Wheels Up Now Public, Trading On NYSE

s A lines like the rest of you. Um. Kenny Dickter, founder and CEO of Wheels up there, based in New York City. They went public today. Vas back. I'm looking at that stock. It's got a great ticker symbol up, up and a stock is trading up about eight point nine percent in early in trading this morning. Kenny, thanks so much for joining us. Congratulations again on your listing. Talk to us about the private aviation business. How has it changed over the years and particularly in the last

eighteen months. Give us a sense of that business. Well, I would say, like our ticker symbol, it's up and uh, I would say, we're in the business of democratizing private aviation. So while I think that you're going to continue to travel commercially with you and your family. I think there will be parts, places and times where we can actually swing an airplane for a guy like you. So again,

we're bringing this to more people, bigger addressable market. We're uberizing the space where Airbnb eising the space, and just making this more accessible to more people. Part of that is you talk about a strategic partnership with Delta Airlines.

What can members then benefit from the Delta Airline strategic partnership. Well, the great news about the Delta partnership and we were able to do that deal off market with Ed Bastion eighteen months ago, and by the way, in that deal that contributed his private jet business and they became our largest shareholder. Um So, a couple of things about the

Delta deal. One is it made Delta easily and seamlessly accessible to our client base, which, by the way, travels commercially on long haul most of our clients most of the time. So you can put a Hunter thousand dollars down on wheels up and you can use that capital to fly Delta. Conversely, Delta's first class business class and Bob Summers and their business customers over at Delta now

have access to last mile. So if you're a business and you're traveling with a couple of people from l A X to JFK, you can jump on your Porsche, which again is a partnership that we just announced. It will take you wing to wing to the private terminal and will fly to your your last mile destination, whether that's Schenectady, New York, or whether that's you know, Vermont or a tough to get to place in Rhode Island. Uh. That's that's really the magic of the Delta deal. Can

he tell us about the typical Wheels Up customer? Give us a profile. The profile is anybody that's worked very hard. I like to say that we appeal to the working wealthy top one to three, which by the way, could be ten, fifteen or twenty million people deep. Uh. Any business that's doing ten to twenty million dollars and a revenue, Uh, they need to It's an essential for them to have a Wheels Up membership and have access to our fleet

of thousands of airplanes. And uh, you know, we did this fact merger with Robbie Tochran and Scott Dank and his crew over at El Cadaton Robbie had twenty years experience with LVMH, so luxury brand lifestyle person. But more important he was based in Asia, uh chairman of LVMH Asia Scott. You know El Cataton uh, the finest private equity firm on a global basis out there. So we picked the perfect partner in this back and then we got to with our cap table. We had t Row Fidelity,

Franklin Templeton. We got to choose our equity partners here almost by appointment. We did a zoom road show in late January. We ended up seeing thirty five companies, twenty seven of them invested, including folks like Third Point, Henry ellen Bogan and his crew with durable capital, longtime supporters, and some other great equity firms that are in this

for the long haul with us. What does the industry look like in a post COVID world where I might actually finally be comfortable having someone sitting next to me in that middle seat. Well, I think that that the first off, I think that the commercial airlines ED was on and at great earnings this quarter. I think that look, you're gonna see a roaring twenties trade. People humans want to travel, So I think that the good news is uh, the high tide, As Warren Buffett said, my old boss

lifts all boats. I think that our industry, the hospitality industry, I can't wait till the cruise industry gets back to where it was. I think that, you know, people post COVID, I think are going to value experience more than they value what they have. So I think we're in the experience economy. I think that's it's it's a very hot space, and I think it's going to be there for a long time. Miss Traveling, Miss Traveling, and call we were

just joking, we'd be willing to sell our house. I drive a Honda just for a chance to get on that private jet. Actually right, exactly, real quick, Um, can you just give a sense of the competitive landscape for you thirty seconds? Yeah, I would say, Look, the only thing standing between wheels up and greatness is wheels up.

I think that we're in a very unique space. Again, we're looking to Uber Eyes and airbnbies the space where others that we compete with the traditional legacy competitors are in the ownership space, which again, you know, does Uber compete with Hurts. I'd rather be Uber and that's really where wheels up this position fascinating. All right, that's really cool. Uh analogy there, Kenny Dictor. We really appreciate you taking the time. I know you guys are having a busy

day today with your listing. Kenny Dictor, founder and CEO of Wheels Up. It's a fascinating a part of the travel market that's again allah similar to an uber uh an Airbnb um. And so the question is, you know, how broad can that market be. But as Kenny was just mentioning, you know, it feels like people are just yearning for those experiences in a post pandemic world, as opposed to maybe you know, at sets they're looking more for experiences, and that would play certainly in two Wheels Up.

Let's talk jobs right now. You know, we spend every Thursday talking about looking at the jobs claims and once a month talking at you know, just the unemployment in general. And what we've seen is generally a pretty solid improvement coming off those just dramatic job losses of the pandemic really hit. But what we've also seen is that women have been and continue to be disproportionately hit by the

labor market and the challenges in the labor market. Let's get the latest with Neila Richardson, Chief Economists for a DP, cohead of the ADP Research Institute, and she was also a senior economist at Bloomberg. Neila, thanks so much for joining us here. Help us think about our framemat for us, what happened to women in the labor force during the pandemic and now during the recovery. Well, first of all, it's fantastic to join you on the job topics because

it's so important right now. But what we've seen with women during the pandemic is this complation of work and home and that's caused many women to exit the workforce. So this has been widely reported. Going into the pandemic, women's labor market participation was at an eight year high of fifty seven upwards. Off it dropped like a like a stone to fifty four percent. Is still starting to recover.

It's but it's not quite there. And that's just women getting in, getting in the door of the workplace, the virtual door as it may be. So we wanted to look at the actual experience of the women who stayed in the workforce. We wanted to look at this kind of mass excit due to health concern and layoffs, and complate that with what we know is gender pay gaps in the workplace. Previous research had told us that women

made about of what men made overall across industries. We saw that that pay gap narrowed to but it's mostly because low pay women were forced to leave or dropped out of the workforce. These are not real wage games. Now, what is the prescription then to fix this? Is it having a workforce and companies and employers that indeed are more flexible with the return to office. I think that's

a good start tailor. I mean, if you look at women in the workplace, this is you know, it's not like we were in a place of rainbows and puppies before the pandemic. But things have definitely accelerated in terms of challenges after the pandemic. One of those barriers has

been full time, full capacity employment. And so the concern is as companies make this transition, some of them from a completely remote environment to a virtual or office environment, women will be particularly affected, even if they have a choice, because our survey evidence shows that women often feeling comfortable taking advantage of remote opportunities even if they have them, and so there's still this issue of companies being very

responsive to women right now, especially considering the takeaups no. I mean, one of the big issues obviously is the women and home healthcare, and um, we're hearing a lot of good rhetoric out of companies about really being sensitive to that. Are you seeing any concrete examples that might give you hope that, in fact, corporate America is becoming more sensitive to these issues as they try to attract

and retain women. You know that that is the silver lining of this whole experience about women in the workplace during a very challenging year, companies in corporate America are paying more attention to worker health in general more than ever before, but also the soft infrastructure that women need to actually get to work and be productives, whether that's

childcare for safe public transportation. So you're seeing companies the one more flexible in their work from home prop uh prop uh processes, but also having an ear to the other things in work life that are meaningful in terms of production for women especially. You know, now we only

have about thirty seconds left. We're not just hearing this from companies, We're hearing it from J. Powell himself saying that despite substantial improvements for racial and ethnic groups, the hardest hit groups still have the most ground left to gain. Is the Federal Reserve doing the right thing by focusing

on this issue and and adjusting monetary policy appropriately. Yes, uh, this is these These issues are not new, These historical pay gaps are not new, and I think the said has been ahead of the curve and recognizing that through monetary policy they can lift all boats and those boats that are that are lagging behind the rest of the economy in terms of the recovery because they've been the hardest hit by the pandemic, that the most challenged and

going into that pandemic. So that policy directed to hard hit groups makes sense if you want a full labor market recovery where you have the most participation across different demographics, including women. Nila, thank you so much for joining us. We really appreciate your thoughts and insights are very important topic. Neila Richardson, Chief Economists for ADP CO, Head of the ADP Research Institute. All right, let's talk ransomware, thank Colonial pipeline,

JBS meat supplier. I mean, the list is getting longer as we speak. It's becoming a big issue. Companies and individuals have to protect themselves. UH. To figure out how we do that, let's welcome Jason Crabtree. He's co founder and CEO of Complex that's spelled with a Q, and he's also a former Special Advisor to Commanding General of the U. S. Army Cyber Command. Jason, thanks so much for joining us here. UM, give us a sense of how big and how concerned should we be about ransom

and I guess just cybersecurity in general. How do you guys think about it? Sure? Well, ransomware is just frankly continuing to gain steam as we see organizations that are far too vulnerable being taken advantage of by really sophisticated and sizable transnational criminal organizations that have created a really

great affiliate network model. I have an awesome business model, and they've been able to reap in tens of millions of dollars of fees this year alone by exploiting and then actually ransoming and effectively holding hostage a bunch of companies and governments all over the world. Jason, we should note that you are the real deal. As a graduate of West Point, your licensed professional engineer looking at the power grid, the broader energy system. Um, so you're the

perfect person to asked sort of big picture? Am I making out to be too big of a deal by saying that ransomware and cyber security is effectively the new way in which some of these states sponsored countries are waging war on us, and and how should our companies be forced to respond given that this seems to be

the new frontier. Well, I think there's a couple of aspects in this, the first of which is that criminals go where the money is right, and they've realized that it's quite efficient and effective to go ahead and either take over companies like Cassea. Right, so, a US company based in Miami, a critical software provider, compromise their customers using vulnerabilities and their software just like the Microsoft software vulnerabilities, used that to take over their networks and then hold

all their customers costas. So you saw trains in Sweden, pharmacies in Sweden, the largest grocer in Sweden, co Op, not able to operate for days as a result of a Miami based software and you know vulnerability here at home. So this is this is a great way to sit you know, anywhere in the world and get paid. I think the challenge for us is a society, is our companies in our country very digitally dependent. Risk is a consequence of dependence. So we've got to do two things.

We have to increase costing consequence for criminal organizations and pursue them around the world. And we also have to acknowledge that we are not defending our networks adequately and that many of these breaches, including things like GPS and colonial we're sort of predictable based on how sort of shoddy a lot of the external security posture and other capabilities were. And that's not victim blaming. It's the reality of under investing in security and having very vulnerable assets

connected to the Internet. You look like a target. You're going to be one. Jason, I'm not sure if this is coincidence or not, but the rise of cryptocurrency seems to have mirrored somewhat the rise of these ransomware attacks. Talk to us about the role that cryptocurrencies play play in this whole situation. Well, certainly, people like Putin have strongly encouraged alternatives to international monetary transfer right, so things like swift that are actually much more both monitored and secure,

so you know, non fungible tokens. Cryptocurrencies are certainly part of the story, but fundamentally, ransomware has been going on before crypto is mainstream in this context, and frankly they'll continue afterwards. But it's it's a contributing factor, but it's not the cause of the rampant vulnerability or the tremendous leverage you can get over a company when you shut down its operations. It's not just companies. Remember the city of Atlanta, right, tens of millions of dollars in recovery

costs school districts in Baltimore. I mean, this is something that's affecting you know, state discor organizations, just like it's affecting big businesses. I am curious what types of companies are coming to you and saying that they are in most need for your services. Yes, so, our business services

some of the most prestigious banks technology companies around the world. Um, so we work you know, in dozens of countries with very very large organizations where we you know, many of our clients have tens of thousands of employees or hundreds of thousands in some cases, so we really help them make sure that the catastrophic breach risks aren't there. We're a bit of an air bag in the car crash, right,

we help you walk away. Um. I think one of the challenges for people, and you're seeing this actually this week with another deadly vulnerability and Microsoft software related to print spoolers, which is very geeky, but fundamentally it allows people to take over the identity infrastructure. And we saw assists of the Cyber Security Infrastructure Security Agency here in the United States just issue a really urgent alert yesterday

because people were taking over identity infrastructure. Remember that's exactly what Russia did in the midst of the solar wind pack to take over major important organizations like Department of Justice, Department of Treasury. Uh Jason just about thirty seconds. How much of this ransomware and cyber issues cyber crime is state sponsored? Do you think versus just some guy in a garage. Well, so, the reality of these are sophisticated

criminal organizations. And remember most of them do operate out of places that are strongly influenced or controlled by Putin Iran North Korea, so it's certainly been actively tolerated. Are known about and I think been quite useful to undermine the last. But we've seen less evidence or no evidence in some cases of overt sponsorship. But remember these Folkstentis permit tremendously. Yeah. Absolutely, Jason Crabtree, thank you so much

for joining us. Really fascinating discussion. Jason Crabtree. He's a co founder and CEO of Complex, former special advisor to the Commanding General the U. S. Army Cyber Command, so he certainly knows what he's talking about. And again, as um uh, you know we were talking about it seems like this is an issue cybersecurity broadly defined as teller's mentioning is a big issue. It's it seems like it's in its early innings and it's something that corporate America

and individuals need to pay more attention to. Well, the more coming up this is Bloomberg Taylor. You know, it's a busy bank earnings day when Shannali Bossik, Wall Street reporter for Bloomberg News literally is running from the TV studio to our radio studio because she has so many different obligations to do. She is running around for us covering not only the Gray m Live t Live blog that we have on the Bloomberg terminal. But joining us

for radio and TV. What a slew of earnings And you know this from your days, Paul of Uh, just what crazy days these are listening to both the analysts and the media call and of course the earnings report, and I just think it's so silly for these big, big banks all to report on one day. It's just ridiculous. Spread it out a little bit. But anyway, Shanali, thanks so much for joining us here again we get Bank

of America, City Group, Wells Fargo. When I think of these institutions as opposed to the Goldman's and JP Morgan's and Morgan Stanley's, I think of corporate banking, consumer banking, making loans net interest margin, and I think one of the takeaways was the loan growth really isn't there? Is it?

You know, it's so funny because on these conference calls this morning, Bank of America with journalists and analysts, same with City Group, they're trying to convince people that this loan growth will come back, that it will be there. But you can see from the investor reaction that they'll believe it when they'll see it right, that they're just not buying this, Yet how much of this can be

one offs? I in everyone was really working on sort of wrapping up our balance sheets right, making sure that if you were laid off or what you do with the stimulus checks was paying off some of your dead is their appetite for people to want to take on new loan. It's self fascinating because from this you're seeing wealthier individuals expand their loan on average, with the biggest banks Bank of America, JP, Morgan Goldman sacts sometimes at

very fast paces. Will be very interesting, by the way, to see what that looks like in Morgan Stanley Tomorrow, which really excels in this space. But the average consumer is not borrowing. So you've got to wonder why there's such a divergence for the wealthiest of America to lever up the way they are, and then where are they

deploying those funds right investments and whatnot. Another interesting thing that I can't really get over because it matters so much to markets is Bank of America said that they are sitting on so much dry powder that they are deploying this into securities, So don't worry so much about the loans. They're they're putting it to make markets. They all so said, we're not a hedge fund, so you know clearly there is a limit to how much risk they'll take on. I've been watching this over at JP

Morgan as well. Their value at risk has dropped significantly. However, again, this dry powder is so interesting at a time where global banking is in an upheaval. It's in a total shake up, and the American banks and Frankly City in Bank of America, which have less share than their bigger three peers, has room to take some of that share and markets. How about the credit quality discussion. What are the banks saying as to the quality of their loan portfolio.

I mean, again, we've come through this once in a lifetime pandemic and economic disruption, but it seems like, you know, individuals and corporations are kind of doing okay. I can't get over what it must be like to be a banker right now and not get the love from investors. When the consumer is in such apparently decent shape. They're paying down their balances, which is why loans are pretty

flat everywhere. I gotta say, the one place that I'm concerned about is Holmes, Uh, that is where they're seeing lower balances at a lot of these banks, and that wasn't the case as we know before. So what are people actually lending borrowing for it? That's not clear to me. They're spending more, they're just not borrowing more. So much of this can be I think about Walls Fargo. What do you think of home loans, auto loans, you name it. We're gonna speaking with the Walls Fargo CFO Mike Santo

Massimo just after the closing bell. If you had one question you'd want to ask him. What would it be? Oh? Boy? How much is the asset cap by the numbers and impacting them? Still? Right? How much of it is? What do you define with the asset cap? Is? It is basically the Federal Reserve saying that you can't get your assets over a certain amount, you cannot be lowing you in the time out box. Yeah, I mean it is never. I mean that is really an unprecedented type of punishment

that's spooked all of Wall Street when it happened. Right, banks are afraid to behave badly? Are they the only big bank that has a asset cap? Correct? And remember this is still relatively early days for Charlie Sharff, the new CEO, who's also treating seeking to keep it lit on costs. The bank is becoming more efficient. They and Bank of America this morning said headcount has dropped by thousands in the last quarter alone. Is that intentional? I think there are two things. I think part of it

is intentional. Bank of America talked about that shifted digital in that retail business. But also they're paying people more, so wages are going up, so head count must go down if you're controlling costs. So I'm just looking at the stock prices, you know, wells Fargo up, I guess forty year to date. Looking at some of those other kind of you know, uh, commercial banks out there, that's

a pretty good performance. So it looks like the streets giving this new management team or just I guess, and this turnaround plans some credit incidents, and you know, similarly at City Group, this is Jane Fraser's first full quarter s CEO. We saw the stock up in the morning and now it's moderated a bit like it's ending fly

their cheaper than on the other banks. You've got to wonder whether Wall Street will give her the same kind of grace period that they've given Charlie Sharfs and she, to her credit, have been one of the few that have embraced the more flexible lifestyle. I'm gonna be that Millennia brings that up in her being a woman, really understanding the need, particularly for women. Though everyone across the board feeling this, the need for flexibility, where are we

and who is doing what? It's so funny because you and I talked about this earlier this week that one of Goldman's top investment bankers they had had more than of the market share of M and A, and so did JP Morgan. Goldman's told me that, you know, part of this is coming back to work and being there for clients. That absolutely helps market share. But for City Group, what their plan here is to retain an attract most importantly talent, and Paul, you and I have talked about

that so much. This game of musical chairs on Wall Street must be one of the hottest we've seen in years. One bank president told me that every day, right we've talked about this, every day he's coming in and a new banker is either threatening to leave or asking for new terms of their employment there. And it is just a hot market for jobs. What's it's it's interesting. You know we're going to hear from the European banks, I

guess later. Um is the theme that US banks aren't fact taking global market share, certainly because you see these banks eyeing that weakness over there in Europe because they've not only have had they had those extra regulatory constraints since the last financial crisis, they have also had even more so of a regulatory constraints since this COVID crisis. So you know, you can bet your dollar that Goldman and JP Morgan are ready to take that share in

Europe and in the US when it comes to those clients. Interesting, I'll be interested to hear from the Deutsche banks of the world and the Barclays and things like that to see how they're performing visa VI. The U S peers say, Bassk, thank you so much, Thank you so for rushing over from TV to radio. We appreciate your efforts. Shinelli Bassak, Wall Street reporter for Bloomberg News, joining us here in

our beautiful Bloomberg Interactive broker's studio. So again, Uh Taylor got Morgan Stanley Uh tomorrow, Uh, pretty high bar for some of the some of the performances there. Yeah, at least when it comes to M and A and invest in banking. Reminder, we've brand Moyniham at three thirty, followed by wals Bargo, CFO just after the closing belt. Awesome.

So you guys have got the lineup, got it all covered from the bank's perspective, and uh, you know, we will certainly cover the remainder of these bank earnings as we continue this earning season. This is Bloomberg. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. Got on Ball Sweeney. I'm on Twitter at

pt Sweeney. Before the podcast. You can always catch us worldwide at Bloomberg Radio.