Airline CEOs Defend Coach Seats
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What is the main topic discussed in this episode?
Your Money Briefing. Money and market stories from the Wall Street Journal. I'm Tanya Bustos in New York. Have you ever been vacuum-packed into a shrunken coach seat wishing the airline's CEO had to endure the same discomfort? The Journal did that for you, sort of. The middle seat asked the chief execs of the three big U.S. airlines to have a seat and see if they think the skimpy confines of coach today are acceptable. First, these money headlines. The U.S. is set to start promised talks with the European Union.
How did the Wall Street Journal set up CEOs to test coach seats?
Larry Kudlow, President Trump's chief economic advisor, said that talks to forge trade agreements on farm and energy products would begin right away. Mr. Trump agreed with European Commission President Jean-Claude Juncker last week to bring a truce to a trade dispute that had erupted after Mr. Trump imposed tariffs on steel and aluminum. Speaking of, U.S. tariffs are carving up the meat industry. Tyson Foods in particular shaved its profit outlook due to trade tensions. The journal writes that this week it lowered its earnings projections for fiscal year 2018 by 10 percent to 13 percent, citing uncertainty in trade policies and increased tariffs. Tyson is directly impacted by China's 25 percent tariffs on beef, chicken and pork imports and Mexico's 20 percent pork tariff, both levied in retaliation against U.S.
trade actions. And Goldman Sachs' last batch of crisis-era stock options will have earned top current or former execs at least $3 billion by the time they expire later this year. A review of regulatory filings by The Wall Street Journal shows how far Wall Street firms have come since the crisis. Case in point, shares of JPMorgan Chase continue to see new heights. And while Goldman Sachs is less profitable than it was a decade ago, its share price last year surpassed the previous high set in 2006. This is Your Money Briefing from The Wall Street Journal. Welcome back. When airline CEOs try the cheap seats, the leaders of major U.S. airlines, Delta and American, tried them. They've defended the tightest sections of their planes.
This is after actually sitting in them. The Wall Street Journal's middle seat columnist, Scott McCartney, tells us all about it. He joins us from Dallas via Skype right now. Hi, Scott. Good to be with you. So before we get into... the CEO experiment, let's just confirm the consensus. Coach is awful, right? Lots of things on airlines have certainly improved. I don't think a lot of people list coach among the improvements. Am I wrong?
No, you're spot on correct. It's a huge frustration for people. The seat rows have shrunk. Bathrooms have shrunk. The fees have increased. It's one of the most common complaints I get from people. There are just more bodies in the same confined space. For some people, it's even claustrophobic. It produces all kinds of anxiety just being that close to the person in front of you who's sneezing and coughing.
How true it is. So you invited three of the top execs from the top U.S. airlines.
Which airline CEOs agreed to try coach and which refused?
Who was up for the challenge and what transpired?
Yeah, I thought this would be pretty simple. I just wanted to interview them about Coach in their Coach cabins and have them explain to travelers why they thought this was a good product. The CEO of Delta, Ed Bastian, agreed to do it. After he agreed, the CEO of American, Doug Parker, agreed he would do it. But the CEO of United, Oscar Munoz, wouldn't do it.
Okay. Well, we were able to get two in the hot seat. Now, there was clearly no way they were going to dress this up, right? So they're not apologizing. It seems like they get it, but, you know, their stance is, yeah, we know, but you can always pay more. Is that kind of the gist of their response?
Yeah, I think so. I mean, you know, to sort of put it in a global context, this is an industry that for decades lost money regularly. And, you know, these guys have worked very hard to come up with a business model that works. They're making lots of money now. Their companies are more like industrial companies. They're, you know, putting up good profit margins.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–0:34
2
How did the Wall Street Journal set up CEOs to test coach seats?
0:34–3:11
3
Which airline CEOs agreed to try coach and which refused?
3:11–4:33
4
What did CEOs say when asked if coach seating is acceptable?
4:33–6:13
5
Why do airlines intentionally make coach seats smaller?
6:13–7:47
Speakers
2 identifiedMore from WSJ Your Money Briefing
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