ADRIANA DIAZ:
00:00:53
All right, let's bring in former New Hampshire Governor Chris Sununu. He is also the president and CEO of Airlines for America, which advocates for airline safety and security. Governor, thank you so much for being here. So we understand how this works, right? Planes have gas tanks, just like cars do. And if you fill them up with more expensive gas, it's going to cost more. Without a doubt. But is there any kind of lever that these airlines can pull to lessen the impact? I mean, do they not have a slush fund of gas? There's no slush fund of gas, unfortunately. So just to take a little step back, from 2019 to earlier this year, frankly, prices didn't budge, right? It was the one thing that bucked the inflationary trends we saw all through COVID and post-COVID. Then Iran hits. Fuel is about a third of the cost of putting an airplane in the air. So while you saw in that previous report oil is up maybe 20% or 30%, jet fuel has far more than doubled because it's a refining process and a worldwide refining problem. So what are the airlines doing? They're actually eating most of that cost. So, yes, the prices are up 30%. But the airlines are still eating the vast majority of the cost. Only a few airlines will likely make profit this year, to be honest. The bigger ones are doing well. And what we're finding, as Ben was referring to there, who is just a phenomenal CEO at Alaska Airlines, what we're finding is people are being creative. They're flying on different days. They're going to fly Tuesday and Saturday. They're using their points programs on their credit cards. I mean, the points programs on credit cards are what allow working class families to do their grocery shopping and still visit over the holidays. People are being smarter about booking. I always find it the best to book directly with the airlines and the apps themselves. Also, when you do that, you can make changes, right, last minute and without the massive change fees that you had before. You can control your own price. Remember the days we had to pick up the phone and call a travel agent if you needed to change something? So by being more creative about it, you, as the customer, can have a better experience, a more cost effective experience, booking a little ahead of time. And again, are these prices going to go down anytime soon? Probably not because the issue in Iran is not going away. And even when it does, you have a refining problem here and capacity-- So that was my followup, Governor, which is that even if the war were to end tomorrow, we know it's not going to, would prices come down? Probably not. So the question, I guess, becomes, what happens when all of the options that you just discussed that consumers can do to make flying a little more affordable, they run out of those options? The prices are too high. You still got to put groceries in the refrigerator, you got to pay tuition, you got to pay your mortgage, all those things. And people stop flying. Would that mean higher prices for the few people that are flying? Or do the airlines say, we got to slash to bring people back? So a couple of things. Demand is still very robust. So we don't see demand going away because people are being creative. Will jet fuel continue to rise? No, we don't think so, either. We think we're hitting a peak, if you will, here. The world market is stabilizing. You're seeing more refinery capacity in Asia. And as tough as it is here in the US, it's really tough in Europe. They have a much harder time. They rely more on that Strait of Hormuz type oil coming in. We at least can refine it and make our own. You have groups like Delta who actually own their own refineries to help hedge against some of that cost. So we don't see it as what happens when the opportunities run out. I think it's just about making sure people continue to understand whether it's a points program on a credit card, flying a little differently. Don't book a week in advance. We recommend-- Governor, look away. Oh, is that you? Are you that booker? I have to travel next week with my family. I'm afraid to book because I'm afraid to look at what the price is going to be. Well, that's the thing, though. But it's so fascinating to me, in a way, Governor, what you're suggesting is that the airline industries have us captive. I mean, we need to travel, just like we need to put gas in our cars to get to work. And so there's really nothing we can do. We're still going to-- Well, there's still a lot of competition. It's not even just-- business travel, as you know, is where the airlines really make money. So I was traveling for work a couple weeks ago, and I walk into the lounge. It is packed. There's a thousand people in there, right? And I'm like, I thought that travel was getting too expensive-- No, everyone's still traveling. And remember, there's a lot of competition. If you're not finding it on American or United, you have Delta. Or if you're looking for a low-cost fare, we call them our value airlines, the Frontiers and the Breezes and Sun Countries, and there's still a lot of options there. If you're flying through some of the busier airports, maybe there's some of the smaller airports or the midsize, which actually stand to get a huge influx of government money to help rebuild those across the country. But let's talk a bit about the dependability of flying because, I mean, last week, we saw a cable line take out several air travel in several states in the Northeast. You were with-- That was my, oh, my God, what are the people of New Jersey doing to us again? [LAUGHTER] I know it's shocking-- The New Hampshire guy being like, what's going on over in Jersey? I can't believe something in New Jersey broke. What a shocker. Governor, respectfully, we have loyal viewers in New Jersey and New Hampshire. And they got stuck in those. Again, that wasn't the airline's fault. Our heads were exploding. It was a headache for them and for a lot of people. You were with the Transportation secretary. What's being done to prevent something like this from happening? So this is a good news story. It really is. Look, I'm a real cynic on Washington, and I'm a fiscal hawk. And I hate to see large infrastructure projects. How many times have we heard of a billion dollar train that doesn't get done or a bridge that never gets done or this project was two years and now it's going to take 10? The story around air traffic control modernization is an amazing one. They said it was going to take seven or eight years. They're ahead of schedule. They said it was going to take X billions. They're under budget. So they're putting in new radars, new radio systems, new surface surveillance systems across airports ahead of schedule and under budget. So what's happening is, because they're so far ahead of schedule-- and again, as kind of a watchdog, for once, I'm like, holy cow, the taxpayer is actually getting a return on the investment-- Secretary Duffy at Transportation, the FAA had Bryan Bedford as saying, we need the next round of funding because we're moving so fast and so effectively. So they're asking for that next round of funding, which is, I mean, I've been in traffic control towers where the roofs are leaking. The computer systems run on paper strips and floppy disks. That still exists out there. Floppy disks? Floppy disks. Like the ones that look like this? I've been in control towers that don't even have wireless systems. So that's all been transformed over, and they're rapidly moving it. But they're moving so fast, they need their next round of funding a little quicker than they thought, which is actually a very good thing. And my argument to the folks in Congress and Senate are-- first, to the people who actually are paying for this-- you and I pay for this, right, with our tax dollars-- it's actually getting a product, haven't had it in 40 years out of air traffic control. And we're actually telling Congress they've earned it, right? For once, we have a project that's on time and under budget. That's a great win. It's great for the airlines. But most importantly, it's great for the consumers. It's great for the flyers-- And we look forward-- ---that resiliency. --to air traffic control being more efficient-- Wouldn't it'd be great to not have one communications line-- That'd be nice. --keeping the entire East Coast running? It's crazy. But that's what they're fixing, and they're doing a great job. Governor Chris Sununu, thank you so much for being here.
