00:00So United is basically expanding their international network.
00:03They're making a bet that Americans will want to travel overseas.
00:06And so that's where the big growth for the industry is going to come from.
00:10And so Newark is betting, United is betting on Newark,
00:14and they're sort of expanding their international longhorn network from Newark,
00:18as well as other airports in the US.
00:20But given the fact that Newark is obviously one of their biggest international hubs,
00:24this is a significant moment for them.
00:26And what they're actually doing is they're using an aircraft called the A321XLR,
00:31which gives you the economics of a narrowbody aircraft.
00:34So think of the aircraft that typically you fly domestically,
00:37and that's the aircraft they're going to use.
00:39But instead, this aircraft can fly for eight hours over the ocean
00:43and essentially offer you the same sort of economics that you would get
00:47on a narrowbody aircraft without having the risk of having to fill up a big widebody jet
00:52like the 777 or the 787 that they typically fly.
00:55So American is betting that Americans will want to travel overseas
01:00at a time when the rate of inflation is rising,
01:03when airfares are rising, when the economic outlook is uncertain.
01:07Is that a good bet?
01:09So United has a bet on the fact that there is a huge demand for premium,
01:14as well as leisure travelers who are sort of well-heeled.
01:18I mean, they've talked about how the average income for their typical customers
01:22is much higher than the typical U.S. airlines.
01:25And so United has sort of always bet on these high-paying,
01:30sort of more affluent customers.
01:32And that bet has paid off because they, along with Delta,
01:34are the two most profitable airlines in the industry.
01:37And that's the sort of bet that United is looking at,
01:40where you can sort of add more international routes,
01:43sort of get that FOMO traveler,
01:45the traveler who wants to go travel to exotic destinations
01:48like Valencia and Ibiza in Spain from America.
01:53And that's the customer that they're targeting.
01:55And with the A321XLR, you have a much smaller plane,
01:58so you can fill up that plane much more easily
02:01versus a much larger plane.
02:03Is United going to cut back at all on what it offers domestically,
02:07you know, as it provides more options for people
02:10who want to leave the country, to travel out of the country?
02:13So they said they will not reduce their domestic frequencies
02:16as they expand internationally.
02:18They're getting these new aircraft like the A321XLR,
02:22which will allow them to increase both their U.S. network
02:26as well as expand internationally.
02:28But they talk about how the significant growth to their network
02:31will come from international.
02:34This is Airbus, not Boeing, right?
02:37This is the Airbus A321, yes.
02:40What's wrong with Boeing?
02:42Boeing doesn't really have a product that competes
02:44with the A321XLR in terms of being able to have that range
02:48that the A321XLR has.
02:51It does, Boeing obviously has a 737 MAX,
02:54the MAX 8, the MAX 9, the MAX 10.
02:56But obviously the MAX 10 hasn't yet been certified
02:59and it also doesn't have that same range that the XLR offers.
03:03And so there is this aircraft that Airbus has in a niche
03:06that doesn't really have a rival Boeing product.
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