Strategic Partnerships for Growth and Sustainability in the Asia-Pacific Region

Transcript

Ian Kershaw:We have 4 main topics on the agenda. This is capacity and route development, it's decarbonisation, digital, and passenger or customer experience. A framing thought as we get into this is that Australian aviation is entering its first meaningful period of capacity growth in over a decade. Now, I think most of you in this room know that, right? If we cast our minds back to the early 2000s, what was happening? Deregulation, airport privatisations, Jetstar entry, Virgin entry, point-of-sale costs coming down, right? And at the same time, we had underlying strong economic growth, a mining boom, and all this was driving really strong passenger demand. The airlines responded. There's strong competitive pressures, and we saw massive capacity growth. This was the capacity wars that led up to 2015. The important thing when you think about airport capacity is the government. The government had built these airports with plenty of capacity, and so when we're going through all this growth, there was no big need across the nation for for huge licks of of capacity investment. But once we hit 2015 and the national domestic airline market growth started to flatline, the airports were already planning their next wave of capacity growth. But actually, this was the first big wave since privatisation. And so when we think about— we've been all talking about the pipeline of investment that's coming across all these airports, but we need to keep in mind that this is actually the first major expansion since privatisation.

Andrew Warrender:Yeah.

Ian Kershaw:And that's an important piece of context. And so as we go into this panel now and start talking about capacity and route development, just keep in mind, maybe the starting point is capacity is coming across all of these airports and others, but it's also not just physical. It's not— capacity is not just physical. It's often in the settings. It's in bilateral agreements. It's in market structures. It's in government, how government, airlines, and airports work together, the friction points.

Dermot O’Neill:Yeah.

Ian Kershaw:And it's all a system. An airport is a system, an airline's a system, and the whole network is a system. And so capacity is set often by the lowest common denominator, right? And so let's start there. Ryan, we're going to come to you first. Do you have some thoughts? We've talked in the past about bilaterals. I'm wondering how you think our bilateral framework is holding up and working for us.

Ryan Both:Yeah, sure. Thanks. Hi, everybody. Good to see so many faces in the room. and a good group here today. Uh, good to be in South Australia, Dermot.

Dermot O’Neill:Always welcome.

Ryan Both:My family's from the Barossa Valley, it's great to be back. Um, so, uh, yeah, I think, look, Jim Wolf spoke earlier to, uh, to some members who were there as part of the Tourism Australia function, uh, you know, the government tries really hard to engage in constructive conversations about bilaterals. I think the things I would say is that, you know, we're very much in favour of open skies agreements. I think we want to let the market serve the needs that are there. We want to let destinations promote to the customers that they're able to attract. And I think things like, you know, the major versus regional distinctions in the bilateral frameworks and the way that we organise our rights are becoming a bit tricky. Yeah, we're seeing that emerge now with a few of the things that are happening, and I think it's, it's creating some competitive distortion. The— and also, you know, in general, we would advocate for more progress universally across air rights. Jim talked today about things like Indonesia, which is really encouraging. Would be great to see, if we can, a segregation, um, carving out Bali and allowing the rest of Indonesia to have more open air rights so we can start to explore these efficient long-range narrowbodies, for example, into into Indonesia, even if Bali has to remain contained. So look, I think in general we'd advocate for less restrictions and more freedom. It's good for everyone.

Ian Kershaw:That might be a good point, because, you know, sorry we didn't say that the bilaterals, for anyone who isn't clear, apply to Brisbane, Perth, Sydney, and Melbourne. And so 3 of our panellists sit outside. And so Adam, if you don't mind sharing some thoughts from someone who sits outside the cap, you know, open skies versus cap.

Adam Rowe:I actually will start the afternoon by completely agreeing with Ryan, because As a port that sits outside of the bilateral rights system, on paper it should actually give us an advantage, you know, some kind of little competitive edge. The practical reality though is actually quite different, because what we find, and full credit to the department, you know, there is another government at the other end of the bilateral negotiations. What we see is that bilateral rights tend to be drip-fed. And so when they are drip-fed through, for every new right that comes in, there's capacity attached to that right. And therefore, that's a scarce resource that is ultimately just being fought over by the 4 major airports. And so it leaves all of those outside scrapping around for anything that might be left in terms of available capacity.

Ryan Both:Mm-hmm.

Adam Rowe:So it's a paper resource in our view, but it's a resource that just should not be scarce. Um, open skies is actually to the benefit of everyone here— regional airports, remote airports. You know, if I think about the airports in our portfolio, um, it's about getting Chinese to the Gold Coast. about getting German backpackers to Townsville. It's about getting Americans out to Longreach or Mount Isa to enjoy everything that they've got there. And if we see how traffic flows work on open skies market versus non-open skies markets, the difference is really clear. So we had about 80,000 Chinese that visited the Gold Coast in the past 12-month reporting period. 78% of those came in over Sydney. Now that's an open skies market. They're coming in through a major gateway. They'll continue to come in through a major gateway, and then they're feeding into the domestic network and enabling that wealth, that value, to be spread around the whole country.

Ian Kershaw:Thank you. And Kate, you sit inside the CAP, but you often see slots, the capacity used by the East Coast. What's your experience?

Kate Holsgrove:Yeah, I think we're in an interesting challenge where we're in— we're part of the CAPs, but we're talking with a number of airline partners where all of that available capacity is already taken up. Um, through Sydney, Melbourne, Brisbane, and Perth, and the western hub has been sort of left behind. And so trying to increase and grow capacity out of Perth's been really challenging through the bilateral agreements because we've had a couple that have been solved recently, but we've still got a number where all available capacity is gone, and Perth's been left out of the— left out of the opportunity.

Ryan Both:Yeah.

Ian Kershaw:Now, Dermot, switching gears slightly, You've made the point before that we operate within a system, in an ecosystem. And I think you've had some recent successes with Border Force increasing capacity without pouring any concrete.

Dermot O’Neill:Yeah, we have. This is probably one of the initiatives we've looked at, and particularly around how we're integrating new digital systems into our operation as well, Ian. For us, we have live passenger flow systems, as a number of airports do that really give us a lot of live information about what's happening across our terminal. How we're using that, I guess, is to increasingly have a focus on moving from managing queues where they may form to actually improving the quality of how we actually predict how capacity is going to arrive in our terminal at any given point, and how it's going to arrive at any given point in the processor. So So it's not just simply around what demand are we going to get today, but we're using it to try and improve the quality of our predictions around when people are actually going to present at any given point in the terminal. Most recently, how we've been able to use that is on a particular part of our inbound international arrivals journey, where we've really worked quite closely with our border agencies. And it's been a really good collaboration where we've been able to look at what are the points in that that are working and where opportunities are. And what we've been able to see is that through improving some of our operational performance, we've actually improved the customer experience for people transiting that part of our terminal, particularly in our peak periods. And that's actually had the effect of unlocking new capacity for us there as well. So we know we're able to look at slots that we might not previously have been able to look at. But it's certainly a really good example for us of collaboration with a government agency that's been able to improve the experience for our customers. Excellent.

Ian Kershaw:Thank you. Andrew, it's coming to you. Now we're going to move slightly because the conversation around capacity and route development in some areas are interlinked, but let's move a little bit more into the route development area of the conversation. And, you know, regional airports, emerging gateways face a specific set of challenges, um, and you have a, a sizable catchment north of Sydney. And yet there's challenges opening that up, unlocking what is existing unmet demand, right? So talk to us a little bit about the challenges you've had and also the successes, because several people, actually all of the people sitting on this couch, are the other ends of the line for you.

Andrew Warrender:Yeah, thank you. We're, um, as you said, we're very different probably to the rest of the airports on, on this panel here, in as much as we're more emerging And really starting our journey like a— like we've woken up for the first time and, and sort of started to see growth. We spent a lot of money on a new terminal and we were very kindly gifted a new runway by the RAAF Defence Force, which means that we can accommodate really big aircraft. And for anyone who isn't aware, we're actually the 6th biggest economy and 6th biggest population in Australia, but we're the 13th or 14th biggest airport.

Ian Kershaw:Wow.

Andrew Warrender:So there's a systemic issue and it's one of our challenges is how do we then better serve that population with the connectivity that they, you know, probably rightly demand from us? So we talk about being the airport the region deserves and we take that very seriously. Our challenges are quite often the rusted-on behavioural model for a lot of passengers who have been used to going a particular way. And providing them an alternative is actually, you know, really— it's quite— it's the very beginning of a very difficult journey. But when you get to the end of it, what we see is really successful routes. So we spent a long time working on a route to Perth. I think it was 12 years, actually.

Kate Holsgrove:Yeah, sounds about right.

Andrew Warrender:Which is, you know, we're the 2 biggest resources sectors in the country. It sort of makes sense that they should be connected. It took a lot of work on both parts. City pair relationships, it took tourism organisations, and calling it out, it took an airline who was willing to do that. And we've had really good success with our airline partners. That's what the secret sauce is. When everybody can come together, there are opportunities out there for regional airports to really serve their communities and to be a contributor to the national transport system as well.

Ian Kershaw:I'm hoping anyone can jump in here. But one of the elements of unlocking capacity is the type of example you just gave. It's sometimes working in the details of the margins, finding a FIFO aircraft that had spare capacity and could operate 3 days a week, right? It's also about trying to fill in the off-peak and the shoulder times where there is latent capacity, right? Because when we talk about constraints, we're talking about the peak. That's what you build for. You don't build for the off-peak. Any other perspectives on unlocking latent capacity, either working with airlines could be government, or filling in the off-peak and shoulder?

Dermot O’Neill:I think we need to be really data-led in our engagement with airlines. We've spoken a little bit today about the capacity that's coming into the system over the next 5 years, and from an— you know, whether that's in airports, we know we've got— we've spoken a bit about Western Sydney earlier today that's coming online. We know there's a new runway coming in Perth in a few years. new runway coming in Melbourne in a few years, and of course on the back of the runway that opened in Brisbane 5 or 6 years ago now as well. So I think it's about making sure that we're really data-led in our route development conversations with our airline partners. And for us, as that new capacity comes online, it's about making sure we understand how that capacity is able to shape airline networks. Um, and if it wasn't the, uh, the Qantas Adelaide team earlier that asked the question about the 321XLR base, I'd have a fairly good guess it was the Adelaide Airport team. But, um, so I think it's about making sure that we're looking at, you know, really good data around what the demand is at the moment. Um, but also, um, also making sure we're looking carefully and in partnership about what's the demand that's yet to be unlocked.

Ian Kershaw:Yeah.

Dermot O’Neill:And that demand has to be sustainable as well for the route to be a success.

Ian Kershaw:Thank you.

Adam Rowe:I think ultimately there's a recognition that we're all city pairs, but we've also got a whole ecosystem of other stakeholders that need to be part of that picture as well. So if I think about some of our markets, you know, Brisbane, for example, is the lifeblood of Townsville, Isa, and Longreach. And so it's making sure that The tourism organisations at both ends, as well as the airports, as well as the state government, are all working together to ensure the growth of those markets. One of the best examples that we've had recently is about 13 months ago, Jetstar launched Dunedin and Hamilton to Gold Coast. And, you know, they're untested markets. They're trying something that doesn't necessarily get captured in terms of travel data. And so, to Dermot's point, looking at those network plans in slightly different ways Engaging with not just the airports at either end and the airline, but heavy, heavy engagement from the tourism bodies, particularly on the New Zealand side. They've done a fantastic job. And so being able to get that coalition together and actually ensure that we've got a model that's going to drive sustainable returns long-term for the airline ensures that we're going to see that growth.

Ian Kershaw:Since you've got the mic, so to say, structural question. Australia's population is 2 to 3 million higher than it was the last time we saw a genuine 3rd, 4th carrier. And domestic capacity sits slightly at or below pre-COVID. So airports are investing, airlines are investing. We're seeing real fleet growth net of retirements. Air services investing, the whole ecosystem is investing. What's the holdup? You know, where's Where's the problem in really getting capacity back up?

Adam Rowe:Yeah, I mean, excellent point. So the investment wave that we've seen in airports, you know, we invested doubling the size of the terminal at Gold Coast, invested in a new check-in hall and security upgrades for Townsville. We're seeing all the other airports around the country invest in the same thing. You may not know it, but we're actually bound to do that under our lease agreements with the federal government. We have to invest in the expansion of infrastructure. And so we're doing our part. We're seeing that fleet renewal from all of our existing domestic carriers, which is absolutely fantastic. We really do need to see that flow through, and that optionality that both Scott and Marcus spoke about before is excellent because it means right aircraft, right time. We're seeing Virgin do a similar thing with the 700s and 800s, but we've still got this structural gap. If you index domestic trips per capita in the 15 years pre-COVID and compare it to today, there's this demand gap of 20 to 30 aircraft worth of flying that's unmet. So that's looking at typical sector length, 6 sectors a day, Code C aircraft, 20 to 30 aircraft worth of flying that just is sitting there not being served. And so if we think about the opening for a potential third player, that's scale. You know, that's something that would represent minimum fleet size for anyone that's thinking about entering this market.

Ian Kershaw:Any other thoughts before we move topics?

Ryan Both:Maybe just back on the peaks thing, if I can, Ian. I want to add a slightly different angle. I think peaks are good. Peaks are great. Like, peaks are where money is made. Peaks are there for a reason, because they're an attractive time to travel. They're an efficient time in terms of aircraft rotation patterns, getting enough utilisation in the day for our airline customers. So peaks are good. And I think what we've been focusing on recently is how do we embrace peaks and do a really good job of them. Sometimes everyone's prepared to put up with a little bit of a level of service degradation for a brief amount of time, as long as it's not— as we would say, if you go sort of green, amber, red, and then black, if you think about capacity levels, we never want to go black. We never want to go into an— into a situation where we're unable to serve something or the experience is something well beyond what you would regard as appropriate. But outside of that, I think a bit of congestion— we've been focusing a lot on our aprons, you know, tucking aircraft in keyhole positions, parking behind, you know, easy tow-offs. These kinds of things make a big difference. And I think, um, as we are, as you've characterized, in a significant investment wave, it's incumbent on all of us to be as pragmatic as we can. Fuel price environment, all of that sort of thing. So we're really focused on that. We're really focused on making sure that we're getting the most out of the capacity, particularly where our customers can make the most money. And then in turn, what we need to see is a bit longer-term thinking from everyone involved to say, hey, actually some developments are needed. You know, Perth needs a runway, Melbourne needs a runway. Qantas have just come out on Friday and talked about that. So These things are really, you know, important investments. They need to happen, and we need to make these steps, but they're significant steps. So we need to— there's a bit of a trade-off.

Ian Kershaw:Yeah, that's an excellent point. It's a good thing you raised it. I'd forgotten about it. We often think about capacity simplistically as throughput, and that's, that's not quite right. It's actually time and service levels, right? What happens if there's not a gate available? You wait. What happens if there's not enough capacity at check-in?

Andrew Warrender:You wait.

Ian Kershaw:Same thing, baggage, the whole way through the system. So it's time and service level trade-offs, and it's hard to get it right. In fact, in the airport lifecycle, what happens? You invest and people are upset because it's expensive. Cost goes up, but time comes down. Ease increases, service levels increase. You get jammed up, and what happens? You end up on the front page of the newspaper. You know, delays at Brisbane, delays at Perth, and then you have to invest again. Yep.

Ryan Both:We always talk about binary and level of service capacity units. So we want to make sure that all the binary units are there so a flight can exist. And I always like to say, if our customers are standing in a queue, they're standing there because the flight exists. But if the capacity is not there for the flight to even exist, then that's a problem.

Ian Kershaw:Thank you. Now we're going to switch gears to decarbonization, but we're going to go light on this one. It's a fairly well-worn topic, I think, across conferences. And tomorrow there's a sustainability panel. I think Fiona from Qantas, Margie from TTF, Kerry from Air NZ. So we'll just do a light touch and focus on the airport perspective. And Ryan, sorry, we're going to come right back to you because you're doing something— you've done something quietly interesting in the EGSE space where you've— I want you to tell us a little bit about your model because handlers are getting cheaper fuel than diesel. Infrastructure sits in the Aero asset base.

Andrew Warrender:Yeah.

Ian Kershaw:So tell us a little bit about that model.

Ryan Both:Yeah, I'll be brief and let some other panelists talk. Um, so yeah, GSE charging is important. We want to decarbonize, we want to make progress. So, um, one of the problems to solve for is, you know, that if we allow proliferation of charging units all over the airport, you can end up with all sorts of unserviceable units, safety hazards, messy cables, inefficient use. So we deployed a common-use set ground support equipment charging across the airport. So efficient delivery model, you know, they're just on concrete slab sort of blocks, and yes, you have to spend to get the electricity to that location, but the installation is relatively easy. You can move it around. So that's a common use network. All users who have powered electric equipment use that charging network. No other chargers are allowed, and that Creates a common use environment. It's very simple. And then we just talk with our airline customers about the pace at which we roll that out. That goes into the aero asset base for the fixed infrastructure, and then ground support equipment, the charging for the electricity itself and the usage of the service is then just based on the fact that it doesn't cost more than diesel. So that's the simple equation. So for a ground handler, they don't need to redo their contracts. They can just think about Well, it used to cost me X to buy a piece of equipment, and it used to cost me that to maintain and fill it with diesel. Now I have an electric piece of equipment, and I pay for it that way. So relatively simple model, but it's been very effective.

Ian Kershaw:Thank you. Now, Adam, you're thinking about doing something similar, or you are going down the path, but actually, why don't you talk to us about Townsville? Because I think, you know, Ryan will hopefully in due course have a SAF production facility on his doorstep, but you've got one Coming under construction.

Adam Rowe:Yeah, really excited. Townsville will be one of the first SAF refining locations in the country, and so it's just seeing the, the level of interaction between government, between investors, as well as the actual proponents to bring that to life is fantastic. I think the next great challenge will be turning that into an actual offtake agreement at the airport and making sure supply chain works from where the refining location is to the actual airport. But, but really excited that it's coming.

Ian Kershaw:Yeah, you don't want it going all the way down to Brisbane, do you? You want it uplifted in Townsville.

Andrew Warrender:Exactly.

Adam Rowe:Yeah.

Ian Kershaw:All right, we'll move on from that. I can fly down. Um, Kate, talk to us— let's switch gears again. I told you that was going to be quick on decarbonisation. We have a few more things to get through. Digital, right? Um, self-service kiosks, not new, but you're seeing— you've seen the gains. You can give us numbers. And I'd like to ask you not just how it's working and how you're seeing potential cost savings— is it a CapEx/OpEx trade-off— but also if you're seeing any upside, whether it's in customer experience or whether it's in commercial spend, people getting through a bit quicker. What do you think?

Kate Holsgrove:It's definitely in terms of getting people through quicker. So we're just actually in the process of rolling out the next stage of the common user self-service Um, check-in in response to really positive feedback from airlines. So we've got sort of check-in queues, um, down from sort of, you know, what was 30 minutes in peak to sort of 4 minutes, down to about 80 seconds, um, to check in and bag drop through the new, um, equipment. So that's been working really, really well. Um, it's not really kind of tangible in terms of direct benefit, but it all, uh, eases passenger anxiety, makes gives people confidence they can get where they need to go on time, reduces stress, and gets people through into the departure gate and the boarding gates quicker. We've also seen the biometric sort of auto-boarding for those airlines that have been trialling it reduce boarding times down to about 15 minutes from 25 as well. So for those that have been using that infrastructure and finding sort of the right way to optimize, optimize that. So we've been looking at that sort of optimization the whole way through from check-in through security. So getting that peak throughput through the security screening lanes, again, sort of got that from about 150 people an hour to about 350 people an hour through the new security screening equipment at peak, which is really important for Perth. We're a very peaky operation with our very strong FIFO peaks in the early mornings in And then through to the boarding technology. So it's not new, there's certainly others doing it, but we're getting some really good feedback around the efficiency that that provides, reducing stress for passengers and improving service levels for airline partners.

Ian Kershaw:Now, Andrew, I want to bleed this for a second into the customer experience, and we'll come back and forth between the two. You've gone through a major terminal upgrade. upgrade, and you've put a lot of thinking into the customer experience around that. Please tell us a little bit around it, but before you finish the thoughts, tell us a little bit about your decision around digital versus human interaction at the border.

Andrew Warrender:Yeah, so we're, like I said before, we're, we're in an interesting position. So we're, we're quite far away from the nearest other airport, which I won't name. Everyone knows whose that is. But our population's been used to using that, so we have to find a way of being different. And one of the things that we really focused in on is the passenger experience. So we want our airport to be convenient. We want people to feel like it's still their local airport, but we also want them to feel like it's a major airport that they can go and interact with and fly to any parts of the world and have that connectivity. So, you know, every part of the journey we've thought about, you know, if you park in our premium car park, you're actually 50 metres from your aircraft, which is, you know, you know, unlike any other airport really. The premium car park, by the way, is covered in solar and the terminal is a 5-star Green Star terminal, so the first in Australia to be accredited as such. And so that kind of passenger experience blends into sustainability because what we know is the expectations of the travelling public isn't necessarily that they want always the lowest price. Sometimes they are willing to go for convenience And they certainly have an expectation that their experience comes with the right sustainability criteria to enable them to make that decision. And that skews the younger you are, the more likely you are to do that. So it's a really long-term thought-out strategy to build the terminal the way that we've done it and to lay things out the way that we have done it as well. We did make a decision, and it was partly pragmatic in terms of our new international inbound processing. We don't have smart gates, and we certainly discouraged our agency partners from putting them in. We really wanted it to be a personal experience, for one, so that you meet a human when you come to our airport, when you come off the flight. We're small enough that that's actually possible. I recognise the bigger you are, that that will have to change. The other part to it is the eGate technology that would have gone in is so old that it wouldn't have really fit with the rest of the terminal. So it was a conscious passenger experience decision and more pragmatic at the same time in terms of the equipment that was being available to us at the time.

Ian Kershaw:Yeah, it's interesting. You've got a lot of things to balance and you have to consider the unique characteristics. Now, Dermot, I know you've spent a lot of time thinking about the customer experience broadly, and there's many elements of it, but I want to touch on your, your new paid lounge, because this is a nice example of a combination of meeting customer demand, commercial opportunity. We've seen other things in the news in the last few weeks— Sydney's paid fast lane, etc. Talk to us a little bit about convenience, you know, where you fit premium into the customer experience. And as part of this, actually, I'll start with that and then I'll bother you about something else.

Dermot O’Neill:Sure, in terms of where you fit premium into the experience, I think the first aspect to recognise in any premium experience is that we've got to be laser-focused on removing all the points of friction that we can. And notwithstanding Ryan's point, which I agree with and is well made, that, that will change at different points throughout the day. But I think we do need to maintain that That sort of laser focus on reducing friction. And hearing those sorts of examples around where self-serve technology removes those, what we might have seen, those 15, you know, 18-minute wait times in a check-in line, that's not a great experience. And I think, you know, being able to reduce those down to something far more amenable gives people more choice to then actually what, you know, how they want to spend their time in our airports. I think increasingly people are choosing to curate their own travel experience more and more themselves as well. And I think it was an interesting discussion on the last panel around what the role of AI is going to be in that in the future. But I think as people are curating those experiences, they're going to choose what are the aspects in their journey where they want a premium experience. So they may choose That they're happy to travel on a low-cost fare and accept all the things that come with travelling on a low-cost fare. But they might also choose that alongside that, within that journey, I actually want to get through the airport experience quickly. And I also want a lounge experience as well. I might not have access to a traditional lounge because of, A, how frequently I travel, or the choice of fare that I've made. And so Plaza Premium, in partnership with them, have recently opened their first domestic user-pays lounge in Adelaide. And that's very much about making sure that we're following that strategy and that those selections are available to people, that if they want to choose to pay for something and they want a premium product that they might not otherwise, as I said, travel frequently enough or select a fare, that those options are available where they can opt into them.

Ian Kershaw:Now, one for, for, for anyone. Australian airports, more than certain airports overseas, have to cater to a wide variety of passengers. I think it's fair to say, probably in particular Adelaide and Gold Coast, as integrated terminals, you've got LCC, hybrid, full-service domestic, and then you're serving a range of international carriers. You've got LCC long-haul, and you've got premium, you know, Asian and Middle Eastern long haul. How do you cater for the range? It's not like someone's a Stansted and someone's a Heathrow, right? You're catering for everybody in one. And the other thing, and I know Ryan, you made this point to me at one point, was you need to focus your investments and kind of where are you going to get the value for money. It links to time earlier, but when you think about the customer experience and where the biggest bang for the buck is when you're catering for such a range of customers. Anyone can jump in.

Andrew Warrender:Feel free.

Adam Rowe:From our perspective, we've got a laser focus on being the most efficient airport we possibly can be, but efficiency doesn't necessarily mean just pure cost and the cheapest at any expense. What it means is we can actually serve different passenger segments, as you said, that wide variety, whilst delivering efficiency along the way. So one example actually came up last week because it generated a little bit of media attention. We've got a special lane at security, so we've got the ability just on the side of our security screening checkpoint where anyone that needs a bit of extra time, a little bit of extra understanding or care going through the main screening checkpoint, we'll send them down that lane. So that's elderly, parents with kids, gender-diverse people, anyone that's just a bit nervous about the screening process or about flying. And so they use that lane and they get that care and understanding that they need, and the positive feedback it generates is fantastic. And the media attention last week was someone just making this comment without necessarily knowing all the detail about, oh, that's slowing things down, that's making it more inefficient for everybody else. That's actually not the case. Because we've got people that might take a bit more time through screening using their own lane, all of the other lanes are actually able to move very, very quickly. And so it's borne out in the data. We've got maximum wait times— or sorry, average wait times of 2 minutes on most days, 3 minutes on our absolute peak days.

Kate Holsgrove:Wow.

Adam Rowe:Because we're able to actually segment whilst delivering that little bit of care and understanding along the way.

Kate Holsgrove:I think the, the point you raised earlier about choice for passengers applies as much as is possible to the infrastructure, right? So some of the infrastructure that you can't choose— we have to build a runway, we need to build a runway for everybody to be able to use. But just as we try and create choice for our passenger experience and what they want, where possible, we want to try and create the choice for our airline partners around what level of service they want to provide. to their passengers, what level of, you know, is it a walkout or a bus-in gate versus an aerobridge? Is it— How are you doing that? A premium lounge product versus being part of a common user lounge experience. And so there are some things where we just can't because the nature of the infrastructure means that it is common user infrastructure that's built for the entire airport community. But where possible, we try and work with partners to Can you tell us a little more about that?

Ian Kershaw:Because you have the interesting example of moving from T2 FIFO, T3, T4Q, FJQ, and T1 International Virgin into Airport Central. So this must be a real live thing for you. How do we give everybody what they need and want now in a new precinct? So could you tell us a little bit more?

Kate Holsgrove:Yeah, so look, it's, it's a challenge but an opportunity. So I think my Most of the room know that we're spending billions and billions of dollars expanding the terminals, so building an expanded international terminal and a new domestic terminal, which will see Qantas relocate over from T3, T4 into the airport central precinct. But we will still have T2. So T2 is still designed to be that low-cost regional terminal. It is 100% walkout or bus-in gates.

Dermot O’Neill:Yeah.

Kate Holsgrove:It's designed to sort of primarily for our FIFO operate— FIFO workers who come in, you know, twice a month on average. They fly about 26 times a year. They're getting there at 4 in the morning. They just want the, you know, easiest, cheapest opportunity to get through. Whereas the international will have that more premium world-class but fit for Perth experience.

Adam Rowe:Yeah.

Kate Holsgrove:but still have the opportunity to tailor the experience wherever possible. I think one of the challenges for us is keeping that small airport sort of feel and convenience and low friction as we grow and expand.

Ian Kershaw:Yeah, 50 metres from the parking lot or valet.

Kate Holsgrove:50 metres would be amazing.

Ian Kershaw:We're out of time. If I could ask you all on the spot for kind of a closing thought, you know, in this conversation we've talked a lot about working together ultimately in the ecosystem dynamic, whether it's solving capacity, opening up new routes, um, reducing frictions. Um, if there's one thing you'd ask of yourselves as airports or, you know, an airline or a government agency, what would it, what would it be? I didn't prep you for this one.

Andrew Warrender:Sorry.

Dermot O’Neill:Uh, for, for me, I look at our, um, our Adelaide community and the gains we get come through collaboration. Um, we, uh, work really closely with our airline partners. Both at a route development level, but also operationally as well. And I know our operations team have a really great and functional relationship with our AOC in Adelaide, as an example, and that allows us to not necessarily be focused on whose problem is it to solve that bit, but how do we solve the journey together.

Ian Kershaw:Thank you.

Ryan Both:It was a great moment 2 weeks ago, Ian, when the Australian government announced after 2 years of concerted lobbying and many more years before that, that we're finally ripping up the paper card for inbound arrivals. So to answer your question from earlier, I think our job is, as major airports, we're servants of our geography, we're servants of the customers that our airline customers bring to us. And so we need to design for everyone. But we need to then try to segment and make sure everyone's needs are met. the extent we can. And, and so Seamless Border for us has, has been part of that, um, really trying to make sure that, um, we get all the basics right. We're implementing biometrics, we're implementing all these technologies, we're taking Australia forward. And for us, it's a selfish aspiration too. We want to do an amazing job as a country of 2032.

Andrew Warrender:Excellent.

Ryan Both:It's a great opportunity. Let's make the most of it.

Ian Kershaw:Yeah, absolutely.

Andrew Warrender:We, we differ from a lot of airports in that we're, um, we're not council-run, but we're council-owned, and so by 2 different councils. And what that means is we've got an obligation to the people of our region in more ways than one. You know, we don't just serve them as passengers, but they're actually beneficiaries of our operation. And we take that very seriously in terms of our— what we do every day. We also take very seriously our role for our customers who are the airlines and delivering the services that they need at the cost that they need it and to access the market that we think that we've got. So, you know, what we want to be known for as an airport, we want the industry to sort of come with us on, is the spirit of partnership. Like, we're really motivated to form those strong partnerships with the airlines and other stakeholders for the good of our region and for our country. So, and if that's not too much of a patriotic speech, that's quite sincere from our perspective. We think the opportunity is massive.

Ian Kershaw:Thank you.

Kate Holsgrove:Uh, I think, you know, my ask for everyone is not to forget, uh, the Western hub. And, you know, we are that kind of natural entry point for, for Asia. We've got the direct connectivity with Europe. Um, and so when we're talking about bilaterals and when we're talking about, um, border and all of those sorts of things, just to make sure that Western Australia is, um, on the West Coast is, is at the forefront of that. Uh, top and, and front of mind. Um, and I think anything that we can do to move towards that open skies model that, um, the team talked about earlier, um, improve visa, um, accessibility and clarity and, and timeframes, et cetera, to make it easier to travel, uh, to and from Australia would be in everybody's best interests.

Ian Kershaw:Thank you. Adam, bring us home into the coffee break.

Adam Rowe:Sure thing. So I, I've spent half my career in airlines, half my career in airports. And I've been struck constantly by just how much passion there is in aviation. Ultimately, it's an industry built on passion, on relationships. And so I've gone from people getting passionate about network planning or aircraft engines or types of seats to now in airports, it's people that are genuinely excited about different types of pavement. So my only ask would be just keep that passion alive because it's what keeps us all ticking.

Ian Kershaw:Excellent. Good concluding message. Thank you very much. Round of applause, please.

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