Unlocking Opportunities and Overcoming Challenges in the Caribbean Aviation Market

Transcript

Robert Konis:Welcome everybody. Buenos días. I hope everybody's recovered after the most amazing CAPA event last night. That was truly magnificent. I've been to La Compagnie before, but seeing where we sat last night was just excellent. This, I think, is the most important panel of the event. This short and sweet CAPA day and a half, but this is an important discussion, and it's all about opportunities and challenges in the Caribbean. And I know this has been talked about a lot.

Adam Scott:Some—

Robert Konis:I did it at Roots Rio back in April, interconnectivity in the Caribbean, and somebody said, good God, we've been talking about this for like 100 years, you know, what's going to change? So, but I think we've got the right mix of people here, and what I'm going to do is get everybody to introduce themselves briefly, tell you a little bit about their association or their Airline, and I might wander, you know, anybody know Ken Quinn, the lawyer? Ken loves to go into the audience and bug you because you're sitting on your iPhone and snoop. I won't put anybody on the spot, but I might wander a little bit as the panel gets going here too. So we have Jonathon Freye, who's the Executive Director of the Association of Vale Airlines. We have Adam Scott, founder and CEO of Bermudair.

Adam Scott:Hi.

Robert Konis:Then we have at the end, we've got Trevor Sadler, CEO of InterCaribbean, and we had a last-minute sub. We were supposed to have Hans from Winair. Urgent matter came up back at the home base, and luckily we've been able to get beautiful Mercedes Martinez, Vice President Alliances for Arajet, to step in. I know there are 3 years, 4 years coming up soon, And Arajet's doing some incredible things as well too. So let's kick it off and let Jonathon tell us a little bit about AVA, and then we'll launch into the panel. We'll try to leave some minutes at the end. We have 45 minutes, but the Slido questions, I believe, will be available. Or if you just want to stand up and ask a question, if you don't want to use Slido, that's fine as well too. So Jonathon, why don't you kick us off and let us know about AVA?

Jonathon Freye:Of course. Thanks, Robert. Truly a pleasure to be with all of you this morning and one of our member airlines as well. The Association of Vale Airlines, headquartered in Washington, D.C. We represent the low-cost carriers. I think many of you may know them, but we're starting to evangelise the term Vale Airlines. Nonetheless, our member airlines are Allegiant, Avelo, Breeze, Frontier, Sun Country, JSX, and Bermuda Air. And, you know, I think our value proposition really is that, you know, Value's not a product category, right? I mean, it's a consumer proposition, and we're trying to talk a lot about that. I mean, the Caribbean and Latin American market, I think if you talk to some of our chief commercial officers, they would hear them say that's certainly a growth area for growth. But, you know, of these carriers, we already do, you know, nearly 20 markets, 128 routes in the region. For an average base fare of about $148, which is about 50% of the one-way base on a legacy carrier. So certainly bringing more affordable travel and connectivity to the region.

Robert Konis:Super. Adam, fellow Canadian, by the way.

Adam Scott:Thank you for having us. BernDair, we actually just celebrated our 3rd anniversary. We are a premium leisure airline based in Bermuda. We're rapidly developing, rapidly evolving. We launched services last year to Anguilla under the name Anguilla Air as well. This year, we're expanding into Turks and Caicos. We're expanding into Belize, Guatemala. We're actually doing a direct service, a stopping service into Cayman as well. What we focus on, premium leisure, providing direct point-to-point services in underserved markets where we see opportunity, basically with the right-sized aircraft in the markets that we serve.

Robert Konis:Trevor, and I'm always interested in the InterCaribbean story because you've got some Canadian de Havilland Twin Otters. I love Twin Otters. Years ago, we did some work with Ken Borick Air in Calgary. There's a big fleet of Twin Otters, but you've got some ATRs, you've got several different bases of operation. Tell us what's— who you are, what you're doing, and anything else that's Good morning, everybody.

Trevor Sadler:My name is Trevor Sadler, CEO of InterCaribbean Airways. Our company was founded by a gentleman called Lyndon Gardner 34 and a half years ago, and he founded the company with one little aeroplane, a Cessna 172. It was not so much to be an airline at that moment, but actually to meet a personal need that ended up in marriage. And it was all about travelling from the Turks and Caicos, where we had little to nothing in the way of air service, to get to the Dominican Republic, where he met his future wife. So it was that, that was the moment that started up the airline. Fast forward a few years at a time, and the company was called Inter-Island Airways for a brief period of time. As international travel came about, rebranded as Air Turks and Caicos. Along comes me 13 years ago when I'd actually met Lyndon the year before, and we talked about how to build a pan-Caribbean airline. And one of the early things I said to him, the name has to go. If we're going to be a pan-Caribbean airline, we can't have a name that's so uniquely tied to a country. So we need a very neutral name. And so we landed on InterCaribbean and began that journey of building connectivity across the Caribbean, doing what everyone keeps talking about wanting to have, but we're already doing. this by way of connectivity. So the fleet has emerged and evolved. We tried to retire our Twin Otters, but there could never be anything to replace them, so we ended up buying 3 more. So we keep those flying on some very short flights, and people like it because you really don't fly very high, so you get the best views out the window of those aeroplanes. Our Embraer 120 fleet of then 10 aeroplanes is reduced and reduced and soon retiring, all replaced with ATR 42 and 72s, giving us 60% more seats on those same aeroplanes from a crewing point of view. Embraer 145s, we have at the height 6. Now down to 2. We actually just sold one to Embraer. So that aeroplane now is flying in Brazil as the corporate shuttle for Embraer. So we're pleased that Embraer wants to buy back from us. And most recently now is the launch of Embraer 170 aircraft. We purchased a fleet of 8 of those. The first 2 are now in service. Number 3 is soon coming, and as quick as we can run them through the maintenance required to put into service, we will also then be expanding our footprint. Today, it's 24 cities in 18 countries, and plenty more to come.

Robert Konis:Fantastic. So that's a great overview. Mercedes, so here you are, 6 years with LATAM, a couple of years with Delta Latin America. Now, you know, the last year or so with Arajet, things are happening in Santo Domingo. Tell us a little bit what's going on.

Mercedes Ballesty:Hello, everyone. I'm very pleased to be here. Thank you for inviting me. Just a couple of hours ago, I was not even capable of getting a mic. No, just kidding. Those were very big for me. So thank you. Thank you very much to be here, the possibility of being here at this panel. So, well, you talked a little bit about myself, so I'm going to talk a little bit about Arajet. So most of you already heard about this kind of new company because we are turning— we are celebrating our 4th anniversary next week.

Robert Konis:Congratulations.

Mercedes Ballesty:We are proudly based, and we are proud of being a Dominican Republic company based in the Caribbean. We already transported more than 4 million passengers. We have a fleet— Garrett was on a panel yesterday, our COO, talking about fleets and aircraft types and that type of things. We already have 16 737-8 MAXs. We have a couple more coming in the short term, so expecting a lot of growth as we had during the last couple of years. We started with one hub in Santo Domingo. We operate 2 hubs now from Santo Domingo and Punta Cana. We served 30 destinations in 17 countries already.

Trevor Sadler:Wow.

Mercedes Ballesty:A lot of growth in only 4 years. That's a little bit about Arajet, and I would like to share a little bit more in the next couple of minutes.

Adam Scott:Thanks.

Robert Konis:Thanks for the overview. Again, the panel's theme being challenges and opportunities in the Caribbean, maybe if we can just dispense with some of the challenges initially and then focus on the positive, on the opportunities. As I mentioned when I led off, we've been talking about inter-Caribbean connectivity for years. And, and look, I come from a country, Canada, very high taxes, fees, and charges. And I know that's similar in the Caribbean. We've had how many failures in the Caribbean over the last 25 years?

Jonathon Freye:A lot.

Robert Konis:I think the average lifetime expectancy of a carrier is less than 4 years in the Caribbean. And, and I know that a lot of carriers will say we need to improve the air navigation services in the Caribbean. We need to have some additional airports. capacity development, but all of that comes with a cost. There's a fine— there's a fine balance between building the right infrastructure and overburdening, because we know at the end of the day, any cost manifests itself through down to the carrier and down to the bottom-line passenger in a market where there's high price sensitivity of travellers. So, let's start off, Jonathon, with you, and that was a bit of a mouthful, but what do you see What do you see as the challenges in the market? What's needed, and what is that right balance?

Jonathon Freye:Yeah, that's a really good question. I think, speaking on behalf of most of our Vale Airlines members that are doing service that originates— nonstop service originating in the US and travelling to the region, you know, what I hear most often is management of scope and cost, right? So in terms of, you know, project scope, I think, You know, our carriers would very much like to see better consultation on planned projects and capital investments. I think, you know, in the United States, we have majority and interest clauses in airport use and lease agreements that, you know, I could argue whether or not those are helpful to the value carrier sector, but nonetheless, that does serve as a sort of formal consultative mechanism. When airports and ANSPs are thinking about new capital projects. You know, we— I think we'd like to see something more formal like that in many of the Caribbean markets where there aren't any today. And then on the cost side, I think, you know, it's the management of cost per enplanements and taxes and fees, right? I mean, we're fine. with fees that fund new runways, perhaps not so much those that are going to general government revenues to support the management of court systems.

Robert Konis:Understood. And I know Pedro yesterday talked about Copa slowly expanding a little bit east still, that north-south airline. But when it comes to interconnectivity, I think a lot of us sometimes get a little tired of having to take American Eagle up to Miami and back down again. And American Eagle's also in the middle of improving their regional hub in Miami. So to get where we need to go, let me ask a question that would be out to Adam and to Trevor and also to Mercedes. Does the average island government in the Caribbean really care about if we say, well, we've done a study that we need— if you can just reduce your taxation by $10 a passenger, we'll get to nirvana? whatever Havana is. Do they care? Because that taxation revenue doesn't just pay for air transport infrastructure, it pays for hospitals, schools, tarmacking roads. How do we get in this challenge in the Caribbean with the size of the population, income demographics, price sensitivity, but taxes, fees, and charges being a key piece of it? How do we get some of these countries aligned with where we need to go? Maybe, Adam, you can kick off. You're starting this big expansion, so what's your viewpoint of that?

Adam Scott:Well, when we started in Bermuda, we were sort of— we were stuck with what we have, which actually is a beautiful facility, one of the best airports, I think. It's gorgeous. But the result of that is we have amongst the highest fees and charges probably anywhere in the world. Our experience with Anguilla has been very different. Anguilla had a very aggressive plan to redevelop their terminal and to longer-term redevelop the runway and supporting infrastructure. I think they did it all within budget, and it's a beautiful, very utilitarian facility, which is perfect for us and perfect for how we see the growth going forward. They've included us in the consultation process with respect to extending their runway and doing this and the other thing. Which I think is a hugely positive way of doing things. I think we're just getting started in the other islands, and so we see some of the challenges in Provinciales. Hopefully, it'll be a process so that we can jointly improve the experience, but not get overzealous and build massive over-infrastructure. And that's going to be costly to the consumer.

Robert Konis:We had an expression, I think it was IATA and former Air Canada CEO Robert Milton made a criticism of Toronto Airport around the year 2001 or 2002, or building a new terminal, is a Taj Mahal. We don't need this, we're overbuilding. So your points are well taken. It's finding the right infrastructure. Trevor, you've got a footprint all over many areas of the Caribbean from your home base at PLS, BVI, BGI down in Barbados, but in points in between, what's your perspective and how much are the taxes, fees, and charges burden impacting your core passenger demographic?

Trevor Sadler:The subject of taxation is, of course, something we continue perhaps talking to ourselves, if I want to say. Taxation is a wonderful thing and it It always forms part of the treasury income, so once they identify that as a line item, it's, you know, how can we extract some more rather than how can we get to the place where more people can afford to travel? You know, I won't sort of call out particular city pairs, but I'll give you an example of an airfare. I have a $79 airfare from A to B, that's my piece that includes having to pay everything, including the credit card fees on the government cut. The government fees on taxes and fees for that airfare is $123.95. When everyone talks about affordability, affordable travel, if You're paying 1.5 times the airfare just in the extra fees just to go to the island next door that's 30, 40, 50 minutes away, and you ask why more people don't travel or can't afford to travel. Not every country— you know, we position ourselves as somehow a rich area, but fully half or more of the people— Can't afford to travel. Or in some cases, maybe only 10% of the people are in a place where they can afford to fly. So while we've got a pretty good population across the region, not everyone can afford to fly, and the taxes, particularly when it comes to developing— I want to go and visit my family. They live— I live here, they live on another island. We want to develop. people wanting to go and visit islands nearby, and perhaps it's only cricket and Carnival which drives people to save up for those moments and feel the pain of paying taxes. My worst-case tax scenario between Island A, transit on one of my hubs to go to Destination C, is $312 in taxes. Nothing in that is for us. So—

Robert Konis:That's insane. And I want to turn to Mercedes as a discount, as a low-cost carrier. And I know in Canada we've lost almost all except for Flair. We had WestJet reincorporate Swoop. We had Lynx Air go bankrupt. But we talk quite often as a low-cost carrier the starting point or the price of stimulation. So for Canada, we're like $65 or $70 per passenger. How does that burden of tax— and this is 2 ways, not just origin of sale, you know, DR or other places, but it could be Canada, it could be southbound. What's your perspective? Does this impede passenger growth with the current burden of taxes, fees, and charges?

Mercedes Ballesty:Well, I don't want to get into the details of taxes and all that because my colleagues here talked a little bit more on that, but I would say that in the Caribbean, we have several challenges that we need to overcome for growth. Taxes is one, but then we have jet fuel prices in some specific airports that are quite high than the rest of the prices in the region or competing airports. We have several airports that have some restrictions for expansion. Thinking about the growth that we are expecting, I would not only focus on taxes, of course, Taxes is one of the items, as my colleagues here mentioned. We have some other ones, as I mentioned. But then, of course, we have a lot of opportunities as well. Thinking about this region and what is going on politically, geopolitically in the rest of the world, we have a lot of new tourists coming. That they were, for example, traveling or planning to travel to some of the beaches or holiday destinations, hot summer destinations somewhere on the other side of the world, and then they suddenly are coming to this region. Being a little bit far away from what's going on in Middle East and It's one of the opportunities that we have as well, being located in this magnificent region.

Robert Konis:Safe harbour in the Caribbean. You mentioned fuel, and I know I said to my panellists I wouldn't really touch on fuel. I spend a lot of time in fuel, but we're all in this together. We're all dealing with this, whether we hedge fuel, whether we're revenue managing the yields and able to counter that. But that's a very good point. But let's stick with you for a moment, Mercedes, because I know you've been hired as Vice President, Alliances, work at Delta in this area. No alliances yet, but just tell us what some of the plans are for Arajet and what that's going to mean to travel to and from the DR and other destinations.

Mercedes Ballesty:Sure. Well, as you mentioned, I was hired as VP of Alliances. Most of my background in the aviation industry has been in alliances departments, several airlines. The idea is to start evaluating partnerships. The world has shown, and low-cost carriers that exist from long before showed us that it's not good to be by ourselves. We have examples in Europe, we have examples in the US that finally turned into that path of partnering. What I've been doing at the beginning, during the first couple of months since I joined the company, it was kind of setting the basis to be able to start partnering. So we got the IASA certification at the end of last year. We joined the IATA last December. We are part of the clearinghouse since June. We are signatories of MITA. We prepared the basis to start working together with some of the carriers out there.

Robert Konis:Very briefly, what's your viewpoint since COVID We've seen a number of examples, hybrid cooperation between discount carriers and full-service carriers where nobody would have thought 10 years ago that would be a case, but it's manifested itself not just because of survival, but in some cases it just makes practical commercial sense for cooperation. What is your view on that hybrid cooperation? Mercedes, I'll just ask you that quickly.

Mercedes Ballesty:Sorry. Sorry. Can you say that again?

Robert Konis:Sorry about that. Since the pandemic, we've had this hybrid cooperation between discount carriers and Full-service carriers. What's your thoughts on that, and is that an approach that Arajet could benefit from?

Mercedes Ballesty:From legacy carriers?

Robert Konis:Yeah, having some kind of codeshare or some sort of commercial relationship with the full-service carrier.

Mercedes Ballesty:Absolutely. We are open to evaluate interlining agreements, codeshare agreements with legacy traditional carriers, with some of them that are not. You can see out there, there's every type of partnership going on right now. Maybe 15 years ago, that was not the case, but you have a lot of very successful examples out there in various different regions with legacy carriers cooperating with Maybe low-cost carriers or value carriers. I think that there's a lot of opportunity. Again, examples are showing us that that's the way.

Robert Konis:Thank you. Trevor, what's your position where you're sitting? Is there an opportunity to tap some additional opportunities that perhaps you haven't pursued yet, and where might those be, and what are your perspectives back again to the the panel topic, looking for opportunities in the Caribbean marketplace?

Trevor Sadler:Of course, surely. We are, I want to say, a lower-cost— not using the word low-cost, but a lower-cost approach to the marketplace. We will often compete with 737-size airlines in terms of going from a point to another point where you In the other cases, it was going via a hub somewhere. We launched our first interline 12 years ago, and not everyone wants to interline, and it always takes some time to have a conversation to get to the starting line, but our newest one launched this year is with Air Canada. And— That's turning into be quite something with respect to the numbers of people, and perhaps you might offer the politics of the day driving some of that. So we're very happy with what we're seeing with that. We launched Virgin also the end of last year. So British Airways was the first. Virgin now gives us 2 competitors out of the UK market, but they have their own distinct marketplace of their travellers. So we are in the process of one more, so that's not announced, but it's in testing, and we just agreed one more here in the last few days. So we're open to everyone who's coming into the Caribbean. In order to see if we can— it's especially interesting where you come on a long-haul leg to this market, you fly with us somewhere in the middle, let's say, and then you go home on the other— on that same carrier back from another market. And that's particularly with the Europeans, it's quite successful. So we're big on interline. Naturally, there's a revenue accounting element that takes up quite some overview, and what we did was outsource that to a company whose expertise is in revenue accounting rather than trying to hire and train a small fleet of persons responsible for that. So far, so good.

Robert Konis:Your perspectives. I like the expanded commercial relationships. grow organically? How can you have selective relationships? You mentioned Virgin, you mentioned Air Canada, amongst others. So that's a good news story. Adam, so we have Arajet at the end, 4 years now— sorry, 3 years— and BernDair, 4 years almost in business. What an exciting—

Adam Scott:Vice versa.

Robert Konis:Yes, sorry, vice versa, 3 years and 4 years. But what an exciting time, and I understand that by next year that a majority of your capacity will not be Bermuda, it'll be elsewhere. Where are the opportunities for you? I'm hearing things like Belize and Guatemala and expanded US footprint. What's going on with Bermuda Air?

Adam Scott:Just in terms of loyalty, I'll just finish up on that as well, if that's all right. I think there's, for us, there's 3 big opportunities. Bermuda is pretty unique because unlike a lot of the rest of the Caribbean, 40% of the market is outbound from Bermuda, and we have really good coverage in the US and in Canada. And so I think there's great opportunity to partner with airlines to bring people out of Bermuda and connect them elsewhere. I think for our O&D markets from the US and Canada down to the Caribbean, I think there's great opportunities with partners in the US and Canada where we can actually provide an interline experience and/or Even as we're evolving and developing our loyalty program, that we can partner and provide an alternative there. I think in the Caribbean itself, partnering with Trevor, partnering with— we've got a— we're working on something in Anguilla that effectively will be able to give us a direct connect from New York down into Anguilla and then into St. Barts, for example, and a very quick connection. Huge opportunities there. I think more broadly for BernDair, it's funny you mentioned the naming challenges. That's going to be one of our challenges because we're BernDair based way over there, but we're doing a lot down in the Caribbean now.

Robert Konis:It's brilliant. You've got that reverse seasonality between Bermuda and the Anguilla-Turks area. It's an opposite seasonality to Bermuda, so it gives you an opportunity to keep the utilisation 12 months of the year in a strong position.

Adam Scott:Yeah, I think for us as an airline, we look at it as, you know, we have 2 peaks. You know, we can maximise the summer in Bermuda and we can maximise the winter in the Caribbean. And I think that, you know, again, working with our partners, we can also strengthen the shoulder seasons as well. But there's a lot of opportunity for us, I think, in the Caribbean, again, with these markets that don't have a direct service. You know, we've identified A lot of islands, and again, a lot of islands come to us and ask for the same kind of service that we've put into Anguilla and what we've done in Bermuda.

Robert Konis:Fantastic. Back to you, Jonathon. How many members does AVA have today?

Jonathon Freye:We have 6 carriers. Look, I mean, we're talking a lot about growth and opportunity. Say what you will sort of about what the realities of the K-shaped economy in the United States, but if you look at, you know, what has happened in the past year or 2, you look at Breeze Airways, for example, that's still a relatively young carrier, but launched, you know, a not insignificant amount of transborder service to Latin America and the Caribbean. Frontier made a really exciting announcement yesterday about adding service to Colombia. And so this is clearly a market that, you know, our domestic carriers in the US see as a growth opportunity for, you know, the segment or sector of customers that we serve.

Robert Konis:I like the word growth because we can talk about fuel costs, we can talk about other issues in our ecosystem, airport development costs, other factors, labour costs, but a lot of times it also comes down to if we can grow— Mercedes, you mentioned about getting new customers coming to DR and to the Caribbean, maybe looking for safe harbour or just— another example is that Canada used to send 1.1 million passengers per year to Cuba and it's totally shut down. So where else can you go to experience, have a great one week on the beach or whatever you want to do? So I like the word growth because we get so transfixed with just the cost. Costs are important, but growth and revenue in the right way for your members is a key part of it too. And you're right, that Colombia service from Frontier is very exciting. I know they want to get going as soon as possible. Any other opportunities you see for your members? Because I know we can say, well, let's forget about fuel costs, but let's forget about taxes Let's just focus on the opportunity. Let's just get on with growing this marketplace. Any other thoughts on that?

Jonathon Freye:Yeah, I, you know, let me pivot that a bit perhaps to a challenge. Adam and I were at the Caribbean Tourism Organisation, their Air Connectivity Summit, and one of the questions that I was asked on that panel was there seems to be a lingering sentiment in the in the region that perhaps some of the value airlines are not bringing the right tourists to the Caribbean. And I'm not sure I agree with that, right? You know, certainly as their advocate, I would say that there are plenty of affordable Caribbean destinations. And you can talk about the transfer of spend for somebody who, you know, is buying $148, you know, airfare that can spend an extra day or 2 at a mid-tier resort down there.

Robert Konis:So that's such a great point. A buddy of mine, Stephen Greenway, who now has gone back to Australia, Alliance Australia, formerly Flyadeal, and before that with WestJet Swoop, but we would make that point, which is the value carriers, which is if I can save money on— let's talk about the taxes, the base fare, I've got more money to spend at destination. I don't know if the case is equal for us, a cruise ship passenger, Do they actually spend money when they get off? It maybe depends upon the cruise line and the income demographic, but I would agree that saving money on the fare frees up money to spend on the shore or when you get to the destination on restaurants, on souvenirs, on clothing, on whatever you buy, on experiences. Good point. Adam, let's go back down the line. We want to leave about 5 minutes at the end for any sidle questions. We've got We've got one anonymous question, but Adam, any additional thoughts on, again, the— if you were to look, let's say, long-term growth plan out, let's say 5 years, medium term, you've got Airbus A220s on order, the first is due in later next year. How is that going to change the BernDair position? Those aircraft might be used in a different way than, let's say, within the Caribbean, or maybe not. So what is your perspective on— does that fleet change what you can do within, let's say, further distances within the Caribbean?

Adam Scott:Yeah, I think for us it's all about growth. You know, we've got to get to the right scale as well. You know, we've learned a lot in our 3 years, but whether we have 2 airplanes or 20 airplanes, you know, we need the same infrastructure. And so I think it's really important for us to get to that scale. I think we've already seen so much opportunity in markets that are overlooked by others, but also just where we can grow into markets and we can start a service in a market where there is no direct competition right now and grow the number of people that actually want to go to that market. I think there's many, many, many of these opportunities there. For us, I think, yes, our position in Bermuda is going to continue to grow, but we're going to grow much faster and much bigger in the Caribbean and elsewhere over time. I think the A220s give us more scale. I think as we've evolved as well, we've seen the right-sized aircraft for the markets that we need. I think that we're going to be just over 130 seats in these aircraft. It's a good size for us. The capabilities, where we can fly to and from, fly further. It just opens up a lot more opportunities for us.

Robert Konis:Trevor, what are your thoughts? Any additional— where is the— where, if I were to say over the next, again, 5 years, like for Adam, what are your biggest growth opportunities organically or with partners? What's the story for you?

Trevor Sadler:We're focused on growing to where we see opportunity. I noticed a question here, and it perhaps is something to answer from our side.

Robert Konis:Let me just actually read the question. This is the underlying question from Pedro Gutierrez from kiwi.com. The question is from Slido: If intra-Caribbean connectivity is one of the top priorities for the region, Why is the most innovation coming from travel technology, like virtual interlining, and what would it realistically take for carriers in the region to interline themselves? And it's interesting because you were just talking about interlining with Virgin and with Air Canada and having some success as far as the passenger numbers you're seeing.

Trevor Sadler:Well, we have a couple of partners, Caribbean airlines, who formerly was competing more with us than they do presently. Winair, actually, our interline together with them is ended. Cubana, perhaps a company most people don't consider and think about, but we have an interline agreement with Cubana as well. We always remain open to what makes good sense in terms of interlining with Mercedes, what do you think?

Robert Konis:Visionary out— I know you've got Fleet on Order and your network plans out 5 years. Where do you think the big opportunities are for Arajet?

Mercedes Ballesty:Yeah, well, we are evaluating opportunities Of course, with the number of aircraft that we are expecting in the near future, we will definitely increase destinations as we have been doing. We just launched Rosario and Mendoza in Argentina 2 and 3 months ago. We announced Montevideo in Uruguay starting next year. We are including or increasing destinations in our network as we go. Thank you. One more thing that we're doing is with the fleet coming, we are increasing frequencies to destinations that we already serve, mostly in the Caribbean, for example. Rather than being operating twice a week, 3 times a week, we would like to increase those to weekly, for example. If we operate from Santo Domingo, something that we have been doing now is We are including from Punta Cana as well. Those are the growth pattern that we are following. New destinations, but then completing and increasing frequencies from both hubs as well.

Robert Konis:I like that densification of existing frequencies, and I'm glad you touched on Rosario and Mendoza as well too. With COPA people in attendance and the team, tentacles reaching from Tocumen down into deep, deep South America. It's great to see Arajet in some of the routes you have been taking on in that part of the continent. But speaking of deep tentacles, there's one additional anonymous question from Slido, and we still have a few minutes if you want to get a question in there, just stand up when I finish this question. Connectivity. With one direct route into Brazil so far, and I'm not sure who this person's talking to, and several others into Argentina. What about using the north and northeast area of Brazil to feed the international and domestic carriers serving these Brazilian airports and cities? When I read that, I right away thought about GOL's Brasília hub and how busy that is. But without saying specifically which carrier, does anybody here—

Mercedes Ballesty:That's for me.

Robert Konis:That's for you.

Mercedes Ballesty:If that question is for me, Arajet serves Guarulhos, so I guess that they're talking about only one route to Brazil, and they're talking about connectivity in the northeast of Brazil. That's something that is on my plate. That's something that I need to work on, on the alliances department, of course, but not only Brazil, the rest of the countries that we serve.

Robert Konis:Very clear. We've got 1 minute left, and is there anybody else that has a question for the panel? I mean, we could stay up here for 5 hours. There's such a— we didn't talk about a number of things, but is there something else you would like to ask? Here we have this great panel. We have Jonathon Freye beside me from Association of Vale Airlines, Adam Scott, founder and CEO of BernDair. We have Trevor Sadler, CEO of InterCaribbean, and we have Marcides Martinez, VP Alliances for Arajet. Is there any final question you would like to ask my group while we're sitting in front of you? I guess we conquered challenges and opportunities in the Caribbean.

Adam Scott:You did it, Rob.

Robert Konis:In 40 minutes, yes, and I'll get the 3 and 4-year rotation right, but, you know, to me it's great to see see things being shaken up a little bit in this region with what Adam and his team are doing, not just for Bermuda, that growth into the Caribbean. Mercedes Arajet story is great. I've got to take your Toronto flight to Punta Cana, but just amazing story there. You've got some great news for your members at AVA. And Trevor, you're kind of like the glue that sort of holds us all together because you're Your airline has been doing so much for so many years in that region. If anybody knows what the situation is on the ground, at the airports, in the air, with the government regulators and the bureaucrats, and with the bottom-line passenger, you're a great resource to have too. So thank you all very much. You know, great opportunity to have a brief chat, and I think we'll be sticking around a little bit longer after this, and if you want to talk to anybody here over coffee. We'd love to engage with you, but let's thank these, these fantastic panelists.

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