Full show: Get ready for air travel to become more expensive

0:00This episode is brought to you by Welch's Fruit Snacks. Big news for your kids' lunch box. Welch's Fruit Snacks are now made without any artificial dyes. A snack parents can feel good about, and the same delicious taste kids can't get enough of. All made with no artificial dyes, try Welch's Fruit Snacks today. This is the Morning for Simmy Podcast, thanks for listening. Little prices are on a rollercoaster ride right now because of what is happening, obviously in the Middle East, which means gas prices are mostly going up and up. So how is the energy industry taking this? Is it going to change anytime soon or pivot maybe? We're going to talk to an analyst about that. And it's not just the price of the pump that is affecting us. Get ready to pay more if you're planning a vacation, too. We'll find out what is going to be impacted. And when is a teacher, just a mean and sarcastic teacher, when does it cross the line into being

1:01abusive? It's a good question about how much things have changed in education. Is it our expectations or is it the student sensitivities? It's all coming up on the Morning for Simmy Podcast. Let's get started. We are going to be talking about oil, though, because if you checked out the price of gas today, of course you have. We are all doing that right now and with good reason. Once the fighting in the Middle East started, the price has shot up. Countries all over the world are worried about what this is doing to oil prices. Now the International Energy Agency is agreeing to release hundreds of millions of barrels of oil from strategic reserves. That is the largest coordinated release in IEA history. Will this make a difference? Our Salazar is back with us head of intelligence at Enverus Energy. Thank you so much for joining us, Al. Hello. Thank you for having me. Now, do you think this release of emergency oil will make a difference?

2:03I think it will help, I guess, stem some of the losses, but not all, so they give some context. Estimates are saying maybe about 10 million barrels to 50 million barrels a day isn't getting through the Straits of Hormuz. For this SPR release, if you look at a rate and how much can be added to the market, it's probably anywhere between two to three million barrels, so you're still short, six to seven. Where does that come from? That's still drawing on your commercial stocks, not the government stocks, but the commercial ones. If you look at the price action, the market still remains unconvinced because until you get security through the Straits and get oil tankers going through there again, this is just a bit of a band-aid, a temporary band-aid. Okay, but the temporary band-aid that brought prices down a little bit, I mean, even gas prices here are 10 cents lower today than they were yesterday, but that's not really sustainable, is it?

3:04No, because, like I said, the longer this goes, you can draw from those stocks, so for simple math, there was 400 million barrel release over, and if you're out 10 million barrels a day in terms of what can't get through the Straits, that's only going to be 40 days, right? So the longer this goes, it's beginning to, you know, stress the system, so to speak, and not to mention also, it takes about 30 to 45 days for these tankers to get to the destination. So the G7, the stocks are being released from, those countries, only Japan is one that's entered to where the outages is, it's a Pacific Basin issue, because all that crude was going to Asia, but the stocks are Atlantic Basin based, European, US, and that lag time there is going to prolong the remedy, so to speak, because you have to get the ships and tankers and hit the Asian refiner, so to speak. So there's a delay that's also causing a bit of concern in the market, so this is timing

4:08wise, it helps, but it's not immediate. Right, okay, you may as a great point though, there are, if this is not even an immediate impact in North America because of the tankers and the destination word, this is going, then why have the prices gone up so quickly already? Well, there's a lot of things that go on in terms of financial interactions with the market, so certainly there's a lot of folks that are betting that when it goes up or down, you know, when you rewind to last Saturday, overnight we went to 120, and then all of a sudden the next morning I went down to 7-80, and I suspect that's a lot of the producers in North America trying to hedge and secure profits, and also people try to take profits that are betting on this price now. Right now it's extremely headline-driven. I mean, last night we had two tankers set on fire, and then we'd push up 100 bucks even though the SPR was announced, the release was announced, so to try to attribute price movements to specific events, it's kind of tough at the moment, but like I said, there's a lag here in terms of when we can address physical markets, and the financial markets

5:12are acting by the tick and by the release, by the news release. So when the physical markets start to come into play, which as you say is a couple of weeks, as this oil starts to get backed up, what kind of impact do you think that will have on prices? I think it should suppress any type of irrational or exuberant gains, so to speak, I mean, more crude, more supply, certainly a little temper, any extreme upside, $150, $160 numbers, but that said, I haven't even talked about the, is the crude that's being released a right match for the refiners that's serving, that's another thing that that may cause a little bit of a delay. I think in the end, the their term prices will go where they are based on everyone's not complete information in terms of what's going on, but physical markets, you'll start to see stock draws, and then once that math clears up, I think you will probably start to

6:15go up again. So you'll have the initial, oh, we're okay, but then as the developments around the hormones come around, I'm not sure we're getting certainty whether that's going to be secure soon. I think that's going to really dictate how durable high prices are. So what you're saying then, Al, is it sounds like it's more of a roller coaster ride that we are in store for? No question. It is. That said, also, I don't know if anyone's betting on $60 WTI anytime soon. What do you think is the top part of that? Like the uppermost ceiling that you think the market's going to see? Well, on a day-to-day basis, it's hard to put a little bit on that. We saw prices hit 150 during the triggered part of the Great Recession back in 2009, and saying that can't happen, it's going to be silly, right? On a quarterly average, then you start thinking about, well, if it gets to that point, you will get people respond to that price, and you'll get demand in rationing programs. So the upper end is probably between 100 and 150 in terms of what's sustainable over

7:19a quarter, but to say that with certainty is you're twisting someone's arms to get that out of them, but conviction is pretty small. Is this viewed as temporary, do you think? I'm wondering at what point people, the markets, start to consider alternative energy sources? Like when does the market start to pivot? Well, I just rewind to 1973, the Iranian oil crisis, that lasted years, right? And I'm not sure if anyone's getting any confidence about when we'll get security around the streets of our moves. Everything was coming out of the regime, and I'm not sure if it's being planned, what's the plan B for the regime staying in place. I think that is beginning to shape people's minds, and energy shortage will start to force people to think, well, I can't tolerate these prices forever, so I need to come up with an alternative. So if this lasts maybe a quarter or two quarters, I can honestly think that we're going to have

8:21some permanent consumer behavior changes looking for alternatives. So yes, I talked about electric vehicles, maybe that's an option. Yeah, I think people are starting to think about that again, Al, thank you for your time on that. No problem. Spring styles are at Nordstrom Rack stores now, and they're up to 60% off. Stock up and save on Ragnbonne made well, Vince, All Saints, and more of your favorites. Why do we rock? For the hottest still. There's so many good brands. Join the Nordy Club to unlock exclusive discounts, shop new arrivals first, and more. Plus, buy online and pick up at your favorite rack store for free. Great brands, great prices, that's why you rack. You've been there, settling in for an evening of TV only to waste half the night scrolling. Entertainment with zero effort required. Fire TV serves up personalized recommendations from across all your apps.

9:26Not sure what to watch? Just tell Alexa Plus what you're in the mood for and she'll pull up the perfect recommendation. Problem solved. Stop the scroll, start the show. Find what you're looking for with Fire TV. Subscriptions may be required. Fair. You might want to rethink that because just like the prices at the pump, airfare prices are set to go up and up and yes, it is all about the conflict in the Middle East. How is this impacting the airline industry? What can you expect from all of this? Well, John Gratic is a Professor of Aviation Management at McGill University and is with us now. Good morning, John. Good morning. How are you? I'm good. Thank you. This like reaction already in the airline industry about what is happening in the Middle East. Oh, yes. It's starting domestically, not so much domestically in Canada. Just yet, I think there's still trying to figure out what price are they going to budget

10:30for fuel. But air transit yesterday announced they were starting to put some fuel surcharges in their international services. You know, the price of fuel at the airport is the same thing that would happen when you are at the tank to fill your gas up in the car. You know, we're paying market price. The price of jet fuel has gone up 35% as of this morning and it's not showing any signs of slowing down. So given that fuel is about 30% of your total bill when you fly an airplane and it got a 30% price increase and that stuff at least, it's not rocket signs that figure out you're losing money on every flight that you operate. So the carriers, you know, in the short term, I'm trying to figure out what price level or what surcharges they should put in place, but they won't be waiting for too long. Right. So essentially, book today, I guess, if people really need to go somewhere. Yep. They make a change. Yeah. It's future bookings. I'm not sure how they're going to do this, you know, if I'm booking today and I want

11:33to fly in July, you know, and they put a fuel surcharge in tomorrow or Friday or Monday, you know, with that price change. So there's that question as well, but, you know, the question would be, how would you, you know, go about making your buying decisions and making it as quickly as you possibly can? Right. How often did, like, we've seen this happen before, haven't we, John, with the airline industry where they've had to kind of maneuver around international conflicts. Yeah. We've had this before. It's not the first time. We started this back in 1981 and I was around back when we had the first oil crisis. And fuel surcharge has been part of the playbook for the airlines. Whenever we have these ups and downs in the marketplace. So, you know, and it shows up on your ticket, not as a, as a fair, but it shows up as an additional charge. So if you look at your ticket and you'll see either fuel surcharge or general surcharge, that's what they bury that, that fuel surcharge in there.

12:36And sometimes it can be pretty expensive. So, you know, you're buying a ticket from Vancouver to London. You'll see a general surcharge in there on the air candidate ticket that's somewhere in a range of about four to five hundred dollars. And buried in there will now be a additional amount of money called fuel. But you won't see it as fuel. You'll see it as general. Right. Now, we know that airlines, companies in general are really quick to add those kinds of charges, John. But what happens when things calm down again and prices go back down? How fast, slash, slow are they to change it then? Ah, good question. Traditionally, they haven't been, you know, because they tend to, you know, people get used to paying these surchargers. And gradually, those surchargers get folded into the, into the fair. So I, you know, in the last, I'd say last three or four fuel surchargers, I'd say 90 percent of the fuel charges, yeah, disappeared off your ticket.

13:37But it got rolled into your, into the actual fair that you're paying on the, on the flight from point A to point B. Right. It's so hard to keep track. John is at these days, he's about, and they still don't make it, and they still don't make any money. You know, you're, you're talking airlines making three percent, four percent margins, same with that, you know, the same level as a grocery store. So they're not making a lot of money. And so when the price of fuel goes up 30 percent and that's 30 percent of your total costs, you're losing money for every flight you operate. Okay. So are there certain areas of the world you think that perhaps people should reconsider? Because the airfare is going to get too expensive. Can airlines pivot to something else at this point? It must be so hard for Canadian airlines. It's, it's a little tough. Internationally, you know, I could, I think, you know, when you're talking about going to Asia or opening up new markets in Africa or Asia or Eastern Europe, you know, you're starting to talk about going into areas where we have, you know, airspace restrictions. And when you start having airspace restrictions, you've got to fly the airplanes a little longer,

14:40spend more time in the air, cruise-fade longer, more gas being spent. So I think that Canadians, you know, I want to look at trips that have some semblance of stability over the next, you know, five or six months. And you know, I love to say it, but it's Canada. You know, visit the country. And you know, the odds of having a disruption happening in Canada, you know, are a few to far between, yes, we'll be subject to the ups and downs of the global pricing because that's how we pay for our fuel. But I think from a safety, from a security, from an operational perspective, Canadians should consider Canadian flying. I think there are a lot of us are going to be considering that. John, thank you for your time. All right, Jimmy. America leads the world in medicine development. It matters. We get new medicines first, nearly three years faster, five million Americans go to work

15:43because we make medicines here at home, and not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them or will we choose to stay ahead? When America leads, America cures. Still, Washington to keep us in the lead. Learn how at AmericaCures.com, paid for by Farma. Score more with the college branded Venmo debit card and earn up to 5% cash back with Venmo stash. Got paid back with the Venmo debit card, you can instantly access your balance and spend on what you want, like game day snacks, gear, tickets, and more. The more you do with the more cash back you can earn, plus there's no monthly fear minimum balance. Sign up now at Venmo.com slash college card. The Venmo master card is issued by the bank court bank NA, select schools available. Venmo stash terms and exclusions apply at Venmo.me slash stash terms, max $100 cash back per month. I need to think back now to your time in school. Do you remember if there was a teacher that was especially tough or mean, maybe a teacher

16:45that had a particular reputation for that? I think we can all probably recall someone like that, can't we? But when is it tough but fair and when does it become problematic and maybe abusive? Story in the news this week, got us talking about this topic. It's about a BC teacher recently disciplined for sarcastic comments in the classroom that gave students anxiety, caused them to stop speaking up in class because they were afraid that they would be targeted by a sarcastic comment. Overall when I read the description of the teacher's behavior, yes, some of it definitely comes across as mean and wrong. Some of it also struck me as, well, I had teachers like that in high school too, so it got us thinking, has teaching changed or have students and expectations of behavior changed? Now Robert Ponditio is with us now, a senior fellow at the American Enterprise Institute to talk more about this. Robert, thanks for being here.

17:46Oh, thanks for having me fascinating topic, isn't it? It really is. So what do you think? Has teaching changed or is it students that have changed? Why can't it be both? I can really speak about this in only in a limited way. I'm not familiar with the specific case in BC that you're describing, but I'm in a former elementary school teacher and I've been involved in education in the US for 25 years. There's no doubt that the dynamic has changed. Kids, I don't think it's unfair to say, are a little bit more sensitive, a little bit more fragile or perceived that way and the expectations on teachers have changed. Those mean teachers that you described from our own childhood, they're probably still there, but now they're accountable for getting every kid across the finish line, so to speak. So the onus is really on them to really deliver results for kids as opposed to using some of these techniques that you and I remember either fondly or not fondly.

18:46Okay, that's a really good point then. So you're right. Those were techniques and we were probably expected to rise to the occasion. And so you're saying now in education, there's new techniques that teachers are supposed to try. Well, maybe it's not so much techniques is just, I think there's greater scrutiny on teachers. Look, I'll admit I'm a little bit old school in some ways, so I want to say that we should be careful not to redefine every uncomfortable moment in school as humiliation. I mean, I had the same response that you did in looking at some of the printed comments about this teacher. Some of them seemed over the line and some of them seemed like, hmm, I think I've said worse things to fifth graders in my time teaching. But the fact of the matter is learning is inherently uncomfortable sometimes. Students will get corrected publicly, that's not going to change. Students do get called on when they don't know the answer, their work gets critiqued. That's normal classroom life, that's not necessarily abuse. But there is a line and it's perhaps in the eye to be holder, but the day is not going

19:53to come. At least I hope it's not going to come when teachers are no longer allowed to correct errors out loud, whether no longer allowed to ask students to try again. A teacher just can't run a classroom with every public correction is treated as humiliation. Right, but I guess the problem is where is the line? I think for my purposes, I would describe it as contempt. A teacher can be demanding, but once you start ridiculing a student, then you've lost the moral authority of the classroom. Now, to be fair, some of that might be in the eye to holder as well, but I think most of us would agree that we recognize when we see it, when a teacher crosses the line from correcting a student to to eventing contempt for the students. Right. And now on the student side of things, I wonder, is this complicated by parents don't want their children to have to go through anything difficult or have anybody be mean to them? That's funny. You say that I was having this conversation with a colleague the other day and this gets

20:53back to my point about the expectations on teachers. When I was a kid and granted, that was a long time ago, if I brought home a bad report card or got in trouble in school, it probably would never have occurred to my parents to criticize the teacher. That's right. They will help me accountable. And now that dynamic has changed. I guess a different way to say this is every conflict that happens in schools has three parties. The parent, the teacher and the student, and they're almost always going to come down to two against one. So the frame becomes which two? Is it the parent and the teacher against the student or the parent and student against the teacher? That changes the dynamic completely. Oh, completely, right? So I wonder how much of that has played into what goes on in the classroom these days has, for some teachers, has that been a more challenging adjustment to make, perhaps? Yeah. Again, I assume it's somewhat the same in Vancouver and BC as it is here in the States.

21:53But the one thing I can say with a reasonable degree of authority is that teachers are increasingly likely in recent years to cite student behavior at a problem and their reason for leaving the classroom here in the States, we often hear about, oh, we need to, we want to keep teachers in the classroom, it's about pay and respect. But when you look at the reasons that teachers actually leave the classroom, certainly they would love to get paid more, but it really has more to do with some of these dynamics we're discussing with student behavior, with oppositional relationships with parents, et cetera. Okay. So then Robert, how do we teach accountability in the classroom to students given all of these parameters and situations? Yeah, it's really hard. And again, I can speak about it more in the American context, but I think it's fair to say that our relationship with schools is in play in a way that it hasn't been. I mean, at the top of the segment you described, you know, and I had a similar experience, some of the teachers that we remember, and frankly, even remember, finally, might have

22:56been called the mean teacher, the sarcastic teacher. We didn't take every correction as an affront on our dignity. The dynamic has certainly changed. You know, there's always going to be some of those kind of teachers, but look, I will, I will say, and again, I want to be careful here because I don't want to be perceived as defending conduct that may have been truly over the line. But based on the reports that I've seen, I hope there's always room for at least some of those teachers with challenging personality. And for no other reason, then, when students leave school, they're going to have to work with people like that. They're going to have bosses like that. This is what I wonder is that we're setting them up. Like I understand we want to protect kids and help kids and nurture kids, but at some point, they have to go out into the real world, and those won't always be considerations for them. No, that's exactly right. In the same way that there's a fine line between correction and contempt, there's a fine

23:57line between a challenging personality and a corrosive one. Right. So has education found that line yet? I don't know that it's ever, I don't know that it's possible to say definitively, this is where it is. A lot of it is in the eye of the beholder clearly, but I will look, I will say this that when a teacher, and again, I want to be careful not to defend potentially indefensible conduct, but when a teacher is called the carpet for conduct that you and I might perceive as kind of work today's stuff, it can only have a chilling effect. This is what I wonder as well. So the way you see it, though, Robert, though, that responsibility, there's three rooms for responsibility here, right? Parent, teacher, and student. Right. I think that's right. And those dynamics are always going to be in play in different because people are different. You perceive as humiliation, I might perceive as kind of, you know, just that's just the way that person is. Oh, that teacher is sarcastic, a teacher is, you know, just that's the way he or she rolls.

25:01You know, it's going to be impossible to draw that line to everyone's satisfaction. It really is. Robert, thank you so much for talking to us about it, though. Oh, thank you for having me. That's the Mornings with Simmy Podcast. Thanks for listening. Don't forget to look for us on Curiouscasts, Spotify, Apple, or anywhere you find your podcast. I really hope that we work in the shadows. Star and Carmelo's in Nick Elfus. Nice work, partner. C.L.A., all new Mondays at 10 on Global and Stream on Stack TV.