Transcript 0:00 42375, go ahead. Uh, they said, uh, the route was for a podcast or something. Is that what we heard? Yeah, that's what I heard. Good morning, and welcome back to "The VIP Seat." 0:09 We have a very special guest today from AV Fuel. Sit back, buckle up, and let's take off. [upbeat music] Well, we have a very special guest today. C.R. 0:25 Sincock, who is the president of AV Fuel, is here. And AV, uh, jet fuel in general has been in the news a lot, and so we figured that this was gonna be a very relevant and current events topic. 0:38 So C.R., thanks for coming on the podcast. Absolutely, Preston, and I like how you almost said, uh, "AV Fuel has been a big topic in the news today." You know, we like to- I did... 0:47 we like to, you know, market ourselves as, you know, like Kleenex for tissue. You know, we're like the AV Fuel for jet fuel. So there you go. But anyway, appreciate it, and happy to be here. Yeah, absolutely. Awesome. 0:58 Well, I guess probably a good place to start is, like, explain to us what AV Fuel is. Like, what, you know, do you make the gas? Do you drill the gas? 1:07 Like, where, where are you in the, in kinda the value chain so that everybody understands kind of what perspective we're coming from? Yeah. Uh, for sure. 1:15 I mean, it's something that, uh, I guess like any industry, you take for granted and then don't realize that, you know, to most people, uh, the truck just shows up at the airplane. 1:22 So, you know, AV Fuel is, I, I would say best thought of as a downstream aviation energy company. 1:29 So y- we, we, we perhaps venture a bit into midstream, but, um, you know, we are primarily involved in United States, uh, Canada, Western Europe, some parts of Latin America. 1:44 Um, you know, we're, we're in a number of different countries, and we're basically doing everything from, uh, the refinery all the way down to when the air- when the fuel makes its way into the airplane wing. 1:55 So y- and then, and then everything related and adjacent to that. So that's, you know, at a very high level, that's what AV Fuel is. 2:04 Um, you know, we're, we're, we're just shy probably of 1,500 employees across our different companies. 2:11 You know, we're several billion in revenue company, so it kinda fluctuates based on the price of oil, uh, as you might imagine, which has been in the news, uh, quite a bit recently. 2:21 You know, we're sort of comparable, I would say, to a small mid-cap kind of publicly traded company in kinda scope, scale, size, but are, but are a family-owned, uh, business. 2:31 So it's a little back of the envelope about AV Fuel. Yeah, and that was one thing I wanted to, you know, talk about because C.R., you know, you're kind of recently taking the helm here of AV Fuel. 2:42 Um, and you know, a lot of people know your dad, Craig, just 'cause he's been in the industry since the '80s. 2:47 So I guess maybe could you give us, too, like the story of, you know, how he started and, and where you guys are at now? Yeah, absolutely. 2:54 And that really does help, I think, to explain, you know, going through that story, I think, will help explain to some of the, um, you know, subscribers here about, like, sort of how, how the industry does work. 3:05 Because, you know, back in, in the '80s when my dad became involved in the company, I mean, he, he acquired the business when it was-- "acquired" is a generous term. 3:13 You know, when it was a really, really tiny, I think there were, like, five employees or something, he likes to joke, and a cat. 3:19 You know, so it was this, this tiny little company, and he actually had to go get equity partners even to buy that, right? So he was kinda the sweat equity in the business. 3:27 And basically at that time, the company was a distributor specifically for Phillips, you know, Phillips Petroleum, Phillips 66, right? 3:35 So kind of analogous to how it works in the car gas industry where, you know, you'll have jobbers that, that work on behalf of different oil brands, sometimes independent, sometimes branded. 3:46 But, so we were a Phillips jobber for aviation for a couple states in the Midwest, including Michigan, and that's how the, how the business got started. 3:56 Over time, and, and so at that point, all the major oil companies and refineries had an aviation business. So just like how you would see, you know, gas stations from all the different brands at the time, you know? 4:09 I mean, not just what you see today, but, you know, e-even more, right? So you'd see your Chevrons, your Texacos back then, your Sunocos, your, you know, Phillips, your... 4:20 I mean, there, there was just, it's just on and on and on, right? You see all these different gas station brands. And, and so the same thing happened for aviation. 4:26 So, so we were, we were, you know, Phillips for that region, and that's how we started our, our growth path. 4:32 And then kinda the next step was going out and getting-- Because we only had a, a, a small region to do our distribution for, you know. We would move the fuel to these various airports for Phillips. 4:42 We would brand them Phillips, right? Put up the Phillips sign, you know, give them the Phillips program, whatever, right? 4:49 And, and so then what, what happened is my dad went and s- and, and, and basically got a few similar arrangements with different oil companies for different regions of the country. 5:00 So it's like, "Well, Phillips, we can only do these couple states, you know, but what about, you know, what if we go get a similar branding arrangement with, you know, XYZ oil company, you know, in, in another region of the country," right? 5:12 And so that's kind of how, um, the early build-out of the, of the business went, was sort of, uh... But we were at that point still a, we didn't really have the AV Fuel brand yet at that time. 5:27 So from there, so okay, so Phillips, and Phillips still exists in the market. Mm-hmm. I guess my first question is, is did you eventually branch out? Is, are they still a partner? 5:36 Like, how did, how does that relationship work if that was kinda the foundation? Yeah, absolutely. So, so, and, and good question. 5:44 And, and I guess first off, w-we are a partner of Phillips and, um, and, and I would say that that has taken now more of the, the, the, the modern or contemporary sort of model in the industry, which is where Phillips does still maintain a certain number of what they call their direct, you know, branded FBOs, Phillips Direct. 6:05 But a large amount of their businessUm, is, is sold at the refinery level and then, you know, purchased by, let's just say AvFuel, World Fuels, you know, and, and, and taken down to, to the various airports and FBOs. 6:20 So but you're right. At one point we did end up branching out. We started working with a fairly, I'd say a regional refinery that was in Texas at the time, back in the '80s, Pride Refining. 6:33 And that was sort of, again, from sort of Texas out to the sort of central United States region. So they became one of the brands that we were, we were putting up. 6:42 And then at one point, um, AvFuel, you know, the, the refinery was being sold, or at least they were looking for ways to monetize and, and, and get cash. 6:50 And so in one of sort of the early transactions for AvFuel, AvFuel acquired Pride Refining's aviation division. So that, you know, obviously expanded the, the scope and scale of AvFuel. 7:03 And then, and then that was kind of a similar time to when the switch got made to saying, "Okay, rather than going out and, and, you know, in one state you're Phillips, in one state you're Pride, in another state you're Sunoco, another state you're Shell," you know, 7:20 kinda confusing from a, from a company, you know, strategy perspective, right? 7:25 So, so that's when the AvFuel brand, uh, was, was born, so to speak, as opposed to not just a company name, but really, uh, you know, a recognized, um, fuel brand in the aviation industry. 7:39 And so the idea was all of those different relationships became now, call it a supplier, right, or a supply chain partner, but everything downstream was, was AvFuel, right? 7:52 So it was an AvFuel sign, AvFuel trucks, AvFuel credit card processing, AvFuel, you know, e- I mean, you pick up the phone, it's AvFuel. It's not, you know, whatever oil company. 8:03 So, so that was sort of the big transition in the industry. And, and it would turn out to be, you know, whether we kind of helped to catalyze that transition to the market a little bit, perhaps. 8:15 I think also there were just other structural factors that were leading a lot of the major refineries to get out of the, the downstream. 8:23 Um, just their, their cost structure, their operations, things just didn't make sense. They needed to focus on drilling, exploration, and refining. 8:31 And so AvFuel was really in this great niche to kinda be that downstream aviation partner for so many different refineries. Thank you so much to AB Jets for sponsoring the show. 8:43 One thing that I am amazed by, because I'm a technical nerd, uh, is always, like, what's going on in the back of the shop? It's not necessarily, okay, it's a pretty plane, everything, it's brand new. 8:52 But, you know, how does the capability of the operator come into play? And AB Jets has been around a long time. 8:58 They've operated a large fleet of Lear 60s, and they've been, you know, taking those 60s and keeping them in service longer and longer, doing the refurbs on the interiors. 9:06 They have the maintenance team that actually backs up the planes. So that's so critical. They got scale, they have operations. I think that's just an amazing combo. Yeah. 9:15 Well, it helps when one of your, you know, co-founders or, you know, one of the heads of the company is an A&P mechanic himself. Yeah. 9:22 So it's like, yeah, you, you're obviously gonna have really high maintenance standards. And when both of the guys who lead your company are pilots, it's gonna be pilot forward. 9:32 It also means that you're gonna have dispatch reliability. They spec'd a box that has two spare wheels and a bunch of spare parts to keep with them in the aircraft while they're on the road. 9:42 And so if you have an issue, they can swap the wheel out and go, whereas other operators have to call the van, and then it comes out, and then hopefully there's one kind of close by, and maybe you're on the ground for eight hours. 9:53 Like, that's not this. This is dispatch reliability, and I think that's one of the big differences. So thanks so much to AB Jets for sponsoring this season of the BIPC. 10:01 Thanks so much for having us on this beautiful brand-new Challenger 3500. 10:06 And I think too, this is a good chance to maybe talk about, for the listener who is not familiar with the supply chain, can you talk about a g- you know, a, a barrel of crude and then how that turns into, h- gets into your airplane? 10:19 You know, what are all the steps in that process, and, and where is the value added along the way? Yeah, absolutely. It's a, it's a long journey. Uh, you know, it starts in the ground somewhere. 10:29 And, uh, most of, you know, today's production, you know, you have sort of big offshore deposits. You have, uh, a lot, the US has a lot of, of shale and fracking-based production. 10:43 You have big oil fields in the Middle East. Um, so you have, you know, a couple different sources of the raw, you know, crude oil. Um, 10:51 that crude oil is extracted and, and then sent to the big refining centers of the world, right? And so one of those big refining centers is here in the United States, right? The Gulf Coast. 11:02 I mean, there's refineries everywhere, but there's a l- in the United States, but there's concentrations in the Gulf Coast. 11:08 You also have big refining centers in the Middle East, in East Asia, some in- Venez- Venezuela... Western Europe. Venezuela. Less so than they used to. Venezuela. Venezuela, a lot of- Venezuela is... 11:17 a lot of, a lot of oil deposits. Some refining, yes. The refining capacity has atrophied over the years because of lack of investment and graft and corruption. But yeah, they have a lot of potential for sure. 11:29 So the, the oil makes its way to one of these refining hubs, and, you know, it's, it's sort of some optimization problem around, you know, how far you have to move the crude oil and then the type of crude oil. 11:41 There's different heavier or lighter kinds of basically how much refining has to be done, how much has to be removed from the impurities. 11:49 And there's different refineries that are better for different kinda grades of crude oil. But roughly speaking, it all gets, it's refined, and then at that point you can think about it as sort of splitting the barrel. 12:01 And so for every barrel of crude oil, you know, you get a certain percentage of gasoline blend components. 12:08 You get a certain percentage of middle distillates, which is what you would kinda group-Um, jet fuel into, but you'd also put, like, diesel and, you know, certainly very similar product, for example, is ultra-low sulfur diesel, um, to jet fuel. 12:23 Whereas avgas is, is much more similar to basically a very, very high octane gasoline, almost like a race fuel of sorts. 12:30 You know, you get this fractionation of the barrel into all these different products, right, that come out. The autogas blend components are the, the biggest. Diesel is a substantial one. Jet's not huge, but not small. 12:42 It's gonna be between 5% and 10% of the output of most refineries. Um, and so that's kind of, uh... And, and then, and then now that fuel has to go somewhere, right? 12:53 So, so the crude coming into refineries is usually on ships, large ocean-going ships, or sometimes pipelines. Going out is again gonna be on either pipelines or ships most of the time. 13:06 And so it's gonna move from, you know, let's just use the United States as an example. 13:10 You know, if it was refined in the Gulf Coast, most of the time in the United States it's gonna then make its way on one of the major pipelines. So you have Colonial that goes from Gulf Coast to New York area. 13:23 You have Plantation that goes from Gulf Coast to, uh, DC area. Of course, all these have many stops along the way, right? So you can pull the product off, you know. 13:33 And then you have, uh, Explorer that goes from Gulf Coast to Chicago area. Um, and then along the way you can break off of Explorer and go into the Magellan system, which is mid-continent. 13:44 So you have kinda all these different kinda ways. Now, the, the coast, like California is a little different. It tends to either have its own refining capacity. Product is bought in, brought in on the water also. 13:57 New York is a split of pipeline and waterborne product. So you have all these different ways that, you know, the, the refined product then makes its way to a local terminal, um, or storage depots. And then from there, 14:12 uh, it's usually loaded onto trucks on a truck rack, right? 14:15 So those terminals have, you know, pipeline comes in on one side, you load into those giant, you know, dome tanks you see when you're driving by the expressway sometimes at ports, you know. 14:25 And then, and then those have, can then pipe their way into a truck rack where over-the-road transport trucks pick up the fuel and then take it on to an airport. 14:35 And then of course, you know, that's where people get more familiar, and then it goes either into, you know, a consortium if it's at a large airline airport, or it goes into, you know, an FBO's fuel farm or a private flight department's fuel farm, you know, on the airport. 14:49 And I, I know that, like- That's kind of the journey... World Fuel has some involvement in, like, the shipping as well, you know. But it's, it, avfuel kind of like from refinery to the wing. Yeah. 14:59 Is that the, your chain? Yeah. Yeah. Yeah, exactly. Well, I mean, I, I'd say we, we, we do shipping as well. We don't do, we don't do a lot of, I would say, like, 15:09 ocean-going vessels just because we feel like there's a lot of people that are kind of, there's a lot of trader, large traders that are specialists in doing that. And so it's kind of, you know. 15:20 But, but we do do a lot of pipeline. Mm-hmm. So it's, I mean, which is basically the main way the product is, is traded, so to speak, in, in, in the United Stat- in domestically in the United States. 15:32 So we do a lot of pipeline, we do a lot of rail car, and then of course we do tons of trucking. And I'm assum- I'm assuming that that's, is that brokered capacity or, like, 'cause you obviously don't own the pipelines. 15:44 Like- Yeah... how do you, how do you, like, are you buying space in the pipeline or how, how does, like, how does that work? Yeah, exactly. 15:51 So the, the larger players, so like an Avfuel or a World Fuels, are, would have, yeah, we have space on the pipelines. 15:57 Yeah, we have a history on the pipelines which gives us a certain, you know, it's kind of like, it's a little bit of a chicken and egg. 16:04 You know, it's kind of like a, well, if you shipped X amount on average per month last year, then you get the right to ship the same percentage this year, you know? 16:13 So sometimes it's a little hard to, like, break in the door, so pipelines will sometimes have a, a program for new shippers or something, you know. 16:21 But, but yeah, that's generally speaking how it works, is that we have space on the big pipelines. So- So from, like- Yeah, we're the whole-... 16:27 a competitive moat perspective, until you're, like, really at scale like one of these big fuel companies, like, you're not gonna get in, you're not gonna get space on that pipeline. Correct. Yeah. Okay, interesting. 16:37 Correct. 16:37 I would say that's, you know, that's one of the additional big scale factors, scale scope factors that, yeah, that Avfuel has invested in, grown into, you know, in the last, I would say maybe 10 years ago or something, when we really kinda got to that kind of 16:56 major, kind of truly that's where it's almost like a midstream, you know, downstream midstream type, like, like, scale. 17:03 We're taking positions on pipelines, and then in the big storage, uh, storage terminals that are at the ends of the pipelines, right? 17:10 And so, yeah, that's something that's v- it's, it's definitely a you have to be a certain size, and then it does create a barrier to entry because it means that, you know, our, our, kind of, our cost basis is different, our reliability is different. 17:25 Okay, so it sounds, like, really complex, lots of barriers to entry. Like, you're not gonna get-- Y- you're not gonna have some startup be like, "Oh yeah, AI and all this stuff, and we're gonna come take out Avfuel." 17:35 [chuckles] I, I gotta ask the question. We had Nick Fazioli on the podcast a couple weeks ago. It feels like you're probably a nice target for private equity or something like that- [chuckles]... 17:49 but you are close, you know, you're a family, family-owned business. Why? I mean, I guess, like, do they come knocking all the time? I would assume, like, they're probably like, "Hey, we wanna buy you. 17:58 This would be great." 17:59 Like, walk us through, like, keeping it as a family business, 'cause you could probably sail off on your super yacht and fly your private jet out there and not have to deal with, you know, all this market volatility and all this craziness. 18:12 Yeah, exactly. We could still be a good consumer of the, uh, private aviation supply chain. 18:17 [chuckles] But no, I mean, uh, so, so I think it's a great question, and I mean, the answer is yes, and we are very, uh, fortunate to have many-... many, uh, suitors in that department. 18:27 Both investment bankers that want the, you know, the company to go public or do some kind of a transaction and, and private equity partners, you know, that, that, that are looking for an acquisition. 18:37 And I would, I, you know, it's, it's something that we see as... I mean, look, it's always there, um, but, uh, we have 18:47 extremely [laughs] de minimis interest in it, I think, just because of the, uh, you know, AvFuel for, for us as a family is sort of a, you know, it's, it's a legacy. 18:59 It's a, it's a, it's a, you know, we see it as a, an important, um, brand and business and group of people in the industry and culture, and something that we, you know, obviously has a, a monetary value to us but also has a deep, um, you know, cultural value. 19:19 The, the, the ability for us to sort of try to shape in a positive way the, the industry and, you know, just the whole kind of, I would say, community and life of people. 19:28 Not just my family, but everybody that's been with the company for so many years. Um, you know, and just that kind of a, a, a, a life in the industry. 19:39 I think some- someone said at one point, one of my friends recently said, they were like, "You know, at, at a certain point, like, you know, if you're in, in an, in certain industries, it's like it just kinda becomes part of your, kinda part of who you are." 19:51 And, you know, in the same way as saying, you know, "I'm, you know, I have dark hair and I'm a man and I'm whatever." And you know, I mean, it's, it's, it's just kinda becomes part of your identity. 20:01 And so I don't think that we don't really have any reason to get rid of that. And I think, you know, I, I find the business really enjoyable. You know, my father obviously loves it. 20:13 You know, he's started it and has grown it over many decades. And so I think it's just, 20:19 you know, there's n- I would also say on the financial side, like, there's, you know, we're also fortunate that the business generates a lot of cash flow. It does require investment. 20:29 I mean, I, I mean, there's a lot of, I mean, not just in people and systems and technology, but also, for example, refueler trucks, right? We, we re- we maintain one of the largest fleets of refueler trucks in the world. 20:41 I mean, it, it may be, it's certainly top five. It may be top two or three just on airport refueling. We have more than 1,000 on airport refueling trucks. And you know, I mean, we have to buy many, many of those a year. 20:53 And you know, for those of [laughs] who spend time around FBOs, you know, they'll know that those are hundreds of thousands of dollars per copy, you know? 21:01 So there are certainly major investment requirements of the business, but even despite that, the business generates a lot of cash flow. 21:09 It's not kinda one of these tech businesses where you're, you're valuing something based on, you know, an outcome five, 10 years in the future. 21:16 And so, you know, because of that, um, you know, we're able to do all of the things we need, uh, for the business, for the people in our business, for our partners in the industry, our customers, without, like, we don't need extra capital in order to be able to do that, right? 21:32 Which, which would be, let's say, another reason to look at that, to be like, "Hey, I wish we could do X, Y, Z, but we can't because we need an extra $100 million to be able to go do whatever." You know? So. Yeah. 21:46 Well, I think you're in the lucky position too that, you know, not everybody has a next generation kinda built in, you know? Some, you know, sometimes the legacies kinda die out with the founder. 21:55 But I'm sure that Craig's very happy that you're, you're happy to, to keep the legacy going, so. He is. He is. And we have a great time. I mean, we, you know, we go to a lot of the trade shows and conferences together. 22:07 I mean, sometimes we divide and conquer, but um, you know, it was just that schedulers, dispatchers, you know, whenever that was, a week or two ago in Cleveland. 22:15 And, you know, and, uh, just so we ended up going to that together, and so it's, it's, it's fun for us. I mean, it's work. It's hard work. 22:21 We're exhausted at the end of the day, but it's, but it's also really fun and getting to see everyone on our team. I mean, gosh, we had, I think, I wanna say 70 something AvFuel team members there, which was incredible. 22:34 Um, it was the most we've ever had. And we had 80 something FBOs and being, partners exhibiting, and just being able to go see customers, many of whom we've known for, like, decades, you know? 22:44 So, so it's, uh, you know, it's like going to see a bunch of friends. I mean, so it's- Old friends. Yeah. Yeah, exactly. Yeah. And you guys throw great parties too at, uh- Exactly. Yes... Schedulers and Dispatchers. 22:55 So, um, you know, those, the, the AvFuel party's always one to definitely be at. So talk about your dad's role in the business now. 23:02 So we talk a lot on this show about, like, aviation is a passion project for a lot of founders, and so it's really hard to retire truly and really get out of the business. 23:12 So, you know, as you're, as you're working through this kinda generational shift, you know, really trying to keep it in the family, walk us through, like, what that transition's been like. Yeah. 23:22 Um, it's spot on what you just said. I mean, I mean, is one of these classic entrepreneurs out there and, you know, there's a couple of them in the industry, but not a lot. 23:31 And, uh, you know, that, that has just, I mean, it's his, his passion, his life. 23:37 I mean, again, yeah, he started, I consider him the, I mean, again, when he bought the company, it was r- wasn't even really known as AvFuel. 23:43 And, you know, so ba- you know, basically started the company and when it was nothing and has, has grown it. And both from a business perspective and aviation, I mean, he, he loves to fly, right? 23:54 I mean, he, he worked at the local airport in Michigan as a job during college and, you know, I mean, he's always been a, you know, an, an aviation guy through and through. 24:03 I mean, he's flown airplanes ever since then until now, when he flies, you know, AvFuel's company airplanes, and so still to this day, you know? Including to Europe and back, you know? 24:12 And so, and so he's, you know, for him it's just, it's just in his blood, like you said. And, and so it is. It is a transition. 24:20 It's something that, you know, I think for him, he's so-You know, as the business grew, he was used to sort of being the, the, the chief everything officer, you know, from, uh, supply to sales to, you know, shoveling the sidewalk to, [chuckles] you know, whatever, you know, whatever was sort of happening. 24:40 So, um, I think, uh, that sort of, uh, yeah, it's just been an adjustment. But, but I think what's happened is obviously as the business has grown enormously in size and scope, it just becomes impossible, right? 24:52 There's a certain point when it's just, there's just not enough hours in the day, and I think we finally have hit that point where, you know, and so, and so that is just helping to, you know, helping him to let go of certain things, certain decisions, a lot of the day-to-day, week-to-week decisions, 25:10 while still having a huge amount of things that he can influence in a really positive way, right? 25:16 So, you know, whether that's-- I, I think he spends a lot of time on just, just the culture of the b- just sort of the like, you know, he used to be sort of well-known for just walking around the office and just, you know, going and talking to people and, and, you know, connecting on a personal level, but also discovering, like, maybe there's something going on here that, you know, people aren't appreciating or whatever. 25:37 And, you know, I think just things like that, I think just his, his obviously very broad network in the industry and kind of all aspects of the industry, right? Not just in our fuel segment, right? 25:51 But, but across all the different, you know, sectors of, you know, whether it's the OEMs, you know, service providers, you know, aircraft operators, you know, you name it. 26:00 Um, just, just because of how long he's been in the industry and. So I think that, like, 26:06 my point here is that there, there's so much to do and so many ways to, to kind of contribute that I think that that's made it a softer, you know, it, it's a long process, but I mean, I've also been involved with the business for a very long time. 26:20 So it's been gradual, right? But, like, even though, you know, I was, I guess, officially made president a few months ago, that's been in the works for, you know, decades. Re- you know- Mm-hmm... 26:31 so, so it's been a gradual process, and there's a lot for him to keep his hands on while kind of elevating our, um, our senior management team, right? Many of whom have also been with the business for decades. 26:45 Well, and that's one of the things I've noticed about, you know, your team specifically. There, there is a, look, this is a commodity business, but it's still very much there's a culture there. 26:53 And now hearing, you know, the story of Craig out there like, you know, cleaning the sidewalks off the snow, like that, that just shows me, like that's a, that's a founder and an entrepreneur who like, you know, there's no job that's too, too, too gross or too bad for me. 27:06 I will-- I'm in there in the trenches with you. That's really cool. Absolutely. Absolutely. And I think that's, yeah, and I think that's a part of the culture that we hope will always stay with AvFuel, right? 27:17 Is sort of this, um... And, and you're exactly right, Jessie. I mean, it is, it's a, you know, it's funny, like what we say, it's like, it's like we sell the same fuel that everyone else does. 27:27 You know, it's kinda like, I guess if you go to a bank or something, right? And it's like, you know, in a sense, like a lot of banks provide the same money, right? Mm-hmm. They do, right? It's all US dollars. 27:36 But, you know, but, but, but there's a lotta difference between kind of all of the other ancillary services that surround that fuel and the relationships of sort of knowing when and how you can count on someone as your, as your business partner, right? 27:54 And so I think that that's kind of what we've really made AvFuel great on is, is, a- and we always work the best with customers that under-- I mean, obviously we have to be very price competitive, right? 28:06 I mean, that's why we make decisions like getting into the pipeline business, which I can guarantee you is not cheap and causes a lot of incredible amount of volatility during price movements like right now and other times for us. 28:18 But, um, you know, the reason we do all that is to, to be extremely cost competitive. 28:23 But the reality is once you get down to a point where you're within a couple pennies of, you know, of other people, like most smart business people will then realize, like, "Okay, at this point, I'm not gonna like make or break my business by choosing", you know, as long as they're within a couple, you know. 28:39 It's like now it becomes more about like what, what are all the other things that we can, that we can count on in this supply partner, right? You know, like how else are they gonna help me grow my business? 28:49 How else are they gonna make sure that, uh, I get fuel even when shit hits the fan? Uh, how else are they going to, you know, basically be an-- I mean, we're effectively a bank for many of our customers, right? 29:01 We, we extend unsecured credit to many customers that have strong credit profiles, right? We provide leasing of many millions of dollars of capital equipment and of, of trucks and tanks. 29:13 There's all these other things that come-- A- and then there's just the relationship of knowing, like, "Hey, are we gonna be there when they really need something?" 29:19 And if we've been working with somebody for 10, 20 years, then for sure we will be. So that's, that's I think what we've tried to, to build the business based on. That's interesting. 29:27 Well, I-- it probably gives us a good segue to talk about what is going on. I mean, we talked a little bit about pricing. 29:35 I think that there's a lot of, uh, there's a lot of shock factor at the pump right now, uh, for, you know, even those with the contracted rates. You know, everything's going up. 29:45 Uh, we'd love to hear kind of commentary on the macro market of jet fuel right now. Obviously, there's been a lot of world events and volatility that's kind of driven that. 29:56 You've got the Strait of Hormuz and crazy true social posts that are coming out that you would never expect to see come out publicly, which is pretty crazy. So like walk us through the current state of jet fuel. 30:09 Yeah, absolutely. 30:10 Um, you know, and I'll preface all this by saying, you know, that if I did have a crystal ball, then back to our, you know, discussion of the superyacht and the helicopter, that, that would for sure be my life, you know. 30:20 But, uh, you know, in, in, in the, in the commodities markets, uh, but, uh, but, but I think that, uh, look, the, the, the big picture is-Twofold, I would say. 30:31 And I'm gonna, I'm gonna start by s- doing this from the perspective of, of North America, you know, recognizing that that's, that's, you know, slightly different for Europe, and then perhaps more different for other parts of the world. 30:43 But, you know, I mean, the United States is the largest energy producer in the world, right? So we, we don't have the largest reserves. 30:51 We have one of the highest reserves, but, but we have the largest production of, you know, energy being kind of like oil and gas. 30:57 And so from a energy perspective, like energy security perspective, the US is gonna be just fine, and, and, and North America, you know, Canada, Mexico, whatever, right? 31:07 So I mean, it's, it's, it's-- we're gonna be just fine. Now, of course, though, markets are not in isolation, so pricing is, is certainly still, has been and, and will continue to be a, a rollercoaster, right? 31:19 Because of the political events. And, and the reason the markets are tied is that because you can trade, right? You can move product from both oil 31:28 and refined products, meaning jet fuel, gasoline, diesel, whatever, between... You know, there's ships every day. And, uh, you know, and so the reality is, right, oil and, and products are going back and forth. 31:40 So obviously, if, if a huge shortage develops, let's just say in the Middle East or Europe, and then, you know, obviously that, that prices will go up. 31:50 So, so there's, there's, there still is, we still are tied to world markets because of that. So I don't think there's any worry about running out of product. 31:58 Yeah, there may be some supply chain funkiness, but I, I mean running out in a, in a large scale, extended way, right? 32:05 And I, I think that, you know, the more severe shortages could develop, again, closer to where some of the, the damage is being done in the Middle East and/or, you know, countries in, in, let's say, Western Europe that don't have, they don't have anything remotely close to the, the, the domestic production that the United States does, you know? 32:26 I still don't think that countries are gonna run out of product. I'm just sort of saying on the, on the relative scale of risk, right? 32:33 So, so it's really, it's really more of a, you know, prices moving, moving product around through arbitrage and, um, and, and look, a lot of that just comes from 32:46 psychological war premium with, with what's going on in the Straits of Hormuz and, and expectations, right? Like any financial market. 32:52 And it's kinda just how long does the strait stay closed, and it's also what other damage gets done to the energy infrastructure in the broader Middle East region. Yeah. 33:03 So I mean, those are really the two big key factors. And what, I mean, what are, what is your crystal ball prediction on pricing? I mean, if this thing goes on, you know, we have no idea. 33:12 I mean, it could be over tomorrow, it could be over in three months, it could continue on from that. You know, and I've already, already seen some parts of the market adjusting. 33:19 Like the Saudis have a pipeline that can go out to the west, you know, so they're starting to route things over. 33:23 Like worst case scenario, I mean, like how bad can pricing get given that the US, we have our own production. You know, like what-- I gu- I guess, how does, how does that all work? 33:33 You know, if this goes on for three months, you know, what can we expect, or more? Yeah, yeah. I think, I think, um, you know, guessing what's gonna happen on a daily or even weekly basis is, you know, is anyone's guess. 33:44 No one knows. It depends on what Trump tweets, you know, that, that day. 33:48 Um, but I would say that, you know, from a, you know, to answer your question from a more, let's call it medium-term perspective, I do think we're gonna see elevated prices. Um, I think that, um... 33:59 And, and you've already seen this, like if you look at sort of like the futures curve, um, the, you know, the market for the last 34:07 number of years has been in, um, people call backwardation, meaning the, you know, the price of front month, the price of delivery of, you know, product tomorrow or next month or whatever is high. 34:19 And then as you go out further, if you want delivery in six months from now or a year from now, two years from now, right? Those, those prices are lower. And, you know, that, uh, 34:30 structure reflects different things in the market, ranging from a risk premium to a shortage in the, in, in the short term, right? 34:37 "Oh, we need, we need product now, but we're not worried about it in a year from now," right? 34:41 But, but we've been in this market structure now for years, kind of since at least the Russia-Ukraine and, you know, war started. 34:47 And it's become, you know, it's gone from sort of severe to, to mild, but it's kind of all been roughly the same structure. 34:52 But I think that what we're starting to see though now is kind of some of the medium and longer term months, you know, are kind of creeping up. 34:59 So I think, like at the mi- you know, simplistically, the back end of the curve is moving up some. Um, and I think that's in response to basically just 35:09 more market participants are realizing that, you know, whether-- unless there's some highly unlikely scenario where everybody sings Kumbaya tomorrow and everything goes back to normal, you know, this is, there's already been damage done and, you know, there will likely be additional damage done, you know, damage in either the form of, you know, blown up, p-parts of refineries blown up, 35:35 terminals blown up, ships blown up, you know, whatever. And like those kind of things are, you know, like are like semi-permanent, right? They take, they take time to restart, rebuild, repair, um, you know. 35:52 And so even if you open the strait and let ships through, 35:56 you know, maybe the refinery terminals aren't operating at full capacity or aren't loading at full capacity, or maybe you have some ships that have been dislocated to other parts of the world or need repairs, or maybe, you know, insurance companies are still really sketchy about, "Oh, this could happen again, and so now we're gonna jack the rates." 36:16 I mean, they're, they're through the roof now, but I mean, you know. So, so there's all these different like what I would call more medium or longer term, you know, knock-on effects, right? 36:25 So, so like if we do get some kind of a pseudo lasting peace-Will the, will the, the spot prices, like today's prices, come down from the peaks of what they are? I, I think so. 36:38 But I, but, but I, I don't think we'll like-- it's-- I, I don't think we're just gonna like go back to where prices were before all this started, it, to, to put it in that sense. 36:47 I think we're going to kinda be at an elevated level of pricing compared to, let's say, the beginning of the year for, you know, an extended period of time, probably a year plus, you know, at least six months. 37:00 Can the market work around it? I mean, from a cr-- you know, the Strait of Hormuz, let's just say, you know, this goes on forever, and we're all just, no one wants to do business there anymore. 37:09 I mean, Venezuelan oil, I know it's harder to refine or that it's not fully ready. But like, I mean, can the market readjust to this in the long term and not rely on that strait? Yes. The market-- I mean, yeah. 37:20 If we, if we talk, if we just really zoom out and step back, the market definitely can adjust. I mean, it would be extremely painful in the, you know, short to medium term. Probably would cause a recession. 37:30 But, uh, but then, because, because then, you know, you'd be starting to talk about many, many months of the Strait of Hormuz closed. 37:37 You know, oil prices would, would potentially go up even more, and so there would be this, you know, there, there would be a very painful short-term shock to the economy. 37:47 You know, sort of medium to long term, absolutely can adjust. Like you, you, you already mentioned the pipeline. You know, the Saudis have to reroute product. 37:56 You have, you know, different, uh, countries and regions where you could make investments to, uh... I mean, again, we were talking about earlier, you know, Venezuela has, you know, the largest reserves in the world. 38:10 Uh, but it would just take a, a large amount of money and effort to kinda get them producing at a high rate, right? And so, but it's very doable. I mean, it's a problem that money and effort can fix, right? 38:23 It's, um, you know, a-a-and political will, you know- Mm-hmm... can fix, right? And so tho- you know, those are-- Which, which extended super high oil prices would, would probably do that, right? 38:34 So I think that the answer is, um, that yes, if it was really a, what I would call, you know, pseudo-catastrophic situation where, you know, the, the, the strait stays extraordinarily volatile and closed for some extended period of time, the market can work around it. 38:51 It would take time, and it would be some pretty meaningful pain in the short term. But eventually, yeah, you'd have, you'd have other rerouted pipelines, rerouted production, investments in other production. 39:02 A-and then at that point, it, you would see more effects on countries that are very short product. So, like this is why China, for example, has been investing for a long time to try to transition away from fossil fuel. 39:14 It's not necessarily because they're all like super green there. It's, it's, it's, it's, [chuckles] you know, it's... Right, yeah. 39:21 Because they realize that if this, for example, got very catastrophic, they would be hurt more than anyone else would be of the very large economies. I mean, some of the Asian economies are susceptible. 39:31 Some of the European economies are a bit susceptible. But, but China, you know, has a huge economy that's very reliant on oil and very net short. You know, it would be challenging. 39:41 So like that's a great framework for kinda global oil and gas. It sounds like I should probably put off buying my F-350 dually for a little while. [laughs] Because, you know, it's gonna be pretty pricey to fill up. 39:54 But let's talk about like the impact that it's gonna have. A-and I think it's important to bifurcate, or maybe the better question is, is there's bifurcation between auto gas and diesel. 40:05 Is the same bifurcation framework the right way to think about that from avgas and jet fuel, or is it, or are they more closely tied together? 40:13 I know there's a lot of subsidies that happen with kind of gasoline and we're coming up on a midterm, so expect, you know, the subsidies to increase. That's kind of, you know, kind of the big joke everybody's got. 40:23 But like are the two markets tied together, one, is the first question. 40:27 And then the second question is, is, is, do they, do the general oil and gas markets and jet fuel, avgas move together or is there like a delay in that? 40:36 Like would we see oil and gas prices come down before we saw kind of av, av fuel come down, to use the [chuckles] metaphor? Right. And airline impacts, just to throw a third one in there. Yeah. 40:46 And its relationship to all that too. Yeah. Great. No, I'll start, I'll start hitting a few of those points, and then I'll kinda pause and see what you want me to, to focus on more. But, but I mean, the, um... 40:56 So first of all, yeah, a-avgas and jet are actually quite different. So, so they are, they are like, like, you know, uh, probably a reasonably good analogy of, um, diesel and, um, you know, and, and car gasoline, right? 41:11 They are at least that different. 41:13 Um, and so, um, they're, they're, you know, avgas is a much lighter, um, lighter in the refining term, you know, which is, it has to do with things like where it sinks in the columns and... 41:25 But it, it really just is a, you know, it's a more pure, you know, more expensive cut of the, of the refining column. Again, it's like a high, you know, if you think about, um, 41:36 premium car gas is like ninety-three octane, right? And avgas is 100 octane, right? Now, the octane that's used is slightly different, but it's roughly speaking, that's a, a good analogy, right? 41:48 Diesel, jet fuel is best thought of as like a very clean diesel. 41:51 It's like a ultra-low sulfur diesel that's even cleaner and has some special properties around flash point and aromatics and freeze point and things like that. Um, so they're, they're fairly different. Avgas is tiny. 42:07 I mean, it, I mean, you know, if, if jet is five to 10%, you know, all, all aviation is five to 10%. I mean, avgas is like, is like a rounding error. Mm-hmm. 42:18 And that's just because if you think about it, right, business aviation uses jet fuel, but [chuckles] all the airlines use jet fuel. The military uses jet fuel, right? So I mean, that's the, that's the vast majority. 42:30 Um, avgas is, is honestly only made by a very, very few refineries now.It's the only major, I hesitate to use the word major, but you know, semi-major transportation fuel, um, that has lead in it still, right? 42:46 Hence all of the efforts to, to... Now, the amount of lead is, is, is minuscule, but it's, it's still there, you know. 42:54 And so that's why the industry has made, you know, the efforts that it has, and is still on a course to, you know, eventually eliminate that from, from the, the fuel, which is a whole topic of a whole 'nother podcast. 43:08 But, um, yeah. I mean, so, so, so that's a very fragile supply chain. Getting back to your, your sort of, um, question about how they move, they, they do move, like I, I... with, with the oil markets in general. 43:22 You know, you can think of everything as, I mean, this is ultra-simplistic, but you can think of, like, the price of oil plus what they call a crack spread or a refining margin plus... 43:31 and, and then that gets you to the product, the, the jet fuel or diesel. That, that neglects, for example, all the transportation margins, you know, like what we would have to charge to pay for moving the fuel. 43:42 It's not free to send the fuel hundreds or thousands of miles, right? But, but, you know, at a very high level, that's, you know, that's kinda what it is, right? 43:49 It's sorta like what's the price of the oil, and what's the cost to kinda refine that oil, and that gets you the price. All these are constantly moving though, right? 43:57 So that refining crack spread is, is also moving around. So it's not like it's a perfect one-to-one, right? 44:03 So when oil prices rise or fall, generally speaking, especially if it's by a significant amount, you're gonna also see the commensurate price of, you know, jet fuel or avgas rise or fall as well. 44:16 But it may not be on a, a lockstep one-to-one because maybe, you know, the refineries all of a sudden are, have, you know, there's too much of the end product in storage, or maybe depending on the season and you don't need, you know, seasonality comes into effect of supply and demand, or maybe, you know, this particular refinery shut down for maintenance and that one is better suited to produce this type of fuel than that type of, you know. 44:42 So there's all these other things going on, right? But, like, at a very high level, yeah, they, they do move together. 44:48 Is heating oil still a pretty good, like, peg for pricing when you're looking at, like, Jet A futures and- Yeah. 44:55 So heating oil, I mean, you know, which used to be for a long time the, uh, you know, the con- the, the, the main contract that was used, right, to hedge, hedge jet fuel and, and that contract has now become ultra-low sulfur diesel. 45:10 Although at some point it was still, I don't know if it still is today or what, it still had a ticker of HO. So just because of heat, you know, it's... 45:19 Yes, they're all roughly, they all roughly fit into the same band of, of kind of the, these, these, you know, middle distillates, so to speak, right? 45:28 You have sort of the, the, uh, you know, the, the gasoline blend stock on the one end and some chemicals, and then on the other end you have, like, the really heavy, like, bunker fuel and, you know, thi- thing, things like tar, you know, like very, stuff that's almost solid, that's like viscous, you know. 45:46 And so, and so the middle distillates, I mean, it's very broad, but includes kind of... 45:50 And so the most traded on commodity exchanges, um, you know, contract in that category is this formerly heating oil now ULSD contract. 46:01 And then you can trade some spreads that are, like, that are either called the regrade or the up down, depending on, like, where you are in the world. 46:11 It's all this lingo, but the, that, that basically convert the ULSD into a jet fuel product, a jet kerosene product. 46:19 But those are pretty thinly traded and don't have a lot of flexibility and options, so usually people are still using the heating oil or ULSD contracts. And airlines, I mean, that's- Yep... 46:31 my understanding is that's what's really driving our prices, is airline activity, they're hedging, they're, you know, can you talk more about that? Absolutely. Absolutely, yeah. 46:39 I mean, that's, that's, I mean, the reality, right, is, I mean, and, you know, for those, uh, watching the show that are, you know, operators of large fleets, they're very familiar with the fact that, you know, fuel is one of their biggest expenses, right? 46:52 I mean, on a variable cost basis it could be the most expensive, you know, right up there with, let's say just a- accrued maintenance on the aircraft or, you know, uh, amortized maintenance or whatever. 47:02 But, and so that's, you know, no different from the airlines. I mean, they might have, you know, a quarter, a third of their expenses are, the whole airline are, are fuel, right? 47:11 And so, um, you know, you got labor, you got that, and you got your equipment. Those are kind of the, the big expenses, right? 47:17 And so, and so because of that, yeah, they're very sensitive to it, and I think most folks know that airlines operate on pretty tight margins. 47:25 You know, they're, they really need a heavy load capacity to, to, you know, be, be full to, to have flights be profitable. And so yeah, I mean, I am, I am, 47:37 you know, concerned might be an exaggeration, but I'm, I'm a bit cautious and, you know, watching how this is gonna affect, uh, the airline industry and especially it, it tends to sort of hit the, the long haul flights the most, 'cause obviously those flights have to, you know, load up on massive amounts of fuel to make these... 47:55 You know, I remember I used to take, at one point AV Fuel was sort of looking at various business development opportunities in the Pacific and I was doing a couple flights over to, to Singapore, and I used to take the nonstop Singapore Airlines from either Newark or from LAX to Singapore, right, which is sort of a 19, 20-hour nonstop flight. 48:14 And more than half of the fuel, like, like, there was so much fuel on board that I, I forget the exact statistic, but it was like half of the fuel is used to carry the other fuel or something. You know what I mean? 48:24 Like, it was like, you know, it was like, it was like airborne, it was like airborne for so long, right? Yeah. And so, like, those kind of things, like, it becomes inefficient, 48:34 and when the prices go up, those are extra sensitive, right, to, to pricing. So-Yeah, I think it's something to definitely watch, the health of the airlines. 48:43 I mean, I think it will kinda sort out again the, the, you know, the airlines that have built more robust balance sheets over the past, you know, decade or number of years, um, at least la- maybe not, maybe since COVID, let's say, versus the ones that haven't. 48:58 And so, so yeah, I think that's gonna be interesting. 49:01 So if you're running a fuel farm, you know, maybe look for a period when the airlines aren't gonna be that busy because fuel prices may be a little bit lower versus the spring break, you know, March, where everything, in addition to the war- Yeah... 49:13 a separate issue. Yeah. It really impacts us too. No, absolutely. Yeah. Absolutely, yeah. 49:17 A- as, as airline demand fluctuates, that definitely has a, has an impact on, on jet fuel specifically as compared to, you know, how expensive jet fuel is as compared to its sister refined products, you know, like diesel or whatever, so. 49:34 Yeah. No, that's really interesting. Uh, so, like, does the fluctuation of business jet fuel, like, w- I guess, what's that relationship? 49:44 Like, so that I understand 'cause I'm, you know, I'm not very smart, and so, like, understanding, like, airlines- Very smart person... like, do they have, do they have excess capacity, and then we, like... 49:54 I, I imagine in my mind an av fuel truck driving over to the airline and being like, "Hey, I see that you have some extra gas. Would you like to sell it to me for cheap?" 50:01 And I know that it's way more complicated than that, but that's, I, I think that's, like, my mental, my mental picture. Like, is, is that a key driver for business jet fuel too? 50:09 'Cause I, or, like, maybe the reframe of that question is, do we exist in a vacuum, or are we completely reliant on kinda airline, you know, supply and demand? 50:19 It's a little bit of in the middle in the sense that we don't, definitely don't exist in a vacuum. There's, again, I would say 99% of the time, I will just answer, there is more than enough fuel to go around. 50:36 It's, you know, uh, it is really just becomes a, a case where the price solves the, you know, the supply and demand, you know, challenges, right? 50:47 The price just keeps rising until, until the demand meets the supply or keeps falling, right? Until, uh, you know, if it's, uh... So, so, so yeah. 50:56 It's, you know, airports, it's very rare to have a, you know, now there are these, these rare freak events, you know, hurricanes, fires, major refinery outages, pipeline shutdowns. 51:11 You know, there's, there's random things like that that can happen that, I, I mean, and that's why, 51:18 and that's why, um, kinda back to what I was saying earlier, companies that are, are thinking more strategic are generally concerned about their supply reliability because they could make or lose a whole lot more money during that one in a mi- you know, one in a rare event than they will by whether or not they bought their fuel at a penny more or less expensive, you know? 51:40 So, you know, if they can get fuel when no one else can, you know, when it's, when, or they have a backup. You know, a lot of these airlines or very large, you know, corporate jet operators will look at it that way too. 51:52 They'll look at it as having redundancy, right? Just like you want redundancy in anything. You know, in an airplane, you want redundant safety systems, you know? So same kinda thing. 52:00 You know, if you are, uh, you know, if you're UPS or FedEx or a, a, a huge passenger airline at your hub, do you wanna have your entire hub supplied by one supply source, right? 52:12 I mean, and then it's probably fine, like, for, like, 99% of the time, right? But then, like, that 1%, you're just like, "Uh-oh." 52:19 So, so that's, that's, you know, th- they'll start to look at that as a supply redundancy system. 52:25 And I mean, even with av fuel, for example, even if someone just works with av fuel, it's not like we're getting our fuel in almost all cases w- from one source. 52:34 Like, usually we have two or three terminals that we can pull that fuel from. Yeah, one or two of 'em are gonna be farther, and so the fuel on those loads might be more expensive, but at least they're there, right? 52:46 And so obviously we try to bring as much as possible from the closer terminal, but at least you have those other ones as a backup, right? So. All right. 52:54 Well, CR, uh, we wanna wrap up the episode with a couple of rapid-fire questions. Might be a little bit off the wall, but that's what we are known for at the VIP seat, so totally random. 53:04 Might be in industry, outside of industry. So I will kick us off, uh, with rapid-fire question, quick answers. Biggest risk right now in the business aviation supply chain. Yeah. 53:17 Biggest risk in the supply chain, um, I'm gonna kinda interpret that a little bit liberally and go with, I think the biggest risk to the industry is just continuing to make sure that we, as an industry, fight the PR battle to kind of, um, demonstrate our relevance, our stewardship, our, um, you know, being good corporate citizens, being, showing the value we bring to communities, the economy, the workforce. 53:54 You know, I think that it's very easy for business aviation to be a target because there are a lot of very wealthy people that fly, and that's okay. I mean, that's, they have to get around too. 54:03 But, but, but I mean, but it's, but, you know, for, for whatever reason, sometimes people get angry and frustrated at people that are very financially successful, and so we have to make sure that we're doing what we need to to show that, "Look, we're employing lots of people, creating tons of value for the economy, and, uh, and doing good and being, being, you know, being good citizens of the communities that we work in." 54:25 That, we just had a post last week that went kind of viral. 54:28 We had, like, 3 million views, and it was a l- and some of it was complaints about all that fuel being spent, but I'm like, "There's no other way for these people to travel." I mean, think about the- No... 54:37 security environment that we're in. You know, you, like- Right... we have people getting shot all the time. You know, we had the United executive. Yes. Like, they cannot go commercially. They just cannot. No. 54:47 And on top of that- Absolutely notThere are lots of people like us that love this business, aircraft mechanics- Yeah... pilots, FBOs, line workers, that they are great, great jobs. 54:57 So yeah, uh, just had a second- Yeah, they're great jobs... and, yeah And I'll tell you, look, I mean, like, there are... 55:01 Exactly, whether it's security for the reason you just mentioned, which is a real reason, as we've seen very vividly, you know, recently, or unfortunately, right? 55:10 Or whether it's, like, very, very just practical business like, for example, I mean, I guess you could argue our business is one of the best use cases imaginable, but, like, we, we could not do what we actually could not do without our corporate aircraft. 55:28 I mean, we will fl- our, our sales team, supply team, quality assurance team will fly around and, in some cases, visit, like, three or four airports a day, and I mean, that's just not possible in any other way, right? 55:43 Because we literally land and, like, we are at our meeting, which is at the FBO, you know- Mm-hmm... or at the, the terminal or the fuel farm or whatever, right? 55:51 And so, like, or you look at a company like Walmart that legendarily built the company by, you know, all, all the planes, you know, going back into Bentonville and then leaving Bentonville at the beginning to go to all the different Walmarts all around the country, right? 56:06 I mean, these kind of things you just can't do. I'm not saying everybody uses airplanes in as practical of a way as that, but 56:14 there, there's a lot of very genuine use cases out there that we need to, you know, really, you know, I guess- Further... ring our bell a little bit. [laughs] Yes, yes. So- That's great. Yeah, yeah, for sure. 56:26 All right, second, second rapid-fire question. FBO consolidation net good or net bad for the industry? Yeah, that's a hard one. [laughs] I think that... Le- le- let me put it this way. 56:37 I think that some degree, I'm, I'm gonna hedge a little bit, but I think it's a, I think it's a, a valid hedge. 56:43 So I think that some, I won't even say consolidation, but I'll say some capital and, you know, the, the accompanying consolidation in, in the industry is good from the perspective of, like, you know, just bringing in that investment into the industry, the, you know, the growth, the standards, the ability to think about the future, think longer term, make, you know, make capital investments, uh, professional systems, management, whatever. 57:11 But I think that, you know, it's at risk of going overboard, you know? Like, I, I, I think it's kind of... So, like, I'm, I'm glad we have some as opposed to, like, if you go back, I don't know, 30, 40 years ago, right? 57:27 When, like, you know, it was like there was, like, none. Um, and I think the industry's very, you know, has really taken a, a step up, but I think that it's also, like, 57:36 we have to be careful not to kind of shoot ourself in the foot as an industry because as 57:43 there's more and more capital and consolidation that comes in, prices get bid up, which is great for folks that, you know, own and operate these businesses. But then, you know, ultimately, someone's gotta pay the piper. 57:55 Someone has to pay the bill, right? And, and so who is gonna pay the bill? Well, the only way to pay the bill is to raise prices, right? 58:04 And then prices get raised, and then you get complaints from operators about, like, "Wow, why am I getting charged, you know, XYZ crazy fee for, you know, whatever?" 58:18 Or, and then you get complaints to regulators about such and such FBOs are charging too much or, you know. And, and, and I just... You, you know, we, we don't [laughs] we don't wanna... It's not one of these things. 58:29 We don't wanna be on the radar as an industry, right? We don't want to. We're already on the radar enough. We don't want to be more on the radar. 58:36 We don't want people to be like, "Oh, look, this industry is, you know, mistreating their consumers," or, uh, you know. It's just like... 58:44 And so I think we've just gotta be a little careful about kinda the whole ecosystem and, uh, making sure that what we're doing is sustainable, and we're not pushing it too far. Classic supply and demand curve. 58:57 If you push pricing too much, the supply is gonna go away. So gotta be balanced. Exactly. Yep. Last, last rapid-fire question. 59:03 If you had to pick one airplane to fly either in the front or the back for the rest of your life, what airplane- Ooh... would that be? I'm gonna go with our Falcon 2000LXS. 59:16 It is the perfect plane for our business, you know? There's a, there's a perfect plane for every business out there, right? Yeah, very cool. Well, CR, it has been awesome to have you on the podcast. 59:30 This has been really helpful, and I think a great, you know, frame of reference for fuel companies in general but also kind of for macro markets and, uh, and what it means for operators, executives. 59:39 We really appreciate you coming on. Oh, thanks a lot. It's been really fun chatting with both of you and getting to sort of geek out about some, some parts of our industry. So thanks. Yeah, absolutely. 59:51 Well, this has been another awesome episode of «the VIP seat», uh, podcast. If you want to subscribe to the newsletter, go to thevipseat.com. Uh, leave us a five-star review. 1:00:02 If you liked having CR on, leave him a comment. Tell him how awesome he is and, uh, and how great this episode was. Uh, leave us a five-star review, Apple Podcast, Spotify, comments on YouTube. Those all help. 1:00:13 Follow us on Instagram, the VIP seat, uh, @thevipseat. We just had a pretty awesome viral video from the Masters. 1:00:20 Thanks again to AB Jets for sponsoring this week's episode of the podcast, and we will see you all next week. 1:00:34 [outro music]
