Navigating the future of regional air travel: Challenges, opportunities and innovations in the US aviation landscape

Transcript

Michael Miller:We're going to move right in. We have 2 airline CEOs that have given us their time today. Embraer, a great manufacturer, and Fay from RAA. So a really fantastic panel. Joining us today, Timothy Wang, CEO of Delta-owned Endeavor. 150 aircraft and $1 billion in revenue. Dave Grizzle, CEO, longtime industry player of Republic, which is twice as big, 300 aircraft, $2 billion. And we have Martin from Embraer, just recently delivered the 9,000th aircraft, which is phenomenal.

Timothy Wang:Absolutely.

Michael Miller:I guess you could say you're the largest regional manufacturer.

Martyn Holmes:And narrow-body manufacturer.

Michael Miller:And narrow-body, take it. And then Fay, we have a long relationship for, long professional relationship for many years, ascended to the role of CEO of the Regional Airline Association, which as the data shows on your website, 1/3 of all flights are operated by regionals and 64% of all flights that you take are regional-only destinations. Is that right?

Timothy Wang:Close.

Michael Miller:Roughly? Yeah.

Faye Malarkey Black:2/3 of the nation's commercially served airports get their only source of air service exclusively via regional.

Michael Miller:You can say it better than me. So thank you all for being here. I wanted to start with something a little bit different to keep you on your toes. We have a couple of route maps. I'm pushing the advance. And I want you to guess if somebody in the audience knows this route map. We're going to click through these pretty— Quickly, down here for the speakers. Does anybody know which airline this is? Henry Hardefelt says Central Airlines, and there, good job. Next one, Henry, you can't talk. Anybody know who this is? Mohawk. It is Mohawk. So you get an idea of— these are the old airlines of the '70s and '80s that now probably are part of Timothy and Dave's business. So after Mohawk, which by the way flew mostly in Lake Placid, Rutland, Vermont, you can see it's very much the Northeast. This next airline was based in San Mateo, California, flew to Bakersfield and Yakima, Washington, bought by—

David Grizzle:Alaska.

Michael Miller:Howard Hughes. What did Howard Hughes buy and renamed it for himself?

Timothy Wang:Air West.

Michael Miller:Hughes Air West International to begin with, and then just Hughes Air West. So the next one may be a tough one. Basically Los Angeles-Phoenix area pioneered regional jet service in the West with Fairchild 28s and DC-9s. Any guesses? This is a tough one. Who said that?

Martyn Holmes:Henry.

Michael Miller:Henry, stop it. The answer is Bonanza, which was bought by Howard Hughes and turned into Hughes Airwest. Bought with Pacific Airlines and West Coast Airlines to form Airwest and then Hughes Airwest. This next one is close to my heart, and Timothy may know this. Oh, spoiler alert. Upper Midwest. This airline took me to the Upper Peninsula of Michigan for many years. Flew Embraer Bandeirantes, Shorts 360s, later became Republic, then Northwest, then American and Delta. Anybody know? Faye?

Faye Malarkey Black:Great Lakes.

Michael Miller:Not Great Lakes. Close.

Faye Malarkey Black:Chicago Express.

Michael Miller:Simmons.

Timothy Wang:Simmons. Oh, wow.

Michael Miller:So a number of those destinations no longer served. I think we have one more. This one is for Dave Grizzle. It became a Continental Express carrier sticking to Illinois and Indiana only, up and down those 2 states.

David Grizzle:Trans States?

Michael Miller:Not Trans States. Pretty close.

Jim Cezniak:Brit Airways.

Faye Malarkey Black:Gee.

Michael Miller:I didn't know Brit until I started researching. And so finally, this one should be pretty easy for everybody, including our panel. Does anybody know this one? That could be—

Timothy Wang:SkyWest.

Michael Miller:American, Alaska, Delta, United.

Martyn Holmes:SkyWest. Yeah, SkyWest.

Michael Miller:It's SkyWest. So the whole point of this exercise is really 3,400, 2,300 flights every day to 250 cities. SkyWest is no longer the mom-and-pop operation. It is nationwide, serves Mexico. It has more flights per day than Air China, Turkish Airlines, Lufthansa, and EasyJet. So it is more than a regional, and most of the airlines today are more than a regional. So You get my point, getting to this. The RAA stats that we cited are core to your business. Fay, to start with you, the regionals serve 94.5% of airports with scheduled service. How would you characterize this business today? You've been with it a long time. Where it's come from to where it is today.

Faye Malarkey Black:Well, I think it's critical. For most communities in the United States, most airports, regional air service is the connectivity. It is the link to the nation's air transport system and beyond. But not only have those route maps changed, obviously the business relationships have changed. Some decades ago, we started to work in partnership with the major airlines to ensure that communities that major airlines are too large to reach independently could partner with regionals to ensure that that connectivity went everywhere. It's a benefit for the passenger, of course, because they get the experience, they can get the air service that they otherwise would not, but it's a benefit for the mainline partner as well because they're able to reach passengers and communities that they couldn't otherwise reach. The regionals are doing it well by providing a really seamless brand experience. That's another way that the industry has evolved as those Fleet maps have changed.

Michael Miller:Where some of those airlines had 6 or 7 airplanes and they were, you know, marketing on TV in those communities. So for Timothy and Dave, how are you looking at the size of your airlines today and the professionalism needed? I mean, I look at some of these carriers that were small now make up a really large operation. What's changed to today as a regional airline?

David Grizzle:Well, a major factor, Mike, is that those carriers that you were showing who have now disappeared, they were having to do a lot of things, including selling tickets and negotiating pro rates with the airlines that they co-shared with. We and Timothy's the same way. We are a pure play capacity purchase agreement airline, which means that we have we have no fuel exposure. We have no passenger marketing exposure. We have to be good at our operations. So we sell reliability, whereas those carriers sold tickets. That is a major change.

Timothy Wang:Yeah, I think, I think that's a great point, right? Uh, we don't talk about it in this context a lot in our industry, but we're B2B businesses, right? And we— that has its benefits, allows us to really focus on operational reliability. Uh, the other thing I would say, uh, Michael, is really because of the rising cost structure post-COVID, uh, you know, it's in labor, it's in supply chain, it's in, it's in maintenance across the board. Um, we do have to find and unlock productivity and efficiency that wasn't there before. So I think you do see overall a higher level of, I'll call it business sophistication, because the market is demanding that.

Martyn Holmes:Right.

Michael Miller:Martin, anything to add about what you've seen in this business?

Martyn Holmes:I think it's, it's fairly obvious how important this space is to Embraer, right? You talked about the Bandarati going back in time, but it was only in the last couple of years we announced, you know, 90-plus aircraft with American Airlines, 60-plus aircraft with SkyWest. We've got a huge backlog with Republic. I mean, it is part of Embraer. We're investing in the 175. We've put new overhead bins. We're putting mood lighting in. We're investing in the technology. We will still see this part, this space, hugely important to Embraer.

Michael Miller:What's changed in some of those negotiations that you've had? Because obviously the numbers are larger. All of a sudden regionals are ordering 100 planes at a time, which never happened before.

Martyn Holmes:I'm not going to get into the details of negotiations.

Michael Miller:Well, just what's changed?

David Grizzle:What's changed? Let's talk about that.

Martyn Holmes:No, no, let's not.

Michael Miller:How much?

Martyn Holmes:Look, I, I think You're talking with huge organizations now, right? It's part— I mean, it's also part of that symbiotic relationship you talk about being a CPA provider and the mainline carriers and everything. It's all how they interwoven, right? So it's our job to be there, to be there for the provider and providing a product and a reliability that enables your customer to be happy with you as well. So that's part of the whole infrastructure that we look at.

David Grizzle:Yeah, you're not just selling to us, you're effectively selling to our customers as well.

Martyn Holmes:And we have a relationship with them to understand what we need to be— keep evolving to deliver a service for them.

Michael Miller:So you talked reliability, and one of the issues that probably close to Fay's heart too is the finance gap for pilots. So there's been this pilot shortage during and after COVID, and then you've had a recovery. Are we where we need to be, and what is that, that financing step that needs to be made to still make it a profession? There are a couple pilots here today. Can it be still affordable?

Faye Malarkey Black:Well, I'll start with that, and I'll kind of just briefly with the history. I mean, at its most acute stages under the pilot shortage, this industry was parking hundreds, almost 1,000 jets, and small communities bore the brunt of that service retraction. Are we where we need to be? Things are stabilizing now, but a lot of those stabilizing forces are external. You heard the administrator this morning say that he would— thought the FAA would be certifying the aircraft, so some of that stability and the relief in the attrition has come from the slowdown of our mainline partners' aircraft deliveries. So the pilots that they had hired to fly that fleet, when the fleet didn't come online, they didn't need more pilots. Already this year, major airline hiring for the first 3 months, and it may have softened a a little bit, has outpaced the production of new pilots. So are we where we need to be as an industry? No. I think the answer is an even firmer no when it comes to access and people being actually able to afford this career. Student loans were never built to cover the unique expenses of flight education. You've got insurance, aircraft, instructors. It's just inherently expensive. And even when you're heavily subsidizing and providing tuition reimbursements. Nonetheless, people are being held out of this career because it may cost up to $200,000, and student loans will cover, you know, it leaves about $80,000 for families to try and bridge the gap. So those with wealth turn to the bank of mom and dad. Those without wealth sometimes can get private loans with higher interest rates, but for those without either of those factors, that gap becomes decisive. We have people who are locked out of this career for no other reason than the fact that they can't finance it. These are incredibly transformative careers on the other side. We do propose a fix. We've got legislation we expect to be reintroduced in the House that would right-size those student loan gaps so that more people can access these transformational aviation careers.

David Grizzle:I think another factor, because they are not able to get financing, is they end up Acquiring their hours doing what I call cheap flying. So they accumulate their hours by pulling a banner on the Jersey Shore or doing crop dusting. And we have found that people whose principal experience is crop dusting are not all that situated to fly in the congested airspace of New York City.

Martyn Holmes:Yeah.

Michael Miller:So Republic has a well-known and well-honored flight academy. Can you give us an update of how many pilots you're pushing through there, or how many Uh, people start? Is there a failure rate that's— I know a couple years ago I know there was a pretty high failure rate, but how's it going now?

David Grizzle:With regard to the failure rate, we have done the same thing that, uh, Secretary Duffy has done at the academy at the FAA, and that is that we have raised our entrance standards because we realized that we were, we were achieving our admission numbers, but our washout, our washout rate was increasing. And so we've increased our standards, reduced our washout rate, and our throughput is actually better net-net from doing those 2 things. And so we're now providing almost half of our pilot supply through people who originate in our Lift Flight Academy and then move through, either they become CFIs or they fly for one of our 135 partners. And so it's been a game changer for us.

Michael Miller:Timothy, what about your experience?

Timothy Wang:Yeah, so we— our program is called Propel, right? And we in the last few months decided actually to merge the Delta and the Endeavor programs into one single flow program into Delta. And I think that that says a couple of things. One, to your earlier question, Michael, on is this something that's still top of mind? It absolutely is, right? And it needs to continue to be. One of the challenges of supply and demand of pilots is, is temporal. It's— there's a lag, right? So young people see, in addition to the obstacles that Fay talked about, which I agree with, whether they're financial or awareness or other, there's also this time gap of saying, well, the market's great for pilots, rates are going up, everybody's hiring, let me go become a pilot. Well, it takes 3 or 4 years to get there. And by the time that happens, the industry is somewhere else, right? So how do we bring those 2 things together and make it a little more steady and match up supply and demand is key. The second is, while we're here representing the regional industry and talking about regionals, it's obviously an— it's a question for the whole industry because our pilots, we're the front door at regionals, but then they do matriculate 2 mainlines for the most part, right? And so the mainlines are just as acutely aware of this. And that's why, at least in our enterprise, we've decided to merge the 2 and make it a single program so we can provide consistent support at the right level.

Michael Miller:So was Propel developed with Delta jointly, or did you develop it on your own?

Timothy Wang:We had a program called STEP that was very similar to Propel. It was done in coordination with Delta, but they were recruiting at separate schools. They were recruiting for separate roles. Now it's just— we realize it's one big travel ribbon, right, for someone's career. You start at the school, you then go in at a regional. You're not going to go straight to a mainline. And then you move— for many of our pilots, you move to a mainline. So we merged the two.

Michael Miller:And Martin, you've spoken at FAES, Regional Airline Association Conference, you know this is an issue. Is Embraer entering this space at all for pilot development, career information? Are you trying to develop the industry at all?

Martyn Holmes:We're not getting involved in the training of pilots. There are people better suited for that. These gentlemen can prove that. But what I would say is commend them. I mean, if you think of the importance of aviation to the economic success of the United States and Canada, This is to your point about the bigger picture and pushing the pilots through that. It's of eminent importance. I would have thought that the whole of the United States is looking at what you guys are doing because it provides that GDP growth that the US needs.

Faye Malarkey Black:Before you move on from workforce, I would just say too that it's not just pilots get all the attention, but we have a looming and, well, frankly, present now shortage of maintenance technicians. I think as we look at what we're doing to recruit, we've broadened the lens. It's not just pilots, but this entire, across the universe of all of the future employees. We're looking at dispatch, et cetera. I think we all have to work a little bit harder to make aviation careers more attractive.

David Grizzle:The maintenance piece is very important. We've also started a facility for training our mechanics. And in some respects, supply of mechanics is more challenging than pilots because pilots are very mobile in a sense that where they are, where they fly from bears no relationship to where they live. Not the same with mechanics. They're, they're going to work where they live.

Michael Miller:Interesting. But how acute is the shortage? Is it worse than pilot shortage?

Faye Malarkey Black:It's looking— it could get worse fast. And as you look to bring on new aircraft and you bring back the jets that were They're all going to need heavy maintenance. They're all going to need a lot of work. And I think to David's point in particular, you know, regionals are in the spokes. And so sometimes you're flying a maintenance technician out to take care of that aircraft there. So it is a big problem, and I think it's poised to get bigger if we don't act to make, you know, STEM a little bit more attractive. Again, you know, it's not as in fashion now to talk about reaching out to more women and other underrepresented populations. But when you look at the maintenance technology workforce and it's something like 6% or fewer are women, I think we have a part of the answer to our problem right there.

Martyn Holmes:Yeah.

Michael Miller:So the undercurrent and the first answer to every question is what's your priority? It's safety. I wanted to pivot a little bit because we've had a couple of regional crashes, regional aircraft crashes, not always the airline's fault. Some of the information out is pointing fingers at air traffic control or the system in general. Is there enough being done, for example, after the DCA crash, the midair collision where there's video of it, there's air traffic control language of it, and the FAA's response recently was somewhat criticized by The NTSB. What needs to happen next? Are we doing enough for safety in light of these crashes? Dave, do you have any—

David Grizzle:We can always do more, and we need to do more. When I was Chief Operating Officer running air traffic control, we had exactly the same problems that the FAA currently has in getting the Pentagon to cooperate with procedural accuracy. And so what happened in DCA is expressive of a relational problem that has long preexisted this administration. It goes a long ways back. And we need to have better cooperation between all of the users of the airspace, including particularly the military users.

Timothy Wang:Right.

Michael Miller:You had to deal with this in Canada recently.

Timothy Wang:You know, I think David answered, I think, very well the regulatory ATC side of the coin. Of course, when it comes to safety, there's a whole other side of it, which is what are we doing as an industry? And AI is, of course, the topic du jour for a lot of reasons, not just in aviation, but across the board and on Wall Street. I think that the AI question has come up a lot in the last couple of days in terms of what are airlines doing to embrace AI? Are they embracing it? How far will it go? I will say that definitively for us, and I think I can speak for many of my colleagues, the application of AI in the safety space in terms of finding trends that humans just cannot because of the sheer quantity of data, Or because data is siloed and they look independent, but we all know after the fact that actually there is a correlation. That is the— that is Exhibit A for a prime use case for AI. And we're, we're embarking on that full speed ahead. Um, uh, the, the, the, the data points that we're able to capture because of the equipage, because of our aircraft, because of our systems is tremendous now.

Jim Cezniak:Yeah.

Timothy Wang:This next step of connecting those dots and finding things that may escape a person, a human's attention, is going to be key. And I think it's going to unlock a whole new level of safety production that we haven't seen. And as David said, that's exactly our goal as operators. It's never a destination; it's always a journey. But I am, I am very bullish about the ability of AI and ML. to add to our safety profile, which, by the way, you did lead the question with, we've had some high-profile incidents. We still have a record, whether it's in the regionals, whether it's in mainlines, that is the envy of other transportation sectors and here in the United States, the envy of the rest of the world that we're very proud of. But we're going to keep focusing on making it better.

Martyn Holmes:Great.

Michael Miller:Fay, do you hear— I mean, AI is everywhere.

David Grizzle:It's—

Michael Miller:questions are asked, but in your role in Washington, are you hearing more questions of, from people in Washington or from your airlines of we need to do more? Is there something more happening on the AI front, or is just, you know, everybody, all your members are working on it?

Faye Malarkey Black:Well, I think AI is one of the most, you know, obviously it is the advancement that everyone's looking at, and it's got a role in everything from safety And Timothy articulated that at the airline carrier, but also the association uses that. In our safety council, we share that information that's fed up to the aviation safety team at the FAA and works with industry. So AI has been incredibly important here. I think David could tell you more about how AI is used in predictive maintenance, and Martin as well. So it really has been transformational. But I do want to get back to your safety question. Because you talked about DCA specifically, and understandably, that gets a lot of attention. It's very critical.

Martyn Holmes:Mm-hmm.

Faye Malarkey Black:And addressing the risk at DCA has been something we've been engaged on. As David said, we need to do more. But I would caution that risk is not limited to the, you know, the 25 largest airports, and close proximity events are risks that are present in every type of airspace. Regional airlines, you said it in your opening, we operate at 94% of the nation's commercially served airports. What that means in practice is that we're in more types of airports, we're in more classes of airspace than any other sector. And where we're seeing risk that we mitigate today is in Class D and Class E airspace. And it's not always just with military, but also with GA. And there are some common sense tools that we can take to those airports, having situational awareness tools in contract towers, limited service towers, and also simple procedural changes that don't cost anything. For example, right now in some Class E airspace, it's recommended that GA communicates on the CTAF and declares their intention within not just terminal space, but also in any commercially served airports, but it's not required. We ought to make that required.

Michael Miller:So give us an example using Class D and E airspace. I mean, real world. You're not talking about big airports. You're talking about in the country somewhere in the middle of nowhere where there is no tower. So what would be an example that, that you, you're a little concerned about?

Faye Malarkey Black:Well, you know, they, they say that the next accident is in your data, but I think the next accident that you prevent is also in your data. So we do look at that. We don't isolate it down to a specific airport, but we do see where there are hotspots. We share that with the FAA. We share that with one another, and then we make recommendations like this.

Michael Miller:So Martin, on the Embraer side, in terms of safety and innovation, what are you bringing to the table?

Martyn Holmes:Well, as we said, safety is always an evolving process. We're always working on it. It's got a great safety record, but what can we do as an OEM We just keep working on the technology, looking at that human-machine interface, making sure that we can bring technology to bear that reduces pilot workload, increases situational awareness, enables pilots to make decisions with the right information, the pertinent information at the time. So there are technologies that work on like ADS-B In or ROAS or ADT. These are things we evolve, and you're right, AI is prevalent everywhere. There's Lots of streams now that we're looking at. So we want to keep working with the airlines, with the authorities, so that we can keep bringing technology that just improves all those aspects to enhance on what is already a phenomenal safety record.

Michael Miller:So is there an example with your newer E2 aircraft that is a standard technology that maybe was optional or not even available 10, 20 years ago? ADS-B In, which is, as you guys will know, So explain what ADS-B is for anybody who doesn't know.

Martyn Holmes:It provides the, the, so if you can, the real-time positioning of the aircraft back to the pilot as well.

David Grizzle:It's a situational awareness tool in the cockpit, right?

Martyn Holmes:So as opposed to ADS-B out, it's coming into the cockpit, right? And we actually on the E2, on, on the narrowbody side, we have a thing called TCAS and ADS-B in is part of that, for example.

Michael Miller:Traffic collision avoidance. Yeah.

David Grizzle:I wanna say one thing more about, about AI. We've made a decision at Republic that even though we risk being a late adopter, we are not going to use AI to make decisions, but we are going to use AI extensively to help humans make better decisions.

Faye Malarkey Black:Mm-hmm.

David Grizzle:Because we are more comfortable with the outcomes that we think we will get over the long term by pursuing that path.

Timothy Wang:Couldn't, couldn't agree more with that statement. That's exactly where we are, and I think much of the industry. And I think we're going to be there for a long time in the foreseeable future, because this was talked about by a lot of panels who've sat up here, but the, the decades and decades of experience and expertise at all of the airlines is what has created the safest aviation environment that's ever existed. So we're not going to abandon that approach that clearly works.

Michael Miller:Mm-hmm.

Timothy Wang:Our approach is to make it better through augmentation, through changing really data from noise into figuring out where the signal is, into something that is, uh, uh, data for data's sake doesn't do anything, but if it drives better decision-making, that's the key. And I think we're in an industry that sometimes we lose track of this because, um, uh, you hear about big data so much today. today in the news in the tech space and in the AI space, this is the industry that invented big data, right?

Faye Malarkey Black:That's true.

Timothy Wang:TSSs were built by airlines because they didn't exist, and this industry realized the importance of real-time accurate information for inventory control to begin with, right? And it expanded far beyond that. So I think actually it's time for us as an industry to reclaim that mantle. We're not technological Luddites here. We're actually on the cutting edge, and we are once again, but in a very responsible way, as David articulated.

Michael Miller:I mean, I don't know how many people can look at the innovation in aviation from the ticket selling process, you know, online buying. So much of the innovation is now when you go to a stadium for a football game, you're using the same technology that airlines and So I want to turn to the audience for just a second if there's anybody who has a question. Now that I can't see—

David Grizzle:I see a hand right there, Mike.

Michael Miller:Okay, please identify yourself.

Jim Cezniak:So Jim Cezniak, Houston Airports. A question for the regional airlines. With eVTOLs coming out, is that something where you're going to see that kind of become a part of your operations? You know, is that something that in the And then the question that I always think on that one, though, is that from a pilot perspective, how, you know, if we've got pilot challenges right now, we're going to add a whole new class of planes that may, you know, kind of worsen that.

David Grizzle:I am confident that eVTOLs will play a role in Republic's future, but we are planning to engage eVTOLs in the same fashion with which we engage Embraer 175s, and that is to say that when we have a customer who wishes to pay us to operate that particular type of equipment, we will then operate it. We will not be taking a speculative position with regard to that equipment.

Timothy Wang:Yeah, very good question. I think the eVTOL, really all of the revolutionary fleet, a lot of the partners are here, right? And we've all been weeks, and months is extraordinarily exciting, right? That's why aviation, I think, has that sheen of future and cutting edge that it used to have that I think we're regaining. And what— look, the fact of the matter is not all of the solutions that the marketplace is serving up is actually going to have a place in the operational world, right? You've got to find that fit. But what they are doing that I greatly appreciate, and that's why I'm here, is they're Endeavor and Delta are leaning into helping and partnering with these innovators is they're pushing the state of the art. And that may be in hybridization, that may be in traditional engines that are open rotor and more efficient, that may be in lighter weight materials. You name it, the state of the art is being pushed. The boundaries are being pushed in all of those areas. What we do know, and the timeline is unclear, if we all had a perfect crystal ball, we'd be doing probably something else a lot more lucrative. But what we do know is that the industry will evolve, and we know that there will be, that revolutionary fleet will come because the demand is there. We don't have enough aircraft to support the demand as it is. As the world creates a larger middle class, there are still billions with a B of people who've never been on a plane who will want to get on a plane. So the demand is there. The supply is going to have to catch up to that. And we know it's going to start with a smaller scale. Right now it's an eVTOL that does, you know, can carry 4 people, maybe 9. Well, at some point that's going to scale up to our sweet spot, which is the 70, 76. And I think that, I think we'll see that sooner rather than later, and then that technology will evolve further into the rest of the industry, including widebodies. But I think it's extraordinarily exciting. Where it all fits, we shall find out.

Michael Miller:Well, if you look at the evolution of the business, you see 737s that were never supposed to go across the Atlantic, and the 737 MAX has this Who would fly that? Would you want to be on that plane? Well, a lot of people are flying that now. And you look at Brazil with Azul started operations that were taking people off buses. So 75% of the people in Brazil had never taken an airplane. And now they have this huge network of operations because nobody tried it before. So there's a lot of innovation. How do you look at some of these eVTOLs? Is that ever something that you'd look at?

Martyn Holmes:Well, We're involved with a side project where we have a majority shareholder in Eve. Some parts know about it here.

Timothy Wang:Yeah.

Martyn Holmes:It's had nearly 60 flights now. It's not just about the technology of the vehicle as such. It's also the air traffic control, the infrastructure around that, which we feel that we can add a lot of value to. We have a lot of experience on how to certify aircraft and get them there. We're leveraging that in the EVE project, which I see is— it will be a success.

Michael Miller:What's the seat range that you're looking at?

Martyn Holmes:I think it's about 100 miles and about 4 seats, that type of thing.

David Grizzle:Once again, as I said with respect to Martin's products, I think it will be the major airlines that drive the adoption of eVTOLs. They're the ones who have to welcome them onto their ramps and their hubs. They're the ones who will have to We need to put in place prorate deals if they're gonna fly out of hub. And so again, look to what the majors wanna do, and that'll tell you where the industry's going.

Michael Miller:So what's your timeframe, just a general, of all 4 of you, when do you think we'll see a Delta logo or an American logo or another logo on the side of an eVTOL flying people from Des Moines to University of Iowa? 20 miles away?

Martyn Holmes:Well, it could be whether it's in Manhattan or whether it's the Greater Bay Area or, or Great— Greater London, I think.

Michael Miller:But how long from now?

Martyn Holmes:I don't think it's more than about 2 or 3, 4 years away to see that. We've already got firm orders. We've got over 2,500 LOIs. We've got firm orders now. Things are moving, but we now got to go through the certification phase, and it's the infrastructure phase as well, and the take-up of an A completely new business model.

David Grizzle:It's a new business model entirely.

Timothy Wang:I would agree with that. You know, Delta has a relationship with Joby that's, that's of course been public. And so, yeah, which it could be on a, you know, on, on eVTOL. I agree with Martin.

Faye Malarkey Black:It's—

Timothy Wang:we're a handful of years, right, on one hand. But then the question is, when do you get to scale? When do you get to a meaningful impact on the business model? I think that's That timeline is pushed further out.

Martyn Holmes:Yeah.

Michael Miller:So any other questions that we have time for? Anybody want to raise their hand? As we wind this, this panel up, I'd love all 4 of you to answer the question of what is a perception of the regional industry that you would like to change and how would you change it? There are lots of perceptions of the airline industry of not caring for customers or something, but Which we all know is not the case because the one bad flight, the one bad storm just makes the national news and people think, oh, you know, this industry is just a mess. But there's lots of perceptions out there. What are— what's one that you'd like to improve?

Martyn Holmes:People's perceptions, you can speak. For me, regional aviation can be efficient, it can be comfortable. With modern technology, you can deliver that. I would like to see more flexibility going forward around some of the scope limitations because that, especially in terms of weight, restricts the ability to bring in new technology that would have lower CO2, lower emissions, better fuel burn. That would be a facilitator. I'd like to see attention to regional aviation in that respect as it's a growth engine for economies.

David Grizzle:I would like to associate myself with Martin's remarks and further say, though, that I'm, I'm really quite satisfied with the way the regional, at least the major regional airlines, are regarded right now. We, Republic, we are the largest carrier in New York City, the second largest carrier in Boston, and the third largest carrier in the Washington, D.C. area. We are well regarded. There is no avoidance of our aircraft.

Jim Cezniak:Right.

David Grizzle:And so I'm really quite satisfied with how the public regards us and I think the larger regional industry as a whole.

Michael Miller:I like that positivity.

Faye Malarkey Black:I would add to that as well, and I'll associate myself with both of your comments.

Martyn Holmes:Thank you.

Faye Malarkey Black:But I will, I will add a distinction. I think that it wasn't always that way.

David Grizzle:It's true.

Faye Malarkey Black:And regionals, you know, existed to ensure that there is air service in communities where where nobody else is serving. It's really, really critical infrastructure, but it's not so much that it was purely taken for granted, but it wasn't well understood, and there was often this perception that if the regionals went away, that somehow the major airlines would come in and backfill all that flying with mainline aircraft into every airport, and we know that's not true. Unfortunately, when the regional industry contracted, small community air service began to hemorrhage their flights, departures, and destination options. As our industry has gotten healthier, that has gone in the opposite direction. But that understanding has been intentional, and it's been showing up. It's been talking to the press. It's been talking to the communities. And even though the regional airlines are mainly fee-for-departure, they view that as a very profound commitment. And they truly partner with the communities, and I think that's made all the difference.

Michael Miller:Great.

Timothy Wang:So I disassociate myself with all my panelists. No, I'm kidding. No, great, great, great answers that I certainly agree with. Look, I think the point that David made and Martin made about that perception, we, you know, the perception gap, if there was one, has largely closed. And I do believe that to be true across the board. We had a very concerted effort at Delta for about a decade that was called Same Except You. And the point was to say for customers, they don't know what plane they're on. They know they have a brand promise that was made to them by the major brand, and they expect that to be upheld, whether that's on reliability from a cancellation perspective, from an on-time perspective. Comfort for us now, Wi-Fi, which our fleet, our regional fleet is 80% complete on with high-speed Wi-Fi. It's got to be there. But moving on to the wish list part, I think ensuring some variation of what they said, we have to make sure that the regional space isn't an afterthought, right? I do think that the chase for scale, whether that's among the operators or among, frankly, the suppliers, chain or the OEMs can be alluring. I do understand a bigger plane you can sell for more money, but I really appreciate what Martin and his team and, and a whole host of other suppliers that we have that are strong partners that understand the regional space is here to stay. It's not that we're always going to upgage our way out of this and it's transitory. That's not fact, fact-based because as demographics shift, we're actually seeing more demand in smaller airports that only accommodate regional aircraft. So that, that, that piece of segment of the industry that we occupy, whatever shape and form, whatever aircraft it is, that gauge is going to be here to stay and it's going to grow. So we need, we need the support of the whole industry to rally behind that.

Michael Miller:I agree with all of you. No, to circle back to the, the route maps that I put up there, I mean, I've spent nights in airports in the '70s and '80s because there was only one flight a day. And all those mom-and-pop operations have led to highly efficient, very safe, I mean, fantastic operations. And your airlines, I'm on all the time. Sometimes I don't even know it until I'm on. Oh, this is a Republic flight. And so kudos to you and to Fay. Martin, for keeping that safety culture high and for really making this a fantastic industry that I'm proud to be associated with. Thanks.

Timothy Wang:Thanks a lot.

Michael Miller:Thank you. Please give a hand to our panel.

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