HK Express CEO Update

Transcript

Andrew Cowen:We've made big strides in our fleet plans actually in the last couple of months. The most exciting part of it is we've been able to sign up a package of 12 A320neos, which will start to deliver to us in August of 2016. HK Express will then take for a year from '16 through to, through to '18. So quite pleased about that. We've been able to take advantage of the, the emerging overordering of neos, which we kind of thought would happen. But, you know, pretty pleased that from our perspective that is happening. We've been able to secure those on really very, very good terms and, you know, hoping to, you know, get some more, quite honestly. But in addition to that, we've also We've now committed another 10 A321s. These are ceos, and this will take us to 12 in all for delivery from 2016 through to 2018. And again, we decided to get into the A321, which will be configured to 230 wide, as a means— well, really one of our strategies for dealing with the, you know, just the short shortage at Hong Kong Airport. So that's going to give us some very good growth versus obviously our existing A320-size aircraft. And we've also got a fair number of routes where it makes sense for us to add larger aircraft rather than try to buy more slots or add frequencies. So that, you know, that's really the summary. We're very excited again. Most of our network development has been focused on Japan, which has really reflected the demands of the Hong Kong travelling public, especially those people looking for low fares. Previously, the routes to Japan were just flag carrier duopolies with very, very high fares. And we started to look for similar such routes around Southeast Asia, where again you have very limited competition, very high fares. And that brings us to Myanmar. Obviously very exciting times for Myanmar. We're all delighted with the election results, and I think we can see that as really opening up interest from really all quarters to traveling to Myanmar. So we're anticipating that a little, and we hope to start, as you say, services to Yangon and Mandalay in 2016. Probably be you know the we're still finalizing the exact date, but really it's just as soon as we can. Luang Prabang as well. We've announced that in in Laos. You know that's part of developing our Southeast Asian network as well. And again, it's a very exciting city that you know lots of people want to travel to. We're huge supporters of the third runway. The the the sort of simple facts for HK Express is that if we could get more slots. You know, I say over and over, I could literally, subject to operational constraints, I could literally launch another 20 destinations within, you know, within months. And the reason, you know, we can't is essentially due to slots. So we were absolutely clear it needs to go ahead, you know, subject obviously to any sensible, reasonable environmental protections, you know, which we want and support ourselves. There's always There's always the question of how does it get paid for. From our perspective, we simply continue to represent that growing air travel, in our opinion, is about reducing cost and making fares more accessible to people, especially many of the emerging countries in Asia where you've got people coming into disposable income and so on and wanting to travel. So anything that adds to, you know, our operating costs, fees for third runway and so on. Whilst, of course, we understand it's got to be paid for and support that, we always want to ensure that it's, you know, it's the most cost-effective plans and executions possible. Certainly, we're very open to it. It's a very logical You know, opportunity for us in Hong Kong. As most of us, I think, would agree, you know, Hong Kong is one of the premier, you know, cities and destinations in the world. It's a major hub. And if we, you know, if we can't get growth through slots, then certainly there may be some opportunities there. We continue to want to always not lose sight of the whole LCC model, but think that, you know, we can. Do some partnering on a reciprocal point-to-point type basis. So we already have a connecting product through the HK Express network, which we call Go Connect, and that's doing well. It's enabling people to travel from east to west and north to south across city pairs. they couldn't— they can't sensibly travel— they can't travel direct at all, or the alternatives are quite poor. So we think it can be done in a way that doesn't compromise the model. And, you know, so we're certainly open to it.

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