Burning Man Charter Flights; Starbucks CEO jet benefit outrage

Jessie Naor (00:00)

morning and welcome to the VIP seat. Today is August 29th and this week's top stories in private aviation include charter flights to Burning Man and how the new CEO of Starbucks 1000 mile commute is actually a great investment. Your hosts today include yours truly,

Jesse Naor and our co -host Andrew

Hopscotch Air. So buckle up, sit

and let's take off.

All right, Andrew. So this week there was a lot of hoopla about the new Starbucks CEO, Brian Niccol. Not only did he get almost a $113 million pay package, but it also included $250 ,000 of personal travel on the company jets. This obviously enraged a lot of environmentalists and employees. But what are your thoughts on this initially?

Andrew Schmertz (00:54)

So I think we agree because we're both in the charter business that the private jet aspect of it is not such a big deal. So I know environmentalists are unhappy, but there's very little environmental impact that has been proven time and time again. Using a private

for a high net worth VIP individual can be appropriate. However, I do think that the optics for Starbucks doesn't look great.

So first they say, well, this is consistent with our

work policy. Yes, but people who work remote and then show up to the office, take their car or walk to work or take the

Not many people are taking a private jet. I think it's

of a kin to when the automakers, the auto CEOs remember back in the day when they went to Washington begging for a handout, they came on their private jets. think honestly, while this guy is very accomplished and

Probably is a great hire and pay him whatever you want to pay him And I realized that

sort of paying for the private jet out of his salary But we know that it was kind of worked in I don't think the optics look great for Starbucks Honestly, if he wants the job if he wants to work for Starbucks, he should probably move to Seattle But that being said I think the I think the uproar over using the private jet is misplaced he is

Jessie Naor (02:09)

you

Andrew Schmertz (02:16)

He is probably worth it. He's a high, he worked at, I think at Chipotle before, he turned around Chipotle. Starbucks is counting on him to turn it around. But Starbucks image has always been sort of a green company, a progressive company. And the optics, I don't think look great. I think the employees have a point. It's not a substantive point, but it's an optics point.

Jessie Naor (02:29)

Yeah.

Yeah, and I think that's a great point that the company is founded in Seattle, very strong ties to Seattle still and kind of that identity. At the same time, I look at Starbucks has had three different CEOs in the last two years. They're not doing great. And he came from

where he doubled revenues. He increased the stock value by 800%. The guy is a rock star when it comes to turning companies around. I think at least from the investor point of view.

And I think the stock price went up like 25 % after they announced that he was coming on board in the first place.

Andrew Schmertz (03:11)

Yeah, he's a great hire. But if you want to turn around the company, you got to do a few things. You know, if you go in and order a cup of

hand you the coffee while there on line. Don't make you wait five minutes just to pour the coffee. I understand if you order some fancy cappuccino latte, mocha thingy that they need to make that that you could wait for, but coffee and iced coffee. That's what I like. I like iced coffee. Just pour the iced coffee. Give it to me.

Jessie Naor (03:33)

Yeah.

Andrew Schmertz (03:39)

You know, mean, Dunkin' Donuts has this problem too. Dunkin' Donuts is doing the same thing. I wait in line, I order an iced coffee, get my receipt, and then I have to wait another five minutes for them to pour the iced coffee. And they convinced me not only to do that, but

pay $5 .50 for it. So I think his first task has to be getting to, you know, make the coffee for the everyday people.

Jessie Naor (04:02)

Mm -hmm.

Andrew Schmertz (04:03)

You've already established that you could charge an outrageous amount for coffee. You know, in New York city, you can get a cup of coffee on the corner for a dollar 50 from the guy at the stand, or you can go into Starbucks and people go to Starbucks and there's

Starbucks every block. So that's been established, but they have to improve the restaurant experience for the people who are just going in and out. And I know that they're cutting back on, you know, people who sit there all day on their computer, all of that. I don't think that's an issue for Starbucks. So.

I think he needs to focus on the nuts and bolts of the organization. And, you know, we should give them a pass probably for using a corporate jet,

I think still the optics are a little messy.

Jessie Naor (04:44)

Yeah, well, just for the record, they did clarify later that he's going to live in Seattle. He will have a home in Seattle. He is just entitled to use the jet as he would like to, which is not uncommon. Yeah.

Andrew Schmertz (04:54)

And that's fine. And that's fine. That's a perk that CEOs and C -suite people at major corporations should get because there's a security risk with having them fly on commercial airlines. I don't think commercial airlines want them on board either. So that's appropriate. And that's better messaging than the way they message it from the beginning.

Jessie Naor (05:09)

Yeah, it was just.

Yeah, and I think too, like someone picked up on, sure this, I know there are like labor

ongoing inside of Starbucks. I'm sure someone saw that SEC filing and the job offer, they went, immediately, he's not gonna live here, he's flying by private jet, let's attack him. You know, I mean, that's the other,

Andrew Schmertz (05:21)

Sure. Yeah.

Jessie Naor (05:29)

man, it was all over the news, like Google private jets this week, and it's every single story that came out, it was crazy.

Andrew Schmertz (05:31)

Call over.

Yeah. And people need to recognize that those kind of images are going to get the stories because that's the headlines. You know, the super wealthy get these perks while the baristas in the Starbucks stores aren't going to be flying that often on the private jet. But it is completely appropriate that he has access to a private jet. is not just a fringe benefit. It is a security issue.

Jessie Naor (05:56)

Mm -hmm.

Andrew Schmertz (05:56)

It is a convenience issue. It's a time issue. You're paying this guy a lot of money. If he's successful, I think most of his money is based on performance compensation. And he needs to be sort of protected from flying on Spirit Airlines. Yes.

Jessie Naor (06:11)

He needs to get where he's going, you know, that's slightly important for these executives whose time is money. But that's a good transition into speaking of, you know, flying on Spirit. Maybe one day your Spirit flight may not have a pilot on it. That's at least what certain companies, certain companies are trying to do right now. X -Wing, who was recently acquired by Joby.

Andrew Schmertz (06:26)

Well, they would like that.

Jessie Naor (06:35)

just

their third autonomous flight in a caravan, Cessna 208B Grand Caravan, with the United States Air Force. This has been an ongoing partnership. This is not new. It's part of the Agile Flag 24 mission. But they're continuing to prove out this concept. And I think it was very smart of Joby to acquire X Wing because they're clearly becoming a leader in this autonomous flight area, which is a fascinating world. Do you think we're going to be

any...

Andrew Schmertz (07:07)

Taking passengers, humans? No. And I don't even think people's pets. think that there's going to be, so, you know, there's going to be acceptance, public acceptance, I think coming for electric.

Jessie Naor (07:04)

pilotless airplanes on Spirit anytime soon.

Andrew Schmertz (07:21)

vertical takeoff and landing aircraft with a pilot. I think that's

But I think it's a little bit too much of a hill to climb to get into a pilotless airplane. People are not getting into driverless taxis. know, in San Francisco, San Francisco, Google, think is doing a big study. And that's one of the issues. I don't think there's going be public acceptance of that. However, the first acceptance you're going to get is packages because they're already being delivered by drone and basically a pilotless airplane is a drone.

Jessie Naor (07:36)

Right.

Andrew Schmertz (07:50)

Right. So you're going to get packages delivered. That's going to reduce those costs. You're probably going to get military applications because the military is already using drones. So why not add that to the, to the mix? But I don't, I personally don't think people are going to get on, you know, what I, I'll give you an example. I take the JFK air train, which is an air train that connects, the Long Island railroad station and Jamaica Queens to the airport. That train is a drone.

Jessie Naor (08:15)

Mm

Andrew Schmertz (08:19)

There is no person inside the train manning that. And I'll tell you, I get nervous by that because that thing can go speeding off the rails at any given moment. And I think that you put that equation into an aircraft, even though airplanes are highly automated as well right

you do want a human in there to interact in an emergency. Even though the computer probably is making the right decision most of the time.

You want that interaction with a human. So I don't think we're going to see pilotless passenger planes in the next 20 years, but I could be wrong.

Jessie Naor (08:55)

Yeah, I mean, it'll be interesting to see. You know, I think at one point though, like back in the day, they probably thought flight engineers would never come out of the cockpit. You know, it used to be three pilots in every cockpit. You know, what? Only two? That's crazy.

Andrew Schmertz (09:03)

Sure. Yes.

And there's also a pushback on the single pilot, right? Because the airlines are trying single pilot operations and obviously ALPA the airline union pushes back against that and that's a reasonable position for the union. I think that public acceptance, because that's where it works, right? You don't need to just build the machine. You don't need to just build the infrastructure. If you don't have public acceptance, you don't have a business. And I think public acceptance is gonna be a while to get there.

It is possible, however, that you will get drones. I'll call them drones because I think that's what they are. Pilotless aircraft, sort of a very short hop. So you might, you might get something from the East side of Manhattan to the West side. That I could see existing, you know, a highly, highly, yes. Yeah. Highly controlled environment, but I don't think anybody's flying to Europe.

Jessie Naor (09:46)

Mm -hmm.

on a highly controlled, you know, this pathway right here. Yeah. Yeah.

will say, no, not yet. I mean, if it comes to personal choice, and this is saying that one day the FAA has certified it that it's safe and it's proven out technology

I would be comfortable with single pilot in a highly autonomous aircraft, just me personally. I would get on that

Now, will the general public? I don't know. But I do think, you look at accidents, statistics, like human error, that's just part of

human nature and other things, but also there's human error in the programming and the technologies as well.

Andrew Schmertz (10:34)

Yeah, to your point, I think passengers will get on to anything that costs them less money. And we see that in the airline industry, right? There's a race to the bottom. People are willing to be uncomfortable, poor customer service, fly to Florida for $65. They could suck it up and do that. But the additional step of not having a pilot on board, I think you have to incentivize people beyond that.

Jessie Naor (10:59)

Yeah, other than, it's cool, let's do it this one time. Speaking of cool, now, you know, this is not normally a part of private aviation conversations, but I think increasingly it's becoming so. You can fly privately to space. The billionaire Jared Isaacman, who was the first person or the first private crew member to fly on the SpaceX Crew Dragon back in 2021.

Andrew Schmertz (11:02)

That's right. That's right.

Jessie Naor (11:24)

was supposed to do a spacewalk this week. They are still planning on departing. I believe there was a helium leak on Tuesday and then yesterday, there was also a delay for weather. So maybe later this month they will actually be departing. But it's the first commercial spacewalk that's taking flight. The mission's called Polaris Dawn. Pretty cool. And I don't know, would you be buying a ticket if you could?

Andrew Schmertz (11:46)

Absolutely. Absolutely. I'm all for this, because this is kind of what adventure is about. This is basically a Disney, Disney world, e -ticket back when they had e -tickets,

It's the, it's the best e -ticket you could buy. And it does push, there is some scientific valid, information coming from it does push the boundaries of space exploration. You know, we, you know, people used to be able to, well, people can, they can sail.

Jessie Naor (11:58)

In space.

Andrew Schmertz (12:13)

the Atlantic Ocean, right? And if you can do that, and back in the day, right, you needed to have a lot of money to do that. If you could do that, why can't you go to space? So if you could afford to, I'm all for it. I think it excites people who don't do that. They say that's, it's aspirational. They say, I want to do that. And that's aspirational. And I'm fine with that.

Jessie Naor (12:30)

Right.

Andrew Schmertz (12:32)

are risks, obviously, but there's risks with, with anything.

You know, I remember William Shatner went up, think, was it Elon Musk's, was it SpaceX? I believe it was, or no, was Amazon. Blue Origin, I think. I think William Shatner. And that was great because everybody knows William Shatner. They know him as the captain of the Starship Enterprise. He got to actually go to space for real. That was an incredible

Jessie Naor (12:44)

yes, yeah, we were talking, yep.

Andrew Schmertz (12:56)

incredible experience for everybody watching that. And I think that's beneficial to the space program and beneficial to all of us.

Jessie Naor (13:04)

It's also interesting because they're going be going

miles farther than the International Space Station and that's going to be right in the Van Allen belt. And I know we landed on the moon and there are people

say that we don't and it makes me so angry. And one of their arguments is, well, what about all the radiation in the Van Allen belt? like, they're going to be there for five days. So I think this will be more evidence than ever that yes, we went to the moon. You can't argue it.

Andrew Schmertz (13:19)

Well.

Now we actually went to the moon. Yeah. There are questions. are questions. I mean, why is it so hard for us to go back to the moon? We did it a number of times, but there's a whole bunch of, think NASA says, because we need to make it like almost a hundred percent safe and to go back there. But you're right. It creates a atmosphere where exploration is more understood and more attainable.

Jessie Naor (13:37)

Right.

Mm

Well, and I love honestly that this

Isaacman, billionaire, created a payment processing program where most of his money came from, but he's obviously a huge aviation

He has his own private air force. It's the Draken International Company. He flies a MiG -28, the only one in the US. He's obviously someone who wants to push the limits and knows the value of space exploration and how that can impact the world.

But it's also going to be benefiting St. Jude's. The last mission that they did a few years ago, they actually raised $250 million for St. Jude's Hospital. They're doing the same again with this. So beyond just

cool factor of him getting to walk in space, I think it's doing a lot of good for the humanity. Right.

Andrew Schmertz (14:33)

Yeah, it benefits a lot of people. and, and, you know, look, it's safer than taking a

sub to the Titanic, you know, because, know, it's true. It's true. You know, serious people are working on the machinery to get these people to space and it would be a high

Jessie Naor (14:45)

Yes.

Yes.

Andrew Schmertz (14:52)

disaster if something happened, like it did with the Titan sub. And I think people look at the Titan sub and look at space. I think space is sp-. I would go to space.

quicker than I would go down to the Titanic.

Jessie Naor (15:05)

have heard that from people who have worked on submarines, that it's a very scary world down there, you just don't realize it. No, no they don't. That's for fish with weird lights on the front of their faces. But speaking of not belonging, I don't know if I belong at Burning Man this year, but people are again going. Not my cup of tea personally, but it seems to have a big draw.

Andrew Schmertz (15:11)

It is. People don't belong down there. There's a reason we are on land. That's right.

I've always been fascinated by Burning Man. I never really understood what it is, but it draws people I know from around the world of all political sizes and shapes. It's, it's, I don't even know what goes on at Burning Man, but I do want to go sometime, I think. Okay. Now that goes on every day in New York city. So.

Jessie Naor (15:40)

Yeah.

Drugs and rock and roll and art and some of those things. But not always like right out in public and sometimes behind closed doors there. But this year is a little different because they used to allow some charter

into their airfield, which is 88NV November Victor.

But this year, they have their own airline, they're calling it, the Burner Air Express. And it's interesting, because when I try to go online and book a seat, this is Miss Jessie likes to follow the rules and used to be an operator, I don't see who's actually operating the flights. And I don't know if all consumers know that when you go to a website and you're trying to book an airplane, particularly something that's like a scheduled airline service, you need to know who's operating that airplane.

Andrew Schmertz (16:29)

Yeah.

Jessie Naor (16:29)

whoever the organizers are, if anyone listens to this, you should

go check that out, because it's not great.

Andrew Schmertz (16:34)

Well, you know, I think the people going to Burning Man aren't really paying attention to most of the rules on anything. So I don't know how much that's going to resonate. But, you know, we know it's a big issue. I'm going to assume that they are using, you know, certificated operators to get this done.

Jessie Naor (16:39)

True.

Probably not.

When I started to dig deeper, they are using a 135 company, but again, they're selling seats, which I didn't see

the DOT's list of prospectuses. That's like industry jargon right there. But basically, if you're gonna sell by the seat, you can't just do it. You actually have to file something with the Department of Transportation saying that when you're gonna do it, where you're gonna do it, because this is something consumers don't necessarily know is that 135 is different than the airlines.

The rules are different, they are less restrictive, and that's not something that I think the common consumer knows or understands, but they should. yeah, so Burning Man's open. They've got two 6

foot runways. It's on a dry lake bed, and they have to water it every night to make sure that airplanes can land the following day.

Andrew Schmertz (17:40)

And if you fly your own plane and you have to, I believe, the plane in like saran wrap entirely because the sand and dust gets into it and will just destroy the aircraft.

Jessie Naor (17:47)

Yeah.

Yeah, I saw some pictures yesterday of just that duct tape and I'm like, could be get all that stuff off before you take off on that airplane the next day.

Andrew Schmertz (17:59)

And make sure your insurance covers, you know, trips to Burning Man.

Jessie Naor (18:05)

Yeah, yeah, how does that work? But anyway, so if you're planning on flying privately this week to Burning Man, you better make sure you know if you can get into 8 -8 November Victor or not, and if not, you might end up hitchhiking on somebody's van on the way, so enjoy. So in our last story of the day, this is one full of twists and

Andrew Schmertz (18:10)

Exactly.

Yep. Yep. Yep.

Jessie Naor (18:32)

there was a international repossession of a Global 6000. Originally, aircraft was owned by Dan Etete, who was the former Nigerian Minister of Oil, who apparently made himself $350 million by selling some rights to an oil field, which then the

obviously didn't like that. So scandalous. Yeah, but essentially it was...

Andrew Schmertz (18:54)

standard operating procedure in Nigeria.

Jessie Naor (19:00)

taken back by the Nigerian government and then the airplane was in Canada and there's a Chinese investment group who was granted an arbitration against the country of Nigeria and now they have taken that airplane back.

one of many to come apparently in the next couple weeks, but man, fun doing business in Nigeria. That's a little complicated.

Andrew Schmertz (19:18)

Yeah. So I know Nigeria very well. I've been there multiple times.

people are wonderful, by the way. They're absolutely wonderful. And the country has exploded in wealth. is now Africa's largest economy. And with that, private aviation has also exploded in wealth.

Jessie Naor (19:35)

Next.

Andrew Schmertz (19:35)

but that is a problem in Nigeria corruption. this guy flew around on, he had a Global, guess, flew around on a Global for as long as he got away with it. But I'm

Jessie Naor (19:46)

Yeah.

Andrew Schmertz (19:47)

that they caught the guy and took back the plane. And there probably will be more seizures.

Jessie Naor (19:51)

Yeah, well, well, but now the complicated part is that, you know, this is all related back to there was another free

zone that these Chinese investors had invested in. And then the government apparently took that right back from them or something along those lines. Quite complicated. But now these investors have an arbitration against the Nigerian government. And not only are they talking about taking away airplanes that were possessed by Nigeria, but even the presidential aircraft. So he just closed on a

Boeing, no, no, no, he got an Airbus. He just got an A330. They

a BBJ 737. His home could be targeted. I mean, they're talking about seizing assets of top government officials across the board. That's pretty wild.

Andrew Schmertz (20:36)

That is pretty wild. And China has become very aggressive in investments throughout the continent and specifically in Nigeria because the United States has pulled back over the last eight to 10 years, pulled back investments in Africa and in Nigeria. And so there was an opening for the Chinese to walk in there. And, you know, there's an argument that the Chinese don't care so much about

rules and labor costs and labor rules and all that.

And so they saw an opportunity, they've invested a lot of money, and that's probably where this is coming. Now there's a friction point there. I don't think government officials should have a global express at their fingertips. know, the president, the president needs a presidential airplane. The vice president is a vice presidential airplane. But I don't think ministers, I think this guy was a minister, you have to wonder how did he have all this money to buy this

Jessie Naor (21:20)

Yes. Yes.

Well, he got $350 million in a kickback on selling this oil field and then the $57 million for the global... Chump change.

Andrew Schmertz (21:34)

We did all that in a kickback.

Not so much. Yeah. Yeah. And he probably gets it filled for free because they probably has the oil field made a deal that gets the oil for free.

Jessie Naor (21:49)

Well, for anyone out there who is maybe dealing with a Nigerian -owned aircraft over the next few weeks, I would just make sure you get those bills paid for fuel and services and catering, because who knows who's going to own it next week.

Andrew Schmertz (22:01)

check the maintenance log books.

Jessie Naor (22:04)

I didn't even go there, yeah, probably different rules in different locations. Well, cool. Well, with that, we're going to wrap up the pod today.

Andrew Schmertz (22:12)

That is true.

Jessie Naor (22:17)

like to keep things short and sweet so that we get the fastest news in business aviation to you each week that's easy to digest on your morning commute. Don't forget to subscribe to our weekly email digest in the show notes and click follow wherever you get your podcasts.

Comments and suggestions on what we should cover next are always welcome. So stay in touch and we'll see you next time on the VIP seat.