ISTAT Jetrader - Winter 2020 - 18

We went all mask early in April, and
it's been very, very effective in keeping
our passengers and crew safe.
What are the biggest lessons you/your business has
learned from the crisis?
JB: We've always valued flexibility and nimbleness, and that
means not just operationally being able to turn on a dime, but
also the way that we build up the finances of the company,
with minimal fixed costs so that we can be as variable as
we possibly can be. Secondly, we've made this push toward
diversification. When I got here, we were basically a leisure
operator with a high expense base and relatively high service
level but focused on the Minnesota-originating customer, and
that's just really concentrated. We were really exposed, and
so we've reduced costs, particularly fixed overhead, and then
diversified into cargo and built up our charter business as
well as a VIP Business that we launched out of LA taking folks
over to Kona on a shuttle basis. It's a subscription model, so
it's not dependent on machinations and fare. We're signing
long-term deals with some of the leagues we support. Our
core businesses is still taking folks from the Twin Cities on
vacation, and I don't think that'll ever change, but in order to
be there for those folks when they want to go, we need to be
able to sustain the fixed costs of our business through other
ways and reduce the fixed costs overall. So, that's what we're
working on, and COVID certainly reinforced that philosophy.
How might your business/the industry change
post-COVID-19?
JB: We want our folks to be safe and also feel like they're
safe. People don't have to tell me if they get COVID on my
airplanes. But my crew, of the flight attendants that we have,
which is about 600, we've had three cases. They got COVID
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outside of work. Masks seem to be the best thing that we can
do on the airplane with respect to COVID. We've also stepped
up our cleaning. We have an ionized spray disinfectant that
we use in the airplanes on overnights, so we're doing a lot of
other things, but masks seem, by far, to be the most effective
tool that we have on an airplane today. We went all mask
early in April, and it's been very, very effective in keeping our
passengers and crew safe. Honestly, I think that's best thing
we can do.
Anything else worthy of note?
JB: We should talk about assets a little bit. There's lot of
talk about the MAX coming back, and I'd be very curious
to know which airlines in the whole world believe that they
want more metal right now. As a private company, and one
sponsored by Apollo Global Management, we want to be
there to take some airplanes opportunistically during this
crisis. I think there's going to be a lot of opportunity. Even
if it's for airplanes that will defer maintenance on the rest
of our fleet through teardown. We're excited about trading
into this market because there's a ton of capacity out there,
and I'm really interested to see how this changes the leasing
community on a go-forward basis. Some of the leasing
philosophies and securitized debt in the space when they
market, diversification by aircraft type, jurisdiction and airline
credit - this COVID situation has blown that up. Hopefully
we don't have to deal with hearing about that anymore
because I think that's a false premise. It's a global industry,
simultaneously affected by downturns, as we've seen 10
times every 10 years for the last 30 years.
ISTAT Jetrader - Winter 2020

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