The post COVID-19 travel and tourism megatrends in South Pacific

Transcript

Simon Elsegood:So we're presenting the South Pacific panel. We have Phil Busson from Air Caledonie, Manate from Air Tahiti, Brett Gebers from Nauru Airlines and ASPA, he's the chairman there, and John Checketts from Fiji Airways. So can you please give them a round of applause?

John Checketts:Thank you.

Simon Elsegood:So I think we've got a pretty good selection of airlines from the South Pacific here. Are we going to solve all the problems of the region right now?

John Checketts:Great.

Simon Elsegood:Or, uh, or just dive straight into things? Um, Brett, I might start with you. You've sort of got the best vision, uh, as ASPA chairman for the, for the region. Um, so one of the big subjects in recent years has been building resilience when it comes to either airline operations or tourism. So what developments have you sort of seen around this, this building resilience in the South Pacific, the ability to go through a crisis, weather it, and then come out stronger on the other side?

Brett Gebers:Well, we survived the crisis, and I think that was referred to as Act 1. Earlier on today. We now sort of in act 2, trying to put things back together, but we find a lot of things still broken, seriously broken. The supply chain is broken. It's difficult to get parts. Because it's difficult to get parts, it's become more expensive. It's difficult to get crew. It's difficult to get engineering. It's difficult to find slots for major maintenance. So there are an awful lot of things that have to be fixed before we can actually move on to Act 3, as was spoken about this morning. And then when it comes to ground handling, there are some significant challenges within ground handling. It's great to add flights, but in fact, it's difficult to find people to handle or find organizations to handle the ground handling. element of this industry that we're in at the moment.

Simon Elsegood:So with labour shortages and MRO and equipment and supply chain, is the solution within the region or is the solution sort of external?

Brett Gebers:Well, I think the solution lies partly in the region and we have to work together because we're all too small to make a significant difference on our own. If we work together, we can achieve more.

Simon Elsegood:And speaking of working together, Philip, you guys have— you're co-chairing with Air Caledonie, and you've got a technical agreement with Air Tahiti.

Phil Busson:Yes, some other airlines in the Pacific also, we have some.

Simon Elsegood:So speaking of more coordination, what is the process to get you guys working Together, even on small things? And how do we use that as a stepping stone to larger cooperation?

John Checketts:Sure.

Phil Busson:As other actors in the industry, we have suffered from the pandemic, and we don't come back to that, but the recovery in the South Pacific Islands is much longer than in bigger industries or bigger airlines. And I think one of the big lessons is our previous model, we cannot recover completely if we stay in our garden field, if we stay in our small vision. So we have to definitely cooperate, cooperate or to collaborate. So we can go in different level of coordination together. One of the main thing also is we have to see the—

Manate Vivish:our—

Phil Busson:I mean, John will also discuss that, I imagine, as Fiji, but— We have to see the South Pacific as a— somehow as a unity also. So that means we have to work on the harmonization or standardization.

Manate Vivish:We all—

Phil Busson:in all of our airlines and countries, we have specific regulation. We have specific regulation with roughly similarity, but some differences. And also, if you take all the fleet of the Pacific, there is a huge difference in terms of fleet. It's not harmonized. And it's something that we have to work together. Because it's linked to MROs, as you said. It leads also to supply chain, but also supply chain in terms of crew training, pilots training, maintenance. So it's something that may be at a different scale in terms of timing, but we have to work together to have a specific scheme. For now, the solution is external of the South Pacific. If you want to do seat checks, it's difficult to do that in-house because you have limited manpower. But so automatically you will look around. And as an airline, as Air Caledonie, for example, we're under the EASA regulation. So if you look in the Pacific, except our friend from French Polynesia, there's not so many people who rely on the EASA regulation. So it's quite a tricky situation. But I believe that the solution for now and for the future is cooperation, definitely. And that's what we do with ASPAL. So we try to find common grounds and to work more together, more integrated, much more than before.

Simon Elsegood:Okay, thank you. Manate, you guys have a really interesting competitive situation that's developing. You've got a couple of new startups that are competing in your market, and the government has sort of declared a limited competition zone, is it?

Brett Gebers:Yes.

Simon Elsegood:Could you sort of expand on that model of deregulation that's going on? Yes.

Manate Vivish:In fact, when we faced the COVID crisis, we also saw there the opportunity to make the government face the tricky network that we have. We are currently operating 46 destinations in French Polynesia, and 30, 34 of them, we lose money. So when we started back the operation, we told the government that we couldn't fly to all these islands, specifically the very remote ones. And we wanted the government to put a PSO on it. And that's what happened. In the early times before, the government said that he wanted competition. And we told the government, if you want competition, you have to solve the problems to the remote islands. So the COVID was for us the opportunity to put the government, the local government, in front of its responsibility. So we did that. And now that the ground is clear, we are facing competition in some of the profitable routes. Not all of them, but some of them. And this competition is quite tricky because it's— we are— both of the airlines, of course, are now losing money in these routes.

Simon Elsegood:It's a familiar story everywhere.

Manate Vivish:So yes, and but we are facing that and the government is a little bit lost. I must say, because it's a very new situation for them. But everybody has to cope with that now.

Simon Elsegood:And you're mostly government-owned, is that correct?

Manate Vivish:No, we are a private operator. But the government owns like 14% of the capital of the company.

Simon Elsegood:OK. Well, it doesn't sound great.

Manate Vivish:There is—

Simon Elsegood:as we discussed earlier, there's competition that seems to benefit the wider sort of market, and there's competition that seems to be a bit more harmful, and somehow regulators need to strike a balance there. John, I'll turn to you. Fiji Airways is going great guns at the moment. Capacity is up about 25% on 2019. You guys, I think, are almost tied with IndiGo in India for the most capacity that's been added since COVID So where's the growth coming from for you guys? Everywhere.

John Checketts:And it is 25% for the full year, but the quarter 4 is actually 41% growth over quarter 4 2019. And as we get to quarter 4 '24, we expect that to be closer to 50% more than 2019. So there's been a lot of growth. We did take delivery of 2 A350 aircraft right before the world ended. with the pandemic. So a lot of the growth is coming from deploying those 2 aircraft. And then we've recently, within the last couple of weeks, took 2 additional A350s. That's put a lot of capacity into the market. A lot of it is flying between Australia and Fiji and also North America and Fiji. But every one of our regions have been growing. The South Pacific region has grown 20 to 30%. New Zealand is also up in the 30% range as well. So it's really hitting everywhere.

Simon Elsegood:And you've mentioned that sort of a target is the mid-market for tourism, and sort of particularly in North America. Do you want to expand on what you guys mean by mid-market and what sort of tourism targets you're looking at?

John Checketts:Yeah, sure. And you mentioned resilience. In terms of demand, We're fighting for resilience as well. And you can segment the market any number of ways. So when we say mid-market, it's a strategy that we've employed internally at the airline focused on North America, because previously all the segments that we were focused on for North America were more on the high-end luxury side of the house. So in North America, Fiji has been looked at as an aspirational destination. Honeymooners, 20-year anniversaries, big events, bucket list. So we wanted to de-bucket list Fiji in North America. And again, talking on that resilience piece, there are multiple travel segments in the market, and the one that was underdeveloped for us was the mid-market. Mid-market is, I think, a lot of what we see from Australia.

Brett Gebers:Yeah.

John Checketts:People who will stay in hotels where they're paying anywhere from $300 to $500 a night. It could be a long weekend getaway. It's not a high-end, once-in-a-lifetime, wealthy-only destination. And we're trying to develop that in North America right now. But it's not the only strategy. It's again about diversification of the travel segments, focusing on the high-end, Mid-market. There's a backpacker, surfers market as well that we're trying to develop, but mid-market is one of them.

Simon Elsegood:You sort of beat me to my next question, which I'll throw open to the panel, is how does the region grow its, its source market? Essentially, how does it make itself more attractive to a wider range of markets, whether that's country markets or individual spending markets or students or your, your once-in-a-lifetime Or your revenge travel. What's the sort of— is there any comprehensive kind of regional strategy? It's a region of 2.5 million people. There's 3,000 inhabited islands in the region. How do we promote it?

Brett Gebers:Well, I would say to start with, there's a significant shortage of accommodation throughout all the islands, and maybe not in Fiji, but even when I went to Fiji, it was difficult enough to get a room. So there's a significant shortage of appropriate accommodation throughout all the islands, and people need a reason to travel, and the reason may be business, or maybe visit family and friends, or possibly have a holiday. But if you don't provide the amenities, they're not going back a second time, and they'll tell all their friends. So we've actually got to address that issue.

Simon Elsegood:And we've mentioned in some earlier discussions that accommodation is a Is a bottleneck, if you will. And does the solution lie with big hotel chains coming in, or the trend where we've seen Airbnbs and that sort of stuff? Or is it a pick-and-mix kind of approach?

John Checketts:The answer is yes. We need all of it. The hotels we need to develop Airbnb. I know in the Fiji market it's not that big. There is opportunity with cruise lines. It's something that Tahiti's actually done quite well with, of having cruise ships come through. And it could be a bit of a chicken or the egg argument as well. Investors who are looking to build properties, they want to make sure that there's safe, reliable, and consistent air access. And for air access to be profitable, you need to have people sitting on those airplanes. So it's developing the other markets, and Brett had alluded to VFR, business, humanitarian, and if we can develop some of these other segments like an Airbnb or other types of room inventory, that makes it easier to provide that consistent air service, which then brings in more investment for the larger properties.

Simon Elsegood:Right, thank you. I just want to switch gears a little bit and talk about a topic that is sort of very high profile, which is a bit of sustainability. Fiji Airways just took delivery of an A350, and the flight was fuelled with sustainable aviation fuel. And while that's very laudable, the region probably isn't big enough to push sustainability on its own.

John Checketts:No.

Simon Elsegood:So what role do your external providers have in sort of helping regional airlines move forward with sustainability, go towards those aspirational goals that IATA and ICAO have talked about? Anyone?

John Checketts:So that SAF fuel flight was the most expensive flight we've ever operated, I'm sure. And it's— It was great, and it's something that we are committed to as an industry, but we have to remember that it's multifaceted and we all have to work together on it. It's also mentioned profitability, and if we're unprofitable as an industry or if we're unprofitable as an airline, there is no airline and we can't focus on sustainability. There are other decisions that we make. That delivery of the new A350 aircraft is far are more fuel efficient than airplanes that were built 12, 15, 20 years ago. So it's, it's looking at ESG in every corner, from fuel, from awareness, looking to offset carbon emissions any way we can in the environment, working with our customers to help offset their own carbon emissions. But I think a lot of it, as airlines in the region, We kind of have to follow as well. And the larger, more well-funded countries and airlines who are developing the technologies really do need to lead the way as well, because it is a very expensive undertaking.

Simon Elsegood:We've seen that there's kind of a say-do gap between what people say they want to do and what people are willing to pay for.

Phil Busson:Sure.

Simon Elsegood:So, Philip, maybe you can talk about this. Do you think that sustainability can be customer-led, or does it have to come from airlines and their suppliers?

Phil Busson:It's an interesting subject because, as John said, when we talk about SAF or sustainability, I would put the technology side on a different sector in a way that In the small airline in the South Pacific, often we change fleet quite regularly because we are facing some situation where, in terms of operability, you need to have less maintenance cost, et cetera. So we have a, I would say, an ease of changing more frequently fleet. On the SAF situation, distribution, production, it's very complicated for the South Pacific, you can imagine. And most of the airlines, they don't fly everywhere. I mean, Fiji is flying in very different—

Simon Elsegood:Yeah.

Phil Busson:But most of the airlines, for example, fly to Australia. Where can we find SAF? On the other hand, on a political— most of the airlines also have some— often the main shareholder is the government of the island, and they're completely convinced of the need in sustainability because we are facing the issue. If I take the example of New Caledonia, we have an island named Ouvéa, The land is shrinking year after year. We see it. So the population knows it, live with it, and they are completely convinced and dedicated to focus on that. Would they pay more? Maybe, maybe not. Because also they align, as I said, with the shareholder from the government. So they always expect that the government is covering all the— most of the expense, or they want to have a fixed price. There is a lot of discussion currently, in fact, in New Caledonia about that. But they're totally convinced of, yes, we have to go forward to that because it's a question of surviving of the country, of the land. It's not a question of the airline. Also, on the other hand, and we were talking about that, like when we talk about the net zero, the aspect of flying net zero on the aviation side, it's only one aspect of the situation on the island. Most of the island produces electricity with diesel, coal. They're not really sustainable. So the government is also focusing on other subjects in terms of power plants. For example, if we talk about electrical planes one day, yeah, but where is electricity provided with? Diesel.

Simon Elsegood:Diesel.

Phil Busson:So it doesn't really make sense. So it's a bigger subject than only aviation, and of course it leads to specific investment and technology, and also on this aspect, as the SAF, It's led to we need some cooperation altogether.

Simon Elsegood:Yeah, the region is kind of at the mercy of its long, thin routes and the sort of necessity of providing public service obligation routes. A lot of you guys have refleeted or completed, are in the process of refleeting. Manate, you've got 3 more ATRs that are coming into you in the next few years?

Manate Vivish:Yeah, currently we're operating 12 8 years. And yes, we plan to add 2 more 42s stall to serve very small communities with very short runways. And yeah, the fleet is— we're also thinking of renewing the fleet. The average age of our fleet is around 7.

John Checketts:7 years.

Manate Vivish:6 to 7 years. And every 8 to 10 years, we change aircraft.

Simon Elsegood:So we've got Embraer and ATR talking about hybrids. If a hybrid aircraft dropped out of the sky tomorrow— well, that's probably a bad way to phrase it. If a hybrid aircraft was magically delivered to you, would you guys be interested in that sort of technology. Is it, is it something that you're keeping an eye on?

Brett Gebers:Yeah.

Manate Vivish:From our perspective, yes. We've been surveying these opportunities for some, some time and we're looking after a 19-seater French aircraft that is quite promising. And yes, we are very interested in that.

Simon Elsegood:John, you mentioned you've finished with your new A350 deliveries.

Manate Vivish:What about you guys?

Simon Elsegood:What are you keeping an eye on? Narrowbodies, widebodies? You know, we're sort of in an intergenerational space at the moment for aircraft, or are we waiting the 5 or 10 years for something generational to come through?

John Checketts:No, we're not waiting for something generational to come through. We're letting demand guide our growth prospects. We do have the 2 additional widebodies, and as I stated, that's 40% growth in this quarter and upwards of 50% growth at the end of next year versus 2019. So we need to be able to absorb that level of growth. But we are also looking at our narrowbody fleet. We have 6 narrowbodies that operate within the region, and as the widebody network grows, we do need to feed some of that with some Some transits, and that, that's something that has helped as the collaboration in the South Pacific region is growing as well. So looking at ATRs, additional ATRs, additional narrowbodies that we can fly within the region to help grow that longer-haul network.

Simon Elsegood:And then servicing those aircraft, training pilots, are we talking about I've got to go to Australia or I've got to go to the US? or I've got to go to France, or is there an opportunity to bring things back into the region?

John Checketts:So I think Brett mentioned that very well. It is an ongoing challenge and it's something that we've faced for years pre-COVID and something that— a problem that we'd had with crews. Sending our crews all over the world to be trained is incredibly inefficient and very costly, and fortunately Fiji Airways was able to grow to to a point where we've been able to build an aviation academy. And we have simulators in the academy. We have— it's a great facility. We've had carriers even from Australia, from North America, and throughout the region send their pilots to Fiji now to be trained with our sims and the facility. So we can expand that, and it's been great. But from a supply chain, from an MRO and maintenance perspective—

Brett Gebers:Yeah.

John Checketts:So that is another challenge, and it may be a difficult one to solve given the different fleet that we have flying in the region.

Simon Elsegood:Speaking of training, Brett, ASPA signed, or is about to sign, a training program with IATA, or is that in the works? What sort of— what would that entail for the region?

Brett Gebers:We're working with IATA to provide cheaper training for ASPA members in the area. That should kick off next year.

Manate Vivish:Oh, next year.

Simon Elsegood:So, but is that targeted on— is that blanket sort of, or are we looking at pilots, we're looking at engineers?

Brett Gebers:What's the— No, it's more support-type training, safety training, accounting, revenue analysis, all that sort of thing. And ASPA's worked with IATA for this for And done this for years. Just as a result of the COVID situation, it all stopped. So we're in the process of getting it back up and running again.

Simon Elsegood:And then building travel—

Phil Busson:Just maybe to add to what Brett said, yeah, it's the— those trainings are mainly on activities that are not linked to certification, because when it leads to certification, it leads to regulation. And a pilot with a EASA license cannot fly to Australia, cannot fly to South Solomon or Nauru. So it's— that's why we were talking about also harmonisation and standardisation for the South Pacific, because we're facing some issues. Technicians cannot move easily from one place to another place.

Simon Elsegood:Yeah, so we've got multinational harmonised aviation bodies in the world. There are several of them. The EU EASA is sort of the gold standard there. Is there the possibility in the future of governments cooperating and looking at a If not a centralised regulator, more harmonisation between the region, which would make training easier, make maintenance easier, and make, you know, providing services— maybe even a centralised services provider. Is there any options?

Brett Gebers:It is an option.

Simon Elsegood:Yeah. Is there the political will for it?

Phil Busson:It's discussion we have.

Brett Gebers:That's the biggest problem, is I don't know if there is the political will for it, but it certainly is a solution, and we have to find a common set of rules throughout the South Pacific. Otherwise, we use little loopholes and rules to compete against each other, which is plain stupid. We're all too small, again, to have our own set of rules and regulations. We just need one set.

Simon Elsegood:Yeah.

Phil Busson:We develop cooperation, for example, with Air Tahiti because same regulation, same type of aircraft, and also somehow same type of political environment. more understanding each other. So we develop cooperation. We are not— we can develop much more cooperation. We're talking about, we never know, one day maybe co-ownership of an aircraft, or, you know, it's— you can go very far depending on our needs and what do we want to do. But we have the same discussion with other airlines in the Pacific, but constantly we have a limitation in terms of regulation.

Brett Gebers:Mm-hmm.

Phil Busson:Commercially, in terms of codeshare, of course we develop codeshare. We have signed a codeshare with Air Caledonie. We are on different codeshare. We are discussing other codeshare with other actors of the South Pacific in our neighbourhood. If it's commercial, it's OK. Yata, Iosa, codeshare, we can do that. But if we go further, parts, technicians, pilots, aircraft, starting to be more complicated.

Simon Elsegood:Yeah, definitely. So we've kind of got 2 duelling regulatory standards in the region as well. We've got some countries that are more aligned with the FAA, some that are more aligned with EASA. There might be more that are sort of linked to New Zealand and Australia. Is there— can we find common ground here? Is there some standards that we can all agree on?

Phil Busson:Can we?

Simon Elsegood:Yes.

Phil Busson:Does the government want to—

Brett Gebers:I don't know.

Simon Elsegood:I'm trying to regenerate this.

Phil Busson:It's also a lot of CA, of course, CA UK, for example, and we're really focusing. I think all the countries have developed their own civil aviation based on civil aviation. The only really common ground is IATA IASA, which is already a step forward. Yeah, it helps a lot. But then it's a question that you should ask to the government of each country. Would they rely on fully application of the EASA and then limit their civil aviation? For example, if we talk about the French, no, the EASA would never do that. They would say, no, we stay within the EASA organization, etc. So it's a tricky question, but there is ways to— if I talk about maintenance, for example, if we develop a MRO, a central MRO within the Pacific, of course we can have several regulations, certifications. So, and it's not— if you look carefully on each line of the standards, it's not so different. But it's more about the license and the certification of the people itself, like the pilots and the technicians. That's always tricky because they're protecting their own workforce.

Simon Elsegood:OK. Speaking of sort of protection and that sort of stuff and opportunities for growth, One of the questions from the audience is that you've mentioned that staying small is impossible in order to recover. Does Air Caledonie have any route or codeshare expansion plans and anything you can share with us?

Phil Busson:Okay, I would not say it's impossible. I would say it's tricky. Yes, we signed a codeshare earlier this year with our big brother, which— or big sister, which is Air Caledonie International. We do the international It's weird, but after 65 years of existence of Air Caledonie, we never had an agreement of codesharing. And now we have codesharing connecting flights, which leads most of the people when they arrive in Nouméa, they go to the islands where there is all the hotels. And Air Caledonie International started routes to Singapore, for example. We have a lot of Asian Singaporeans coming to those hotels, so it makes sense.

Brett Gebers:Okay.

Phil Busson:We are also discussing on other co-chairs. And also, the airline is changing its strategy, depending on the link to the geography of New Caledonia. You have one big island and small islands around. But the distance between the islands make that we have a division between international and domestic. And now we are going towards to a division between long flight and regional domestic. So Air Caledonie is also now starting to fly Regional, like flying to Vanuatu, for example, which is an international flight, but the distance itself, it's like going— it's like a domestic flight. So we change a bit of the program.

Simon Elsegood:Brett, you guys have— you've got a fleet of fairly modern 737s, some -800s and things, and I saw that you might be acquiring a cargo aircraft or a dedicated freighter. Sort of thing. How is the freight market sort of— it's just bringing things in for the country, or is there export, or what's sort of the reasoning behind that?

Brett Gebers:Nauru Airlines is primarily an ACMI operator, and we fill gaps for other airlines.

Phil Busson:Right.

Brett Gebers:And the gap is there for a 737-800 freighter at the moment, and that's why we bought one.

Simon Elsegood:Okay.

Brett Gebers:Yeah, during COVID we converted a couple of passenger aircraft to freighters. We had freighters before, but we sold them and Converted others to freighters and made best use of the fact that everybody was sitting at home and wanted their parcels flown around the country. But there's definitely a softening in the overnight cargo market at the moment.

Simon Elsegood:Right, yeah, we're seeing the big wide-body operators come back and we're seeing the belly hold capacity come in.

Brett Gebers:Well, that's true, however, as a guy said to me the other day, the first thing that gets offloaded is the beef, and then it's followed by the dairy products, and then it's followed by the fish. But, you know, people's baggage goes first, and then all the cargo doesn't go when they want it to go, and that sort of cargo spoils very quickly, so there's still a role for freighters.

Simon Elsegood:Right. One of the questions from the audience is, so how dependent on the ground product are we, the hotels? I think this is— we've sort of covered this— for future growth. Like, what are the plans for accommodation? How are airlines involved in this sort of discussion, or is this a black box for you guys?

Manate Vivish:On our side, we previously invested in hotels because there was not that much investors coming from outside the country. So we decided to take care of this issue. And we're about to do the same again. So our company will invest in a few hotels. Because most of the tourism is focused on one island, I'd say one or two islands, which is the main island is Bora Bora. It's the destination everybody wants to go there. But there are so many, so many more islands to see. So we'd like to develop small hotels in different islands in order to prop up the business. And that's, that's on the way.

Simon Elsegood:And are you concentrating on the luxury? Bora Bora tends to have this, this sort of air of mystique and luxury around it. Are you concentrating on the luxury market or are we looking at more middle market?

Manate Vivish:As Fiji, we try to reach every segment of the market. There's, of course, Bora Bora is a very luxury destination. But as I told you, more islands to see for different budgets and Yeah.

Brett Gebers:Okay.

Simon Elsegood:So a general question I want to throw open to the panel is what support could your providers help you with to be more successful, other than just lowering costs? Like, we've talked about the difficulties of getting everything into the region. Where can the supply chain help with this?

John Checketts:I mean, cost really is the big one. But from an ASPA perspective, I'm not sure if you— you mentioned MRO, the parts, how difficult it is to source things, but I'm not sure how providers in the region can really help with that.

Brett Gebers:I don't really think there is a lot, unfortunately, and we were talking about it over lunch. There's a lack of commonality in terms of aircraft types to start with. So if we all operated one brand of airplanes, then there probably would be an opportunity to acquire and share parts a lot easier than perhaps it is at the moment. I mean, the airlines in Australia all share parts as far as possible. When I say share parts, they buy parts off each other all the time.

Simon Elsegood:Yeah.

Brett Gebers:Keeps things going.

Simon Elsegood:That's very difficult to do in the South Pacific because of the distances between So could you set up a central purchasing commission or negotiate en masse with Boeing and Airbus?

Phil Busson:We have done some parts. I mean, we, you know, all the big OEMs, like for example, if I look at Airbus or ATRs or Boeing's the same, or the engine manufacturers, now you have an aero campus in Singapore.

Brett Gebers:Uh-huh.

Phil Busson:There's a lot of parts, trainings. It's like a centre. I'm not saying that we will develop something similar that Singapore in the South Pacific because it's not the same market, but we can, we can have some ideas about locating in the Pacific in a place that means a hub or something more central, and to have also local— the localization of parts or specific training. I mean, Fiji, what they did with the academy, it's really interesting. The thing after is how do we all work together to have the flow of the paths of the flights and to be more sustainable, economically sustainable of doing that. And that's, I think, the provider can help us to do that, to help us to do that. But of course, previously, as a prerequisite, more harmonization, more commonality.

Simon Elsegood:Yeah, this is—

Phil Busson:It's always the same story. So, but we have to start something different.

Simon Elsegood:Yeah, a common theme. So blue sky thinking, 5 years from now, can you see steps being made starting from here, down 5 years down the track, that sees some more sort of uniform, kind of uniformity in the region?

Phil Busson:I believe, because if you look at the growth in the South Pacific, if you look at the projection of the OEM also, aircraft, manufacturer about what's the number of aircraft they would sell in the South Pacific. It's a growing market. There will be a need. So I'm quite confident that there will be things within 5 years, 10 years, whatever. But there is a need. And discussion we had— I mean, I imagine it's the same. But the discussion we have— I had, for example, with the OEM, yeah, they're quite open to this idea. When, how, it's not decided, but there is a need, there is a possibility, and there is a market. It's a growing market.

Brett Gebers:I think the one common element here is people, and we all need people to run our airlines. And Fiji have built the most amazing training centre, and I believe that could be the catalyst for a lot of efficiency in all of our operations if we can get a proper school running there where you can train other skills other than just flying an aeroplane and fixing it. It's how to manage an airline. Those are important skills which are not readily available to people in the South Pacific.

Simon Elsegood:So it's not just the people in the cockpit and the people in the cabin, it's the professional managers and that sort of thing that the region needs. So how do you attract talent?

Brett Gebers:What are—

Simon Elsegood:what strategies are you looking to— John, you're from the States, and Brett, Australian, I'm assuming. So how does the region bring in talent? How do you attract people? It's—

John Checketts:for me, it's more about developing talent. And yes, we have a number of expats at Fiji Airways, a number of expats in the airlines in the region, but it's really about developing talent. And we have Very willing, strongly— and Fiji, good educated people just need more experience. And I think, as Brett alluded to, specific training and specific schooling at the universities within the region, but also universities here in Australia, New Zealand, that a lot of Pacific Islanders come to attend, but then with a desire to come back home. and work for their national airlines and the airlines in the region. And there is work ongoing. The academy is helpful to train pilots, but we need people in the universities, secondary education, to be focused on these trades as well.

Brett Gebers:Right.

John Checketts:But the goal really needs to be about— you know, the reason we're here is to help emerging economies continue to flourish and develop. And to just bring in expats to do that is— it's a short-term solution. We really want the long-term sustainable path of developing the people of these nations to do all the jobs, from executive all the way down to engineer and pilot.

Manate Vivish:Which is the case for us. We currently have 90 pilots, and all the pilots are Polynesians. And the company is a Polynesian-operated company, and we are very proud of that. And it's a matter of education and the way you attract people to this industry, which is quite valuable for a territory as French Polynesia, where the islands are very spread. And there's no other way to bring people from an island to another than aircraft.

Phil Busson:So when you work, if I can add, let's say Manate is the same situation and you help. When you work for an airline in the South Pacific, you work for the development of your country.

Simon Elsegood:Right, yeah.

Phil Busson:That's very important.

Simon Elsegood:Tourism, and it's a third, 40%, 50% of some economies.

Phil Busson:It's important. It's sustainability economically, tourism. But first of all, the target is development of the country.

Simon Elsegood:So I can see a situation in 20 years' time where Fiji turns into to what Ireland did 20 years ago, where managers, airline managers from Ireland are now all over the world running some very, very successful airlines. We've gone into the red, so I might just ask the audience to put their hands together for the panel and say thank you very much. Thank you.

John Checketts:Thank you, Simon. Thank you very much. Thank you.

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