Air Astana Joint Stock Company (AIRA.IL) Earnings Call Transcript & Summary

Good morning and good afternoon, and also a very warm welcome to Air Astana's 9-month and Q3 2025 Results Presentation. My name is Simon Wray. I'd like to thank you all for joining us today. Our CEO and CFO will take you through the group's performance shortly. After the presentation, there will be opportunity to ask any questions. I encourage you to submit them through the link. We hope to get through as much as possible today. But if you have any follow-up questions or need any clarification, please e-mail Air Astana Investor Relations team. The presentation, earnings release, and other materials are available on the company's IR website. Finally, I'd like to remind all participants that this call is being recorded. And with that, I'll hand over to our CEO, Peter Foster, to open the presentation. Peter?

Thank you, Simon, thank you very much. So in a slight break with the usual practice, I'd just like to highlight some of the key metrics and some of the key events that have been taking place since we all last spoke on the 5th of August. So if we look overall at the 9 months' results, we'll be going into detail, of course, in a couple of minutes. But overall, the performance for the first 9 months was pretty positive, but that has to be seen in the context of a challenging quarter 3. Quarter 3, of course, I think as many of you know, is traditionally our peak season. And this year was challenging. The peak season was challenging, and it was challenging primarily for the reason that we had 14 unplanned engine removals of Pratt & Whitney 1100 engines, which, of course, are the engines that go on the Airbus Neo fleet. Now I think you're all aware, of course, of the powder metal problem that the company, indeed the industry, has had to manage during the course of the last 18 months or so. And of course, we had a plan for that, that had been divided in advance, whereby aircraft and engines were arrested to enable them to become available to us in the peak season, which is, of course, the third quarter. Unfortunately, this year, we had 14 unplanned engine removals over and above those planned groundings caused by issues other than powder metal. Now I can go into as much or as little detail as you want on that. But the fact is that those were 2 other issues that we faced. And therefore, what happened was that we had to obviously ground the aircraft and swap and change engines between different aircraft types, which resulted in an overall shortfall of planned aircraft in the peak season in the quarter of 10.4 aircraft, once you average it out. And that cost us approximately $23.7 million worth of EBITDA, which, had that been realized, would have had us on a level slightly higher than Q3 in 2024. Notwithstanding the devaluation of the Tenge, which caused a sort of secondary effect in terms of domestic airfares, particularly for FlyArystan, which I think as everybody knows, has a route network and a revenue base that is dominated by its domestic operation, which represents approximately 80% of its operation. So the net effect of those 2 events, roughly $23.5 million because of the loss of the 10.4 engines due to the unplanned -- 10.4 aircraft due to the unplanned removals and a net loss of around $7 million by virtue of the devaluation and its effect on FlyArystan's domestic network. And perhaps before I start the presentation proper, I might just perhaps make a comment on Q4, of course, which we are now halfway through. And it is quite interesting that, in fact, Q4, of course, obviously, the aircraft are still on the ground. But of course, we don't need those aircraft in Q4 because we are now into the low season. So if you like, the loss effect of those aircraft is no longer, if you like, so damaging to us. FlyArystan has been able to address, to some extent, in fact, quite a considerable extent, the exchange rate losses through increased domestic airfares, which it has been imposing since really the sort of middle of August right through September, which, of course, is beginning to now show effects in quarter 4, particularly in light of the squeezed capacity. And finally, the Tenge has, in fact, appreciated to the tune of about 5% in these last few weeks. So there are 3 positives that enable us to, I think, be fairly optimistic about quarter 4. But of course, quarter 4 is as it is. And we are, as we all know, halfway through it now. Our real issue, of course, is 2026 and the availability of engines in 2026 in light of the loss of these 14 additional engines resulting from these unplanned engine removals. And in that context, we are in the midst of vigorous discussions with Pratt & Whitney. I'm not obviously able to reveal the conclusion of those discussions because they are ongoing, but those discussions are vigorous, and we are pushing Pratt & Whitney very hard to make more engines available to us in order to be thoroughly prepared for 2026 and particularly the peak season in 2026, which whilst 8, 9 months away, we need to plan for right now. So I thought I'd just like to make that statement to you, which will set the rest of the presentation into context. And now we'll go on to the formal presentation. So [indiscernible] you might just go forward. So notwithstanding the challenges to which I have referred, the company remains thoroughly and entirely focused on these 3 key pillars of growth, which we have continued to deliver, notwithstanding the aircraft shortfall, efficiency, and, of course, service excellence for which we have again been rewarded with a plethora of awards from industry bodies in 2025. Go to the next slide here, please. So this -- I think you've seen these numbers already. These are the numbers to which I was referring. And Ibrahim, you all know very well, perhaps just to run through those numbers.

Thanks, Peter. We'll be coming more into detail on the numbers as we go forward during the first 9 months of the year, we have had a growth of 16.8% of available seat kilometers accompanied by 15.4% traffic growth compared to the same period of last year and passenger numbers growing to 7.5 million by 10.5% with a stable load factor at 83% for the first 9 months and then growing the revenues by 10.1% during the first 3 quarters and an EBITDA growth, notwithstanding the challenges in Q3 by 3.5%. And the RASK minus CASK, we will be going into further detail later on, where we've had 4 consecutive quarters of positive gap between RASK and CASK that has been due to the unscheduled engine removals in Q3 turned to a differential in the 9 months that we are reporting. Peter has in length talked about the Q3, where we have grown the capacity by 15% in this very challenging quarter, with the load factor at 85%. We've grown the revenues by 7.2% during this quarter, with a RASK at 7% below, particularly impacted by the exchange rate in the quarter. It is important to state -- to restate that the -- on FlyArystan, which has the majority of the domestic traffic, fares have been adjusted. Those actions have been taken during the third quarter. While, of course, with the profile of the forward sales, the impact of those increases have started coming through towards the end of Q3, and therefore, will be more visible in Q4 as we go forward. And in terms of the CASK, it's not surprising that when we have fully geared up for a maximum production during Q3, including the employment of pilots, cabin crew, as well as having fixed costs for the almost entirety of the depreciation of aircraft and significant part of the engineering maintenance. As a result, when we didn't have the production because of the unplanned engine removals, the cost has gone up by 2.1%.

Thanks, Ibrahim. If we just go on to the fleet development. This year, as the fleet simplification program has continued and indeed is somewhat complete now, the final Embraer E192ft fleet. So we're now down to a core fleet of Airbus 320 family aircraft, both NEO and CEO, and of course, the 767s. Looking forward, we 2025, of course, we'll finish the year with 62 aircraft, which is what we have at the moment, going to 2029 to 84 aircraft. Some big highlights, of course, coming. I'd just like to sort of point out that we've now modified 6 of the A321 LRs with the additional center fuel tank, which has in the region of -- has added a range -- in the region of 300 40 nautical miles worth of extra range, enabling us to fly nonstop to London and Frankfurt and Soul and various other places, which has been, of course, a great help. It means that this aircraft will do what it is required to do for us without the acquisition of the XLR, which is a much more expensive aircraft. And of course, the big event coming up in 2026 will be the first of the 3 Dreamliners, 787-9s that we leased from ALC Lease Corporation in December of 2022. And if we go on to the next slide, we're on the next slide already. You will, of course, obviously all have become aware that the Board on the 5th of November approved the acquisition of up to 15 787-9s, delivery starting in 2032. Just to sort of clarify this point, the 15 that is the headline number that's up there, 5 of those are firm, 5 of those are options, and 5 of those are purchase rights. So it's up to 15. And how many we take will, of course, be dependent on how the market develops as we go forward to 2032 and beyond. But as I said, we'll have the first of those aircraft coming next August, the second at the end of next year, and the third in spring of 2027. And these aircraft will, of course, obviously the 767s. And the long-term future of the airline will therefore be a combination of narrow-body aircraft and the 787-9 Dreamliner, which, of course, is a great aircraft. 303 seats. It will have a superb business and economy class cabin, highly passenger friendly carrying up to 25 tonnes of cargo. And of course, this range will enable us to fly pretty much anywhere that we might conceive that should be on the route network in the course of the next 5 to 10 years. So with that, I think we'll slip on to the -- on the financial -- sorry, we've got another slide here on the Pratt & Whitney challenges. We've talked about this already, so I don't intend to go through this slide. Obviously, everybody -- anybody is open to any questions once we get to the Q&A. Thanks, Azma. Over to the financials.

Thanks, Peter. We will go through the -- through more detail of the financials of the group, Air Astana and FlyArystan in the next couple of slides. The financial results for the 9 months of this year, we have maintained a good growth as we shared at the opening with growth of capacity, growth of EBITDA, despite the challenges that we faced in the third quarter of the year. And we once again executed successfully the capacity -- dynamic capacity allocation between our brands based on the highest margin, getting the capacity that was rather scarce in the third quarter. In the first 9 months, we grew capacity by 16.8%, traffic by 15.4%. And I mentioned about the RASK and CASK differential that has turned to negative in the third quarter, with the challenges that Peter has mentioned in the opening. But despite the challenges that we faced, we have contained the impact of that through relentless focus on efficiency, profitable route allocation, as well as the dynamic capacity allocation that we have been executed for several years now. As a result of that, we had a 3.5% growth of EBITDA for the first 9 months. For Q3, there were 2 key factors that led to the 17% reduction of the EBITDA. Firstly, the Pratt & Whitney, the 14 unscheduled engine removals or 19 year-to-date that including the maintenance cost on top of it, exceeded $25 million. Secondly, the Tenge that was 13% weaker during Q3 and another further slip of 5% during the quarter itself. FlyArystan has adjusted the prices. And as Peter mentioned, we have seen an up to 5% revaluation after FlyArystan has made those adjustments. To a lesser extent, airport closures also had an impact of about $4 million. With these external factors, particularly on the cost when we had the full cost planned and committed to during Q3, the CASK did increase by 2.1%, and we will be expanding on those in one of our slides going forward, but we wanted to make the point that in total, these factors combined had an impact of $37 million on the EBITDA of the quarter. We have taken actions on these. We talked about FlyArystan increasing the prices. Peter has mentioned that we are in vigorous discussions with Pratt & Whitney to address the concern going forward. And we've mentioned that the tanker has further rebounded, which is going to help the stronger trading in Q4. If we can move forward to the next slide, we will be turning down to the breakdown by brands. As we mentioned before, there is a dynamic capacity allocation between our 2 brands, and that's one of the strengths that we have with a dual brand model that was once again the case in Q3 between Air Astana and FlyArystan, as FlyArystan was more exposed and therefore, more impacted by the Tenge movement and therefore, disproportionately -- with a disproportionate impact projected a lower margin to be produced on the assets. The bigger part of -- the bigger portion of expansion was allocated to Air Astana during this period. Air Astana grew by 17.8% for the first 9 months or 16.3% during the third quarter against a 14.4% growth of FlyArystan, who had much higher growth ambitions for the same quarter. With similar traffic growth, the load factor remained stable and high. Another point I'd like to make that in Q3, 91% of Air Astana's growth was allocated to international routes with the higher margins. Now despite the higher-yielding routes, we still had issues with unplanned changes to the capacity because of the Pratt & Whitney challenges, which meant that some of the late booking curves was not able to materialize. And therefore, we still had a RASK drop of 3.9% in Q3, yet almost the entirety of the EBITDA growth in the first 9 months by 6.2% was the key source for the group's EBITDA growth in the 9 months of the year. Moving on to FlyArystan. We see the impact of the lost production because of the unscheduled engine removals, as well as the initial impact of the Tenge weakness. The growth of FlyArystan is more moderate, as we mentioned in the comparison with Air Astana. While the RASK and the CASK remain largely aligned for the first 9 months, there has been a differential in the third quarter, which was caused by the lower yields on the routes because of the last-minute combination of the flights, which meant that the higher-yielding demand during the peak season could not be accommodated in the interest of the group growing the international network. The lower yields that were coming from the higher exchange rate, and FlyArystan was more impacted by the airport closures as well. Meanwhile, FlyArystan has adjusted the pricing. That is more visible -- that needs to be read in the context of the booking curve because when this happens, more than half of the capacity of FlyArystan was already booked and occupied starting from August, as well into September. And therefore, the yield improvement will be more visible in Q4, as we did see it in action towards the end of Q3 already. We talk quite a lot about the EBITDA, but I thought it would be good to put into context what we have reported, which is on the left-hand side, the $105.2 million. The additional groundings on their own account for 70% on their own, so by far, the largest contributor of the EBITDA bridge. The devaluation that we referred to that has a net effect of $7.1 million. That is after taking into account the advantage of the cost that is also quoted in Tenge. These 2 combined are roughly about 90% of the gap that we envisage has been there, and our estimates of how the EBITDA would be looking like. Now I want to emphasize once again that this is more of an illustration. We reported the EBITDA on the left-hand side of $105.2 million. And our estimate is that we would have been running at $142 million had those factors not been in place, and that would have been a 12% increase on the EBITDA of the previous year. Diving down more into the detail about the ASK and the capacity allocation. We carried 7.5 million passengers in the first 9 months, up 10.5% on the same period of last year, and a relatively slower increase in Q3, 8.8%, while we were striving for a higher growth during this period, had it not been for the Pratt & Whitney URs. The group ASK for the first 9 months is up by just shy of 17%, where, as we mentioned, 91% of Air Astana's growth was on the more profitable international routes. And similarly for the group, 74% of the capacity growth was on the international routes. In terms of the trend between the growth of domestic versus international, that positive trend continued in the third quarter, where we grew the international capacity by 19%, almost double of the capacity growth of domestic that grew by 10% during the same period. In terms of traffic, the RPKs increased by 15.4% with a 12.7% growth in Q3, resulting in an 83% load factor for the first 9 months or an 85% load factor in Q3 of 2025. Moving to the unit revenue and cost performance. And here, we'll be mentioning a few details of what impacted the cost in Q3. We have talked repetitively in the previous quarters about the balancing between the movements between the unit revenues and the unit costs. And we have successfully achieved a positive differential in the last 4 quarters, particularly due to the focus on efficiency, the mitigation plan that was in place for -- against the powder metal and dynamic capacity allocation. Faced with the challenges in Q3, we have continued to mitigate the RASK minus cost differential. However, the extent of the challenges that we faced as we gear up for the peak season caused the CASK to move ahead of the RASK in this particular quarter. On the revenue side, RASK was 5.7% lower than the same 9 months of 2024 or 7% lower in Q3. And we've talked about the pressures on FlyArystan and particularly the fact that the price changes that were brought in are mitigating the exchange rate, but it should be again read in the context of the booking curve, which will be in full visible during the fourth quarter. And once again reminding that since those fare changes were implemented, the Tenge has gained 2.5% in the last 2 weeks and 5% since the peak of the Tenge devaluation in August of this year. So that should again be a positive for Q4. In terms of the competitive landscape, there have been some significant changes as well. On some of our key international routes, we see that our competitors with higher cost per ASK have been optimizing capacity and allocated the capacity to Almaty to other destinations for the winter with the aim of coming back in the latter season. What this means is that both of the Frankfurt and the sale routes where this has happened, we expect traffic to increase both on the point-to-point and transit traffic by direct distribution of ourselves as well as with the cores that we have in place with the respective carriers on those routes. While it happened entirely for different reasons, the cessation of operations by Wizz Air Abu Dhabi has again further contributed to the strong performance we have seen on the Gulf traffic, especially on Dubai. On the costs, the CASK was 3% lower in the 9 months. However, you will have noted that the unit cost in the third quarter is up by 2.1% due to the unproductive costs that had been incurred for the peak season and could not be utilized in full due to the unscheduled engine removals. Looking at the 9 months CASK bridge, the improved performance is positively impacted by the lower fuel costs. We see that the employee and crew costs are still a positive contributor for the 9 months. However, as you may remember, the employee cost was down by 8.8% in the first 6 months of the year, and because of the nonproductive resources in the third quarter is up by 2% during the third quarter of the year. Other cost reductions are mainly related to E2 redelivery costs that we had in Q3 of 2024, costs related to engine and sales leasebacks again in Q3 of the previous year, and to a lesser extent, accumulation of bonuses that we had in Q3 of 2024. This was partially offset by the higher D&A and engineering and maintenance costs, as you would expect with the lower production as a result of the higher groundings. On the positive side, I would like to mention that we remain extremely focused on the efficiency of the entire group through CapEx investments on key infrastructure and several tools that we are investing to improve the efficiency. Some examples of these are the digital transformation program. We launched an AI lab earlier in the year that already has started generating cost efficiencies and prompted a response for increased agility and resilience for the entire group. Some specific examples to this would be the deployment of the crew pairing tool that was launched this year, has reduced crew duty days by 14% and saved about 17% of the seats that were allocated for crew positioning for training flights. In addition to that, this will be extended further to the to the crew grocering and crew bidding that we expect will have a positive impact on the crew engagement. And the third element I'd like to mention to you is that we are investing into an AI tool together with StorkJet as a supplier that will be further optimizing the flying of the Air Astana Group with an estimated efficiency gain of 3% less fuel burn on the same routes that we are operating here today. The last point I want to make about the cost is that at our main hub in Almaty, we have mentioned before that we were in constructive discussions with [ TAB ]. And those discussions are now close to conclusion, and we have good visibility of costs for the next 5 years, which we anticipate to be ceiling off before the end of this month. Moving on to the balance sheet. I would like to start off with the Boeing deal that Peter has just referred to. This may be raising questions in mind how it impacts the cash and the debt of the company. The aircraft are scheduled to be delivered by 2032. So that's when we expect the impact to come on to the balance sheet. The PDPs have been successfully negotiated to be backloaded towards the close to arrival of the aircraft in 2032, which means that there is minimal impact of PDPs in '26, '27, and all the way up to 2030. And we will be intending to finance these aircraft with Exim, as we did for the 767s, or similar tools that are now available to finance the aircraft. In terms of the cost-benefit, we looked at it and the deal enables us to have a significant savings for costs. In terms of the debt that will be coming on in 2032, we anticipate that this will be broadly similar to an operating lease, which would have a similar debt level, minus the fact that it will be bringing in cost savings for the group. So with that, I'll move on to the balance sheet of today. We retain a very strong financial position as we invest into the continued growth of the business. The CapEx program is well on track with over $100 million that have now been allocated to key infrastructure projects such as the new hangars in Astana and the second full-flight simulator, which is due to be commissioned by the end of this year or the early part -- the very early days of 2026. The group cash increased by 14% in the first 9 months of the year to $539.6 million at a very healthy liquidity ratio of 38.3% of annual sales, well ahead of the guidance that we provided for 25% and maintain that unchanged. This again excludes the 12% available facility that till date remains untouched. Leverage similarly is at a comfortable 1.3x despite the delivery of 5 additional aircraft this year. And all these numbers demonstrate the strength of our balance sheet even as we paid out the ordinary and special dividends back in June, and we repaid the Airbus finance leases well ahead of schedule in the third and fourth quarter of last year. With that, I will hand back to Peter for the next part of the presentation.

Thanks very much, Ibrahim. If we just go to this -- you're all familiar with this route network. But I'd just like to, again, just restate something that Ibrahim touched on in passing there, which is the change in the competitive dynamic and specifically the withdrawal from the Korean routes of Air Astana, the withdrawal from the Gulf routes of Wizz Air Abu Dhabi, and the withdrawal from the Frankfurt route of Lufthansa. In addition to that, IndiGo have had to suspend their operation between Delhi and Almaty due to the closure of India and Pakistan airspace, specifically to Indian carriers. And that's not the situation that appears to be close to being resolved in light of recent events concerning that unhappy situation. As far as we're concerned, of course, obviously, it is reasonably likely that some of these -- or certainly the Air Astana and Lufthansa may come back in the peak season next year, but it's not assured. They haven't made any announcement that effect yet. So we don't know. For the time being, these key markets, we now have a much freer hand than we had when we last reported. And therefore, consequently, they're doing very well. If we go on to the next slide here, we just have a look at how the dynamic is changing. I mean obviously, domestic growth at 8% is probably a little bit more than we necessarily would want given the uncertainty of the Tenge, although notwithstanding the slight improvement that's shown over the last few weeks, as Ibrahim has mentioned. But I think the big story this year has been the substantial recovery of China. Of course, China took a long time, much longer than anybody else, to come out of its closed period. And even last year, the market remained very soft. It has come back stronger this year. We've seen excellent growth on all of our routes. We have, of course, inaugurated flights between Almaty and Guangzhou earlier in the year, and we continue to look at opportunities in China as we go into 2026. India also, we put on extra capacity there in inaugurating the flights to Mumbai. I mean Mumbai is a more challenging market than Delhi because the distance is obviously greater from Mumbai to [indiscernible]. But notwithstanding that, of course, it shows tremendous promise and tremendous growth and will continue to be a major focus. Central Asia and the Caucasus, of course, as we grow the hub, I mean, as we go forward, we're going to be emphasizing to an ever-increasing extent the developing hub-and-spoke nature of the airline, particularly with regard to connecting Central Asia and Caucasus with the long-haul network. And that, of course, obviously, is the key driver behind the decision to acquire the 787. We talked about Korea already. Remember, these figures are prior to the withdrawal of the airlines to which we have referred. The Gulf of Saudi Arabia may show a small amount of negative growth there. But in fact, that's, again, very specific to the challenges that we had with Abu Dhabi, which is no longer there, of course. And the fact that Saudi Arabia, which have tremendous potential as a growth market, is not a market that we operate during summer for obvious reasons. It is a market that we're now growing into rapidly. And indeed, we've just inaugurated services to Medina in addition to the flights that we all already have to Jeddah, and we are looking at other destinations also within Saudi Arabia. So if we go on to the next slide, this, of course, is a slide that you will have seen in all of the presentations that we have given the 2. We are pleased to say that the second simulator is now fully up and running and operational. And we do also have approval from authority for the multi-crew for the NPL, which is a much faster method of initial training without in any way sacrificing the rigor or seriousness of that training. And of course -- and that's primarily simulator-based. And this will allow us -- this will allow us not to do [indiscernible], but it will enable us to speed up the licensing process and therefore, put more people through the program with the second simulator. The new hangar is, of course, planned for Almaty and Astana, and Astana is on track to commence construction at the beginning of 2026. And in terms of ground services, I think we've mentioned this before as well. We have established Air Astana terminal services. We are looking at significant opportunities initially within Kazakhstan, primarily for ground and ram handling at various airports in Kazakhstan, and we'll be making some announcements, we believe, in the short term -- in the relatively short term about some opportunities there. And obviously, the continue -- the company is very much keeping abreast of technology changes with regard to the introduction of AI into the airline industry. And we already, in fact, have various AI applications in areas such as crew scheduling and planning, fuel management, and continuous pricing. This is various elements of the technical elements of the marketing and sales mix that we manage that are increasingly being driven by AI. We have an internal AI Lab, which is driving these developments. We continue, of course, obviously, to -- I mean, we have to remind ourselves that within the last 2.5, 3 years, 19 new airlines have come into Kazakhstan. And the majority of those airlines, in virtually all of those airlines, have been low-cost airlines from the Gulf, from the Far East, Vietnam, from other parts of Central Asia, and from India and elsewhere. So 19 low-cost airlines. And of course, obviously, we have FlyArystan that is more than capable of competing with any of those airlines in terms of its cost base. But at the end of the day, Air Astana remains the flagship brand of the group. Air Astana is a company in which we've taken a huge amount of pride over the years of developing this reputation for high-quality customer service. And I think it's very significant that the strongest performance this year-to-date has come from Air Astana, and it has definitely been driven by the power of the brand and the product. And the trick, of course, as we have seen, is to try and maintain the quality of the service whilst hanging on to a cost base that enables us to be competitive, including with the low-cost airlines. That's not a trick, evidently, that Lufthansa and Air Astana have been able to pull off, but we have, and we continue to grow strongly, and we continue to win these awards, and we continue to innovate. And I can tell you all that when the 787 comes next year, it will be an absolutely magnificent product that the market -- to which the market will respond extremely positively. So if we go on to the next slide, second -- this is really repetitive. You're aware of all these opportunities that we have. We have talked a lot this year about enhanced strategic partnerships. I think we mentioned in August that we had concluded an agreement with China Southern Airways, China Southern Airlines, for a comprehensive codeshare agreement right across China. That was signed by the time we spoke to you, I think, in August, and it comes into force on the 28th of this month. So we haven't yet seen the benefits of that, but we are just about to start doing so. And since we last spoke, we signed a comprehensive code of agreement with Air India. And that also will come into force within the -- before the end of the year. So both of these are huge codes shares, the opportunity of which lies in front of us. So just to conclude the presentation, whilst, of course, obviously, Q3 has been quite tricky and quite challenging. Ibrahim and I, we've been running this company for 80 quarters, and they can't always be perfect. But I think Q3 2025, of course, obviously has been hit, as we've said, by a couple of events really beyond our control. But we move on. We address them as best we can. We think we're having vigorous but also productive discussions with Pratt & Whitney. And we are taking steps, of course, to ensure that we can retain our yield even on the domestic routes, which, of course, as we all know, are to an extent threatened by this currency volatility. But I think overall, the group is in great shape. We've got a great plan going forward. We've just made an enormous aircraft order, the largest order in the history of the airline. That, I think, is a testament to a demonstration of the confidence that we, the management and indeed, the Board of Directors have in the prospects of the airline. We are the largest airline in Central Asia, and Central Asia is the fastest-growing air travel market in the world. And I think this was brought home to me last week when I was in Washington, D.C., when a senior cabinet member of the U.S. government stated, and I think to quote him, if Central Asia was a stop, it will be a very strong buy. And we're the biggest airline in Central Asia, and we look forward to counting these sort of speed bumps that we've had in the last few months and moving on with confidence to the future. That concludes our presentation.

[Operator Instructions] We'll now take our first question. The codeshares with China Southern and Air India were both signed in Q3. When will they become effective?

Yes. Sorry, just to repeat, Air India is becoming effective about now, and China Southern will become effective at the end of this month or the 1st of December. I can't remember the exact date.

Congratulations on a robust CEO succession process. Can you share an update on the CFO succession plans?

Yes, I think I'll do that. Yes. Firstly, I'm glad that question has been asked. I'm, of course, delighted to be handing over the CEO succession to Ibrahim at the end of March of next year. I have thoroughly enjoyed the last 20 years working with so many great colleagues, including Ibrahim. And I have absolutely no doubt whatsoever that the company will be in the best of hands as we go forward through to that succession. As far as CFO is concerned, yes, the succession process is taking place. It's an international search with all of the trappings that goes with an international search. And we've got some very strong candidates being put forward. And I think Ibrahim and I look forward to choosing that person within the next sort of few weeks to months.

If I may just add, Peter, on that, thanks for the very kind words. I'm absolutely delighted and excited -- we've worked very closely with Peter for 20 years as part of Peter's team, and I'm privileged to be taking over from that very high base from Peter with strong foundations from the 1st of April of next year. And as Peter mentioned, we are in full speed of search of the CFO replacement across any opportunities that we see led by our international headhunter.

Our next question is, given more aircraft grounded than expected, has this affected your view of growth for the upcoming next 3 years?