cleanliness. But I think a lot of what you're seeing now, companies, I'll talk about both leisure and business. I think businesses really understand how valuable getting their people out there, the face to face, that is a revenue driver, it's a growth driver for their businesses that there's certain things that are effective you can do behind a zoom or a teams. But more and more companies have done the ROI and they know that they're moving the needle more, getting their people out there selling biz, dev consulting, but then also bringing their teams together for creativity, innovation, strategy. There's just certain things you can't do sitting behind a computer screen. And then I think people being cooped up during the pandemic, you know, life is short, they want to adventure, they want to get out there, they want to experience. I think we've kind of entered into an experience economy, if you will. You know, a lot of folks have saved quite a few pennies and you've got kind of a generational transfer of wealth going on. So experiences premium. I really think the airlines are the benefactor of that. And it's no longer just, hey, I'm going to get upgraded. Business class. First class is sold out across the board where it used to only be 20 or 30% sold up front. And then it became the upgrade game 10 years ago. And I think it's weathered the storm nicely here. You're still seeing really strong premium demand and that's why you're seeing all the airlines think about their fleet, the configuration. We, you know, we talked about Southwest clearly leaning into the extra leg room and assigned seating because people want predictability, they want to know where they're going to sit and they think that there's untapped market and customers that never gave them a shot until they introduced this, this model. So, you know, we're going to find out a lot here the next quarter to be candid with you, to see how strong this premium strategy is going to hold up. But that is, you've seen a lot more softness in coach and economy, but premium is still carrying the day.
- [66:02]
C
Hey, and by the way, I just wanted to mention Dave, you were talking about that transfer of generational wealth, you know, from parents down to their kids. I am hitting a lot of my, my friends and granted I'm a little on the older side of this, but they're starting to tell Those kids, hey, I'm going to spend this money. I'm not sending any of it down to you. That's why I'm flying in first class and business class, which is. I think the airlines are thrilled to be getting that. So I just wanted to point out to the parents there, you don't always have to pass that dough down. I say, we're airline guys. I say, go spend it right now. You keep sitting up front. That's exactly what you should do.
- [66:44]
D
I'm about to stare. I'll have three of the boys in college at the same time this fall. So I'm like, you guys need to get your education and get off the payroll. So I feel you. Hill
- [66:57]
B
cost of coach tuition. They're fine. Coach.
- [67:00]
C
That's right.
- [67:01]
B
Yeah. So, so curious. I wanted to touch on the Southwest changes a little bit more because you were on the front lines of trying to sell businesses on an airline where it was the cattle call. And what we've heard was that a lot of business travelers balked at that. At the J.P. morgan conference, the Southwest folks were talking about a whole lot more business travel buying with the changes. Do you think it's going to work for them?
- [67:39]
D
Yeah, no, I do. And I've got to give a tip of the cap. I had an incredible opportunity to work for Andrew Waterson for nine years and may have learned more about the nuts and bolts of the airline business from Andrew than anyone else. But it's interesting how the Southwest network grew up. You know, It's. It'll be 55 years this. This year. And, you know, the first decade was pretty much Texas. Then the next decade started expanding out to kind of adjoining Texas states. But the network moved more south and west, you know, and the biggest customer base is California. I haven't looked at this data recently, but if you think about Intracal, how massive of a market that is, I think 70% of the people that fly intracal every day are flying Southwest Airlines.
- [68:33]
B
So they.
- [68:34]
D
The. The whole open seating, the boarding process, you know, Bay to Basin, heading down to San Diego, Sacramento, they had been exposed to that for decades, and they were very comfortable with that model. As Southwest grew up, you know, didn't even really get to the East Coast. You think about the strengths in bwe, so Baltimore, Washington and down in Florida. Not until the mid to late 90s did they even touch, really, the East Coast. And, you know, think about the carriers that had served the East Coast. And I mean, it just. It was. That's how you flew, was assigned seating. So there was absolutely. As you get into more of these business centers, some of these large corporate markets, there was a disadvantage to not having assigned seats because that's just how people were hardwired for decades of traveling for flying for business. So I think it, it now, you know, the, the trick that they're up again, you know, how do you keep all the loyalists and kind of move them from kind of a loyalty and experience and boarding and you've seen they've been doing some refining, some fine tuning of their boarding groups and you know, bringing bags on board, you know, versus the, you know, because they are charging, you know, bag fees now but then unlocking this whole new opportunity of business travelers that have never experienced Southwest and trying to, trying to win them over. So the demand is there and I think they're, the network is still very strong so they're set up to really compete vigorously.
- [70:09]
B
Very interesting. I've been commuting on them and I have to say I've been loving it. I love the extra legroom. It's more generous than other airlines extra legroom product. And, and I think they've, they've done a really good job of working out the boarding kinks and the overhead baggage bins up front. It's, it's working now.
- [70:33]
D
Yeah, I feel they're going to have a nice Runway here. You know, as you think about some of these new revenue streams maturing for the uber frequent, the high frequent business traveler that has the, the upper status tiers, you know, they are used to more of a true business class product lounges. You know, clearly the three network carriers, you know, have their wide bodies and have long haul international for those trips and then have the joint business partners, you know, globally which you know, clearly Southwest is moving aggressively into that space with some of their partners as well. I think that's going to be the next, you know, threshold is how, how far down that path of, of premium and business focus are they going to go? So they'll, they'll have to kind of really work their way through that and make some decisions here over the next three to five years.
- [71:27]
B
Yeah, yeah, let's go to the, the, the extreme, the end of that luxury continuum and talk about the private jet world. I'm curious about differences, similarities you, you saw between the airline world and the private jet world at Wheels up.
- [71:45]
D
Yeah, no, there is, you know, I thought the point to point model of Southwest was, was complex when you had a plane doing five legs and it didn't touch five. You know, this the same airport on any of those five legs and just some of the, some of the operational complexities and scheduling complexities that came with that. When you think about private aviation, it's truly a floating fleet. Demand is coming very close in. You're trying to match the plane, the pilots and the customers in an efficient and effective way because it's all about asset utilization and repeat customer business and trying to minimize those deadhead legs, those non revenue legs when you're repositioning aircraft. So the level of complexity that's going on in some of these larger, you know, private aviation shops inside seven days is a, is an or, or optimization or AI engineer's dreamland trying to, trying to figure that out. But what was interesting, people think private aviation, they think luxury and experience absolutely matters. But Scott and Hilf, at the end of the day, when you talk to all the private customers, 90% of them, they're just trying to claw back, they're trying to buy back time, they want reliability. They're paying top dollar to get into first mile, last mile, secondary, tertiary markets. It always blows me away. The network carriers here in North America, they're all serving about 250 to 300 airports in North America. You know, the private operators can fly into 4,000 unique airports because, you know, shorter field and you know, some of these secondary and tertiary. So that just kind of speaks to the complexity there. Yeah, but, so that's just trying to, to paint the picture at the, the similarities are very much about reliability, service and delivering what they expect. But the complexity, it's a whole other host of problems to solve to run that operation effectively.
- [74:07]
C
Yeah, it's a pretty extraordinary biz. You guys may remember our buddy Dave Myrick, used to be VP of sales at United, ended up in the private jet world. He just told me, wow, it's such an extraordinary business trying to manage those assets like you said, Dave, that those empty legs. But wow. I would just think over these last couple of weeks, maybe even this week, with the uncertainty of tsa, I was just wondering if the demand has just gone off the charts because obviously most of the private jet, there's some security, but it's not that kind of tsa. If you were waiting four or five hours and you've got a number of execs that maybe don't normally fly private but would have that kind of issue in play. I can only imagine those requests to the private jet operators have been pretty amazing.
- [74:59]
D
Yeah, no, they're, you know, the last few years there was a massive spike in private jet demand during the Pandemic and then you know, it kind of normalized in the last few years. It's been low to mid single digit growth. But you know, guys like Doug Golan and other, other folks that are really in tune with the demand they've, they've been showing here in the first first quarter that there's been a really nice kind of uptick with. It could be weather, it could be some of the, the conflicts, you know, that were going on south of the border in Mexico to what's going on in the Middle East. And you know, it's just, it's supply and demand and people are willing to pay whatever it takes to jump on the private jet to get where they ultimately need to go.
- [75:48]
C
Absolutely. Well, hey buddy, you know, I've had the opportunity and I think Scott has got to keep in touch over these years and I know what you're up to, but a lot of our listeners may not know exactly what you've been up to lately. I know you're, as Scott mentioned up front, you founded Harvey Global Advisory and, and providing some great insights and some consulting with some wonderful companies and you know, involved in distribution technology, AI modernization. Anyway, maybe you could just tell our listeners out there kind of all the cool things you're up to beyond some extraordinary LinkedIn posting which I do want to get to before we finish out our segment with you because you are the LinkedIn king, one of the all time greats, really legendary for it. But anyway, tell us what you've been up to, bud.
- [76:39]
D
Yeah, no, just a really unique opportunity and so much of that goes back to relationships and people. Last fall I just had a really, you know, kind of a nice inbound of people whether it's projects or you know, basically mentoring or helping commercial teams or hey, this board, we'd love your expertise for governance and kind of how do we, how do we scale effectively and just really some neat, neat businesses and being able to be really selective in and getting to hitch my wagon with people that you know, also really, really excited about working with. So I've joined a few, few boards and you know, things in the customer engagement, customer experience space to dining and golf to AI and automation and really some unique solutions that people are able to do at scale. I know we'll probably talk a little bit more about AI in a moment but then just legendary iconic brands like American serving a lot of their sales and distribution efforts, they're about to turn 100 here next month and 60 billion in top line revenue down to even some pretty pre revenue startup opportunities. Uatp. Ralph Kaiser, so, so blessed to work with him and the team on, on really expanding UATP's portfolio, doing some technology procurement work. So I am having a ball and learning a ton. I, I, I actually feel like I'm, I'm getting multiple NBAs and it's a lot of long hours and I'm in build mode, getting to see a lot of, lot of great opportunities and cards in if you will. And you know, and some of it I've, I've worked for big brands my entire career except for the last nine months and really trying to figure out is this the motion? Is this what I like? You know, I always like to run with my hair on fire to a degree. I, I think I'd go stir crazy if I didn't have multiple coals in the fire. You know, there is something about working for the big brand and I, I'm, I'm a, I'm a people and brand ambassador and like to wave the flag and I think that's a lot of the LinkedIn that you're referring to there.
- [78:58]
B
Hilf.
- [78:59]
D
Yeah, because it is such a captivating industry and these brands are just kind of larger in life. So being a small piece of that. So I'm really giving myself 2026 to see where this thing goes and not make a long term decision but just, just having so much, so much fun every step of the way.
- [79:21]
B
That's great, that's great. And let's talk about AI because I'm really curious. Do you see opportunity to really transform the business or is this just kind of next step in automation technology?
- [79:37]
D
Yeah, there's a, I'll just kind of dive right in and go unplugged here. Scott There's a lot of AI marketing being thrown about because it is kind of the shiny object. At the end of the day. AI is an enabler. You've got to focus on the customer, you've got to focus on the business problem. And now I don't want to diminish the AI capability. I mean it may be the biggest kind of threshold capability since the Internet and I think we're almost expecting too much from AI in the short term. I think we may be underestimating what it's going to do for business in that kind of medium to long term horizon companies are just really that personal productivity. Some emails, some synthesis of some meetings, some research. A lot of companies are really trying to figure out how you scale it on an enterprise. But when I think about the opportunity for airlines, there may be no industry that's sitting on more of a treasure chest of data in customer and travel patterns, credit card information. So it's ripe. I do think there's probably in the early days, there's more operational efficiency, eliminating waste, cost, taking administrative things out of the equation that a lot of the frontline, that's not what jazzes them up. They'd rather be heads up and more strategic and more value driven in how they engage customers. But then when you think on the commercial side of the ledger, truly curating kind of personalized retailing and offer propositions that is, I think is going to be a huge unlock. You can't just keep waving the flag, discounting fares, you know, email fatigue. That stuff is played out, but really unique. You know, I'm talking to Dave Hilfman. I know where he likes to travel, I know that he, he likes to golf, you know, his, his interest. And I'm, I'm looking at his past behavior to kind of serve up unique experiences and opportunities that that's the path forward that AI is going to be able to curate. It's more about the, the journey and the master itinerary, tying ground, hotel car experiences, dining at all together. And that's the power it's going to lock on the commercial side. So I think there's going to have to be a little bit of patience here and we're asking maybe a little bit too much of it in the short term, but I think we're going to be blown away over this kind of medium to long term horizon, what it's going to provide for us.
- [82:29]
B
So interesting, so interesting. All right, well, since you, since you mentioned it, since we know so much about Dave Hilfman and you, and you have the information about it, what was it like competing against Dave Hoffman, the golfer?
- [82:43]
D
Well, I've actually never competed with him on the, you know, we probably did a couple of events, but we weren't in the same foursome. So I have heard, never put money on the line if you're trying to play some golf. Actually, funny enough, Hilf knows one of my uncles in San Diego and I think he takes my uncle Mike's money every single week. That's, that's probably for another episode. But you know what, what I can
- [83:07]
C
say, by the way, Dave, that should be noted, it is absolutely the other way around.
- [83:13]
B
Okay.
- [83:13]
C
Your uncle, Uncle Mike is an extraordinary guy and amazing gamer on the golf course, but he's so proud of you and all that you've accomplished. So we always have a great time. Scott, you would have Loved it. I just didn't even realize the connection. And this has been a number of years ago when we were chatting about the airline industry, and Dave's uncle Mike said, he goes, yeah, my nephew's in the business and he's really done quite well, I think. And he tells me, Dave Harvey. I'm like, yeah, Mike, he's like one of the legends in the biz and, you know, has just done amazing things at Southwest and really gotten into the. More of the corporate travel space, which, you know, he and his team have really made a lot of headway. And so anyway, it was just kind of ironic and we had a lot of laughs about it. But. But yeah, I appreciate you mentioning that. I wish I was taking Mr. Mr. Defay's money, but I have not been, Dave.
- [84:13]
D
But what I would say. And you actually, Hilf, you and I have not had this conversation. You know, when I was a younger buck, you know, Southwest was, you know, a little bit later when they decided to make the big bet on, you know, B2B and corporate, call it, you know, almost 10 years ago now, and jumped in. We had a couple icons. I kind of look at Bob Summers over at Delta and Dave Hilfman. It's just she's almost larger than life statesman. When you think about, you know, those are sales leaders through and through. And, you know, they had decades of relationships. They knew how to perform, they knew how to motivate teams. They knew how to, you know, just, just really almost be a, a diplomat. And I like that word. I think it's a good word to describe statesman representing the brands of Delta. And now it's, it's really, really fun just to kind of see some of the, the new sales leadership. You know, not, not new by any stretch, but folks coming from other, other areas of travel and hospitality or consulting with Doreen Burs and Eileen now over at Southwest and, and Lucas Martin here at American. And it's, it, it's fun just to kind of see this, this and where they're going to take it. But, Hilf, you were a little imposing my first year or two on the job, like how this guy knows everybody and their brother. How am I ever going to get my Rolodex to where this guy was at? So I tip of the cap to you.
- [85:56]
C
Well, thank you, my friend. I appreciate the extraordinarily kind and generous comments. That means a lot. And you know, Mr. Summers, who's still there and doing a beautiful job. And, you know, one day I told Bob he probably should never retire. He's, I mean, work is almost like a hobby to him and he's just, he's been so great at it. But you know, the fact is we loved our industry and I think all the leadership. I know love is this strong word, probably never all that appropriate for the business world, but. But it really was just a huge passion for what we were doing. We love, you know, just love the travel industry and what it could do. Whether it was on the corporate making dreams come true. Right. A little cliche, but whether it was on your business adventures or your family or vacation adventures, you just felt like you could make a difference. And we had such great people at all these companies that cared about what they were doing and their company's success and how to do great with their clients. And you know, I just, I always felt very privileged by it. I know you have to Dave, and you're still a lot younger and, and still knee deep in a lot of this. And you know, I did want to get back I on all sincerity about the whole LinkedIn. I know that's not AI but you know, it was tired of the technological wave social media. I never was that involved. I had a team that used to do some of those things. But you really have done amazing with that because you, you've recognized through that particular channel, if you will, or that social media, you know, the way to communicate is you were so good and how and continue to be about recognizing people and events and experiences and you know, you always would weave in your family, which I always thought made you so much more relatable and people could appreciate that. So how did you get into that? I just, you know, it's important. It is part of today's business world. I just wanted to why you got into that and kind of how you started and stuff.
- [87:56]
D
Yeah, I give so much credit to the comms team over at Southwest. Whitney Eichinger and team. So in the depths of the pandemic, call it May or June of 2020, and as backdrop, I wasn't on Facebook, Twitter, X Instagram, any of it. And I still am not on any of those. But as we were all hustling to try to get people back on planes, we were, you know, we're all masked up and we're all getting out there and any, I mean literally we told the team and you know, anybody that's willing to meet face to face, the answer is yes, go. And the. Our comms team said, hey look, you guys are out there hustling. They, they gave us a lot of grace to be honest with you, and said, look, keep it positive. You know, don't get us in trouble, don't blow us up. Don't, you know, don't take any political stance on anything, if you will, but, you know, just be true to the, the brand and, you know, just wave the flag, whether it's, whether it's doting on your team, talking about a great customer interaction, going to an event like gbta, or all the other events that, that we love throughout the year, and then feel free to, to, you know, take some pic. You love to travel, your family loves to travel. Kind of always, always tie it back to business so that there's, there's some connective tissue. And that thing just blew up. Like I literally went from zero to, you know, whatever it is now. Significant number of followers and it's just. And then it's funny, I kind of tie it to my boys as well, who are, you know, Gen Z's. And, you know, they say, dad, if it's not online, it didn't happen.
- [89:48]
B
You.
- [89:49]
D
And there's, there's a little bit of, there's, you can go overboard with that, of course, but there's a little bit of truth to that. And then when you tie back to all these amazing things we get to do, leading our groups within airlines get to do just some really, really neat stuff. So why not be a brand ambassador and a storyteller? I actually think that there's a lot more opportunity for airline leaders to do more of it. And it's not about the individual, it's about the brand and telling the story. So people aren't filling in those blanks for themselves. So it's, it's been so much fun. I have met so many people digitally initially, and then, I mean, literally I was in an elevator today and somebody said, hey, Dave from LinkedIn, so good to meet you in person. I've been following you for years. I mean, completely cold on the street. So it just, it's been such a warm opener for so many neat relationships over the years.
- [90:49]
C
Yeah, thanks for sharing that, Dave. I just, I've been so impressed by it. What you said is spot on. I do think other leaders have been inspired by what you've done, and I've seen more of that. Even if it's not the VPs always, it's, you know, a lot of the frontline sales professionals. They've just done a great job. So anyway, thanks for sharing all that. It's great.
- [91:09]
D
We are, we're going to have to get you to Dallas and the three of us, three musketeers tears. Go play some golf and we'll, we'll get some LinkedIn mojo out there. Of the, of the three of us connecting around your passion hill, I love it.
- [91:26]
B
That's awesome. Awesome. Well, this has been great, guys. Really appreciate both of you. Dave's both of you, all you've done for the industry, all you've done for, for, for airlines in general and, and all you shared with us. So let's do it again someday. And I just want to say thanks.
- [91:49]
D
Would love that. Thank you, Scott. Really appreciate you and all you've done for this industry.
- [91:54]
B
All right, Hilfman and I will be back with more in three seconds.
- [91:59]
A
Promotional support provided by the Ultimate Avgeek website, theairchive.net, a vast collection of airline memorabilia, Tyler timetables, route maps, rare cabin and airport photos, special flights and more, all@theairchive.net, the hub of air transport history.
- [92:15]
B
Thanks again to Dallas Dave for a great discussion. I want to wrap up this episode with deep appreciation for the support we get from Cirium. Cirium offers the most accurate and precise data and analytics to enable airlines to optimize planning, operations and passenger services. 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 opportunity. Visit cerium.com for more.
- [92:48]
C
And special thanks to Ontario International Airport, Ont. Which is celebrating a decade of local control for its sponsorship as well. Thanks to public support, the local community reclaimed onto revived it as a vital gateway in Southern California and ensured the airport is ready to soar even higher in the years to come. Please visit flyontario.com 10 to learn the story and find out how you can join the year long celebration of how a decade of local control has turned Ontario into one of California's fastest growing and most economical airports. It's a great one.
- [93:25]
B
It is, it is. Love Ont. Easy in, easy out. Terrific. And talk about social media. They're just masters of really fun and entertaining and informative social media.
- [93:40]
C
They are.
- [93:41]
B
All right, that's all for another edition. Thank you so much, Dave Hilfman. This has been grand, April Fools and everything else. Really, really appreciate it.
- [93:53]
C
Always a pleasure, Scott. Thanks again for the opportunity to be of part, part of the airlines Confidential family and podcast. And so long everyone. Hope you have a great week. Appreciate you listening. Enjoy.
- [94:05]
A
This podcast is produced by mass media infousmedia.net.