1 00:00:03,520 --> 00:00:06,760 Speaker 1: Kirakoto. Welcome to Shared Lunch. I'm Garth Bray. I hate 2 00:00:06,760 --> 00:00:09,160 Speaker 1: to be Captain obvious, but if you are an airline 3 00:00:09,480 --> 00:00:12,639 Speaker 1: and you're not flying, you can't make money. And sadly 4 00:00:12,720 --> 00:00:15,440 Speaker 1: that's been the picture for part of Air New Zealand's fleet. 5 00:00:15,600 --> 00:00:18,000 Speaker 1: Up to a fifth of its planes grounded at any 6 00:00:18,000 --> 00:00:21,599 Speaker 1: one time thanks to engine trouble. That's also dragged down 7 00:00:21,640 --> 00:00:25,360 Speaker 1: its results. You add into that higher non fuel costs 8 00:00:25,680 --> 00:00:28,520 Speaker 1: and a weak economy where fewer people are flying domestically, 9 00:00:29,000 --> 00:00:32,880 Speaker 1: how on earth are they going to chart a profitable future? Well, 10 00:00:33,159 --> 00:00:36,400 Speaker 1: funny you should ask Richard Thompson, the CFO might have 11 00:00:36,479 --> 00:00:38,640 Speaker 1: something to say about that. Before we hear from him. 12 00:00:38,680 --> 00:00:42,120 Speaker 1: It some important information you should always consider before investing. 13 00:00:42,760 --> 00:00:45,360 Speaker 2: Investing involves the risk you might lose the money you 14 00:00:45,400 --> 00:00:48,680 Speaker 2: start with. We recommend talking to a licensed financial advisor. 15 00:00:49,400 --> 00:00:53,200 Speaker 2: We also recommend breading product disclosure documents before deciding to invest. 16 00:00:53,479 --> 00:00:55,880 Speaker 2: Everything you're about to see and here is current at 17 00:00:55,880 --> 00:00:56,760 Speaker 2: the time of recording. 18 00:00:57,560 --> 00:00:59,720 Speaker 1: So, Richard Thompson, I want to start actually with your 19 00:00:59,760 --> 00:01:04,480 Speaker 1: own personal approach to aviation. Welcome to Sharesy Shared Lunch. 20 00:01:04,600 --> 00:01:05,679 Speaker 3: Thanks Gar good to see you. 21 00:01:05,840 --> 00:01:08,520 Speaker 1: Yeah, thank you you are a pilot in your own. 22 00:01:08,440 --> 00:01:11,080 Speaker 3: Right, Ah, yes, amateur. 23 00:01:11,760 --> 00:01:14,920 Speaker 4: So I've got a private pilot's license which is current, 24 00:01:15,120 --> 00:01:19,160 Speaker 4: which I did thirty five years ago. I fly a 25 00:01:19,240 --> 00:01:22,760 Speaker 4: little bit around sort of the country down in Central Uta. 26 00:01:22,840 --> 00:01:25,800 Speaker 4: I go up here sort of once or twice a month. 27 00:01:26,080 --> 00:01:30,240 Speaker 4: Not enough love it, but yeah, it's not quite the 28 00:01:30,280 --> 00:01:33,840 Speaker 4: same as flying a jumbo, but it's my little outlet. 29 00:01:34,480 --> 00:01:38,959 Speaker 1: So being someone that's always been interested in aviation, it 30 00:01:39,000 --> 00:01:40,560 Speaker 1: must be a bit of a dream to be working here. 31 00:01:41,000 --> 00:01:43,920 Speaker 4: It's a lot of fun. I've first joined here in 32 00:01:43,920 --> 00:01:47,760 Speaker 4: two thousand and four and have had an association in 33 00:01:47,800 --> 00:01:50,760 Speaker 4: a professional capacity with the airline since two thousand and 34 00:01:50,760 --> 00:01:51,520 Speaker 4: one or two. 35 00:01:51,600 --> 00:01:55,280 Speaker 3: I think it was. It's an interesting industry to be. 36 00:01:55,240 --> 00:01:57,640 Speaker 4: Part of and a fabulous team to be part of, 37 00:01:58,520 --> 00:02:01,280 Speaker 4: and we're very proud of them. No matter what sort 38 00:02:01,320 --> 00:02:04,000 Speaker 4: of setbacks we're dealing with at any point in time, 39 00:02:04,600 --> 00:02:08,520 Speaker 4: the team has remarkable resilience and just get out every 40 00:02:08,600 --> 00:02:10,440 Speaker 4: day with a smile on their face and get the 41 00:02:10,520 --> 00:02:11,040 Speaker 4: job done. 42 00:02:11,280 --> 00:02:12,920 Speaker 1: I guess the idea is that if you're a pilot, 43 00:02:12,960 --> 00:02:14,760 Speaker 1: you have to I think someone said to me once, 44 00:02:14,840 --> 00:02:15,560 Speaker 1: panic slowly. 45 00:02:16,720 --> 00:02:19,760 Speaker 4: Yes, So I think Greek said there, and I think, well, 46 00:02:19,800 --> 00:02:23,920 Speaker 4: I think panic calmly, calmly. Yeah, sometimes you can't be 47 00:02:23,960 --> 00:02:26,840 Speaker 4: too slow about it, but certainly you just want to 48 00:02:26,919 --> 00:02:30,320 Speaker 4: sort of take stock of the situation, don't rush to conclusions, 49 00:02:30,840 --> 00:02:32,960 Speaker 4: and just sort of calmly work your way through the 50 00:02:33,160 --> 00:02:35,560 Speaker 4: sort of the curveballs that we get dealt from time 51 00:02:35,600 --> 00:02:35,920 Speaker 4: to time. 52 00:02:36,040 --> 00:02:38,480 Speaker 1: So let's maybe just refresh people on the top line 53 00:02:38,520 --> 00:02:40,799 Speaker 1: results that you had out of the last result there. 54 00:02:40,400 --> 00:02:42,280 Speaker 1: How are things looking at the moment. 55 00:02:42,639 --> 00:02:46,639 Speaker 3: Yeah, it's a reasonably tough environment we're in at the moment. Garth. 56 00:02:46,720 --> 00:02:48,920 Speaker 4: As evidenced by the last two years results, we made 57 00:02:48,960 --> 00:02:51,520 Speaker 4: it one hundred and eighty nine million before tax in 58 00:02:51,520 --> 00:02:54,200 Speaker 4: the year just finished thirty June, one hundred and twenty 59 00:02:54,280 --> 00:02:57,720 Speaker 4: six after tax, and there are two or three things 60 00:02:57,760 --> 00:02:59,840 Speaker 4: going on that are influencing it results. Sounds like a 61 00:02:59,840 --> 00:03:02,840 Speaker 4: lot of money in the absolute terms. I guess it 62 00:03:02,919 --> 00:03:04,680 Speaker 4: is a lot of money, but we've got four or 63 00:03:04,680 --> 00:03:10,480 Speaker 4: five billion dollars of aircraft in associated infrastructure, so as 64 00:03:10,480 --> 00:03:13,480 Speaker 4: a return on total assets, a return on investment, it's 65 00:03:13,520 --> 00:03:16,040 Speaker 4: not where we want it to be. Three or four 66 00:03:16,080 --> 00:03:20,359 Speaker 4: things going on there relatively at the stage week Domestic 67 00:03:20,400 --> 00:03:25,800 Speaker 4: economy where optimistic that sort of improvements on the horizon 68 00:03:26,480 --> 00:03:30,080 Speaker 4: is monetary policy ease these as dairies going well, that 69 00:03:30,160 --> 00:03:34,040 Speaker 4: will filter through into the economy. Tourism is coming back 70 00:03:34,480 --> 00:03:37,280 Speaker 4: by bit, which is good to see, but relatively weak 71 00:03:37,320 --> 00:03:40,760 Speaker 4: economy just at the moment. And then in combination with 72 00:03:40,880 --> 00:03:45,480 Speaker 4: that we've got the much publicized engine challenges. So one 73 00:03:45,480 --> 00:03:47,880 Speaker 4: of the great virtues of the New Zealand has always 74 00:03:47,920 --> 00:03:52,240 Speaker 4: been we've continued to invest in new aircraft and equipment, 75 00:03:52,640 --> 00:03:56,000 Speaker 4: which has kept the experience very fresh. In the economics 76 00:03:56,040 --> 00:03:58,960 Speaker 4: of new aircraft are pretty good. We've just been a 77 00:03:58,960 --> 00:04:02,760 Speaker 4: bit unfortunate in the most recent environment to have an 78 00:04:02,840 --> 00:04:05,520 Speaker 4: exposure to what's called the Trent thousand engine which we 79 00:04:05,600 --> 00:04:09,720 Speaker 4: operate on the seven eight seven, and the geared turbofan 80 00:04:10,040 --> 00:04:13,800 Speaker 4: Prats engine it's called the eleven hundred on the narrow 81 00:04:13,800 --> 00:04:18,200 Speaker 4: body jet, and they are relatively new pieces of technology. 82 00:04:18,920 --> 00:04:22,200 Speaker 4: They are safe, they are very economic. The issue that 83 00:04:22,240 --> 00:04:26,480 Speaker 4: we've got is that the maintenance cycle on these engines 84 00:04:27,640 --> 00:04:31,080 Speaker 4: is about a quarter of what it would normally be, 85 00:04:31,320 --> 00:04:34,600 Speaker 4: So most of these wide body Euro engines on the 86 00:04:34,640 --> 00:04:37,800 Speaker 4: seven eight seven would normally fly for three three and 87 00:04:37,839 --> 00:04:41,560 Speaker 4: a half thousand what we call cycles. It's starting engine 88 00:04:41,720 --> 00:04:45,840 Speaker 4: turning it off effectively a flight. They are lasting at 89 00:04:45,839 --> 00:04:50,919 Speaker 4: the moment about anywhere between seven hundred and nine hundred cycles, 90 00:04:50,960 --> 00:04:53,880 Speaker 4: so quite a bit less. And the problem that it 91 00:04:53,960 --> 00:04:55,760 Speaker 4: causes is we have to take the engine off the 92 00:04:55,800 --> 00:05:01,719 Speaker 4: aeroplane that has to go into an overhaul facility. Because 93 00:05:01,760 --> 00:05:05,839 Speaker 4: neither ourselves nor Rolls Royce the engine manufacturer, expecting any 94 00:05:05,880 --> 00:05:08,760 Speaker 4: of this to happen. They don't have a big enough 95 00:05:08,800 --> 00:05:14,200 Speaker 4: global network of facilities to cope with the volume of 96 00:05:14,240 --> 00:05:15,880 Speaker 4: these early engine removals. 97 00:05:16,000 --> 00:05:18,320 Speaker 1: And so not just from any Zealand just. 98 00:05:18,320 --> 00:05:21,040 Speaker 4: From the New Zealand, it's a global issue. We're probably 99 00:05:21,120 --> 00:05:23,560 Speaker 4: unique in this part of the world in the Southern 100 00:05:23,560 --> 00:05:26,839 Speaker 4: Hemisphere having that engine, but there's a lot of Northern 101 00:05:26,880 --> 00:05:29,600 Speaker 4: Hemisphere carriers that have got it. So the engine ends 102 00:05:29,640 --> 00:05:33,039 Speaker 4: up in a queue to get fixed, and that queue 103 00:05:33,720 --> 00:05:36,920 Speaker 4: at times has been over a year long. So it's 104 00:05:37,000 --> 00:05:41,640 Speaker 4: meant that we've had at times or right now, four 105 00:05:41,760 --> 00:05:44,599 Speaker 4: or five of our fourteen to seven eight sevens on 106 00:05:44,640 --> 00:05:48,479 Speaker 4: the ground and four or five of our brand new 107 00:05:48,600 --> 00:05:52,800 Speaker 4: A three twenty one's on the ground, and a business 108 00:05:52,800 --> 00:05:57,159 Speaker 4: that makes margins as fine as our own relatively thin margins. 109 00:05:57,520 --> 00:06:01,039 Speaker 4: Having twenty percenty of your domestic jet fleet sitting on 110 00:06:01,080 --> 00:06:04,599 Speaker 4: the ground, costing you money but not earning an income, 111 00:06:06,320 --> 00:06:08,960 Speaker 4: has a negative effect on financial performance. 112 00:06:08,960 --> 00:06:11,960 Speaker 1: Obviously, does an aircraft make any money at all when 113 00:06:11,960 --> 00:06:12,880 Speaker 1: it's sitting on the ground. 114 00:06:13,200 --> 00:06:15,159 Speaker 3: None. No, it spends money. 115 00:06:15,360 --> 00:06:17,760 Speaker 4: And that's one of the other factors in all of 116 00:06:17,800 --> 00:06:21,880 Speaker 4: this is to actually keep the aircraft on ground we 117 00:06:21,960 --> 00:06:26,800 Speaker 4: call it AOG. To keep that position at twenty percent 118 00:06:26,839 --> 00:06:30,400 Speaker 4: of the fleet has required us to spend a whole 119 00:06:30,440 --> 00:06:33,599 Speaker 4: lot of money in the background to maintain it there. 120 00:06:33,760 --> 00:06:36,800 Speaker 4: If we're not least triple seven aeroplanes or we've leased 121 00:06:36,839 --> 00:06:40,800 Speaker 4: in twenty plus spare engines for the narrow body jet fleet, 122 00:06:41,080 --> 00:06:43,080 Speaker 4: actually the ground at fleet would be much bigger than 123 00:06:43,160 --> 00:06:46,160 Speaker 4: it is. But that's a huge impost on the business. 124 00:06:46,680 --> 00:06:49,960 Speaker 4: We're getting some compensation for it, but in the round 125 00:06:50,120 --> 00:06:54,800 Speaker 4: we're getting roughly thirty cents in every dollar it's costing us. 126 00:06:55,279 --> 00:06:58,920 Speaker 4: So that's it's been a big drag on the business. 127 00:06:59,080 --> 00:07:01,120 Speaker 1: I want to talk about that because presumably if it's 128 00:07:01,160 --> 00:07:04,200 Speaker 1: a manufacturer of fault, it's not performing. I mean, obviously 129 00:07:04,200 --> 00:07:06,480 Speaker 1: there's nothing like the Consumer Guarantees Act that's working here, 130 00:07:06,480 --> 00:07:09,080 Speaker 1: there'll be some pretty serious litigation going on. Is this 131 00:07:09,120 --> 00:07:12,680 Speaker 1: a negotiated settlement effectively between you and the manufacturers to 132 00:07:12,720 --> 00:07:15,800 Speaker 1: achieve that or is it an advance on what might 133 00:07:15,840 --> 00:07:16,320 Speaker 1: come later. 134 00:07:16,760 --> 00:07:21,680 Speaker 4: No, it's a negotiated, ongoing settlement, so it's not full 135 00:07:21,720 --> 00:07:24,880 Speaker 4: and final. As long as the problem persists, we hope 136 00:07:24,880 --> 00:07:27,600 Speaker 4: to be able to negotiate more compensation, but it's not 137 00:07:27,640 --> 00:07:30,200 Speaker 4: a given. And one of the reasons why it's more 138 00:07:30,280 --> 00:07:33,320 Speaker 4: challenging than you think it might be is in New 139 00:07:33,400 --> 00:07:36,280 Speaker 4: Zealand signed the contract on the Rolls Royce engines back 140 00:07:36,320 --> 00:07:39,920 Speaker 4: in two thousand and four, so that contract was signed 141 00:07:40,040 --> 00:07:43,240 Speaker 4: twenty one years ago, so we're out of any sort 142 00:07:43,280 --> 00:07:47,640 Speaker 4: of traditional engine warranty period. Obviously, there are commitments in 143 00:07:47,680 --> 00:07:51,160 Speaker 4: the contract keep us in a spares position, but really 144 00:07:51,200 --> 00:07:55,640 Speaker 4: the terms of those arrangements didn't contemplate the environment that 145 00:07:55,800 --> 00:07:58,040 Speaker 4: US and all these other airlines with the same engine 146 00:07:58,080 --> 00:08:02,680 Speaker 4: type are grappling with. So the negotiated settlements we're doing 147 00:08:02,680 --> 00:08:06,400 Speaker 4: the best we can, but it's not as straightforward. Does 148 00:08:06,440 --> 00:08:11,000 Speaker 4: it probably should be, or or might look to a layperson. 149 00:08:11,960 --> 00:08:14,920 Speaker 1: Does that change at all the kind of approach you 150 00:08:15,000 --> 00:08:18,960 Speaker 1: have to how you'll handle engine fleet purchases these kinds 151 00:08:18,960 --> 00:08:20,360 Speaker 1: of things in the future. Are you're going to mix 152 00:08:20,400 --> 00:08:22,080 Speaker 1: things up a bit, Are you going to put better 153 00:08:22,160 --> 00:08:26,160 Speaker 1: agreements in place? How does it change? It's a great question, Garth. 154 00:08:26,360 --> 00:08:29,280 Speaker 1: I'm not sure you can put better agreements in place. 155 00:08:29,640 --> 00:08:33,680 Speaker 1: If the engine manufacturers had to make good to the 156 00:08:33,760 --> 00:08:37,839 Speaker 1: last dollar, all the losses incurred by these airlines around 157 00:08:37,880 --> 00:08:40,079 Speaker 1: the world would probably go bankrupt themselves. 158 00:08:40,240 --> 00:08:42,959 Speaker 4: So there's sort of a limit to how much they 159 00:08:43,000 --> 00:08:47,120 Speaker 4: can cover. But I think if there's a lesson in 160 00:08:47,160 --> 00:08:47,600 Speaker 4: all of this. 161 00:08:48,240 --> 00:08:51,480 Speaker 3: There is. We were a very early move on the 162 00:08:51,480 --> 00:08:52,040 Speaker 3: seven eight seven. 163 00:08:52,080 --> 00:08:54,559 Speaker 4: We were actually the launch customer for that aeroplane end 164 00:08:54,559 --> 00:08:57,160 Speaker 4: engine with A and A at that point the engine 165 00:08:57,160 --> 00:09:01,440 Speaker 4: hadn't been built. And on the GTF the Pratz engine. 166 00:09:01,480 --> 00:09:03,880 Speaker 4: It's a great engine, but we're a relatively early mover. 167 00:09:04,360 --> 00:09:06,960 Speaker 4: If there was one thing you'd put sort of the 168 00:09:07,000 --> 00:09:10,560 Speaker 4: internet in the institutional archive is maybe god a little 169 00:09:10,559 --> 00:09:13,520 Speaker 4: bit later, wait until these things have got five or 170 00:09:13,559 --> 00:09:17,160 Speaker 4: six years on wing and then pile into it. I 171 00:09:17,160 --> 00:09:20,280 Speaker 4: think it's the lesson there in terms of sort of 172 00:09:20,280 --> 00:09:22,320 Speaker 4: going back to the engine itself that we've got. They 173 00:09:22,360 --> 00:09:25,760 Speaker 4: are good engines and When they're performing, they perform really well. 174 00:09:26,040 --> 00:09:28,440 Speaker 4: We've got a bit of diversity going forward on the 175 00:09:28,480 --> 00:09:30,400 Speaker 4: seven eight seven. We have both the roles and the 176 00:09:30,440 --> 00:09:32,520 Speaker 4: gen X gen X on the new airplanes that are 177 00:09:32,559 --> 00:09:36,040 Speaker 4: delivering starting to deliver from early next year. And we've 178 00:09:36,080 --> 00:09:39,400 Speaker 4: got a mixture of the old V twenty five hundred 179 00:09:39,600 --> 00:09:42,040 Speaker 4: and the GTF on the airbus fleet, so we do 180 00:09:42,200 --> 00:09:47,120 Speaker 4: have a bit of diversification of technology across the airline. 181 00:09:47,559 --> 00:09:49,280 Speaker 1: But so, how did you reach the view that you 182 00:09:49,320 --> 00:09:53,559 Speaker 1: would have achieved substantially higher revenue without this problem. I 183 00:09:53,600 --> 00:09:55,360 Speaker 1: think it was like one hundred and sixty five million 184 00:09:55,400 --> 00:09:55,880 Speaker 1: was the figure that. 185 00:09:56,000 --> 00:09:57,199 Speaker 3: It's meat of compensation. 186 00:09:57,679 --> 00:09:57,920 Speaker 1: Wow. 187 00:09:58,160 --> 00:10:00,960 Speaker 4: Yeah, So the actually the cost to us is in 188 00:10:01,080 --> 00:10:04,440 Speaker 4: gross terms two hundred and fifty three hundred million, and 189 00:10:04,480 --> 00:10:09,520 Speaker 4: that's a combination of a number of factors. One, we 190 00:10:09,600 --> 00:10:13,080 Speaker 4: are flying at the moment the wrong aircraft types to 191 00:10:13,120 --> 00:10:16,000 Speaker 4: the wrong markets. So we've got great big Triple sevens 192 00:10:16,040 --> 00:10:19,400 Speaker 4: with huge premium cabins flying up to Japan, for instance, 193 00:10:20,000 --> 00:10:22,640 Speaker 4: which is the wrong size aeroplane and the wrong cabin 194 00:10:22,720 --> 00:10:26,640 Speaker 4: mix for that market. We've got higher variable operating costs, 195 00:10:27,040 --> 00:10:31,480 Speaker 4: so that's expensive. We've got the cost of leasing extra 196 00:10:31,520 --> 00:10:35,440 Speaker 4: aircraft in to keep the network intact to the extent 197 00:10:35,520 --> 00:10:38,160 Speaker 4: we can. So we've got as I said, three triple 198 00:10:38,200 --> 00:10:42,280 Speaker 4: seven three hundreds that we've rented in short term. By 199 00:10:42,280 --> 00:10:46,720 Speaker 4: that I mean anywhere between three and six years, and 200 00:10:46,800 --> 00:10:51,000 Speaker 4: so that's an expense. All of those aeroplanes are in 201 00:10:51,040 --> 00:10:55,720 Speaker 4: a different configuration to our own, so we carry an 202 00:10:55,960 --> 00:11:02,160 Speaker 4: entire bespoke parts pool for the aeroplane, different catering carts, 203 00:11:03,000 --> 00:11:06,080 Speaker 4: the seats themselves have got different componentry on them, so 204 00:11:06,120 --> 00:11:08,920 Speaker 4: we have to carry huge inventories of different components. 205 00:11:09,240 --> 00:11:10,720 Speaker 1: So you've had to buy a whole bunch of spears. 206 00:11:10,800 --> 00:11:13,240 Speaker 3: We have to do the millions of dollars of all that. 207 00:11:13,400 --> 00:11:16,080 Speaker 4: And then on the narrow body jet type or jet 208 00:11:16,080 --> 00:11:18,840 Speaker 4: fleet I alluded to before, we've had to keep the 209 00:11:18,840 --> 00:11:23,160 Speaker 4: fleet flying. What we've got flying, we've had to leasen 210 00:11:23,840 --> 00:11:26,959 Speaker 4: a huge number of spare engines. Normally we would have 211 00:11:27,080 --> 00:11:34,880 Speaker 4: four spares in normal times. We are carrying twenty soon 212 00:11:34,960 --> 00:11:40,240 Speaker 4: to go to twenty one, and these at enormous cost. So, 213 00:11:41,440 --> 00:11:45,320 Speaker 4: without giving too many secrets away, the cost of renting 214 00:11:45,360 --> 00:11:48,920 Speaker 4: these engines runs to up to a couple of one 215 00:11:49,000 --> 00:11:54,000 Speaker 4: hundred thousand US dollars a month per engine, and that's 216 00:11:54,040 --> 00:11:57,360 Speaker 4: before you start burning any time off the engine because 217 00:11:57,400 --> 00:11:59,960 Speaker 4: there are life limited parts on it. So the total 218 00:12:00,120 --> 00:12:03,240 Speaker 4: cost of that's enormous. So that's the second big issue. 219 00:12:03,600 --> 00:12:06,280 Speaker 4: The third issue is because we don't know when this 220 00:12:06,400 --> 00:12:10,160 Speaker 4: problems exactly when it's going to cure itself, and we 221 00:12:10,200 --> 00:12:13,880 Speaker 4: want to be ready to fly the full network when 222 00:12:14,080 --> 00:12:18,880 Speaker 4: the engine issue recovers. We're carrying most of the staff 223 00:12:18,920 --> 00:12:22,400 Speaker 4: that we were carrying pre COVID in different parts of 224 00:12:22,440 --> 00:12:26,679 Speaker 4: the business pilots, airports, engineering and maintenance. 225 00:12:26,960 --> 00:12:29,439 Speaker 1: That has to be a lesson from COVID, surely, because 226 00:12:29,480 --> 00:12:34,199 Speaker 1: I think as a company you lost a huge number 227 00:12:34,200 --> 00:12:37,160 Speaker 1: of staff four right, so. 228 00:12:37,160 --> 00:12:39,319 Speaker 4: You also we've got all the staff for that very reason. 229 00:12:39,400 --> 00:12:42,079 Speaker 4: We've learned through the COVID that it's really hard, particularly 230 00:12:42,120 --> 00:12:44,760 Speaker 4: in a country as small as this, with a highly 231 00:12:44,800 --> 00:12:48,800 Speaker 4: specialized workforce. You can't just magic them up. So we've 232 00:12:48,840 --> 00:12:52,720 Speaker 4: got everybody on deck, but we are flying twelve percent 233 00:12:52,920 --> 00:12:56,640 Speaker 4: less capacity than we were in twenty nineteen. So there's 234 00:12:56,640 --> 00:13:00,320 Speaker 4: a big scale this economy occurring there in the short term, 235 00:13:00,960 --> 00:13:04,559 Speaker 4: but we are playing a long term game, so we're 236 00:13:04,600 --> 00:13:05,600 Speaker 4: not chasing it down. 237 00:13:06,320 --> 00:13:09,080 Speaker 1: We're prepared for the upswing. Lolocky, you've got a bit 238 00:13:09,080 --> 00:13:11,120 Speaker 1: of a bank balance. They're a cushion the falls. 239 00:13:11,360 --> 00:13:12,160 Speaker 3: It is helpful. 240 00:13:12,280 --> 00:13:14,440 Speaker 4: We don't take it for granted though, and we certainly 241 00:13:14,440 --> 00:13:15,280 Speaker 4: don't want to waste it. 242 00:13:15,440 --> 00:13:18,120 Speaker 1: That's I mean, that's on top of a high cost environment, 243 00:13:18,120 --> 00:13:20,120 Speaker 1: as I understand, where you're paying a lot more. What 244 00:13:20,400 --> 00:13:24,040 Speaker 1: sort of extra costs are you carrying that everybody is 245 00:13:24,080 --> 00:13:25,199 Speaker 1: facing if they're in the airline. 246 00:13:25,280 --> 00:13:28,400 Speaker 4: Yeah, I think so everybody in the airline business is 247 00:13:28,440 --> 00:13:32,880 Speaker 4: facing higher labor costs, although that that is starting to moderate, 248 00:13:33,000 --> 00:13:37,400 Speaker 4: has moderated over the last year or two. Engineering parts 249 00:13:38,160 --> 00:13:45,200 Speaker 4: and components are still incredibly expensive. Through COVID, the global 250 00:13:45,320 --> 00:13:50,640 Speaker 4: aeronautical supply chain was interrupted badly. You've got you always 251 00:13:50,679 --> 00:13:54,560 Speaker 4: think about Boeing, Eearbus, General Electric roles, but actually each 252 00:13:54,600 --> 00:13:58,880 Speaker 4: of those big manufacturers have got huge supply chains of 253 00:13:59,120 --> 00:14:02,400 Speaker 4: much smaller or organizations, a lot of whom or not 254 00:14:02,440 --> 00:14:04,040 Speaker 4: a lot of whom, but a number of whom went 255 00:14:04,120 --> 00:14:09,280 Speaker 4: bankrupt and COVID. You have got one customer might be Boeing. 256 00:14:10,040 --> 00:14:13,360 Speaker 4: Boeing is not buying anything off you. 257 00:14:13,360 --> 00:14:14,520 Speaker 3: You're on life support. 258 00:14:14,960 --> 00:14:18,000 Speaker 4: So a lot of them disappeared from the landscape during COVID, 259 00:14:18,080 --> 00:14:21,080 Speaker 4: and some of them haven't come back, and the ones 260 00:14:21,120 --> 00:14:25,440 Speaker 4: that are back are inundated with demand can't keep up 261 00:14:25,440 --> 00:14:29,960 Speaker 4: with it. So classic economics, supply demand even't got much supply, 262 00:14:30,200 --> 00:14:33,080 Speaker 4: plenty of demand. Guess what that does to prices. So 263 00:14:33,120 --> 00:14:37,040 Speaker 4: we're still seeing that increase materially, and we buy a 264 00:14:37,040 --> 00:14:40,720 Speaker 4: lot of those parts and materials in US dollars, So 265 00:14:40,880 --> 00:14:45,360 Speaker 4: the current exchange rate isn't helpful on that front either. 266 00:14:46,200 --> 00:14:49,280 Speaker 1: But I think, gosh, why are you still shut up 267 00:14:49,280 --> 00:14:50,480 Speaker 1: shop and go home kind of thing? 268 00:14:50,560 --> 00:14:52,480 Speaker 3: Oh no, we love it. 269 00:14:52,840 --> 00:14:58,280 Speaker 4: We're New Zealand's largest deer carrier. You know, we obviously 270 00:14:58,360 --> 00:15:03,480 Speaker 4: the biggest oper domestically. We've got a big network domestically, 271 00:15:03,680 --> 00:15:05,400 Speaker 4: we sort of cover just about everything. 272 00:15:05,920 --> 00:15:06,720 Speaker 3: We've got some. 273 00:15:06,640 --> 00:15:11,120 Speaker 4: Really good regional operators here Chats sounds a great barrier. 274 00:15:11,200 --> 00:15:12,680 Speaker 1: More deals with them, you think coming out in. 275 00:15:12,760 --> 00:15:16,040 Speaker 4: Origin they do some great jobs, sort of in some 276 00:15:16,120 --> 00:15:19,280 Speaker 4: of the smaller ports, really good job. They're facing similar 277 00:15:19,280 --> 00:15:22,280 Speaker 4: precures to us, and we're increasingly working with them where 278 00:15:22,280 --> 00:15:24,720 Speaker 4: we can to just sort of help each other out. 279 00:15:26,000 --> 00:15:27,760 Speaker 1: That govern announcement around I think it was like a 280 00:15:27,760 --> 00:15:30,200 Speaker 1: thirty million dollar facility to try and help that in 281 00:15:30,320 --> 00:15:32,760 Speaker 1: lining sort of enabling them to take it straight through 282 00:15:32,800 --> 00:15:35,760 Speaker 1: to your service or whatever. Does that actually is that 283 00:15:35,800 --> 00:15:36,480 Speaker 1: going to help it all? 284 00:15:36,560 --> 00:15:40,800 Speaker 4: I think it will help. We shouldn't overstate the benefits 285 00:15:40,840 --> 00:15:42,200 Speaker 4: of that, but it is beneficial. 286 00:15:42,240 --> 00:15:46,400 Speaker 1: And does that make those smaller regional flights potentially more 287 00:15:46,520 --> 00:15:50,520 Speaker 1: viable though smaller, it should help, yes, during christ down 288 00:15:50,600 --> 00:15:50,880 Speaker 1: with it. 289 00:15:50,880 --> 00:15:53,480 Speaker 4: It won't bring the costs down, but it might help 290 00:15:53,520 --> 00:15:55,400 Speaker 4: with the revenue and loads. 291 00:15:56,480 --> 00:15:58,120 Speaker 1: I mean, all this kind of comes back to what 292 00:15:58,160 --> 00:16:00,720 Speaker 1: does it cost to fly around? I think I heard 293 00:16:01,080 --> 00:16:03,960 Speaker 1: Greg saying, like anything under two hundred bucks, you're not 294 00:16:03,960 --> 00:16:04,880 Speaker 1: really making any money. 295 00:16:05,160 --> 00:16:08,000 Speaker 4: I think that's probably right. Little know in fact, but 296 00:16:08,120 --> 00:16:11,640 Speaker 4: fun fact is the smaller the aeroplane in, the shorter 297 00:16:11,760 --> 00:16:15,000 Speaker 4: the sect you're flying, the higher the seat cost. So 298 00:16:15,040 --> 00:16:17,720 Speaker 4: we often get sort of asked questions why it costs 299 00:16:17,720 --> 00:16:20,760 Speaker 4: as much to fly from Timaru to Gisbon as it 300 00:16:20,800 --> 00:16:25,720 Speaker 4: costs to fly from sort of Auckland to Brisbane, for instance, 301 00:16:25,840 --> 00:16:29,600 Speaker 4: or even further afield, And it's just scale economies. It's 302 00:16:29,600 --> 00:16:32,080 Speaker 4: the same reason why it costs you a fortune to 303 00:16:32,280 --> 00:16:35,560 Speaker 4: go on a scenic flight around Mount Koch and a 304 00:16:35,640 --> 00:16:39,360 Speaker 4: six seater versus you know, flying in New Zealand from 305 00:16:39,680 --> 00:16:41,520 Speaker 4: Dunedin to Auckland, you're. 306 00:16:41,360 --> 00:16:45,800 Speaker 1: Just spreading the costs over over a much bigger base, 307 00:16:46,000 --> 00:16:48,400 Speaker 1: the bigger the aeroplane gets. Because it's an era of 308 00:16:48,520 --> 00:16:52,520 Speaker 1: pretty stiff competition. I mean, obviously there's renewed competition in 309 00:16:52,560 --> 00:16:57,440 Speaker 1: the domestic marketplace as well. That must make things quite challenging. 310 00:16:57,480 --> 00:16:59,560 Speaker 3: Yet again, yes it is. 311 00:17:00,040 --> 00:17:04,480 Speaker 4: We've always had competition on domestic main trunk and that 312 00:17:04,520 --> 00:17:10,160 Speaker 4: competition is as intense as it's ever been. We've got 313 00:17:10,440 --> 00:17:14,199 Speaker 4: a great network, a great product. We're very proud of 314 00:17:14,240 --> 00:17:19,080 Speaker 4: the service we deliver. We're motivated to that as affordably 315 00:17:19,240 --> 00:17:23,359 Speaker 4: as we possibly can, working hard to ensure that we 316 00:17:23,400 --> 00:17:27,959 Speaker 4: are price competitive. But we've got a very big, ubiquitous 317 00:17:28,000 --> 00:17:32,320 Speaker 4: network in New Zealand and we're the only ones actually 318 00:17:32,400 --> 00:17:37,480 Speaker 4: in the country that fly to virtually all of these places. 319 00:17:37,480 --> 00:17:39,320 Speaker 4: The tough thing was some of the competition is the 320 00:17:39,320 --> 00:17:41,680 Speaker 4: competition gets to pick and choose the ones that they 321 00:17:41,720 --> 00:17:45,679 Speaker 4: want to go after us on and so therefore tend 322 00:17:45,680 --> 00:17:51,640 Speaker 4: to restrict the flying to the biggest, most lucrative sort 323 00:17:51,640 --> 00:17:52,800 Speaker 4: of markets in the country. 324 00:17:52,960 --> 00:17:55,199 Speaker 1: Behind all of that are some very patient shareholders. And 325 00:17:55,200 --> 00:17:57,040 Speaker 1: I'm not even talking about the Crown at this point. 326 00:17:57,160 --> 00:17:59,760 Speaker 1: I mean, I think I'm not wrong in saying that 327 00:18:00,160 --> 00:18:03,520 Speaker 1: the Any Zealand is probably the most held stock or 328 00:18:03,560 --> 00:18:05,920 Speaker 1: one of the most held stocks on the shareses platform. 329 00:18:06,000 --> 00:18:09,400 Speaker 1: It does seem to have quite a wide base. What's 330 00:18:09,480 --> 00:18:13,320 Speaker 1: going on there because the results are, as you say, challenging. 331 00:18:13,600 --> 00:18:14,120 Speaker 3: Is it right? 332 00:18:14,160 --> 00:18:15,239 Speaker 1: Why people hanging on to it? 333 00:18:15,280 --> 00:18:15,879 Speaker 3: Well, I don't know. 334 00:18:16,200 --> 00:18:17,960 Speaker 4: We don't know whether people are hanging on to it 335 00:18:18,040 --> 00:18:20,400 Speaker 4: or not. That we people buying and selling shares all 336 00:18:20,440 --> 00:18:20,760 Speaker 4: the time. 337 00:18:20,840 --> 00:18:22,680 Speaker 1: Well, you're selling home buying a few. At the moment. 338 00:18:23,200 --> 00:18:25,520 Speaker 1: The buyback that's been going on, what are we about 339 00:18:26,040 --> 00:18:27,040 Speaker 1: forty million dollars through. 340 00:18:26,880 --> 00:18:29,720 Speaker 4: It's it's one hundred million dollar buy back, which we're 341 00:18:30,000 --> 00:18:32,120 Speaker 4: sort of planning what we need to have to sort 342 00:18:32,119 --> 00:18:34,520 Speaker 4: of finish by the end of the calendar year, and 343 00:18:34,560 --> 00:18:36,160 Speaker 4: we're a bit over halfway through that. 344 00:18:37,280 --> 00:18:40,320 Speaker 1: And reasonable prices. He would have to say at the moment, yes, 345 00:18:40,359 --> 00:18:43,680 Speaker 1: that's right, Yeah, and that's obviously we wouldn't be buying 346 00:18:43,720 --> 00:18:46,520 Speaker 1: shares back if we didn't think if we were confident 347 00:18:46,600 --> 00:18:48,840 Speaker 1: in the in the long term, medium long term value 348 00:18:48,880 --> 00:18:49,399 Speaker 1: of the company. 349 00:18:49,440 --> 00:18:52,400 Speaker 4: There's no point in us buying shares back for more 350 00:18:52,400 --> 00:18:54,880 Speaker 4: than we think they're worth. But we're in the middle 351 00:18:54,920 --> 00:18:57,320 Speaker 4: of that process at the moment. We've got a capital 352 00:18:57,320 --> 00:19:00,800 Speaker 4: management framework that we're working tightly within, and we just 353 00:19:00,920 --> 00:19:07,160 Speaker 4: had some flexibility within that to give offer an opportunity 354 00:19:07,160 --> 00:19:08,320 Speaker 4: for shareholders. 355 00:19:07,840 --> 00:19:10,360 Speaker 3: That might want to sell in the buyback. The ability 356 00:19:10,400 --> 00:19:11,480 Speaker 3: to do that. 357 00:19:11,080 --> 00:19:13,200 Speaker 1: That comes at a cost. I mean, that's potentially funds 358 00:19:13,200 --> 00:19:17,280 Speaker 1: that you could arguably use for to support a dividend policy. 359 00:19:17,280 --> 00:19:19,119 Speaker 1: That's a lot that's more generous than what it is 360 00:19:19,160 --> 00:19:19,639 Speaker 1: at the moment. 361 00:19:19,800 --> 00:19:22,400 Speaker 4: So we've got a different way of dealing with the dividend. 362 00:19:23,320 --> 00:19:25,720 Speaker 4: So the dividend policy we published a couple of years 363 00:19:25,720 --> 00:19:30,159 Speaker 4: ago links it to earnings, which we think is appropriate. 364 00:19:30,480 --> 00:19:35,800 Speaker 4: So it's anywhere between forty and seventy percent of rolling 365 00:19:36,080 --> 00:19:39,520 Speaker 4: net profit after tax. So as earnings come under pressure, 366 00:19:40,040 --> 00:19:44,920 Speaker 4: the dividend comes down. As earnings improve, the dividend goes up. 367 00:19:45,440 --> 00:19:51,800 Speaker 4: But we treat decisions around buybacks entirely independently of earnings 368 00:19:52,080 --> 00:19:54,879 Speaker 4: in the dividend policy, so the buyback is more a 369 00:19:54,920 --> 00:19:59,240 Speaker 4: function of the strength of the balance sheet, our liquidity position, 370 00:19:59,760 --> 00:20:03,520 Speaker 4: our capex profile, our gearing ratio, how much debt we've 371 00:20:03,520 --> 00:20:06,480 Speaker 4: got in the business, and whether we've got the ability 372 00:20:07,800 --> 00:20:12,680 Speaker 4: to thunder buy back while maintaining all our capital management metrics. 373 00:20:12,680 --> 00:20:17,359 Speaker 4: So we the scope for the buyback program we're running today. 374 00:20:17,440 --> 00:20:19,040 Speaker 4: But I think back to your thing around earnings and 375 00:20:19,320 --> 00:20:23,040 Speaker 4: shareholders patients, which I think you know it's an important 376 00:20:24,200 --> 00:20:26,720 Speaker 4: it's a very important question. We're obviously confident in the 377 00:20:26,760 --> 00:20:30,840 Speaker 4: future of the organization, but short term earnings are under 378 00:20:30,880 --> 00:20:34,639 Speaker 4: pressure and through sort of three reasons I've given some 379 00:20:34,680 --> 00:20:38,680 Speaker 4: of them, but three things that make a successful airline 380 00:20:39,359 --> 00:20:43,560 Speaker 4: generally you need some scale so the business. It always helps, 381 00:20:43,600 --> 00:20:46,199 Speaker 4: particularly in a high inflation environment. It helps if the 382 00:20:46,280 --> 00:20:49,760 Speaker 4: business is growing and we have plans to grow. We've 383 00:20:49,760 --> 00:20:53,359 Speaker 4: got a great fleet plan we're getting We've just taken 384 00:20:53,440 --> 00:20:56,840 Speaker 4: delivery of two new A three twenty one narrowbody jets 385 00:20:56,880 --> 00:20:59,120 Speaker 4: and we're getting some seven eight sevens early next year. 386 00:20:59,240 --> 00:21:02,400 Speaker 4: Five years late, mind, but they are arriving. 387 00:21:02,680 --> 00:21:04,160 Speaker 3: But it's important to have growth. 388 00:21:04,400 --> 00:21:06,600 Speaker 4: With twenty percent of the jet fleet on the ground 389 00:21:06,640 --> 00:21:09,520 Speaker 4: at the moment, we haven't been able to pursue the 390 00:21:09,520 --> 00:21:11,679 Speaker 4: growth agenda we would have liked, but that is coming. 391 00:21:12,440 --> 00:21:17,280 Speaker 4: The second element of it is new technology. New aircraft 392 00:21:17,320 --> 00:21:23,000 Speaker 4: technology generally or almost exclusively lowers the cost seek cost 393 00:21:23,280 --> 00:21:26,520 Speaker 4: of traveling, and we can use that to either make 394 00:21:26,600 --> 00:21:29,800 Speaker 4: fears more competitive and grow the top line end or 395 00:21:30,200 --> 00:21:34,359 Speaker 4: bankerter's margin, usually some combination of the two. But with 396 00:21:34,480 --> 00:21:38,440 Speaker 4: our very best aircraft ten or eleven of them grounded 397 00:21:38,440 --> 00:21:41,680 Speaker 4: at the moment, we are not getting the fleet economics 398 00:21:41,680 --> 00:21:42,640 Speaker 4: that we would have expected. 399 00:21:42,640 --> 00:21:44,160 Speaker 3: We're paying for it. 400 00:21:44,200 --> 00:21:46,480 Speaker 4: So we've got half a billion dollars worth of brand 401 00:21:46,560 --> 00:21:48,920 Speaker 4: new A three twenty one sitting around at the moment, 402 00:21:49,040 --> 00:21:52,240 Speaker 4: burning a literal and figurative hole in the ground. 403 00:21:52,760 --> 00:21:54,399 Speaker 1: But we're in the ballot. 404 00:21:54,560 --> 00:21:56,760 Speaker 4: We're not getting the balance, so we reliant at the 405 00:21:56,760 --> 00:21:59,560 Speaker 4: moment on just good cost control, and that is hard 406 00:21:59,600 --> 00:22:02,520 Speaker 4: and high inflationary environment, but we're making good progress on there. 407 00:22:03,160 --> 00:22:05,600 Speaker 4: So we've got one of the three levers sort of 408 00:22:05,640 --> 00:22:08,439 Speaker 4: going for us at the moment. But that and that 409 00:22:08,480 --> 00:22:11,600 Speaker 4: will be that will persist over twenty twenty six. But 410 00:22:11,720 --> 00:22:15,199 Speaker 4: our expectation now we're getting to the closer to the 411 00:22:15,320 --> 00:22:18,680 Speaker 4: end of these engine problems than the beginning. None of 412 00:22:18,760 --> 00:22:21,240 Speaker 4: us thought it would take this long, but over the 413 00:22:21,240 --> 00:22:24,240 Speaker 4: course of financial year twenty seven and twenty eight, we 414 00:22:24,320 --> 00:22:27,840 Speaker 4: would expect those issues to start resolving themselves and we'll 415 00:22:27,880 --> 00:22:31,840 Speaker 4: get onto a normal footing and start to have those 416 00:22:31,880 --> 00:22:34,639 Speaker 4: three levers working in our favor. 417 00:22:34,680 --> 00:22:35,959 Speaker 1: A couple of years back, I think when you had 418 00:22:35,960 --> 00:22:37,720 Speaker 1: the capital rays that sort of set yourselves up for 419 00:22:37,760 --> 00:22:39,800 Speaker 1: all this twenty twenty two, and you were talking about 420 00:22:39,880 --> 00:22:43,120 Speaker 1: being app at about ninety percent of COVID levels. By now, yes, 421 00:22:43,359 --> 00:22:44,960 Speaker 1: it's right nowhere, nowhere near it. 422 00:22:45,160 --> 00:22:45,960 Speaker 3: I think we're at. 423 00:22:45,840 --> 00:22:50,080 Speaker 4: About eighty eight of pre COVID levels eighty seven, but 424 00:22:50,680 --> 00:22:54,440 Speaker 4: at huge cost. All these rented triple sevens, all these 425 00:22:54,480 --> 00:22:57,920 Speaker 4: rented engines, a whole bunch of new aircraft that we're 426 00:22:57,960 --> 00:23:01,800 Speaker 4: paying for in terms of depreciation and invested capital that 427 00:23:01,840 --> 00:23:06,520 Speaker 4: aren't doing anything. And so while we're close to that 428 00:23:06,640 --> 00:23:10,679 Speaker 4: level of flying, it's coming at a significant cost burden 429 00:23:10,760 --> 00:23:13,600 Speaker 4: that what we didn't anticipate nearly four years ago, Garth 430 00:23:13,720 --> 00:23:16,040 Speaker 4: was the capital rais'd. 431 00:23:15,240 --> 00:23:19,040 Speaker 1: Be nice to get some tourists too, It would something 432 00:23:19,119 --> 00:23:21,720 Speaker 1: like what I think I read fifty or fifty five 433 00:23:21,760 --> 00:23:25,439 Speaker 1: percent levels coming out of China compared with pre COVID levels. 434 00:23:25,960 --> 00:23:29,760 Speaker 1: Obviously that's an industry wide problem, but it's it's it's 435 00:23:29,800 --> 00:23:32,840 Speaker 1: another one of those levers that anyw Zealand's already always 436 00:23:32,840 --> 00:23:36,200 Speaker 1: been quite keen to sign, pull and support what's what's 437 00:23:36,240 --> 00:23:36,800 Speaker 1: going on there. 438 00:23:36,880 --> 00:23:39,119 Speaker 4: At a total country level, I think we're at eighty 439 00:23:39,200 --> 00:23:42,560 Speaker 4: seven eighty eight percent of where we were visitor arrivals 440 00:23:42,560 --> 00:23:46,399 Speaker 4: pre COVID, but within that number, averages are deceiving. So 441 00:23:46,480 --> 00:23:49,200 Speaker 4: within that number, actually the US is ahead of where 442 00:23:49,200 --> 00:23:52,760 Speaker 4: it was pre COVID. So the exchange rate of US 443 00:23:52,760 --> 00:23:55,360 Speaker 4: tourists coming to New Zealand now actually the exchange rates 444 00:23:55,440 --> 00:23:58,399 Speaker 4: amazing for all the reasons why it's tough for a 445 00:23:58,440 --> 00:24:00,760 Speaker 4: key to travel to US the US at the moment, 446 00:24:01,280 --> 00:24:05,560 Speaker 4: so US is sitting actually well above where we were 447 00:24:05,640 --> 00:24:06,280 Speaker 4: pretty COVID. 448 00:24:07,760 --> 00:24:09,120 Speaker 3: Australia just behind. 449 00:24:09,160 --> 00:24:11,320 Speaker 1: I think they might be ninety two to ninety three 450 00:24:11,560 --> 00:24:14,719 Speaker 1: percent of where they were, but they're strong to demand 451 00:24:14,760 --> 00:24:18,640 Speaker 1: out of Australia. So it's one of our best performing markets, 452 00:24:19,000 --> 00:24:21,639 Speaker 1: as you say or allude to the big gap at 453 00:24:21,680 --> 00:24:25,040 Speaker 1: the moments out of China market. So we are I 454 00:24:25,160 --> 00:24:27,560 Speaker 1: think half or very close to half of where we 455 00:24:27,560 --> 00:24:30,920 Speaker 1: were before. I think I've read somewhere it's like over 456 00:24:31,480 --> 00:24:35,200 Speaker 1: five hundred dollars for someone to come here before they've 457 00:24:35,200 --> 00:24:37,359 Speaker 1: even bought the ticket, right, there's a huge visa cost, 458 00:24:37,640 --> 00:24:40,000 Speaker 1: and then you've got that extra visa levy that's been 459 00:24:40,080 --> 00:24:44,520 Speaker 1: put on for tourism and conservation purposes and instead of 460 00:24:44,520 --> 00:24:46,240 Speaker 1: pricing ourselves out of the. 461 00:24:47,119 --> 00:24:50,280 Speaker 4: I don't think it helps. So I'm not for sure 462 00:24:50,359 --> 00:24:53,280 Speaker 4: it's five hundred dollars. It's four forty one, I think for. 463 00:24:53,240 --> 00:24:55,119 Speaker 1: The visa and then the hondy on top and then 464 00:24:55,560 --> 00:24:55,920 Speaker 1: on top. 465 00:24:56,440 --> 00:25:00,480 Speaker 4: So is expensive us in our Singapore offic a couple 466 00:25:00,520 --> 00:25:03,080 Speaker 4: of weeks ago talking to the team up there, and 467 00:25:03,359 --> 00:25:06,680 Speaker 4: there's no doubt it's a friction point compared to other 468 00:25:06,720 --> 00:25:12,320 Speaker 4: countries who have got much lower sort of costs of entry. 469 00:25:12,320 --> 00:25:14,679 Speaker 4: And I think one of the tough things with the 470 00:25:14,760 --> 00:25:20,520 Speaker 4: visa is that it's a levy that's imposed at the 471 00:25:20,640 --> 00:25:25,520 Speaker 4: time people are making decisions about where they're traveling. It's 472 00:25:25,520 --> 00:25:30,080 Speaker 4: not like they've arrived in country committed, you know. So 473 00:25:30,440 --> 00:25:34,520 Speaker 4: there's no doubt in my mind that it is influencing. 474 00:25:35,359 --> 00:25:37,159 Speaker 3: Where people choose to travel. 475 00:25:37,200 --> 00:25:40,760 Speaker 4: We are have become a much higher cost destination than 476 00:25:40,760 --> 00:25:44,080 Speaker 4: we were in the past, still very desirable and we're 477 00:25:44,119 --> 00:25:46,439 Speaker 4: still getting good and bound tourism, but that is a 478 00:25:46,440 --> 00:25:47,000 Speaker 4: friction point. 479 00:25:47,040 --> 00:25:50,040 Speaker 1: I think all of this makes me think, like I said, 480 00:25:50,200 --> 00:25:51,840 Speaker 1: how on earth do you sort of keep turning up 481 00:25:51,840 --> 00:25:53,639 Speaker 1: with a smile on your face then when it feels 482 00:25:53,760 --> 00:25:56,679 Speaker 1: this challenging. I mean, any aircraft that sets out without 483 00:25:56,760 --> 00:25:58,720 Speaker 1: knowing when it's going to land, where it's going to 484 00:25:58,800 --> 00:25:59,920 Speaker 1: land is in some real. 485 00:26:01,359 --> 00:26:03,440 Speaker 4: We're an airline that's been around for eighty five years. 486 00:26:03,960 --> 00:26:06,639 Speaker 4: There's a huge amount of pride in the airline is 487 00:26:09,840 --> 00:26:12,040 Speaker 4: it is an amazing place to work. A lot of 488 00:26:12,040 --> 00:26:17,720 Speaker 4: our workforce because they are aeronautically minded, with the single 489 00:26:17,760 --> 00:26:20,840 Speaker 4: biggest employer in the country by a long way of 490 00:26:20,920 --> 00:26:23,520 Speaker 4: people in this industry. We've got a lot of people 491 00:26:23,560 --> 00:26:25,800 Speaker 4: on the staff who have been with the company for 492 00:26:26,520 --> 00:26:31,080 Speaker 4: twenty years, like me, thirty forty fifty. In fact, I 493 00:26:31,160 --> 00:26:36,320 Speaker 4: have a member of staff who has celebrated sixty years 494 00:26:36,320 --> 00:26:39,359 Speaker 4: with the company. This sort of huge commitment to the cause. 495 00:26:39,440 --> 00:26:43,080 Speaker 4: People A lot of people on the staff have seen 496 00:26:43,160 --> 00:26:46,120 Speaker 4: the various ups and downs through the years, and there 497 00:26:46,160 --> 00:26:50,160 Speaker 4: have been people are philosophical. I think about where we're 498 00:26:50,200 --> 00:26:53,280 Speaker 4: at in the cycle. We have a good plan going forward, 499 00:26:55,080 --> 00:26:58,119 Speaker 4: great fleet plan, great product, you know, the wide body 500 00:26:58,119 --> 00:27:01,480 Speaker 4: fleet at the moment, it's just starting now. It's been refreshed. 501 00:27:01,520 --> 00:27:03,800 Speaker 4: We've got four of the fourteen seven eight sevens now 502 00:27:03,840 --> 00:27:07,840 Speaker 4: with the new interiors in them. We fly the flag 503 00:27:07,920 --> 00:27:13,520 Speaker 4: offshore lots of different countries in North America, Japan, North Asia, 504 00:27:13,800 --> 00:27:21,040 Speaker 4: Southeast Asia, Australia, so where one of the country's biggest cheerleaders, 505 00:27:21,680 --> 00:27:24,520 Speaker 4: and people just get a thrill out of that. And 506 00:27:24,600 --> 00:27:28,520 Speaker 4: it doesn't seem no matter how tough the situation is. 507 00:27:29,000 --> 00:27:33,960 Speaker 4: People we just get that fulfillment and pride out of 508 00:27:34,040 --> 00:27:37,399 Speaker 4: representing the country as well as we can, and. 509 00:27:37,440 --> 00:27:39,800 Speaker 3: That's what gets people or keeps people going. 510 00:27:40,040 --> 00:27:42,119 Speaker 1: Okay, Richard Thompson, if we'll return our seats to the 511 00:27:42,160 --> 00:27:45,000 Speaker 1: upright position, I believe that our flight here has ended. 512 00:27:45,040 --> 00:27:48,280 Speaker 1: Thank you for flying Cheesy Shared Lunch this week. If 513 00:27:48,280 --> 00:27:50,720 Speaker 1: you like that, let us know. If there's something else 514 00:27:50,720 --> 00:27:53,120 Speaker 1: you want to know, let us know. And I hope 515 00:27:53,160 --> 00:27:55,080 Speaker 1: you enjoyed that wherever you listen to it straight off 516 00:27:55,080 --> 00:27:58,000 Speaker 1: the app on YouTube. I heart all the places you 517 00:27:58,040 --> 00:28:09,760 Speaker 1: get your podcast. Omit. That's us for this week. H