Transcript: Forward Path: Travel | Instant News

Welcome, mr. Hayes, and welcome to our audience throughout the country. HAYES: Hey, Frances, how are you? This – I see you and I see myself talking. That’s – MS. SELLER: Good, okay, and –SIR. HAYES: Yes, exactly. MS. SELLER: I want to start with one problem that arises among all my friends and colleagues when I talk to them about returning to the air, and that is fear. I know that JetBlue was the first airline that was mandated to use face masks, but what did you do specifically to get people back in the air? MR. HAYES: No, Frances, once again, thank you for having me today, and I think that’s the most important problem we face as an industry today. How do we give people the confidence to fly again? You know, we see, at least in the US, volumes are starting to return, but it’s still a little from what we normally expect at this time of the year. So, what we do at JetBlue is we launch our “Underground Safety” program, and it has a number of elements: The first thing is to make sure our crew members are healthy and healthy. And we have to make some changes to some of our internal policies to ensure that, if a crew member is not good, if they have been tested for COVID and tested positive or if they are asked to quarantine that they know it’s really okay not to come to work. So, that is the first thing. We also launched – actually, from June 1 – temperature checks, too, for our crew members. The second part is making sure our customers don’t fly when they feel unwell. So, giving our customers the ability to reorder, change their flight dates without penalty. So, we introduced it a few months ago, actually. The third part of our “Safety from the Underground” program is to ensure that airplanes sanitize. We call it “healthy air,” making sure the aircraft are cleaned, that they are clean, the plane has a HEPA filter. I mean, I don’t think anyone knows what a HEPA filter is, now. And every time an airline executive does something like this, we talk about HEPA filters. And we do it because what most people don’t know is that air on a plane is fully recycled every three to five minutes. We are also the first airline to ask customers to wear masks. And then, also creating, you know, more space. So we are block the middle seat, we block the aisle seat to ensure that you never sit next to someone you – to download the application. It’s always good for the airline when people download the application, but you know, use the application to check in, use the application to travel through the airport, scan the application when you get on your plane. And then, change our service routine to -MS. SELLER: I have a question about that. In your opinion, how many of these changes are part – MS. SELLER: Will cancel and change fees back. Will I sit next to strangers again on the plane? MR. HAYES: Well, I think you will definitely sit next to strangers again, I’m afraid, on planes, because of our industrial economy – most airlines have a break-even factor of 75 to 80 percent. So, obviously, limiting flights to 55 to 60 percent, which we do now until July 6, is not sustainable. But you know, in terms of – you know, and I think you hear a lot of people talk about what’s temporary, what’s permanent, I think airlines have to rethink, you know, how they sell their products, because that will never be right completely acceptable, I don’t think, for someone who is not healthy to feel that they have been made to fly. And, I think airlines should think about how they, you know, monetize their fare structure, how they create products that give people the ability to change flights more easily than they might have felt in the past they could. SELLER: One of the innovations we’ve heard, is not only the HEPA filter, you mentioned, but also the electrostatic fogging. MS. SELLER: What is that? How does it work? And how do you know it works on a plane? MR. HAYES: Yes, you know, I – I remember when I first started flying years ago, I went to all these exotic places and the crew would come with what looked like deodorant cans. You know, they will come down and they spray it into the air and all that stuff lands on us and it’s there to stop – you know, stop the insects and – there’s insecticide in it. Thankfully, we’ve come a long way since then. And you know, what we’re doing now is just high-level cleaning. And you can do it a number of different ways. You can do – you know, clean your hands or use this electrostatic cleaner. And what to do? Really taking the product that we use for sanitation – cleaning the airplane, and it’s like an aerosol. You go through the cabin and you spray it and then it goes into all the gaps and gaps that are difficult for someone to get in there by hand and do it. So, again, the thing about safety on the ground, it is a layered approach. There isn’t a single thing you can do, silver bullets, here, but a number of things that work together to create the feeling that flying is really safe like everything else you would do when you left home. MS. SELLER: So, a number of our listeners and readers have sent questions, and they are especially worried, I think, about personal safety. Someone, Cindy Nayer [phonetic] from California, asked: “What do you do about people who are immunocompromised? Can you make special circumstances for them?” MR. HAYES: Yes, again, you know, everybody has different health problems. And you know, I think everyone has to make their own decisions when it’s safe to fly again. You know, we believe that, you know, using masks, keeping the chair next to you as free as we do for now, you know, we think that it offers a significant level of protection. But again, you know, everyone has to make the decision to fly based, first, on what they think is their health risk; and second, what level of risk they are comfortable taking when they do anything at the end of the day. So, you know, I think that – yes, please, sorry. MS. SELLER: That brings me to another question from the reader, which is very interesting, from Jamie Bennetts [phonetic] in California, who said, “What are you going to do – what are you doing now and what are you going to do with people who decide they don’t want to wear masks when they get on your plane?” MR. HAYES: Yes, there are all these questions from California. MS. SELLER: I suppose Florida. But anyway, this – MR. HAYES: No, this is a good question. So the good news is that most of our customers adhere to the directions of face masks, and that is very important. Look, we know that face masks are not good to wear. I mean, you know, I wear it when I go to the store, I wear it when I’m on the road. Now, I don’t like to use it, but you know, we know it’s significant mitigation. So, we ask all our customers to wear masks. Our flight crew members are amazing at persuading people, sometimes doing things they don’t want to do. So, we train them on how to manage conflict. We call it ABC, ask questions, bargain, and convince. And again, when we get past that, most customers – will do – wear masks. You know, in the end, if someone refuses to wear a mask before they get on the plane, we win let them get on. And secondly, when, if they are in the air, fly, and they take off their masks – and again, if you have medical problems, if you want to have something to eat or drink, like, let’s use common sense, OK? So, there are times when you need to take off your mask to do something. But if you want to sit there and not wear it and everyone wears – you – around it, then, you know, unfortunately, we have to revisit whether we want that person to fly JetBlue again. Fortunately, that hasn’t happened yet, but you know, the safety of our customers and crew members is very important. This is a new flying ethic, at least until there is a different solution for this. And we must accept that wearing a mask is not about protecting ourselves but rather about one of our social obligations to protect one another. MS. SELLER: Currently there are no federal regulations governing cabin cleanliness, tickets, and similar things. Do you believe there should be? MR. HAYES: Yes, you know, I would say the industry has responded very quickly. And you know, there is a huge amount of cooperation going on in the US between our airline and regulator, FAA, on all safety issues. And, you know, we don’t want to wait until the regulations, because we don’t know how long it will take. We don’t know if that will happen. So, we have to go ahead and do what we think is reasonable. And you know, there are thousands of private companies, shops, shops, hotels, amusement parks, all thinking about how they can be reopened quickly. You know, I think it’s very difficult to manage to keep the middle seat free. I really think where there is a regulatory role are some of the things we need to think about doing consistently around the world to help people get international travel back. You know, we see countries when they begin to think, open their borders, or think of ways to protect their countries. And I think it can be very confusing if each country has its own solution for how to do it. MS. SELLER: Let me ask you, about this country. Public health officials have made it very clear in this country that tracking contacts, knowing where people are, knowing where they are flying, knowing who they are sitting with are key to preventing this disease from having a second wave or continuing to spread. But the aviation industry has, in the past 15 years, at least, battled lobbying to not produce more information for public health officials. Where do you stand on that? What is the proper role of the aviation industry, here? MR. HAYES: Well, again, I think, you know, to track contacts, we have cases today where we were contacted by the CDC or state officials. And you know, we work together and we make sure we do it fast. You know, I think some – maybe what you meant was two or three months ago, because some of these flights came from China, you know, when – at first, everyone thought the virus came from China. And then, then, that – maybe it came from Europe too. We are still learning it. You know, there are requests for how we can get that kind of information. And it’s not because the airline is resistant, that we don’t really have it – airlines refuse that we don’t really have the tools that make it easy to do. MR. HAYES: So, like you –MS. SELLER: – 15 years back – 15 years back to SARS, there are questions about how much data the airline needs to collect and submit, I think, and that comes to mind – MR. HAYES: Yes, I mean, we have privacy – this is actually not a question of rejection. This really ensures that we have information. And again, we really offer as a group of US airlines, through A4A, which is our trade association, to actually build a contact tracking application that we will all use and can use. And again, so, not because we hold it; it’s just that we need to make sure that what we do, you know, we have the technology and tools to make that happen. MS. SELLER: Thank you. I have a question from Colorado this time. This is Suzie Campbell [phonetic]–MS. SELLER: – who asks – yes – who asks – you know, he hears what the airline is doing. He asked: “What about the airport? What can you tell us about the airport what is being done to make the path through the airport to the airline safer for passengers?” MR. HAYES: Yes, I think the best news about flying right now is that not many people do it. So the airport is naturally very quiet. So, now it is actually very easy, I would say, in most cases, to be socially distanced when you pass the airport. You know, I think the challenge is, when the volume starts to increase again, how do you type – you know, maintain that security. So, once again, some responsibilities are at the airport, some are at the airline. You know, I think you will see, again, a big push in using cellular technology. You know, I think you will see the seating configuration change in both places, you know, you can get something to eat and drink, and also at the gate to spread people. You know, you will see, I think, more floors to help encourage people to stay six feet apart, when you’re on an airplane, to make sure you don’t all rush at the same time. And you know, airports are very good partners in this whole process. MS. SELLER: And speaking of the actual seating configurations on the plane, I want to know about how you think they might change. And also, whether, by paying more, for example, going for – you know, more expensive chairs, people tend to get safer seats in the era of transmission of this virus. HAYES: Yes, I think, again, the question is – does what we think change over time. And you know, obviously, right now, we’re dealing with a pandemic. We manage a lot of legitimate concerns that are around, you know, people who want to stay healthy when they fly. And you know, you can’t – see, even if you keep the middle seat free, you can’t get social distance from others in terms of a standard six feet. So, in the end, for the actual quote / social distance quotes on the plane, you might take an airplane that has 150 people today and the most you will get – is 40 to 50. And it’s not worth it. You know, I think people’s desire for low fares, for all the benefits of travel, they will still be there when we get past this. So, I think the things that you will see changing are things like aircraft sanitation, ensuring it is a healthier environment. All of that is a good thing. But I don’t personally think, in the long run, you will see a significant change in the way seats are configured on an airplane. You might get more people who choose to buy a spare seat to create that space. You know, some people do it today; I think it can be improved. But we also have to accept that maybe only a small number of people are able to do that. So, what else can we do to make sure people feel really safe when they fly. MS. SELLER: Right. And we all get very good at Zoom. Here we are currently talking to each other – and all other forms, Skype, everything. MS. SELLER: Do you think business travel will improve, or are you preparing for a future where there will be fewer business trips, and maybe fewer vacation trips? MR. HAYES: Yes, I think the actual vacation trip will return very quickly. You know, people – you know, we don’t have the cable to sit in our house and do this locking. We do it because it is an important short-term priority for public health reasons. But you know, people want to travel. They want to see friends; they want to see family; children want to go back to college in the fall. So – and especially in the U.S. domestic, I think many people might leave international travel this year. I have done it. You know, I usually – I like to go to Europe and see friends and family in the summer and we will do it in the U.S. This year. So, I think traffic will return quickly. I think business travel will be slower. And I think, again, part of it – there are certain types of jobs – you know, you work in sales, lots of relationship jobs, you want to travel. You have to travel. You can’t do much with Zoom. But that too – I think, there will be some changes that might be more permanent. Now, we are 80 percent vacation carriers. For the past ten years, we have tried to make ourselves more dependent on business trips. Now, I am rather happy that we are mainly an airline. But you know, a business trip will come back, but I think it will take longer. And, where we are – you know, like, before this happened, we flew 15 flights a day between Boston and Washington. We won’t have 15 flights a day for a while, but you know, maybe 4 or 5 or 6. It will only be a much lower volume, I think, for business trips for a while. MS. SELLER: You have postponed JetBlue’s own plan to have a flight to London, I think. And where does it stand, and is it influenced by London’s public health regulations and decision making about what happens? MR. HAYES: We’re still leaving, can see London there. Yes, we delayed a little. You know, it’s still our intention to go by 2021. We really think that the US market to Europe will be quite strong in the second half of next year. We think it might take around a year for the market to recover. So, we are still leaving but may be delayed. You know, it might be delayed a few months later in 2021.MS. SELLER: I have another reader question for you, this is from the State of Washington, and this is from Jay Carmel [phonetic]. Let me read it to you: “Will JetBlue use this reduction as an opportunity to reduce the average age of its fleet and adopt more fuel-efficient aircraft?” he asked. Mr. HAYES: Yes, that’s a good question and the good news is we’ve done that. So, in fact, this December saw the first arrival of one of our Airbus A-220s. They are modern aircraft, very fuel efficient, and we will take 70 of them over the next few years and they will gradually wipe out our A-190 aircraft. Also, all of our A-320s, we are through – what we call restyling cabins. So, we replaced the interior, everything, with new chairs, new entertainment systems. So, like, as you continue, it will look like new. And we’re actually only halfway through the process when COVID reaches and we sort of – we’ve stopped it and, you know, we’ll take it again when requests suggest we need a plane. But oh, yes, in a few years, like, every plane we have will look new or new. MS. SELLER: So, last month, income dropped by 95 percent. I think you – 73 percent of flights are less than half full. What is JetBlue’s fate now, and what do you see in the future? MR. HAYES: Frances, you have to remind me of that. HAYES: Geez. Yes, you know – MS. SELLER: Facts, facts, facts. What we did at The Washington Post: facts.MR. HAYES: Yes, I know, I know. Yes, all right, look, here it is. So, the good news is we’ve seen a slight increase since then. So, you know, in mid-April is the lowest point and the U.S. industry see about 3 to 4 percent of what they usually see. You know, we’re back around 10 to 11 percent now. I never knew that TSA used to post their system security number on their website at 9:00 every morning showing how many people flew through the US airport the day before. Like, I was at that thing at 8:40 a.m., waiting to load. So, you certainly see a slight increase but, again, not far from where we are. So, you know, when we discuss this, we have three main priorities. First of all, you know, the safety of our crew members and customers, and we have talked a lot about it today. Second, to reduce the burning of money. You know, cash is king in this neighborhood, hear that from any organization that might try to save some money. So, we are very aggressive to fly to May to reduce the burning of cash, knowing that there is – we are in an environment with almost no income. And third, get ready for recovery. So, you know, when we see May, we fly about 10 to 15 percent of our normal schedule. In June, we might fly about 25 percent of our normal schedule. So, again, you see a small increase, but – you know, there – we assume it will be an L-shaped recovery. We plan conservatively for that, and it will, I think, a significant period of time before earnings return. MS. SELLER: You got a significant boost, too, from the bailout, federal bailout, around 935 million, I think, from 58 billion. What do you use the money for? MR. HAYES: Yes, so – yes, the money comes from the CARES Law. Finally, I think 936 million, but I have to check that. And you know, we are very grateful to the Trump administration, Secretary Mnuchin, Secretary Chao, members of Congress, especially – our Schumer Senator in New York York. And you know, it really gives the airline industry time to breathe and time to make sure we are here when we go through this pandemic and get out of the other side of it. I think if it wasn’t for the CARES Act – I can’t speak for other airlines, but I think, of course from the JetBlue point of view, the only reasonable thing to do is to bring down the fleet, even though most of our people are. We had never branched out with anyone before; it will be difficult. So, all of that money, under federal law, must be paid directly to pay our crew members. So, that’s what we do with it. The alternative would be really – and in fact, when the CARES Act was presented to us, you know, the Treasury said that they estimated that around 70 percent of the money we passed through the CARES Act would effectively pay unemployment benefits and lose taxes if they haven’t – if they paid leave. So, 70 percent goes directly to the crew members and not in terms of wages. And about 30 percent – MS. SELLER: Have you – sorry to bother. Have you made one employee go wrong since receiving this money? I believe you have been criticized – MS. SELLER: – by some Democratic Senators for violating – MS. SELLER: – the spirit of CARE. Nothing has been skinned? MS. SELLER: Do you continue – do you continue to pay all health benefits and other benefits? MR. HAYES: Yes, yes, yes. We haven’t left anyone yet. We have a number of voluntary programs that have been taken by crew members. You know, we have a lot of crew members who want to take summer periods. So, we actually have more than 60 – about 60 percent of our crew members take time off without pay, whether it’s a day or a week or five months, but all of that is a voluntary program. MS. SELLER: So, this has given you time, right? The CARES Act will take you through the summer months. How do you imagine work in October? MR. HAYES: Yes, that – that is probably the question I ask most often now and we spend a lot of time thinking about it. You know, it’s quite clear that when we arrive in October, requests will not recover. So, we are sure that we will become a smaller airline than we want. And that – you know, it’s a difficult conversation to do. You know, it is our intention that we will try to manage this, if we can, through voluntary means. As I just said, 60 percent of the people – from our crew members have taken some kind of voluntary summer leave plan. So, you know, we will see – we will see how much interest there is. I think there will be substantial interest in continuing that, and then we will see where we are. And we will only use accidental leave on October 1 if we have to do it. MS. SELLER: And are there other bonds attached to the CARES Act money that you have to manage during these critical months? MR. HAYES: Yes, I mean, there are partners, but I think they both make perfect sense. One, there are some limits on the executive, which we support. Executive compensation [unclear] if you take government money, the last thing you have to do is pay it in the form of a million dollar bonus. So, we support that. There are requirements to serve the market. So, if we want to temporarily stop flying somewhere we usually fly [phonetic], we must get an exception from the Department of Transportation. So, we have followed the process. And then, there are restrictions on things like stock repurchases and dividends for a certain period, but for one year, if you take the CARES Act payroll support for the period after that. Again, however, stock repurchases are not really on the agenda, because when you get past this, you burn so much cash your debt starts to really go up. So, you will – we will be very focused in the next two or three years, de-levering and paying off the debt rather than repurchasing shares. So, once again, all the restrictions are very reasonable. MS. SELLER: So has the government done enough for the aviation industry, do you think? MR. HAYES: Yes, I think, actually – I think – by the way, not only the government, but Congress, because something like this might not happen with [sic] bipartisan support. And you know, we focus a lot on today’s differences. I would say that, behind the scenes, I saw people from across the alley, both Republicans and Democrats, working very hard together to get this Care Act over the line, and it was not an easy thing to do in such a space. short. time.MS. SELLER: So, I know you were not with JetBlue for 9/11, but do you see a faster or slower recovery for the industry after this disaster? MR. HAYES: I think this will be far worse than 9/11. You know, I think there are two things that happened here. There are health problems, where, you know, it will take time. You know, some people are ready to get on an airplane today; others, they will not want to go near an airplane for a significant period of time, at least until they are sure that there is a vaccine or therapy or other means we have taken to reduce this. So, we deal with it. And then, we also deal with economic problems, right? So, we’re going to go through health problems, but then, you know, how do people earn? What is the unemployment rate? All of this has a significant impact on discretionary spending and the ability of people to vacation and fly. So, for those two reasons, I think this will be a significant period of time before we look back to the 2019.MS level. SELLER: Right. And I understand that JetBlue has lost six employees to the corona virus and that during the revenue call you take a moment to discuss each of them and reflect on them. What is meant by this crisis in terms of your understanding of company leadership and your role in the company? MR. HAYES: Yes, I think culture is always very important to us at JetBlue. You know, I remember when you – when I first joined JetBlue on my first day, I didn’t join the role of CEO, and you went for orientation, which is our training center in Orlando that every crew goes through. And you learn about servant leadership and you learn about – you know, it’s about setting the right tone and not being – not wanting to do anything you ask your people to do. Now, you don’t want me to fly an airplane or repair an airplane, but I certainly can do many other things. So, you know, we always have families like that on JetBlue. So, losing a crew member is an extreme thing – again, you know, these are the six crew members lost by COVID, but every loss is difficult. And our first crew member lost, Ralph – I mean, I know Ralph. And he’s not just my hero at JetBlue; he is on our flight team. You know, he played a major role in 9/11 at the New York Fire Department. Dan Anda tahu, kita – setiap kali saya melihat pesawat Departemen Pemadam Kebakaran New York, saya masih memikirkan Ralph. Jadi, setiap orang memiliki kisah pribadi, tetapi keenam orang itu akan, Anda tahu, ingat. Dan kami akan mencari tahu, begitu kami melewati ini, cara yang lebih permanen untuk mengingat keenam awak kami yang kami hilangkan melalui COVID-19.MS. PENJUAL: Robin, terima kasih banyak atas refleksi itu. Dan kita semua merasakan hal yang sama tentang orang-orang yang kita kenal yang telah kalah – kita telah kehilangan virus. Sayangnya, hanya itu yang kita punya waktu untuk siang ini. Saya ingin mengucapkan terima kasih banyak – MR. HAYES: Anda bercanda. Setengah jam sudah berlalu – MS. PENJUAL: Ya, –bahwa setengah jam semua hilang, begitu cepat. MS. PENJUAL: Begitu banyak jawaban menarik. Saya ingin mengingatkan audiens kami untuk mendengarkan untuk mendaftar ke acara mendatang. Kami memiliki beberapa yang hebat yang akan hadir besok. Rekan saya, David Ignatius, akan mewawancarai mantan Perdana Menteri Inggris, Gordon Brown, tentang dampaknya terhadap ekonomi global; bersama dengan mantan Menteri Keuangan AS, Larry Summers. Itu besok pukul 9:00 pagi, Timur. Dan setelah itu, pada sore hari, 1:00, Karen Tumulty, juga kolumnis Washington Post, akan mewawancarai Penasihat Senior untuk kampanye kepresidenan Joe Biden, yaitu Symone Sanders. Jadi, dengarkan Terima kasih banyak telah bergabung dengan kami hari ini, dan kami akan segera bertemu lagi.

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