Opportunities For Foreign LCCs Flying Into/From North Asia

Transcript

Steve Saxon:So, gentlemen, thank you very much. I'd welcome first for each of you to briefly introduce your business and how you view the opportunity of North Asia. Attila, would you care to go first from the AirAsia and AirAsia Group point of view? What sort of opportunities do you see here?

Attila Emam:Sure. Thanks very much, and thanks very much for CAPA for inviting AirAsia on board and to be part of this esteemed panel. So, just getting quick to the point, the opportunities— of course, we're excited about the opportunities in North Asia. We do see the opportunities there to provide convenient— to translate our operations, our style of operations, and our business model and translate that into low fares, convenience, high-frequency travel for the people of North Asia and travelers into and around North Asia as well. Clearly, we're excited about building new markets and I believe that about half of the destinations that we flew to in North Asia really did not— didn't have much of a service before we flew. And it's about developing those markets and we see a lot of that potential growth in especially West China and of course Japan and Korea. So the point is to develop the connections with our expansive network in Southeast Asia which we've built up over the years, connecting that onwards to West Asia in India and of course to Australasia where we're expanding as well. So there's a lot of exciting opportunities there and I— and the opportunities are not just in terms of routes but also in terms of operations within the region as well. And, you know, I'm sure many of you are aware that we're about to see the launch of AirAsia Japan in the autumn of this year, so that's on the board. And we are putting in— dedicated resources into North Asia itself to explore opportunities there. So we will have a much bigger, a much more senior team of people in the North Asian region to look at those opportunities both in terms of commercial partnerships as well as routes.

Steve Saxon:Thank you. Garry?

Garry Kingshott:Thank you. Well, Cebu Pacific has been flying into North Asia for quite some time now. Probably one of our biggest international destinations for the last 5 years has been Korea. And it's a— it's the single largest source of inbound tourism to the Philippines. So a substantial market for us, something like 40, 60 million visitors a year. somewhere between 40 and 50 services a week we're operating into various markets in Korea. Japan has been— and we tend to think about North Asia as Korea, Japan, and China. Japan has been something of a challenge until bilaterals were renegotiated about 18 months ago. Prior to that, we were limited by existing bilaterals to 3 services a week to Osaka. We're now operating 22 services a week from 2 cities in the Philippines and to 4 cities in Japan, Tokyo Narita, Osaka, Nagoya, and Fukuoka. The larger challenge for Cebu Pacific, so those, those, those markets are going well. Japan's traffic on the Japan route was up 38% for this period, 2016 versus last year. So we're, we're pleased with the progress there. China, for the Philippines, presents a unique, some unique issues, largely due to some political disagreements about—

Jonathan Hutt:China.

Garry Kingshott:Now I need to be careful what I say here, about some—

Jonathan Hutt:Issues.

Garry Kingshott:Some pieces of rock that are either in the West Philippine Sea or the South China Sea, depending on where you're speaking from. And that, that has slowed down the growth that we've been, Slow down our growth into the, the, the Chinese market, although we do serve Beijing, Shanghai, Tianjin, Guangzhou on mostly daily basis. So it, it's still a substantial market, but there's a lot more we could be doing in, in China, and I'm hopeful that, that we'll see a resolution or at least a cooling of, some of the heated exchanges over issues in the South China Sea in the next couple of years. And it does tend to go up and down a little bit. So, very important market for Cebu Pacific. I think we, we're certainly the lowest, we're certainly the largest low-cost carrier serving this market, Japan. And with the, emergence of the value alliance, I think we can work closely with Vanilla Air and further improve the penetration to the, to the Japanese market.

Steve Saxon:Thank you. Jonathan, you're somewhat of a different— because you're in North Asia as well as serving North Asia on this panel. What would, what would be your views?

Jonathan Hutt:Okay, I think we've heard quite a lot about Spring already, which is a good thing, but I'd also like to thank Thank you, Garry.

Chu Viet Cuong:Thank you, Jonathan.

Jonathan Hutt:Thank you, Stephen and Susan, all the team for CAPA for doing a great conference again this year, and thank you for the hospitality you extend to Spring. Really do appreciate it. North Asia again is like a term like LCC. It's a very irrelevant one in many senses. This is a very fragmented market. It is one which require— has its own unique opportunities and many, many unique challenges for us. For example, the challenge in terms of Japan has not been an easy market to enter to, but one which has had Yes. An enormous reward for Spring. And last, in 2014 to 2015, the passenger growth from China to Japan for Spring Airlines grew by 300%. That shows that given the right climate and the opportunities and the slots and the bilaterals which have been loose, we can do extraordinary things in this market. There's extraordinary potential. There's a huge demand. The customer expectation is changing drastically, and we have to keep adapting to that. And I think that's why LCCs do so well in this market because they are flexible and they do have their finger on the pulse of what the consumer wants. And I think that we heard yesterday from, from our friends at Peach and etc., how smart they are in tapping into that demand, but doing it in a way which never deviates from that, that low-cost ethos. And we will We believe that that's the core of our success in this market, and it's a different message that we have to translate to different consumers and different groups, but we've done fairly well in what we're doing. The growth projection that we have in Northeast Asia, our core market operating with, with short haul, we see that with bilaterals shifting, we have to be a little bit more opportunistic in the way that we look at it, look for that, that Mm-hmm. —slight opening and take the advantage of that. We will not be an airline that pursues a pattern to become a player which is competing directly against full-service carriers, but we do have a long-term objective to be the largest, the most cost-effective, and probably the lowest fare for any LCC in the North Asia region.

Steve Saxon:Great. Thank you. Sandeep.

Sandeep Bahl:Thank you, Steve. Great presentation when you started, and I think you've set up the right tone. What is LCCs in North Asia, has what perspectives they have. So I'm working right now with consulting to an airline called Mega Maldives. You probably have heard about it, but it comes from a very little tiny island. Uh, nation which has a population of maybe this whole city or maybe the people here in this group. Um, so, uh, Megamall Leaves has started just 4 years ago and serve dominantly into China market where Beijing, Shanghai are the key routes. And then, uh, flights into Hong Kong, seasonal flights into Zhengzhou, uh, and other cities in China. Yeah. Recently, as we've been talking about ASAs, on the ASAs, Megamall leaves, we don't call ourselves as a low-cost carrier just because in Maldives, the fuel cost is probably the highest in the world. We cannot say we are the low-cost carrier, but we are the low-fare carrier and we run a hybrid model. What Mr. Wong Wei said earlier, When Spring looks at where to go, they actually go and ask their tour operators and say, hey, where are you gonna, where the customers wants to go? And then based on that customer demand, they set up a route, make sure the price is right. So that's what we do in MEGA where we look at, um, uh, where, where are the destinations where customers wants to go? Can we put up a flight there? Can we put up a right price there so that we can develop that marketplace? And if it all works out, we then go and look at whether the regulator's gonna get us, let us fly there or not. In that way, I will, I will say something which is, I think we as an airline, many of us talks about ASAs, market access. I think sometimes it is not that difficult. And, and I'm going to tell you my experience. If it's an area where it's going to serve a region and we can demonstrate To the marketplace, like what we heard yesterday from Kansai Airport, getting the— was almost ¥2.5 billion or ¥235 billion worth of economic activity that started happening in Kansai. It was the same case for us. We're very appreciative of NAA here. We wanted to start Maldives all the way to Japan for during the peak season time.

Jonathan Hutt:Right.

Sandeep Bahl:And NAA, we reached out to NAA. Japan and, and Maldives doesn't even have ASAs. So forget about regulators talking about, oh, ASA doesn't allow, but we didn't even have ASAs. So, but we reached out to NAA and we requested to them, this is what we think there is a market for us to bring some people from Maldives here and how easy it is for us to do it. We also told them we don't have a plane that can come here nonstop. So, I think they worked with us very nicely. We went to JCAB and we got access and plans and we started flying here. So, there are reasons that we will find the challenges that we'll continue in during the panel discussion. But overall, as a carrier, what we look at it, where is an opportunity, and North Asia represents a lot of opportunities for us.

Chu Viet Cuong:Yes.

Sandeep Bahl:It's only whether we can get enough planes in time and we get investors in time to put some money with us and have that confidence is the important part. Then that how we define ourselves is basically, as I mentioned, we could be very low fare, very competitive carrier in the marketplace. We are not afraid to compete with anyone.

Chu Viet Cuong:Okay.

Sandeep Bahl:We are also ready to develop a marketplace if they are right partners with us. And at the same time, we are happy to work with the different authorities and different tour operators so that we can build a model where it's a scheduled carrier, it's a charter carrier, or it's a hybrid carrier where a mix of business customers or MICE travelers are traveling with us.

Steve Saxon:Thank you very much, Sandeep. Mr. Chu, I think many of us look with envy at the scale of the opportunity in the Vietnam market and with— and also, we're incredibly impressed by the scale of VietJet's growth plans both now and in the future. How do you look at the opportunities in North Asia versus your home market and other regions?

Chu Viet Cuong:Thank you, Steve. As you know very well, VietJet is a One of the fastest, I mean, growing airlines in Asia. We just started in operation near 5 years, but seems to be we are going very fast, especially we focus for our domestic market. Last year, we carried about 9.3 million people.

Attila Emam:Wow.

Chu Viet Cuong:And we have just only 24 aircraft, but currently we have 35 aircraft already, and in the end of this year, we have 45 aircraft. And for domestic market, for last year, we just only 37% of domestic market, but currently for the first quarter of this year, we reach 42%, 43%. 60% of domestic market. So we, one hand, we focus to expand our, I mean, business in domestic market, but at the same time, international market are very important for us, especially North Asia. 3 years ago, we started to operation to South Korea. And South Korea, very important market for us. Today, we have from big— from 2 big cities of Vietnam, Hanoi and Ho Chi Minh City, we have daily flight to Incheon. And in July, coming next month, we have a flight from Da Nang, I mean tourist city in the middle of Vietnam, to Incheon as well. December, we will open, I mean, new 2 routes from Hanoi and Saigon, Ho Chi Minh City, to Busan. For China mainland market are very important for us. Currently, we use charter service for more 6 cities, big cities of China, including Guangzhou, Shanghai, Ningbo, and others. We bring, I mean, Chinese tourists to come to our Da Nang and Nha Trang. I mean, these are tourist cities in Vietnam, and we have direct flight from Da Nang to Macau as well. We are waiting for slot from Hong Kong Airport. We applied for 3 years already. So we strongly expect that we will receive it soon. For Taipei, I mean, for Taiwan market are very important for VietJet as well. Currently, we have flight directly daily from Ho Chi Minh City to Taipei and from Ho Chi Minh City to Tainan, and soon we increase Just daily one flight, but 2 flights per day from Saigon to Taipei. Soon we open, I mean, it is our flight from Hanoi to Taipei as well. We see this, I mean, North Asia market very important for VietJet growth. However, we think there's, of course, For Japanese market, yeah, it's coming soon. Very important for us, but depend on our aircraft. Currently, we use A320, so just a little short haul, so you cannot reach to Japan. We expect that in the end of this year, we receive, I mean, A320neo, new, I mean, engine option, and then we can open, I mean— For the first quarter, I also fly to Japan. We have planned to go first to Osaka, unfortunately not to Narita right now, but first from Hanoi, not just from Saigon, from Hanoi to Narita in the first quarter of the next year. I think that North Asia, it seems to be very high opportunities for us, but very— I mean, in terms of very high quality service, I mean, market. VietJet, we think that's not just we provide, I mean, low fares, but just high quality. We have— so we are facing many obstacles of visa because Korean and Japanese come to Vietnam, no need visa, but Vietnamese come to To Korea, to China, and to Japan, we need visa. The second one, languages, because when we started to operate to South Korea, we need interpreter for each, I mean, flight.

Sandeep Bahl:Yes.

Chu Viet Cuong:But now we recruit Korean, I mean, cabin crew working for VietJet. So we step by step to resell, I mean, it is languages. And the last one, I think that's what we have, maybe later on we can discuss. We have many opportunities interlie with Japanese or North Asia partners to do interlie because we know very well a lot of Vietnamese community are living in US and in Australia.

Garry Kingshott:Thank you.

Chu Viet Cuong:So in the future, we can bring, I mean, interline with Japanese or Korean and Chinese, I mean, as partners to bring passengers from, I mean, North Asia to Vietnam and bring them to all cities domestically in Vietnam. Thank you.

Steve Saxon:Okay, thank you all very much. I'd like to spend a bit of time on the North Asian market. And coming back to what we saw at the start, which is that the penetration here is substantially lower. In your view, is this— is there something fundamentally different about this region which means it is less— the LCCs are less successful, or is this just a point in time? And Attila, first, obviously AirAsia was the pioneer of low-cost travel across Southeast Asia, which was Right at the other end of the spectrum. Do you see anything fundamentally different about this market?

Attila Emam:Fundamentally different? I think Southeast Asia is— the geography of Southeast Asia itself lends itself to air travel. I mean, you've got parts, you know, land divided by swathes of water and ocean and people need to traverse. And so obviously, Absolutely. Not just for leisure travel, but just literally getting back to families and holidays and all the rest of it, lended itself to the kind of products and services that low-cost carriers offered. People want to travel. I think the main driving idea behind AirAsia was to provide convenient, affordable, and choice-driven travel for people that wouldn't have otherwise thought about traveling by air. I don't see why that should be different in North Asia compared to Europe or Southeast Asia. People want to travel. What's the most convenient? What's the most affordable and where have I got the most choice? Surely that's universal. And I think the issue isn't so much on the demand side, but perhaps later on, on, you know, the factors that are holding back this growth. So I think the demand will be there. I think one of the previous speakers had said, you know, we make the product, people will come. And we've seen— we've learned that lesson in India. We've seen that lesson in Southeast Asia. Europe's obviously seen it as well. So I don't really see why that should be any different in North Asia.

Steve Saxon:Any of the other panelists care to comment?

Jonathan Hutt:Yeah, I'll add on to that.

Steve Saxon:Yeah, please.

Jonathan Hutt:When you think about it, when Spring entered the market 11 years ago in China, possibly 80% or more of the population had never traveled by plane. That's a huge proportion. And you see within that 11 years what has been able to be achieved. But the rate of first-time flyers, the people who actually have to come to terms with what the product is, is quite unique. So again, it's a slow incremental process of becoming aware and differentiating between what your expectations of an LCC—

Sandeep Bahl:Yes.

Jonathan Hutt:Or a full-service carrier are because you don't know. You know, when we first came into the market, our website had to explain explain each and every step of who we were given the fact that we had to educate the public in a way, and that's been the first mover disadvantage. So I think, of course, the motivation is there regardless of where you are. It's the acceptance rate or the possibility or the availability which is really going to define the growth of that. And you've seen in Japan, again, very unique.

Garry Kingshott:Yes.

Jonathan Hutt:These have a very short history, but their growth trajectory has been quite different than it is in China or elsewhere simply because maybe the expectation or the demand for it is localized. And I think within North Asia, that degree of localization comes down to consumer behaviors, which again are very, very different. And even within China itself, consumer behaviors along the coast and continental China, again, quite different. How are we going to see North Asia develop really depends on a lot of economic, a lot of expectation, and the whole exposure to the romance of travel, which is new to many people in our region.

Steve Saxon:Yeah, and Garry?

Garry Kingshott:I actually believe there are some fundamental differences. Just put China aside for a moment. The phenomena of low-cost carrier penetration in Southeast Asia was primarily because if you look at those countries and you look at the GDP per capita, effectively relative to China, relative to Japan and Korea, they're poor. These were markets where they were screaming out for a low-cost carrier, an affordable way of travelling. And I think AirAsia was the pioneer, clearly, certainly in the Philippines, Cebu Pacific, 7,000 islands, pioneered low-cost travel in that country. And just to put some numbers on it, I mean, domestic travel in, in the Philippines was somewhere between 5 and 6 million travellers every year. Year after year after year after year. When Cebu Pacific launched, within 5 years of Cebu Pacific's launch, domestic travel had grown to 20 million travellers in, in the country. These people came off the ferries, they came off the buses because they now had an al— an alternate mo— mode of transport that they could afford. So I think the phenomenon in Southeast Asia is a natural one. We've seen it also in Indonesia, where GDP per capita is very low, equivalent to the Philippines. Now you come to a market like Japan or South Korea, and now you're dealing with, in a relative sense, wealthy people who have generally always been able to fly by air. But you are dealing with a population that's not growing substantially, and, and so this is about trying to encourage people to take more trips rather than take their first trip. And some of them don't need to make the trade-off. They don't, they don't have an economic imperative to make the trade-off from a full-service legacy carrier to an LCC. But I— but it is changing. Now China's different. China is a bit more like Southeast Asia in that sense, in terms of the economic pressures. I think the other fundamental difference in, again, I'm going to talk about South Korea and Japan, is that the traditional distribution systems, travel distribution systems in this market are very entrenched. And I'm curious, when I talk to some of the LCC operators in Japan, who are all very new, to understand that for the domestic travel, they're starting to get quite a bit of their traffic over their website, but for the international travel, it's less so. And I think what we see here is a natural concern amongst the consumers who are falling back to their travel agent partners or advisors, particularly when the risk goes up a little bit. You know, international travel being slightly more risky than taking a flight to a, you know, another city in my country where they speak the same language and all of those sort of things. So I just think it's— I think my expectation would be that you would see LCCs penetrate the the wealthier markets of North Asia to the level that we've seen in Europe or the US, which is 35%, 40+% something like that. Unlikely to see the 80+% that you see in the Philippines or in other Southeast Asian markets, and I think it's about economics. And I think it's going to take a while for those, for that embedded distribution system to be sort of shoved aside slowly by the LCC websites. So I do think there are some fundamental differences.

Steve Saxon:We saw from the data just the incredible explosive growth in China outbound, and I would be interested to hear from the panel what sort of different expectations the Chinese outbound traveler has, and also potentially how you need to tap into that market differently. Sandeep, I know that Mega Maldives is the mainstay of your business, is China outbound into the market. How do you address that?

Sandeep Bahl:I think when you look at what actually Gary mentioned just now, the Chinese marketplace is an evolving marketplace. place. And the consumer mix, as Mr. Wong Wei mentioned in the morning earlier, that it's also quickly changing. And why is it changing? If you look at it, you know, when you look at the difference, say when people say LCC perspective or what is happening in North Asia, please look at it, the difference. 1971, That's where the first LCC in US started. By 1980, that was the biggest airline in the world. If you remember Southwest was, there was a time when it was the largest airline in the world. In UK, it started in, or in Europe was Ryanair, I think started in '85. But when you look at the board that CAPA has put it up yesterday, all the LCC in North Asia are 5, 6, 7? Only Spring is like 10 years old? And if you look at China, it's exactly same. 2002 or 2003, China deregulated their aviation marketplace. And at the same time, if you look at it from 2002 onwards till 2010, China has a rapid growth economic-wise, right? If you look at GDP was 10% growing year on year. So with that, the value that came through and the money that China started producing, it started going into the real, really into the pockets of people. Not to forget about China being a country where travel has been in Chinese history, it's in their genes to travel, right? You can go anywhere in the world, you will find a Chinese and Indians for sure.

Jonathan Hutt:Yeah.

Sandeep Bahl:But you will find them all. That's in their gene. The system is designed for people to move. Chinese New Year holidays, a billion people are moving in 3 days. That means that China was— it started erupting, and that's where the opportunity started coming in. Not to forget, the aviation openness in China also came with another opening up in a very planned way, and that was high-speed trains. China just didn't realize that, oh, low-cost carrier or aviation will fulfill the need of Chinese travel. They said, no, no, there's more to be done. There's highways to be built because the people will travel once the money started filtering into their pockets. And that phenomenon you can see now within China, there's a lot of travel, but now you can't contain that within the country, right? So then there's a nearby Hong Kong, Macau, Korea, and now Japan. So that's, that's an evolving trend that's continued to come. But as an airline, low-cost airline, if you look at the spectrum of what is going on with every other provinces coming up with an airline, whether they call them low-cost or low fare, or in North Asia like Korea or even in Japan, I think that consolidation We haven't seen it started yet because they are still coming up. You look at US now, like so many low-cost carriers were there, now even Alaska and Virgin Blue or Virgin America also got together. And what is happening in Asia, in Northeast Asia especially, when the ASEAN, you know, they build the open sky and they haven't done their bilateral discussions with a lot of other countries whether, the ASEAN Open Skies applicable or not. Once that started coming up, we'll see the evolvement more of different changes that's coming into LCC world or the aviation world. So I think, you know, China is in a great spot right now and that's where MEGA is very proud. Okay, but we are also looking at when China has reached to its peak, what's next? So that's why the North Asia continues. It's a big marketplace. Not to forget. And as Garry mentioned, the economic factors. There was Japan, the leading second world economy in the world with a middle income size of basically everybody's middle income. And then there's China that's coming up which is now has a middle income earners, they are equivalent to what the US has, the whole population of US. And then Korea and Taiwan, very developed market place already. And I think that explosion of people with so much money in their pockets, they would be— they're ready to go and travel and explore the world. I'm not worried about the domestic low-cost carrier or the domestic— I'm looking at the long haul because these people will eventually say, okay, now we have done our Korea, we have done our Japan, we have done our Ishijima Islands and all those. What's next? That's where the evolvement is coming through. And that's where mega, we were, you know, we are not flying 4 or 5 hours of distance, we are flying 8, 9 hours of flying. Maldives is in the middle of a little ocean in India, so it's a long flying. And so that's why we started looking at already that how we can evolve and get into this Great.

Steve Saxon:Thank you very much, Sandeep. The last topic I want to talk about is kind of what's holding back growth, and I think we heard from many of the panelists that various type of— various regulation and infrastructure issues are to some extent holding you back. Mr. Chu, you talked about you can't get slots in Hong Kong. You talked about there's visa challenges, other panelists talked about bilaterals. How much is this holding back your growth, and what do you see as the likely evolution of this?

Chu Viet Cuong:I think there's— of course, in any market, when we access to any market, we have opportunities, and of course, we have difficulties. North Asia, We understand the penetration of low-cost airlines. If you want to access to this market, you should get clear on circumstances. Just like I mentioned before, for slot, for bird slot so far, I think that's for Japan, for South Korea, for mainland China, and for Taiwan, Macau are, I think, Still available for us. But just like Hong Kong, we think that's because maybe there very long queue, so we are waiting and we hope, we expect it to receive it soon. So, we just really thinking about how to meet, I mean, high quality of services of For North Asia. VietJet, we just really— because like Steve's presentation, we just really mentioned now between low-cost and full-service airline seems to be the gap still smaller. In VietJet last year, we just really launched new, I mean, class service. We call this SkyBoss. Skybox look like, I mean, business class, but the seat, we have the same. We just reserve, I mean, some row, first row for, I mean, Skybox. We serve their lunch, waiting business lunch. We have special car to bring them to aircraft and back to the terminal, and we have extra luggages. So we try to attract more, I mean, it is—

Garry Kingshott:Business class.

Chu Viet Cuong:seems to be quite medium and high-income customers, passengers to join with us. I think that's one of solution to meet, I mean, high, I mean, quality service of North Asia market.

Steve Saxon:Yeah. Thank you very much. Any of the other panelists, what's holding back your growth? Garry?

Garry Kingshott:Well, I mentioned earlier there's some China is troubling because of some political issues that we're dealing with, or the Philippines is dealing with at the moment. I think the other, the other issue is airport access. The main airports of China effectively are slot constrained now, very difficult to get additional slots in there. into Beijing, Shanghai, Guangzhou. And Manila itself is, is an extremely constrained airport. So to, to effectively overcome the lack of slots there and in, in some of the Asian regions, Cebu Pacific a few years ago placed an order for 321s. So we will start replacing our A320s with A321s. It's a fairly easy way of getting an extra 40 or 50 seats without actually having to get an extra slot. And we are already operating our A330s into some of the North Asian markets, including Hong Kong, where we're again slot constrained. So being able to up-gauge is really one of the ways to overcome that, that, those slot issues. It's, it's really one of the very few options at this stage because airports are just not going to get expanded or built.

Jonathan Hutt:One final thing I think is, is for us it's HR, it's human resources. We need, of course, we need talented personnel, but again we need pilots. Our original fleet plan was to have 100 aircraft by 2015, and we didn't get that. And one of the impediments, other than the ones we've talked about already, is the fact that we need that to actually grow our fleet. We need that, and we have to be aggressively recruiting internationally to this day. When that will actually change, when we'll be able to, to develop at the pace that we want to, will be determined a lot by how we can actually have the team we need to do I'd agree with both points of view, Garry's and Jonathan's as well.

Attila Emam:Capacity management is clearly one way around it. One of the things I think that carriers in America and Australia have been exploring much more than I think the ones in Asia is to actually go back down the value chain and manage the terminals and the airports, right, in partnership with the operators of the I mean, that could be one possibility. I mean, it could be to build a new one, it could be to take an existing— we saw the presentation yesterday about the opportunities in terms of military airports, for example. So those could be ways of addressing those issues because just waiting for the infrastructure to be built could be a long wait. The other thing I would say, though, is taking it holistically. We talk about Bureaucracy and air politics and all the rest of it, but it has to be said, and I think we've said this before, Tony certainly mentioned it as well, one of the things about dealing with North Asian bureaucracy, particularly China, Japan, they are efficient. There may be high hoops, standards may be stringent, but they are efficient. You know what you're going to get, and in that sense, it's very transparent and clear. most of the time in terms of what you're dealing with. So it's a double-edged sword, but it's at least efficient and makes planning a lot easier. So I have to, I think, put that in and recognize that as part of— as far as this part of Asia is concerned.

Steve Saxon:Thank you. Our time is unfortunately up. I'm sure there's many other topics we would have loved to ask the panel about. So, Attila, Garry, Jonathan, Sandeep, Mr. Chu, thank you very much for your time, and please join me in thanking the panel.

Jonathan Hutt:Thank you.

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