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Speaker 2: It is well documented that Boeing is having problems with
Speaker 2: its seven three seven Max. However, there's another issue which
Speaker 2: has been hitting this industry very hard as well, and
Speaker 2: that affects airbus aircraft. Not all airbus aircraft, some airbus aircraft,
Speaker 2: and it concerns the RTX Pratt and Whitney geared turbofan engine. Now,
Speaker 2: if you buy an A three twenty today, you are
Speaker 2: given two engine options. You can either buy the CFM
Speaker 2: which easy Jet bought, or you can buy the jet
Speaker 2: engine that comes from RTX. And that latter engine has
Speaker 2: been having major problems which has been hitting our next
Speaker 2: guest very very hard, and that is Joseph Variety. He
Speaker 2: is the CEO of with Air. His engines are RTX
Speaker 2: engines and they're having a major impact on his ability
Speaker 2: to provide capacity to the market. Josephs with us this morning.
Speaker 2: You've got numbers out this morning. Topline looks pretty much
Speaker 2: in line with expectations. New income. You've beaten there. But
Speaker 2: this is a this isn't a carrier. The moment is,
Speaker 2: in some ways in survival mode, is you try and
Speaker 2: manage to do this problem which Withney engine issue. How
Speaker 2: hard is it hitting you right now? When is the
Speaker 2: peak of this problem going to manifest itself? And when
Speaker 2: are you going to start preparing for the kind of
Speaker 2: the growth phase when all the engines are back.
Speaker 3: No, absolutely, I mean this is a significant issue we
Speaker 3: have been dealing we can be a continue to deal
Speaker 3: with in the next few years. So this is not
Speaker 3: something you can resolve overnight. Good news, we are going
Speaker 3: to receive the first engine with no problems, clean up
Speaker 3: all of these issues as of next months, and from
Speaker 3: that on this situation we start improving. So we are
Speaker 3: probably peaking on the problem as we speak. By the
Speaker 3: time we're going to be completing the worst cycle of inspections,
Speaker 3: it's another two years to go off the speaking, but
Speaker 3: now we will start seeing some improvements. So this issue
Speaker 3: has been dragging us over the last six to twelve months,
Speaker 3: but now we are starting to sign up recovery and
Speaker 3: I think we're going to get better going from here.
Speaker 4: Okay, how many engines you've got out now?
Speaker 2: Now when you get them all back, how much extra
Speaker 2: capacity you're going to have? What are you going to
Speaker 2: do with that capacity? We need to start thinking about
Speaker 2: next year and what you're going to do with the business.
Speaker 4: Then yeah, maybe the best way to look at this.
Speaker 3: Today we are a two hundred aircraft airline two hundred
Speaker 3: and nine. Precisely three years now from now, we're going
Speaker 3: to be more than a three hundred aircraft. Some of
Speaker 3: our aircraft are grounded as we speak. We have forty
Speaker 3: seven aircraft on ground right now. Those will be recovered
Speaker 3: completely within the course of the next two years or so,
Speaker 3: so we will be back into gross overround twenty five
Speaker 3: to thirty percent of year after this year. So it's
Speaker 3: going to be a bit of a roller coaster. So
Speaker 3: right now we are flat on capacity. We are protecting it,
Speaker 3: but in the next two years you're going to be
Speaker 3: seeing growth in excess of twenty twenty five.
Speaker 5: Percent years A good morning. Have you been losing market
Speaker 5: share there in some places as a results of this
Speaker 5: and are you so? Are you confident that you can
Speaker 5: get some of that back with the capacity plan that
Speaker 5: you describe.
Speaker 3: I think I just said it that effectively we are
Speaker 3: protected by or the supply chain issues because we are
Speaker 3: unable to run at the moment, but no one else
Speaker 3: is able to run because they all have their own problem.
Speaker 3: So I think it's a rather like statusco in the market.
Speaker 3: So we are not losing market share, we are protecting capacity.
Speaker 3: We are flying exactly the same number of seats this
Speaker 3: year as last year.
Speaker 4: So we that regard we are fine.
Speaker 3: But most importantly, you know now we need to look
Speaker 3: at the future because growth is coming. We need to
Speaker 3: start setting ourselves off for that from a market standpoint,
Speaker 3: detre between pilots and kevin crew to make sure that
Speaker 3: we're going to be able to deliver it.
Speaker 5: What can you tell us about pricing. We spoke to
Speaker 5: the easy Jet boss recently and he was saying it's
Speaker 5: too soon really to say too much about the pricing
Speaker 5: outlook for the summer. What are you seeing.
Speaker 3: Yeah, First of all, we are seeing a very robust
Speaker 3: market out there. We are operating across geographies, investing Europe,
Speaker 3: in Centralistian Europe, in the Middle East, and we are
Speaker 3: seeing a very consistent picture. The consumer is fine, demand
Speaker 3: is fine, the market is fine.
Speaker 4: There are no issues. Now.
Speaker 3: The problems some of the allies have that they overcharge
Speaker 3: the consumer last year and they cannot just keep doing
Speaker 3: it every year. So of course that is a plateau
Speaker 3: to it. But we said, is in the cost business.
Speaker 3: We are very much focused on unit costs to make
Speaker 3: sure that we are actually loading our cost of operations.
Speaker 3: We are in the business of commodities, in commodities lowest
Speaker 3: cost previous.
Speaker 4: This is what we are focused.
Speaker 3: On, and we are very happy with the pricing environment
Speaker 3: we are seeing out there.
Speaker 1: Tell us a little bit about some of the kind
Speaker 1: of black swan events that we're watching, which Jet has
Speaker 1: to been operating in Israel, for example, if that conflict escalates,
Speaker 1: are you prepared to gain or deploy or get that
Speaker 1: market share back in other parts of the world.
Speaker 3: I think we are prepared for everything. By now, I
Speaker 3: mean going through the last three to four years. One
Speaker 3: of the things we certainly have learned how to deal
Speaker 3: with blackstone events because we have had a lot of them.
Speaker 3: With regard to reshuffling capacity and that is a conflict
Speaker 3: or there is, you know, any big issues affecting the business,
Speaker 3: we have learned how to do that. We are a
Speaker 3: very flexible organization. Simply what you do is that you
Speaker 3: play according to market. You play according to the situation.
Speaker 3: So if you are contained with regard to flying, you
Speaker 3: just move capacity over to somebody else. Let's not forget
Speaker 3: that we have a huge network footprint. By now, we
Speaker 3: are operating a two hundred countries. We have options to
Speaker 3: go for when we have to do that.
Speaker 1: Talk to us a little bit as well about labor
Speaker 1: issues that seems to come up every summer, in terms
Speaker 1: of capacity at airports, in terms of negotiations with fight
Speaker 1: attendant pilots, et cetera. Your visibility on the labor story.
Speaker 4: Again, we are we are good.
Speaker 3: I mean, let's not forget that we are structurally a
Speaker 3: growth business.
Speaker 4: We are growing the company.
Speaker 3: As a result of that, we continue to create carrier
Speaker 3: opportunities for our people. You may be a pilot, you
Speaker 3: may be cabinettendant, you may be in a manicheri role.
Speaker 3: So people come to work for this on the one hand,
Speaker 3: for the spirit of the business, but also for the
Speaker 3: carrier opportunities that growth continues to create. So we are
Speaker 3: very attractive to the market. We actually never had labor
Speaker 3: issues ourselves. We have been dealing with lavery issues of others.
Speaker 3: Us in the situation is a lot better this year
Speaker 3: than what it was last year.
Speaker 2: Why are supply chain issues still hitting this industry as
Speaker 2: hard as they are? How long are they going to last.
Speaker 2: You talk to the OEMs US and bye. They still
Speaker 2: talk about their supply chains. They still talk about problems
Speaker 2: where years in the pandemic they haven't resolved it. How
Speaker 2: long is it going to hit this issue? How long
Speaker 2: can we expect capacity problems? How long can we expect
Speaker 2: that to impact fares personally?
Speaker 3: I think supply chain issues will affect the operations of
Speaker 3: the industry over the next three to five years. Again,
Speaker 3: this is not something you can fix overnight. And if
Speaker 3: you look at the root causes of these supply chain issues,
Speaker 3: I think they are two forward. One, the whole industry
Speaker 3: has been structurally growing a lot more than it was expected.
Speaker 3: And two COVID was such a big hit and such
Speaker 3: a setback for the whole setup that the industry is
Speaker 3: theory covering from that in terms of getting labored back
Speaker 3: into work, get focused on some of the issues which
Speaker 3: you let go during the COVID times. And this is
Speaker 3: a very robust industry. It takes time to move again.
Speaker 3: I think it's years still out.
Speaker 4: There, all right.
Speaker 1: Joseph Varady, the CEO of wizare joining us this morning
Speaker 1: on SAT talking about a variety of issues from a
Speaker 1: supply chain story to the labor story. We thank you
Speaker 1: so much for joining the program.