airBaltic, CEO, Martin Gauss at the CAPA World Aviation Summit 2023

Transcript

Martin Gauss:How many aircraft are missing engines? We had this summer a large number on the ground, a big portion of our fleet, but currently only aircraft which are in the normal regular maintenance have no engines. The rest of the fleet is flying as we're in the winter season, so we are at zero missing engines for the active aircraft. But we have a forecast already for next year that we also would be missing engines because they cannot produce— they cannot return the engines to us as fast as we need them back. So Pratt Whitney from the Raytheon Group, they keep giving us different information week on week, so we do not have the final number which will be missing for the next summer. Numbers are going up and down, but as soon as we have it, we can plan what to do to bring other airlines in to do our job, because we are selling tickets, right, already today. So the issue is that we do not know today how many aircraft would be missing next summer, and that makes it very difficult for us to plan because you cannot just say from one day to another to bring in an aircraft. We have this summer done a lot of wet leasing. We had several airlines flying for us, which is not good for the product. We know that and the passengers give us that feedback. We have a negative promoter score, so it reduces. We now have actually a very positive net promoter score because we only fly our Airbus A220s. For the next summer, we would also take in wet-leased aircraft if the need arises, but that means which means they will have to tell us how many engines are missing, which they cannot by today. I think as they are a stock-listed company, they are very careful in giving you a clear statement because they would have to publicize it. And I'm waiting for it. We have weekly informal information, but we're waiting for some formal feedback on the situation for next summer. For the 3rd year, they tell us it's over when this year is over. So we had that promise the 3rd year in a row and it didn't come true. So the frustration is not only with us, with others pretty high. They also say now that the problem would be getting better as we go into the future. And of course, I trust in what they say, and we hope that this is the last year where we will be missing this amount of engines for our operations. So we, of course, are growing. We are taking a lot of deliveries. We took deliveries. We're taking more deliveries of new aircraft. And with each aircraft coming, of course, also the amount of engines which we are, which we have to overhaul over time goes up. But Looking at that, of course, it gets better because overall the total number of engines available in the world, specifically that specific engine, gets larger because they are producing new engines. They're just not produced fast enough, and then the overhaul of the engine is also not happening fast enough. We saw today here at CAPA, we saw that we are at 97% globally compared to 2019. We, of course, today have already more passengers than we had in 2019, so the demand for us in a European airline from the Baltics, is already higher than it was. But going forward, we do not see a slowdown in the booking trends, and therefore we see a very positive trend. And I would say that we can exceed as a globe the levels of 2019 next year already. But we as an airline have already— we are larger today than we were in 2019. But if we look at the globe, then we are still 3% behind. What are the key trends you see in the industry?

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