Transcript 0:00 Good morning, and welcome to the VIP seat. 0:02 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' 1,000-mile commute is actually a great investment. 0:13 Your hosts today include yours truly, Jessie Naor, and our co-host, Andrew Schmertz, Hopscotch Air. So buckle up, sit back, and let's take off. 0:22 [Upbeat music] All right, Andrew, so this week there was a lot of hoopla about the new Starbucks CEO, Brian Niccol. 0:36 Um, not only did he get almost a $113 pay package, but it also included $250,000 of personal travel on the company jets. Um, this obviously enraged a lot of environmentalists and employees. 0:51 Um, but what are, what are your thoughts on this initially? 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. 1:02 So I know environmentalists are unhappy, uh, but there's very little environmental impact that has been proven time and time again. Using a private plane for a high-net-worth VIP individual can be appropriate. 1:16 However, I do think that the optics for Starbucks doesn't look great. So first they say, "Well, this is consistent with our remote work policy." 1:25 Yes, but people who work remote and then show up to the office take their car, or walk to work, or take the subway. Not many people are taking a private jet. 1:35 I think it's more akin 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. 1:45 I 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 realize that he's 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. 2:03 If he wants the job, if he wants to work for Starbucks, he should probably move to Seattle. But that being said- [laughs]... I think the, I think the uproar over using the private jet is misplaced. 2:15 He is, he is probably worth it. He's a high... He worked at, I think, at Chipotle before. He turned around Chipotle. Yeah. Starbucks is counting on him to turn it around. 2:24 But Starbucks' image has always been sort of a green company- Yeah... a progressive company, and the optics, I don't think, look great. I think the employees have a point. 2:36 It's not a substantive point, but it's an optics point. 2:39 Yeah, and I think, you know, that's a great point, that, I mean, the company was founded in Seattle, very strong ties till, to Seattle still, and kind of that identity. 2:48 At the same time, you know, I look at, Starbucks has had three different CEOs in the last two years. Mm-hmm. They're not doing great. 2:55 Uh, you know, and he came from Chipotle, where he doubled revenues, he increased the stock value by 800%. You know, the guy is a rock star, you know, when it comes to turning companies around. 3:05 I think, at least from the investor point of view, and I think the stock price went up, like, 25% after they, like, announced that he was coming on board- Yeah... in the first place. 3:12 He's a great hire, but if you want to turn around the company, you gotta do a few things. You know, if you go in and order a cup of coffee, hand you the coffee while they're online. 3:22 Don't make you wait five minutes just to pour the coffee. I understand if you order some fancy- [laughs]... cappuccino latte mocha thingy, that they need to make that. That you can wait for. Yeah. 3:33 But coffee and iced coffee, 'cause that's what I like. I like a lot of iced coffee. [laughs] Just pour the iced coffee, give it to me. You know, I mean, Dunkin' Donuts has this problem too. 3:41 Dunkin' Donuts is doing the same thing. 3:43 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 convince me not only to do that, but to pay $5.50 for it. 3:54 [laughs] So I think, I think his first task has to be getting to, you know, make the coffee for the everyday people. Mm-hmm. You've already established that you could charge an outrageous amount for coffee. 4:06 You know, in New York City you can get a cup of coffee on the corner for $1.50 from the guy at the stand, or you can go into Starbucks. And people go to Starbucks, and there's a Starbucks every block. Yeah. 4:16 So that's been established, but they have to improve the restaurant experience for the people who are just going in and out. 4:23 And I know that they're cutting back on, you know, people who s- sit there all day on their computer, all of that. I don't think that's an issue for Starbucks. 4:32 So I think he needs to focus on the nuts and bolts of the organization and, you know, we should give him a pass probably for using a corporate jet, but I think still the optics are a little messy. Yeah. 4:44 Well, and 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. And that's fine. Which is not uncommon. 4:55 Yeah. And, and that's fine. That's, that's a perk that CEOs and C-suite people at major corporations should get. Yeah. Because there's a security risk with having them fly on commercial airlines. 5:05 I don't think commercial airlines want them on board either. So this is, that's appropriate. Yeah. It was just- And it's bad messaging in the way they messaged it from the beginning. Yeah. 5:14 And I think, too, like, someone picked up on, I'm sure this... I, I know there are, like, labor disputes ongoing inside of Starbucks. I'm sure someone- Sure... saw that SEC filing and, and the- Yeah... and the job offer. 5:24 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- Yeah... the other... And man, it was all over the news. Like, Google- All over... 5:32 private jets this week, and it's every single story that came out. Yeah. It was crazy. And, and people need to recognize that those kind of images are gonna get the stories, because that's the headlines. Right. You know? 5:42 The super wealthy get these perks while the baristas in the Starbucks stores aren't gonna be flying that often on a private jet. But it is completely appropriate that he has access to a private jet. 5:53 It is not just a fringe benefit. It is a security issue. Mm-hmm. It is a convenience issue. It's a time issue. You're paying this guy a lot of money. If he's successful- Yeah... 6:02 I think most of his money is, is based on performance compensation, and-And he needs to be sort of protected from flying on Spirit Airlines. [laughs] He needs to get where he's going, you know? That's, uh- Yes... 6:14 slightly important for these executives whose time is money. But that's a good transition into, uh, speaking of, you know, flying on Spirit, maybe one day your Spirit flight may not have a pilot on it. 6:25 Uh, that's [laughs] at least what certain companies- Well, they would like that. [laughs] Certain companies are trying to do right now. 6:31 Um, Xwing, who was recently acquired by Joby, um, just completed their third, uh, autonomous flight in a Caravan, Cessna 208B Grand Caravan, uh, with the United States Air Force. Um, this has been an ongoing partnership. 6:46 This is not new. It's part of the- Mm-hmm... Agile Flag 24 mission. 6:50 But they're continuing to prove out this concept, and I think it was very smart of Joby to acquire Xwing because they're clearly becoming a leader in this, um, autonomous, uh, flight area, which is, which is a fascinating world. 7:02 Do you think we're gonna be seeing any, uh, pilotless airplanes on Spirit any time soon? Um, uh, taking passengers, humans? No. Um, and I, and I don't even think people's pets. I think that there's going to be, uh... 7:14 So, you know, there's going to be acceptance, public acceptance, I think, coming for electric vertical takeoff and landing aircraft with a pilot. I think that's coming. 7:26 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. You know- Right... 7:36 in San Francisco, they're, you know, San Francisco Google I think is doing a big study, and that's one of the issues. I don't think there's gonna be public acceptance of that. 7:42 However, the first acceptance you're gonna get is packages because they're already being delivered by drone, and basically a pilotless airplane is a drone, right? So you're gonna get packages delivered. 7:53 That's going to reduce those costs. You're probably gonna get military applications because military's already using, uh, drones, so why not add that to the, to the mix? 8:03 But I don't, I personally don't think people are gonna get on... You know, what I... I'll give you an example. I take the JFK AirTrain, 8:12 which is an air train that connects, uh, Long Island Railroad Station in Jamaica, Queens to the airport. That train is a drone. Hmm. I- there is no person inside the train manning that. 8:23 And I'll tell you, I get nervous by that. Hmm. Uh, because, you know, that thing could go speeding off the rails at any given moment. 8:30 And I think that you put that equation into an aircraft, even though airplanes are highly automated as well, uh, right now- Right... you do want a human in there to interact in an emergency. 8:42 Even though the computer probably is making the right decision most of the time, you want that interaction with a human. I... So I don't think we're gonna see pilotless passenger planes in the next 20 years. Y- yeah. 8:56 I mean- I, I could be wrong... it'll be interesting to see. Uh, 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. 9:03 You know, it used to be- Sure... three, three pilots in every cockpit, you know? Yes. What? Only two? That's crazy. And, and, and there's also pushback on the single pilot, right? 9:10 Because the airlines are trying single pilot operations, and obviously ALPA, the airline union, pushes back against that, and that, that, that's a reasonable position- Right... for the union. 9:19 Think that public acceptance, because that's where it works, right? You need, you don't need to just build the machine. You don't need to just build the infrastructure. 9:28 If you don't have public acceptance, you don't have a business, and I think- Yeah... public acceptance is gonna be a while, uh, to get there. 9:35 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. Mm-hmm. 9:46 So you might, you might get something from the east side of Manhattan to the west side. Hmm. That I could see existing. You know? On a highly controlled, you know, this- A highly, highly-... pathway right here. Yeah. 9:58 Yes. Yeah. A highly controlled environment. Yeah. I will say- But I don't think anybody's flying to Europe. No, not yet. I mean, if it comes to a personal choice, 10:08 and this is saying that one day the FAA has certified it and that it's safe and it's proven out technology-wise, I would be comfortable with single pilot in a highly autonomous aircraft. Just me personally. 10:19 I would get on that aircraft. Now, will the general public? Mm, I don't know. But I do think, look, you look at accident statistics, like human error, it's just part of human nature and, and other things. 10:31 But also there's human error in the programming and the technologies as well. Yeah. To, to your point, I think passengers will get onto anything that costs them less money. Uh- [laughs]... 10:41 and, and we see that in the airline industry, right? There's a race to the bottom. Right. People are willing to be uncomfortable, poor customer service, fly to Florida for $65, they could suck it up and do that. Yeah. 10:52 But the additional step of not having a pilot on board, I think you have to incentivize people beyond that. [laughs] Yeah. Other, other than, "Oh, it's cool. Let's do it this one time." [laughs] That's right. 11:04 That's right. Speaking of cool, now, you know, and this is not normally a part of private aviation conversations, but I think increasingly it's becoming so, you can fly privately to space. 11:14 The billionaire Jared Isaacman, who was the first person or the first private, uh, crew member to fly on the SpaceX Crew Dragon back in 2021, was supposed to do a spacewalk this week. 11:27 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. 11:37 But it's the first commercial spacewalk that's taking flight. The mission's called Polaris Dawn. Pretty cool. And I- Yeah... don't know. Would, would you, would you be buying a ticket- Abso-... if you could? 11:47 [laughs] 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, right? It is. It's the, it's the- Yeah... 11:59 best e-ticket you could buy. And it does push, there is some scientific valid information coming from it. It does push the boundaries of space exploration. Mm-hmm. You know, we, you know, people used to be able to... 12:12 Well, people can. They can sail across 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? 12:21 So if you could- Right... 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 wanna do that." Right. 12:30 And that's aspirational, and I, I'm fine with that. There are risks obviously, but there's risks with, with anything. You know, I remember William Shatner went up, I think, was it Elon Musk's... Was it, uh, SpaceX? 12:41 I believe it was. Or no, it was Amazon. It was Blue Origin, I think. Oh, oh, yes. I think. Yeah, Blue Origin. Blue Origin. Yep. I, I think William Shatner, and that was great because everybody knows William Shatner. 12:49 They, they know him as the captain of the Starship Enterprise. Yeah. He got to actually go to space for real. That was an incredible experience for everybody watching that. Yeah. 12:59 And I think that's beneficial to the space program and beneficial to all of us. 13:05 It's also interesting 'cause they're gonna be going, uh, 600 miles farther than the International Space Station, and that's gonna be right in the Van Allen Belts, and I'm... 13:14 I know we landed on the Moon, and there are people who say that we don't, and it makes me so angry. [laughs] And one of their arguments is, "Well, what about all the radiation and the Van Allen Belts?" 13:23 And, like, I- it's... They're gonna be there for five days, so I think this will be more evidence than ever that yes, we went to the Moon. That we actually went to the Moon. Yeah, yeah. You can't argue it. 13:32 There, there are quest- there are questions. I mean, why is it so hard for us to go back to the Moon? We did it a number of times. [laughs] Right. But, but there's, uh, there's a whole bunch of... 13:41 I think NASA says because we need to make it, like, almost 100% safe and to go back there. But you're right. It, it creates a atmosphere where exploration is more understood- Mm-hmm... and more attainable. 13:54 Well, and I love honestly that, it, this guy Jared, Jared Isaacman, um, you know, billionaire, ca- created a payment processing program where most of his money came from. 14:02 Um, but he's obviously a huge aviation enthusiast. He has his own private air force. Uh, it's the- Mm-hmm... Draken International company. He flies a MiG-28, the only one in the US. 14:11 I mean, he's obviously someone who wants to push the limits and knows the value of space exploration and how that can impact the world. Um, but it's also gonna be benefiting St. Jude. 14:20 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. 14:27 Beyond just, uh, the cool factor of him getting to walk in space, I think it's doing a lot of good for the- Yeah... humanity. It benefits a lot of people. Right. 14:36 And, and you know, look, it's safer than taking a manmade sub to the Titanic, you know, because bec- Yeah. [laughs] You know, it's true. It's true. Yeah. You know, serious people are working on the machinery- Yes... 14:49 to get these people to space, and it would be a high-profile 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, is safe. 15:01 I would go to space quicker than I would go down to the Titanic. I have heard that from people who have worked on submarines, uh, that- Yeah... this is, it's very scary world down there. [laughs] You just- It is... 15:11 don't realize it. People don't belong down there. No. No, they don't. There's a re- there's a reason we're on land. That's, that's for fish with weird lights on the front of their faces. [laughs] That's right. 15:20 But speaking of not belonging, I don't know if I belong at Burning Man this year, but people are again going. Hm. Not my cup of tea personally, but it seems to have a big draw. 15:29 [laughs] I've always been fascinated by Burning Man. I never really understood what it is, uh, but it draws people I know from around the world of all political sizes and shapes. Yeah. It's, it's... 15:41 I don't even know what goes on at Burning Man, but I do wanna go sometime. It's drugs and rock and roll and art- [laughs] Yeah... and some of those things. Yeah. No, that goes on every day in New York City, so. 15:50 [laughs] Yeah, but not, not always, like, right, right out in public. It's sometimes behind closed doors there. 15:56 But this year is a little different because they used to allow some charter flights into, um, their airfield, which is 8.8 Nove- uh, November Victor. Uh, but this year they have their own airline. 16:07 Um, they're calling it Burning, the Burner Air Express. 16:10 [laughs] And it's interesting 'cause 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 the c- 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. 16:29 Yeah. So whoever the organizers are, if anyone listens to this, you should maybe go check that out 'cause it's not clear. 16:34 Well, you know, I think the people going to Burning Man, Burning Man aren't really paying attention to most of the rules on anything. True. So [laughs] I don't, don't know how much that's gonna resonate. 16:44 Um, but you know- Probably not... we, we know, we know it's a big issue. 16:47 Um, I, we're gonna, I'm gonna assume that they are using opera- you know, certificated operators to get this, get this- When I started to dig deeper, they are using a 135 company. 16:59 Um, but again, they're selling seats, which I didn't see in the DOT's list of prospectuses. That's, like, industry jargon right there. But basically, if you're gonna- Yeah... sell by the seat, you can't just do it. 17:11 Um, 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, uh, this is something, uh, consumers don't necessarily know, is that 135 is different than the airlines. 17:23 You know, the rules are different. They are less restrictive. Um, and that's not something that I think the common consumer knows or understands, but they should. Probably. But yeah, so Burning Man's open. Ready. 17:33 They've got two 6,000-foot runways. It's on a dry lakebed, and they have to water it every night to make sure that airplanes can land the following day. 17:41 Um- And, and if you fly your own plane in, you have to, I believe, wrap the plane in, like, Saran Wrap entirely because- Yeah. [laughs]... the s- the, uh, sand and dust gets into it and will just destroy the aircraft. 17:53 Yeah, I saw some pictures yesterday of just, yeah, that and duct tape, and I'm like, "Well, I hope you get all that stuff off before you take off in that airplane the next day." 18:01 [laughs] And make sure your insurance covers, you know, trips to Burning Man. Yeah. Yeah, how does that work? Um, hm. [laughs] Exactly. 18:10 But anyway, so if you're planning on flying privately this week to Burning Man, uh, you better make sure you know if you can get into 8.8 November Victor or not. And if not, you might end up, uh, 18:21 hitchhiking on somebody's van on the way, so. Yeah. Enjoy. Yeah.So in our last story of the day, this is one full of twists and turns. There was a international repossession of a Global 6000. 18:35 Originally, the s- aircraft was owned by Dan Etete, who was the former Nigerian minister of oil, uh, who apparently made himself $350 million by selling some rights to an oil field, which then the government, uh, obviously 18:54 didn't like that, um- Standard operating procedure in Nigeria... scandalous. Yeah. 18:58 Um, but e- essentially it was taken back by the Nigerian government, and then the airplane was in Canada, and the Chi- there's a Chinese investment group who was granted an arbitration against the country of Nigeria, and now they have taken that airplane back. 19:11 It's one of many to come, apparently, in the next couple weeks. But man, fun doing business in Nigeria. That's a little complicated. Yeah, so I, I know Nigeria very well. I've been there multiple times. 19:21 The people are wonderful, by the way. They're absolutely wonderful, and the country has exploded in wealth. It is, it is now Africa's largest economy, and with that, private aviation has also exploded- Hmm... in wealth. 19:35 But that is, um, that is a problem in Nigeria, corruption. Yeah. And you know, this guy flew around on a, he had a Global, I guess, flew on, around on a Global for as long as he got away with it. Yeah. 19:47 But I'm, I'm glad that they, they caught the guy and took back the plane. Yeah. Well- And there probably will be more seizures. 19:54 Well, but now the complicated part is that, you know, it, the, this is all related back to there was another free trade zone that these Chinese investors had invested in, and then the government apparently took that right back from them, or something along those lines. 20:07 Quite complicated. 20:08 But now these investors have an arbitration against the Nigerian government, and not only are they talking about taking away, you know, airplanes that were possessed by Nigeria, but even the presidential aircraft. 20:18 And so he just closed on a Boeing... No. No, no, he got an Airbus. He just got a A330. Um, they have a BBJ737. Uh, his home could be targeted. 20:30 I mean, they're talking about seizing assets of all, of top government officials across the board. Um, that's- Hmm... pretty wild. That is pretty wild. 20:38 China has become very aggressive in investments throughout the continent, and specifically in Nigeria, because the United States has pulled back, uh, over the last eight to 10 years, pulled back investments in Africa- Hmm... 20:52 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 environmental rules and labor costs and labor rules and all that. 21:04 And so they saw an opportunity. They've invested a lot of money, and that's probably where this is coming. You know, there's a friction point there. 21:10 I don't think government officials should have a Global Express at their fingertips. No. You know, the president, the president needs a presidential airplane. The vice president- Yes... 21:20 needs a vice presidential airplane, but I don't think ministers, I think this guy was a minister. Yeah. You have to wonder, how did he ge- have all this money, uh, to buy this aircraft? 21:31 Well, he got $350 million and a kickback- And go that, and a kickback... you know, on selling this oil field, and then, you know, the $57 million for the Global, chump change. Not so much. Yeah, yeah. 21:41 And he probably gets it filled for free because the, the, he probably has the oil field- Yeah... made a deal that gets the oil for free. 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, uh, for fuel and services and catering, because who knows who's gonna own it next week. 22:01 And, and check the lo- maintenance logbooks. [laughs] I don't, I didn't even go there. But yeah. Yeah. You know, probably different, uh, different rules in different locations, so. That is true. Well, cool. 22:15 Um, well, with that we're gonna wrap up the pod today. We like to keep things short and sweet so that we get the fastest news in business aviation to you each week, um, that's easy to digest on your morning commute. 22:24 Don't forget to subscribe to our weekly email digest, uh, in the show notes, and click follow wherever you get your podcasts. 22:30 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. 22:37 [outro music]
