What Are The Big Issues Confronting Airlines Today?

Transcript

Peter Harbison:I'm going to get you working to start with before we invite our panel up on the stage, if you would. And if we could just show— we're going to do a little sort of polling. It's actually a word cloud. If we could show the first question up there, please. So you need to tune into pollev.com, the upper and lowercase doesn't matter. pollev.com/capa18. Now this is a word cloud that we're going to develop here. You're going to contribute to this word cloud. What I'd like you to do is put in no more than 2 words, 1 word or 2 words max, what you consider will be the most important issue facing the airline industry in 2018. So why don't you— I'll And I'll start showing you some of the results, but I don't want to show you any of the results until we've got a few of them because I'd like to get some originality. If you've ever seen word clouds, what happens is then we develop a sort of consensus in terms of the words that you're thinking of. So if you've entered them, let's start showing them now, I think, if you're starting to enter some. If you haven't put your words in anyway, please do. There we go.

Rafał Milczarski:Oh.

Peter Harbison:Okay, they're pretty interesting, these things. It gives you a real, really quick idea. And this— so this is in 2018. What have we got apart from fuel? Overcapacity? Capacity?

Hernán Rincón:Competition?

Peter Harbison:Infrastructure sustainability? Protectionism? Pilots, labour. You still going? Climate, fuel price, prices, shortage, yield. Every mundo. What's every mundo? I should have said in English, please. Okay, so I think that's And we'll leave that up if we can, and then if you're still sort of thinking about what you want to put up there, please do. It seems to be that fuel is the number one thing that's preoccupying people for 2018. So now we've done that, and please leave that up on the screen, I'd like to invite our panel up onto the stage. And before I do, just a few words. First of all, Hernán Rincón.

Hernán Rincón:Thank you.

Peter Harbison:Rincón, Hernán Rincón, sorry, who's the Executive President of Avianca, who joined us in Cartagena last year. We had a good time on the stage. He's got a background in maths and computing and joined the airline in April—

Hernán Rincón:am I right?

Peter Harbison:April 9th, 2016.

Hernán Rincón:2016.

Peter Harbison:So 2 years. Congratulations. Thanks, Hernán. Thank you, Peter. And you've done some really interesting things with Avianca. Please take a seat. Secondly, Willie Walsh, who's the CEO of IAG. I don't think needs an awful lot of introduction, but welcome to the stage, Willie. Good to see you. Thirdly, Rafał Milczarski, who's the President and CEO of LOT Polish Airlines. Rafał is a multimodal man. I was interested to find this out. He actually started up a rail company, Baltic Rail, in the early part of this century, and has also got a bit of background in maritime, an economics graduate. Nice to— welcome to you.

Rafał Milczarski:Thank you.

Peter Harbison:And then, ladies last on this occasion, we'd like to welcome Gloria Guevara, Guevara, whom you saw at the IATA conference, who's President and CEO of WTTC, World Tourism and Travel.

Hernán Rincón:Welcome.

Willie Walsh:Thank you.

Peter Harbison:Thank you very much. Give them a big hand, please. So Gloria has a lengthy background in travel, not so much in aviation, but you know a lot about it. But also multimodal. So we'll be looking to her a little bit for some of the sort of multimodal issues as well. Now, rather than just follow this, maybe I could just ask you for a quick poll, the 4 of you, what you consider to be the most important issue for 2018. So we've only got 6 months left of it really. What are the most important issues? Hernán?

Hernán Rincón:Well, no question that fuel is important to us right now. Having said that, at Avianca we have a mixed view of fuel prices. On the one hand, they go up, pressure on the bottom line. 22% of my costs are directly related to that. On the other hand, multiple of the countries where I operate are based on exports of oil, and those higher prices bring higher incomes and brings economic growth. And that helped us offset to some degree the pressure on the bottom line.

Peter Harbison:Okay, so you're in increased demand, relatively. There's not much upside and not much downside, in fact, with a bit of luck.

Hernán Rincón:Short term, there is some downside, but medium term we can—

Peter Harbison:Because the economy will be stronger.

Hernán Rincón:A stronger economy locally.

Rafał Milczarski:Yep.

Peter Harbison:Yeah. Willie, you don't serve many oil companies or countries.

Willie Walsh:We serve a few, but Fuel is clearly going to be an issue for the industry at level. We're reasonably well hedged for 2018, so I'm not particularly concerned about fuel for 2018 with 70% of our fuel hedged at this stage. It is going to be a challenge in 2019, definitely, as hedging for most airlines starts winding off or winding down. It is having an impact because it's much higher than we expected it to But for me, in a European context, the thing that's really impacting on us in Europe are air traffic control strikes and the general air traffic control environment in Europe, which is a complete mess.

Peter Harbison:Mm-hmm.

Willie Walsh:But we have ongoing strikes pretty much every weekend now with Marseille air traffic control protesting against regulations introduced by the French government. And it's destroying traffic traveling through Europe. Europe. In the context of Vueling, which is based in Barcelona, it's particularly acute. About 50% of all Vueling's flights go through Marseille air traffic control. So they have over 600, nearly 700 flights a day. So you can imagine, you know, 350 flights a day being impacted by air traffic control, and it's getting worse. So the ATC system in Europe is really critical. It's just creaking at the seams, and when you lay on top of that these ongoing air traffic control strikes, it's just making a complete mess of the situation there.

Peter Harbison:And you see that persisting through 2018?

Willie Walsh:Well, it shouldn't, and quite honestly, you know, we've been pushing the Commission, and to be fair, they have been responding, but I think there are solutions that we could put in place. This is one of these things that hits our industry, it's impacting on our customers, hundreds Hundreds of thousands of customers, millions of customers when you aggregate it across all European airlines.

Gloria Guevara:Yeah.

Willie Walsh:What we've been arguing for, some simple changes to the rules to enable air traffic controls to better plan for these issues, and also to introduce the concept of European airspace, where, you know, if France wants to shut down, fine, let France shut down, but don't You can't let a dispute in France shut down Europe. And that's effectively what's happening. And what we're seeing with Marseille air traffic control is that, you know, the actions of one ATC system in Europe is having a disproportionate impact on Spain, not on France. It's having a huge impact on Spain. So I think there are issues that could be implemented, but we're not seeing the pace of change that we really need to see. If the increase in ATC delays that we're witnessing this year continues, Europe just will not be able to plan for a proper operational performance in 2018 and 2019.

Peter Harbison:Are you able to sort of translate that to a cost to the airlines in terms of effect on profitability?

Willie Walsh:Yeah, it is impacting. For all airlines, it's literally every time we have a flight French air traffic control strike, it's tens of millions of pounds and it's impacting on hundreds of thousands of passengers. And it comes through in a number of different ways. Clearly you end up with more of your flights regulated where there are traffic control delays. So we've seen about 3.5 times the number of flights being regulated by ATC delays. It impacts on the schedules that we're operating. We then end up, in many cases, paying compensation to our customers.

Peter Harbison:You get the double whammy.

Willie Walsh:Our famous EC261 of 2004. Completely outside of our control, but we have to bear the costs. And it's also having a huge impact on fuel, because to get around the ATC strikes, we're extending flights to bypass French airspace. So, you know, it's having a really significant increase. We thought this was an issue that would actually get better in 2018, but in fact it's getting worse and it's got to stop. Something has to happen or Europe is, is going to be in a real mess.

Hernán Rincón:Peter, can I add something if I may? I didn't know we could give long answers, responses to your questions.

Willie Walsh:That wasn't a long answer for me.

Hernán Rincón:That wasn't—

Willie Walsh:that was short.

Rafał Milczarski:Okay.

Willie Walsh:You gotta remember, I'm Irish. I was short, you know.

Hernán Rincón:I realize that now. But you and I need to talk about one subject, which is hedging, which is hedging, because we're significantly more conservative about hedging than you are. You're quite aggressive. I think you say 70%. That's, that's all the way up there. And I haven't met many CEOs that have really made any money in hedging. Most of the people I speak to have had difficult times with hedging. So I need to talk to you about what secrets you have. So I can apply in Avianca. But the comment I was going to make anyway was that the thing that worries me a lot is infrastructure. I didn't get to that point of my answer. My number one operational headache is infrastructure and specifically airports.

Peter Harbison:Yeah.

Hernán Rincón:Where the capacity is not there, where the services are not there, where the costs are very high. And it's my number one headache. infrastructure in Latin America. Not only Latin America, it's around the world. Anywhere that I fly, there are very few exceptions. I don't know if anybody has been to LaGuardia recently. You know, this is supposedly New York City and it is a mess, right? So all the infrastructure is number one headache for me.

Peter Harbison:And going back to what Willie was talking about, does that extend to ATC in Latin America? Air traffic control? Yes. Yeah. So, big issue. And of course, just, I mean, to state the obvious, what we're talking about largely here in the airline business is external factors over which we have no control.

Hernán Rincón:Of course.

Peter Harbison:That's quite apart from the ones where we do have some control and we do have issues as well, obviously. Rafał, I wasn't specifically asking about fuel. I was asking what you think will be the biggest issue for your airline this year that can be fuel.

Rafał Milczarski:I think, you know, the point of view depends on where one sits, but I think there are 2 immediate rationalization proposals. One, I think European airlines should consider very seriously whether they should hedge, and a great opportunity presents itself. Actually, it's expensive to hedge fuel because fuel has gone up. So perhaps we should have a collective decision not to hedge and not to increase—

Peter Harbison:I agree.

Rafał Milczarski:Increase opportunities for speculation in the year 2019. For 2018, we were also hedged quite well. But fundamentally, my view on fuel is that it's completely unpredictable. So the better way of hedging would be natural hedging and actually passing on the cost differences—

Hernán Rincón:Correct.

Peter Harbison:—to customers.

Rafał Milczarski:Exactly the same way as American Airlines are doing. That's point number one. Another rationalization proposal would be that actually those who cause the disruptions should pay for them. Of course, it's their right to strike, and I understand it's one of the basic human freedoms, but actually it's also one of the basic human freedoms to have a good undisrupted journey, and I think we have to find the right balance. I think the social situation in Europe is an especially challenging one because we are not clearly coping very well with demands versus possibilities of meeting them. And I think something has to change here as well, on the regulatory level as well, because it's completely ridiculous. Now, from the perspective of the airline that I'm heading, we actually We actually have several challenges. The most important one is airport capacity, and actually also airspace capacity, because those 2 elements, you know, they come to play. We have basically, with our very dynamic growth over the last 3 years, we have more or less maxed out the capacity of the Warsaw Chopin Airport. And you're looking at the future? And basically the airport doesn't— is not capable of growing its capacity at the rate of our growth. So this is always very, very difficult for an operator. I think the problem maybe not acutely is present, not as acutely is present pretty much everywhere. And there's always this trade-off, you know, invest a lot of money to increase capacity and actually open up capacity. That is against— normally that is against the interests of incumbent operators who obviously, if capacity is limited, are able to sell the tickets at higher prices. On the other hand, we have very dynamic changes in the geopolitical situation in the world because we have regions that are being awakened in terms of aviation, regions that are growing, regions that want to be connected with other regions. And I think actually for the benefit of the world and all those regions, capacity has to be created and there have to be capacity investments. In terms of the airspace capacity, for example, Polish airspace was extremely underinvested. And actually, you know, Europe has tolerated huge disparities in terms of the unit cost difference, you know, between €90 or almost €100 in parts of Europe to something like €30 or sub-€30 in Central Europe. Clearly, this is completely wrong. And actually, when there is no ATC, capacity, the home carrier in a particular region tends to suffer a great deal. I think every airline is now also suffering potentially from certain staff shortages, especially pilot shortages, and I think the solution to that is a challenge. Maybe not every airline, but there are certainly airlines in our part of the That's a good bit to bite on.

Peter Harbison:Can I just ask you one thing? In your sort of multimodal experience, you were talking about not hedging basically, and I'm not sure if you were actually suggesting that, say, IATA should get all the airlines to agree not to hedge.

Willie Walsh:Well, we can't do that. Let's be clear. That would be a breach of competition law. We're not going to do that, so there's never any discussion around that. Individual airlines will decide whether it's appropriate for them to hedge or not. We take a very simple view. Hedging is not about making money, although it's often translated into how much money did you make. It's about managing the volatility.

Peter Harbison:Of course.

Willie Walsh:So we've had a hedging policy in place for many years. We test it. And every time we've tested it, we've come back and decided it's right. But I don't disagree with airlines who decide not to hedge. hedge, because the situation they find themselves in could be very different. So, you know, in the US you've got greater consolidation.

Hernán Rincón:Correct.

Willie Walsh:And it's likely that in an environment like that, you know, people will respond in a different way. But for us, hedging is about giving us time to adjust in a volatile oil price environment. And that's why, you know, we're satisfied that it is appropriate for us to hedge and we will continue to do so.

Peter Harbison:Well, Ryanair was a good case study on that, wasn't it?

Willie Walsh:Yeah, and they've got it right and they've got it wrong. And this time around they've got it right. I think Ryanair is 90% hedged at prices of around $500 per tonne. So that's a nice position to be in. But if you look back historically, Ryanair has tended to get their hedging wrong. So you've got to— it's great and we laugh when they get it wrong. And then when they get it right, we don't really talk about it.

Hernán Rincón:We have actually taken a balanced view on hedging. We're conservatively hedged in the 30% range, but we have done what Rafał was talking about, which is try to transfer some of those increased prices to our customers in many ways. And by doing those two, we've done quite well this year.

Peter Harbison:That does run a danger— run the risk, of course, of suppressing demand once you start— even fuel surcharges, if you're not putting it on the actual price. But what I was going to ask Rafał, You were in the rail industry, you had started a rail company in fact. What's the hedging practice with rail? I mean, you use a fair bit of fuel there too.

Rafał Milczarski:Exactly as I've explained it. I had contracts with my customers where either I was paying them if the fuel was cheaper or they were paying me if the fuel was more expensive. And I think that is actually the, I would say, the most sensible—

Peter Harbison:But that does affect supply and demand, doesn't it?

Rafał Milczarski:When we look at forecasts of fuel price, if we looked at forecasts a year ago, they'd probably be wrong right now.

Peter Harbison:Right.

Rafał Milczarski:If we look at forecasts today, they will probably be wrong in a year's time. And the fundamental issue is that the price is driven mostly, I would say, by playing, by speculation of various types. I think there are geopolitical reasons why fuel should not be on the rise. I think that's— we don't need to define them. I think everybody understands them. But of course, opportunities are sought to push the price up because of course people— there are people, many people who benefit from higher fuel prices. I've, you know, I know it's very difficult Given the regulations and given the fact that we can't really discuss these things, but I think the outcome that is in the States is actually the best outcome. This is the optimum outcome. Most of those airlines, or all of those airlines, do not hedge, and there are shifts in ticket prices. And this is something that's actually fair and sensible.

Willie Walsh:Yeah.

Peter Harbison:I think that's— it's got to be very hard in a competitive market though, isn't it? You can't just push prices up without risking dampening demand quite considerably. Let me move on to the passenger and to more of a sort of broader perspective anyway, Gloria. We— I didn't start on this discussion asking about fuel specifically. I was asking what—

Gloria Guevara:I have no comments on that.

Peter Harbison:Yeah, no, asking, you know, what you really see from your broader perspective What do you see as being the key issue for this, this year, 2018? I mean, there are heaps of things in the travel and airline industry. What's— what are the biggest 2 or 3?

Gloria Guevara:Well, first of all, as WTTC, as we represent all the different industries, including of course the airlines, I think that perhaps we have a different view. 3 priorities. We asked last year our CEOs, more than 170, what are the top 3 things that that keep them awake at night, right? The number one by far that has to do a little bit with capacity is security and travel facilitation. How can we travel more secure? How can we move people? How can we grow? And also considering the capacity that we have today. IATA, for instance, say that last year we had a wonderful year, 4 billion passengers, right? And they are forecasting 7.8. That's wonderful. But to tell you the truth, I don't see myself in an airport spending more than 3 hours. I don't know about the rest. And how do we maximize the infrastructure that we have right now? Because I don't think that we're going to grow 100% in terms of the airports. So the answer is that we have to be more efficient, right? We need to use the technology and biometrics is the answer. And that's one that is very important for WTTC. Starts with the airlines and the airports, but then we can also use the same concept with the cruises, the hotels, the Airbnbs, the rest of the industry or the rest of the sector. So that's by far the number one. How do we move people in a much more secure way?

Peter Harbison:Can I just ask you there? I mean, how much parallel is them is there between say take cruise and and aviation? Do they look at each other's experience?

Gloria Guevara:Absolutely. We are learning actually. The airlines are the backbone, right? Without airlines, without passengers, we don't have tourism basically. So we understand the importance. They are in many ways ahead of the game. So the cruises, for instance, they are looking at biometrics, but they want to learn from the airlines. And that's where we play a role. How do we learn from them? We are working with IATA. For instance, we just signed this agreement on the One IT and the multiple initiatives. I know that VA, for instance, is working with CBP testing a very interesting solution. We're looking at that and the benefit. How do we use exactly the same standards and the same solutions so that we can speak to the governments with one voice and ask them to be part of the solution? Because yes, we can use biometrics for the airport, for the boarding. What about security? And what about immigration? That's where the bottlenecks are mainly, right?

Peter Harbison:Yeah.

Gloria Guevara:So we need to include the governments as well. In the case of the cruise, it's exactly the same thing. Imagine a port with 4,000 passengers that arrive at once.

Rafał Milczarski:Yeah.

Gloria Guevara:How do you do it? You need to use technology to be more efficient, and that's one of the challenges. And not only that, the hotels is the same, and the car rentals, the trains. I mean, the entire sector. It's going to be much more secure if we use the technology. So that's a priority for us.

Peter Harbison:As you move between the different modes of transport, there are quite different regimes out there for security. I mean, I think of going onto a train platform and really just stepping on the train with no security whatever. Now, obviously, the impact of, say, a bomb on a train is a little bit different from on an aeroplane. But there isn't that homogeneity.

Gloria Guevara:Well, for trains, when you have international movement, like for instance, I live in London. When I go to Brussels, I have to go through security. Absolutely. And they are testing biometrics as we speak. Yes.

Peter Harbison:But it really is an international train more dangerous than a domestic train?

Gloria Guevara:It's the same, actually. It's just that the governments, they want to know who arrives and they want to control the movement of people. But you're absolutely right. Domestic, they also have to figure out how do we use that, how can we have trains much more secure, and biometrics again is the solution.

Peter Harbison:Now I think I interrupted you.

Gloria Guevara:I think you were going to say something else. So our priority number one by far, as I say, is security and travel facilitation. The second one is crisis management, which is a little bit similar to what was going on in Europe. Everything impacts travel and tourism, from outbreak, geopolitical, weather, volcanoes, You name it. The question is, how do we make sure that the private sector is engaged? How do we make sure that we're part of the solution, right? Because a lot of the times, all these crises are managed in silos without the input from the private sector, and then the impact is higher. We have seen that when the private sector is engaged, the recovery is faster. So that's a top priority for us. No. And the third one is sustainable growth. How do we make sure that the growth is sustainable with the communities in the center? Has to do with social responsibility and of course with climate change as well.

Peter Harbison:So those are— I mean, we're talking 2018, so those are big issues. They're probably not the pressing issues in 2018.

Gloria Guevara:Yes, those are the current top priorities for WTTC and its members. How do we influence the agenda of the governments in those 3 main challenges.

Peter Harbison:OK. Could we just put up the word cloud again, please? So I think we— I mean, we've talked a little bit about overcapacity, we've talked certainly about fuel, pilots were mentioned.

Gloria Guevara:Security.

Peter Harbison:Security, certainly.

Gloria Guevara:Sustainability.

Peter Harbison:Sustainability. Was that you?

Gloria Guevara:That's me. Well, that was not me, but that's important, of course.

Peter Harbison:It is, it is important. Climate change.

Gloria Guevara:Labour is another one that is also important.

Peter Harbison:Well, labour is one of the ones which are more or less within the control of the airlines. Should we pick that one up? I mean, let's look— so we've talked about the external things. I mean, sustainability too, and the environment is to some extent something that the airlines need to be controlling. But how about labour? I mean, where do we stand when we talk about strikes? I mean, we used to have a lot more strikes. I think going back 20, 30 years. How do we stand relatively in terms of—

Hernán Rincón:Don't get me going on this subject, please. I endured the longest pilot strike in aviation history around the world. Anybody has never seen 52 days of a pilot strike.

Rafał Milczarski:Congratulations.

Hernán Rincón:Thank you. It is an honor.

Peter Harbison:Hernán, I think that started the day after I left Colombia last year.

Hernán Rincón:I think so, just about that time.

Peter Harbison:You were very fortunate.

Rafał Milczarski:It was a very difficult period for us.

Hernán Rincón:Fortunately, we were well prepared both financially and operationally. And we endured and we took them right on and we were very kind to them. We asked them to come back. We counseled them not to go to strike and we explained to them why. And we told them that, listen, the law requires that we negotiate. We have made We have made 20 different proposals to you. You have declined them all without even looking at them. And they stood up, left the negotiating table before the normal time of negotiations by law. Once they went on strike, we invited them back 3 times. I went on national television to invite the pilots back. In the third time, I offer amnesty. I said, guys, if you return before Saturday midnight, we will take absolutely no negative action, no— nothing. And you can come back and we'll be happy.

Peter Harbison:Sorry, can I just ask, what was the strike about?

Hernán Rincón:It was about— well, they presented a list of— let me summarize what they requested. It was going to double my payroll. Of course, there was no way in hell that I would strike.

Peter Harbison:So it was basically just money.

Hernán Rincón:Well, money and many other things.

Rafał Milczarski:Stages.

Hernán Rincón:They wanted computers, they wanted cell phones, they wanted more days off, they wanted free tickets in business class for them and their families every time they flew, et cetera, et cetera. It was absolutely crazy. It was total out of proportion with anything. So we had to go to court. We went to court. When they did not come back, when we gave them the amnesty, we went to court. First at the lower circuit level, then all the way to the Supreme Court. Supreme Court. I went to the Supreme Court very late last year. The court surprisingly ruled very quickly. They're normally relatively slow for these things. They very quickly ruled in our favor. It was appealed, and the appeal was also in our favor. And we're now in the final stages of firing 120 pilots that were the ones that initiated these, were responsible led many other younger, not well-informed pilots into the strike. And of course we had to— it's been tough on us. We lost a lot of money. This is public. We lost almost $300 million in that process. And we are about 95% capacity today. We'll be 100% by August, but it took us 7 months to recover recover from— will take us 7 to 8 months to recover from the strike.

Gloria Guevara:Did you fire all the pilots?

Hernán Rincón:No, we fired 120 out of— we have 1,400 pilots in Colombia. I'm talking about only Colombia. I'm not talking about Brazil or Argentina or Central America because the pilots that went on strike were in Colombia. We have 1,400 pilots in total of which only half belong to the union, of which only 200 went to the General Assembly, of which only 67 voted to go on strike. So those were the ones that were firing. It's about 10% of our total pilot group.

Peter Harbison:You mentioned one important, one interesting thing in there, and it rang a bell with some of our discussions with the American Pilots Association. You said that they were ill-informed, these younger pilots. And I think the American pilots seem to have taken the approach that if we inform ourselves much better and get ourselves much more involved in the operations of the airline, then we will actually understand and be more cooperative with management. Willie, is that something that— I mean, you went through a fair bit of turmoil both in Aer Lingus and in BA. Does that ring a bell, or is it— what's your approach?

Willie Walsh:I've been following what's been happening, and nobody goes into business to have a strike. I've never met a business leader anywhere in the world who said, you know, my ambition is to have a strike. Everybody works hard to avoid them. But, you know, we have responsibilities as managers to ensure that the long-term success and viability of the company is protected.

Rafał Milczarski:Exactly.

Willie Walsh:And often what you find in these situations is people have a very narrow focus. You know, so they say, well, look at our profitability last year. You can afford it. And that's the problem. I think we've got to make sure that people understand that we make investment decisions for the next 25 years. And we've got to satisfy ourselves that those investment decisions, principally aircraft, are going to be— will make a viable return for the benefit of the business, for the benefit of our shareholders. So I think being more open, more communicative, involving people is great. But there's a responsibility on people to communicate and there's a responsibility on people to understand what is being said. So it's not a one-way situation. But I think the situation in our industry is getting better. I think people are more informed. That's not to say all people are informed. There is a view that there's a pilot shortage at the moment. I don't see it. I started— it's well known— I started as a pilot.

Rafał Milczarski:I did too.

Willie Walsh:40 years ago. Back then it was because there was going to be a pilot shortage. I'm still waiting to see it. So, you know, and I'm pretty sure I will have retired from this industry before there is a pilot shortage. There are in some situations— so it's well known Ryanair had an issue in terms of the number of pilots they had, but it wasn't pilots that they were short of, it was captains that that they were short of.

Rafał Milczarski:Mm-hmm.

Willie Walsh:And it was copilots who were ready for promotion to command. And it was just getting the logistics a little bit wrong. So there are plenty of pilots out there. A lot of airlines are investing in training for future pilots. And what we need to do, actually, as an industry— and it came up in the debate at IATA— is to encourage more people to see our industry as being an attractive industry to go into, and particularly to convince more women. You know, we've had longstanding campaigns. Aer Lingus recruited their first female pilot in 1977. They now have roughly 10% of their pilot workforce female. So it's taken 40 years to get from 0 to 10%.

Hernán Rincón:Mm-hmm.

Willie Walsh:And quite honestly, part of the problem— because we've been very active in this area— is convincing young girls And you've got to get at that early stage when they're in school that, you know, a career as a pilot, for example, is a career that is open to them. And it is important that the educational system is geared towards educating both boys and girls in the right subjects to ensure that, you know, this is an opportunity. So, you know, it's interesting, IATA is working on this, and I think it's good that the initiatives are being stepped up, but there's still a lot of work that we need to do.

Hernán Rincón:Peter, going back to your comment, I do have to say that we left a vacuum as a management team in the conversation and dialogue with our pilots for several years, and they grew isolated, and we didn't do much to bring them in and keep them informed. And that provided the very small group of radical pilots to really work for years on the younger pilots. And they had a very, I have to say, very effective recruiting process. As pilots came into the company, the union would, in the first day, come and talk to them and explain to them. And the way they sold it was relatively simple and clever. They said, if you join the union, you will never lose your job. And you got a 25-year-old kid, you know, and hears that and says, well, yes, that makes sense. And he would sign up for the union.

Peter Harbison:Mm-hmm.

Hernán Rincón:And we left a vacuum. We learned our lesson. We have now a very modern, comprehensive connection with our pilots just to prevent that from happening again.

Peter Harbison:Gloria.

Gloria Guevara:I have a quick question, and again, I'm not an expert in airlines, but I was just wondering, have we documented any cases where strikes of pilots or strikes of this nature or negotiations like that have taking airlines out of business? Because, for instance, it would be very helpful— I had the chance to see what happened with Mexicana de Aviación in Mexico. It went out of business, right? Because of the pilots. It would be very interesting to have your Colombian pilots to talk to the Mexican pilots who have no airline, right? Because of their strike and the demands that they were not reasonable. And they were looking at the previous numbers.

Willie Walsh:Yes, but there's plenty of examples. You look at United. If you think back, United employees owned the airline. And as they went through the prospect of bankruptcy, they wore badges. I don't even remember it. It said, full pay to the last day. So this was a group of employees that actually owned— I think from memory, I may get it wrong, but they owned 78% of the shares in United.

Gloria Guevara:Wow.

Willie Walsh:And the view was, we will not give concessions To secure the value of our shareholding, we will take full pay to the last day. United went into Chapter 11, their equity was wiped out. So there are plenty of examples. Sabena, Sabena was on strike the day it went out of business. And it was announced that Sabena was now bankrupt and the pilots came back and said, okay, we're ready to negotiate now. You know, negotiate about what? There's no company, it's gone. So, you know, there are plenty of examples.

Gloria Guevara:But the thing is that, for instance, in the case of Mexicana, the Mexican pilots, I'm not sure that they knew the other global cases or examples, or at least it seems to me that they were— I was in the government before and I had a chance to see that from the other end. They didn't know the United or the other cases. Perhaps at the global level we have a better view. But the local guys, they had no visibility and they didn't have a chance to talk to anyone. And I was just wondering, it would be good sometimes to get them talking to other ones to understand how much they are putting at stake because they can lose the company at the end of the day. Right.

Peter Harbison:You have a good point there.

Hernán Rincón:What is sad is some of these pilots that we just fired didn't lose a job. They lost their career. There are very few airlines that are going to hire them once they know what they did. With Avianca, right?

Willie Walsh:So, but this is the issue, you know, in an environment where it is believed that there is a pilot shortage, right? You know, there is a view, well, we have nothing to lose because if this airline goes out of business, something new will start up and we will get jobs with somebody else. And that is the thing you've got to do.

Hernán Rincón:Let me give you a number about no shortage of pilots. Back in September of last year, when the pilot was about to begin, we opened up our doors for new pilots and we advertised and we had 150 slots. We got 2,000 applications of people with a pilot license that wanted to work for us. So there is no shortage for sure. I agree with you on that.

Peter Harbison:This is— and this is globally, presumably. They're not all in Colombia, these guys, these applications. I mean, are these coming from—

Hernán Rincón:No, they were all from Colombia.

Rafał Milczarski:They were all Colombian citizens.

Gloria Guevara:Yes.

Hernán Rincón:Yes, the pilots negotiated something in Colombia which I cannot believe, but it's true. To fly an aircraft in Colombia, a Colombian aircraft, you have to be a Colombian citizen. Oh, so, yes. So, so you have to be— good rule.

Willie Walsh:We used to have that in Europe as well. It wasn't that long ago. You know, I moved to Spain to run Futura Charter Airline in 1998. When I joined there, to be a pilot on a Spanish— it was actually to be a captain on a Spanish-registered aircraft, you had to be a Spanish national. That's correct. So, you know, which was in breach of EU regulations. It did change. So, you know, the environment is more flexible now, and we do have greater movement, and we have pilots from all around the world working for us. And I think it is a much better environment. So you are right, I don't think there is a general shortage. No shortage of pilots. I think there's quite a lot of pilots available, but there are pinch points in the system at the moment. So the day you see me back flying as a pilot is the day you know there's a pilot shortage.

Peter Harbison:You're finally— God forbid.

Rafał Milczarski:It's actually quite amazing how across the universe, I mean, Colombia, Poland, you have the same mistakes in thinking by the unions, but also Similar mistakes in terms of what the management fails to deliver in terms of informing the team.

Hernán Rincón:Yes, yes.

Rafał Milczarski:Because I mean, I have to say, if I, you know, we had a similar situation at LOT, but we didn't get to a strike because we managed to get a court injunction that the strike was in fact illegal before it happened.

Peter Harbison:That's great.

Rafał Milczarski:And for 3 days they were still going on about We will, even though the court doesn't matter because justice is on our side. In the end, they stopped it. They stopped this madness. But it's actually quite amazing that they just do not want to bear the consequences. They don't want to understand that the result of an industrial action the cost associated with it actually impacts their future pay, their bonuses, and actually potentially their jobs. And there is this amazing belief, and I think it's the same in every country, that somehow if they make enough noise, the government will help somehow step in. Even in case of LOT, which, you know, we received state We stopped state aid in 2012. We cannot have any state aid, any money coming into LOT, at least until 2024. And I hope by that time we will, you know, I mean, we're already a healthy company, but we'll surely be a super healthy company and we will never, I hope, never ever need any state aid in the future. But there is a fundamental perception that actually, you know, if things go wrong, somehow the government Well, we've got 2 airlines in Europe that we won't talk about right now. And this is absolutely out of order. This is— and I'm sure it's the same fundamental belief of the French traffic controllers and everyone else. And what is required? Well, A, the governments have to somehow stand firm and not give in.

Peter Harbison:I guess that's what's It's a massive desire for self-destruction, I think, isn't it? And this belief that the government will step in. I just wonder what's going to happen in France and in Italy.

Willie Walsh:Well, in Italy they've stepped in. Let's be honest. So I'm sure people here have read it. I could not believe when I read this article say Alitalia are issuing new uniforms to their people. 2 years after their last uniform, new uniform, they're issuing And when challenged by this, they said, oh no, but we didn't pay anything to have this new uniform designed. And it's only going to cost us €7 million to issue it to staff. This is a company that's bankrupt and has received emergency state aid to facilitate their restructuring. And I had a good chat with one of our Italian press colleagues. And he said, well, you know, new uniforms, you could argue that's restructuring. Yeah. This is madness. This is madness.

Peter Harbison:Dressing up for the funeral. So it's, you know—

Willie Walsh:That's a good one, Peter. And, you know, there is a belief that the French government would step in if anything happened to Air France. Now, I know they've come out recently and said they will not do that. But, you know, the evidence of the past suggests that they will.

Gloria Guevara:That's exactly what happened in Mexico. Waiting for the government, and that never happened.

Hernán Rincón:Yeah. Many of the pilots that used to fly for Maicana applied to our jobs in Colombia, and some of them are very good pilots.

Gloria Guevara:Yeah, very good. They have been they were with the company like twenty years.

Peter Harbison:We've got about twenty minutes left. Let me ask the second question of you. Get you involved again in this, if you would. We've drifted off a little off of 2018, but what I'd like to ask you now is. If you'd get back onto your pollev.com/capa18. What I'd like to ask you now is, what is going to— what are going to be, or is going to be, the biggest problem confronting the airline industry by 2025? Now, all of the current ones obviously have something to do with it, but what, what is the next big thing that's going to affect the airline industry over the next 5 to 7 years. Okay, let's, let's get going.

Gloria Guevara:Infrastructure, capacity.

Peter Harbison:It is interesting the way the perspective changes. I mean, these are obviously things that are relevant now, but— And I was interested just talking about the pilot shortage. Henry Holliday was saying the other day, one of the reasons we have an issue at the moment is because, of course, we have had much higher growth than anticipated over the last 3 or 4 years. Even as recently as April, I think Europe was seeing 6% growth on a fairly quiet economic front. So some of these problems are persisting. Some of them are really for the long term, I think. So look, OK, we're coming up with infrastructure here.

Hernán Rincón:I have to agree. I have to agree. I said that, that that's one of my problems today. And the airports that are being worked on right now will not be sufficient. And they're being designed for the past, not the future, capacity-wise. So that will continue to be probably our number one issue. The number 2 issue for us— and I don't see it, I cannot see everything— is understanding in detail our customers. And sorry, understanding in detail our customers and their needs and their requirements and their expectations and satisfaction. I find that is going to be for the next several years a very important area for us to invest on and really do that.

Peter Harbison:That's a big— let's take— I mean, infrastructure is so obvious, it's there in our face. Let's talk about understanding our customers. And I mean, because I must say, if I'd been answering this question, I would have had— I'm not sure if it's up there— I would have had distribution in the mix. It's right there.

Rafał Milczarski:Is it there?

Gloria Guevara:In the bottom.

Peter Harbison:Oh, right at the bottom, yes, supply.

Willie Walsh:I think distribution is going to be resolved well before 2025. I think it is true, infrastructure, I would agree with number one.

Peter Harbison:It's a no-brainer, really, isn't it?

Willie Walsh:Because we can see that it's impacting today, and if nothing is done about it, and what we can see that's in the plans isn't going to be sufficient to address it.

Gloria Guevara:Biometrics, we need to ensure that it's implemented 100%, right? So that it's more efficient. Instead of being 3 hours in an airport, just 10 minutes in and out so that they can move more planes and have more passengers.

Peter Harbison:Well, I mean, that's part of the solution, isn't it? But at the same time, you've still got to move the planes onto the concrete and up to the terminal, however fast you can move the passengers.

Gloria Guevara:But a lot of flights Just recently there was a flight from Berlin that one of the reporters was telling me, I think she was from Reuters, was telling me that 50% of the passengers, the pilots say 50% in Berlin of the passengers are in security. So we have to wait and the entire flight was delayed. I don't know how often is that, especially when you have connections, but I guess you guys know that better. Is that an issue?

Willie Walsh:It has been a big issue. With the introduction of additional passport checks in Europe, we've seen longer delays departing airports as well as arriving. So you get a lot of people who are caught up in airports that weren't designed for this. And there are simple technological solutions to that.

Rafał Milczarski:More than—

Willie Walsh:But longer-term infrastructure, I would agree with you— runways, taxiways, parking stands, air traffic control— these are really critical issues. And I suppose the good news is for a lot of it there are solutions. You know, in Europe we have the single European sky concept that's been talked about for 50 years, but, you know, that would make a big difference if we had it. It wouldn't resolve all of the problems, but it certainly will be a big step forward if we could see that introduced.

Peter Harbison:You sort of get the impression— I mean, governments obviously have a whole lot of political reasons for not going ahead because there are so many voices raised against doing anything in terms of building new airports and so forth. But one of— and so there's almost a belief that, okay, this airport's at capacity. Well, it was at capacity 20 years ago. You can always squeeze a few more in. There's that consideration in it. But isn't there also— and maybe we could talk about this a little bit— the change in, or the evolution from total reliance, large reliance on hubs? Into more point-to-point operations with, with new smaller aircraft that can go longer haul. Are we going to see much better utilization of the underutilized airports as a result of this? I mean, is it actually going to push that process or support that process?

Hernán Rincón:The answer is yes for some of our domestic operations where our hubs— we have hubs in multiple cities— but are really at max capacity and we have issues resolving that. So we began last 3 years ago to go point-to-point within domestic operations in Colombia or in Peru, and we think that that there is an opportunity for us to improve on that. No question about that.

Peter Harbison:So they make an opportunity out of the adversity.

Willie Walsh:Yeah, it's marginal capacity.

Hernán Rincón:That's correct. It's not huge, but it helps.

Rafał Milczarski:It helps. Actually, it's pretty obvious that the number of city pairs that will get connected is increasing, and it will continue to increase because of new new airplane technology. technology, so you can actually fly longer distances at a smaller trip cost and a smaller unit cost. And I think that will definitely be a trend that's going to continue. But there is definitely also the need for additional hubs. And actually, in some places, in some regions, hubs are being built.

Peter Harbison:Like Warsaw?

Rafał Milczarski:Well, actually, there will be a hub outside of Warsaw that be built, a global hub for Central Europe will be built by the Polish government. And I think there will actually be 2 trends here. Well, it's not easy to add capacity in highly densely populated areas, so I think lack of capacity will actually lead to, by nature of it, will push traffic out to those airports that are less used unless you can actually generate a situation that new capacity can be built. And I believe that Poland will build this new capacity and it will provide an essential service to the whole region of Europe, which is currently severely underconnected.

Peter Harbison:It's—

Rafał Milczarski:But I also would like to say I think there is going to be— we will be forced to have a revolution in terms of biometrics, in terms of how we verify people's identity, how we verify their intentions, whether they have bad or good intentions and so forth. Because fundamentally, if we do, that will be great for the industry because at the moment, I mean, what is the most unpleasant? I actually like flying. but I really hate going through those security checks. And I think that is—

Peter Harbison:I don't think anybody loves it.

Rafał Milczarski:That is shared by everybody. The vast majority of people do not have bad intentions. The vast majority of people are good people who just want to get from point A to point B, and we have to find a way.

Willie Walsh:But they didn't have bad intentions until they get to airport security, and then they want to kill somebody. I'm thinking of that.

Rafał Milczarski:But actually, resolving this issue will have several consequences. First of all, it is likely to increase airport capacity. Secondly, it's going to shorten the journey time and increase the modal attractiveness of flying. So actually, I think this is— the issue of how we deal with security is going to be the next very important driver of yet greater aviation growth. Because if we were able to get to the airport 20 minutes before the departure of the airplane, I mean, that change— that is it. Well, maybe not 20, maybe 30 minutes, and not 1 hour and a half. That is a total game changer.

Peter Harbison:So that goes very much into the customer experience that we like to talk about, Gloria. To what extent— I mean, we've always seen the customer as actually being pretty passive. This is something that's changing now because I've got apps on my phone that can do more for me than my airline can do or my airport can do. Are we starting to see a sort of impact of my power against the system, the consumer's power, the customer? Is the customer starting to change things, in other words?

Gloria Guevara:Well, I believe that the power has always been in the customer side. The customer decides where to fly, what to pay. That's why we have yield management in the airlines, right? They come up with different variations of prices because the customer is demanding different prices. That's why we have different type of airlines as well. Now, now it's much more sophisticated and it's real time. So I believe that the customer should be in the center. And if we can have a seamless passenger, a better experience, I couldn't agree more with what he just said. Rafał, you say that if you have a better experience, people are going to travel more. I mean, that's, that's true. People don't want to go through the hassle.

Peter Harbison:And if you had a bad experience—

Gloria Guevara:Exactly. You want to avoid a bad experience. You don't want to feel unwelcome to a country. I mean, I can— we can spend a couple of days talking about that with some recent examples. But at the end of the day, it's about the experience. That's what it is. If you provide a good experience, people will come back to your product, will come back to your destination.

Peter Harbison:This is tough. I mean, just talking about airlines though, it's tough for the airlines because, as we all agree, I think the worst experience is in the airport. Which is beyond the control, largely beyond the control, not totally beyond the control of the airlines.

Gloria Guevara:That is true.

Peter Harbison:But they'll cop the blame, just like they have to pay for the delays, they'll cop the blame, won't they?

Gloria Guevara:Absolutely. And the worst experience is before actually, as you say, boarding, when you go through security, or when you arrive at the airport and you're ready to enjoy your holidays and you have to wait 2 hours in immigration because you don't have an e-passport or because But you can go shopping. No, when you're arriving in a lot of airports, no. Or like, for instance, when you are going home, why do we need immigration on departure? I still don't understand. And I still see a lot of countries, including Colombia unfortunately, that you have to go through immigration on the way out and do a line. Why is that? What is the value when there is technology that can provide that information real time to the governments? But that's the conversations that we're having with the governments. I think that They are also interested in having that data in real time.

Peter Harbison:But going back to my question, can the customer do anything about that? Are they doing something these days?

Gloria Guevara:Well, they are complaining a lot.

Hernán Rincón:They are complaining a lot. They are indeed complaining a lot.

Gloria Guevara:They are demanding a lot. They are demanding more. And I think we see that also in shifting. They are going to destinations that are having better experience, that is easier. They are adopting the use of new technologies, more like online checking or biometrics uses and things like that. So we are seeing that a lot, especially the new generations. Like when you see the millennials and what's going on with them, it's interesting.

Peter Harbison:Well, let me close with one thing on that. I went through the hall of doom recently with losing a bag. Now everybody's got a losing bag story. This is an area that I really think the airlines have not come to grips with.

Gloria Guevara:I never check my bag since I had a vaccine.

Willie Walsh:We debated at the Board of Governors of IATA making it mandatory for airlines and airports to have RFID. Now, I can remember actually this debate at the Board of Governors of IATA 10, 15 years ago, and at that time we felt that the cost of doing so was prohibitive, both the cost of the RFID tag and then the RFID reader. You know, we now estimate that a baggage tag with an RFID— or an RFID baggage tag will cost about 3 cents per tag, and, you know, fixed RFID readers are down to about $1,500 a reader. So it's definitely an opportunity. But the airlines will need to work with the airports, because we can have the baggage tag that's RFID-enabled, but we need the RFID readers in the airports, and that requires the airports to install them.

Gloria Guevara:You have to make the investment.

Willie Walsh:But it would make a difference. Now, you know, the debate is, you know, RFID technology is, what, 30, 40 years old, you know, and that we see this as a solution for the future. But it is possible. And, you know, I think actually the performance of airlines has been hugely improved. So what we've got to do is we've got to reduce the number of bags that go missing. We don't lose them, and in fact, we— I don't recall ever losing one in the air. So, you know, we know that the problem is on the ground.

Peter Harbison:Or a passenger, for that matter.

Willie Walsh:But I can remember the first time my bag didn't arrive at my destination. I was flying with United many years ago, and I went in to say to the agent, you know, you've lost my bag, and they said, no, sir, we've not lost your bag. We know exactly where your bag is. It's just not here. But, you know, we can do this better, and it will— the concern that some people expressed was, are we sure that the industry can afford the cost of retrofitting, you know, airports with RFID readers? We've got to do it because we could debate that one forever. So I think I agree with you. I think this is an area where airlines— and quite honestly, the airports have got to step up now, you know, because it's not just an airline issue. The airports have got to step up and take responsibility to ensure that the infrastructure that we're forced to use is efficient and has the necessary arrangements in place.

Gloria Guevara:Regarding that one, I'm sorry to interrupt. I would say I would add also the governments, because in some cases I never checked my bag, never ever. And the reason is because once there was the government who had this rule of scanning all the bags, and for whatever reason mine got stuck in the queue and it was not able to make it to the flag. And of course the bag never arrived, and that was a hassle. So that's another one that now also some governments are testing biometrics as well for the Trusted Traveler Pass, which That would add also with the airports, no?

Peter Harbison:I think a bit though, I mean, with respect, I think it's not just losing the bag, it's what happens to the customer when there is a bag that's delayed. And that's the customer interface. I mean, we had this in Ireland a couple of weeks ago, didn't we, Willie? Where when a bag is lost, you can't talk to anybody, they don't give you information, it's quite frequently outsourced by the airline to somebody else.

Willie Walsh:It's a nightmare. I think this story— this was at the CAPA event in Dublin where one of the presenters, his bag did not make it to his destination. It was never lost and he got it in the end. And it was with one of my bags. Just before he left. But his complaint was he sent a text message and the response came back saying, sorry, we don't recognize text messages. You've got to phone us. And he was going mad. And I said, listen, that's our issue.

Peter Harbison:No, he responded to the text message.

Willie Walsh:Yeah, but that's what I'm saying. They responded to the text message with a message saying, we don't recognize text messages. And he's gone— I said, listen, that's Irish humor. We're just winding you up. But yeah, we do have to get better. I thoroughly agree with you. It's incredibly frustrating for anybody when something that they're expecting doesn't happen. And we do have to improve on that.

Peter Harbison:And it's very infectious, isn't it? People talk about it and talk about it.

Rafał Milczarski:This is not only handling companies, it's also airport technology that's installed, you know, the equipment that's installed within the airport. So actually, in order to make sure that that problem is solved, additional investments have to be made by the airport management companies, and they have to have the incentive to do it.

Peter Harbison:This goes back to the point we were talking about with Gloria before, the standardization I mean, not just across different industries, but within the airports across an airline's operating network. That's a real issue for it, isn't it? Let's not finish on a down note. What are the— let's just very quickly, what are the great things that the airlines are doing this year that customers will respond to? What are the things that the customers are going to see that say, wow, this is actually a really good industry?

Rafał Milczarski:Connecting people, connecting new markets, opening up new destinations. In our case, certainly, this is like a breath of fresh air. Suddenly Poland can get connected to various continents direct without going to Western European hubs. I think a lot of people actually feel empowerment through that, and I think growth of regions And there will be many, many new regions in the world that will have aspirations for that growth, that will attract investment through this means. The world becomes richer because regions actually get connected.

Hernán Rincón:Yes.

Rafał Milczarski:And I think the real challenge will be, because there are many regions in the world that still are not connected to the same degree as they should be, in order to have, you know, the world as one happy place, how do we generate and how do we create capacity, you know, in the most congested places? E.g., for example, let's take London Heathrow. Now, I'm sure there are many regions that would aspire to get good connectivity with London Heathrow and many airlines that would like to land there, but there is not sufficient capacity.

Peter Harbison:Yes.

Rafał Milczarski:in the airport. And I think that will be a challenge because it can actually replicate, you know, those who are advanced, they will stay advanced and then they will always have the advantage, whereas those who are underdeveloped, unless something is done across the world, will constantly remain underdeveloped.

Peter Harbison:This is the opportunity. Yeah, let's stay upbeat. Yeah, what's— what's— I mean, we saw that social media campaign of IATA, that had some nice things. Romance.

Hernán Rincón:This may be specific to Avianca, but what we have done recently that people are really happy about is we are moving— we moved all our organization and all our processes around the customer, which were not like that before. We used to be around engineering and airplanes.

Peter Harbison:Yeah.

Hernán Rincón:That's what drove the company. And we're moving away from— that's important. We have to do that. Security is key. But changing the organization to be responsive to the customer needs. And we have introduced a number of things. I'll mention 2 just to illustrate that have been very well received. One, we have introduced a concierge type of service for our most important clients where the same person They take care of them. They take care of them. It's not a 800 number where— no, it's the same person and they know the first name and second name of that individual and they can call that individual for service and that has been very well received. On the other extreme, that doesn't scale, of course, that's for a limited number of clients. On the other end, we have introduced a digital assistant and our new clients, our younger clients don't want to talk to anybody, don't want anybody to call them. They just go to the digital assistant via— actually works as part of Facebook Messenger and they do everything that they want to do through that. So those are 2 examples of things that we're doing that people are happy about.

Peter Harbison:Nice stuff. So Willie, apart from Alitalia's new uniforms, what are the great things in the industry?

Willie Walsh:Actually, you know, we should be very positive about the industry. There is a lot going on and I've always argued that the consumer benefits when the industry is strong. Because the industry then has the money to invest, the money to do research and development. And there's no better example of that than in the US. It's well recognized that the US carriers' products had lagged the industry for many years because they didn't have money to invest.

Peter Harbison:Yeah.

Willie Walsh:Now you can see them. They're all spending. The product has significantly improved and continues to improve. So pretty much every US carrier is spending a lot of the profits that they're earning today reinvesting that in the business for the benefit of their customers. And when the industry is healthy, you know, I think it does have a big impact on future research and development because we can spend money to try and improve on things. And technology is a great example of that. So there's a lot of good things going on. It's frustrating and obviously, you know, we sit here and we'll talk about the challenges, but the opportunities are great as well. The connectivity that exists today and will exist in the future will be better. Product, I believe, will be better. Our ability to serve the customer using technology will be better. So I'm very optimistic, actually, that the environment can improve. And if we controlled it all, it would even be better.

Rafał Milczarski:Humanity would be better, thanks to us.

Hernán Rincón:I agree with that.

Gloria Guevara:To add to what Willie was saying, and it was mentioned, if the airlines are doing great, travel and tourism does well. And travel tourism is 10% of the GDP, is one of every 10 jobs, right? 330 million jobs on the planet are depending on the sector. So if the airlines grow, tourism grows. And we see that we reduce poverty, we create jobs, which is wonderful. And on top of that, I always say, if you're depressed, go to arrivals. Any airport you choose, you will change your face. You guys bring experience and happiness. I don't know if you have seen that. Any airport you pick, go to arrivals. Yeah, it's fabulous. Amazing experience. No, I love it. Yes, that's true. I love that thing you can do on a rainy weekend, watching people change your humor. I love that.

Peter Harbison:It's bringing good experiences. Yeah, that's a nice note to end on. So that was our entrée for tonight. Thank you very much to the panel, a really interesting discussion.

Rafał Milczarski:Thank you.

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