International update: Airline strategies in the Australasian and Asia-Pacific markets

Transcript

Adrian Schofield:Thank you for that introduction, Simon, and for a really interesting presentation. As always, there was a lot of food for thought in that. In this session, we're going to be talking about trends in Australia's international market, and we have a great panel to talk about that, and we'll also be, be taking audience questions. So towards the end we'll have microphones circulating, and also if you want to submit questions via Slido, that would be fantastic too. So just by way of introduction, on my left, from my left we have Eddy Somalilaga, who's Head of Indonesia Affairs and Policy for Indonesia AirAsia. Stephen Pearce, who's Executive Director for the Board of Airline Representatives of Australia. Rob Dugan, who is Executive General Manager for Strategy and Culture for Tourism Australia. And on the end, we have Teng Tahu, who's Commercial VP for Vietjet. So once again, welcome, gentlemen, and thank you for joining us.

Stephen Pearse:Thank you.

Adrian Schofield:So just, just to set the scene a little bit, I wonder, Teng, if we could start with you. Could you talk about what your current Australian network looks like? and how much it has grown in the past year, and perhaps a little bit about your plans for future expansion in this market.

Thanh Huu Ta:Yeah, Vietjet started to operate to Australia since the middle of 2023. During that time, due to the capacity entitlement between the 2 governments, Vietnam and Australia, it's only 42 flights per week. And we allocated 18 flight away. And that time we start operate with from Ho Chi Minh City to Sydney and Melbourne, after that to Brisbane. At the end of 2023, 2 authorities agreed to increase the frequency, capacity, and time for the airline of both sides. And so that we quickly increase frequency and we open some more new route from Ho Chi Minh City to Perth and Adelaide, from Hanoi to Melbourne and Sydney. And the current schedule is that we operate a total of 21 flight per week, in which the 5 flight per week from Ho Chi Minh City to Sydney, 5 flight per week from Ho Chi Minh City to Melbourne.

Eddy Krismeidi Soemawilaga:Thank you.

Thanh Huu Ta:4 flights from Ho Chi Minh City to Brisbane and 3 flights from Ho Chi Minh City to Perth, and 2 flights from Hanoi to Sydney and 2 flights from Hanoi to Melbourne. And as, as in 2024, we have 2 support points out of it, from Ho Chi Minh City to Adelaide. Because at that time we operate the combined route between Perth and Adelaide. But due to some operational reasons, we had to temporarily postpone and waiting for our widebody, and so that we can operate a nonstop service from Ho Chi Minh City to Adelaide. We will resume as soon as possible when we receive more widebody aircraft. Thank you. And during the year 2024, we carry nearly 600,000 passengers between the two, our country. And Australia is a strategic market for Vietjet, and we see the long-term opportunity driven by the tourist trade, education, and often travel of the Vietnamese community between the two countries. We continue to work with local airports and tourism body and travel partner to drive sustainable growth and deliver It's a more affordable travel option to passengers. As you know, at the end of 2023, both authorities agreed to gradually increasing their capacity entitlement. And in the Northern winter 2025, we allow to operate up to the 84 flyable weights. It's double than before. And so that we have a chance to increase our frequency, increase more service to Australia. And yes, that is the commitment to depending Our vision in the Australia market. Our expansion plan includes increased frequency to— on the existing route. We find the new route to another destination in Australia to meet the growing travel demand and employing the new opportunity to serve Another destination with the potential.

Adrian Schofield:Okay, great. And we'll certainly get into some of those regulatory issues a little bit later. That's, that's very interesting to hear, and I know Vietjet does have a, you know, a pretty big presence in the Australian market. So, Eddie, turning to you, Indonesia AirAsia has also had significant growth in the Australian market. So could you tell us about what your current network looks like here and, and what your growth plans are in this market?

Eddy Krismeidi Soemawilaga:Thank you, Adrian. I think for Indonesia AirAsia, we treat Australia as a very important market with the proximity of this country with Indonesia, of course. And for that, I think we start with the route from Bali to Perth, which I think we have established quite a long time ago, and now even we increase. For Bali-Perth, we have 32 flights a week actually. So some, uh, some days we have 5 flights per day, some 4 flights a day from Bali to Perth. Then after that, we continue with actually Cairns here. Last year we opened Cairns Bali last year, and 4 months ago we opened Bali Darwin. Then last month we also opened Bali, Adelaide. So in terms of what we have now, I think in terms of plan for this year, we have already achieved all the plan for Australia. We are waiting actually for the aircraft to be ready before we really plan for next destination. More or less, I think in terms of collaboration, I think like Vietjet, we are also being treated very well with local government, state government, as well as the airport. in opening new routes, actually. We do some collaboration and joint marketing, attracting people to come and increase awareness, especially because I think currently most of our passengers is Australian going to Bali. 70%, I think, our pax is Australian. Indonesian to Australia is still around 5%, even less than UK, actually.

Adrian Schofield:Mm-hmm.

Eddy Krismeidi Soemawilaga:UK is above Indonesia in using our flights to Australia. So I think more or less that is the situation. So in total, we have around 42 flights a week between Indonesia and Australia, and we see if we have new fleets, we can reach more cities that may be farther, like Melbourne or Sydney.

Adrian Schofield:Okay, well, so in terms of next markets, You were thinking, you know, Melbourne or Sydney perhaps?

Eddy Krismeidi Soemawilaga:Yeah, so we are thinking towards— because our fleet now, Airbus A320, maximum flight is 4 to 5 hours.

Adrian Schofield:Right, yeah, okay, very good. So Stephen, from a more general perspective, what sort of service and capacity growth trends are we seeing in the Australian market from overseas carriers? And is it back to pre-pandemic levels? Ian?

Stephen Pearse:So, no, look, it's really interesting to sort of hear some of these comments of, of the growth. And I think Simon, in his presentation, you know, that we just saw before, and some of the comments from before sort of show how— look, in answer to the last question, we're sort of back to pre-pandemic levels, but clearly the mix is very different. Um, so, you know, sort of still a bit of recovery in what were formerly the major markets, and, and some of the smaller markets having come up. That, that change of mix sort of more leisure than business, et cetera. The airlines in aggregate that Barra represents, you know, the sort of the international carriers, you know, they cover all of those, and so each carrier is kind of adjusting to those issues for their own markets and based upon their own, you know, whether it's bilateral restrictions or fleet availability, et cetera. But in general, we're kind of— I mean, I think, you know, we would look at— I'm sorry, Uh, 2025 as probably being the first relatively normal year since, since COVID which seems like an awful long time to get there. And we'd like to stop talking about sort of pre-COVID, but we're, we're sort of just about there and we're just about on the cusp. And so I think, you know, capacity growth now, we've got a kind of a new normal and growth now is therefore more considered, a little bit more, um, progressive. You're not going to see the big jumps market by market. Um, that we saw sort of in the recovery phase when international borders were opened, you know, in, in 2022. The only exceptions to that might be where there's, if there's another, um, you know, the next, the next bilateral, let's say, that, that may get opened where you may have, you know, heavily constrained demand. Um, but I would say actually the Department, um, uh, of Infrastructure have done a pretty good job actually in terms of sort of addressing most of the major markets. in terms of looking to have dialogue and increasing where those, you know, increasing those bilateral capacities where they're able to. So actually, look, 90% odd of current market to and from Australia has more liberal settings now than it did.

Robert Dougan:Mm-hmm.

Stephen Pearse:So there's a sort of degree of just-in-time. There's always a bit more that can be done, but there aren't too many major markets where regulatory bilaterals are So that's a good thing. There are other issues and we can talk about some of those later on.

Adrian Schofield:It's a very good point about the, the, the new normal for the market. Yeah, it just seems like it's time that, you know, we, we stop, you know, doing comparisons versus, um, pre-pandemic perhaps, because it's a long time ago now. The market's changed.

Stephen Pearse:Yeah, that, that, that's right. And, and I think, look, when we do forecasting and planning, uh, again, I think Simon put up a very interesting slide there, which is sort of, you know, just in terms of aircraft, um, production, you know, had things continued as they had from 2018, you know, that's sort of of 3.5% per year, we would potentially have more, more wide-body aircraft than, than is now seen as the deficit. Um, that is kind of true in one sense, but it's also, you know, the reality is the reality we have, right?

Robert Dougan:Yeah.

Stephen Pearse:So we have to move back. And when we look at sort of, um, 20-year master plans from the airports and, and look at Australia as a whole, um, you've got sort of 2 ways of looking at it, which is you can pretend that COVID never happened and try and draw a straight line across from sort of long-term trends, Or you say, OK, we had a resetting, and there are growth trends. Maybe you'll get to sort of where the total market might have been in 20 years' time. But as somebody also said in one of the presentations, you know, if you even try and go 10 years ahead, you're going to look like a fool. So long-term trends are good, but you don't want to sort of say for certain what'll happen in 20 years' time.

Robert Dougan:Great, thanks.

Adrian Schofield:And Rob, also from a more sort of overview perspective, what's your view on international airline service to Australia in support of inbound Is it back? And, you know, are airlines sort of serving this market differently now, do you think?

Robert Dougan:It's brilliant to hear about this language of new normal, right? Because we're in the process of writing a 2035 strategy, and even that, from a strategist, that feels like a very, very long horizon, right? And 2019 is now sort of 5, 6 years behind us as well. So looking back is really tricky because so much has changed. But we keep getting calls to kind of look back to 2019, which I'm desperately trying to do. kind of bored of. But, you know, so much has changed, and while the top-level capacity might be back and we're still seeing growth in kind of future schedules, you know, that capacity regain is very, very different, right? And there's lots and lots of reasons for that, but that's why it's great to hear about some of the growth coming out of Southeast Asia in particular. But if you look at India, if you look at South Korea, these are really big jumps in capacity and direct connectivity, and you see the, you see the jumps in visitation as a result, right? So it's a really good lesson for us that the, um, what we're trying to do, which is bring more people into the country, bring more expenditure into the economy, uh, the impact that aviation has on that. And those are some of the two big, really big jumps which we're very, very keen on. And, you know, pre-pandemic when I first started, we really began to have a look at Korea in particular, and you could see that Australia didn't necessarily have the share of outbound that, um, Korea had, right? There's lots of reasons for that. Aviation's a big one, but I think there was a perception of that market and other markets as well around the world that didn't necessarily take advantage of the type of spend levels that Koreans were making in other countries.

Eddy Krismeidi Soemawilaga:Mm-hm.

Robert Dougan:So I think there's also a mindset shift around how different markets have changed over that period of time, and hopefully the way that we go out and look at markets and then we look at audience is being updated in that way. And I think, you know, there's been lots of talk about Asia, Southeast Asia in today's conversations already, but I think we need to sort of update what our view on those visitors are, right, because they are changing as well, right? You know, the perception of Korea pre-pandemic was, you know, anecdotally when I talked to industry about shopping tours and that sort of thing, right, but the fact is outbound to other destinations Koreans are really big spenders and they're going to lots and lots of places and they're spending big, so I think that's partly our perception change on what these markets mean, partly changes in how the airlines are viewing the opportunity in different markets, and then also how we go out and look at a change in, in, in what we're after in terms of where we can find yield, and some of these emerging markets are really kind of stacking up.

Adrian Schofield:Right, interesting, yeah. So, so a general question for the panel, could you talk about demand trends in the Australian international market? How strong is it at the moment, and how is the upcoming summer season looking in terms of demand? Edy, can we perhaps start with you on that one?

Eddy Krismeidi Soemawilaga:Yeah, I think in terms of— I think Australia is number 2 market for Indonesia, and we play a role on that. Like, this first semester this year, we already carry around 250,000 with our fleet from Australia to Indonesia. And we see that the demand is picking up, and still popular destination is Bali. Therefore, I think what we are trying to do here for Indonesia AirAsia is in line with government of Indonesia, is try to spread out these tourists coming to Bali to also visiting other destinations. Like, of course, one of the famous one, the new destination like Labuan Bajo, when you can see all these Komodos and perhaps to East Java Island also. So I think in terms of that, I think the growth is still there. We see that opportunity for us to tap the market is still plenty of room for us to really tap it. But again, I think on return inbound, I think we need to really increase on the awareness of the destination, especially for Indonesia. We have quite huge population now. We have 300 80 million population in Indonesia. If the middle income is around 90 million, if they have propensity of travel 1, so 180 million already that you can tap for. And currently, I think one of the challenges that we are facing for Indonesia is actually on the visa, because they tend to— in Indonesia, I think they— people tend to visit neighboring destination.

Thanh Huu Ta:Yeah.

Eddy Krismeidi Soemawilaga:Like Malaysia, Singapore more, because they have, of course, no visa requirement. They just come and go at any time. And the other thing is actually characteristic is more shortened period, only long weekend. If there's long weekend, then flight will be full. Say, for example, Friday they go out to Malaysia and go back on Monday. It's something that's common for us. So So I think that's more or less the situation that we have in terms of Australia market. Okay.

Adrian Schofield:Stephen, any thoughts on demand trends at the moment and how summer's sort of shaping up for your member airlines?

Stephen Pearse:So look, the immediate summer, northern summer '25, look, seems to be pretty robust for everybody. I think the comments that are sort of worth making is that, you know, they're— we're still enjoying what seems to be sort of that relatively insatiable demand from Australians outbound to travel, and that's been referred to already. But, um, and, and so that's, you know, sort of driving a lot of, uh, you know, driving a lot of, um, you know, the traffic decisions and the demand. And, um, you know, I think sort of good examples about some of the challenges of inbound. Um, if you go forward a bit further though, ultimately it's inbound that is going to be the continued driver of International growth, and I think again Simon touched on it, you know, Australians travel about 4 trips a year already. There is an extent to which you can become wealthier, but, you know, unless you suddenly have a lot more time, there is, yeah, how much can you travel? And so by contrast, when you look at the sort of the target markets, that ability, that propensity to travel will go up and up, and that should start to sort of increase the inbound loads on carriers across, you know, across the network, because Australia is an attractive destination, but, you know, does have some challenges of, you know, cost and distance and, you know, regulation and infrastructure costs and so on and so forth. But, you know, the demand is there. So over time, I think we're sort of looking to see that shift back towards, you know, being a sort of preponderance, let's say, of inbound, whereas the last 20 years has been very much driven by Australia's, you know, economic prosperity and outbound travel.

Adrian Schofield:Great, okay. Rob, any thoughts on demand?

Robert Dougan:Yeah, I mean, I think Australia, we're very lucky that the Australian product is very highly demanded, and I think if you look at some of the sort of macro trends around the world at the moment, we sit right in the heart of what people are looking for, which is more natural experiences, more authentic experiences. Even, you know, you see our wellness product really kind of increasing, so I think that we have a lot of really good reasons why people would want to come here. I think to your point around time, distance, and cost, that those are the big barriers that we always talk about at Tourism Australia, and every destination's barriers are time, distance, and cost to some extent, right?

Eddy Krismeidi Soemawilaga:Yeah.

Robert Dougan:But for Australia, I think that's really pronounced, and why we, we put so much emphasis on aviation, because we're an island. But really, time and cost are derivative of distance, right? And it's our geography that has the, by far, the biggest impact on the sort of macro shape of our demand. So I think that how you get here and what the cost you— how long it takes to get here and the cost of getting here are the things which are really going to shape the types of people, the types of trips that are going to be taken in Australia in the future. So that's why I think some of these conversations around SAFs, for example, or some of these frictions are really interesting just because they have a bigger or more pronounced impact on a really long-haul destination. nation like Australia. But the flip side of that is that we have what people want and we're able to charge a premium for it. So that is really promising in the longer term. Right.

Adrian Schofield:Okay, very good. Pheng, I've got to turn to you. How is Vietjet seeing demand for your Australian routes? And also on that question of the inbound-outbound mix, how does that sort of shape up for Vietjet?

Thanh Huu Ta:As you know, last year Vietnam received nearly 14 million foreign tourists came to Vietnam.

Eddy Krismeidi Soemawilaga:Mm-hm.

Thanh Huu Ta:And this year we plan to receive around 20 million foreign tourists. And that's why the Vietnamese airline and foreign airline have chosen a very important role for this target. And as you know, right after COVID, we are facing many difficulties in order to resume or maintain our service to the Northeast Asia market. And that's why we found a new market, and we found the India market is very potential.

Eddy Krismeidi Soemawilaga:Mm-hmm.

Thanh Huu Ta:And that's why during one year, we operate nearly the 40 flights to the 5 destinations in India. And so that we, we carry passengers to Vietnam and use Vietnam as the connecting point to another country. And we also chose to lease the wide-body aircraft and for our long-haul service, and we start to operate Australia. And as you know, right after the 6 months, the total drop-off Between Vietnam and Australia has increased by 60%. And besides that, we carry passengers between Vietnam and Australia, we are also enhancing connectivity via our hub at Ho Chi Minh City and Hanoi to offer the convenience the one-stop connection to destination in China, in Australia, in Japan, Korea. And now I saw the traffic still keeps growing, and that's why this year we plan to open nearly the 20th international route. And so that's why we, we, we will receive more aircraft, includes the Airbus A321neo. And next year we will receive the widebody, the quite new aircraft, Airbus A330neo, for our long-haul approach. In our point of view, the market seen growing Right, okay.

Adrian Schofield:Yeah. And another general question for the panel, from a policy and an infrastructure perspective, what are the main things that need to happen to support international demand in the Australian market? Like, what needs to happen to reduce some of the friction points? Eddie, do you have any thoughts on that?

Eddy Krismeidi Soemawilaga:I think since we are currently depending much on the Australian outbound market, Which is dominant. So far, I think we are okay with the arrangement. What we need is actually the inbound traffic. So far, in terms of traffic rights slot, I think we haven't really encountered significant problem in our 4 destinations. So, so far, it's still okay. But I think if we can look into the visa facilitation, that could— I think that's a very good point. More or less stringent for Indonesia, and I think that would be helpful, especially taking into account now the cost structure of aviation industry in Indonesia, especially domestic, is relatively high. Indonesia is experiencing first 6 months now in terms of domestic capacity is slightly decreased by 7% compared to same period last year, and one of the contributions is the cost factor. cost structure of aviation industry in Indonesia. For example, tax, tax, fuel price, as well as the some charges. Therefore, like for example, flying from Jakarta, say, to eastern part of Indonesia, like Jayapura or maybe Ambon, it's much more expensive compared, say for example, if you fly from Bali to Darwin or Bali to Cairns. So if people in Indonesia are given option to see that actually there are opportunities actually for them to also flying. And frankly, now growth of international flights in Indonesia is much more faster compared to domestic because of the cost structure is much more lean and less compared to domestic. So in terms of that, airfare is much more cheaper in Indonesia to fly international rather than Domestic and— Some of the cases, for example, there are cases in Indonesia where people flying domestic using international flights. Like, for example, people from Aceh, Banda Aceh, going to Bali, instead of going to Jakarta and going to Bali, they go to Aceh-Kuala Lumpur and Kuala Lumpur-Bali. It's much more cheaper. While if you fly that, domestic route, you'll get 11% taxes at least.

Stephen Pearse:Yeah.

Eddy Krismeidi Soemawilaga:Right, so there's an option. So I think that's the situation that we have now in Indonesia, where actually international is much more interesting compared to domestic. Uh, therefore, I think if there is this less, uh, Schengen visa facilitation, I think will be helpful to generate more Indonesians to come. And of course, now the visa facilitation itself has been helpful because you can do online. Previously, you have to go to embassy, take the visa, and do surrender your passport and get the visa. But now you can do online, and sometimes in only days you can get already the visa. But the costing is still very high for Indonesia.

Adrian Schofield:What about from your members' perspectives, Stephen? What are the friction points in terms of increasing international service to Australia?

Stephen Pearse:So look, I'd probably characterise kind of constraint or friction points maybe into sort of 3 broad categories, one maybe being sort of physical infrastructure in terms of sort of access to and from, for international to and from Australia, and that would include, you know, through the majors mainly. The second bucket might be sort of around, you know, what you might call regulation and government Taxes, visas, you know, the cost of actually sort of getting through, um, you know, facilitating travel to and from. And then lastly, perhaps, um, sustainability and SAF, which is sort of a, you know, a separate issue, uh, because that's clearly an infrastructure issue, you know, within Australia that needs to be tackled in order to, to, you know, start producing SAF at any kind of volume, whether that's domestic or internationals to be able to buy it. So if we kind of start on the first one, you know, obviously, look, Um, all of the major airports, international airports, are engaging in very significant, um, uh, capital growth in order to sort of, um, uh, be able to meet these sort of future demands. Um, that's all well and good, but as I think has also been highlighted, you know, cost is absolutely critical, and it's critical to maintain that at the most efficient level, uh, possible. Because without, you know, because if costs in that category sort of blow out, you know, I've seen one of the questions, does it have a material impact? Yes, it does, you know. You know, the cost of getting through the airports is, according to IATA, somewhere between 15% and 18% of the total cost base for an airline, and airlines are made up of hundreds and hundreds and hundreds of different costs, so each one is very material. So, so that's on that one. Just briefly on the second topic around, uh, regulation, um, yeah, it's critically important that becomes as efficient, uh, as possible. So Visa's trying to digitize the AP, you know, the, the APD, you know, that's a project that we've been pushing to get fast-tracked. Um, that requires adequate funding for ABF and DAF to, to sort of build their systems, which, you know, we've been pushing hard to sort of say, you know, it, it's not a case of, necessarily putting in extra money, it's how the money that's already raised from the passenger movement charge is allocated towards the sort of tasks that it should be, should be there to fund. So that's critical to sort of minimise that, and then South we can leave for another time.

Adrian Schofield:Yeah, right, okay. Rob, what about from your perspective in terms of regulatory and infrastructure bottlenecks that you're seeing?

Robert Dougan:Well, firstly, I'd like not to sit next to Stephen next time because he keeps using my points, which is really annoying.

Eddy Krismeidi Soemawilaga:So if I could—

Robert Dougan:we could rearrange that, that'd be brilliant. But, um, look, from a— I mean, our role is inbound demand generation, right? So I don't tend to, um, comment on policy all that much. But I would say that, um, there is a competitive lens, and, you know, Eddie's already kind of touched on this, but there's a competitive lens to how we welcome people to this kind of country, right? And we've got a campaign at the moment, which you'll probably see more of soon, called Come and Say G'day. And I think, you know, it's clear that there's demand out there. What we want to see is a reduction in all these kind of frictions so that we can get out of the way and let those people kind of come in as easily and as affordably as possible so they can spend as much money in the Australian economy as possible. Um, you know, if you look at Malaysia, for example, we'd seen visa issues or approval of visas there, but we've seen that improve, you know, markedly recently, which is really encouraging, and I know that you hear anecdotally same things in Vietnam, right? And these are 2 high-growth markets, so the more that we can get out of the way of that growth and and get people in, get the right type of people in, that's a good thing. So that's kind of on this as far as I go.

Adrian Schofield:And Thang, I know that this is, you know, visas is a topic that's of concern to you. So could you talk a little bit about that for tourist visas? And I think transit visas has been a bit of a pain point for you as well.

Thanh Huu Ta:I don't know, besides that, we focus, we maintain our current market. We need to find a new market, right? And now we are looking for the new market in Bangladesh, Sri Lanka, Manipur, something like that. And we carry passengers not only between Vietnam and that country, and also we want to take them via Vietnam to another country. And for Australia and New Zealand, as you know, now it's a traffic between Vietnam and New Zealand and the United States.

Eddy Krismeidi Soemawilaga:Yes.

Thanh Huu Ta:the limits, and so that we need— we want to operate a new market, New Zealand. But due to the traffic demand, traffic volume, and so that we want to combine, operate between Australia and New Zealand. And that's why last year we have an agreement with the New Zealand authority, and that's for both Australia's authority as New Zealand authorities, and that we obtain the 50-kilometre right between Australia and New Zealand. But in order to operate the combination service from Vietnam via Australia to New Zealand, now we're facing one problem. That's the Vietnamese people and some buy-on Citizens, as Indian people, who travel to New Zealand via Australia, they require to obtain a visa transit. It's very, very difficult for the traveller, because they take time, and it's based on much more money for the visa to— entry visa to New Zealand. They have a ban. their time to obtain the transit visa. It's the same, the applied procedure is the same as the entry visa to Australia. It takes nearly 1 month. And so that's why we have 13 lots that operate the service that combines Australia and New Zealand. And so that we hope the 2 governments will discuss and they like this policy. And another issue, in order to increase more frequency to Australia, now the visa fee of Australia is still high, and the application, the visa application of the Australian government requires so many supporting documents.

Eddy Krismeidi Soemawilaga:Mm-hmm.

Thanh Huu Ta:And so that is the main constraint. If relaxed and reduce the visa fee or the letter of supporting document, we think the most Vietnamese people will visit and go to Australia for tourism.

Adrian Schofield:Great, okay. So we do have some questions coming in on Slido, but before we get to that, does anyone have any questions they would, they would like to ask the I think there are some microphones going around if anyone wants to raise their hand if they want to ask a question. Not as yet. So a couple of interesting questions on Slido. First of all, for Rob and Stephen, the spread of visitors around Australia brings benefits. Where would you like to see inbound visitation from to achieve that?

Robert Dougan:I was going to go first.

Eddy Krismeidi Soemawilaga:You go first.

Robert Dougan:So in terms of dispersal, right, which is what this question's asking about, right, there are certain markets which are just more likely to disperse around Australia, certain types of travellers, right? So if you look at particularly continental Europe, the UK, that's where you get proportions of visitors who are far more likely within that overall kind of travelling cohort to go further afield around Australia, and that's why, for example, Germany is the perennial favourite at ATE, right, because the Germans, they just, they go and they explore and they travel and they stay and they spend, right? So they're a real darling of the tourism industry for that reason. But that sort of, there's a second part to that story, which is just not the propensity of individual markets to travel, but also the volume of some of these markets as well. So in actual fact, the volume of dispersers is more likely the markets which have greater numbers of visitors here, right? So while we get very excited about the propensity, I think it's really important to, to think about the kind of volume as well. So, you know, China, US, New Zealand, Singapore are also very high-volume disperser markets. I think also there's 2 types of dispersal, right? There's dispersal which is, um, you know, from Sydney, Blue Mountains, and then there's further afield. So I think we need to make sure that we're selecting the right markets, but also the right audiences, and then prompting them to spread further around the country. Because we know that obviously money spent in some of these regional areas bounces around the economy more and is kind of effectively worth more. So selecting the right people and then prompting them and then to do the right types of experiences, but then also finding ways that they can do those. So, you know, obviously domestic aviation is is the way that people get around Australia, but also finding alternate ways, be it rail, be it drive, be it cruise, whatever it's going to be, so that people can have multiple ways of exploring the country.

Eddy Krismeidi Soemawilaga:Yeah.

Stephen Pearse:Yeah.

Robert Dougan:My mum and dad at the moment are up in Darwin doing a cruise. It looks absolutely kind of phenomenal. This is one of the ways that you can get kind of people out there.

Eddy Krismeidi Soemawilaga:Right. Interesting.

Adrian Schofield:Stephen, do you have anything to add to that, or did Rob cover it?

Stephen Pearse:No, look, I think Rob mostly covered it. I mean, the only other observation I'd make from the inbound dispersal perspective is the vast, vast majority of international businesses, you know, come through the major ports, the sort of 5 majors, 5, 6, you know, however you want to count it, and that proportion hasn't changed greatly over the last 20 years. So the next kind of level from that then is sort of, How effectively we can sort of help, um, you know, from the airline, the aviation industry around, um, uh, sort of seamless transfers at airports, that ability to be able to connect, um, and, and sort of being able to make that as seamless as possible. Um, the more we can do that, the more we're going to encourage dispersal that, you know, Rob and his team are busy sort of promoting, and that's good for everybody because Um, at the end of the day, when you get a visitor here, whether it is in a major destination or, or a regional, as long as they're spending, then they're contributing far, far more than they are via visa fees or PMC and everything else. It's better to have them here and spending. Um, so, you know, that's a good thing, and we want to get them in and get them distributed.

Adrian Schofield:Great, okay. Another really good question on Slido. Um, could the panellists talk about the opportunities created for the Australian market by the introduction of longer-range narrow-body aircraft like the Airbus A321XLR and the LRs and that sort of thing. Any thoughts on what sort of opportunities that means for Australia? And I know that we heard from Cairns Airport about some of the interest they have in those possibilities.

Eddy Krismeidi Soemawilaga:Yeah, I think if you're talking about inbound from Indonesia, I think the source market is not in Bali actually. The first market is in Jakarta, and I think second market will be in Surabaya. There's where the city with high middle income group exist. But problem from Bal or for Surabaya and Jakarta, the demand the demand is not really sufficient to cater wide body aircraft that can achieve say for example Surabaya to Sydney or Surabaya to Melbourne. Even now, for example Jakarta Melbourne Jakarta. Sydney is still limited. I think for Melbourne, I think Qantas flies 4 times a day. Garuda also same. But I think with such situation of demand, we need actually narrowbody but can fly longer route. Like this is A321LR or XLR. AirAsia is actually already Last week— last month, we have already announced that we ordered additional 70 XLR A321 on top of 281 LR that we have ordered earlier. So I think this is the plan that we are actually putting in place in order to cater such market where the demand is still not really sufficient to create a low widebody aircraft, but there are, there are, there are markets actually, but the distance is quite long. So having this, I think by having this XLR or LR, the possibility to have more destinations to serve by especially like us, low-cost carrier AirAsia, is more. So I think this opportunity is, I think we have to tap, and we will materialize it through opening the new route for this type of aircraft. But we still have to wait. I think the arrival is only 2027.

Adrian Schofield:Yeah, okay, great. We're starting to run out of time, but briefly, it'd be interesting to hear from the rest of the panel about opportunities created by long-range narrowbodies. Stephen, any thoughts on that?

Stephen Pearse:No, look, I think that's been well said by the airports and the airlines, you know, the opportunity that these new longer-range narrowbodies present, particularly in the Asia-Pacific market, which which is, you know, set to double, are huge. It's up to then the operators to sort of, you know, turn those into reality. You know, the fact that the equipment is there now is fantastic, or coming. So it will be a question of availability. I mean, the only other issue on top of that will be assessing the Australian routes which are possible with that aircraft versus the other opportunities that exist for those carriers to deploy those assets elsewhere.

Adrian Schofield:Well, Yeah, exactly. Rob, any thoughts on that? Long-range narrowbodies?

Robert Dougan:I just think it's exciting that it opens new opportunities, but I think that's also true of the Sunrise aircraft as well. You know, distance is our big issue, you know, the geography. So I think the more ways, more and more innovative and more cost-efficient, more fuel-efficient ways we can get people here is obviously a good thing.

Adrian Schofield:New ways to exploit those thinner routes.

Robert Dougan:Absolutely.

Adrian Schofield:Thanh, what about for Vietjet? What do you think about the possibilities of long-range narrowbodies coming to Australia?

Thanh Huu Ta:Vietnam's leading private airline, Vietjet, is making decisions more into the long-haul market, which is the widebody fleet is too big. As you know, last year we signed a contract to purchase 20 Airbus A330neo, and this year we add 20 more. It's a total of 40 widebody aircraft, Airbus A330, for our long-term plan for the Long-haul international routes. We intend— we want to expand our global network, including the new route to Europe, to the US, to the Middle East, and strengthen our presence in Australia, India, as the Northeast Asia market.

Stephen Pearse:Thank you.

Thanh Huu Ta:It's Japan, north of Japan, like Sapporo, Fukushima, something like that. To create affordable conditions for our passengers. And another reason is to enhance the passenger experience in racing. Because when we operate the widebody aircraft, for long-range aircraft, We will focus on the high-class customer. We provide the business class service, and so that we will provide more convenient service to our passengers.

Adrian Schofield:Great.

Eddy Krismeidi Soemawilaga:Thank you.

Adrian Schofield:Well, that is unfortunately all the time we have, so please join me in thanking the panellists for a really interesting and insightful conversation.

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