Latest / SkyTalkDoc / E265 Spirit Airlines Belly Up...
Transcript
- SkyTalkDoc- Dr. Michaela: Good morning, Commander. Welcome to the Sky Talk Doc podcast. You've heard me talk about it a lot. If you have ever found yourself reacting in ways that you fully don't understand, shutting down, over giving, pulling away, chasing validation, withdrawing, you're not broken, you are patterned and seven primal wounds breaks down the core emotional injuries that quietly drive your decisions, your relationships and your stress response. This isn't surface level self-help. It's real insight into why you do what you do and how to actually change it. So if you are ready to stop repeating the same cycles and start understanding yourself at the root, Andy: Good morning sweetheart, it's great to be back on again. SkyTalkDoc- Dr. Michaela: we have something exciting to talk about. This is not our usual 4 a.m. rambling, but here we are. Yeah, so some interesting stuff has been playing out in the world of bargain basement airlines in the past couple of days. ⁓ I know we've both been kind of blown up with these reels getting sent to us and people asking our thoughts. And thought, well, this is like a really cool topic that we should probably be podcasting on. And there's a lot of different dynamics that I think are at play here from This book is for you. Check it out, 7primalwounds.com. The psychology that's playing out with people kind of rooting for the underdog and wanting to take back like corporations to give them to the people. There's also this part of things that we kind of have talked about at Nausium Offline, which is the ⁓ ⁓ the quality of airlines ⁓ pilot training, et cetera, which ⁓ can kind of jump in on. And then ⁓ Andy: Thank SkyTalkDoc- Dr. Michaela: Even more, we started visiting with our buddy about how there might be a more nefarious agenda at play here in terms of dismantling the airline industry as we know it in preparation for what's kind of coming next, which already seen since 9-11 ⁓ more regulatory control, less autonomy, all those kinds of things. And order to bring in new systems, they have to create distrust and dismantle the old systems, usually in kind of dramatic ways. So that's all kind of things on the list. But I guess I can jump in first and kind of share my thoughts. So I got forwarded these reels of this guy who's like, ⁓ I'm going to be the CEO 2.0 of Spirit Airlines. And just to kind of like set the stage here, Andy: Right. SkyTalkDoc- Dr. Michaela: It's a really cool idea to do some crowdfunding gig to try to save an airline. But if we just look at like the fundamental legalistic structure of this airline, and you and I know this from our time toiling with Flying Yacht Company and Part 135 stuff, Spirit Airlines has this company that everybody online sees, which is Spirit Airlines Corporation or whatever it's titled. And within that, they have a an agreement with the FAA to allow them to do scheduled air transport, which is in particular a Part 135 certificate that they maintain. Andy: That's a Part 121 certificate. SkyTalkDoc- Dr. Michaela: Part 121 certificate for them because they are the next level then compared with what we were going to do. Andy: Right, they fly transport category aircraft. So that's part 121 stuff. SkyTalkDoc- Dr. Michaela: Part 121 versus 135, right. Okay. So, and that ties into, you know, just the rules and regulations as governed by the FAA. But separately of that, so they've got this part 121 certificate that they would be, you know, utilizing to run their scheduled flight. Essentially, you want to go from, ⁓ you Sacramento to San Diego on a Wednesday at 9 a.m., Andy: Right. SkyTalkDoc- Dr. Michaela: They've got that in their system. That's their scheduled time and that's part of that whole program that they offer. Spirit Airlines has this front-facing organization that has the ⁓ part 121 certificate. ⁓ However, if they're structured like any smart the asset holding would be entirely separate. So they would have ⁓ XYZ Spirit, ⁓ LLC that actually holds all the aircraft. This guy's out there with this cool idea that like, they're going to auction off this certificate and we're going to swoop in that we, the people are going to swoop in and we're going to buy this airline and we're going to run it and we're going to take it back from big corporate America. We're going to save the spirit of America. on the surface, ⁓ a cool story, bro. But ⁓ like corporations have, you executive officers, usually elected positions, shareholders, etc. And just because somebody is declaring, you know, chapter seven or chapter 11 bankruptcy or whatever it's going to be does not necessarily mean that they are they are going under completely. And they might be, but it's I guess, let me back up to say this differently. just because a corporation declares bankruptcy doesn't mean that the corporation is dissolving. There's a lot of other components to that and they might start auctioning off assets that are held in another corporation to try to cover different debt and things like that. even if you were to swoop in and buy the certificate, there's still going to be different things that are associated with the corporation that had the certificate. might be pending lawsuits, there might be Andy: Right. SkyTalkDoc- Dr. Michaela: overages of gas bills that are due. It's not like, guess I'm saying it's a complex situation. And this guy's saying, I've talked to attorneys, we can make this happen. it's like, okay, well, presuming you had a ⁓ for people by the people corporation that is ready to rock and roll. Like it's a company that is all set and is where every shareholder ⁓ Andy: Okay. SkyTalkDoc- Dr. Michaela: has a right to fly, anybody who's invested a certain amount of money becomes a shareholder at a certain percentage level, presuming that you actually had that structure ready to rock and roll, you're still going to be maybe purchasing a company that has a lot of other debts that are owed. Any money you've generated would probably just go to paying those debts. If somebody is declaring bankruptcy, it's usually because they have more debt than they have inflow. And so when you think about it like that, it's, I mean, I guess the only way that I could see that potentially playing out would be that this guy would be setting up a company, a corporation separate, and then just buying the ticket. But he's probably got to get in line behind a lot of other people that want to buy that Scheduled Operation Part 121 certificate from that company, right? Because they can sell that off. Andy: Right. you Right. Well, they can sell off so you know can't the way it's structured you can't just buy the 121 certificate you have to buy the corporation that actually holds the certificate so you don't buy the ticket itself you buy the corporation that is holding the certificate and so a lot of times another larger airline let's say United or Delta or somebody else would come along and buy the certificate just to eliminate competition. because it is so much work to get that FAR, to get a 121 certificate. It's a lot of work. It's years of hard work and it's millions of dollars. And most people don't want to go through all that work to get maybe, you know, to operate that cinema margin. Some people are pretty passionate about it. It's a horrible business model. all the majors know this and usually it's the major airline that will come in ⁓ swoop up and buy the certificate. They'll outbid whoever else is trying to get that. SkyTalkDoc- Dr. Michaela: Absolutely. Because yeah, they can operate that as a separate division or whatever, just like how Andy: It's good. No, they'll just take it and shut it down and close it up. Take it out of circulation so nobody can compete with them. It's one way to get rid of competition. If you get rid of competition, you can raise your rates. SkyTalkDoc- Dr. Michaela: Right. Or you could do what Alaska ⁓ and Hawaiian did, right? They basically inherited those Andy: Right, well they did a merger which is different than what this is. This is a fire sale. SkyTalkDoc- Dr. Michaela: Right. I there's a couple of streams of thoughts happening. There's, there's, there's, my mind, there's three streams of thought. There's the, the bigger issue at play, which is the dismantling of the airline travel industry as we know it. There's this ⁓ person in right now, who's, and I say person place, but let's just say, let's, let's, let's pretend that that's not the situation. ⁓ There's an individual who's always geeked out and always wanted to own an airline that sees an opportunity to kind of do something cool. And he's just mind blown at how quickly this is like advancing into something that could become a real possibility. then there's the psychology of the people who aren't putting money or there's the psychology of people that aren't able to put food on their plate right now, ⁓ they're willing to throw down money for this American dream of ⁓ Maybe if we cannot have it run like it's been run, airline travel will be feasible and affordable for the general masses. And if it's run by the people, it'll be way better. And then there's actually this fourth component to it, which is these budget airlines operate on kind of, and the industry in general, on like very limited flight training these days. You know, we've talked about it before, 1,500 hours of the same hour. not really kind of going out and getting the training that they used to get. And we're seeing that play out in the aviation incidents across the nation. all these different avenues. I guess what I say is the psychology of this is very fascinating I think what we're seeing is this macrocosm, right? Airline industry has been, like you have stated, running on very tight margins for a long time. And it doesn't take much to throw them off kilter and out of whack. So there's that. Then we have these other kinds of things that are at play right now, which is people are feeling very desperate, very out of control on kind of all the things in their life in terms of prices are becoming so outrageous, so many things that impact that ⁓ ⁓ the ability to change. Like fuel prices, for example, right? Like I can't Andy: Right. SkyTalkDoc- Dr. Michaela: I can't go out and make a change on that. And then it trickles down to all these different areas of my life. So we see this company that has been functioning in a very probably tight margin environment for a while that is now declaring bankruptcy and the American people see an opportunity to come in and rally together and save them. ⁓ ⁓ when you look at the legal structures involved with high risk environments that are squishy like airline industry stuff, already a questionable market to tap into. Then you add the fact that the assets are held separate. And I kind of joked about this on a text thread. Like, you know, I could have the best recipe in the world for espresso. Andy: Cool. Right. SkyTalkDoc- Dr. Michaela: But if I don't have an espresso machine and the beans, nobody's getting coffee. Even if they were to go buy, even if they were to rally enough money to zero out the debt that Spirit Airlines has and inherit this 121 certificate that the FAA has given this corporation specifically, they are still not getting the assets. And the whole other side of this, as you know, you and I know from our ventures in 135, Andy: Right. SkyTalkDoc- Dr. Michaela: the aircraft would be leased to that corporation and it's specific to that end number. And that end number comes with all of its maintenance and all of its stuff that has already been cleared by the FAA specifically for that lease operation for that charter for that 121 certificate. Andy: Right. Right, may be wrong, but if you go ahead and you buy the corporation that holds their certificate and you for if you can magically somehow assume the lease on the aircraft that the airline was leasing, there's gonna be, you know, some scrutiny from the because, you know, everything suddenly changed hands. And so, you all of the same people may be in place, but because there's a change in ownership per se, you know, you have to go through and jump through a certain amount of hoops just to maintain to get flying again. It just doesn't magically happen like flipping a switch. There's all kinds of shit you have to do before you can get to that point. SkyTalkDoc- Dr. Michaela: Well, and even then you don't just automatically become the CEO. Even then, right, there's so much more that goes into that. Like board of directors have to make decisions to remove someone from that position and all of those things. It doesn't just like, oh, I bought this company so now I'm the CEO. yeah, think the complexities of corporate structure and the fact that most Americans are not taught this stuff in high school, instead we're taught stuff that we'll never ever, ever, ever use, is what makes it seem alluring on the surface. But if people really knew what it would take to actually save this company and actually bring it back to life, both from a corporate structure standpoint and the rules and regulations of the FAA and the tight margins and any kind of pending lawsuits and or debt that this company has, Andy: Right. And the insane amount of money it's gonna take to do it SkyTalkDoc- Dr. Michaela: It's not realistic or feasible in any way, or form. So I love where this guy's spirit is at, but this is where I also feel like we kind of zoom out and I go, this feels like some sort of MK Ultra plant or something like this, where it's like, let's put this guy in place who's gonna rally everybody to get some hope about this and we're just gonna shine a light on what's this. Andy: No. Right. SkyTalkDoc- Dr. Michaela: failing dinosaur of an industry. By the way, the airline industry has been failing ever since I've been alive. I remember how many airlines have merged over the years, how many have gone belly up. Truly, it's just like you said, it's such tight margins as is. All it takes is one catastrophic incident where you've got 255 people, families that are suing Andy: Right? SkyTalkDoc- Dr. Michaela: You know, and this is exactly why, by the way, the corporate structure is such that assets don't sit with the, you know, this is why they're dispersed among different companies so that they can only get to so much of the corporation. It's actually quite a smart structure. But I think when I look at this at a bigger level, I see there's something much larger at play, which is airline travel has been threatened from an emotional standpoint, from a psychological standpoint for a long time. Like we get shown pretty graphic incidents starting with 9-11, going before that, but definitely from 9-11. They've created a psychological dynamic where people are already very distrusting, kind of holding their breath every time they're getting on an airplane. And now you can share more to this, what you're seeing and hearing is that highly experienced pilots are telling you, I wouldn't get on a SkyWest, Jess. No way. I've seen the training that these kids have. There's no way I'd put my family on that plane. Andy: And this is kind of like, you know, where I'm at, we've had this conversation a bunch of times. It's like, you know, I'm sitting here and, you know, I've been flying airplanes for 40 years. Well, actually longer than that, but I've been a licensed pilot for 40 years. you know, I had a flight school early on in my career for about five years or so. And then I worked the Alaska Bush and other things and then bounced back down here and sort of, I don't want to say like semi-retired, but I'm sort of, you know, different phase of my life. not really retired and I started flight training again one thing I really noticed and it hit me in the face like you know somebody hit me with a ⁓ the head with a cast iron frying pan it's like holy shit these guys are idiots and not being trained adequately at all not even out out of the gate and so what has happened over the years is there's been this huge demand for pilots And the FAs answer to that is, well, let's just make it easier. And so there's a lot of stuff on the private pilot certificate. For example, in the commercial pilot certificate, the standards, the ACS Certification Standards, that they have dropped a lot of maneuvers. And they have opened up the tolerance. Some of the tolerances that we used to have to fly to are twice what they used to be. And so now we've got, you sloppier pilots that aren't trained as well be trying to meet this minimum standard and The minimum standard is like it's crap to be blunt It's a dogshit standard if we get these kids going to the airlines, so that's their hope and dream They need to be able to fly better than what they're doing. ⁓ SkyTalkDoc- Dr. Michaela: Yeah, we've kind of talked about how you'll see the CFI is trying to rack up their 1500 hours the minute that the Hobbs is on. They're sitting there running it up an hour with their Andy: Yeah, I've seen, I've watched, you know, there's a guy across the street from, or across the taxiway from me now that's like, honest to God, he cranks up and he sits there 30 to 45 minutes, he's clocking the time, the student's paying, you know, 300 bucks an hour to sit there and idle this stupid 172, and they're gonna go out and fly for a couple hours and they come back and they taxi and they sit there in the idle, and so in this, you know, two and a half or three hours of flying they do, the CFI's logged five hours toward his 1500, and he's only actually flown for three of it. And so there's something fucking broken here. mean like, hardcore broken. SkyTalkDoc- Dr. Michaela: So of the 1,500 that they get to go to the airline, maybe only 700 of them were actually in the air. The rest were just dying. Andy: Well, I wouldn't go quite that low, but it's like, you know, maybe a thousand or twelve hundred is actual flight time. The other three to five hundred is just sitting there on the fucking, pardon my English, sitting there on the taxiway ⁓ and charging the student out the ass for flight time that they're not getting. ⁓ SkyTalkDoc- Dr. Michaela: Yeah. And then it's a bunch of time and it's not actually dealing with the speed of an aircraft that goes from, you said, 100 knots to 500 knots. Andy: Right, and it's not just that, it's the total lack of situational awareness. You know, we're sitting here, we've got a, you know, a favored runway when the winds are calm. However, when the wind switches around, they're married to this runway. And it's like, dude, you're landing with a 10 knot tailwind. If you have an engine failure and takeoff, and you go straight ahead, you're gonna die. You know? I mean, and so, you know, and there's a whole, you know, this next generation that we're seeing. SkyTalkDoc- Dr. Michaela: Right. Andy: maybe the past two generations of pilots, you know, they're glued to their iPads and if you don't have a transponder in your airplane, you don't have ADS-B out, they're on the radio crying because they can't see you. Well, all you gotta do is look out the damn window. right in front of you. Just look out the fucking window. And so there's this whole mountain of issues that nobody seems to be addressing. There's a complete lack of basic stick and rudder skills. SkyTalkDoc- Dr. Michaela: Yeah. Andy: There's a complete lack of situational awareness. Nobody's looking out the window for traffic. on top of this, we've got standards that are to point, they're incredibly low to the point where we're set up for like the perfect storm for a huge freaking disasters in the airline industry. And nobody wants to talk about it. You get captains that are jump seating and they're like, yeah, I'm never gonna get on this particular commuter airline again, because the pilots suck. And so, not just one or two ⁓ guys, it's a lot of people who are starting to say that. And it's only a matter time before this, you know, knowledge trickles down to the general public. ⁓ SkyTalkDoc- Dr. Michaela: Well, I think on some level we've already seen these really odd kind of aviation catastrophes happening where people are starting to question that, you know. And again, ⁓ feel like if I think about biopsy of PSYOPs, dismantling old systems, implementing new systems, well, what's the next system that we're looking at? Well, first of all, more regimented control, right? when we think of things like smart cities and stuff like that, it's keeping you within a certain geographic area under the guise of climate, whatever, the climate. Andy: Right. And you know, it's like, you know, there's this push toward more automation, which is fine. know, automation has helped for it. But you know, they're already talking about reducing flight crews from two pilots in the cockpit to one, and then more automation is going to take over, which is fine, as long as everything works like it's supposed to. And I've got some friends that fly, you know, Boeings and AirBuses and stuff like that. And they're like, well, you know, the automation is great and two guys can handle it. SkyTalkDoc- Dr. Michaela: unmanned aerial vehicles, right? Andy: until stuff starts to go wrong. And then you need maybe two, three, four guys on the cockpit handling shit because all of a sudden when stuff breaks, it's not just one thing that breaks. There's usually a cascade of issues that come up. One thing breaks, at least to something else that's gonna go offline. Next thing you know, you're not dealing with one or two things. You're dealing with a dozen shit things that are going on and suddenly the crew is overwhelmed and shit goes downhill fast from there. You need two more people like. in the cockpit to handle this stuff. And so doesn't happen very often, but every once in a while it makes the front page news. You know what I'm saying? SkyTalkDoc- Dr. Michaela: So I think to pivot the conversation a little bit here, the secondary part of this is, going on psychologically? Like I said, that people that can barely put food on their plate are kicking in money as angel investors to save Spirit Airlines, which ⁓ know fundamentally we've talked about doesn't make any sense. ⁓ But a standpoint, ⁓ people in environments, they're not. thinking rationally or logically, they're using their emotional part of their brain to kind of go, ⁓ man, this is the underdog, this is the low tier, constantly criticized, nobody respects them, the airline that gets dumped on. so it's like when someone says, let's raise money and save them, it kind of triggers that, know what it feels like to be the one that people write off or the one that's dumped on. So it kind of soothes, it soothes our own ⁓ Andy: Right. SkyTalkDoc- Dr. Michaela: rejection button. the rescue heroic kind of empowerment that comes along with it. it's like self-repair by proxy. ⁓ If can somehow contribute to this and save this underdog, then I did thing. ⁓ I contributed show that there is another way and that it's not always the little guy gets kind of stomped on. Andy: Right? SkyTalkDoc- Dr. Michaela: kind of deal, like that grassroots movement, crowdfunding, know, core. But at the end of the day, so bigger than that, you know what I mean? And I think that it does create a sense of agency. It does create a moment of control. Like, I can't fix my life. Everything else is out of control, but I can contribute to this. ⁓ Andy: Right. SkyTalkDoc- Dr. Michaela: And I like that idea, like ⁓ from a psychological standpoint, I think it speaks to a larger place that people, least in our nation are at, and I would argue to say worldwide, but. Andy: Yep. SkyTalkDoc- Dr. Michaela: we would need to concentrate our efforts on something that would actually deliver. Andy: Yeah. don't know what that ⁓ SkyTalkDoc- Dr. Michaela: And I don't either, but I think. Maybe, maybe just maybe this could be an effort that could gain some wings, no puns intended, but I think more than likely it would fizzle pretty quickly when people got into the reality of what's actually happening. Because like you and I had talked about with our 135 stuff, was going to be, there would be shareholders and they would be awarded certain time to travel based on that shareholder investment. Andy: Okay. SkyTalkDoc- Dr. Michaela: And so if you think about how this could actually play out in any way, every investor would have to be a shareholder and every shareholder would have to then in turn receive something in exchange, I guess is how that would work. ⁓ all right, now who's going to cover it when something breaks? know, like everybody going to kick in when, ⁓ we've the company to this point now. Andy: Yeah. Right. SkyTalkDoc- Dr. Michaela: We just lost, you know, a bird's-gift flew through something and now we've got to fix the left engine. Like, that going to be everybody kick in another however much money if you want to continue to play in this game? You know what I mean? Andy: Yeah, and so that's where, you know, that's where it starts to get complicated because at the end of the day, people are a pain in the ass. And the more people that get involved, the messier it gets. SkyTalkDoc- Dr. Michaela: Exactly. think one of the things that I'm seeing and I just was sent a reel on the all-state lawsuit that's going on where what they've kind of found is that this company has been collecting premiums for quite some time and then finding every reason under the sun not to pay out, which I think fundamentally people probably knew. ⁓ But the recent wildfires and floods and things like that have really shined a light on that. And ⁓ again, we have a dismantling of another system that has already been precarious, that people already had a little bit of distrust in. And now we're seeing a ⁓ of bit of distress ⁓ now we're seeing it being dismantled. And so, you what I employ people to think about in these kinds of things is Andy: little bit of distrust. SkyTalkDoc- Dr. Michaela: We tend to get micro-focused on what's right in front of us. It's like if you've ever been on a walk, are you looking down at your feet or are you looking up ahead? And I think when things happen, it's really easy to bring our focus right off the tip of the nose instead of looking for the end of the runway. ⁓ well as I, when you focus on the nose of the airplane when you're landing, that's a good way to wreck up. You've got to keep your focus ahead. Andy: Right. where you want to go. SkyTalkDoc- Dr. Michaela: Look where you want to go. And so think as all of these things are going to start to unravel bit, we have to be looking at what's behind it. ⁓ And would be a good place to pull in Chris. I think we're going to jump back on with him later. But in my opinion, this is all tying into ⁓ biometrics, digital convergence, less autonomy in the guise of more autonomy. internet of bodies, internet of things, all of these different ways in which we will trade our ⁓ for comfort. ⁓ how this might look in this scenario is look, these airlines, you know, even with government help, haven't been able to ⁓ you know, the corporate world in a way where they can stay in business and look how ⁓ Andy: you Okay. SkyTalkDoc- Dr. Michaela: you know, now you've lost your airfare and things have gotten so expensive and you can't pay for your suitcase, but don't worry. We have a solution right behind this problem to help, that fixes everything. And I think that that's constantly the presentation, right? it called? The problem solution dyad, right? Like, ⁓ think that when I see stuff like this happening, Andy: Yep. Right. SkyTalkDoc- Dr. Michaela: I tend to be a little bit more skeptical. My first thought is, what are they intentionally trying to do on a macro level that we're maybe missing on this micro level? So now ⁓ news today was jet blues behind spirit and so-and-so's, and it's like, right, you knew that. We all knew that fundamentally we can kind of do the math that. Andy: Right. SkyTalkDoc- Dr. Michaela: I put $100 in my car and I can drive it about 300 miles or less, 250 miles for a couple of days. How many gallons of fuel at how many bucks goes into a jetliner to take you multiple states away and you're telling me you're buying a $30 seat and maybe kicking down 50 bucks to check your luggage? The math ain't mathin' and it hasn't been mathin' for a long time and on a subconscious level, everybody knows that. Like all of us on some level know that this stuff was barely eking along. Andy: Right. And so I guess maybe the bigger question is, is like, not to pick on the airlines, you know, it's one of those things where part of me is just thinking as you're talking, if you don't blow money on something, the government's gonna raid your bank account. And so the more money you make, the more money you have to blow on shit. And is a perfect place to hide money. SkyTalkDoc- Dr. Michaela: Mm-hmm. Andy: so if there's a bunch of investors there and they're losing their shirt on these airlines, that's exactly what they want to do. SkyTalkDoc- Dr. Michaela: The tax write off. Andy: don't buy airplanes to make money they buy airplanes to hide it you know and owning an airline owning a flight school or maintenance shop that's a good place to hide money from the government because they're always operating in the red I mean they're literally never not operating in the red and so anybody that tells you they're making money at a ⁓ the flight school are making money for where the maintenance shop working in aviation SkyTalkDoc- Dr. Michaela: Mm-mm. Mm-hmm. Mm-hmm. Mm-hmm. right? Andy: They're blowing smoke up your ass. That's a lie. You know? The numbers just don't work. SkyTalkDoc- Dr. Michaela: Yep. I think we're going to start to see global travel and nationwide travel. That's not on the agenda. Andy: Right. SkyTalkDoc- Dr. Michaela: It's not a part of the future agenda. yeah, I think that, you know, it's just opening the conversation more than anything on what's actually going on here. And I think people like to get focused on stuff like this, but you got to zoom out and you've got to really take a look at what's happening Andy: Yeah, that's all I have to say about that. SkyTalkDoc- Dr. Michaela: all I had to say about that. Andy: as Forrest Gump would say.