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

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Air Astana's Q1 2025 Results Conference Call on the 2nd of May. [Operator Instructions] I would now like to pass the line to Mrs. Irina Martinez, the Head of Investor Relations at Air Astana. Please go ahead, ma'am.

Thank you, operator. Thank you. Good morning, and good afternoon, ladies and gentlemen. Welcome to Air Astana Group's First Quarter 2025 Results Presentation. Thank you for joining us today. I'm joined today by our CEO, Peter Foster; and our CFO, Ibrahim Canliel. They will take us through the company's performance during the first quarter of the year. After the presentation, there will be a question-and-answer session. We hope to get through as much as possible today. But if you have any follow-up questions or clarifications, please e-mail Investor Relations team. The presentation, earnings release and other materials along with IFRS financial statements are available on our website. With that, I will hand over to Peter. Peter, please go ahead.

Thank you, Irina, and a very good afternoon, very good morning to all of you wherever you're joining us from, and thank you for attending this event. So let me start with the headlines. Next slide, please. [indiscernible] using the slides?

No, it's me.

Thank you. Fine. Okay. So I'd like to talk a little bit about the operational highlights and the financial highlights of the first quarter. So for Q1, we have produced revenue that has increased by 10.4% to $292.4 million in comparison to the same quarter last year. Of course, all these figures are comparative to Q1 2024. EBITDA has increased by 37.1% and the EBITDA margin has improved by 4 points to 20.5%. ASKs, that's capacity, of course, have increased by 13.5% to $4.7 billion and RPKs, that's the passenger kilometers carried have increased by 13.9%. In terms of unit revenues and unit costs, unit revenues have decreased by 2.7% primarily driven, of course, by the depreciation of the Kazakh tenge. And unit cost has decreased by 5.7%. And therefore, it's important to note that there is a positive differential of 3% there between unit revenues and unit costs, which obviously very positive. That's the first time, by the way, that we've been able to produce a positive margin of such magnitude since we went public. Of course, we have a slight positive margin in Q4 of 2024, but that positive trend has increased since that time. Even if one strips out the lower cost of jet fuel because of the fall in the price of oil recently, the cost per ASK is still reduced by 3.4%, which again provides for the positive differential between unit cost and unit revenue. Next slide, please. Right. Should we just go on, Irina, to a couple of slides. Yes, if we just talk a little bit about the fleet development, the fleet has continued to grow. We received 5 new aircraft this year. That's 3 Airbus 320neos and 2 Airbus 320neos for FlyArystan. And I think most importantly, we have finally -- in fact, just yesterday, we find a bid very well to the final Embraer E2, which means to say that the fleet is now simplified to 59 aircraft of Airbus 320 family and 3 767s. And actually, interesting enough, that's the simplest fleet profile that we have had in the airline since 2003. So it's taken us 22 years to get back to 2 fleets. If we carry on, the Pratt & Whitney issue continues to rumble along, of course. Again, I don't really have anything to add there other than the fact that the time between off-wing and on-wing continues to be roughly 18 months. And again, we continue to mitigate this issue with our engine resting program. And I think you're familiar with this, but just to repeat it quickly, we rest those aircraft that we do not require in the low season, Q1 and proportion of Q2 so that we have sufficient available time on wing to be able to deploy maximum capacity in the peak season, which, as you're all aware, in Kazakhstan runs from the middle of June until the end of August. So I think that concludes. I'll just have one very quick comment on currency. And its relation to various macro and political events taking place at the moment. The Kazakhstan has slid this year significantly, but that has been mitigated to a large extent by the fact that Air Astana has been able to introduce increases in domestic fares, on the 1st of January, the 1st of February, on the 1st of March. You may remember the domestic fares for Air Astana were frozen last year at the order of the anti-monopoly committee. That freeze fell away on 31st of December. And therefore, we have, to some extent, been able to mitigate the fall in the value of the Kazakh tenge by those fare increases. It hasn't covered by any means all the devaluation, but it has been quite successful in mitigating it. And of course, the company remains naturally hedged in the sense that 2/3 of its revenues are charged in either dollar or euro or dollar-euro equivalents. And I think that will conclude the first part of this presentation. So on that note, I'd like to hand over to Ibrahim.

Thank you very much, Peter, and good morning, good afternoon to all. During the first quarter, on the group level, as Peter mentioned, the ASK growth has been robust at 13.5%. The RTK growth was 0.4 percentage points ahead of that at 13.9%, resulting in a 0.3 percentage point improvement of the load factor to 81.5% during Q1 2025 compared to Q1 of '24. In our early meetings, we were regularly asked about the impact of the currency event. We explained in response that due to the balance of the tenge costs over the tenge revenues that we have a natural hedge in place that Peter just referred to as well. The results of Q1 reconfirm the effectiveness of that natural hedge with the tenge depreciation, main cost items such as payroll, airport charges, navigation, as well as the local element of fuel, contributed to the 5.7% drop per ASK. On the other hand, as a result of mitigating actions taken just expressed by Peter, the drop in revenues has been softer at 2.7%, maintaining the positive RASK minus CASK trend that we saw throughout 2024 by 3 percentage points. We will be coming back to the positive outlook of RASK in a further slide. Revenues during the first quarter were up at the group level by 10.4%, EBITDA by 37.1%, and the EBITDA margin up by 4 percentage points in Q1, providing us for a strong start to 2025. Coming to the performance by brand, our brands and their routes continue to compete for capacity. And in the low season of Q1, Air Astana benefited from the margin outlook of longer-haul routes against the lower margin expectations for domestic and shorter-haul routes during the low season. Air Astana increased capacity by 17%, and that increase was entirely on the high-margin international network. You will have noted our early announcement on routes across the high-growth regions of Asia, Gulf, and Saudi Arabia, which for Air Astana were at the forefront of growth during Q1. Notwithstanding the high growth of capacity, the RPK growth of Air Astana was aligned at 17%, resulting in a robust load factor of 80.3% during the late season quarter. With the CASK drop outpacing the RASK drop, EBITDA of Air Astana was up by 34.9% when adjusted for the intra-group revenues that it had in the first quarter of 2024, which are due to the FlyArystan moving from a department or airline within airline to its own AOC starting from the end of first quarter of last year. And its 21.3% margin is up 2.8% year-on-year compared to Q1 of '24. The first quarter being more challenging season for the LCC short-haul market and therefore, foregoing capacity to Air Astana long-haul routes, FlyArystan managed its capacity well with a 5.1% growth. With RPKs growing by 6.7%, FlyArystan's load factor improved by 1.3 percentage points from 83.5% to 84.8% during the first quarter. With the RASK improving by 2.1% as a result of the capacity discipline and CASK reducing by 0.8%, the FlyArystan EBITDA, excluding intergroup revenues, was up 5.7%, again, exceeding the capacity growth of 5.1%. If we expand on the capacity, we continue to make good progress in expanding the fleet despite supply chain challenges. By the end of Q1, we had 60 aircraft in the fleet, up from 50 aircraft 12 months ago at the end of Q1 2024. Over the last 12 months, the group has taken delivery of an additional 13 Airbus 320 family aircraft, 4 of these were added during the first quarter of this year, while 2 of the 3 last remaining E2s were redelivered, and the last 1 departed in preparation for redelivery later in the year. We took another delivery of an A320 family aircraft after the closure of the quarter, another point to make. On the group level, the stated capacity was up by 13.5%. 87% of that on the group level was on international routes. And in the case of Air Astana, the entirety of the growth was on the international medium and long-haul routes. Passenger numbers were up 7.1%, which translated in an almost double RPK growth due to the fact that network expansion was skewed in favor of the longer-haul routes. Coming to the RASK and CASK differential, the dual brand competition between Air Astana and FlyArystan once again proved its effectiveness in Q1 as reflected in the high EBITDA growth for the group. As a result of efficient capacity allocation based on different seasonalities of market segments, the load factor improved to 81.5%, notwithstanding the growth of capacity in double digits. When we made the annual results announcement, we stated that the fare adjustments have been made throughout the quarter, please just refer to those as well. The implication of the gradual adjustments throughout the first quarter is that the first quarter has a partial impact of that mitigating action reflected and the full impact should be reflected in the second quarter. Notwithstanding the partial reflection on the back of a 13% lower tenge compared to a year ago, the RASK in Q1 is down by only 0.7%. International fares are quoted, as you already know, in U.S. dollars and hard currencies since 2015, and we don't see at this point any impact of the exchange rate on the travel. Another important point to make is that Ramadan with a muted demand impact spread over the end of the first and second quarters in 2024, while in '25, it started and ended in the first quarter, which is a point that you may want to take into account and factor in when you look at your projections for the second quarter. I need to emphasize the natural hedge with local currency expenses matching the local currency revenues. We had a positive trend of RASK minus CASK in 2024, starting with a narrowing gap in the first 3 quarters and turning to positive in Q4 of '24. With a well-managed capacity discipline between the brands as a result of the internal competition, we are pleased to present the continuation of that trend with a 3 percentage point improvement in the first quarter. Approximately 1/3 of our costs benefited from the depreciation against the dollar, and these contributed to a 5.7% drop of the cost per ASK. The drop in fuel cost was almost proportionately contributed by the lower global oil price and reduction of domestic fuel, resulting in a 12% reduction in cost per ASK for fuel, or the CASK excluding fuel being at 3.4%. Tenge denominated portions of the payroll, airport charges, and litigation charges were the next contributors to the drop of cost per ASK, with 9% and 3% cost per ASK reduction impact, respectively. In addition to that, we continue to invest in operational efficiency in a range of tools that Peter will be referring to in the coming slides. And I want to conclude this section by stating that we are pleased to report in Q1, the natural hedge has once again proven its effectiveness and its value to the Air Astana Group. Coming to our balance sheet. Our balance sheet remains robust compared to the same quarter of 2024, which already included the IPO proceeds; the cash is up by another $144.2 million and remained in excess of the $500 million mark at the end of Q1. That translates into a healthy cash-to-sales ratio of 38.4% of annual sales, improved by 7.6 percentage points compared to Q1'24, and that again excludes the available facilities in the amount of $170 million or 13% of the annualized sales of the group. The net adjusted debt is up by $134.4 million, driven by the aircraft delivery since the completion of the first quarter of 2024, and impacting the net adjusted debt to EBITDA that is now at 1.4x. While already well within the guidance provided, it is worth mentioning that over the last 12 months, we have taken delivery of 13 A320 family aircraft. We mentioned that 4 of those were delivered in Q1, and those aircraft had minimal or no depreciation till date and have close to full lease liability reflected in the first quarter of the year. And those are all geared towards the peak production in Q3. The strong balance sheet of the group, both in terms of high liquidity and low leverage, supported by the consistently strong operational results, reaffirms our confidence when announcing the proposed ordinary and extraordinary dividend during our full year results, and most importantly, enables us to look into the future with confidence. The dividends that were proposed and announced during the full year results were at KZT 17.7 ordinary per common share or KZT 36 for the special dividend, or a total amount of KZT 53.7 per share, which translates into a 7.5% dividend yield on yesterday's closing. These are subject to the approval at the upcoming AGM, which is scheduled on the 29th of May, and the same counts for the proposed enhanced dividend policy, which increases the returns from 20% up to 30% and 50%, respectively. And coming to the buyback program, in accordance with the earlier buyback and the subsequent second phase that was approved by the Board in March for an additional $5 million, the company since the start of the second quarter of 2024 has till date, bought back 4,638,550 shares into the treasury, some of which were distributed in February to the employees of the company who all have become shareholders since that date. With that, I will be handing it back to Peter.

Thank you, Ibrahim. Thanks very much. Next slide, please, Irina. Thanks very much. So the network continues to grow. This is the network as we sit today. The network has continued to grow. 1 or 2 of the significant changes have actually taken place after the end of Q1, but since they've already happened, we can talk about them. There has been a significant expansion of the routes to Vietnam. They, generally speaking, could be considered to be tourist routes and are therefore seasonal. But I think in terms of structural room network, there have been significant increases in both China and India. We started operating in Guangzhou in Southern China, recently. And last week, we inaugurated flights to Mumbai in India. We've also started a flight to Goa. That's, of course, obviously the tourist routes in India and Ying in China. But I think the point is that China, in particular, in terms of Q1 growth and India in terms of growth going forward, and continue to be the major drivers of the network growth, as indeed is a growth of both points and frequencies into the GCC region. Go to the next slide. If we take a look at this, this is where we are in terms of dynamic capacity reallocation. Obviously, we can see China and the Far East, the Middle East, which I just referred to. When we say the Middle East, we really change the slides; we mean the Gulf and Saudi Arabia. We'll change this for all future presentations, if you don't mind. This slide, of course, was produced before the inaugural of our new flight to Mumbai. So, evidently, when we see the Q2 capacity results, we will see a significant jump in capacity to and from India. And of course, this is right because these markets are not only -- China is back into a period of growth. It's been a long time coming, of course, since the COVID restrictions were lifted very late, much later in the rest of the world, and they suffered the economic consequences thereof, but notwithstanding current issues of trade policy and tariffs and so on and so forth. The China market is improving and increasing. And therefore, we're seeing good growth coming from the Middle East. Gulf and Saudi Arab, I already mentioned, and India will change as we go forward with the inaugural of those flights to Mumbai last week. If we just go on to some of the sort of key infrastructural events which are taking place at the moment. We have, again, extended the operation of the internal MRO, the Advanced Technical Center. We are just in the process of finishing the third [indiscernible] which is on at the moment in the hangar in Astana. We are increasing the manpower levels there in order to reduce the turnaround times, particularly for the 12 sets, which are very complicated checks. Comparatively, we do extremely well already this season [Technical Difficulty] I should just mention that before the end of September, we will be breaking ground on a second hangar in Astana. In terms of the training and the flight training center also in Astana, again, I think we mentioned this when we spoke to you on the 14th of March, we expect to have the second simulator up and running and in service during the course of 2025. And finally, I think as we also mentioned on the 14th of March, we are going ahead with the subject to final Board approval. We have a Board meeting coming up shortly, subject to final Board approval. We are going ahead with the establishment of Air Astana Terminal Services. And I just make the point that Air Astana Terminal Services will not limit itself to passenger or ramp handling. The scope of what we call ATS will be widened to include all possible services, aviation-related services in and around airports, nor will that company be limited to Almaty. We expect to extend it throughout the country in fairly short order. In terms of customer experience, we continue to win multiple awards for ground services. But I'd particularly like to draw your attention to the code-sharing MOU with China Southern Airlines. Now again, we did mention on the 14th of March at that time, I myself have been to China and the discussions with China Southern are proceeding in a very positive way indeed. And I fully expect that we'll be signing a comprehensive codeshare partnership agreement with China Southern Airlines in the forthcoming weeks. And I should also just mention that the codeshare with China Southern is in the context of a significant expansion of the work that we are doing to enhance these partnerships around the world. Now as you know, we've had long-standing partnerships with both Lufthansa and Turkish Airlines and Asiana in Korea. And obviously, China Southern represents quite a groundbreaking development given the fact that China Southern has over 900 aircraft, by far the largest airlines in the world and indeed in China. But also, we are looking at partnerships in other key strategic parts of the world, again, to enhance the connectivity of the airline over the Kazakhstan hubs as a function and feature of the geographical location, which, of course, is our great good fortune. The new app will be launched at the end of May. The Nomad Club is being reevaluated in terms of the way that we allocate points to the Nomad Club to make it more attractive to frequent flyers. And we continue to keep our eye on the ball as far as enhancing customer service is concerned. So if we go to some summary slides, we continue to focus on the fact that we are a clear leader in our home market and indeed a clear leader in the entire Central Asia and Caucus region. We continue to enhance that with the introduction of new aircraft, the improvement of introduction of new services and the work that we're doing to ensure that our service and operational reliability levels stay at the absolute top, not only in this region but in global aviation. And of course, as I mentioned, as we look towards these partnerships, again, just to repeat the point that we are ideally geographically placed to take advantage of these mega markets that are nearby. So growth, efficiency and excellence continue to be the watch words of how myself and the management team approach their work. I think the Q1 results demonstrate that we're well on track to continue being able to deliver that, notwithstanding the headwinds that are being placed, I think, in front of all airlines and indeed in front of all businesses by virtue of the complexities of the tariff and trade situation that's developing around the world. Notwithstanding those headwinds, we are continuing to move forward in accordance with our plan, and we are continuing to deliver on our own promises and commitments. And this is I think reflected in the fact that the results that we are discussing today and presenting to you today entirely in line with our expectations. So I think that concludes the presentation from Ibrahim and myself. And now we're very happy to answer questions.

[Operator Instructions] Our first question comes from Ms. Jaina Mistry from Jefferies.

It's Jaina Mistry from Jefferies. Two questions, if I may. You talked about the impact of the tenge depreciation on your numbers, but I wondered if you could quantify it. So what was your RASK and CASK, excluding currency impacts in Q1? And then secondly, when I look at your ASK growth by brand, the composition is quite different to your medium-term targets. And I wondered if this is reflective of a change in strategy for the business?

Jaina, very nice to hear from you as ever. I think, Ibrahim, would you like to perhaps tackle that first question?

Sure, sure. If I take the first question on the RASK and CASK excluding the impact of the tenge depreciation, Jaina, if there was no action taken, the impact on the tenge depreciation would have been on an overall level at about 4.6%, roughly 13% of the 35% of the revenues. That has been softened to 2.7% by the gradual adjustments that have been made through the quarter. In your modeling, what I would suggest to take into consideration is that the first quarter represents a phased adjustment of the fares. So it doesn't reflect the 100% throughout the quarter, while it would be reflected in the second quarter in full. So that should give some kind of an idea of the RASK. If you take the weighted average, you can use your simulation in the second quarter. In terms of the CASK, the element of the fuel is about 12% down in cost per ASK. 1/3 of that is coming from the international global price drop. The other part is coming from the domestic pricing, which is impacted by the exchange rate. They're roughly at the same level, Jaina. They're roughly at the same level between the international and the domestic, albeit for different reasons. And our CASK, excluding the fuel, we mentioned that it is down by 3.4% versus the 5.7% that includes the other elements. In terms of the non-tenge impacted costs, the engineering and maintenance cost, which is not impacted by the exchange rate at all, it is quoted in U.S. dollars. That one is down by 6% for the first quarter and completely offsets and slightly exceeds the increase of the depreciation and amortization, which was up during the first quarter because we intentionally, as part of the Pratt & Whitney mitigating program, we have voluntarily grounded aircraft in order to keep the resources for the peak season. So I hope that provides an answer to your question.

And maybe just to clarify, your CASK ex-fuel, which was down 3.4%. I presume some of that is impacted by currency given your cost will be in local currency. Was the CASK ex-fuel -- do you have the CASK ex-fuel, excluding FX? Do you have that number to hand?

We could work it out, Jaina, in terms of the total cost of the impact. So we said that 1/3 of the cost is impacted by the fuel, which is down by roughly 13%. So if you would exclude the impact of fuel, you would be looking at a cost reduction of about 1.2% to 1.5%.

We'll be moving to the next question from Mr. Jakub from Wood & Co.

I would follow on Jaina's questions. Actually, I also have 2. First, on the Fly versus Air Astana growth pattern, is the higher growth at Air Astana something that we will also continue to see in the second quarter? And is it possible that for the full year, then we may also see Air Astana growing faster than FlyArystan based on current outlook?

Yes, I think we need to look at the ASK growth in the first quarter in the context of the differentiated markets. The shorter haul and domestic, it's a very -- it's a much slower period in Q1 in comparison to, for example, the longer-haul demand that is into some of the business or leisure destinations of Air Astana. And that's why the margin outlook for Air Astana was looking better for the first quarter, and therefore, Air Astana got a much higher portion of the growth during that period. However, you also know that the LCC business does extremely well when demand is very high. So naturally, you would therefore expect that that the same differential may not be necessarily reflected throughout the year. It's a very seasonal assessment that was done. And therefore, we see the big differential in the first quarter, which has produced an extremely positive result for the group. However, we wouldn't see a change in the strategy that we have been demonstrating in the previous years for the peak season.

And my second question, also following on Jaina's. For Air Astana Airline, could you remind me what is the split of revenues that you charge in tenge and that you charge in other currencies? And what were the RASK dynamics in the ticket that you were selling in other currencies than tenge in the first quarter? And was there any significant deviation in trends between the individual markets or geographies that you fly to?

For Air Astana, we've shared before that the split is about 80%-20%, 80% in favor of the international. And all of that is charged in hard currency, U.S. dollar or euros in some of the overseas markets. And again, as we stated before, the margin outlook for the first quarter for the Air Astana long-haul routes was good. It was looking more positive. And that's why the internal competition was favored in favor of Air Astana.

I see. So this means that there was pressure on RASK even on the routes which are priced in dollars or euros or other currencies outside of tenge. What were the -- was that the reason?

No, no, not at all. Not at all. Why are you coming to that conclusion, Jakub?

I thought that we have seen a negative RASK dynamics for Air Astana Airline in the first quarter '25 relative to first quarter '24 and if 80% of revenues charged in hard currencies. I thought that we would have seen some pressure there also, not just the tenge effect.

Well, if you do the calculation of the 20% of 13% and then you factor in the gradual increase, you will see that a large part of the drop is because you haven't yet seen the full effect of the adjustments in the first quarter, and you will see them going forward, Jakub. So no, there isn't a big drop in Air Astana's tariffs that it's able to charge on its international network.

I see. So the fair conclusion would be that the rough on the 80%, which is priced on the international routes on hard currencies, was flat year-on-year?

I couldn't hear the second part of your question. Can you repeat that?

Sorry. So the 80% revenues in Air Astana Airline that you price in other currencies than tenge, the RASK on those were flat year-on-year, roughly?

They were almost, yes, broadly flat.

Our next question comes from Mr. Igor Savchenko from Halyk Finance.

I actually have 2 questions. The first one would be that you emphasized the partnership with Chinese Airlines and your strategic focus has been significantly shifted to Asian markets. And I'm curious whether you are planning to see the major influx of foreign tourists to Kazakhstan and whether you consider these tourists as a major source of revenue in the future for you? And the second question would be whether the increase in the Middle East travel this quarter is sustainable because obviously, there is a Ramadan month and I'm just curious whether we remove this month from the typical Q1, whether the growth would be the same as it is right now.

Yes. Thanks, Igor. I think just with regard to -- actually the 3 questions are all sort of rather linked really because you've identified our 3 key markets, that is to say, China, India and GCC. So yes, I mean, India -- I think it's well known in the industry that India is presently experiencing a significant huge outbound tourism boom. And it is interesting that on our Indian flights this year, they are -- it's the one route we have where it's the traffic at the other end of the route that significantly outpaces and is larger than the traffic from this end, the Kazakhstan end of the route. So I think actually in Delhi for the first quarter on the Delhi route, something very close to 75% of all business on that route was actually Indian business, only 25% was Kazakh business. And we're seeing exactly the same phenomenon in Mumbai at the moment. So there's absolutely no question that India -- the outbound Indian travel market is in very strong shape. I mean there is a particular phenomenon that we're experiencing at this moment. It's not a Q1 phenomenon, of course, as you -- I think as many people will be aware, the Pakistan airspace was closed to Indian airlines last week following the terrorist attacks in Kashmir. So that means that Indian carriers cannot overfly Pakistan on their way to Central Asia, which effectively means they can't fly. So IndiGo has actually stopped flying to Kazakhstan at this time. So we have -- at the moment, we're the only airline flying between Kazakhstan and India. Now of course, we don't know how that situation is going to develop and whether it escalates or de-escalates. But for this precise point in time, the demand from India is absolutely massive because it does actually coincide with school holidays as well. But yes, we've got tremendously high hopes of India, and we're already seeing significant growth of the Indian inbound market into Kazakhstan. As far as China is concerned, as I mentioned in the main part of the presentation, China has been very slow for the last couple of years. notwithstanding the fact that the COVID restrictions were lifted by the Chinese government on outbound travel. It's been very slow, has been linked to the issues within the Chinese economy. But it's much better this year. It's doing very well. The Guangzhou route is doing very well. Again, we're seeing a significant increase in the number of Chinese travelers coming into Kazakhstan, that's both business and leisure. So that's very good indeed and that positive trend obviously is set to continue. And I think as everybody is aware, there is now visa-free entry for both Chinese and Indian passport holders in Kazakhstan. As far as the Gulf is concerned, Ramadhan was actually March Eagle, as you know. So yes, there was indeed a slowdown. In fact, we have to emphasize as much as we should. The Q1 results should be seen in the context of the fact that the whole of the month of March this year, which, of course, included the narrative holiday was Ramadan. In fact, Ramadan went from memory, it went from the 1st of March to 31st of March. So, the entire month of March was affected by Ramadhan this year. So yes, it was a factor in Q1, which obviously was a very good quarter for us, but it might have been even better had not been Ramadhan starting in the middle of the first peak season of the year. But that's over now. So clearly, we are now into the post-Ramadhan period. That's no longer a factor.

But can you correct me, please, I right, but I see that you mentioned that the domestic travel has not been growing that fast due to Ramadan, but you also saw the international traveling growing significantly. And I'm just curious whether not go with each other?

Well, I mean all travel was somewhat depressed. I mean the first 2 weeks of March, in any case, are low season. The school holidays, of course, kick in around the 15th of March. And so yes, I mean, all travel, including international travel was affected by Ramadan, both domestic and international. And of course, by implication, and I think we can talk about the booking curve as of the 31st of March. The booking curve for April as of the 31st of March was very strong. So Ramadan played an effect or had an effect on both domestic and international outbound business for that period, 15th of March to 31st of March.

Our next question comes from Mr. Anton Proutorov from Citi.

Two questions from me. First is the macro one. Could you talk about the impact of a lower fuel price for the travel demand in Kazakhstan, both domestically and internationally? What was your experience operating in this cycle previously? And do you expect that now that you have FlyArystan, the dynamics of that could be different to your previous experience? And the second question is a more structural one on the LRs economics A2821. Can you help us understand the unit economics of operating LRs? Does it have a positive CASK impact? Or is it just the -- you expect the RASK to outweigh CASK on those routes? I'm basically trying to understand the margin implications as the mix changes more towards the LRs. These are my 2 questions.

On the first point, we had a question on this earlier today. How much of the drop in the oil price sort of affect demand? Obviously, it affects cost with a lower fuel cost, but does it have a negative effect on demand? The answer is that, generally speaking, in terms of overall airline performance, whenever the fuel cost is low, driven by oil price, the company was as well in common with most other airlines. So, if we go back to 2009, 2010, those were very good years for us, 2009, 2010, notwithstanding the fact the oil price, I think in 2009, the lowest you got to was around $43 for memory. But we did well during that year and indeed the subsequent year. And the same applies in 2021, 2022 before the oil price picked up in the post-COVID period. So, in common with any other airline, we like low fuel prices. We like low oil prices. The cost saving always outweighs the demand effect. Your second question was on the LR specifically. I don't have comparative route economics to hand with me. So, I can't go into the exact detail of the RASK and CASK specific to the LR. We do have that information of course.

Are we allowed to share that or not?

No, we don't have it [indiscernible] Sorry?

On Broad level, we can.

On Broad level we can. That means, fundamentally, the cost of operating the LR is no greater than the cost of operating the non-LR. The LR obviously has a heavier business class seat, so it has weight implications and also it's got a very high service level. But then because there's only 16 seats on the aircraft, whereas the non-LR 321 has a lower weighted seat. It's a lighter seat in business class. But of course, it's got 28 seats as opposed to 16. So the sort of evens itself out. I mean obviously, the difference is that you can sell 28 seats versus 16 seats, that's 12 seats. But that said, of course, the business class yield on the LR is very high because the product is an absolute premium. In fact, I don't think there's any doubt really that it's the best narrow-body business class operating in the world today in any airline. So obviously, the yield more than compensates the fact that we've taken a hit of 12 seats. And evidently, if we couldn't justify charging higher fares and therefore, getting a higher yield, we wouldn't take a penalty of 12 seats less on the aircraft. So yes, the LR is an extremely successful aircraft for us because we can leverage the quality of that product to charge premium prices.

[Operator Instructions] Our next text question comes from Christopher Young. Is Air Astana considering hedging the jet fuel prices in the short term?

We hedge for all of the fuel that we to foreign airports. We hedged right through until Q3 of this year. Do you mind to just. . .

Yes. We are hedged, as Peter mentioned, till the end of Q3 with positions between $75 and $85. Those positions were mostly taken in the back end of last year and some part of it in the earlier part of this year. I would like to highlight that the positions that the Air Astana Group has been taking for many years now has been call options. So what that means in comparison to other airlines who, for example, would have the so-called zero cost collar, which comes with a very heavy cost when the oil price drops is not a strategy that we pursue. So in case of the low fuel scenario, we would only lose what we refer to as the insurance cost of the option, but we wouldn't have the obligation to buy fuel at a higher than the spot price. So we would fully benefit from the drop of fuel prices. And if it were to went up, we are hedged to the upside. For the periods going forward, of course, the volatility at the moment is extremely high. Therefore, that is priced in by the pricing of the banks with regard to forward transactions. We're monitoring it closely. And if we see that it is coming to a reasonable level at those levels that we see are suitable, which would be largely forward into around current pricing, then we would start hedging for the back end of this year and forward into 2026.

Okay. Thank you very much. It looks like we have no further questions at this point. I'll be passing the line back to the management and IR team for their concluding remarks.

No, there's no more questions, I don't think we have anything further to add at this point other than that we'd like to thank you all for joining. We hope it's been useful. If you have questions that pop up afterwards, then of course, please feel free to get in touch with us, and we'll answer those. And in the meantime, just to conclude with where we started, we're satisfied with the performance in Q1. We think we continue to deliver on our undertakings. We are notwithstanding the sort of headwinds that the global trade is facing at the moment for a series of reasons, we remain confident in the performance for the remainder of the year. Thank you very much.

Thank you, Peter. Thank you, Ibrahim. That concludes our presentation. Thank you, everyone. Have a good day. Thank you, and bye-bye.

Thank you very much. We'll now be concluding the call and closing all the lines. Thank you, and goodbye.