WEBVTT 00:00:00.000 --> 00:00:02.339 Welcome back to the Deep Dive. Today we're doing 00:00:02.339 --> 00:00:05.540 something, well, a little different. Yeah, this 00:00:05.540 --> 00:00:08.419 one is interesting. We are essentially reconstructing, 00:00:08.419 --> 00:00:10.960 maybe not a literal crime scene, but definitely 00:00:10.960 --> 00:00:13.699 a corporate autopsy. I like that, a corporate 00:00:13.699 --> 00:00:16.460 autopsy. Yeah, we're looking at a stack of documents, 00:00:16.879 --> 00:00:20.199 financial reports, crash investigations, all 00:00:20.199 --> 00:00:24.199 of it centering on one defunct company, Armavia. 00:00:24.890 --> 00:00:27.129 And if you're listening and thinking, why should 00:00:27.129 --> 00:00:29.789 I care about an Armenian airline that stops flying 00:00:29.789 --> 00:00:33.990 back in 2013? Just hold that thought. Right. 00:00:34.109 --> 00:00:35.750 Because this isn't really a story about planes. 00:00:35.909 --> 00:00:37.609 No, it's not at all. It's a story about post 00:00:37.609 --> 00:00:42.189 -Soviet identity. It's about the incredibly dangerous 00:00:42.189 --> 00:00:45.500 gap between ambition. and reality. And honestly, 00:00:45.700 --> 00:00:47.780 it's a masterclass in how not to run a logistics 00:00:47.780 --> 00:00:49.840 business. It's almost Shakespearean in a way. 00:00:49.920 --> 00:00:52.859 You have the rise, the hubris, the tragedy, and 00:00:52.859 --> 00:00:55.320 then the fall. So looking at our sources today, 00:00:55.420 --> 00:00:58.439 we're covering the timeline from about 1996 to 00:00:58.439 --> 00:01:01.920 2013. We've got ownership battles, fleet data, 00:01:02.140 --> 00:01:03.920 which is a total mess, by the way. Oh, we'll 00:01:03.920 --> 00:01:05.480 get to that. And the official accident reports. 00:01:05.859 --> 00:01:09.620 And the mission for this deep dive is to figure 00:01:09.620 --> 00:01:12.719 out what actually killed Armavia. Was it bad 00:01:12.719 --> 00:01:16.269 luck? Was it the Russians or was it just the 00:01:16.269 --> 00:01:19.790 brutal economics of trying to be a flag carrier 00:01:19.790 --> 00:01:22.590 for a small nation? Let's start right there with 00:01:22.590 --> 00:01:25.230 that term, flag carrier, because that sets the 00:01:25.230 --> 00:01:28.150 whole psychological stage. It does. Armenia wasn't 00:01:28.150 --> 00:01:30.549 just a business. It was supposed to be the face 00:01:30.549 --> 00:01:32.950 of Armenia to the world. Right. And that is a 00:01:32.950 --> 00:01:34.409 heavy, heavy burden. You have to remember the 00:01:34.409 --> 00:01:37.840 context. This is the 90s. The Soviet Union has 00:01:37.840 --> 00:01:41.219 collapsed. And every newly independent state 00:01:41.219 --> 00:01:44.280 wanted two things. A seat at the U .N. and their 00:01:44.280 --> 00:01:46.840 own airline. It's a sovereignty thing. You want 00:01:46.840 --> 00:01:48.760 to see your flag on the tail fin at Heathrow 00:01:48.760 --> 00:01:50.620 or Charles de Gaulle. Exactly. It says, we've 00:01:50.620 --> 00:01:54.060 arrived. But Armavia's start was, well, sluggish 00:01:54.060 --> 00:01:55.540 is putting it mildly. The papers were signed 00:01:55.540 --> 00:01:58.359 in 96. Yeah. But I was looking at the flight 00:01:58.359 --> 00:02:00.719 logs. They didn't actually move a paying passenger 00:02:00.719 --> 00:02:03.620 until 2001. That's five years of just nothing. 00:02:04.239 --> 00:02:07.299 A paper airline? They had the license, but not 00:02:07.299 --> 00:02:09.419 the medal. And when they finally did start, it 00:02:09.419 --> 00:02:11.860 was strictly regional. Flights to Russia, flights 00:02:11.860 --> 00:02:14.360 to Turkey, the easy stuff. But the real story 00:02:14.360 --> 00:02:17.800 kicks off in 2002. This is where the plot thickens. 00:02:17.919 --> 00:02:20.919 We see a major foreign player enter the game. 00:02:20.960 --> 00:02:22.900 That's Seven Airlines. Which stood out in the 00:02:22.900 --> 00:02:25.000 corporate history immediately. This is a Russian 00:02:25.000 --> 00:02:27.539 giant, formerly Siberia Airlines. Not a player. 00:02:27.699 --> 00:02:32.759 And very aggressive. So in 2002, S7 buys 50 % 00:02:32.759 --> 00:02:35.909 of Armavia. Right. And then... Just a year later, 00:02:36.009 --> 00:02:39.490 2003, they bumped that up to 68%. So effectively, 00:02:39.669 --> 00:02:42.210 Armenia's national airline was two -thirds Russian 00:02:42.210 --> 00:02:45.090 -owned. Yeah. Which, if you know the geopolitics 00:02:45.090 --> 00:02:46.710 of the Caucasus, isn't that surprising? Yeah. 00:02:46.750 --> 00:02:48.590 But commercially, it was a fascinating move. 00:02:49.289 --> 00:02:51.830 S7 basically used Armenia as a feeder system. 00:02:52.050 --> 00:02:53.830 Okay. They wanted to dominate the routes between 00:02:53.830 --> 00:02:56.830 Yerevan and the major Russian cities, Moscow, 00:02:57.050 --> 00:03:00.949 Sochi. It gave Armenia stability, you know, access 00:03:00.949 --> 00:03:03.409 to S7's maintenance, their booking systems. But 00:03:03.409 --> 00:03:05.789 it turned them into a subsidiary. A vassal state 00:03:05.789 --> 00:03:08.349 airline. Essentially. And for a country trying 00:03:08.349 --> 00:03:10.650 to assert its independence, that's an uncomfortable 00:03:10.650 --> 00:03:12.990 dynamic. You've got the Armenian flag on the 00:03:12.990 --> 00:03:15.349 tail, but the decisions are being made in Moscow. 00:03:15.389 --> 00:03:17.849 Which has to explain the massive pivot in 2005. 00:03:18.069 --> 00:03:20.389 This is the first big turning point. The big 00:03:20.389 --> 00:03:24.189 brother exits the chat. And a local entity, Mika 00:03:24.189 --> 00:03:27.590 Armenia Trading, buys out S7 completely. Led 00:03:27.590 --> 00:03:30.490 by Mikhail Bagdasarov. And this is crucial context. 00:03:31.180 --> 00:03:33.560 Bagdasarov was a tycoon, very well connected. 00:03:33.800 --> 00:03:36.379 Mika Trading wasn't an aviation company. They 00:03:36.379 --> 00:03:39.300 were into oil, cement, finance. So it's the classic 00:03:39.300 --> 00:03:42.259 oligarch buys a sports team trope. But instead 00:03:42.259 --> 00:03:44.879 of a soccer club, he bought an airline. And now 00:03:44.879 --> 00:03:48.340 it's 100 % locally owned. The timing here is 00:03:48.340 --> 00:03:51.979 wild because the previous national carrier, Armenian 00:03:51.979 --> 00:03:55.020 Airlines, had just gone bankrupt in 2003. So 00:03:55.020 --> 00:03:57.199 Armavia just steps right into this massive vacuum. 00:03:57.319 --> 00:03:59.379 They inherited the crown. And the strategy shifts 00:03:59.379 --> 00:04:02.139 immediately. Oh, completely. Under S7, it was 00:04:02.139 --> 00:04:04.900 cautious, calculated. Under Bagdasarov, it was 00:04:04.900 --> 00:04:06.960 just aggressive expansion. They wanted to be 00:04:06.960 --> 00:04:09.180 the player. The numbers back that up. I was looking 00:04:09.180 --> 00:04:12.639 at the passenger growth charts. In 2005, they 00:04:12.639 --> 00:04:17.100 moved about 513 ,000 people. Five years later, 00:04:17.259 --> 00:04:20.839 2010, they're over 800 ,000. Which is huge growth 00:04:20.839 --> 00:04:23.060 for a country with a population of just under 00:04:23.060 --> 00:04:26.459 3 million. Explosive. But, and there's always 00:04:26.459 --> 00:04:28.540 a but, when you grow that fast, you need the 00:04:28.540 --> 00:04:30.199 infrastructure to support it. And this is where 00:04:30.199 --> 00:04:32.279 I want to talk about the fleet. The Frankenfleet. 00:04:32.439 --> 00:04:34.139 Because when I looked at the list of aircraft 00:04:34.139 --> 00:04:35.959 they were flying, I honestly thought it was a 00:04:35.959 --> 00:04:38.279 typo. It's a zoological garden of airplanes. 00:04:38.579 --> 00:04:40.680 It's such a mess. Okay, let's list this out. 00:04:40.939 --> 00:04:45.019 You've got Airbus A319s and A320s. Fine. Standard 00:04:45.019 --> 00:04:47.180 workhorses. Yep. Totally normal. Then you have 00:04:47.180 --> 00:04:49.560 Boeing 737s. Okay. So now you need two different 00:04:49.560 --> 00:04:51.139 sets of pilots, two different sets of mechanics, 00:04:51.399 --> 00:04:53.720 two warehouses full of parts. Exactly. Yeah. 00:04:53.800 --> 00:04:57.100 Then Bombardier CRJs for the short hops. And 00:04:57.100 --> 00:05:02.279 then a Yakovlev Yak -42D, a Soviet trijet for 00:05:02.279 --> 00:05:05.379 VIPs. Don't forget they also leased ATRs at one 00:05:05.379 --> 00:05:07.500 point. It's the definition of a mixed fleet. 00:05:07.769 --> 00:05:09.730 So why is that a problem? For the listener who 00:05:09.730 --> 00:05:11.810 doesn't run an airline, why can't you just mix 00:05:11.810 --> 00:05:14.310 and match planes like cars in a garage? Because 00:05:14.310 --> 00:05:17.670 in aviation, complexity is the enemy of profit. 00:05:17.949 --> 00:05:20.430 It's the fastest way to burn money. You lose 00:05:20.430 --> 00:05:23.730 all economy of scale. Completely. Look at the 00:05:23.730 --> 00:05:26.269 most profitable airlines in history. Southwest, 00:05:26.610 --> 00:05:29.850 Ryanair, they fly one type of plane. Southwest 00:05:29.850 --> 00:05:33.550 only flies the 737. Ryanair, mostly the 737. 00:05:34.350 --> 00:05:36.990 Armavi was flying a Noah's Ark fleet. Two of 00:05:36.990 --> 00:05:40.009 everything. It just suggests they were desperate 00:05:40.009 --> 00:05:42.930 for capacity, grabbing whatever leases they could 00:05:42.930 --> 00:05:45.149 find without thinking about the operational nightmare 00:05:45.149 --> 00:05:47.009 they were building. It sounds like they were 00:05:47.009 --> 00:05:48.850 patching holes rather than building a foundation. 00:05:49.250 --> 00:05:52.009 Yeah. And speaking of ambition outpacing reality. 00:05:52.970 --> 00:05:55.050 We have to talk about the Los Angeles connection. 00:05:55.430 --> 00:05:57.410 Ah, the Holy Grail. I saw this in all the press 00:05:57.410 --> 00:05:59.470 clippings. They were obsessed with flying nonstop 00:05:59.470 --> 00:06:03.050 from Yerevan to LAX. Of course, because of Glendale, 00:06:03.089 --> 00:06:05.389 the massive Armenian diaspora in California. 00:06:05.689 --> 00:06:07.490 It's practically the second capital of Armenia. 00:06:07.769 --> 00:06:09.550 The demand is there. The cultural connection 00:06:09.550 --> 00:06:11.670 is there. Yeah. But look at that fleet we just 00:06:11.670 --> 00:06:13.850 talked about. They didn't have a single plane 00:06:13.850 --> 00:06:16.529 that could make that flight. Not even close. 00:06:16.810 --> 00:06:19.529 An A320 is not getting to California from the 00:06:19.529 --> 00:06:23.639 Caucasus. You'd need a wide body. A Boeing 777, 00:06:23.899 --> 00:06:26.939 an Airbus A330. But they kept promising it. Kept 00:06:26.939 --> 00:06:29.339 promising. It was a pipe dream. It was marketing 00:06:29.339 --> 00:06:31.939 fluff to keep the public excited. But the physics 00:06:31.939 --> 00:06:33.800 just weren't on their side. But they did try 00:06:33.800 --> 00:06:35.899 to pioneer something else. And this is probably 00:06:35.899 --> 00:06:38.040 the most interesting technical chapter of their 00:06:38.040 --> 00:06:41.800 story. The Sukhoi Superjet. The SSJ -100. This 00:06:41.800 --> 00:06:44.959 is where politics and aviation collide. This 00:06:44.959 --> 00:06:47.259 was supposed to be the great Russian comeback 00:06:47.259 --> 00:06:49.360 in civil aviation, right? That was the narrative. 00:06:49.680 --> 00:06:52.199 The superjet was the first clean sheet design 00:06:52.199 --> 00:06:56.000 from post -Soviet Russia. A modern fly -by -wire 00:06:56.000 --> 00:06:59.160 jet meant to compete with Embraer and Bombardier. 00:06:59.360 --> 00:07:02.379 It was Putin's pride and joy. And Armavia decides, 00:07:02.560 --> 00:07:04.860 we'll take the first one. Launch customer, April 00:07:04.860 --> 00:07:08.180 21st, 2011. Armavia becomes the first airline 00:07:08.180 --> 00:07:10.259 in the world to fly the Superjet on a commercial 00:07:10.259 --> 00:07:13.519 route. Yervon to Moscow. Sounds like a huge PR 00:07:13.519 --> 00:07:16.360 win. First in the world. But being a launch customer 00:07:16.360 --> 00:07:18.199 is not always a good thing, is it? It's basically 00:07:18.199 --> 00:07:20.480 being a beta tester for a multi -million dollar 00:07:20.480 --> 00:07:22.879 machine that flies. Okay, right. I mean, when 00:07:22.879 --> 00:07:25.560 Singapore Airlines launches a new Airbus, they 00:07:25.560 --> 00:07:27.819 have the engineering depth to absorb the teething 00:07:27.819 --> 00:07:31.220 problems. When a small carrier like Armavia does 00:07:31.220 --> 00:07:35.019 it, it's a massive, massive risk. And they found 00:07:35.019 --> 00:07:37.899 bugs. They sure did. Within a year, the whole 00:07:37.899 --> 00:07:39.600 relationship imploded. They'd ordered a second 00:07:39.600 --> 00:07:41.680 jet, canceled it, then they returned the first 00:07:41.680 --> 00:07:45.160 one. Why? They publicly cited reliability concerns. 00:07:45.699 --> 00:07:48.339 What does that mean in plain English? It means 00:07:48.339 --> 00:07:50.139 the plane was spending too much time on the ground. 00:07:50.500 --> 00:07:52.279 Maybe it was software glitches, maybe waiting 00:07:52.279 --> 00:07:55.160 for parts. But if you're Armavia, you can't afford 00:07:55.160 --> 00:07:57.319 to have your shiny flagship plane sitting in 00:07:57.319 --> 00:07:59.560 a hangar earning zero dollars. It feels like 00:07:59.560 --> 00:08:01.480 there was political pressure to take that plane. 00:08:01.779 --> 00:08:04.459 Almost certainly. It was a prestige project for 00:08:04.459 --> 00:08:07.519 Russia. And Armenia is a close strategic ally. 00:08:08.259 --> 00:08:10.879 But the economics just didn't work. It became 00:08:10.879 --> 00:08:13.920 an anchor around their neck. So we have a chaotic 00:08:13.920 --> 00:08:17.199 fleet, a failed experiment with a prototype jet. 00:08:17.560 --> 00:08:19.980 But we can't tell the story of Armenia without 00:08:19.980 --> 00:08:22.319 stopping at the darkest moment. No, you can't. 00:08:22.680 --> 00:08:24.920 This is the event that defines the airline's 00:08:24.920 --> 00:08:28.980 legacy, unfortunately. Flight 967. May 3rd, 2006. 00:08:29.879 --> 00:08:34.460 An Airbus A320 flying Eurovan to Sochi. A routine 00:08:34.460 --> 00:08:38.759 route. A short hop across the Black Sea. A flight 00:08:38.759 --> 00:08:41.159 they had done hundreds of times. But the weather 00:08:41.159 --> 00:08:45.200 was awful. Rain. Poor visibility. And the plane 00:08:45.200 --> 00:08:48.220 never made it. It crashed into the sea. 113 people 00:08:48.220 --> 00:08:50.860 died. Total hull loss. And the investigation 00:08:50.860 --> 00:08:52.620 report. I mean, these are always hard to read, 00:08:52.659 --> 00:08:54.879 but this one is particularly frustrating. Because 00:08:54.879 --> 00:08:57.899 the plane was fine. That's the term CFIT, right? 00:08:58.279 --> 00:09:00.919 Controlled flight into terrain. Correct. The 00:09:00.919 --> 00:09:02.919 engines were turning. The computer was online. 00:09:03.120 --> 00:09:05.399 The hydraulics were working. The pilots flew 00:09:05.399 --> 00:09:07.539 a perfectly healthy airplane into the water. 00:09:07.679 --> 00:09:09.799 How does that even happen? How do you lose track 00:09:09.799 --> 00:09:12.059 of up and down so badly? It's a psychological 00:09:12.059 --> 00:09:14.679 trap. Yeah. They were attempting to land in that 00:09:14.679 --> 00:09:16.799 bad weather. The tower told them visibility was 00:09:16.799 --> 00:09:19.179 below minimum, so they had to abort. Right. They 00:09:19.179 --> 00:09:22.080 initiated a go around, pull up. Circle back. 00:09:22.139 --> 00:09:24.740 Try again. Which is a standard maneuver. It is. 00:09:24.799 --> 00:09:27.559 But it is high workload. It's stressful. And 00:09:27.559 --> 00:09:30.059 this is where biology betrays you. The captain 00:09:30.059 --> 00:09:32.299 likely suffered from something called somatographic 00:09:32.299 --> 00:09:36.059 illusion. Somatographic illusion. It's a sensory 00:09:36.059 --> 00:09:39.480 trick. When you accelerate quickly, like when 00:09:39.480 --> 00:09:42.059 you gun the engines for a go around. Yeah. Your 00:09:42.059 --> 00:09:45.460 inner ear detects that acceleration. Yeah. But 00:09:45.460 --> 00:09:48.120 without visual references, remember, it's pitch 00:09:48.120 --> 00:09:51.970 black. It's raining. Your brain confuses that 00:09:51.970 --> 00:09:54.690 forward acceleration with tilting backwards. 00:09:55.009 --> 00:09:56.590 So you feel like you're doing a backflip even 00:09:56.590 --> 00:09:58.509 though you're flying straight. Exactly. You feel 00:09:58.509 --> 00:10:00.309 like the nose is pitching up dangerously high. 00:10:00.570 --> 00:10:02.690 So what's your instinct? Push the nose down. 00:10:02.789 --> 00:10:05.210 You push the nose down to level off. But you 00:10:05.210 --> 00:10:07.690 were already level. So now you're diving. And 00:10:07.690 --> 00:10:09.330 that's what happened. He was making inputs that 00:10:09.330 --> 00:10:11.649 sent the plane into the sea thinking he was saving 00:10:11.649 --> 00:10:14.309 it from a stall. And first officer, why didn't 00:10:14.309 --> 00:10:17.330 he stop him? That's the other tragedy here. It's 00:10:17.330 --> 00:10:19.289 a failure of what's called crew resource management. 00:10:20.139 --> 00:10:22.860 In many post -Soviet aviation cultures at the 00:10:22.860 --> 00:10:25.500 time, the cockpit hierarchy was very steep. The 00:10:25.500 --> 00:10:28.139 captain was God. The captain was God. The first 00:10:28.139 --> 00:10:30.200 officer either didn't monitor the flight path 00:10:30.200 --> 00:10:32.799 effectively or was too hesitant to intervene 00:10:32.799 --> 00:10:34.980 and scream, Captain, we are diving. And the plane 00:10:34.980 --> 00:10:36.980 itself, the computer must have known it was too 00:10:36.980 --> 00:10:40.779 low. Oh, it did. The GPWS, the Ground Proximity 00:10:40.779 --> 00:10:43.460 Warning System, was screaming, Pull UP! But in 00:10:43.460 --> 00:10:46.460 that high -stress, disoriented state, they ignored 00:10:46.460 --> 00:10:48.559 it. They were fighting their own safety systems. 00:10:48.720 --> 00:10:51.659 God, that's just terrifying. Total sensory confusion. 00:10:52.039 --> 00:10:54.799 It is. And even though Armavia kept growing after 00:10:54.799 --> 00:10:59.279 2006, that crash breaks the trust. You can repaint 00:10:59.279 --> 00:11:01.980 the planes, but the locals remember. It changes 00:11:01.980 --> 00:11:05.259 the company culture from ambitious startup to 00:11:05.259 --> 00:11:07.960 crisis management. So let's fast forward to the 00:11:07.960 --> 00:11:10.980 end. We move from the tragedy of 2006 through 00:11:10.980 --> 00:11:14.320 the super jet fiasco. We get to 2013 and the 00:11:14.320 --> 00:11:16.340 wheels just come off. The financial depression, 00:11:16.580 --> 00:11:18.460 as the reports call it. It really seems like 00:11:18.460 --> 00:11:20.279 it happened overnight. One day they're flying, 00:11:20.360 --> 00:11:22.620 the next day they aren't. Bankruptcy often looks 00:11:22.620 --> 00:11:24.759 sudden from the outside, but it's a slow rot 00:11:24.759 --> 00:11:27.019 from the inside. They'd been bleeding cash for 00:11:27.019 --> 00:11:29.820 at least two years. Right. High fuel prices were 00:11:29.820 --> 00:11:32.519 hitting everyone. But Armavia had that inefficient 00:11:32.519 --> 00:11:34.879 Noah's Ark fleet. They were burning more cash 00:11:34.879 --> 00:11:37.240 per seat. They were piling up debt with airports, 00:11:37.360 --> 00:11:39.919 with fuel suppliers. I read the IATA clearinghouse 00:11:39.919 --> 00:11:42.779 suspended them shortly before the end. And that's 00:11:42.779 --> 00:11:45.100 the death knell. The IATA clearinghouse is the 00:11:45.100 --> 00:11:47.620 financial circulatory system of the airline industry. 00:11:48.159 --> 00:11:50.639 It handles money between airlines and travel 00:11:50.639 --> 00:11:52.799 agents. So when IATA kicks you out... You can't 00:11:52.799 --> 00:11:54.600 sell tickets effectively. You're cut off from 00:11:54.600 --> 00:11:57.759 the global system. So on March 29, 2013, they 00:11:57.759 --> 00:12:01.519 announced bankruptcy. April 1st. April Fool's 00:12:01.519 --> 00:12:04.700 Day, ironically, operations stop. Just like that. 00:12:04.840 --> 00:12:08.440 Gone. Imagine the scene. You're a passenger in 00:12:08.440 --> 00:12:11.600 Paris or Moscow. You have a ticket home to Yerevan. 00:12:11.799 --> 00:12:13.759 You show up at the counter and the lights are 00:12:13.759 --> 00:12:15.879 just off. And because they had co -chair partners, 00:12:16.200 --> 00:12:20.700 Air France, El Al, LOT Polish, this wasn't just 00:12:20.700 --> 00:12:22.860 an Armenian problem. Right. Explain that. If 00:12:22.860 --> 00:12:24.679 I bought a ticket on Air France, how does this 00:12:24.679 --> 00:12:27.360 affect me? Well, you might book New York to Yerevan 00:12:27.360 --> 00:12:30.070 on airfrance .com. The first leg is an Air France 00:12:30.070 --> 00:12:33.669 jet. But the second leg, Paris to Yerevan, is 00:12:33.669 --> 00:12:36.970 operated by Armavia. Suddenly, Air France has 00:12:36.970 --> 00:12:39.090 hundreds of angry passengers stuck at Charles 00:12:39.090 --> 00:12:41.490 de Gaulle with nowhere to go because their partner 00:12:41.490 --> 00:12:44.190 airline just ceased to exist. It rippled through 00:12:44.190 --> 00:12:46.690 the whole network. It's just such a stark ending. 00:12:46.809 --> 00:12:50.129 No bailout, no government intervention for the 00:12:50.129 --> 00:12:53.330 flag carrier. And that's the real surprise here. 00:12:53.809 --> 00:12:56.190 Usually, the government steps in. They say, we 00:12:56.190 --> 00:12:58.649 can't let the flag fail. But the Armenian government 00:12:58.649 --> 00:13:01.529 essentially said, this is a private company. 00:13:01.710 --> 00:13:04.009 Good luck. They let it burn. They let it burn. 00:13:04.129 --> 00:13:06.629 It signals a real shift. It's not just a vanity 00:13:06.629 --> 00:13:08.549 project anymore. If it doesn't make money, it 00:13:08.549 --> 00:13:11.429 dies. So when we step back and look at this whole 00:13:11.429 --> 00:13:14.190 arc, what's the big takeaway? Is this just a 00:13:14.190 --> 00:13:17.990 story of bad management? I think it's a story 00:13:17.990 --> 00:13:20.389 about the danger of what I'd call flag carrier 00:13:20.389 --> 00:13:23.029 syndrome. Okay. Define that. It's the belief 00:13:23.029 --> 00:13:25.470 that because you represent a nation, you are 00:13:25.470 --> 00:13:29.299 immune to basic... Or maybe you try to do too 00:13:29.299 --> 00:13:31.960 much. They wanted to be a geopolitical player 00:13:31.960 --> 00:13:34.220 with a superjet. They wanted to span the globe 00:13:34.220 --> 00:13:36.360 to L .A. without the right planes. They wanted 00:13:36.360 --> 00:13:38.379 to expand with a Frankenfleet. Ambition without 00:13:38.379 --> 00:13:41.840 foundation. Exactly. Aviation is a margins game. 00:13:42.000 --> 00:13:43.960 It's actually quite boring when it's done right. 00:13:44.100 --> 00:13:46.600 It's about standardization, safety, efficiency. 00:13:47.139 --> 00:13:50.019 Or maybe it was exciting. It was dramatic. And 00:13:50.019 --> 00:13:52.980 in aviation, exciting usually leads to bankruptcy. 00:13:53.320 --> 00:13:56.509 It's a sobering reminder. Next time I'm at an 00:13:56.509 --> 00:13:59.690 airport and I see a logo I don't recognize, I'm 00:13:59.690 --> 00:14:01.289 going to think about the House of Cards keeping 00:14:01.289 --> 00:14:04.269 that plane in the air. You should. Yeah. Behind 00:14:04.269 --> 00:14:08.190 every single ticket is a massive web of debt, 00:14:08.370 --> 00:14:11.429 leases, and geopolitical deals. We just usually 00:14:11.429 --> 00:14:13.490 don't see it until the lights go out. Well, on 00:14:13.490 --> 00:14:15.070 that cheerful note, we're going to wrap up this 00:14:15.070 --> 00:14:18.190 deep dive. A fascinating, if tragic, look at 00:14:18.190 --> 00:14:20.269 the rise and fall of Armadia. Thanks for having 00:14:20.269 --> 00:14:22.169 me. And thank you for listening. We will see 00:14:22.169 --> 00:14:23.429 you on the next deep dive.