Demand for air travel is back in a big way, but judging by the rise in delayed and canceled flights it seems like the airline industry got caught flat footed. What’s up? Andy grills United Airlines CEO Scott Kirby on what’s causing all the schedule problems, why he thinks removing the mask mandate was a good decision, and how to cut carbon emissions in the friendly skies.
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- Learn more about United’s Aviate program, a new flight training school aiming for at least half of its trainees to be women or people of color: https://unitedaviate.com/
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Andy Slavitt, Scott Kirby
Andy Slavitt 00:18
Welcome to IN THE BUBBLE. This is your host, Andy Slavitt. Monday, July 11th. This is an episode you’re gonna want to listen to. It’s about the crisis in air travel, and how it reflects on all of us right now, in our day to day the CEO of United Airlines, Scott Kirby, agreed to come on the show and answer questions, tough questions. And I appreciate that. It’s not easy. And I don’t give them an easy time of it. And I want to preview the interview a bit for you, in part, because like a lot of our best episodes, these weren’t just my questions, they were yours. You gave me over 100 questions of things you wanted to know if you could talk live to an airline CEO. And so there were three important things I wanted to cover. We talked about the $50 billion bailout the industry received, and you will hear that Scott does not like the term bailout. Nevertheless, the $50 billion of taxpayer money. And look, I personally supported that, you know, we spent trillions of dollars over the course of the pandemic, and the money spent to keep people employed was important money to spend. But there is a question of what obligation that carries along with it. And let’s face it, if you’ve traveled recently, you know how frustrating it can be, get fewer flights than before the pandemic, down, maybe 15% or more, all the flights are full, there aren’t enough pilots, ticket prices are incredibly expensive. In some of the smaller markets, because of the pilot crisis, have seen like a 33% reduction in flights. There’s cancellations, there’s no good backups. And there’s charges for everything. And people are really annoyed with air travel. And I think some people are making this connection, that a lot of people are saying that the pilot shortage is the major cause. Some airlines have even admitted that. And they would draw the line and say airlines haven’t lived up to their part of the bargain by employing enough people, which is what they got money for. Now, Scott disputes that, you’ll hear he disputes that that’s what’s going on. So there are disagreements you’ll hear drawn out. But I want to hear that they’re respectful disagreements. And that, really trying to be able to have conversations with people where you disagree, you can take them on, you can be polite, you can be thoughtful. And you can judge for yourself, how much of what Scott says is compelling, how much and cases where we disagree, where that’s what I say, there were two other topics that I want to discuss with him as well. Also, which are pretty thorny. One was around the removal of the mask mandate. And the other was the whole environmental and climate emphasis that airlines are putting on air travel in there too, they’re really dicey topics. Again, you will find on the topic of masks. He says some things which are absolutely what he believes. And I’d say some things which might be a little counter, in my view. But again, I think there’s room for people to listen and interpret. You know, we’ve had a lot of experts on the show, which is how I get informed, which is why I develop my point of view. So I really think this is a good conversation and the one of the environment may even be the most important one. And again, somee good back and forth. I do want you to hear this, as you listen to the interview with Scott. Scott Kirby was the first CEO in the country to require vaccinations for his employees. We talked about that. When I was in the White House, he was somebody who, as a CEO was a leader in a lot of areas. So in times of crisis, some people step up, some people don’t I found Scott to be someone who stepped up. So I want you to hear that, despite the disagreements, there’s a lot of respect. And given that hopefully, you’ll hear some of that come through as well. So that that’s important. And then we get into this topic of the lack of diversity in the cockpit. Also important to know that even if we talked about that, you know, United Airlines is the one major airline that’s actually trying to do something about that. So I want to just provide the context of the background, that, you know, he’s a person who’s willing to come on the show, knows he’s gonna face tough questions, got tough questions. And he answers them honestly. And yes, there’s places where the disagreement? Yes, there’s places where I think you’ll find this interview gets very interesting. But he’s done a lot to earn my respect, not only because he answered his questions, but because he’s actually led in a couple of important areas, including vaccines and now and including the quality of the workplace. Okay, that’s about enough of an introduction. I think you don’t need any more than that. You get it from here. Now you just wanna hear the interview. Okay. Let’s do that. Here comes Scott.
Scott, welcome to in the bubble.
So let’s start with the airline industry and air travel is today, right now in the summer of 2022. The airline industry has been through an awful lot of ups and downs over the last few years. But here we are. And summer travel is an exciting time. Exciting time for families, particularly now because people get to see people we haven’t seen in a few years, they take trips that they have put been putting off for a few years from where you sit, describe the air travel environment, and what people are likely to be experiencing in air travel these days.
So first, it is great to see the recovery happening, air travel is recovering. I’ll describe it a little more specifics in a second. But it’s wonderful to be reconnecting and uniting with people around the world. I’m traveling twice as much as I did before COVID. And it’s not just good for our business. It’s also part of the psychological recovery for the country and for the world. It’s so important to get back and meet people. So it’s great that we’re back traveling. We see leisure demand, particularly in the United States and Latin America. 100% recovered, really 100% recovered in Europe as well now. Business demand is still on its way back. You know a little bit we expect another bump up when we get to September, kids are back in school, and Asia is still mostly closed. So we’re you know, I would say we’re kind of in the sixth or seventh inning of the recovery. We’re different than a lot of other businesses. Here. All these people talking about recession, you know, we’ve got the potential economic headwinds, but contrasted with we’re still on the recovery slope from COVID. So demand is back. It’s tough right now, all the infrastructure around to your point, you know, has really made it tough on customers this summer has been difficult. I can tell you that united, we’re you know, we don’t have staffing issues, we have 10% more pilots for block hours than we did pre COVID. And, by the way, that’s true, largely at all airlines, frankly, the biggest area we’re all struggling with is the air traffic control system, which has not been able to keep up with the growth. And it’s understandable. I’m not criticizing, it’s understandable. But there’s simply more airplanes in the air than the air traffic control system with its current staffing can handle and that’s really what’s driving these operational challenges.
So to start on labor, how is staffing levels compared to before the pandemic?
Scott Kirby 07:41
We at United Airlines don’t have a problem hiring. And in fact, we’re staffed, your pilots is the most critical one that you hear in the news a lot. We have 10% more active pilots per […] that we’re flying. We’re overstaffed.
Is that because black hours are lower?
So, our block ours are about 14% lower and our total number of pilots, which would then be about 3% or 4% lower, but we have more pilot availability per flight than we did before by about 10%. And by the way, that’s true at almost every airline.
Andy Slavitt 08:10
But is there is there unmet demand for travel? I think the perception that people have the perception that I have is that if we had more pilots, if we had more labor across the airlines, not just, not specific to any one airline, that there is more demand. And I think that, you know, people’s perception is that they see, you know, fewer flights, fewer options, more canceled flights. And so the sense was, is that if we had 10%-15% more pilots, you could easily fill the or whatever the shortage categories, you could fill those flights.
We would like to be fine more, as with many of the others in the industry, there is more demand that we could be satisfying right now. The pilot issue is really well, that’s really not the constraint, however, it is the constraint in small cities, where the small cities are losing the small regional jets, or losing service across the board because those pilots instead of flying, you know and making less money or moving up to bigger airlines like United, so it is definitely impacting small city service. But the bigger constraint on the total system capacity right now, to be honest with you is air traffic control. I mean, we just go day in Newark is a perfect example. We go days, you know, out of the last 100 days, we’ve probably had 95 of those days have had air traffic control mandated delay programs, even blue sky days. It really is staffing the controllers are doing a wonderful job. They’re working their butts off, but they’re just not fully staffed.
Constrained is also labor?
Yeah, it’s labor and air traffic […] and that one is even harder because an air traffic controller, a Newark air traffic controller is specific to Newark can’t work. Usually can’t work, JFK, LaGuardia, can’t work anywhere else in the country. Can only work to in a typical training time is 18 to 24 months. And so, you know, you compound that with the COVID policies that are still in place at the FAA, close contacts that can be out of work for as much as 10 days just from a close contact. And we’re just staffing shortages are rife throughout the air traffic control system. And every day, we’re waking up to […] programs and flow control programs. And that really, you’re just behind the eight ball and you can never it’s like there’s a major thunderstorms across the United States every single day, even on a perfectly beautiful blue sky days.
Andy Slavitt 10:36
Yeah, got it. Well, that explains at least apparently what it what it feels like when people see canceled flights and they don’t see bad weather. Your point is interesting way to think about it, that there’s the equivalent of bad weather. The the pilot shortage, help us understand that a bit. Because my understanding is that, that is not a new thing. That you know, we have a system whereby maybe we have mandatory retirement at age 65. I think, you know, the bolus of of pilots that have come from the military, my understanding you shouldn’t we’re kind of the Vietnam era pilots are all retired or should, or at least that’s what the math suggests to me at this point in time. And it’s interesting, you make an interesting distinction, which is, if I hear you, right, the big airlines like United and Delta, and I don’t know if you’ve heard of Delta and American Airlines. The big airlines are the laddering of careers that sounds like goes from these regional airlines up to the national airline. So when we face, we see shortages, you’re going to see them in Chattanooga, Tennessee, with a regional carrier more than you’re going to see them. So I guess I’m gonna ask you to reflect a little bit more on the industry issue than your own issue. Help us understand what’s driving this, the size of the shortage and how it gets resolved.
Scott Kirby 12:03
So there have there has been a pilot shortage looming, and people have been talking about including us for a long time. But it was exacerbated by COVID. So what happened during COVID, is you had several 1000, early retirements of pilots. And you had two years where airlines were in shrinking survival mode, and they weren’t hiring new pilots. You also on the other side of COVID, we think you’re going to permanently need 4% to 5% more employees in all groups for COVID, that sick calls are just higher, because of COVID. And it takes you out for a longer period of time. And so you need more pilots, and every airline was coming back with a desire to grow. All of that meant that supply and demand of pilots got out of balance. There was historically in the last decade, 5000 to 7000 pilots hired per year produced per year in the United States, coming out of COVID. At the beginning of this year, airlines wanted to hire 13,000 this year and another 12,000 next year, but the supply hasn’t changed at all. And the supply is really difficult because the federal rules which are for safety, in which we support require such an extensive training, that it’s hard, that pipeline can’t get filled quickly. It takes time.
But I was much of a stickler for having pilots be trained as experts. If I were you, I wouldn’t hire me in other words to pilot fly fly a plane. But are they too, is the implication that they’re too strict?
No, not at all. But the the issue is just supply and demand are out of balance. Look, what we’ve done at United Airlines is trying to take a proactive approach to it we even we bought and launched the United aviator Academy during COVID, only airline in the country that we own our own training academy, we can take people who’ve never flown before. It’s called […] training, we give them better training, and they get the normal civilian, lot closer to military training with flying airplanes upside down and doing stalls and things like that. And so we’re doing, we’re going to we’ve started that program, which helps. But that also, by the way makes a difference on diversity. Today, over 80% of the pilots in the United States are White males. At our United aviator Academy 80% of the students so far are women or people of color. So we’re taking steps to do it, there’s not a quick fix to this problem. Because it takes so long to get through. And we need to have really good training, you know, we don’t want to hire pilots from kind of fly by night, check the box organization. And so we’re going to be, there’s going to be a shortage of pilots for the next several years. And in particular, that’s going to impact small community service more than anything.
Andy Slavitt 14:37
Let’s take a quick break and then we’ll dig even more into the lack of diversity in the cockpit, which kind of blows me away. And then we’ll talk about where the money from the airline bailout actually went. Your point about diversity in or lack of diversity in the cockpit was totally interesting to me. And I saw what you did I actually read some articles about the kind of proactive steps you took. But what I read, the statistics I saw, and you may have better statistics are that 94% of pilots are male, 93% are White, and only 1% are women of color. This feels like it may be the most segregated job in America. How did this happen?
So? Well, first, I’d say the numbers are better United that 90% of our pilots are women or people of color, which is better, it’s still 81% White male, so it’s got a long way to go. This this happened, I don’t think from ill intent on anybody’s part, most of our pilots historically came from the military, a lot of White males. You know, for a long time, women couldn’t fly combat aircraft, not just male pilots. And then the second thing is, it’s really difficult and expensive to get your certification. And unlike every other advanced career field, you know, if you want to go to law school or medical school, the government has programs where you can take out a loan and do that. By the way, if you want to be a commercial airline pilot, your expected career earnings are higher as a commercial airline pilot, than they are as a doctor or a lawyer. But you can’t get loans. There’s no government programs to get loan. It’s six digits to get that training and certification. And so the only people can do it, are people whose parents can afford to send them because you got to have your parents pay for it. And mostly what that has meant historically, is airline pilots, their sons, they might send their sons to do that. So a lot of our pilots are the children of existing pilots. And they tend to just because they’re used to it, they tend to their sons tend to go and their daughters are less likely to go. It’s really that, it’s the military and it’s the expense. And the fact that there’s no government loan support, like there is for other programs means that the segregation that started decades ago, has just never changed. And we’re trying to change it now with […].
And I noticed that you’re also actually giving loans and grants for, for people to attend the school to try to get behind that barrier. And you’re the only ones doing it. So this is really not, this is not a United Airlines thing. Takes effort. But But I think the good news is, if we think about where there’s untapped potential labor, at least from the pilot front, that’s at least one place. Another is you’ve got a 60, mandatory retirement age at 65.
Because the medical standards, medical safety standards are so high for pilots. Right now, 36% of our aged 64 pilots are unavailable to fly on any given day, because of various medical short term, long term issues. So I don’t really think extending the pilot […]
Andy Slavitt 18:01
Got it. That’s not the issue. So you know, you don’t recommend extending the age.
I don’t think that that’s the answer. There’s no quick fix to this problem.
Interesting. I know Senator Graham was proposing some legislation to extend it to 67. And, you know, I’m not 65, I can see it in my kind of, you know, I could see it, it’s on the horizon. For me, it’s within a decade. I’d like to think that I’d be able to do my job just as well. But who knows, but you don’t think, that’s the you don’t think it should be extended above 65?
Well I don’t think that’s the answer. I’m not really taking a position on extending it. But given 36% of our age 64 pilots are unavailable to fly, it feels like that’s probably not the answer.
Okay. So tough problem, tougher on the industry. It sounds like it’s affecting the small markets the most, it’s probably a slew of things that are one of a list of things that I think when I look at the questions people have submitted, that are feeling our pressure points for them. And your point is people may be inappropriately or overly attributing this to one thing, it sounds like it’s a lot of things, not just pilots, but as you pointed out, air traffic controllers and other things. Let’s talk about the context of the airline bailout.
That was, you know, the government keeping people employed and keeping the aviation system here for the recovery. And by the way, we were here to support the recovery caring vaccines into the country.
So I could see why you don’t like the term bailout. I can also see why it’s hard to strike from the nomenclature, but whatever you want to call it, I guess my my question is, to help you who I think of is first principles type of a leader. To think about kind of what the context of taking that money is the obligations that went along with it, how that all worked and got a lot of questions from the public on its I think it’s a good opportunity to address it. A lot of airlines particularly smaller ones. Alaska was one that I’ve heard, despite taking bailout money, or however, whatever phrase we use. I know you don’t like that term. You know that they encourage a lot of early retirements, a lot of airlines, I’ve not read that united did but but there were early retirements probably for a lot of reasons, including the fact that the whatever money came in from the government wasn’t covering every cost, it was unclear how long the downturn was going to take. And a lot of people including me, felt like that, whenever we call it, it was appropriate, that we needed to do it kept people employed. But so how do you just explained to people, particularly those who understand why it was necessary, how not to be frustrated when we have, at least in some markets, we don’t have enough flights for people as a result of it cancellations.
Scott Kirby 20:50
So let me try, first, I think one of the most effective and highest payback government programs you could imagine, because had we not had those programs, airlines were going to close shut down. We were going to shut down in United, wait a couple of years hope we could come back after COVID. Not only would that have been unemployment, but we wouldn’t have been around to support the recovery, like the recovery is much more robust today. Because of what we’re doing. We wouldn’t have been around to fly citizens back from India, the State Department back from India, we wouldn’t have been here to fly Afghan refugee like, the payback has been great. There’s a lot of this noise around like all the cancellations and like we spent all this money, why are there all the cancellations? And I think there’s a misconnect, what’s really happened, the misconnect is people think that we have a staffing shortage at the airlines. And that’s what’s driving. That is not the case. At United Airlines, we have 10%, as I said, 10% more pilots for black hour than we had before, I talked to the CEO of JetBlue. And they have 24% more pilots than they had before. We can’t fly our full schedules, because the air traffic control system cannot support the number of flights that existed before. This is not about airline bailouts. This is not about airline moneys, we need the air traffic control system to support it. We just sent a letter to our employees. That said in the last four months, we estimate 75% of our cancellations were for FAA mandated delay programs. I mean, that is the issue. Now it’s getting reported in the process.
Andy Slavitt 22:20
To be fair, some airlines have said they are running shortages. And that is part of the problem. But they’re saying it’s some of the problem.
A lot of airlines have had shortages and have had problems. But they’ve responsibly pulled the schedule down. And that’s what they’ve done when they’ve had shortages.
Sure, sure and look to be I think that’s all make sense. I think that thing that like to pasture to someone flying, having a smaller schedule is better than having flights canceled. But it’s still not great as having the number of flights that they had before the pandemic, if there were if we had full on labor, because then there are more choices when a flight does get canceled. There’s something to move to. It’s easier to get a reservation, all those sorts of things.
But you gotta go back to the what is really the constraint. Having more pilots, like scheduling more flights right now, when the air traffic control system already can’t handle the number of flights we have, just makes the problem worse. The key is we’ve got to get the throughput back to what it was pre-COVID in the air traffic control system. And if we don’t do that, nothing else matters.
All right, when we come back, we’re going to talk a little bit about the pandemic and masking policies and all that. So, Scott, you and United Airlines implemented a vaccine mandate for United employees earlier in the pandemic, you’re one of the first to do it. I know it wasn’t an easy decision to come to, it couldn’t have been, I know that you heard from a lot of different voices. Some are in favor and some against and I generally speaking, I admire people who take principled positions and make difficult decisions. I admired yours at the time. In retrospect, was it a good decision?
Scott Kirby 24:19
Look, I think I will in my career, that’s one of the decisions I feel the best about. And the truth that it was an easy decision, like everyone says, was a hard decision. It’s not a hard decision. I mean, I can remember the moment I made the decision. One of the things I did that was somewhat unique during COVID is I wrote a letter to the family of everyone who lost their life to COVID all of our employees, and I wrote a lot of letters. That also meant though, to write those letters, I had to learn something about it. So it was really made it personal to me to do that. I’d stopped writing letters back in March 2021. And then the Delta variant came along. And in the summer I started I got my second notification of employee loss of life. I was on vacation in Europe, with my family, I walked around for about half an hour. And I was doing the math in my head and said, you know, if we require a vaccine, it will save the lives of probably 20 to 40 people. And once I did the math done the math in my head on it, like then it felt like no choice. That’s why I said it was easy. There was no choice. I called our team and, and then we did it. And then we got 99.7% of our people vaccinated because it was principal, you know, there was no waffling about it, there’s no compromising, there was no debating it. Like we were just, it was the right thing. It was just so the right thing to do. It turned out the situation was worse between Delta and Omicron. So there’s literally probably, you know, north of 40 people that are alive today, because we made that request, some of them are still mad about it, but they’re alive today. That’s probably the only time in my career, I’ll get to make a decision like that, that directly saves people’s lives. So I absolutely wouldn’t do it any differently than we did it.
Well, like that is really an interesting way to look at it. You save people’s lives. So the decision itself is one you can sleep at night with despite not not being extremely popular. But the other thing is that 99.7% strikes me as incredible. 90% of us can agree on anything. Whether left is left and right is right. Maybe 70% of us anymore can’t agree on anything. So there’s something about how you did it. How you communicated? How you explained it, how you talk to people how you listen to people? Because I will tell you, I spent, I’ve talked to probably 20 or 30 CEOs, on the very question of I’d like to do a mandate, or I’d like to talk about vaccines in the workplace. But I’ve gotten a lot of pushback, give me some help. What was it about how you did it that made it go so well.
Scott Kirby 26:48
So I’ve probably talked to 100 CEOs. And I eventually there were a lot of things we did when we were early. I think we announced on August 2, so it was less political when we did it. We were done with ours by September before it became, you know, a raging political controversy. So that helped. We did it with a short fuse. We did it in six weeks announcement to have to be done was a six week time period. But I think the most important and we communicated it was about safety. We did why we were doing it. It was about safety. I did a lot of it, I got on it to safety in an airline is our number one thing on culture, I think this the safe thing to do. And that’s my job. But I think that most important thing we did was everyone knew it wasn’t a bluff. This is where I told other CEOs, like I had my team come to me two weeks before it was over and say we’re only at 80% that like the airline is we laid off 20% of our people, like we can’t do that, we need to change. And I said absolutely not. We’ll deal with whatever the consequences are. But this is the right thing to do. And we’re doing it no matter what. And if you’re willing to back off of it. People can smell a bluff. And if you’re bluffing, they don’t do it. But people knew and a lot of ours came of course at the end.
Andy Slavitt 28:04
Were you disappointed or surprised? So if you followed whether in the airline industry or other places?
Yeah, it was both. Because I was particularly surprised and disappointed in the airline industry, because we say safety is number one, and we do anything for safety. And there’s no question. This was the right answer for safety. I mean, just no question. You can disagree about the politics, whether somebody but there’s no question. It was the right decision for safety. And, you know, the fact that business considerations got in the way of doing the right thing, particularly in the airline industry, with our culture about safety was both surprising and disappointing to me.
Let’s talk about the role of masks in air travel. Before the mask mandate was eliminated. You’d get on an airline airplane, everybody was masked. I’m sure that flight attendants had to deal with outrageous things as by the way they probably often do. I mean, I think we’ve all observed really badly behaving people in stressful situations like air travel. And it was one of those situations. That’s really strange in this country where unlike a lot of changes that take place over time, we went from a day when everybody was traveling to the court, essentially invalidating the mandate. And then it went away, actually, in many cases in the middle of the flight. People found out about it, and we’re told it’s okay to take off the mask. And do you think was handled the right way? I mean, the court decision is the court decision. Do you think it happened when handled the right way?
I was absolutely an advocate for once we’ve gotten to the level of vaccinations we had in the country once the safety data on hospitalizations and deaths had changed that it was time to not require masks on airplanes anymore. I also argued that it was part of the psychological recovery when you weren’t wearing masks anywhere else and you get on an airplane, you know, that was impacting people, you know, to feel like I’ve still got this COVID cloud hanging over me in that unique area. So I was an advocate for removing the mask. I won’t comment on how or it should have been done. I’m glad it got done. Just like I’m glad that we got to removing the testing requirements. At the time we put masks on, they were the right data science safety decision, but it was also the right time to remove them.
Andy Slavitt 30:24
So a lot of the smartest questions I got were about, like, is there a middle ground here? Studies show that there’s a very high likelihood that on every plane, there is someone who is contagious with COVID. And about 1 in every 10 rows contagious and asymptomatic. In other words, they’re contagious and don’t know. And I’m not even talking about people who have it, but people who are the contagious, active contagious stage, and that the ventilation systems work great for airborne droplets, that the real risk is in the three immediate rows of where someone is sitting. Should there be for example? Or could there be sections of the plane that are rows that are masked only.
First, I’d say any discussion, you know, just because somebody says it’s the science that it’s one rows, or three rows, they’re just dead wrong. We did the study, we did the most. We didn’t do it. But our airplanes were used for the most comprehensive study. And I understand the airflow on airplanes. It’s just factually incorrect. Those same people, if they’re riding a taxi to the airport, if they ever go to a restaurant, maybe when they’re sitting anywhere that they are indoors in a building, they’re at much, much, much, much greater risk than they are on board an airplane and get, and it’s logistically impractical to have separate rows on airplanes. So that’s not something we’re going to do. I feel completely safe on airplanes. If I was advising, you know, anyone that’s worried about it, I have talked to people, including family members that are worried about it, I would simply say, being on the airplane is the safest place you’re going to be, if you’re willing to leave your house and go places, the airplane is not the one to worry about everywhere else at it, perhaps, but it’s not the airplane.
Andy Slavitt 32:16
So you don’t feel the need to wear a mask on a plane.
I do not. Well, I mean, I’m got my fourth shot. So I definitely don’t feel the need.
Okay. Scott, we’ve had, we’ve had two intense conversations about two topics that people care a lot about. And I think people really benefit from the conversation, you know, and there’s no easy answers as we think about some of these things in air travel environments. Another interesting one. And another tricky issue. Let me just try to frame this question to you. So the Supreme Court in the last couple of weeks, less of the power of the EPA to put forward climate regulations. And Congress is gridlocked on climate policy. Meanwhile, by the way, meanwhile, just to set the context, I think everybody understand as we have scientists estimate, we have 7 years to take out about 30 trillion gigatons of carbon, to get to the goal of by 2050, taking a 59 giga tons, which is roughly what it will take to keep one and a half degrees celsius climate rise. So those are roughly the numbers that people understand. And airlines to be clear are a very, very small portion of 15 giga tons, it’s like less than half a giga ton of that work. So this is not primarily anything new. The airline industry can solve or cause. Yet, it’s an important part of, I think, how you present yourselves. And you know, we’ve many of us have seen the billboards outside of I live in LA outside of LAX, talking about climate goals. And to do their part, the scientists say that, or at least is what I hear that we’ll need by 2025, to be flying about 20% of our miles, using low carbon fuel. And that by, I think I can’t recall the year but by I think 2035 or so we need to figure out how to fly about 40% of our flights and a carbon neutral fashion, which is by the way, that technology does not exist today, as I understand it, so big challenge, big challenge for all of us, all of us who care about the planet want to figure out how to do our part. So how do you think about United Airlines commitment and the airline industry’s commitment to these goals and how to fix so.
Scott Kirby 34:31
So first, I think anybody that wants to go look into what I’ve said and done, you’re gonna be hard. I’m extremely passionate about this issue. It’s fascinating. It’s the biggest problem we have to solve. I like to say that, but it’s true that I have seven kids and I won’t be able to look them and my grandkids in the eye unless I have tried to make a difference on it. For aviation, specifically United is doing more than any airline around the globe. One big part of it, you talked about low carbon fuels and sustainable aviation, we call it sustainable aviation fuel. And we are never going to be flying big airplanes long distances with electric or hydrogen, battery density, just not energy density just not high enough, at least nothing even on the theoretical drawing board. So we need staff, United, today, our commitment to staff is more than double all the rest of the world’s airlines combined. That tells you and we’ve invested in about a dozen companies. You know, we’re trying to build an industry, the challenge that we have for staff is we need to get SAF on a level playing field with road fuel, renewable diesel and ethanol. Today in the United States, there’s a renewed there’s a tax credit from the FAA from the government. If you produce sustainable fuels, you can get a couple of bucks a gallon. But that doesn’t exist for SAF, if you do it for diesel, or for ethanol, you can get it. Ironically, airplanes can’t be electrify, all those could be, that’s a must have, if we’re going to have change this, I think the second big point I want to make is because this is bigger than aviation, is when people say they’re getting to net zero with carbon offsets with, you know, planning trees, it is the worst thing that can happen when you say corporations need to solve it, corporations are not going to solve it, unfortunately, because they’re almost all using carbon offsets. And there’s nothing wrong with planting trees. But there’s simply not enough room on the planet. First, most of those projects are fraud, they’re trees that were never going to be cut down anyway. But even if they weren’t a fraud, there, if you planted the entire surface of the planet, with trees that could grow trees, and we count for five months of mankind’s emissions. And then you’re done. It’s over. And oh, by the way, we’d all starve to death, because you just planted over all the farms. And when people, when everyone uses that as their go to answer for getting to net zero, like we’re not changing anything by doing that, we have to have the right government policy. I mean, I’m an advocate surprises people, because I’m an airline guy, we have to have a carbon tax or something like a carbon tax, or this isn’t going to get solved. I mean, the peak year for emissions flat was 2021. And that’s going to be eclipse this year, the peak year for coal burning in the world was 2021. And that’s going to be Eclipse this year, like we’re going the wrong direction. The government policy has, have sticks and carrots to make this happen. And the only real way to do it, I think is carbon tax. And the frustrating thing is like, look what’s happened right now. I mean, I hate seeing oil prices high and affects our business. But the political response to high oil price, instead of saying that’s going to, you know, be a demand signal to reduce consumption, is to subsidize it, like we don’t yet have the political will actually solve this problem. Gasoline, fuels have to get more expensive over time. That’s the only way we’re gonna wean ourselves off of them. And we need a carbon tax. And if we don’t have government policy, if we don’t have government policy, to solve this, it’s not going to get solved has to start with the government.
Andy Slavitt 38:00
Well, I don’t think we’re going to be able to reduce the demands to travel.
But the other thing that we can do, instead of traditional carbon offsets is carbon sequestration, it is the one technology that we know today can work. It’s expensive today. So we got to drive the cost down. But this is taking carbon directly out of the atmosphere, bury it underground, it’s essentially an acceleration of the natural process for what happens with carbon. United Airlines, by the way, as a partner with Occidental on 1.5. And what will be the world’s largest and first commercial scale, carbon sequestration plant will bury the equivalent permanently buried the equivalent of 40 million trees per year worth of carbon in the ground, just one plant that can work and we can do that. But there’s no economic reason to do that. Without a government if there was a carbon tax. And that counted as a fair offset, you’d have economic reason to do it. This is my point that we’re always going to require government policy, because no businesses, you wouldn’t stay in business. If you did that your competitors didn’t.
Andy Slavitt 38:55
Yeah, we just say that we’re at a place where people’s trust in government is low. I mean, I don’t think we people don’t really trust corporations any more than this. But I think at the meantime, we have to create at least some consensus about what you’re talking about, about a carbon tax, about why some of these short term trade offs are important. And we have to make it easier for people because I do think I do subscribe to this notion that people aren’t going to pay a green premium.
We have it in our data, we offer people the option to offset their flights. And that means it’s beyond time.
And to just to put the challenge of perspective, the way I think about it, is until you can make an electric car without talking to airlines any longer. We’re a little bit different space, but to make an electric car for $6,000 in India, which is by the way, not something conceivable in the next decade. People are going to still drive fossil fuel driven vehicles.
You’re going to all electric we’ve got to also solve the problem of having always on reliability, and grid renewable energy today does not do it. It’s great to be pursuing it. But this is part of the point of solving climate change, we got to have honest conversations. I personally think nuclear has to be a part of it. Unless somebody develops fusion energy, which is, you know, been 20 years away for the last 40 years, which is a silver bullet, but there aren’t otherwise silver bullets that are easy answers.
Andy Slavitt 40:19
I would say it’s one of the interesting things as we wrap up here, all these things, like just the thing I take away Scott, rich dialogue about all this stuff about nuclear, about the green Carbon Tax about all these things, the pros and cons, this sort of idea, building consensus around good policy does take all of us it to kind of figure out how to do.
One thing I would leave, when if there’s, if they’re willing to listen to it piece of advice for me, that I’ve learned is, just because someone doesn’t disagrees with you on a policy, like any of these policies, doesn’t mean they’re wrong. And you’ll do far instead of just being angry at them and telling them that they’re wrong. And it’s far better to listen to them, try to understand their perspective, try to find where you can change their mind genuinely, or get to a compromise or understand it, but try to understand the other side’s position, and why they’re coming into place.
That’s a great note to end on. And even to places this conversation where you and I disagreed or had a different set of facts to present, you could do that an incredibly respectful way. Just having, not agreeing on every topic. And when we say this in the show, a lot is not agree on every topic is there reason to make someone your enemy, and look at an old part of my job, whether it’s the White House or other places, is to put out the word, I will get in a room with anybody who’s serious about solving these problems, even if they got very different ways of going about it. If you’re serious about it. I want to be in the room with you, trading ideas, these problems are tricky. They’re gonna require a lot of us. I really appreciate you coming on the show today. To me, taking these questions on in a forthright way, is a good example, in my view, part of the process of getting these things resolved. And plus I had fun, I thought it was interesting. Great, well, all the best to you.
Same to you, good to catch up.
Wednesday’s show, what’s happening to our immunity from COVID? Bill Hanage, just coming back on the show, if you have heard him a couple of times, he is really authoritative scientist, who is gonna help us understand what’s happening as BA5 starts to sweep the country. It’s really going to be a great show. That’ll be on Wednesday, on Friday, we have a Friday conversation. It is about what we are doing in this country about the suicide crisis and the crisis-crisis, the crisis that we’re all having crisis, the mental health crisis, with the rollout that’s coming this Saturday of the 988 hotline. And so we’re going to have a few experts on people who’ve run crisis call center to talk about like, what that means. What is the resource mean? Is it going to be helpful? What does it do? Great conversation. Looking forward to that. And then next Monday, a week from today, Senator Chris Murphy from Connecticut, the guy who just would not quit, to get a gun bill passed, and we’re gonna hear the inside story. We’re gonna hear the personal emotions. We’re going to hear all the wind into this transformation, and then we’re going to try to understand what’s going to be different. Where are we going to go from here? Okay, you have four more days of the workweek left. So you know, don’t get too exhausted today, but we will really look forward to talk to you on Wednesday. Thanks for tuning in.
Thanks for listening to IN THE BUBBLE. We’re a production of Lemonada Media. Kathryn Barnes, Jackie Harris and Kyle Shiely produced our show, and they’re great. Our mix is by Noah Smith and James Barber, and they’re great, too. Steve Nelson is the vice president of the weekly content, and he’s okay, too. And of course, the ultimate bosses, Jessica Cordova Kramer and Stephanie Wittels Wachs, they executive produced the show, we love them dearly. Our theme was composed by Dan Molad and Oliver Hill, with additional music by Ivan Kuraev. You can find out more about our show on social media at @LemonadaMedia where you’ll also get the transcript of the show. And you can find me at @ASlavitt on Twitter. If you like what you heard today, why don’t you tell your friends to listen as well, and get them to write a review. Thanks so much, talk to you next time.