- 16 hours ago
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00:00We're just talking about the complexities of this trade war between U.S. and China here right now.
00:04How do you see this really evolving when it comes to, you know, cargo volumes and the like?
00:09How is this all going to kind of play out for your business?
00:11Well, at the end of the day, the U.S. and China are always going to have a very rich and deep trade relationship.
00:17You can't avoid that.
00:19It's just a matter of figuring out what it's going to look like, and then we'll get back to a new balance and new stasis,
00:24and then we'll continue to move on.
00:25I mean, you know what's very interesting is Chinese exports have really increased this year versus last year.
00:32Just where they're going has changed a little bit.
00:35And despite what a lot of people think, exports between China and the U.S. are not, they're not, they did disappear.
00:40They're just a lower rate now until everything is settled.
00:44What have you seen in your business specifically into a window of, in terms of cargo flows?
00:48Because you have a very unique perspective.
00:49Yes, because of where we sit in Qatar, we sit in the middle of the, what I call the modern Silk Road.
00:56So we see all the travel back and forth, both for the passenger side and cargo side.
01:00What we saw this year is a lot of capacity was shifted from the Transpac, China to the U.S., into Europe.
01:08So what we saw is demand in Europe was up a little bit, but most importantly, prices were down a little bit
01:12because there was a lot of capacity that went in.
01:14For us specifically, what we saw is growth in our traffic from China, Hong Kong, Macau, into the GCC and into Africa.
01:22So we've seen a little bit of a shift in the market as Chinese exporters have had to adjust to the slightly less demand in the States.
01:31They've had to focus on additional markets.
01:34So are those the most best opportunities for growth for you guys?
01:37Well, actually, the opportunities for growth for us are still really strong.
01:40I mean, keep in mind one thing, and you guys follow this as much as we do.
01:44Global economies are still very strong.
01:46Trade is still resilient.
01:47Trade is resilient.
01:48Knock on wood.
01:49You don't have wood here.
01:50Knock on wood.
01:51The global economies are very strong.
01:53The GDPs, all the major GDPs are actually slightly up to a little bit, even more than up since last year.
01:59The Chinese GDP is up.
02:00The U.S. GDP is up.
02:02UK GDP, India GDP, all the GDPs are still very strong.
02:06So we expect once all of these trade issues are resolved, as I said, we'll get to new states.
02:11There's a new balance.
02:12And assuming that the GDPs continue to be strong, we expect cargo next year to actually do quite well again.
02:19Is there a sense, though, that we'll get some payback because of potential front-loading of these trade numbers?
02:24I mean, can the momentum continue through the trade deal and beyond?
02:28Yeah, I think it's a very good question.
02:30I do think you will see a period of time, once the trade deals are resolved, you'll see a refilling of stock, if you will, and that we could see a nice big jump.
02:40And that's really for the TransPAC carriers, the carriers that are operating between Asia and China in particular and the U.S.
02:48We're not really a big player in that market.
02:49When you make kind of long-term planning, then, how do you look at these kind of changes in geopolitical influences, what customers need?
02:56To what extent is one of the things that you're doing and planning is permanent and what's not permanent?
03:00That's a great question.
03:01And, in fact, it's part of what we do every day.
03:04There are two things to keep in mind.
03:05Number one, we at Qatar Airways, both the passenger side and the cargo side, we're very agile.
03:09You saw that during COVID as an example, what we did passenger side and cargo side.
03:14So agility is one of the things we're focused on.
03:16And our job, then, on the cargo side is to understand where trade flows are, how they're moving, how they're growing, and then to address them accordingly.
03:25The second part to what we do is we look at what are the forecasted GDP growth numbers, and then where do we see the most opportunity, what do we expect the most opportunity to be?
03:34But, again, that is how we plan it.
03:36But then we respond to the actual marketplace by being agile.
03:40We actually looked at something recently to see how much we moved our capacity around versus our competitors, and we were much more reactive to understanding how the trade flows move because we want to follow the customers.
03:54Right.
03:55So on aggregate, how do all these projections on GDP growth inform you?
04:01What is your aggregate growth forecast for the business next year?
04:04And within that, of course, where do you see granularity?
04:06I would love to tell you, but we haven't focused.
04:08We haven't resolved that yet.
04:10Our team is right now literally working on it the last couple of weeks.
04:13It's almost the end of 2025.
04:14Yes, it is.
04:15It is.
04:15But because of the uncertainty in the market, I wanted to get as close as possible to the end of the year so that we don't have wild swings in our forecast.
04:24That's fair.
04:24So we're in the middle of doing it right now.
04:25But knock on wood, as I said, you know, economies are, GDPs are expected to continue to have a nice, solid growth rate.
04:32So I don't expect it will be significantly different.
04:36Can you tell us, I mean, you're a key customer in terms of, I just want to tell you about freight, too.
04:39You're a key customer in the 777X program, including freighters.
04:42Yes.
04:42Right now.
04:42What's the latest communication you're getting from Boeing on, you know, when this first freighter can arrive?
04:46Yeah, when you get those.
04:47Well, I think Boeing has been very public about there may be some delays.
04:51And I think they won't have an idea what any additional delays may be until the U.S. government shutdown is resolved.
04:59Because the U.S. government shutdown means that the certification process has slowed down because employees are not working at the same level as they were.
05:06So we're waiting to hear once it all gets resolved, Boeing will be able to give us an idea.
05:11Is that a 2028, I believe, at the 2028 expectation?
05:15For the freighter, yeah, a 2028 is right now what we expect.
05:19But, you know, new aircraft programs can move either way.
05:22So we really have to wait to see when the FAA gets back to full work.
05:26Are you in the market for more freighter planes right now?
05:28That's a great question.
05:29We actually, in the next 12 months, are taking seven new aircraft.
05:33Five of them are converted freighters, and two of them are direct from Boeing.
05:38Right.
05:39So that sort of answers a question you had earlier, David.
05:41You know, we are expecting next year to be robust.
05:44And part of it, Yvonne, getting back to the question you asked, is we not only look at the GDP growth, but we also look at what industries are growing, what products are growing.
05:54And one thing we've identified and we've had really great growth in lately is a growth in high-tech and aerospace.
06:00And that's something we've focused on very much in building unique products around those so that we can offer something better in those two very fast-growing, very important markets.
06:11Right.
06:11And then that also sort of offsets what's going on with any individual regional GDPs.
06:16Right.
06:16Interesting product category there as far as – so what route is that specifically?
06:21I'm sorry?
06:21What route do you see that growth in?
06:23Actually, aerospace and tech is all over the place.
06:26It's not limited to one area, which is very interesting.
06:29That's good.
06:29And when you think about it, I mean, you've seen all the forecasts for aerospace over the next 10, 15 years.
06:33Right.
06:34It's just going to continue growing as quickly as possible.
06:36So for aerospace in particular, it's important that those products, those components are delivered as quickly as possible.
06:42Tech, we know there's no slowdown.
06:44You guys watch how AI stocks are just driving markets around the world.
06:47That's not going to slow down anytime soon.
06:49So that's why we said we have to develop very specific products as those are growth markets that we already are leaders in and we want to continue being leaders in.
06:58Another way that you are building the business is with these sort of partnerships with other airlines when it comes to the global trade lines,
07:04whether it's British Airways, Malaysian Airways, and the like.
07:07How actively are you now in expanding this pact?
07:11And where are you in terms of regulatory, you know, backdrop, environment, and commercial integration?
07:15Great, great question.
07:16Two questions are around our JB, our joint business.
07:20Number one, as you know, in June, we announced the joint business with IAG, which is BA, Iberia, and Aer Lingus in Malaysia.
07:28We have received already from EU, UK, and US, and Qatari authorities the ability to move forward with it.
07:36We're waiting for the Malaysian authorities to grant approval.
07:40We expect that will come sometime at the end of this quarter, maybe in the next quarter.
07:43We will, once that's all in place, probably in the first quarter, we're going to launch the JB.
07:47It's the first global cargo JB.
07:49You all are used to the passenger JBs.
07:51This is the first global JB, the first time these very vast networks with unique geographies are linking together.
08:00And I have to tell you, it's been a lot of work.
08:02And I've done passenger for 30 years.
08:04The cargo side is much more complex.
08:06Why is that? I'm just curious.
08:08It's for a bunch of things.
08:09Number one, there isn't as much digitalization in this industry.
08:13So there's a lot of that that we have to do.
08:15Operationally, there are a lot of differences because you've got warehouse here, warehouse there.
08:19You've got to make sure they're together.
08:20The safety and security regulations have got to be aligned.
08:24So there's a lot of work around alignment and understanding how to provide the customer that same seamless product you have as if they were just on your network alone.
08:33So we've invested a lot of time and energy in that.
08:36And we're very excited about it.
08:37It will be like for the passenger side.
08:39It will be groundbreaking.
08:40It really will open up markets that aren't open today because we'll make it easier for that trade to occur.
08:46Do we have a name for it?
08:47Because passenger side is one world, for example.
08:49Not yet.
08:50We don't have a name.
08:50But if you've got any suggestions, share it with me.
08:52You'd love to hear it.
08:53I'll think about it.
08:53Okay.
08:54Yeah, we'll think about it.
08:55Okay.
08:55We'll get back to you then, too.
08:56Yes.
08:57Yeah.
08:57All right.
08:57We'll let you go.
08:58We know, of course, you're headed to Singapore next.
09:00That was Mark Brechner.
09:00Thank you so much, sir.
09:02Thank you for coming.
09:02Thank you for coming.
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