Richard Aboulafia - Managing Director - AeroDynamic Advisory - YouTube
https://www.youtube.com/watch?v=dOMxVV-hvSU

Transcript:
(00:00) I don't see us catching our breath from a supply standpoint for another 5 years at least this appears to be a supply constrained situation not just for Aerospace but for a lot of most other sectors of the economy and will probably remain that way for some [Music] time this is the time on wi podcast Edition 20.
(00:29) 0 I'm Courtney Miller with visual approach and itics with me as always dutifully Garrick dean of collateral verifications Garrick who are we talking to today so today we have another great guest for show number 20 um we actually have Richard abolafia and uh it should be a name that I think a lot of our listeners are familiar with he's been doing what he's doing for quite some time um and he is an expert in his field so Richard is currently the managing director for aerodynamic advisor but before that um you might have known him from a little company called the
(01:05) teal group um he was there for a little over 30 years he basically uh wrote and edited the world military and civil aircraft briefing he was also oh he did and market analysis for Jan's information Group which uh James people should be familiar with if you know anything about airplanes and he also supported research projects for the Brookings institution um he has a bachelor's from George Washington University and a master's in war studies from King's College in London he is a uh fellow of the Royal aeronomical Society
(01:36) uh he writes articles on a regular basis and is regularly quoted for Aviation week for.com Wall Street Journal Financial Times professional Pilots amongst others um he's also appeared on TV and radio programs on some of the small networks like ABC BBC Bloomberg Reuters CBS CNN NBC NPR PBS you name it um yeah if it's out there he's done it Richard this is your time on Wing just a quick intermission before we continue with the show we do get a lot of questions about how our listeners can support the show and you can uh support
(02:13) the work that I do through Visual approach by visiting visual approach. where we produce a lot of research and Analysis a lot of data visualizations from my side obviously I focus more on Metals so anything that's you know aircraft related uh if you're looking for valuations whether it's on aircraft engines happy to help with any of those types of projects um so we we appreciate you know certainly the opportunities to to work with all of you and we certainly also appreciate just the fact that people are willing to listen to what we
(02:41) have to say and enjoy kind of our thoughts and takes on what we think is a fascinating industry so thank you okay back to the [Music] show Richard thank you for for being on the podcast you know it's certainly uh it's nice to have you on and uh so if you've had a chance to listen to some of the stuff that we've done before one of the things that we ask our guests is kind of we'd love to hear kind of how you got your start where the passion came from obviously you've been doing Aerospace Aviation for a long time and
(03:15) so it'd be great to hear how it all started right where where was that little click that went hey you know what this is what I want to do for for the rest of my life um so please tell us yeah you know it's it's funny I live in Washington I've been here for a very long time aside from grad school you know I've been here since 1980 my God one and and I remember coming here for the first time thinking this is a really cool town there are a lot of super interesting people it's a very International City and uh I I was
(03:43) fascinated by this marks me as a Washington tonian because it's about the only time you're ever get hear they use the word policy the word policy in like some kind of promising oh cool I want to be a policy W sort of way uh but I was really inspired by that sort of person and uh it quickly became very obvious that the Aerospace and defense component of that was the most interesting but you know even before that I mean you look back at the sort of positive messages you get for Aviation growing up and and
(04:14) I remember all of them you know grew up in a really super boring Place jetliners could take you away from that that's a very positive message uh you know they take you somewhere interesting and of course as deregulation and fairs came down it became conceivable for a middle class club like me that's good my dad was a a World War II foot soldier whenever he talk talked about Aviation that too was very very good it was like there are planes for our guys going overhead that will defeat the enemy and allow me to stop fighting this battle
(04:47) faster you know just that's a good message you know similarly as as kind of a child of the Cold War it was pretty obvious that if the the bad old Soviet Union ever came barreling down the folded Gap that Aerospace Power air power and Aerospace power was about the only hope we had and if you know anything about history that was hugely important so I guess every message I got up until the time I started you know college grad school in my career was that Aviation is an incredibly good thing Billy Mitchell approves
(05:19) yeah yeah that's great so how um so from that right how did you get to kind of cuz you started doing I think a few things for like Brooking tion then the you know jine market for Janes right so how how did that kind of progression lead to those kind of positions and then that led to to then the teal group can you talk us through that a little bit yeah you know I had this wonderful Mentor back in college Rosemary Hollis sadly she's uh she's departed but lovely person and she recommended uh me to her
(05:52) old school in at Kings College London which has a terrific War studies program which is all about that Fusion of technology and policy and history and I was you know I was I thought it was incredible it really was it was a great program I probably wasn't the best student but boy that I love it and uh you know out of that you know it it wasn't easy getting a job in the waning days of the Cold War but within a a bit I'd gotten you know first you know sort of a kind of gee this is what Washington policy won life is like at Brookings for
(06:24) for six months or whatever it was but then James hired me which was tremendous and it was a terrific group of people um so I got extremely lucky I had a boss and Mentor there who was terrific and then unfortunately that office closed after a couple of years um and I was hired by Bill story at teal group another incredible mentor and friend and I worked for him for 32 years with absolutely no regret so I just got incredibly Lucky in terms of uh the people who gave me a chance yeah yeah yeah wow and now now so
(07:00) at at uh at teal group can you can you walk us through a little bit kind of some of the cuz being there for 30 years did you did you do kind of the same things I mean I one I I'll I'll kind of take this this this moment to when I first started working uh I get introduced to the teal group through uh I think it was somebody sent me a file with basically the the what the publication that you guys have right that had kind of commercial airplanes military and I just geeked out for I don't know how long just kind of looking
(07:31) through because it was just so cool to look it it had obviously kind of the the details on each of the whether it was you know aircraft or helicopters or everything else and then you also had kind of the forecast on there you had some pricing data on there it was just kind of like I was like amazed with it and that's kind of how I got my my introduction to to that publication but um so what what were some of the things that you know Haven been there for 30 years that you were kind of doing while you were there yeah you know it was a
(08:00) lot like grad school just kept going uh in the best sense of the word um and I I should sort of take a moment looking back uh a couple years ago one of my very best friends in the industry my best friend in the industry Kevin Michaels who started uh the company I'm at now aerodynamic adviser he hired me and generously he made me co-managing director which I'm sure I don't deserve but you know his message was look teal is fantastic as an information provider and with some limited Consulting but we're a management consultancy we look
(08:35) at very big issues and come up with conclusions and it occurred to me that for 32 years it was effectively the world's best source of Aerospace information but I was maybe trying to make it something it wasn't which was a proper management consultancy um but in terms of a source the greatest collection of Industry information you're going to find it's totally teal group I mean and there's a publication on missiles on electronic warfare on companies and Country defense requirements all of it is unbelievable
(09:12) and uh not to make it an advertorial from my former compt as a teal but it's a hell of a good value yeah and I loved it I love doing that and I tried to sort of Leverage that into consulting which I I had some success with but it was a small group of folks who were mostly focused on information collation and and and you know basically explaining to the world why things were based upon all of these facts which is great it's absolutely great and I loved every second of it but ultimately I you know I I wanted to
(09:45) actually I guess um look at things from more of a seite sort of level um and that's what aerodynamic advisory does extremely well I think so I I guess it's sort of an interesting contrast in business models but for 32 years it was the most incredible opportunity to really get to know almost on a on a day-to-day basis the commercial and and and Technical realities behind about 1508 different aircraft so it was kind of Heaven yeah Richard how how did you find that transition I'm fascinated by the kind of
(10:25) transition from correct me if I'm wrong here but like information to advisory and your role in that um you it's so you ironically strike me not as a salesperson but as a marketing person um who thrives at finding beautiful amazing things and sharing them with the world and and impressing people but you know I I'm speaking I'm I'm CH channeling myself this is my challenges as I move into advisory actually telling people okay now pay me for all the interesting things right I'm I'm curious
(11:07) maybe maybe you just uh you you have amazing partners that do that but I'm really interested in that transition more from a selfish standpoint because I I'm I'm interested in in how that works yeah and it's it's the people uh you know one of Kevin's messages to me a couple years ago um when we started talking about this actually our wives kept saying this you know was like after 30 years of knowing each other you guys should work together or something like that I was like hey yeah and he he was
(11:35) his main message was I've collected the finest group of people who really know stuff and between all of us we can come up with solutions to what people need to know and you know if IID made that transition on my own I think I would have stumbled badly very badly uh but you this organization aerodynamic advisory has about 13 or 14 of the the smartest people I've met and uh you know there's that old that old saying you know if you think you're the smartest person in the room you might be in the
(12:07) wrong room it really hits me uh being here that's that's fantastic I I fully appreciate that Richard my the first time uh I met you actually was on a podcast I'm remember uh airplane gigs podcast um we talked about uh a developing uh aircraft program at the time that was called the ceries um which you were not all that excited about at the time and then when we finished recording I said hey so guess what I just accepted from bombarder and you said you're going to have the time of your life and I did I really I really
(12:50) did you know it's it's funny looking back um my interaction with the ceries um there were a lot of things I didn't know one of a few things that I did know um and I remember first discussing it back in I think 2003 with the brjx and then talking about the C Series when it when it became that I think in 2005 of memory serves and it was very obvious that they had well first of all they'd bitten off more than they could show there was no way they could do this without destroying their company which almost became the case
(13:27) what I perhaps underestimated a bit was the talent and passion of the people behind it um I mean they produced a really neat jet it's really good and there were a lot of people who came out of that it's just that inevitably uh I think from a market analyst standpoint I I was right and almost did destroy the company I agree um and it's some I think now isy now was the appropriate time uh that just in full disclosure we should point out that you are talking about probably an overbuilt ahead of his time
(14:02) Canadian aircraft uh that did not did not end up being the success that it was while you're wearing an Avo Arrow Shirt I just want to make sure that that's that's fully transparent I am I I totally am and and I'm fond of saying that the ghost of the AO Arrow kind of haunted the C Series the irony though that if you're Canadian and prone to conspiracy theories you might believe that Eisenhower and the Americans destroyed the arrow what destroyed or almost destroyed the ceries was the Europeans in airb
(14:39) us I I you know I don't see Boeing as playing a terribly compelling role in you know the destruction of the business case for the the C Series we just finished recording a podcast with John faren where he said all the same things so I have a feeling that that you and him got together you were you're conspiring I I see how this works well first of all truth and advertising yes I do in fact know and like John Baron very much uh second of all of course you know the proof of any good conspiracy theor is that the
(15:16) conspirators were so good they left us exactly zero proof that of what they' done so but yeah we call that consultancy that's right yeah I I prefer to think of it as leveraging a consensus View for the education of Executives but if you prefer Consulting that's fine the well it's synonymous you put that on your business card yeah it says if you look that up in the dictionary it says c consultancy um but so it's kind of along these lines because I do kind of want to um be before we kind of move on to the
(15:54) industry as it stands or has once stood um I I do want to get kind of your take on your approach and by that I mean this approach you are known I you know I hope I'm not taking this too far by saying I think you were kind of one of the very early on the the genuina side of of Aviation saying you know that I don't I don't mean for the sake of you know saying controversial things but just being you know genuine having that that uh well injecting humor into a lot of writing into a lot of the the conversations um it's more common place
(16:37) now but it truly wasn't when um you know when you were really injecting it how how did you stumble across this how did you how did you develop that to a point where your bosses would be feel comfortable allowing you to do that that's the real question here yeah thanks I you know I first of all Aviation was sort of a a lagging indicator of uh of what you might call criticism you know uh if you look at say music criticism or art criticism or architecture criticism uh people are ahead of the curve in terms of being funny about
(17:18) things because it resonates it's it's a good way to get people to remember things it's a good way to differentiate yourself so you I guess the important message here is to be omnivorous about what you read you know read things outside of your industry because there's interesting people coming up with new ways of communicating but also again I got really lucky in terms of in terms of bosses George Burke at James bill story at at deal certainly I'll call Kevin my boss nominally were co- managing
(17:48) directors but he created the company and you know he's he's in a Class by Himself but all of them were very tolerant and open-minded and you know you get a lot of RIS rigid corporate structures that don't tolerate that kind of thing it's a Pity really because there's a lot of potential I'm not that unique there's there's there's plenty of folks out there who could be interesting and engaging but they're kind of suppressed by whatever structure surrounds them I I I agree but I I'm going to hold
(18:18) you to your suggestion that there are omnivorous examples um can you give one from another industry um what are some of these kind of um uh influences from elsewhere uh that we should be reading really you should be boy um you know this is one of those Sarah and all of them sort of moments but um there's there's a lot I mean first of all it's funny this is not a coincidence but I've been reading Paul and gracia's excellent engines of change the history of the American dream in 15 cars I you know there's there's a lot of
(18:59) really interesting car writing JJ girtler who uh is like me on one of Vago madan's podcasts not to mention a competing podcast but uh JJ took my job uh at teal I recommended him to do it as as his own retirement job he had a long story career in Washington as uh as something like what I did like what I do um anyway long story short he also writes about cars uh so that that that's kind of I think one of his great strengths you got looking out side um you know you look at people who write about the music industry like gra
(19:34) Marcus uh or um gosh uh Lester bangs someone like that John Savage certainly uh there are a lot of really interesting folks there um oh my God uh you know Tom Wolf you know the new journalism uh architecture writing from bow house to our house you know I mean all of that I should also mention though that there are people out there in the world of aircraft not enough people read books we all know that and there are plenty of books written by people like Bill Gunston or Roy braybrook uh you know typically Brits who wrote in that kind of you know
(20:12) slightly sarcastic British way that I was hugely inspired by that's great yeah yeah who are yours come on Garrick on the spot yeah I I don't read so uh I'm one of I'm one of those that just yeah I wish you know it's funny every once in a while you do find like somebody recommend something and you read you're like wow that was I'm glad I took the time to do that and I'm like I should do that more and then you know a couple years go by because then life gets in the way right you've got uh you know
(20:42) work family and whatever else and it's kind of hard to find the time but uh yeah but every once in a while you do get you know some stuff and you're like oh you know what that's great and you don't want to you want to you want to finish it so um always looking for for good books to to take a look at um but I guess the the one of the question that I have for you when you think about you know I guess having been now in the industry for yeah for for for sometime for 30 years right um 35 35 yeah County uh good
(21:15) for you good for you from that standpoint um I guess you know started five yeah you know in those days child labor laws were pretty loose knock him [Laughter] down small fingers to clean the gear boxes you know there you go that's how you got yeah I mean you know somebody's got to clean those tanks in those airplanes and you know regular adults can't fit so might as well use children I've seen those videos that's terrifying don't do that yeah yeah I I don't know yeah you wouldn't pay me enough for that
(21:48) um no so so what I was going to say was um with the course the last 30 years right because you focused on both kind of the the commercial side the Civil side as well as the military side um you know what do you think have been some of the maybe some of the biggest changes within those industries that you know you found kind of fascinating as you've because you've gone through multiple ups and downs right in in in all facets of Aerospace so I'd love to kind of get your take on what you thought were the most profound
(22:18) or the most interesting you know over the course of the those last 30 years 35 35 sorry 35 it's it's I'm not just I'm not just you know saying 35 for the sake of 35 it's it's important to remember that if you've expanded in 35 you're looking at the waning days of the Cold War which is exactly what you're talking about uh and I you know I went into this degree in war studies fascinated by defense policy and the relationship between technology and strategy and then it all you know
(22:52) this is the late ' 80s again 35 years ago and it was all falling down and there's actually a movie called falling down I think about the end of the defense industry in Southern California from one sad saxs point of view uh but it was looking terrible and so everyone was thinking about the commercial side and I did too and wording for the first time 34 years ago3 years about the commercial side and finding out it could be just as Dynamic maybe even more Dynamic and more interesting than the defense side that
(23:25) was fascinating and and years later I had the pleasure of getting to know John new house sadly also passed but he was at an air show writing an article for the New Yorker um back in the I think late 70s about the defense industry and someone said you know actually the real actions on the commercial jetliner side the Big Iron and he wrote what I think is the finest book ever about the jetliner industry called the sporty game and that was published in the early 80s I got to know him uh 15 or 18 years ago when he was doing
(24:01) a sort of sort of follow-up book called Airbus vers Boe or Boe vers Airbus and he was one of the nicest guys I ever met and uh he told me about that that you know what it was like going from the defense side of things to the commercial side of things and that was fascinating and you know you look at these markets and how they evolved and how they became more important business Jets were ridiculous pointless go nowhere Backwater when I started it was like oh that's adorable who cares and in the 90s and 2000s they exploded and now it's one
(24:36) of the most fascinating parts of the industry or real technology incubator uh big money you know lots of fascinating stuff happening there that's been fascinating to watch and now unfortunately we've got the return of History um you know the world is not flat uh and defense making a giant return and impacting the entire industry because in large part because of its demand for resources um so that's one of the major transitions I've also been witnessing over these decades that's interesting the you
(25:11) mentioned the The Business Jet not a sector of the industry that I've spent much time in myself even though I've operated business jets in the past but um certainly even even in that industry started of course as Lear went through the small jet but the 2000s that you referenced was really the move into the large very long range Business Jet that was against Gulf Stream versus uh Global was were kind of the the big big uh rivalry at the time and now what's going on in that sector kind of here in the last post- pandemic I we
(25:52) know there was a big boom uh cargo had the big boom cargo kind of fell on its face um commercials doing what commercials doing what what what trends did you see in business did is it kind of continuing well it's it's it's really interesting as you allude you know during the pandemic you had a lot of newcomers joining you know fractional share programs and they chared Jets and whatever else they didn't buy their own Jets but they did become participants in the market and ever since that boom that
(26:23) or follow on to the other Booms that we've seen um people have been speculating how many of these folks are going to stay around as normal Airline service resumes and people care less about um you know public terminals um it we predicted about 10 to 15% would stay looks like that might be reality so the industry's gotten a nice bump but so far it's mostly shown up with yeah part 91k part 135 fractional and Charter rather than new flight departments and people buying new Jets um and almost all of the new product
(27:02) development action is at the top end of the market it's now Gulfstream and Bombardier and deso has gotten in in a very big way um so it's become more of a three-way high-end Battle of big metal I guess uh but you know you think about the numbers go back to this the end of the Cold War business jets in today's money was a market worth about four billion a year today it's in the about five or six times that again in the same dollars uh sometime in the 90s I came up with what I called the the guns to
(27:35) caviar index which was the relationship between the combat aircraft market and business Jets and in 1989 it was about nine to one in favor of stuff that shoots and today business jets are actually well I should say up until the past two years for the previous decade business Jets were considerably biger bigger as a market than combat aircraft now for reasons we read about every day in headlines uh military has come back usually yeah the one of the biggest surprises I had on the Business Jet side I I guess it makes sense it shouldn't
(28:12) have been a surprise but um a phenomenon that I shall now coin as the HDMI cable effect which was the idea that when they're specking out their aircraft they will choose the most expensive thing period they don't care what it is it needs to be the most expensive that's why they're getting a jet just like HDMI cable is an HDMI cable but you could get a goldplated one for $200 or one off Amazon for $5 you would do the same thing but you bought it because it was the most expensive thing and here I am
(28:44) sitting in a floundering commercial Aviation sector being like so people pay more because it costs more like that's a thing what am what am I doing with my life you know what I should do advisory well that's its own you know Business Jet advisory that is to say how to get people the jet that they want yeah that's that's a fascinating line of work not anything I've done before but it is truly fascinating and as you say elasticity in that part of the market is negative not existent you know I yeah
(29:21) it's it's it's inverse right yeah right right I remember seeing my first Airborne espresso machine sometime in the '90s is thinking that can't be a thing but apparently it was and uh you know from that I mean it's state rooms you know air hockey cables whatever you want all that extortionate prices and that's where the profits are really pretty impressive but to your point of being the leader in technology and and kind of proving some technology a pointless story that's good for bar
(29:51) trivia the very first logo light do you know do you know do you happen to know uh which aircraft the first logo light was installed onto I'll give you a hint dc930 maybe and it was the Playboy airplane oh wow he wanted to always see his logo and if you remember on the on the Douglas airplanes the logo lights I think were mounted on the trailing edge of the Wings the wing tips and shined back they weren't under the tail I think the dc9 was as well I know the MD80 was um so there's a great he also wanted and
(30:31) got a shower a spinning bed and he wanted a fireplace but that's where they said no this is a true story if urban legend holds true yeah wow fireplace that's a great idea on an airplane yeah that go well that'll go well that right yeah although I'm sure people still ask can I just get an kind a fireplace I mean you can get a gas one that's fine it doesn't have to be wood I mean you know yeah wow yeah it's amazing spent yeah well I mean that and that I if I remember correctly right in
(31:05) the oh what was it in the probably last decade or so right when when all a sudden you know the the crjs that were being converted to VIP right it was in you know mainly like Eastern Europe was Big Market because it was all about you know look at how big my airplane is I don't really need to go far I just want to basically people to see how big my airplane is and the crj kind of fit that category and especially when you got a brand new interior in there you were like oo that's nice you know didn't
(31:34) didn't go very far but yeah but it's all about it's all about egos right it's all about the the people that just have the money and need to spend it and need to show that uh they've got something that's better than you know the than the guy next door um yeah and you know it's interesting the father of the BBJ the going business yet borgi bosov very interesting man um and that was exactly what he thought you know it was just hey people are out there buying g5s or globals um we've got
(32:01) a perfectly nice jet liner to sell them why don't we do that and uh sure enough it's like buying a house though you know the bigger the house you buy the more you fill it with crap I'm certainly living proof of that as my wife will remind you and it's the same with business shs you know the bigger you make it the more you fill it with the spoke um you know well everything from that stateroom to that shower to that fireplace if you if that's private buyers are why list prices exist exactly absolutely exactly rich I I
(32:36) would love to know uh so we're talking we've we've set the Spectrum it's 35 years so the spectrum is really really wide I mean but but that's fine we'll work with it um in that 35 years uh the different things that you've seen what broke your expectations the most what did you expect to happen that that later you're like wow I just did not see that coming yeah wow that's that's uh I didn't see that question to uh one thing I didn't I made I made Richard's list there you there you go nice nice uh
(33:18) one thing I didn't see I don't think anyone but it's a it's a macro change a very big one uh and this I'll I'm stealing somebody else's idea Muhammad AR on formerly of alance Chief Economist um but he wrote a really compelling article in foreign affairs magazine one of its main points was that the defining condition of the world economy for our lifetimes has been inadequate demand or Cycles between adequate and inadequate demand that's been the story of our our economic lives this is now
(33:54) the first time uh now over the past year or two maybe three where we're going back to that pre-1960s 1950s um the problem is inadequate Supply and that is 100% true for our industry and that explains all of the supply chain problems it explains the endless labor inflation um obviously the endless search for talent um it is the defining characteristic of our economic times and I certainly didn't see that ever happening and I don't know when we get out of it you know when the whole P we thought it was a transitory thing you
(34:37) know pandemic ends demand returns okay and then the defense side of things went into overdrive for obvious reasons um and then you just had an economy that would not slow down um when does this end I I don't see as catching our breath from a supply standpoint for another five years at least and as as a guy who spent his living forecasting demand you know I'd been almost trained to say ah this will this will change in 18 to 24 months no it won't you know we've been seeing that for a couple years now this appears to be a supply
(35:18) constrained situation not just for Aerospace but for a lot of most other sectors of the economy and will probably remain that way for some time yeah I think I think the question is is is 5 years long enough that this may just be the the new reality quite frankly yeah um the the metric that I've fallen in love with recently I just really like the study of uh demographics just kind of population demographics and we're going through a major major shift um right right now or actually we came out of a really major shift a really weird
(35:51) kind of moment in in human history um that meant like you said just BAS basically Unlimited Supply labor Supply the ability to you know with that came cheap Capital you know especially in the last really 15 20 years um and then what happens when when that goes away that seems like that's the answer for the questions on what are we going to worry about here in the next 20 30 years you know in another in another 30 years when I'm on a podcast talking about you know my 35 your career um you won't be you
(36:35) know thank you sorry had to say something yeah um so so when you think about sorry when you think about all all these all these supply issues does that um does that drive new innovation to be able to correct things I mean cuz if you're if we're talking about you know obviously there there there is the the whole the labor issue right that's a big deal on all facets of any industry um so does that push for Innovation to uh you know basically depend Less on labor for things but that only can take you so far
(37:14) um but on the supply side I mean if how without the ability of making more of the supply to be able to support the production of things um How do you I don't know does that drive Innovation I mean does that is that kind of what what's next is that somebody figures out a different way of doing something to be able to do the things that we need to do to to basically meet demand well it's it's really hard I mean you can invent the world's best machine tools and we've done incredible things
(37:49) in in automating uh but as you imply there are limits uh you can invent the best form forms of design digitization mbsc CAD cam you know um generation whatever else but boy you still need a lot of Engineers don't you um there appear to be limits in what you can achieve and you know I guess the answer to your question maybe is one of the older sayings in the economic textbook the cure for high prices is high prices in other words as prices inflate um demand will Pro probably take a hit um and that will correct those
(38:31) high prices that's that's the essence of a market economy right um one big complication however is that a lot of the problem is on the defense side and elasticity and defense is a very different thing so if you have high prices impacting the commercial side of the house or commercial demand um it's going to get worse when defense keeps absorbing a high percent of high percentage of productive resources and you know my my my favorite anecdote that I've heard about from Old Folks is still how McDonald Douglas was
(39:07) created 1967 you had McDonald order book filled with military aircraft for the Vietnam War Douglas their order book was filled with jetliners uh for the jet you know dawn of the jet age year nine of the Jad age whatever it was and uh McDonald basically said actually truth is that everything we do the taxpayer covers so if you don't mind we're just going to inflate wages for everybody by 10% or 15% um Good Luck matching that because of course commercial terms are very different than Government Contracting
(39:44) terms here the terms of surrender that will create McDonald Douglas I suggest you sign right now before they get even worse and I I wonder today whether we're not starting to see signs of that with the industry making a big shift towards an emphasis on the military side of things well let's look at it from we I mean we had a long conversation with John about this on the engine side because that's what's holding everything back right now I mean besides the inaptitude of aircraft oems to build
(40:16) something new um or just just unwillingness but but same on the engine side right so the latest generation of commercial aircraft technology was almost exclusively a result of of new engine technology so much so they called it the new engine option right because that is what what created that and then but by the way by by making that push to the Next Generation the engine oems ruined their own business case they they replaced their own models while they were in the earning period uh of of the the um of the cycle of their
(40:59) of their program and now that you have again because of a whole bunch of different reasons we have Supply constraints a very large portion of which in the Aerospace world is is engine OEM driven and the airframe is like okay so pick that up uh we need you to you know double down on that mistake we tricked you into and they're like yeah just no like how about if not and they're not but but there's no in this isn't a they should or they shouldn't it's the incentives are are upside down
(41:32) would you put this in the context of like the 60s in Vietnam um World War II is too big uh to really talk about in it too early but the shift probably the early 90s the shift from kind of the civilian sector the commercial sector into defense really feels like we're entering slash in one of those Cycles right now yeah it certainly does and if you look at these pressures self-inflicted and Market structural that have been visited upon the engine primes it really hits you that we've got perhaps an industry
(42:10) sector that's right for change um you know there's obviously three big commercial oems in the engine World um there are two airframers building large Jets unless there are two commercial engine oems they're probably going to have worse commercial terms than the air framers here's the analogy it's like getting six hot dogs with eight hot dog buns or wait no eight six hot dog buns with eight hot dogs right they just don't match right right right right and we've known for my entire career you know the first thing I
(42:53) was taught when I got that job in the J engine business James was Boy Pratt and Whitney and rolls would go great together but it's complicated by transatlantic politics well 35 years later they'd still go great together maybe even the transatlantic political complications have gotten a little less severe because frankly the British government seems to care less about its Aerospace industry relative to 35 years ago uh so does that happen and is the or does something happen with Honeywell and its engine unit um merging with someone
(43:30) and creating an even stronger GE um it's it's fascinating the the range of possibilities but you're right given that Dynamic uh or those dynamics of you know new technology business models being broken uh more reliability but also more problems uh a razor blade model that clearly doesn't function anymore all of these things then you think that some kind of change in the industry would be coming down the pike wouldn't you and that change would be led by the engine oems in that in that kind of thought experiment right because
(44:08) they're the ones they they hold they hold all the power literally and figuratively in in this context um no I mean they hold the power to make products better as you imply um you know that's the part of the that that's that's part of the aircraft that burns the hydrocarbons they're responsible for the Improvement hence yeah as you say Neo but they're just subject to a great deal of Market pressure by the two airframers and you know the joke we told when UTC was created and now of course
(44:45) rolled into RTX was that when they merged Pratt Collins goodr be and all those other Legacy companies into one they created an RFP for a tube and wig uh in other words at what point does a mezzanine company like that decide it's going to enter the airframe business in conjunction with a structures maker like Spirit or Mitsubishi or somebody like that now if you don't believe in that scenario then there has to be something that rescues the engine companies from being at a a a market or business disadvantage relative to the two
(45:22) airframers that control the business so there's there's another no we we discussed this with with John um a couple days ago but there is actually a kind of a another path kind of a tangental path you know I always caution myself to not get stuck in the past when looking at the future the past being the the huge leaps have been uh pun not intended but have been from the engent side um but that doesn't necessarily mean it happens to happen or in fact I think that's why it won't happen again in the future um so
(45:56) if 15% is the bar that they need to cross which I think Calhoun even said 15 20% we can get that today on today's engine but moving to a drastically different design and I'm thinking like Blended Wing body I'm thinking well open rotor is a different propulsion but you know that's that's absolutely back on the table for for discussion and that's before we even start talking about moving into different power sources and different and different fuels yeah absolutely and you know I don't make need to make this an
(46:28) advertorial but about uh about seven or eight months ago Kevin Michaels and I paid a visit to Jet zero and I was just hugely impressed I mean it it's I I'll I don't mean to discourage on one level because it's in a strip mall in Long Beach um you know come come for the path breaking new jetliner design stay for the delicious Vietnamese fa beef noodle soup next door you know I mean it's it's really small they got a lot until you tried it but oh boy I mean they've got some really interesting
(47:01) ideas and I'd love to see a breakthrough like that get some traction and I you know I was at the Air Force contract announcement when um you know secretary Kendall and company gave them I believe 250 million to make some progress towards a prototype that could be used for an aerial refueling tanker under the Air Force kcz program and obviously they're team now with northr Grumman and with RTX sure hope this is the sort of something I'm I'm fascinated by this and look the the story certainly of
(47:34) the last year and a half two years um kind in the technology side has been all AI um deep in it I get showed so many things we talked to Abdul about this um so many things that people call AI which turns out to be nested if then statements right because it's a it's it's basically a a fad right now uh um but but when that fed cycle plateaus to what it's going to be in the future then we start looking at you know where we came out of the advancements in engine technology the advancements in manufacturing right that's what's that's
(48:09) what's stopping the blending body when we talk about infrastructure yeah airport infrastructure but but we talk about airport infrastructure being a challenge for the Blended Wing body like we did for the A380 right they just have to shape things differently and make some some heavier concrete I I say that in the context of hydrogen you know where you have to build the another entire Transportation infrastructure which is a pipeline system or or some sort of hydrogen transportation system that gets it to the aircraft not saying
(48:41) it it can't be done it's just a whole order of magnitude different it's it's hard to call those two things both infrastructure challenges um but you know for a company like uh jet zero um I guess the the question for you is if let's let's play out the hypothetical here that this is what comes next how would it play out would jet zero just rise up and say Hey you know we're the Uber or the SpaceX of of this and now we manufacture all your airplanes would they partner with one of the large oems would they be acquired by
(49:21) one of the large oems um and which one is kind of the preferred solution yeah big questions you know it all gets back to I guess uh you know Clayton christens and the innovator's Dilemma um you know the people who'd be most disrupted are is definitely Airbus because of course this thing is aimed at the thing that's propelling their massive increase in revenue and market share the 321 Neo um so do you let someone else disrupt you do you do something proactive to prevent that disruption either way you're losing the ultimate
(49:59) Cash Cow the 321 Neo bowling right now is paralyzed by a leadership that simply doesn't want to do anything um they've got great people great ideas and a top level leadership that is determined to do exactly nothing a complete failure if you will of leadership uh that can change but if it doesn't count on them to do nothing and you know run the commercial part of the business for cash until something bad happens um so what does jet zero itself do you know first of all you go back to the dawn of the
(50:33) jet Age A lot of it was the KC 135 becoming in with some changes the 707 and then the CX losing design becoming the 747 could that happen again where this becomes an Air Force tanker uh for KZ and North for gemman says hey we're going to recreate what we once had a commercial jetliner unit working with RTX as a major supplier stroke partner we're going to create a you know a jetliner Prime of our own that would be incredible I I think it would be fantastic another possibility is you know the Soviet Union and other uh
(51:08) systems bifurcated engineering and production you know Mig didn't build Fighters it only designed them and they were built in Nova seers at an aircraft production factory owned by somebody else uh maybe that's the answer where jet zero stays an aircraft designer and someone like North r or you know I don't know from Mitsubishi or whoever Spirit or whatever builds it in conjunction with a major mezanine supplier maybe that's a possibility which wouldn't be too different from the first scenario
(51:38) another possibility is yeah they're bought by somebody and who knows who that is um you know but somebody either way I'm intrigued I'm really it's the first new idea I've seen in a great many years that kind of gave me inspiration for a way forward in terms of uh commercial liner fuel efficiency improvements and Emissions reduction I'll tell you what uh just to completely ignore Garrick and all the awesome things he wants to say as I just keep going here but what really excites me about about jet zero is I don't hear
(52:13) about jet zero I hear about EV toll I hear about um all the hydrogen stuff I hear about all this stuff and it's always there's there's something to be said somewhere I don't I don't know there's probably a study somewhere that that backs up my hunch but it's kind of The Quiet smart conversation that's that's happening right now look there are some there are some great the uh some great conversations that are happening on the short Hall side but they're not translatable to really the
(52:45) whole of Aviation I love I love the idea of hybrid uh electric hybrid aircraft you know I love what Universal hydrogen is doing with volumetric hydrogen not the the cryo hydrogen these these are great solutions for you know ampair is doing some amazing stuff um but in that whole kind of in the buzz I I think um the what what we're kind of seeing out of jet zero and kind of not hearing is intriguing agree completely and you know it's it's a little frustrating because all the other stuff you mentioned that
(53:22) we've done a lot of work in the world of alternative propulsion when I say we I mean the the far smarter people than than me who I work with yeah but that's why you're there so you can say we you know I I'm one of you you know I mean true fact I'm the only one in a team of about a little more than a dozen who does not have an engineering degree so what does that tell you but uh you know their conclusion is that they a fascinating way forward forward ways forward for the next couple of decades
(53:52) for maybe 2% of traffic yeah right maybe three and and EV isn't even that traffic that's that's that's holy generated new traffic right and it's to a certain extent if you assume that ground transport is decarbonizing faster than Air transport then it's recarbonation not decarbonization don't get me start that's that good yeah and and everything you're saying about hydrogen yeah I mean negative - 253 degrees in pressurized cylinders on aircraft what's the problem yeah go WR there why not yeah yeah why
(54:27) not so that's what that's another thing about jet zero we can't keep lights from destroying Windows right right yeah how can we keep a pressurized cryo hydrogen Frozen and not like rapidly depressurized forget the flammability part of it which I'm sure they'll they'll manage forget that yeah yeah I mean so it's actually it's pretty exciting right to think that there could be a another manufacturer of the tube basically that could be out there competing in that space right I mean it's been such a
(55:02) duopoly for quite a long time now right I think it would be pretty exciting now you know it doesn't mean that it's I I I don't think it's something that happens in the next decade I think it's going to take a while right I mean great at the end of the day right it's not something that's just going to be yeah like quick because you know you have to ramp up you have to have all there's so many things that need to happen for you know the market to all of a sudden accept a new manufactur of aircraft using different
(55:27) partners um than what they see today to feel comfortable with okay so you're going to be able to build how many airplanes per year you know it's kind of it probably looks it's very similar to maybe the the comac situation today which is okay so they could be a threat at some point but they're talking about what 100 airplanes a year by the end of the Decades maybe how is that a threat to anybody right so um but it's but but it is very very exciting right that's the that's the cool part is that
(55:52) somebody's out there uh doing that which kind of makes me think that we should probably have somebody from jet zero on the podcast I think that'd be really cool um see listen look at all the interesting people we're finding out about just by talking to Richard this is why we have you on man that's right yeah that that that's great good for people I know who are more interesting to me this is true well I do I think they say the same thing about you though so the so the the the comac um the the ability for comac
(56:22) to disrupt I think the one point that I would just remind on that is take a look at both Airbus and Boeing's OEM forecast and look at how many of those airplanes they expect to be delivered into China and what if those don't and that may not even be a comac thing that may be a I don't know China does something stupid thing um but that's that's in open that'll be for the for podcast episode 2000 you know 20 years from now when we we go back and and look at how things turned out on on that side
(56:56) yeah I mean I don't understand anything China is doing right now I really don't accept in the context of recreating the old Soviet experience uh for their citizens for their economy for everything it's it's horrible because I you know I I went to China for the first time as a Backpacker yeah 30 something years ago and I Lov the place and seeing what's happening now is just probably the greatest tragedy of the century so far and there have been a lot of tragedies and again talking from the the
(57:25) demographics that I'm now suddenly so interested in China just had a major shift and I mean a major major shift and that is the population decreased for the first time in what 60 70 years um and it will only continue to decelerate well or accelerate in the negative Direction which which is not a bad thing it's just that you have to think of it uh you know the saying is you're in a race to get Rich before you get old Japan and South Korea won that race bless them they won it they're you know their populations
(58:02) are going down but they're rich who cares uh China's losing that race yeah yeah are and the the the rate at which they're losing their population is much faster that's what a one child policy does two people only makes one yeah that that comes back um but you're right Japan Korea Germany um Germany you know right right they all got r they you know began to to lean down yeah Canada yeah can all right let's not go too far um qu so question in terms of when we if I take it back to kind of the the engine oems right and
(58:41) and the the the situation that they're in today and you talked about obviously there is kind of a uh increasing Demand on the military side so does that does that create an opportunity for the engine oems to to you know further take the foot off the gas on the commercial side because they're ultimately still making money on the more money on the military side right and so they're they don't have to do as much on the commercial side does that does that play a role at all in terms of where where
(59:12) they put their resources and where you know I mean they have a lot of reasons why they may not necessarily want to do more than than you know as they've done before but does that add to it because now all a sudden they do have another client base that's asking for more so let's go with that side it's absolutely the horrible truth grick it's uh you know when Ron was formed or new RTX I should say a lot of people including me said wow now Pratt Whitney has all the money in the world uh to do whatever
(59:43) they want on the commercial side but it's becoming obvious that's not the case the emphasis is on taking advantage of the military market and I can't really blame them I mean military you get all your upfront costs pretty much paid for you're really well protected against inflation uh your return on investment is guaranteed this is the exact opposite of the commercial world where there are risks at all levels I'm sympathetic I'm just horrified by the likely results of an industry which is going to see a
(1:00:13) crowding out and perhaps less commercial Innovation at the established companies anyway it's it's a real concern you're describing very well the l111 right yeah yeah that's right that's right um my favorite gent liner by the wayo beautiful yeah first quadruply redundant design beautiful uh but classic you know I mean another in addition to being crowded out by within the context of a defense Prime there was also you know that sort of mixing of design parameters everything at locked especially at the time was a little bit
(1:00:52) over engineered and the l1011 was no exception yeah there you yeah which uh do do you think that I mean we talked about kind of the the labor shortages and the I think there's been a lot of talk about kind of that that Brain Trust the loss of that Brain Trust from people that are just taken packages retired where they've had you know 35 years of experience or or 40 years of experience um I mean do you think that that slows that down right because of of the situation that we're in today where the
(1:01:23) experience just isn't there and more to be able to potentially you know as you call it over engineer something well you know we're also I think right now we're in a unequally bad moment because if you look on the commercial side of the house so much had to be done to survive the pandemic that meant laying off everybody and so a lot of people took early retirement especially since there was a ton of liquidity flooding into the economy under both Trump and Biden uh so that people could afford to do
(1:01:56) that and then of course you had the ramp up where a lot of new people came back on but that mentoring that typically exists between the older workers who had left and the newer ones didn't take place and that transfer of tribal knowledge didn't take place so that's kind of a big concern uh I think across the board is that what you're alluding to or was it a different Dynamic no no I mean yeah exactly right I mean I I think that's something that is definitely concern and um you know when you talk
(1:02:26) about you know certain products that were uh you know kind of put out there with with so many you know years of experience or or you know so much thought in terms of every little component right do we it doesn't seem like we're going to we're going to see that anymore right it's just more um because of that that loss of kind of experience that's you know enjoying uh their retirements and enjoying their you know their packages that they got for for doing that so uh from that standpoint I guess it it makes you
(1:02:55) wonder will be you know will will we see less new products sooner based on the fact that it'll probably take some time for the experience to get established right to feel comfortable with like hey look we've come up with you know this next great thing um that we feel really good about uh I feel like you're going to you know there going to be more stumbling more so than you know great ideas and not to say it that you know obviously the there's a lot of bright people out there so that's that's that's
(1:03:22) not the they're all working that's what I'm trying to make working at uh Richard's group all 13 of them or all 14 all 13 of them can I offer can I offer a contrarian take to that Garrick of course of course you know we'd expect nothing less yeah uh uh so no that's my contrarian take I wow I think about this often and ostra and I would always get into these uh 4-Hour editing sessions where the first three and a half hours Were Us debating over this topic and that topic is you know the brain drain
(1:03:57) out of the oems and the engineering brain drain and all that my I as time progresses I'm getting more and more set in my take that if if the if the hypothesis is that we're not building new things because we don't have the people I tend to believe that we don't have the people who are interested because there's nothing to build I think that might be true I think we're in this weird of course all the things are happening at once and and it's it's a complex system but we are in this really
(1:04:33) weird moment right now where by the way you know the uh I I think the um uh the Boeing uh anma or whatever they call the last version of it I think there's a lot to be taken at face value when Calhoun says we're not where we need to be to produce the next thing and other Technologies appear to be maybe two steps beyond that will make this obsolete so we're not going to move forward that I think speaks a lot more to you know of course he got lambasted for that and oh the brain drain and all this at Boeing I don't think this is a
(1:05:12) Boeing problem I think this is where we are in the cycle of History I'm not debating with you Garrick I'm not arguing with you I'm I'll I'll debate with you awesome let's do it no I it's it's interesting I'm I'm really kind of interested in that concept of you know the the whole idea of well Boeing should have just built something to keep those people employed I'm like yeah no like it's not there yet it's not the the what the next is not there yet should they be
(1:05:39) working on that yes there's no magical next and I'm not making the argument they should have done nma to be honest I I really think it there was some big flaws about it they never reconciled the needs of you know a a a twin a with no belly card go with the needs of operat among among other among other issues there were a lot of things that were but that doesn't mean that there's some magical invention of new technology that's gonna op in in all these decades we've never seen anything like that and
(1:06:08) I wrote a column in aviation we quite recently making that point basically you know even when the first High bypass turbo fans arrived it took decades to extinct low bypass turbo fan designs you know if you want something in the next couple of years and that's what I would argue for I I would start defining something now which they're not doing I I don't fault Calhoun for not launching the nma I fault him for not saying there's some kind of future in the next few years it's like oh yeah maybe maybe you know after we go a
(1:06:41) quarter of a century without designing something new there'll be something magical coming and then we'll do something new it doesn't work like that at all what you need to start doing is now thinking about your list of technologies that you'd like to incorporate talk with customers think about launching something in the next three or four years getting it into service in the early 2030s all of this is within the realm of the possible and know this will not be obsoleted by something that's magically powered with
(1:07:11) unicorn tears or something that's not how the industry Works what's wrong with unicorn tears they cry a lot actually yeah well with all the extinction um yeah it you're abs look the airplane the the max that's rolling off the line today is going to be around for 30 years yeah absolutely right that's that's Absolut the way it is I'm not convinced by the way that so so my take on Boeing is very is from a very different perspective I mean that sincerely it's it's more from the the
(1:07:44) mid and lower level perspective um uh Calhoun would have no idea who I am and that's probably for to his to his benefit um but I I see at those mid and lower levels of Boeing real interest in being it's that that that Gen X moving into the leadership Suite um I I think we're probably giving Boeing we're probably giving Calhoun too much credit um for directing Boeing and not that he's not I mean he's he's leading the the company where he wants to lead it but I don't think he's long for the the seu it at
(1:08:24) Boeing and I think that's by Design I he would probably choose that as well one little change will move everything and really I say everything in the context of Boeing by thinking about Airbus because this is where I really have the challenge what the hell are they doing like they're winning by the way I mean don't get me wrong they're cash and checks that's right um but when we talk about oh Boeing doesn't have anything on on the on the drawing board coming forward what what does airbuzz have like
(1:08:52) they don't all they have is you know a lead it it's it's real don't I mean it's a great reason to to not have anything necessar on the drawing board but you have XLR maybe a freighter right you have you know minor variant of variant and then you have hydrogen maybe there's something in between there that we don't know about but they're not doing anything either I disagree I I disagree strongly I I think there's a scenario here where they leverage wing of tomorrow or perhaps
(1:09:22) maybe even the RTI technology they got in Belfast but more likely wing of Tomorrow you do an A2 2500 using that wing and then you leverage it to 32321 you create with new propulsion you know uh elaboration of leap or or gtf or maybe even maybe there's even a case for Rise maybe even you know Ultra fan scaled down I don't know but something and it arrives in early to mid 2030s and it absolutely destroys Boeing's only cast generating Pro uh you know program which is the max 8 I mean I think the idea of a complete rewing maybe
(1:10:03) re-engining and complete redo of airbus's narrow body product line is an absolute segment killer will they do it I don't know could they be disrupted in turn by a blended Wing body absolutely but either way Boeing's answer seems to be to sit there and watch its engineering core gradually erode that's not good yeah I got nothing Richard wins I know that's interesting right I mean that that's what uh that's what keeps us Keeps Us in business right um people keep asking those questions but yeah mrj
(1:10:39) yeah which I mean at some point mrj yeah do unfortunately that makes a return at some point or did they just take too big of a loss to come back right I mean well you know it's the AO Arrow I mean the horrible reality of the aru AR they built 18 and destroyed each and every one there's not a single Survivor um and I saw one of the mrj prototypes was destroyed the other day um deliberately yeah what if they're all destroyed you know just the complete final stage of any failed project you know it's uh destruction of all useful
(1:11:14) documentation and persecution of the innocent yeah which is a real shame right when you think about like somebody that put that much development and capital into a product and then and be like you know what it was a failure so we're just going to get rid of it no don't yeah put it somewhere have people look at it right right yeah I mean I was I think that was more of a timing issue than anything on the mrj side from from my perspective so um but so I guess going with all of that right um when you think about the next what 5 10 years
(1:11:47) right where I guess where do you see like the biggest opportunities or challenges on either side kind of how do you see the market over the next 10 years on the um you know all of it covered by what we were discussing before about the military side of things I mean Capital labor all that other stuff going to more to the military side of the house but I'm really intrigued by the prospect of something disruptive and again not to keep harping on or you know promoting uh jet zero but I'd love to see something like that or you know Ron
(1:12:23) EP at Bank of America had a terrific design basically taking the the crust wi concept and meing it with a prop fan and scaling it up I I I'd love to see something like that I think there are big opportunities to do something disruptive and if not Airbus does something that rewing and redefines and saves everybody 10 to 15% and calls it a day and and cobers Bo I think there are real opportunities uh across the board here to do something like that or to do something disruptive um yeah I'd like to see continued experimentation but no no
(1:13:01) nothing I'm not anticipating hybrid or electric to take over more than 1% or two% of traffic but it's great to see the experimentation and you talk about what attracts young people they are attracted to that kind of thing and the EV TOS too so they they do serve a purpose and making the industry exciting to an incoming labor force that's absolutely a great Point uh so there's there's a lot coming I think that's that's pretty darn exciting you get right down to it so we haven't talked
(1:13:29) about the trust Wing but you did you did mention it is that I don't know a whole lot about the aerodynamics um but I I seem to think that it's you know increased economics or or reduced cost um kind of trading for Speed kind of like we've been doing for the last 30 years and I don't think it's a lot of speed but um what's why why isn't the the trust wing and the conversation of kind of potential looks for Boeing here in the next decade or so well I think they do have the um you know the NASA demonstrator program which
(1:14:05) gives a job to an old md9 fuselage made that's right ratio wi jobs for jobs for uh seniors there you go that's right ger U and you know there's there arguments against a high aspect ratio wing of course um in terms of just what you might need uh you know what your mission profile is what your what Your rout what the routes you're flying obviously with with longer routes it's better um you're not carrying a bunch of fuel that you might want to carry that's that's certainly a problem um I think
(1:14:41) there's every reason to look at it uh what Ron did was couple it with you know the return of the prop fan and as somebody I got my you know my first job looking at the jet engine industry at the time when the Allison Pratt 578 DX and G36 UDF were all the rage and one of my favorite themes in technology development in this industry or any other is that very often the best Technologies are found looking backwards not forward you said oh that was an interesting idea but w wow manufacturing has moved on uh various other
(1:15:14) refinements and improvements have moved on we can make this reality now Blended Wing body is a good example of that uh and prop fans might just be a great example the gtf is an example of that right turo for forever and they just they put a shroud around it right that's that's the difference as a matter of fact I have a drawing of the the Super Fan from iae the v2500 people from 1986 it was the first commercial offering that I know of and it took 30 years for it to enter service in 2016 the concept enter
(1:15:46) service and well the concept was even around before that but the Super Fan was the first firm product offering of it but you're exactly right I like that a lot um and and in the in the conversation of Blended Wing in the con conversation of unducted fan which I I think absolutely deserves to be in that conversation right the the benefits are so big and we're really talking about like noise I mean there are other challenges don't don't get me wrong but um I I think the also to be included in that is um boom no not at
(1:16:21) all uh the trust wing um I I really I really think uh because look we're talking about 15% hit that hit that 15% how do you get it where where do you get it and what trade-offs do you have to make uh to get there are they manufacturing trade-offs are they noise tradeoffs are they infrastructure tradeoffs um but these are these are the I I I don't think I'm going too far by saying these are the boring topics of today that are really exciting for tomorrow in the context of all the other exciting things we keep hearing
(1:17:00) about that's totally right and you know on the subject uh of looking back and the importance of boring and old um I'm self- serving here because I'm turning boring and old myself so I better be self- serving about this but uh one of my great intellectual gurus David ederton wrote a terrific book about 15 years ago called the shock of the old that argues that a lot of innovation technology history comes from exactly this process I'd urge everyone to read it it's a great book can we touch on defense uh a little
(1:17:33) bit because there's so much going on in that World um my experience does not extend beyond the hobbyists and whatever I happen to watch on YouTube um which by the way basically describes my entire Aviation career but that's okay um a lot of good stuff on YouTube a lot of great stuff on YouTu a lot of great stuff um this podcast will be one of them um the F uh the F35 the idea of the F35 the philosophy of moving to kind of The Joint Strike Fighter you know compared to and you know I think of the F-22 is probably the
(1:18:12) most capable air superiority aircraft um that is now old is now no longer in production where we've we've kind of taken this shift away from capabilities um into maybe economies commonality I don't know what you know different different areas you know technology and and awareness and all that um how does how does all that in the context really of the F35 program how does all that kind of Encompass your your take on what's happening in the defense sector yeah uh this is a fascinating one I I would frame it exactly like that the
(1:18:50) F-35 is is is kind of an interesting paradigm if you will it was very much a post-cold war fighter for a world where it was the McDonald's of Fighters you know everyone to have the same fighter it would be supplied for from some giant Amazon like warehouse distribution center in Texas you know and sovereignty was no longer a thing offsets were no longer a thing highend was no longer a thing you just had a jack of all trades fighter that did a job for everybody and then oh my God history resumed and Russia and China came back as near peer
(1:19:21) or peer adversaries and all of the sudden the F35 is the best fighter we can get now that has a hot production line but it's not the future um it's simply not optimized for that kind of peer adversary so that's why we're moving on to NAD and faxx and you know the simplest answer for inad um it it isn't there are prototypes flying we don't know anything about it they've done a great job of keeping this in the black world I mean it's they're multiple protypes flying and we don't know uh but the most likely
(1:19:57) answer is it's it's an answer to the the classic joke from many years ago which is that the F22 was an incredible air vehicle in search of a good Mission equipment package and the F35 was an incredible Mission equipment package in search of a good air vehicle what if you could combine the two and most likely end Gad will be exactly that and faxx perhaps also to a certain extent only scaled down it's obvious inad is a is a monster like maybe even F-111 size uh but nevertheless it's going to be return
(1:20:29) the return of um high-end air dominance capabilities uh after as you say the F22 wound down after building 187 and now even in terms of design points especially computers kind of obsolete how does again from the hobby YouTube explaining like I'm five but as I look at just we're talking fighter technology here when I look at the the technology of the fighter how much of it is how much of whether or not you win is due to the airplane versus due to the capabilities of the air aircraft and the pilot or the capabilities of the
(1:21:15) missile well it's it's it's both you know I mean your kinematics are better with a with an airplane that has you you know um a bit more power behind it um it's that combination if you can get there faster fire your missiles before being seen low observability you have a much better chance I always look at the j20 from China as sort of an interesting Paradigm for a long time a lot of people looked at it including me and said what the hell that is so stupid you know it's a stealth fighter with
(1:21:49) canards that's just dumb you know but then it became very obvious this thing had one job and that was to come in fast not all aspect stealth but frontal stealth only so you can use canards and do whatever and use that you know speed and kinematics to fire a Beyond visual range Miss missile that doesn't do anything about your about American or Western Fighters but goes after tankers awax jars any kind of before we have a chance to react uh so I again I guess it gets back to that interplay between the airframe
(1:22:27) and the missile that's I I geek out on the the defense side jealous that you get to spend time in in this world Richard it gets me back to my roots you know takes me back to the good old days all those years ago I don't understand the economics of it you know I wrote my Master's thesis on the the follow on forces attack subconcept for the second Dr second Eton Warsaw pack forces destruction uh you that was Irrelevant for much of my career seems to have come back into use yeah wow see you hang around long enough this
(1:23:06) is this is this is how I forecast whenever somebody whenever somebody says ah that didn't that didn't play out like you said I said just hold on a second that's how Adam polsi his big prediction was what $50 Barrel oil at the time whatever every year like come on just wait was $40 yeah $40 $4 yeah yeah exactly just wait all you got to do just out outweight the prediction outlive it well I I love I love Adam for many reasons but uh especially since he's uh been around a lot longer than me so he gives me hope
(1:23:38) that I'll have another another decade or two or three irrelevance uh but he's got a great he always he always has a very good point about the cyclicality of these things although it does remind me of Dennis Duffy the brilliant character from 30 Rock Liz lemon's boyfriend who's a complete o who just says everything stupid he's carrying a pager and he's challenged on that and he says technology is cyclical they'll be [Laughter] back wow well on that note um we've uh we've been on for 90 minutes and so I
(1:24:12) you know obviously we don't want to take much more of your time obviously we know your your time's valuable too so um but this this has definitely been uh phenomenal to to be able to speak with you and kind of get your take on how you guys started in the industry and everything else I mean we'd love to have you on again at some point because this is just so much fun so much fun so time to speak with us today yeah when Boeing announces is their next program we'll we'll talk about it so 2040 that's right yeah 20 yeah we
(1:24:42) we'll pencil you in for uh yeah Richard thanks so much for having me on and uh yes thank you for joining us and what you do and and the style in which you do it um yeah thank [Music] you can we just can we just start where the first question that I asked Richard was hey do you know any good podcast guests yeah it's once we get going it's kind of funny or I'm sorry let me rephrase that once Courtney gets going it's really hard to stop him let's just put it that way um and so it's hard for
(1:25:28) me to get stuff in only entropy or impact got it