Transcript 0:00 All right. Good morning and welcome to the VIP Seat. 0:02 Today is January 16th, and this t- week's top stories include a private jet operator who's been accused of organ trafficking and, uh, how drones are hurting the LA fire suppression efforts, uh, just like other things that they're damaging right now. 0:15 Uh, but your host today includes yours truly, as always, Jessi Nyore, and today we have with us Tracy Carwile. Tracy, welcome to the show. Hi. Thank you. We're so happy- Pleasure... to have you here. 0:25 All right, folks, sit back, buckle up, and let's take off. [upbeat music] All right, Tracy, so anyone who's in the organ business this week had a lot of interesting things to look at. 0:42 Uh, so TransMedics, who's made a lot of news in business aviation over the last year because they've purchased 18 Phenom 300s, so they have a massive fleet. 0:51 Um, you know, for those who don't know, I also operated the same airplane and had the same fleet, so I know in particular what they're trying to do, but they're in the organ transport business. 1:00 This was a medical device company, uh, that extends the life of an organ, and they got into the airplane side to move those organs around the country. 1:08 Uh, there's a short seller though that came out with a scathing report. A lot of accusations. I can't tell you what's true or not. Oh, yeah. 1:16 But one thing I did wanna note, um, was the short seller was talking about how, you know, they bought these overly expensive airplanes and they're not... They don't need them, and I'm... 1:26 I take issue with that because if you don't spend money upfront on an airplane, you're gonna spend it on the back end. Um, operating costs. Exactly. So I, I don't know. 1:34 What, what do you think about their approach that these airplanes are, you know, over the top for, for the mission? Listen, reading that report, number one, as an investor, I also would be very, very worried. 1:47 However, I... it seemed like they threw a lot in there, like literally every single possible complaint. 1:53 I think that we run up against those complaints often regarding usage value and the understanding of that plane as an asset. 2:02 I think obviously we need to do a much better job, um, the industry, the public, but most importantly to the shareholders. That has got to be key. 2:10 That gap cannot be as wide as it obviously is that allowed for that piece to be also included in the overall scathing report. I will say that's probably one of the least... 2:21 To us, it's most important, but overall, the, the report is extremely shocking. They ha- they're being accused of quite a bit of, quite a... 2:28 I was hoping to see more information regarding either maintenance, what type of planes did they, were they operating before? 2:36 We're talking about them going down and then also side by side organ transplant and saving lives. What is, what is the cost of that life, right? 2:45 So those are obviously interesting, um, and very insightful discussions that the shareholders should have been having this entire time. So- Absolutely... I'm interested to see more on it. Yeah. I, I... 2:58 But my, my whole point is, you know, there's a lot of people that have different opin- opinions on this, but I went along with the we buy new and we keep our operating costs low. 3:07 Like you're gonna pay for the airplane no matter what, and there was some numbers in this report too. You know, said, "Oh, the Phenom 300 is 7,000 an hour versus a PC-12, which is this much an hour." 3:16 But I'm like you're talking about a massive difference in time savings when the whole point is to get the heart there faster- Absolutely... get the liver there faster. Like you can't... 3:24 Those are not apples to apples comparison. Absolutely not. While some of the stuff maybe has some credit, and I don't know, I'm not an organ surgeon, I can't tell you, the airplane stuff was a little off. 3:34 Like that's just... Yeah. It literally seemed like it was thrown in there. It was very frivolous. The other item that was literally referenced was, was the doctors were using the flights for comfort. Yes. 3:47 Convenience, convenience, convenience. And to get their beauty sleep. Listen, as we talk about what not only the doctors have to go through and the high 3:57 pressure situation they're under to save that organ, on top of that, a lot of these instances happen at the last minute, right? So in addition to that, you have crew. 4:08 This is a whole entire operation, and I find it very hard to believe that a few doctors are misusing an entire flight department's asset, um, for a couple of gains. Again, I think it'll be interesting. 4:24 I'm very interested to hear what the, what happens past report. Yeah. Yeah, I mean- It's your opinion. It's just one report. It's just one report. It was 340 pages. Yes, I read every page, and it took me forever. 4:37 But- That's a lot. And I actually, I do analysis on TransMedics on a, a website called Seeking Alpha. It's like a stock- Ooh, okay... website. 4:44 So I'm actually gonna be doing an analysis this week, but it's taken me a lot of time to get through that report, but we'll be publishing something on that. 4:52 But the whole, you know, doctors getting beauty sleep, this sort of thing, it's like this goes back to fatigue and like crew fatigue and issues. Absolutely. It's not just beauty sleep. 5:00 Like these are critical environments, operating rooms, working on patients that could, you know, result in people's death. Like they do need to be rested. And okay, if there's a device- Absolutely... 5:10 and a technology that saves lives in that aspect, like that's also valid. That's not an unreasonable thing. Yeah. It was, it was very dramatic. 5:19 Some of the stuff in there, I mean, they're ac- accusing them of like organ trafficking and some other stuff. Right. And I'm like, it seems like a stretch, but we'll see. 5:27 I'm pu- dig- I'll dig into it a little bit this week. Absolutely. 5:30 Um, with that being said, because it did also, you know, um, I think your analysis will also show as you get through it, but is, it is very important as an investor, as a shareholder, that you are asking very important questions. 5:41 I think the other piece of this, as you mentioned, is this started as a startup for a medical device company that then expanded into flight. 5:50 So those are obviouslyDifferent aspects when you're investing, um, do you have the right people in the right places? A lot of things happen very quickly, especially in the medical field. 5:59 So as an investor you should be obviously doing your due diligence, but as a startup you know how things shift. And in addition, you need to kind of keep your eye on the ball as well. 6:09 So those are obviously, as an entrepreneur I know those are things that you've had to deal with, and things come up and you pivot. But the regulatory environment for both of those that you're operating in is very high. 6:22 Very complicated. That was one of the things I pointed out like a year ago. I was like, "This is a, that's a complicated business to get into." Mm-hmm. 6:29 And you're already in a really complicated bus- you're in the medical device field. 6:32 Like man, now you have to manage both of those types of businesses, and they're very heavy in regulatory terms and, you know, safety and crisis ter- It's a lot. I would say it's a lot to take on. What? 6:44 Um, maybe they'll figure it out. Who knows? Fingers crossed. Let's take a moment to talk about an exciting step forward in aviation sustainability, AVfuel Zero. 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That's avfuel.com/zero. 7:39 All right, well, speaking of, uh, well comp- complicated situations, I think everyone was pretty annoyed this week when we saw that there was a drone that damaged a firefighting aircraft in California. 7:51 They're fighting, you know, just horrible conditions out there. So many people have lost their homes and their valuables and lost their lives, and here we go again, you know, some unauthorized drone activity. 8:02 But I did actually see an update recently. Someone got arrested yesterday. They found them. Was it actually the people who had damaged the aircraft? Yeah. Okay. The one that I, I think I read the same exact one. Yes. 8:13 Yeah. That's good. And I, I have a lot to say about it, mainly because honestly, what are we doing? 8:20 Like no hobbyists know- if you did not take the time to properly volunteer with the police department, with the fire department, in Texas we have Texas EquuSearch that searches for missing people. 8:35 There are tons of rescue opportunities for you to volunteer and get licensed and be a part of a group. And the fact that you, we didn't do that ahead of time, but now we're now costing 8:50 thousands of dollars but potentially lives that could be saved from fires not being put out now that this aircraft not only was damaged, it now has to, it's out of service. Let alone it could have caused their lives. 9:03 It's almost shocking that we have to talk about it, but over 40 incidents just for the wildfires alone in the area. 9:11 People need to be focused on what matters, which is getting out and doing what you can on the ground and not interfering with professionals. Exactly. Like don't, you're not, you shouldn't, you know not to be there. 9:23 You know, that's the whole thing is like these, at this point, especially after all the stuff in New Jersey and everything else, like I think the FAA is gonna have to address this in some way. 9:32 I mean, I'm glad that people seem like they're gonna be getting in some serious trouble for this. Absolutely. But obviously it's not enough. Like we still have 40 incidents, you know? A- like how is this happening? 9:41 Just 'cause you wanna go up and like film, you know, the fires and get something on TV? Like that's just not, it's not okay. I don't understand who thinks that that's okay to do, but um, yeah, it's a terrible situation. 9:51 The Air Force is sending out C-130s. Lots of other people are coming together. And as usual, business aviation is swooping in. You know, even when there's, there's a crisis, like- Absolutely... 10:01 people forget about the good things that we do, and this is one of the good things is we get out there and we help people. Absolutely. And there's tons of ways to do that. 10:08 And I, they flipped the drone over, and if you're a licensed, uh, one of s- drone pilot, and your number should be on there, right? So this also leads me to believe, and I'm hoping so, um, that it was a hobbyist. 10:21 Uh, and the reason I say that is because the FAA has been very open with the process on how to become a licensed drone pilot. It's not difficult. You can, you can take the time to do it properly. Mm-hmm. 10:34 I do believe that the gap between hobbyists and licensed is too wide. 10:40 I don't necessarily believe additional regulation enforcement from the FAA is the answer, which is kind of what the threat was before the re- FAA Reauthorization Act. 10:52 So I'm very happy with what they landed on, but I do feel this is a perfect example. Maybe it's more public education, but this is critical. 11:03 It's, it's critical because there's a couple of those incidents where they were damaged because they were flying too close and then fell on people. Like this is, uh, falling objects. 11:14 It's not, there's a lot of things that can occur, and I guarantee you hobbyists aren't carrying personal liability insurance. 11:21 So then again, if something additionally happens, who's gonna co-There's no, there's no recourse. 11:26 Well, and one of the things I, I can't remember who it was, someone sent me a Joe Rogan podcast, and the guy was talking about drones a lot and, and that's why I tuned into it, 'cause I, I wanted to hear the drone part. 11:35 But he was talking about one of the big problems is in the United States to manufacture drones there are limitations. Yes. Like, it can only go so high, there's restrictions. 11:44 So American manufacturers are held to a standard, you know, a safety standard that helps all of us. But unfortunately, Chinese and other manufactured drones- Right... are not. 11:52 So they're coming into our country without the same manufacturing standards and restrictions- Absolutely... and I think that's part of the reason why we're ending up with this. So we need to- Absolutely... tighten up. 12:02 You know, if we're gonna make our manufacturers do this, I think we should also be putting that onto the, the imports that are coming into the country too. Absolutely. And the FAA is absolutely on top of that. 12:10 They are 100% looking at, and the drone specifically that was, that they found that damaged the fire plane was actually a DJI drone. 12:20 Those are the ones that are most available to private users, and those are also not made in, in the US. 12:26 So you have to proactively install geofencing on that DJI drone and turn it on, and it will actually limit it- Mm-hmm... but it does not come on every single drone. 12:36 So if you are a pilot that is supposed to be taking it seriously, even as a hobbyist, there is a basic level that you should be doing and operating for safety in your urban areas especially, but you should be following those guidelines everywhere. 12:51 And putting the geofencing on is required in the United States. Um, when you have a loft and you're looking at your app to even see if you're available to fly that day, it reminds you to put on your geofencing. 13:03 So I know that the technology pieces in the United States are helping, but it again, it doesn't, it doesn't limit that. So what does that mean? I think we need to kind of PSA and hold each other accountable. 13:17 We can't- And hold everybody to the same standard. You know? That's, that's like level playing field for everyone, and honestly, sometimes people are dumb and they need- Yeah... to have restrictions [laughs] 13:27 set into things. Like, they're not, like, they're not in the aviation system. They don't understand what can happen, which is exactly what happened in this case. 13:34 They're like, "Oh, I'll get out of the way if there's an airplane." Not when it's a super scooper who's dropping water, you know, hundreds of feet above the ground. That's not gonna happen. Just don't do it. 13:42 I was in shock though. I mean, it said it left like a three by six-inch hole in the- Yes... left wing. That's massive. I mean, imagine that was a windshield. Hopefully it didn't go through, but I don't know. 13:51 Some of these helicopters, I just don't know. But anyway. Not enough appreciation for the pilots as well, so great flying. Yeah. Yeah, great flying. They got it down safely, and I'm sure they were pretty angry that day. 14:02 Yeah. Guess- Yeah... guess what they don't get to do? Definitely. Go right back up. Right, right. Mission. Ugh, it's wild. But very happy to see again, like Wings of Rescue was airlifting animals and pets- Absolutely... 14:13 out of danger. Um, a lot of good stuff. People were also giving... Leonardo DiCaprio apparently evacuated pri- private jet and was getting a bunch of flack online. 14:21 And I'm sorry folks, if I had a private jet and my house was almost on fire, I think I'd be using that to say goodbye. Like, really? Like- Of course he's gonna use it. Listen, what's the weight allowance? 14:31 I think that's the mo- Like, okay, how many people can I bring? Okay. How many people can we get in? Let's load everyone in. I put all my stuff in there. And at that point, that's, that's, that's what I did. 14:39 On top of that, it's actually really funny because you're like, wait a second, you're in Titanic, you're su- okay. Like, come aboard. You can fit more people. And then like- Oh, right. Yeah Right? Yeah. See? See? 14:49 You know, he got left behind, but not this time. Not this time. Not this time. [laughs] Oh, gosh. Showing our age. It's so funny. Oh, that's all right. 14:59 Hey, you know, if there's anyone out here who has not seen Titanic, like, get with it. Come on. You know. Yeah. Where, where are you? Exactly. All right. Well, the next story, um, this is an interesting one. 15:10 So yesterday there was an industry day, um, with the FAA involving vertiports- Yes... and some of this came out. 15:16 There was a report that came out, it was actually two weeks ago, I think it kinda quietly came out and no one was really paying attention to it, but there's a new FAA study that's done studies on the downwash and outwash of eVTOLs. 15:27 And for if anyone's been in a helicopter before or flown in a helicopter and boarded one, downwash and outwash can be pretty extreme depending on- It is... the aircraft that you're getting on. 15:36 And what they're finding is, of the four studied, and I think it was, uh, I think Aviation International News figured out it was Joby, Beta, Archer, and like somebody else or something. 15:44 I can post the article, the link here. What they're finding, some of these eVTOLs are producing 100 mile per hour winds, even like 40 to 100 feet away from the eVTOL. That are, that's hurricane force winds. 15:58 That can knock things over, that can damage, uh, weather equipment, you know, buildings. That's gonna have to be addressed and I don't think, you know, we're gonna see the same enthusiasm for where these things can fly. 16:09 I mean, I... It severely limits. They can't land on top of parking lots now. They can't land on- Right... top of, you know, buildings because of what could happen. 16:17 So this is gonna really impact the development and potential use cases for these aircraft. It's very interesting, and I know the FAA has been playing catch-up in this space, and they are doing phenomenal. 16:29 In the grand scheme of things, there are already, are already operations going on right now in powered lift aircraft and eVTOL. 16:36 So the fact that they've been licensed in this short amount of time and an SFAR has been issued, to me, I, I see it as another piece of a challenging innovation structure that we just have to get through, right? 16:51 I understand that it's complicated, but I also don't think that it's as damaging. Maybe pushes the timeline back- Mm-hmm... 16:59 but I also foresee the ingenuity of what we've been able to accomplish in a short amount of time that it can be addressed. If Skyport is already investing so heavily in New York, 17:11 I have a feeling that the solution is not that far away. I also think that with this type of report, they're obviously gonna be focused on this, but there is no actual solution. 17:21 I haven't heard one from Beta, I haven't heard one from Joby. 17:24 From what my understanding is whenever we were at Base, we obviously know it's a concern, but it also wasn't a topic of interest because-It does seem like that is one of the proprietary piece that each piece is trying to solve in their own way that can only be accomplished with a design solution, right? 17:44 So I haven't seen as much... I think the industry hasn't seen as much talk on the solution for that specific reason. Mm-hmm. 17:52 But I find it very hard to believe if we already have SVRs, we're already doing rural operations, that we're not closer than we might think to urban - solving it, um, in the urban atmosphere. 18:05 I know we're not there yet, but I feel that we might be closer than what the report kind of lets us on to believe. What do you think? Yeah. I honestly, I have no clue. I mean, I think I was surprised at these numbers. 18:16 Yes. I've been in a lot of helicopters. I was originally from the helicopter industry. And I'll tell you too, there was one time we landed near a hospital, and I was very uncomfortable. 18:25 Um, it was a Bell 407, really not a lot of downwash relatively speaking, but just the, the place that they put us in and it was near a dumpster and then I, you know, you started seeing the downwash was pushing stuff out of the dumpster. 18:36 Like, helicopter pilots have gotten me these situations. It's, it's a little scary. It is. You know, you get into whiteout conditions, brownout conditions. I think they're just gonna have... 18:45 And, and because of these aircraft, they're so, they're so much lighter and they have more disc space, that's what's creating all this additional wind velocity- For sure... that there's way more than a helicopter. 18:55 So I think it just, it's gonna present another challenge and it's like, what is the use case for these? Maybe New York's fine because those heliports are on the water. 19:03 You know, if there's a 300-foot distance between a ship and the helipad, okay, or vertiport, whatever we're gonna call it one day- I know... you know, maybe it works. 19:12 But I think this does put another complication in the process- Really... that they're gonna have to figure out, so. Especially for urban flight, right? I think that's- Yeah... obviously where we wanna get to quickly. 19:23 Or personal use case. Yeah. Yeah. Where we want to get to quickly. Um, but I do, I do... Yes, we... It's just unsafe. That's, that's- Yes. You don't, you don't wanna be standing next to these things. 19:35 Uh, so [laughs] we're gonna have to figure that out. Or have something come across the field. Mm-hmm. The airfield. Yeah. I mean, these were significant distances. 19:43 And they're saying too because you've got like mul- you know, usually a helicopter, it's a single disc and it's pushing downward and it's less, there's less things happening, you know, with the wind kind of pushing each other, but in the case of eVTOLs, 'cause you have so many rotor discs, I mean, they're interfering with each other, they're creating irregular patterns. 20:00 And I think even in one of these articles it said the FAA was having a hard time actually modeling it out because it was so complicated. Right. So I'm like, "Wow, that's, uh, it's interesting." Right. Very interesting. 20:09 And it's very interesting to see from Beta to Joby also kind of the different types of solutions from either landing vertically versus to, um, putting landing gear and now you're getting, again, 20:23 much closer to a manned aircraft. Mm-hmm. However, we, we have solutions, right? We do have solutions. So I'm hoping to see, like you said, more conversations around what those solutions are. 20:36 Um, there's a lot of investment going on, a lot of talk about what the FAA needs to do to help them get to where they need to be, but these are critical items because they affect more than just operations, infrastructure. 20:49 Who's going to pay for that, right? That obviously is key, and we know what that looks like currently for commercial airports. So then again, the question is, are we 21:01 editing and upgrading current or are we then building separate? Right. And who's- Yeah... paying for that? Yeah. And who, where, and where are the resources gonna go to? 21:11 'Cause the FAA is limited in its resources in the first place. 21:14 I do think, I mean, they've been, they've been on top of this real- I know the eVTOL people probably wouldn't think so, but like, the, the people who've been in the industry a long time- Yes... 21:22 and the certification process, like they're actually moving relatively quick in terms of FAA terms. When... 100%. When I saw that, I was like, they already have the... 21:29 When at, uh, Basic when I saw they have the SR already, like those are operating and the... It's great. It's great to see. Um, 21:38 I do think obviously because of the solution I think will be more proprietary for each company, I think that limits collaboration and obviously discussions like this. 21:48 So I do think that there's a opportunity, um, especially with new innovation and technology, just to be open to that new generation that's coming in and looking at professional development and career development in a different ways. 22:01 Often these solutions are in the industry already, and then be open to inviting more people in. But I, I have a feeling that the solution's gonna rely on a proprietary invention for each, but I'm excited. 22:15 Well, you know, they might wanna start banding together because, you know, when it's a safety critical thing, usually working together gets you there a lot faster and, you know, it's, it's gonna be the best eVTOL that wins, and I don't know if, you know, the downwash and outwash is gonna be the thing that is gonna set you apart from everybody. 22:30 It may even get you there faster. I don't know. But who, what do I know? I'm not an engineer. I know. I'm excited. 22:35 I, I, I will say that it's been nice to see the collaboration between the startups, and this is so exciting that it can get very competitive, which it should be. 22:49 Obviously these are for-profit businesses, but I have been extremely pleased to see the collaboration and information sharing from the industry startup going to the FAA. 23:01 I think that's also why the FAA was able to come back with such a clear and precise guidelines and get our innovation to where it needs to be is because the market came together as one collective whole. 23:14 So I do think that as an example, we can, on the business aviation side and with initiatives, learn from what the new AAM community's doing and- Oh, yeah... 23:25 let's, let's- No, they're, they're, they're making things happen... everybody help us. Right. Yeah. It's working. They did. I mean, they're, they're, they're moving things. Exactly. There's so- Money helps. 23:32 The billions and billions of dollars that have gone into these things helps though. We'll see. [laughs]But well, speaking of lobbying and learning from, 23:41 this is- it's another eVTOL story, but I thought it was kind of interesting and related to the other one because there's a group in New York City called Stop the Chop. 23:50 They have been fighting helicopters in New York City, I don't know, for the last 30 years, something like that. I mean, they've really... And they've put a lot of restrictions in place. 23:57 Honestly, they've had- Absolutely... some success. They've had some wins. They've limited a lot of hours. Yeah. Um, and me, you know, I'm an aviation person. I'm like, "Helicopter cool," you know? 24:05 But not everybody thinks that, and so they're one of the people that are trying to get, you know, the noise reductions in- in New York, which a part of it I understand, but also I'm like, "It's over the water. 24:13 Who cares?" 24:14 But their new strategy, and I think everyone just kind of needs to keep an eye on this, especially if you're in the helicopter industry, they're really pushing the adoption of eVTOLs because they're saying they're greener, they're cleaner, they're quieter. 24:27 But I think, you know, there was a story from The Air Current, um, Ilan Head, who is a great writer, um, she published this story and it's- it's interesting. 24:34 We need to keep an eye on it because I think they're using eVTOLs as like, "Let's ban all the helicopters, and then when eVTOLs are ready, then we can, you know, allow them to come into the city." 24:43 So it's a, it's a slippery slope, and I don't like it. I think it's shiny. Yeah. It also, uh, you're right, it takes the buffer and the sting off a little bit. And again, they're only seeing the helicopters for tourism. 24:56 I think that's also part of it, right? That gap. 24:59 So yes, I think that if you're only seeing helicopters in New York specifically in this example being used by certain people to fly from one side of the city to the other is- Mm... 25:09 kind of what the veiled implications are. 25:12 And usually the only side of the story that's being kind of addressed whenever we're talking about the need for change specifically, regardless of what it is around helicopters in New York. 25:23 So I think that's sort of the start, right? 25:25 Again, how do we have this conversation with the overall general public about the value of that asset, not just for tourism, which is obviously a business, and the amount of people that come into New York, [laughs] they need to do something. 25:38 So from that point alone, but i- in addition to that from a very serious aspect, those helicopters are- are valuable and we just have to close that gap because when we have to go up and fight against the city at a city level, we're not speaking the same language with those people that are- do have the actual complaints. 25:59 So- Well-... I think that's the challenge... but y- at the end of the day, I think there's a lot of things that are annoying that tourists do in New York City. Like, that's just par for the course. 26:08 If you're gonna live in the city, you're not gonna go to Times Square, okay? 'Cause you don't [laughs] wanna be around that. I get it. 26:14 But also there's just, I don't think we should be restricting people's ability to enjoy an experience like that. Like, how, you know, that's a once in a lifetime thing. 26:23 A family may take a kid, that kid gets inspired and is flying over the city. Like, what a cool thing that's part of, you know, a- an amazing ex- experience in life. 26:33 And I understand restricting it, like you shouldn't be doing helicopter tours at 10:00 o'clock at night when people are trying to sleep. 26:38 But also, like, let people, like, enjoy this, you know, in some way and in a, in a reasonable way. 26:44 And maybe, I- I don't know what all the solutions are, but I don't like the pressure to, like, completely ban the helicopters in New York City except for obviously military, police, and air ambulance. 26:54 But we- you know, let people fly. Come on. I mean, it's- it's amazing. Of course. Yeah. W- what's the benefit? I mean, what- what's- what's the benefit of not having them fly, right? 27:08 And I, and I just don't, I just don't see one, honestly. Um, obviously I don't live there and I'm not affected. 27:13 However, at- to your point, if you're gonna live in the city, there are, specifically here, there are some challenges. 27:20 Uh, with that being said, I think it also brings an amazing opportunity to the city for innovation- Mm-hmm... 27:26 for, I believe it's Skyport is the ones that, Skyport is specifically building the vertiports in New York City specifically. So that is amazing, like where- Well-... 27:38 we're going, where aviation is going, um, and I don't think it has to be either/or. So we need to get better about that c- that conversation as well as, and making sure it's not a either/or. 27:48 We're not here to run anyone out, just like the drones aren't here to replace all manned flight. There's a different lane and a different opportunity and a different customer for each, and I think it's exciting. 28:00 Um, the powered lift aircraft are coming, but also obviously helicopters are gonna have a need. They're not going anywhere. 28:08 Yeah, I mean, and when you just lift ratios, they don't have the battery technology in eVTOLs yet to do anything near what a helicopter is doing today. 28:16 Maybe at some point, you know, when there's great innovations in technology, but yeah, I don't know. I think keep- keep fighting New York City helicopter operators. Uh, we've got your back. We'll sign your petitions. 28:26 Whoop whoop. Just let us know. We got you. But all right, so our next story, after eVTOLs, we are getting back to actual business aircraft. 28:33 Sorry that we took a little, like, dive there, but it's interesting times and it's fascinating. 28:37 Uh, but Epic owners, this happened almost a decade ago at this point, but the case is still ongoing and officially has been approved as a class action lawsuit against Epic Aircraft. 28:48 But essentially what happened was, you know, when they were first developing the E1000, uh, the Epic, I think it was the E... 28:54 Yeah, the E1000, not the E1000 GX, people had put down $27,500 as a p- deposit for a position on an aircraft's price. So they paid this and they got a guaranteed price when the aircraft actually went in production. 29:09 Unfortunately, um, due to something along the way that happened, I think costs were more than they expected. Uh, at some point Epic decided, no, uh, your contract's null and void. 29:20 We're gonna charge this much more, and you have to pay us $600,000 if you still wanna get an aircraft at this new price. And a different aircraft, correct? And a different aircraft. 29:29 Well, it was an 1000 GX, so it's more like an upgraded model of the E1000. They decided not to produce the E1000- Oh... 29:37 that they had originally decided on, so-It's a bit of a, a tricky situation and there's a class action against them regarding this. And I don't know, I, I think they kinda have to honor the price. You know? 29:49 You, you gave someone a contract and position, but we'll see what the courts have to say. I think it's very interesting. 29:55 I think in our industry, yes, contracts are key, but you don't go anywhere without a relationship in this industry. Mm-hmm. 30:04 And doing the right thing does go a long way regardless of what you may feel or whoever was in charge before you of the project. Reading their rebuttal of, "We told you you'd have to pay," [laughs] 30:17 It didn't seem like it would hold up, so I can absolutely- Yeah... understand why it was elevated to a class action lawsuit specifically, as more than one party is involved. 30:29 But I do think that there's a greater learning here as a vendor, supplier, manufacturer to operators in the industry. The overall understanding of your contract absolutely is important. 30:41 Writing it in the spirit of your values as an organization is important, and how you operate within them is extremely important. And our industry obviously has a, has a long memory, right? 30:54 Not this particular manufacturer, but certain things do come up over time, uh, with specific vendors and manufacturers and contracts. 31:02 So I think it's really important whenever you are operating that you need to make sure that your partners are aligned in that aspect. 31:11 And sometimes you have to do what Jesse did and read the 376 pages of the report before you know what you're, kinda what you're getting into. 31:19 'Cause from that aspect specifically, it does state from their point of view in the small fine print that it does not constitute for purchasing, right? So obviously that's not in the spirit of the agreement. 31:31 However, what was written in there is different in what they're trying to hold their client accountable. 31:37 So I think those two things obviously are different and you need to understand as a consumer not just the spirit of your agreement, but actually what is in writing, and you have to do your due diligence. Yeah. 31:49 And I have to wonder, you know, if some of this could've been smoothed over with a personal relationship or some sort of open conversation. Like, why did this end up in litigation? Mm-hmm. 31:59 Although, I will say, you know, the locked in base price that they were guaranteed was, like, 2.75 million or up to three million depending on the deal, and the retail price at least last year was 4.8 to 4.9. Yeah. 32:11 So there's a huge difference- Huge... 32:13 in how much that airplane actually ended up costing, but also, like, maybe you should've thought about that before you signed these agreements with people or given yourself a better out in the first place. Absolutely. 32:24 So, I don't know. Absolutely. Lot of important questions- It'll be interesting to see what the judge says. Lot of important questions I think probably didn't get asked. Mm-hmm. 32:33 Then thinking back to, also again, thinking back to 2014, what was the industry like, right? Yeah. Like, to your point, it's so long ago. Um, I think we've learned a lot since then. 32:45 I think manufacturers have also learned a lot, and consumers. Um, but most importantly, those of us that are doing deals need to truly understand the spirit of what we're signing. Uh. Yeah. 32:58 Well, I think you probably wouldn't find this with much larger manufacturers, 'cause I think much larger manufacturers have, like, "We've been through this, this game already. 33:06 You know, like, we think it's gonna cost this much, then the overruns. You know, and then we have these disagreements with customers." But yeah, Epic was trying to- To-... 33:13 start something new and- To your point, probably would've been solved in mediation or to, before it got to this point, to your point. Right. Right. Absolutely. 33:19 But I'm sure this will establish some interesting case law for aviation attorneys out there and manufacturers and all sorts of stuff. Yes. So see how it goes. 33:27 And just, I've also found this interesting too, that while Epic is a US-based manufacturer, it is owned by a Russian billionaire. Um, his name is Vladislav Filev. He also runs Russia's biggest private airline. 33:40 I knew they were made in Oregon, but I didn't know that it was owned by, by Russian billionaires. I'm surprised he didn't get sanctioned a couple years ago. Yeah. Very interesting. Very interesting. Very interesting. 33:51 [laughs] Yes. Well, cool. Well, this has been an awesome show, uh, very interesting. But we're gonna wrap up the pod today because we like to keep everything short and sweet for our listeners. 33:59 This is a good morning commute listen, uh, on your drive to work. Don't forget to subscribe to our newsletter too. 34:04 We cover all the same stories in three sentences or less, so you get what you need each week really quick. Tracy, thanks so much for being here. Loved your input and your energy. 34:13 We, we, we definitely need to have you back on the show. Absolutely. See you soon. All right, folks. We'll see you next time on The VIP Seat.
