WEBVTT X-TIMESTAMP-MAP=MPEGTS:900000,LOCAL:00:00:00.000 00:00:00.090 --> 00:00:04.685 Is it possible airfares could collapse. Come the autumn and winter. 00:00:05.910 --> 00:00:13.560 I wouldn't say collapse but definitely come down where we're already seeing them decline. It looks like June July was the 00:00:13.560 --> 00:00:21.755 peak and we've seen what you call promotional fares come down after Labor Day. 00:00:22.020 --> 00:00:29.105 They're not as low as they were last fall. Last fall we saw the most lowest. Thirty nine dollars one way. We're seeing them. 00:00:29.100 --> 00:00:36.720 Fifty nine dollars one way. So they're definitely come down and. Right. If fuel prices go down they'll continue to come down. I'm 00:00:36.720 --> 00:00:47.320 looking for the fifty nine dollars ticket to see DG in Paris as well as domestic versus international. So domestic is is 00:00:47.320 --> 00:00:54.940 significantly lower. We're seeing fares come down in October for international September still seems to be fairly high although 00:00:54.940 --> 00:01:00.645 I've noticed some really good deals. If you want to go to places like Paris. Haven't seen much in the 00:01:00.640 --> 00:01:09.310 way of London. London seems sold out but I've seen Paris I've seen Frankfurt Madrid Barcelona on unmarked down. So there were 00:01:09.700 --> 00:01:16.035 places that have good sales for after Labor Day as well. I'm guessing Tom's going to spend a couple hours later on today 00:01:16.060 --> 00:01:22.720 searching prices for and take a spare. I mean I don't ever listen to interviews back Kailey Leinz Becker. I listen back 00:01:22.720 --> 00:01:31.240 like five times. Take Paris. All right. Well Helene you were just talking about how fuel prices have come down so that will 00:01:31.240 --> 00:01:39.400 have a bearing on fares. Are you saying essentially that it's more about the input cost that airlines are facing that dictate 00:01:39.400 --> 00:01:43.305 that rather than it being some kind of demand construction on the part of the traveler not being willing to pay higher fares 00:01:43.300 --> 00:01:52.755 anymore. I think it's a combination of both. Right. I think that we've seen input costs especially fuel come down off the peak. 00:01:52.780 --> 00:02:04.240 So that's a good ISE that labor costs are still very high. The Department of Transportation reported yesterday that in June the 00:02:04.240 --> 00:02:13.215 number of employees employed by airlines exceeded the number in 2019. So we're already back to pre pandemic levels of 00:02:13.210 --> 00:02:18.525 employment. The fact that we're seeing these huge delays continue it just 00:02:18.520 --> 00:02:25.390 means that airports are still understaffed and whether on the East Coast is not helping. So. So think about it that way as far 00:02:25.390 --> 00:02:31.605 as demand goes. We're seeing very strong demand especially for ultra low cost airlines. And we're seeing what we're calling 00:02:31.600 --> 00:02:41.020 trade down as people have relocated and they have to go back to their home office. Paying for tickets is gifts. It gets old 00:02:41.020 --> 00:02:49.845 fast. So we're definitely seeing trade down to the ultra low cost airlines. And of course to your point. Food costs are high. 00:02:49.840 --> 00:02:53.565 Gasoline prices are high although I've heard they've come off. The lows are the highest rather. 00:02:54.700 --> 00:03:03.045 So maybe that makes a little more attractive for people to fly again. Yeah but instead of taking five trips I'll take for 00:03:03.310 --> 00:03:10.810 something like that. But I mean consumers get tired of high fares for sure. Yeah. And that definitely impacts the leisure 00:03:10.810 --> 00:03:13.905 side. What about the business side. Tom John and Lisa have their 00:03:13.900 --> 00:03:18.615 business class tickets booked a Jackson hole and a couple of weeks. Is everybody else doing that too. 00:03:19.930 --> 00:03:28.300 Yes. I think what we're seeing is business travel resume. We might not be seeing five people going to that conference. We 00:03:28.300 --> 00:03:38.235 may only see three but we're definitely seeing an increase in business travel. Earlier this year we were down still down 50 to 00:03:38.230 --> 00:03:44.560 60 percent. Now we're down closer to 20 and 30 percent. And a couple of the airlines and their recent earnings calls talked 00:03:44.560 --> 00:03:51.585 about it being down 15 to 20 percent. So you're seeing that increase especially as return to office happens as more people 00:03:51.580 --> 00:03:59.800 go back to their offices at least two days a week. You're seeing that travel come back. Helene I talked to Lisa Abramowicz this 00:03:59.800 --> 00:04:06.015 week in Broome. So Debbie she said Tom you got to watch. Guess who's coming to dinner just to see the opening of the movie 00:04:06.010 --> 00:04:15.880 which is a magisterial United Airlines 747 flying from another time and place. So there I am channeling Abramowitz Spencer 00:04:15.880 --> 00:04:19.844 Tracy Katharine Hepburn and Sydney Party Day. And it was all great. 00:04:21.579 --> 00:04:26.015 But it's about the image of the airline. So you are long on someone like Kirby's United Airlines. Great. 00:04:27.460 --> 00:04:37.155 The fact is UFO has gone 90 to 20 and you now claim back up to 40. Do you envision that UFO and the others could get back to 00:04:37.150 --> 00:04:48.295 that market. I have 90. Probably not. And the reason we say that is even if the earnings are what they forecast. So back when we 00:04:48.290 --> 00:04:56.095 had our hundred dollar price target on United we were talking about them doing thirteen dollars in earnings in 2020. 00:04:57.980 --> 00:05:00.665 And of course the pandemic interfered. So we pushed that out to twenty twenty three or four. 00:05:02.090 --> 00:05:05.545 But remember they issued shares during the pandemic to get through it. 00:05:07.490 --> 00:05:15.325 And so when you add in the increase of the shares even if they get back to the net income no the increase in shares outstanding 00:05:15.320 --> 00:05:22.220 means that you're not getting back to the thirteen dollars maybe you're getting back to twelve and instead of nine multiple maybe 00:05:22.220 --> 00:05:33.260 is an eight multiple because the airlines are still losing money in a recession which if you recall that 2018 2019 timeframe 00:05:33.350 --> 00:05:42.020 people were saying oh the airlines will never lose money again. 2020 proved how wrong that that forecast was. You know unless 00:05:42.020 --> 00:05:49.765 you're dead on about you know Newark to Paris United Airlines Kirby's got it on sale this week. There was a nine thousand 00:05:49.760 --> 00:05:57.050 dollar ticket. And I'm seeing a quote in October for four thousand six hundred eighty three. That's a while. Change isn't 00:05:57.050 --> 00:06:06.770 it. Yes. Yes it is significantly lower. And we'll know again in October is not a time when a lot of people travel. It's more a 00:06:06.770 --> 00:06:15.380 business time. Yes it is. But yeah I mean so it. So I'll mean you'll join us in Paris with Caylee Kailey Leinz a surveillance 00:06:15.390 --> 00:06:21.080 road trip. I think it's around you Tom. OK thank you. Holly Becker thank 00:06:21.080 --> 00:06:24.595 you so much. Thank you. Planning the next surveillance junket.