IHeartMedia Aviation Expert Jay Ratliff talks about the week in aviation

Episode Transcript

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Hey thirty coming to D thirty oneto put you out here CD talk station
tgiit. Thank god it's Thursday atthis time because we get the pleasure of
the company of iHeartMedia aviation expert JayRatlift Jay, I'll talking to you.
Welcome back to the program, myfriend. Well, as we watch people
on Wall Street lose their mind andthe world of aviation fall apart, it's
always fun, my friend. Isaw your billboard coming into work the other

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day. It's like, Hey,that's Jay, I need to put up
there. Listen to Jerome pal Ithink anytime I hear the fed chair talk.
I look at him now as RodneyDangerfield. He gets no respect.
Nobody believes him. And when hecame into this year saying we hope to
have three interest rate cuts in twentytwenty four, maybe that was translated into

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yeah, we're going to have sevenor eight massive rate cuts this year,
just wait and see. And Idon't know why nobody believes him. Let's
give him a referee shirt and awhistle. Maybe people will listen to him
when it says time out. Well, it's nineteen seventies all over again.
I know. Jimmy Carter bagged andbegged. Wasn't it an Alan greens to
lower the interest rates because he wastrying to deal with inflation. I think
it was Volberger. I believe thatwas the FED chair at the time.

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You're trusting my memory here, sureon that, but it goes back.
I think it was pre Greenspan.But yeah, I mean, you know,
back then, the idea was thatthe Fed did get involved, they
did stay ahead of inflation, andthen they took their foot off the pedal,
and inflation blew by us so fastthat we don't know what hit us.
And of course that's what Jerome Palacecontinue to say. You can't just

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dismiss inflation. You can't take oneor two months, even a quarter of
inflationary numbers and say, okay,we've got it beat, It's time to
move on. Let's start cutting interestrates. And Bran, as you and
I have talked before, they raisedinterest rates over the years in very slow,
gradual, methodical fashion, as theyshould have, and the interest rate

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cuts are going to be applied thesame way, very slow, over a
period of time. So anytime Ihear the word massive and all this other
stuff, I'm thinking, what crap, it's just not going to happen that
way. And it bothers me becauselook, last fall, people believe that
when I bought houses they couldn't affordthinking they were going to refinance this spring,
and it's obviously not going to happen. Adjustable rate mortgages do come with
their downsizes or downsides, don't they. I know, Hey, that'll give

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me nightmares. You throw that atme. Yeah, that's that's not thirty
year fixed or anything I get,and no penalty for paying it off early.
Well, and that's exactly what wewere able to accomplish in my household.
So but I get sigh of reliefon that one. Well, yes,
and the inflation numbers came out,and the inflation numbers did go up,
and of course everybody's dealing with thecost of housing and gasoline. Nobody

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can hide behind that. In spiteof the fact that Biden administration wants to
blame us for believing the economy isin bad shape. No, we all
look at our own bills and ourgrocery bill and realize, hey, the
inflation is still here and it's notgoing away anytime soon. That's what FED
has to deal with. I guessthe indication now is they're not going to
lower interest rate inflation has not gottenunder control. That's really the message you're

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saying, isn't it. Well,if Jerome Pal has said two percents our
target, it's got to be thereor close before we're going to even begin
to entertain discussions on an interest ratecut. So even though we've not been,
you know, at two percent oreven really close to that mark,
people continue to say. You know, there was a time people thought it
was an eighty percent certainty we weregoing to see an interest rate cut in

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March. It didn't happen, andthen there was an eighty nine percent chance
we're going to see it in June. I doubt that's going to happen.
So you know, we may seeone, two, maybe three. But
Brian, I'll tell you this,if these inflationary numbers start to tick up,
you're going to hear a different word. It's going to be an interesting
rasese hike. And you think peopleare losing their minds now you wait till

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of course, I guess if JeromePal says that, nobody's going to listen
because they've not listened to anything elseyou've said before, we go to Puzzer
vintage. Oh look, Boeing's onthe eating square pegs in round holes.
I guess let's talk about it.I just anyway, the latest gap between
Bowing and Airbus continues to widen.Say you, but I saw that article
about Spirit Airline announcing that they weregoing to furlow two hundred and sixty pilots

(04:08):
and postponed Airbus aircraft deliveries. Theysave the delivery pause partly due to the
quality issues related to the aircraft's Prattand Whitney engines. So it's going on
over to Airbus too. In somefashion. It is when we're looking at
some of the of course, someof those engine issues have been with us
for a period of time where theyhave come across parts that are wearing faster

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than expected. And what's happening isthe airlines are being either encouraged or sometimes
required to pull those airplanes out ofservice to inspect that specific engine part to
make sure it doesn't show signs ofwhere beyond what is considered acceptable where they
would have to make repairs. Andthose inspections when you take an aircraft out
of service can certainly impact things.But yeah, Spirit laying off two hundred

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and sixty pilots was in the largestpart because a the merger with Jet Blue
didn't go through and the were planningon using a lot of their pilots with
some of the aircraft that they hadat Jet Blue. And the other reason
is that they're not getting the jetsfrom Boeing that they had anticipated as well,
because there's been obviously a very there'sbeen a mark slowdown in aircraft deliveries

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from Boeing. Boeing reported their numbersand they delivered just eighty three airplanes in
the first month of the year,and United was looking at I think seventy
one or seventy seven aircraft in thefirst part of this year. They were
going to be getting a good chunkof those and that's simply not happening.
In fact, the United pilots havebeen asked to take the month of May
off without pay because they don't havethe aircraft that they were anticipating having from

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Boeing. And that's why Scott Kirby, the CEO of United Brian, he
has ticked big time because they hadplanned on really making some hey in this
busy, lucrative, high demand summertravel season. And they're not going to
have all the silver revenue tubes theyplanned on, and it's going to really
impact their ability to generate some additionalprofit. And that's something that in Kirby's

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mind, is simply not acceptable.Well, and it may not be acceptable
to go Boeing aircraft as many problemsas they have. I mean, every
day in the news of something elseabout Boeing, and I know we're going
to get to the whistleblower here ina moment, but that got that just
means business for Airbus, right itdoes. In fact, I mentioned that
the first quarter of this year,Airbus excuse me, Boeing delivered eighty three
planes. Airbus delivered one hundred andforty two. Oh my god, the

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numbers when you look at him.We're still at that sixty forty mix where
Airbus is supplying about right now sixtypercent of the new aircraft into the worldwide
airline industry, Boeing at forty percent. In that gap continues to widen,
and sadly because Boeing has been forcedto slow down their production, thank you
Federal Aviation Administration. While they makesure they're doing things as they need to

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be doing whenever the restrictions on thespeed at which they can produce airplanes is
lifted by the FAA. I thinkthere's going to be a great deal of
pressure on Boeing to try to helpclose that gap. How are they going
to do it? Well, weknow over the last eight years how they've
done it, and I don't wantthem to do it again. It's just
it's scary. But you know,when you look at the numbers as far

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as historically speaking, it's amazing becausethere's some years that we have more air
Bus stories, then we have Boeing, and then we'll have the next year
where there's more Boeing stories than isair Bus. They kind of go back
and forth. Now this year's obviouslygoing to be dominated by Boeing. There's
no way to get around that.But this bucket that people keep throwing bucket

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Boeing related issues and keeps getting bigger. And when I get emails and questions
from the media saying, Jay,there was a bird strike. It's a
Boeing aircraft. Should we be worried, I'm thinking, Okay, we have
jumped the shark, We've gone overthe cliff. There's no way in the
world a bird strike against a Boeingaircraft should be something we blame Boeing on,
but some people want to do it. Well, I see Boeing stock

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is trading down in futures, downthree forty nine, almost two percentage points
in early trade. You and Italked several weeks ago when it was approaching
two hundred dollars a share, andwe said, ooh, does that make
it a good bye? And we'relike, probably not. And then it
was at one eighty five. Nowit's at one seventy four. This is

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a stock that was trading you knowwhen we came into the year, it
was up to two hundred and twentyfive dollars this year, no excuse me,
two fifty two sixty as early asJanuary, and then it's done nothing
but obviously fallen from there. Andwhen you see the increased scrutiny and a
lot of the additional whistleblower accounts thatare coming out, it certainly makes me

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think the same thing I've been thinkingsince December when Boeing came out saying check
the nuts and bolts on the ruddercontrol system of the Boeing seven thirty seven.
Some airlines have reported under toward hardwareor missing bolts and nuts. My
thought was, what else is goingon that we don't yet know? And
of course two weeks later we hadthe door plug blow off. We've had
other instances since, and yes,some instances we can say is more of

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a maintenance issue than anything else.When you look at some of these airplanes
that have been service for eight ornine years, that's not Boeing, that's
the air Airlines maintenance. But Itell you some of these concerns are you
know, they're alarming, and youcertainly don't want there to have the problems
that some of these people are suggestingthat we can have. And let me
give you a quote that you canspring from a whistleblower Boeing quote, engineers

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used excessive force to make some partsfit. Taking me back to my square
peg in a round hole. I'llscrew it, just make it work.
That is not not a positive reflection. The whistleblower went on to say that
he literally saw people jumping up anddown on pieces of the airplane to try

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to get them to a line.And that's simply, as he said,
not how you build an airplane.And when this latest whistleblower brought his concerns
to management, which is what Boeingsaid five years ago they were going to
really make sure they did was listenmore to their employees. Belogney, he
was simply reassigned to work on theseven seven seven instead of the seven eighty

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seven. In other words, ifyou're going to keep bringing this up,
we'll just put you on another lineand work with another airplane. What does
that tell you? You're being dismissedbecause you're telling him something that they simply
don't want to hear. And whenyou're dealing with issues of safety, it's
just it's unreal. And you know, to me, Boeing should be forced
for an extended period of time,not just this brief moment of decreasing their

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their airplane production, because we needto make sure over a long haul they're
going to be doing what they aresaid they're going to be doing, because,
Brian, some of the promises they'remaking now they made to us five
years ago. I didn't believe itthen, and I certainly don't believe it
now because they've proven over the lastfive or six years. We're going to
say what you want to hear,and then we're going to keep doing what

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we want to do. And sadly, the federal Aviation Ministration over the last
five six years has been totally bamboozledinto believing some of these these claims from
Boeing that they're going to improve.Well, we're going to get a new
CEO, as they did five yearsago, that's going to fix things didn't
happen. Now they're getting rid ofthe next CEO promising that's going to take
care of things. And obviously it'snot. It didn't work before, it's

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not going to work now. AndI'm telling you that Boeing stock that is,
you know and kind of a clearedfor final approach, is it keeps
going down. I suspect it's goingto go a little bit lower because right
now there's just a lot of unknownson the future of Boeing, and I
like, you know, people saythat you know, things are too big
to fail. Yeah, they've gota lot of fence contracts, this and

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that. But their slow down ofthe aircraft deliveries is impacting so many airlines
around the world that at a timeover the next ten years when we're expecting
aviation to double in size, thissingle Boeing issue that's going to last for
a period of time is really goingto hinder the industry's ability around the world
to grow by as much as itcould because Boeing is simply dropping the ball

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with regards to the quality of theairplanes that they're producing, and it is
such an important industry. I mean, it's easy to make fun of them
and their mistakes, and they've piledon and they made all matters worse for
themselves. But it's just a tragicthing to behold that they can't get their
act together because it is such animportant industry to the United States and of
course the community in which Boeing resides. Well, if one of these Boeing

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aircraft comes apart in flight, morethan a door plug, but something more
significant, where before, thank godwe didn't have a loss of life,
we certainly could have. But ifsomething happens, then the FAA is going
to be forced to ground airplane stopproduction. They're going to have to take
some massive steps in order to kindof calm the fears of a lot of

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people. And I've never seen atime like now where people have said,
Jay, I'm only going to flyan airbus airplane. I'm not getting on
anything of Boeing, And in thelast thirty some years that I've been doing
my reports, I remember people avoidingspecific aircraft, but net or an air
line, but never an aircraft manufacturer. And I mean that's just never.

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I've never seen this before. Andso many people are saying, you know,
yeah, the old phrase used tobe, you know, back in
the day when Boeing set the standardfor safety. If it's not Boeing,
ye ain't going. That's now beenturned. If it's Boeing, I ain't
going. They're looking for an airbusflight. Frightening stuff. Jay Ralevez,
let's end on hub DeLay's got someinclement weather around here in the greater Cincinnati

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area. But how are things lookinggenerally speaking for air travel today. We've
had a rough week from a stormstandpoint, as far as things around the
country that have really been given usfits. Atlanta has had some issues this
morning. I suspect that they're goingto continue to get better. So if
you have that as a hub,you're going to be in pretty good shape.
But our friends in Chicago and Detroitare taking an absolute beating, as

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will be the northeast New York,d C, Boston, Philadelphia. So
literally most of the major hubs fromChicago East be impacted, including Charlotte.
So yeah, it's going to bea slow go for travel unless you're heading
due west and your airplane is notflying through any of these affected areas.
We'll anticipate some delays. Oh onone real final point before we part company,

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Jay, and I hate to haveto do it on this note,
but Boeing, if they were tohave one of these tragic accidents like you're
talking about due to a manufacturing issue, given their the recent history and the
history punitive damages comes to mind,I mean, oh well, yeah,
yeah, it's going to be somethingthat it could rock them to their core.

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And an insurance only gets you sofar. And look, they just
gave Spirit Airlines an excuse me,Alaska Airlines to one hundred and sixty million
dollars check for the things that associatewith the door plug. Yeah, that
was the first check of I'm sureseveral so. And you don't think United
and some of these other airlines thatare losing revenue aren't going back to them

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saying look you're costing us this much, you owe us this much. Yeah,
Boeing is either going to have toget some really sweet deals on future
aircraft, which is what they're doing, or they're they're being forced to cut
checks. And because in that timeI told you real quick that Boeing had
in the first quarter had produced eightythree airplanes. They took orders for I

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want to say one hundred and thirtyaircraft. No, it was one hundred
and thirteen new orders. So peopleare still lining up to buy Boeing airplanes,
and I'm certain that's because of thebig discount that they're going to beginning.
Jay Rod, I've always a pleasurehaving on the program, and as
always I will look forward to anothersegment that next Thursday, and between now
and then, best of healthy andto you and your better half. I

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appreciate Brian, Thank you, sir, take care of my brother. Eight
fifty one to fifty five kars ofdetalk station. You have the screws full
out and the bolt the bolts