Episode overview In this episode, Cameron and Tony range from bushfires in Australia to political pressure on the US Federal Reserve, before digging into portfolio performance and a detailed QAV-style teardown of Mexican ultra-low-cost airline Volaris (VLRS). They unpack why airlines keep showing up on the QAV America buy list, how VLRS built a Ryanair-style model aimed at converting long-haul bus travellers into flyers, and why the Pratt & Whitney GTF engine recall temporarily derailed the business. The discussion balances strong operating cash flow and a seasoned low-cost airline playbook against razor-thin margins, fuel price sensitivity, and the ever-present risks of airline investing. ⸻ Timestamps & topics 00:00 – Bushfires and resilience Victoria bushfires, large-scale horse evacuations, and the limits of government preparedness. 02:30 – US market tension: Powell vs Trump Political pressure on the Fed, central bank independence, and why markets care. 06:30 – Portfolio performance update QAV America portfolio vs S&P 500. 09:30 – Stock deep dive: Volaris (VLRS) 31:00 – Other recent picks and portfolio reflections Quick updates on recent selections and sector clustering across airlines, shipping, and power. Transcription [00:00:00] Cameron: Welcome back to QAV America, Tony. This is episode 35. We’re recording this on the 13th of January, 2026. Uh, how are you, Tony? Tony Kynaston: Good, good, good. As I said, um, in the Australian show, we’ve had a lot of bush fires Victoria, which is unfortunate. And some of those I guess, have indirectly affected me because I have, um. Brood mares and race horses in various farms, and had to be evacuated overnight quickly, which is logistically very difficult to move. I think in total like about 500 horses. Um, between various farms and it’s been amazing the way that everyone’s pitched in. And there’s just been convoys of horse floats taking horses and putting them on other farms. In one case, I think the sale yard in the near tele marine airport in Melbourne’s taken 150 and there’s housing them. So [00:01:00] it’s, it’s the worst part of nature and the best part of humanity, as someone said to see all this happen. Cameron: Although I’d like to see humanity stop the fires from happening in the first place, I think that would be a better, Tony Kynaston: Yeah. Cameron: you know? Hmm. Tony Kynaston: Well, I think they’ll Cameron: Hmm. Tony Kynaston: bushfires. It’s whether they’re uncontrolled is the issue. Cameron: Hmm. Yeah, as we were talking about on the last show, like, you know, we’ve known for a long time that things are getting hotter and that we’re gonna have more fires and what are we doing to not, or prevent them if we can, and if we can’t, you know, sort of minimize the impact and the damage and the destruction of them better than we are currently doing because. You know, they still seem to be hugely tragic events. So I was just reading about the LA Fires, which happened a year ago. The other day, I think it was the 12 month anniversary of that. They were talking about how many hundreds of thousands of people are still displaced in LA after all of that [00:02:00] happened. Um. Tony Kynaston: Yeah. Um, you’re right. I dunno about America, but in Australia it still seems to be a lot of finger pointing between councils and government departments and people who think we should be going back to First Nations and looking at what they do to manage bushfires, et cetera, et cetera. they Cameron: Hmm Tony Kynaston: occur. So Cameron: Hmm. Tony Kynaston: they’re not effective. Cameron: Well, speaking of effective solutions, um. Jerome Powell, apparently not very effective in rebuilding or renovating whatever he is doing to the Federal Reserves offices. And the Department of Justice has decided to open a criminal inquiry into Jerome Powell. Uh, we talked about this on the last show, what the implications of this might be. Yeah. My understanding is like the big issue of this is the perceived. Political nature of the investigation. [00:03:00] Obviously President Trump has been very critical of Jerome Powell, who of course is a Trump appointee originally, but in this administration, uh, second administration of Trump has been very critical of Powell. Powell has not been cutting interest rates as quickly or as often as President Trump would like, and there is this concern that if the. Perceived independence of the Federal Reserve as lessened that it could have implications for the market. Am I understanding that correctly? Tony Kynaston: Yes it is. Uh, well, yes, you are understanding it correctly. Um, and look, it’s. It is been a long time since we haven’t seen an independent reserve bank or fed chair or, um, the European equivalents to those, uh, in various countries. So it’s hard to say whether Trump’s right or the chairs of the Fed is right in terms of interest rates and what they should be set at. But generally he’s [00:04:00] accepted that if, um, if you have interest rates set by the government, they will. Because they’re beholden to the electoral cycle, manipulate them to suit themselves rather than necessarily the long-term benefit of the economy. Um, which kind of begs the question that why isn’t the whole country run by technocrats if they do a better job of running the economy than, um, elected officials? But anyway, that’s a different story. but, you know, well, I’d like to explore further, but, um, yeah, it’s, uh, it’s, it’s an interesting situation. Um. We see this in Australia from time to time and is often, uh, reported after the fact when, when things get announced, when. There’s enough time between the event and, and when it’s reported that, uh, the treasurer or the Prime Minister, they rang up and abused the head of the reserve bank for not doing the right thing that they Cameron: Not gonna do. Tony Kynaston: rates. so there’s always some kind of pressure going on between elected officials and the independent board. but the independent boards generally given [00:05:00] enough power to resist. It doesn’t mean they’re infallible. We saw a problem in Australia with interest rates. Um, when the RBA head here said there wouldn’t be interest rate rise for a couple of years, and then a few months later started to rise, interest raise interest rates, and that caused problems to people who’d acted on, his verbal, they predictions and took out mortgages, et cetera. So, um, they don’t always get it right. Uh, so it’s, it’s. Generally, I think the, the RBA or, or the Fed should be independent. I think that’s the, um, the best, uh, framework for, for setting interest rates to affect the economy. But I’m not saying they’re infallible. I’m not saying crops wrong. Um, you know, as, as we discussed before, we, I thought tariffs would lead to inflation and they haven’t yet. Whether they do or not, I’m not sure, but, um, you know, maybe, maybe the president’s right, interest rates should be cut. [00:06:00] It could just be a timing issue. I wouldn’t be surprised if the US does cut interest rates at some stage in 2026. Um, so maybe he gets his wish anyway, if he just let, leave things alone. But, um, that’s not his style, is it really? Cameron: Certainly now I’m pretty sure interest rates will be cut by someone. Hmm. Tony Kynaston: Yeah. Yeah, By the current guy or the next guy. Mm-hmm. Cameron: Well, that’s the big story in terms of the US market this week. Um, in terms of, uh, other stuff going on, you know, the, the whole, uh. Market’s been, um, still bubbling along over their little bit of an equity wobble, but um, I think things are still just chugging along, uh, in the US And I was saying to you just earlier, our portfolio has really been going quite strong over there recently.[00:07:00] Um. For the last 90 days, our dummy portfolio is up 16% versus 6% for the s and p 500. Uh, since inception, our portfolio is now up 77% versus 57%. For the benchmark. So a couple of weeks ago we were sort of running neck and neck, but we’ve, um, just really rocketed back up again. It’s been an interesting period. If I look at the last one year, uh, some of the stocks that have done really well for us are in Nova International. Year ago they were trading around about 98 bucks. They’re now trading up around 160. Tony Kynaston: Oh. Cameron: Uh, so it’s been a big year for them. Euroes, one of the shipping companies that we’ve held for quite some time, ESEA is their ticket. They were trading around 26 bucks. They are currently trading around [00:08:00] 55. They were up over 60, uh, late last year. They’ve come back a bit. So, um, yeah, there’s been some, some other good ones. Um, UBS Ag, they were trading around about 31 bucks a year ago. They’re up at nearly 48 bucks today. Um, this, I’m just looking at the charts here. There’s just lots of, lots of good stories right across our portfolio. One of the best ones though, in uh, last year, we haven’t held ’em for this long though, is career electric power that we, uh, talked about on the show a few months ago. Um, they were trading around about six bucks a year ago. They’re now up around 18 bucks, but, uh, yeah. Tony Kynaston: What’s caused Cameron: Hmm. Well, you remember we had this whole story about, uh, their inability to raise rates that were held back by the governments, and then all of a [00:09:00] sudden some of those, uh, holding the, that hold was taken off and they were able to adjust it and the, the numbers turned around. Anyway, the company that I’m gonna talk about this week, Tony, um, is another airline. You know, we’ve talked
