00:00What's going on?
00:01How much capacity are you flying?
00:02What effects of the war are you feeling?
00:05Look, we're back on track.
00:07That's what I can say, right?
00:08Of course, we had a transition period.
00:11First week of March was more complicated, right?
00:13We had to ground the airline for two, three days.
00:16We started to come back slowly, 20% capacity, 30% capacity.
00:20We did about 50% to 60% in April.
00:23So May we did about 70% of ASKs, I'm talking ASKs.
00:26Right now, we're about 85%, 90% ASKs right now.
00:31And June 15, when the summer season starts, we go actually to about 110% of last year capacity.
00:40Right.
00:41Are you surprised by that?
00:42I'm a bit surprised, right?
00:44Because I think the speed of recovery is really going well for us.
00:49And it's different for different airlines in the region.
00:51So I'm more surprised about the fact that some airlines are performing differently in terms
00:56of recovery than the fact.
00:58But I learned that that was expected, right?
01:00Because the constraints different airlines have are different in terms of airspace availability,
01:06right?
01:06So in our case, we have a lot of airspace available for civil aviation.
01:11So we were able to bring back capacity in a fast pace.
01:16Corporate?
01:17Corporate is a very good question.
01:19It's very different across the globe.
01:21Yeah.
01:22So corporate into Abu Dhabi is as strong as before.
01:26Yeah.
01:26So all the companies that invest in Abu Dhabi, they're coming back to Abu Dhabi to say, we're
01:29with you.
01:30Yeah.
01:30We're going to commit to the future, right?
01:33Corporate also outbound Abu Dhabi is really, really strong.
01:36So we don't see any difference as of now in terms of new bookings, right?
01:40Where we see some difference is in connecting flows for corporate.
01:44But that's being overcompensated.
01:46Yeah.
01:46And that's related to travel warnings, that they're going down.
01:49Yeah.
01:49Right?
01:50But some corporations, they take longer to remove the warnings, right?
01:53But that's being compensated by other flows.
01:55For instance, India to the US is booming right now.
01:58VFR is booming.
01:59Right?
02:00So we're really happy about that.
02:03What are you having to do on pricing?
02:04So in some ways, fuel prices are going up.
02:07What kind of a margin squeeze are you feeling if you're selling?
02:10Are you compensating for the fuel price rises that you're saying in terms of what you're saying in terms of
02:15fares?
02:15Not yet.
02:15We press to demand and we press to competition.
02:18Yep.
02:18Right?
02:18So right now, things are back to what we had pre-conflict in terms of new bookings.
02:23Yeah.
02:23Average fares about the same.
02:25But if average fares about the same in jet fuel is 60% more expensive or 70% more expensive,
02:30I'm discounting.
02:32Right.
02:32In other words, right?
02:33So, but it's okay.
02:34It's okay.
02:35We see that as a transition phase, right?
02:37We start to see futures in jet fuel go down.
02:41Right?
02:41It's going to take longer.
02:42It's not going to be quick.
02:43Right?
02:44But things are coming back.
02:46Coming back on track.
02:47Do you think you will have to raise prices to compensate for that?
02:50I don't know.
02:51Because it depends on competition.
02:52We price to competition.
02:54It's a highly competitive region in the world.
02:58Yeah.
02:58So we price to competition.
03:00If, in some ways, keeping fares stable is a price cut.
03:03It is.
03:04Relative to kind of what effectively...
03:06If fuel doesn't go down, airlines are going to have to raise pairs.
03:10Okay.
03:10For sure.
03:10And then we'll do it together with them.
03:12Do you think that the region as a whole, there's talk, a lot of talk about this in European
03:17airline spaces, that you're going to see some sort of a price war coming out of the Gulf?
03:20I don't see that.
03:21I mean, I don't see that.
03:22If my price is now back to what was brief conflict, I think European carriers are saying
03:28that but not based on data because I think it's concern.
03:33Yeah.
03:33They may be concerned as we come back.
03:36But why I'm going to discount if my load factor yesterday was 84%.
03:39Yeah.
03:39Makes no sense.
03:40My planes are full.
03:41My flows to the U.S., India to the U.S., are 92%.
03:45I don't have a seat available.
03:47Right.
03:48Do you think the European carriers hang on to any of their Asian, they picked up Asian
03:53traffic as a result of what's been happening?
03:56Do they hang on to that?
03:57I think the fares are very expensive in Europe to Asia.
04:00Right.
04:00They're very expensive.
04:02Right?
04:03Unsustainable.
04:04Okay.
04:04Unsustainable.
04:04So they're going to go back to normality, right?
04:07But that's not discounting.
04:08You see what I mean?
04:08Yeah.
04:08They were leaving two, three months of unreal fares.
04:12And what do you have to understand?
04:16We're very efficient in the Middle East.
04:19Yeah.
04:19Very efficient.
04:20My personal cost to revenue is 15%.
04:23Yep.
04:25Emirates about 15, 16.
04:26Yep.
04:27Right.
04:27We have a 10 point advantage at least to European carriers.
04:32I bet you our competition in Europe, their people cost, personal cost to revenue is about 25, 27%.
04:38I have a 10 point advantage.
04:40Yep.
04:41And we give that back in product first.
04:44And in fares.
04:45So that's why we can compete.
04:47What you're painting a picture of though is still a booming global economy.
04:50Is that what you're saying?
04:52Of course.
04:53Of course.
04:53I mean, Abu Dhabi.
04:54But not of course.
04:55Europe's slowing down.
04:56The signs of the US is slowing down.
04:57But travel is not.
04:59Travel is not.
05:00I mean, and think about Southeast Asia, right?
05:03The Europeans are going to keep traveling for holidays.
05:06Yep.
05:07Right?
05:07I mean, if you go to Southeast Asia, there's amazing value proposition for Europeans.
05:11Yep.
05:12To Puket.
05:13I have six flights a day to Puket.
05:15Yep.
05:15I have six flights a day to Bangkok.
05:18Yep.
05:18So Europeans are going to keep traveling, right?
05:21I understand the economy may slow down a little bit here and there.
05:23The exchange rate right now, the euro is not as strong as it was a couple of weeks before.
05:29But in the end, people are traveling a lot.
05:32Right?
05:32And we see that.
05:33And the region is growing.
05:35So Abu Dhabi is growing 7.7% of its population every single year.
05:39Yep.
05:39So if a region is growing 5% GDP, aviation is going to go 10%.
05:45So, and we're growing 20%.
05:47But India, these are the kind of places that are going to be the driver.
05:50For sure.
05:51And Middle East.
05:52And Middle East.
05:52Do you think the Middle East remains?
05:53Are people going to pick the Middle East as a holiday destination?
05:56For sure.
05:57Has that changed?
05:58That narrative changed?
05:59But we have, I will talk about that, but we also have local demand.
06:03Yep.
06:03And Middle Easterns, they fly out.
06:06Yep.
06:06They go to Europe.
06:07They go to Southeast Asia, right?
06:09If you go on my flight to Bangkok, Emirates is all over.
06:12Right?
06:12So it's not only that Europeans are the ones flying.
06:15The Middle Easterns, they also fly.
06:17But talking about the impact on tourism in the region, I think it's game over.
06:23It's not going to happen.
06:25Right?
06:26I mean, if you see all the problems that the world had.
06:28I mean, we had situations in Istanbul a long time ago, 20 years ago.
06:34We had situations in New York City, right?
06:37Not a long time ago, right?
06:39Yep.
06:39And tourism was back.
06:40So I think the way we see the folks coming back and the level of confidence that our customers
06:46are demonstrating, right, is a clear proof that we're selling tickets.
06:50We're selling tickets, people are coming.
06:52Okay.
06:52It's going to come back.
06:53I think if we were, if the UAE, for instance, was the war zone was there, then it's different.
07:00I think what's going on with Kiev, right, with Russia and Ukraine is different.
07:05Yeah.
07:05Right.
07:06But we're not in a war zone.
07:09Not very far away.
07:11But how far is Frankfurt from Kiev?
07:13Yeah.
07:14Very fair point.
07:16In terms of what comes next, autumn, winter, what does it look like?
07:21Is that when we start to see maybe the situation becoming more difficult?
07:25Like fuel prices, there is the potential of fuel price volatility at that point as well.
07:29What are you looking at autumn, winter?
07:30And is also that the point where you could start to see some failures in terms of carriers
07:35around the world?
07:36Yeah.
07:37I think so, from a global perspective.
07:39We already saw that with a spirit, right?
07:42Yeah.
07:42I think that's going to happen, right?
07:44I think it's a very big burden right now, especially in, you have to take into consideration
07:50places that are more seasonal.
07:53Yeah.
07:53Right.
07:53Sorry.
07:53Europe is very seasonal.
07:55Very, very seasonal.
07:57So airlines in Europe, they make money in summer, right?
08:00And then in winter, they lose money.
08:02So in winter, they have to pay the bill of summer.
08:04In our case, we don't have a lot of seasonality.
08:07Actually, last year, we made money every single month, but three months.
08:12We were on track this year to make money every single month because the flows are organized
08:19in a way in our region that when it's in the Middle East, it's not Eastern in Europe.
08:28You see what I mean?
08:29So one summer, we have different people flying to Abu Dhabi.
08:34Winter, we have all the Europeans that come to Abu Dhabi.
08:37So we manage seasonality.
08:38So my point is defaulting.
08:39I think airlines that can manage seasonality in a better way are going to do better than airlines that have
08:44a lot of seasonality.
08:45This takes me on to my kind of, almost my last question.
08:48Last time I spoke to you, you were in the market looking for aircraft.
08:51Do you think there is going to be an opportunity at some point?
08:54It's happening already.
08:54All right.
08:55So you're seeing it now?
08:55It's happening.
08:56We're ordering planes right now to be delivered between 28 and 2032.
09:01And we're getting positions of airlines that are giving up.
09:03Right.
09:04So it's happening.
09:05So you're already getting earlier slots out of the OEMs.
09:07You talked as well to me last time about looking for secondary aircraft.
09:11Same.
09:12Same with that.
09:13But these ones that we're getting right now are new, are not secondary.
09:16But we're open for secondary plans.
09:18Actually, next year, we're putting together partnerships with airlines that have planes that they don't need right now.
09:26And they're going to be bringing from five to ten incremental white bodies from partners.
09:30Right.
09:30Next year.
09:31I'm signing those contracts right now.
09:32So in addition to the new plans.
09:34So in the rest of the world, you're seeing a slowdown therefore.
09:36That's that's I wouldn't say it's a slowdown.
09:38I think people are doing some numbers.
09:40Yeah.
09:40And they say, look, with that jet fuel level.
09:42Yeah.
09:42I'm uncertain about next year.
09:44So if I have a partner who can use the aircraft, I'm going to be within two.
09:48But you're getting earlier slots.
09:50Wow.
09:50OK.
09:51Yeah.
09:51So for new ones.
09:52Yep.
09:52So yeah, we are.
09:53We are.
09:5428.
09:5528, 29.
Comments