Aaron, what is the thinking behind this move? Why do you think it wants to join these businesses now? And what could it help Alaska to achieve that it might struggle to do on its own?

Well, Alaska's view in itself is becoming essentially the fourth global long haul U.S. carrier, along with American, Delta and United.

And as Ben Mininucci pointed out, all of those others are part of JVs, international immunized JVs.

And so American, for example, is part of one with BA, Iberia.

Finnair, Aer Lingus, and Level going across the Atlantic and with Japan Airlines going across the Pacific.

And Alaska wants to join those two JVs in which they could share revenue and planning in terms of these long haul flights.

And they view it as just nothing different than what the other majors have.

And Aaron, what about you? How convinced are you are that it can become that global premium player that it wants to be?

Mm-hmm

... that was very short-lived.

Uh, if s- people may remember that.

That was LaGuardia, National, Boston.

Uh, came around in 1989.

Actually had, like, a 40% market share at one point, but quickly ran out of cash, and one of the things that killed it was the, uh, the price hikes in fuel that accompanied the 1991 Iraq war.

Um, yeah, I think that the, the problem is here, if you can't adjust to shocks, like a fuel shock, without going under, then y- you know, you're not, you're not gonna be able to survive because the airline business is all about adjusting to things you can't control, and it's all about being prepared to adjust to fuel shocks.

Um, Aaron, do you have any last thoughts on that?

air traffic system.

Well, my biggest takeaway so far is that the airports have what's called an airport surface detection equipment model, HACS system, A-D-S-E-X.

And air traffic control uses this.

And what this provides is a very granular picture of everything moving down the airfield.

ground vehicles, aircraft, aircraft coming in for landing, and it puts up alerts if there's going to be a collision.

What has come to light is that the rescue and fire truck vehicle and all the vehicles coming in behind it were not equipped with a vehicle movement area transponder, which sends the data to the ASDE-X system.

FAA quote unquote encourages these vehicles to have those on them, but does not require it.

Let's open things up again.

So what are the key themes that you're seeing with regard to networks?

I've been covering the Latin American aviation market for 25 years, and I believe this is the most stable it has been in that time.

And there seem to be stronger airlines with better balance sheets with more reach.

And I think we're starting to see real evidence that what we've talked about for years and years about the middle class being able to afford flying instead of taking buses is really coming to fruition.

One thing you hear from Latin American airline executives that not just the people can afford to fly, but more and more can afford the premium products and are joining loyalty programs.

And that's a big deal, I think, because that shows that the middle class is really growing in a way that benefits the airline industry.

You talked about some markets that have focused on Latin America, and I think one that's very interesting is Canada.

Aaron, are airlines viewing Venezuela as a genuine long-term structural opportunity or are they still approaching it more, do you think, as a tactical market where capacities perhaps deployed a little bit opportunistically and then withdrawn if conditions deteriorate? What are your thoughts on

Aaron, what do you think are the chances of this getting government approval?

Well, we should know that this will be the first airline merger that the Trump Department of Justice will examine.

And I think that means there's a bit of unpredictability involved in it.

I think the best thing to do is look at the previous two mergers that the Justice Department, and this was under the Biden administration, examined, one which was blocked, one which was approved.

The JetBlue Spirit merger was blocked because it was viewed as eliminating a low-cost carrier from the market being Spirit.

And the mindset was, and this isn't really working out with where Spirit is, but the mindset was, is that Spirit would remain a low-cost carrier and keep that element in the market.

When we look at the Hawaiian-Alaska Airlines merger that was approved by the Biden Justice Department, that was seen as that the carriers were—nothing was being taken away from the market.

Aaron, can you just talk a little bit about that and the significance of that?

What do you think, Aaron?

Well, one thing we should note, I was down at the Takeoff North America conference a couple of months ago and I spoke with John Heimlich, who's the airline for America chief economist.

And he said there's been a persistent main cabin weakness in the U.S. market.

So premium is doing OK, pretty well.

there's been a return in corporate travel, but the airlines are having real trouble selling the main cabin tickets at good fares.

And I think that's a problem.

You can do as much with premium as you can, but ultimately you have to fill those seats in the main cabin.

What do you think?

So tell us a bit about that day and the reactions you saw from airport leaders there and, you know, just how different security was at US airports before 9-11.

Yes.

Well, I was at the Airports Council International World Conference in Montreal, and pretty much every director of a North American airport, every director of a U.S. airport was in Montreal at that time.

And I'll never forget, the convention was opening, and the Canadian transport minister was giving remarks All of a sudden, someone handed him a piece of paper and he immediately, in mid-sentence, stepped back from the microphone and very quickly left.

And then David Plavin, who is then head of ACI North America, announced the conference was being suspended.

They didn't know what was going on.

A plane had apparently hit the World Trade Center.

Erin, what are your thoughts?

Aaron, can I turn to you and in particular ask about Brazil? Why are Brazil and Brazilian Airlines so important in all of this?

Well, I think that the main thing to say about Brazil or the most important thing to say about Brazil in terms of airlines is that the per capita airline trips for Brazilians is less than 0.5. And so that's even low for Latin America.

It's one fourth of the US, like one seventh of Spain.

And so as a result, they're seeing as a tremendous growth opportunity in the Brazilian market, not just from Sao Paulo and Rio de Janeiro, which everyone knows about, But for example, Azul Brazilian Airlines, they run their South Atlantic flights from Campinas.

And right now they're flying to Lisbon and Paris Orly.

And they just started flying to Porto.

And right now, Brazilians traveling to Europe, the main destination, of course, is Portugal and then Spain and then France.

Do you think that's helped them as they look to grow internationally?

Is that realistic?

In a word, I would say no.

And first of all, there's a real money issue here.

In the Biden administration's last budget proposal, they proposed $8 billion over five years for ATC modernization.

And you mentioned the word vague.

There's been a lot of vagueness about how much this is going to cost.

And the estimate being thrown out there is about $12.5 billion.

Aaron,

What were your thoughts in terms of what they were asking about FAA and the controllers?

Well, I think one of the things that the DCA accident did was thrust the controller shortfall issue into the public eyes.

I mean, everyone in aviation knows it's an issue, but I think it's now front and center in the public's mind.

And so a lot of the hearing was... you know, why is this the case? Why do we have too few controllers? And how do we get more controllers? And it's not an easy solution because you have to hire controllers, you have to train controllers.

Work conditions right now, there's a lot of overtime.

It's a demanding, difficult job in the best of circumstances.

And now the system's strained.

Aaron, what are your thoughts about sort of, you know, is there a threat there?

Aaron, thoughts?

Yeah.

And I think one of the huge problems that Boeing has is that there are no plans right now for a new commercial aircraft.

And to say that it's still on the drawing board would actually be an exaggeration because there really isn't a drawing board.

With the CEO changes, they keep dropping what they're going to do in the past.

The technology that they have been talking about is stuff that's going to be tested in the towards the end of this decade.

And so I think we're right now looking at possibly the 2040s before a new Boeing commercial aircraft comes online.

And what about Alaska Hawaiian?