AirAsia Group Berhad (AAX) Earnings Call Transcript & Summary

[Foreign Language] A very warm welcome to our distinguished guests, analysts, investors and members of the media present here today as well as the international press joining the press conference online. Today, it is our great privilege to welcome Mr. Tony Fernandez, Co-Founder and adviser of AirAsia Group, together with Mr. Bo Lingam, Group CEO of AirAsia Group, which is joining us online and also Mr. Farouk Ahmad, Deputy Group CEO. They join us today to give an update on the situation and provide clarity on the recent new surrounding AirAsia Group that everyone has been following. Without further ado, I would like to invite Mr. Tony Fernandez to address that situation to you all. Please, Tony.

Good morning, everyone. Thanks for coming. Honestly, there are better things to do right now than have this press conference, but it has become so much news. In my normal style, I'd rather deal direct with it and be transparent, and you can ask me whatever questions you want. That's always been my style over the last 25 years. My senior management team is here, some with socks, some with no socks, but they're all here from Thailand, from Malaysia and Indonesia and Philippines, was obviously the news that 1 newspaper article has created a ripple effect everywhere. And so I thought it's better that everyone is here, and you can ask whatever questions you want on this. I suppose I start before I go into this presentation is, one, I think in the 25 years, we've been the most transparent, open and accessible company, probably in Southeast Asia. But -- and that is good and bad. It's good that everyone knows us and you can see the good and the bad. It's bad that sometimes small things get blown out of proportion because we sell newspapers and we sell news. But that's the way it is. And so you take the good and the bad. So in the 25 years, we've been through many, many crises, many crises, right? In Malaysia, in Thailand, in Indonesia and Philippines, we've always had crises. But we've always come out stronger. So the first thing is COVID was far, far worse than what we are dealing with now. COVID was like 4 years. This was not going to go on for 4 years. But number two, the most important factor that everyone's forgetting is that I couldn't fly. We couldn't fly in COVID, but we can fly now and our demand is very strong, right? We as a group 80% for the third quarter and the fourth quarter looks very, very good. So we always come out of these crises stronger and better, and I'll try and explain that to you as well. And so I want to say that, one, we're transparent. We're not running away. I would rather be doing other things, to be honest, than doing a press conference now on a newspaper article that was very inaccurate, precipitated and unfortunately causing problems to our other countries from a Malaysian newspaper article or Malaysian statement. But we are going to try and clear up as much as possible today, okay, within what I can say. That's my style. Number 2 is I would ask you to ask whatever question you want, right? Don't -- in whatever language you want, okay? Number 3 is this is really an ASEAN conference. This is not Thai. This is not Malaysia, this is not Indonesia, Philippines. We are an ASEAN group. So all our CEOs are here, all the reporters from all of ASEAN here. We're a very important part of use, right. And number 2 is this is no different from any other crisis I've been, but it is better than COVID. And we came out of COVID very strong, okay? And now I will also take each AOC individually as well during the presentation because obviously, there will be some concerns on Thailand, [indiscernible] Indonesia, Philippines, and Malaysia itself, right? So that's how I will handle this today. Okay. I feel very lonely here. I love my team just puts me up here by myself and everyone has a relaxing time down there. Well, I have all the press around. Okay. So just to to highlight actually. I was in Cicada yesterday. I've been in Bangkok a few times. There was a lot of exciting developments in our AOCs outside. We're very excited about Indonesia. We're super excited about Philippines and Thailand, I think, is looking really good. So I've been traveling sorting out the next 5 years because we have a lot of planes coming, et cetera, right? Okay. So we have a presentation. which is hot off the press. And I'll take you through this presentation. So as I said, we've had so many crises, right, Bird flu, size, airports, natural disasters, financial crisis. And of course, COVID. COVID being the toughest that we've been through, right. COVID-19 was the biggest crisis and hit every airline. I want to add that -- do you have this it? Can you put this on here, whether we keep turning around? Do you have the presentation? So it's important to look at history as we look forward, right? Number one, no government helped us during COVID, 0. And we lost about MYR 10 billion of revenue, 26,000 staff, MYR 10 billion. And during COVID, we only flew about 10% of our flying. But what did we do out of that? We restructured our business. We paid everyone back, right? Many airlines have not settled their debts from COVID. They pushed it to the end. We didn't do that. We restructured them straight away, right? We paid all refunds back, everyone. And honestly, it's a little bit unfair. I'm paying lessors and all these people because we couldn't fly. But we paid everything, right? And throughout COVID, this is the most important point, we spoke to our creditors every day. No creditor will say we ran away or we weren't transparent. And that's the most important thing going forward because we delivered. We delivered on every single creditor during COVID. Every refund every lessor every bank, right, was repaid in full, right? I'd say we didn't get any support. Unlike many airlines around the world, many airlines in Thailand, in Malaysia, in Singapore. Singapore got a huge infusion of cash from Temasek, right? In Europe, every airline in Europe got loans or equity. In America, it was huge. We didn't get $0.001. We got $25 million loan from a provincial bank in Saba, of which we have paid back and only MYR 15 million is there. So we got about $25 million, $26 million in 4 years in COVID, and it's been paid down to MYR 15 million. Otherwise, zero government support. Go to your research during COVID and see how much airlines got during COVID. It's a massive number. It's a massive number. Not only did we pay back all our creditors and we pay back all our passengers, everyone who booked a flight has got their money back or flown again. We had to put 250 planes back into operation. 250 planes were grounded. 500 engines had to be redone, okay? And we are still not 100% finished with the 250 planes. We have about 10 left, which should be finished by October. So I'm saying this because we are good at managing cash, and we are strong in liquidity, right? So that sets the context when you look at some of the press that has come out, we survived 4 years of COVID, and we're still suffering the effects of COVID because we haven't put all our planes back into operation, which I think by October, we will put that back into operation, right. I don't know how to use your clicker, very high tech. As I said at the beginning, this is fuel and geopolitics, right? So demand, people are still flying. Our load factors is good. Our cash is coming in. It's not like COVID where we couldn't fly, and we had to do other things like Super App and Teleport and all these other things, right. But I always -- and I say I because that's my style, but it's really the culture of this airline. We always look at a crisis as an opportunity, right? You go and see every time there was a crisis in AirAsia Group we grew after that. And the first thing we saw an opportunity was to let go of all planes and get new planes. And so in March, we were able to negotiate a fantastic deal for the A220, which I believe will be transformational for AirAsia Group and very important for Philippines and Indonesia. This is a very important plan for Philippines and Indonesia. So most people during the crisis stopped, we pushed growth ahead. There was a good opportunity where no one was buying to negotiate with our partners and get a good aircraft. We did that before with the A320 and the A321, right? And I want to talk about the A321 in a second. This war -- look, I'm not a politician or a geopolitic guy. But it's pretty obvious this war cannot go on for much longer, right? If it does, I will send Tasapon to Tehran and Farouk to United States. And for sure, the war will go on much longer after that. So it's a matter of time, right? Both economies cannot handle it. So it's not like COVID where this is 4 years, 3 years, whatever, right? It's a matter of time. And it's an adjustment period. This is the really important point. Obviously, we sold a lot of tickets at lower oil price, right? So the war started on February 28. We had sold a lot of tickets at $85 jet oil. Of course, you wake up the next day and it goes up to $200. I can't go and charge you a I'm flying to book, sorry, you paid THB 200 because of Donald Trump, you have to pay me another THB 200. We can't do that, right? I don't think it's fair. Cargo does that, but we don't do that to passengers, right? Cargo has a fuel surcharge. So we just have to adjust our cost structure, have to adjust our fares. And now by the end of the third quarter, we're catching up. The liquidity is catching up, right? So obviously, this is a reset. If oil prices stay like this, then fares will stay like this until oil prices come down, and every airline will be adjusting. All airfares are going up, right? Demand hasn't changed actually, which is good because it shows that people still want to fly, even though airfares are going up 20%, 25%, et cetera, right? And obviously, we are still the lowest cost airline in the world, so we still have, in most cases, the lowest fares, right? So this is a timing period or imagine in the old days in the press, if you were making newspapers at 1 [indiscernible] and the cost of the paper was $0.20, you would have a stock, right? Once that stock runs up, you have no choice but to put the paper up. But if you don't have stock and you've presold your newspapers, you're going to have a gap. You just have to catch up. So we're in the catch-up period, right? So I urge everyone to look at our third quarter results, which will come out in November and fourth quarter. Obviously, the second quarter is the worst quarter because we sold all our tickets mostly at $85 oil. But then we had to book in oil at almost $190, I think. That's basic accounting, right? So we used our cash to pay for the oil supply and now we're rebuilding our cash balances. And I will show you our cash balance, nothing to hide in a second. Why don't you put a -- I'll articulate our cash balance, okay? So that's the most important thing. And all our countries are adjusted. The country that adapted the fastest was Cambodia. Cambodia has made money throughout this period, but it's small. So you can adapt very quickly, right? Thailand is doing great, right? It's cash flow positive. It's very good, and I'll deal with some of the intercompany issues, et cetera, if you want to ask that, right? I mean are you a financial influencer, I thought so from the way you were nodding. Can you leave the room? So I will deal with that as well, okay. Everything is going to be very transparent. So all you're seeing, of course, liquidity for the -- and profits for the second quarter look bad because we sold 85 and we had to book oil at 200 but it catches up in the third quarter and fourth quarter. And of course, the cash catches up in the third and fourth quarter as well, okay. So I'm very confident, right? And my -- obviously, all 26,000 old stars don't understand in the pilot [indiscernible] it's so good to see you so positive and so happy and like nothing is happening, even [ Tonnet ], who owns a Jazba. I said because we're going to come out of this stronger, there's nothing to be worried about, right? So sometimes press makes even my own staff worry. But I've been through this for 25 years and 23 with [indiscernible] right? In Thailand, we had some different sorts of issues as well, but we always came out, right, from ownership issues to -- I mean, the airport was closed in Thailand by demonstrations at 1 time, right? And I think we had to take the planes to Utapao, midnight rate. So we've been through everything actually to survive. 16 years, we have been world's best low-cost airline. I don't think there's an Asian brand that has won 16 years during COVID. And today, they're going to announce who is the world's best low-cost airline today in London. And I have a good feeling that we may become 17th, right? 17 years, we've been -- we've carried 900 million people and close to 1 billion, right? But think about all those people who couldn't fly before, right? And after us, of course, other airlines came, which is good. And I don't sit here. I mean, some airlines in Malaysia may be commenting, et cetera. I don't care. I don't begrudge them. I'm not positive if they're trying to take advantage of this press article, good luck to them. I'm focused on ourselves, right? And you can't automatically take AirAsia capacity. You've got to have our cost structure to get our fares. I cannot just say, oh, this airline is going to take AirAsia's capacity. I mean it's the most ludicrous statement I have seen in 25 years. And I can confirm, I mean, the government in Malaysia said no such thing, right? I mean, no one's quoted if they said, Prime Minister of Malaysia said this or Finance Minister of Malaysia said this, we can sources, right? But even if some junior government guy said it, how do you do it? I mean just use a little bit of common sense, how do you replace 100 planes in Malaysia, 70 planes in Thailand? Well, it's only Malaysia, 100 planes in Malaysia. You can't -- first of all, you have to have our cost structure, you have to have our brand, our market, our network, our interlining. So no one would have said that. And I'm amazed that there was a headline I've been in this business for 25 years. I've seen many airlines start and go. But never in my mind, oh, I can replace that airline. No. It's focused on ourselves. We're a very unique brand with the lowest cost, lowest fares, biggest network. You can't just step in. You can't. I flew yesterday on TG, right, from Jakarta because there were no seats on our airline and it was the economy, right? And I had very nice cut power row. It was really good, better than ours. Okay. Nice [indiscernible]. The crew are fantastic. They all recognize me. We'll take pictures. It was a very nice flight. I think our seats a bit better than the economy seat. The Wi-Fi didn't work. So it was like an AirAsia experience, right. You can't just replace [indiscernible] is a different brand. It's different cost structures, different everything. So I can say confidently, the government said, we never said anything like that, and it makes no sense to even say that, right? And you can say, since they said sources, you can say sources and the government told you no such thing, right? Okay? I'm very proud of that, almost $1 billion figure. Before AirAsia, most people couldn't fly, right? And it's not just flying to Bangkok or Kuala Lumpur, it's flying to all the smaller cities that we have made a massive difference to and will continue. And I'm very proud. You know I don't just fight for airline flights, we fight for lower airport tax. We just did with AOT, we are trying to make sure Malaysian airports don't put up taxes, right? We fight for air traffic control to be lower. We push everything because ultimately, the consumer pays and our time line is now everyone can fly. We want everyone to fly, right? And we created that and 1 billion people have benefited, 26,000 jobs and million-odd other jobs that we've created from hotels to tour operators to bus drivers to everything. And most important in smaller cities. That's our strength. That's what we'll continue to do. We're not about flying to Shanghai and Delhi. We're about flying to the smaller cities. We're about developing Udon, developing Changi, right? KK in Malaysia, Bandon in Indonesia, Cebu in the Philippines, planes that have been staffed of connectivity, right? And that's why we continue to survive because we go to different places, right? So 2 most important things. One is what is our strength, our cost structure. And when you see the refinancing, it's about cost. It's not about fresh capital. It's about bringing down cost. That's all I'm focused on, right? We've carried 43 million people so far this year. And my team have lowballed it, I think, will come close to 65 million, 70 million people. That is bigger than any ASEAN airline. For an airline that everyone is predicting to be ending. 45, all our planes are operational, [indiscernible] a grounded through maintenance, and I'll explain that to you. 60 million and not many airlines in Asia that are flying 60 million people, right? And next year, we target 80 million. Okay. So I find some of these articles strange, to be honest. And there's a good excuse to come to Bangkok because there's hays in Kuala Lumpur and there's blue skies here, and I get to see us upon a time. The shares 1 reason not to go or new hairstyle, nice color. Look at what we built. No one can replicate this tomorrow, okay? And we're going to grow it a lot. 229 use, 100 unique routes that no 1 else has done before, 122 global destinations, [indiscernible] 244 aircraft, and I think people forget, people forget that we have an order book of 500 planes. And roughly, I mean, I'm not going to give you the real number, the profit city in that is $1.5 billion because we bought them at good times, right? And our 220, we bought at a very good time, right? So there's a lot of profit. So even if you think we're short of liquidity, we can monetize that and we'll have lots of cash. We don't go into because we want to grow, right? And you look at our -- in Malaysia, 60% market share, which we are predicting to grow the 70%, right? Thailand, 39%, so on and so forth, right? Of course, we're small in Indonesia and Philippines, but with the new aircraft, we're very confident of building market share. And what we're beginning to do in [indiscernible] and Kuala Lumpur build what Emirates has built network. We just tied up with Pegasus Airline, A lot of people now are flying to Istanbul and going to Moscow, going to London for 5 destinations where we'll be opening up. And now many airlines in Europe want to partner us on this, right? And we will be launching from Bangkok very soon in Jakarta and Manila more connectivity. Manila, we will push to the West Coast of America and Jakarta more to the south and north. And we continue to innovate, some really great destinations coming, people laughed at me when I said Kazakhstan, it's the hottest route in Bangkok right now, right? Everyone wants to go to Kazakhstan. And we have many more exciting destinations. There'll be Bangkok, Istanbul soon, many other great destinations. That's what we're good at. And this is the first LCC to tie up with other LCCs to create a new, unique product and bringing more people to Thailand, more people to Indonesia, more people to Malaysia. We don't stand still. This is not an airline that's in trouble if we're continuing to expand this way. I mean it just makes no sense to me. Of course, we've had to readjust when oil goes from $85 to almost $200, we have to readjust that readjustment will be finished by the fourth quarter. And we have predicted -- we have said, look, we don't know what Donald Trump and the Iranians are going to do. We just have budgeted oil at the highest price, right? And if it goes higher, we readjust again. some airlines may have benefited from a bit of hedging, but most are finished by the end of this year, right, very small. Most airlines didn't hedge jet. The hedge Brent. The real problem is in jet, right? The crack between oil and crack. So all of us have to adjust our fares. That's just what have I been focused on, which everyone has missed bringing cost down in other areas so we can still create demand, getting cheaper plans, looking at different routes, creating new traffic with our tie-up in -- with Pegasus and other airlines. And it's unbelievable, Singapore was always a leader just released yesterday, I think, was it yesterday? Yes, OAG made Kuala Lumpur the #1 MegaHub. And I've been trying to work with AOT, and I'm going to start working with Indonesia and Philippines. We don't have to have 1 part strategy. We can be like Scandinavia, where you have Copenhagen, you have Stockholm and Oslo. So we want to create Megahubs in all of our AOCs, right? And pushing very hard on [indiscernible]. We brought our planes back at 330s from Savannah to [indiscernible]. We keep a couple of planes there because there are some airlines that want to work with us and move traffic from full service. So we delivered in Kuala Lumpur, the #1 LCC hub in the world, right? And the fourth largest global hub in the world. And we're not happy. We're growing more, right, through all of our other things. How did we deal with this short term, we cut some capacity. We had to cut some capacity, routes that didn't make any sense. And we're now slowly adding back that capacity. We cut about 60 routes in the third and fourth quarter, we're adding back 25 routes because we've stabilized, and we're adding back, right? I don't want to fly TG from Jakarta to Bangkok. So I pushed the network team to please restart and it's full. They flew a 787, and it was much more extensive in our face. So we're reputting down the routes that we canceled during this period, right, where we had to readjust. So third quarter some routes to come back, fourth quarter a lot of routes will come back, right? And then next year, will come back even more. Our load factor is 82%. And again, when you see the third quarter results and the fourth quarter results, you'll see we're recovering the costs, right? Not 100% recovery, but then we're cutting other things to balance it up. The fare cannot recover 100%, but then we reduce cost elsewhere. We cut some routes, et cetera, et cetera. So the key is cash flow strength and stability, right? We had on-time performance of 67% from Thailand was the best but as a group, we had 67% because we had no spare planes, we had to fix all our planes ourselves, right, 250 planes. And again, I put this up because this doesn't show like this is an airline in trouble. Our on-time performance is 1 of the best in the world, 88% and 86%, you go check any other airline. When an airline is in trouble, you begin to see a lot of planes on the ground, spare parts being shared, on-time performance not good. On-time performance is very good. This is -- that's why when I read these articles unlike and I've been doing this for 25 years, we look at our on-time performance, right? And that's when you're going to get better. I mean my target was 90%, which is very high when you think of weather and all the -- deal with volcanos and all kinds of things, 88% is remarkable, right? And again, it shows you that we're in a good position because we have spare parts. We're dealing with our engines. We're dealing everything, right? So I'm making you look at it in a different way to debunk this theory. There is no chance of nonsustainability, 0 trials. This is far easier to take -- right? It's just adjusting. It's just timing. That's all. And unfortunately, AirAsia is a big name. So I sneezes, [indiscernible] is a big story, right? That's a fact. I'm sure you don't even know some of the CEOs of other airlines. It's just the way we are because we're open and transparent. So we sell newspapers. Influencers get more likes, right? How many likes did you get on your last story. So that's the nature of the beast, right? That's the way we operate our company. So things get blown out of proportion when it's AirAsia. Good and bad. But that's just life, right. So this is what I said, we didn't change it. So I said, we suspended 81 routes. They're all coming back now, right, because we had to conserve cash. right? We took this opportunity. No 1 repossessed aircraft. That's another myth. We -- obviously, price -- oil prices are high, older planes burn more fuel. So we took the opportunity to say, can we return these planes while we cut our capacity down. And in the long run, that saves us a lot of money. Fares went up. And I want to say what I used this crisis more is to really push AI. And in the fourth quarter, it's unbelievable what our team is doing, really unbelieve. I'm a big fan of AI. I'm a big fan of social media. I love influencers. It's all about transparency. We were the first airline to use the Internet, years and years ago. And now we're the first to really drive AI. I mean, I'm very, very -- and AI can save us already 3% on fuel, right? And it's going to get better in that. So my aim on AI is cost and help customers meet better decisions on revenue, right? We've never done ancillary income revenue manage. You pay baggage the same, whether you go a long flight or short flight within the short-haul network. You pay food the same I think we should revenue manage. At lunch time, we may charge you more in the evening, we may charge you less to stimulate you to buy, right, same with luggage, et cetera, et cetera. So I couldn't do that before, but AI has given me a real opportunity to earn more income and reduce cost. And just before I start the slide, our fourth quarter really is very strong. And despite all the news yesterday was a record day of sales you think maybe people would be a bit wide. He was very strong yesterday, may be very happy. Neil from K [indiscernible]. This is [indiscernible]. Okay. I want to talk about each AOC, right, in a second. Malaysia is our biggest and strongest and business is very strong. And we're adding aircraft very soon. I want to talk about Thailand, lots of good things with the government and tourism adding back roots. I think there's some concern on intercompany. So on the intercompany, these this business as usual goes up, goes down, goes up, goes down in seasonality. But you'll see in the third and fourth quarter, it begins to go down quite a bit because of seasonality. So Intercore is not a major issue at all. Thailand will have loss for cash. It's just timing sometimes, et cetera. So I mean we're going to see in the third quarter, the fourth quarter anyway, which will normally happen. So we're quite content of that. Indonesia and Philippines, I'm very optimistic. I'm actually going to Manila on Monday. We have restructured. We shrunk the airline down, obviously. But now with the 220 and some other plans, we're going to start growing it. I had a fantastic meeting. There will be some new shareholders coming in to both these AOCs and strong shareholders really believe. So it's a point, right, yesterday in Jakarta, we've appointed a merchant bank and 2 very big businessman are really bullish about AirAsia, right? I mean they read all the articles. They said, this is a great time. That's the difference between entrepreneurs and stuff. So we're very committed to Philippines and Indonesia. We're bringing new capital, and we're going to start growing it with 220. And we don't talk about Cambodia, but Visa and Cambodia has done an incredible job, throughout this period, he made money. And now we're ready to grow and add planes to that thing. So our biggest problem is where do we allocate the new planes coming in as being stabilized. So for me, costs have stabilized at 160, 170, 180 oil. Of course, if it goes up to 250, then I have to do another repricing, right? Right now, I'm anticipating oil to be between 160, 190, and we have stabilized. So the operation is stable now, sustainable and looking good, right? And I put this up because every person we have their own questions. Malaysia, I think we can cover a lot. Thailand since I'm in Bangkok is there's no chance that anything will happen to Malaysia AirAsia. The interco is up and down. But again, you'll see the next 2 quarters going down. And the growth is there, right? We -- Thailand is still -- I mean it has a lot of competition, Thailand in terms of Vietnam and other countries. But we have working with Thai tourism, with the government, we have some very good ideas on creating new growth for Thailand, right? And Indonesia and Philippines, there will be new capital coming in. And I think those markets need other airlines dominated by 1 or 2 airlines, and we would give consumers more of a choice and we really use our network going forward. And as I said, Cambodia was a star country that made money throughout this period, but it's just small. So I want to clear some of these myths, right, looks 1 slide everyone need to rush. No government bailout. I don't know where these stories have come from, right? And I ignore them, but it just got bigger and bigger. So I'm here in Thailand, right? We've never received any government support in 25 years. And as of today, we haven't got any and that's it. There is no discussion. [indiscernible] for those the lady in the back, who's known me for 20-odd years, also a new hairstyle is being consistent, right? We have built this airline through blood, sweat and tears. No sugar daddy, no sugar mommy, the closer sugar mommy I have is [indiscernible]. New subscribes to our bond. But we've done it ourselves, and I'm very proud of that, and we'll continue. If in the future, government think is good to help us because it adds to the economy, great. But there's nothing as yet, okay? No aircraft have been grounded, no aircraft have been repossessed, zero, right? Every aircraft today is flying. Every aircraft we returned was our choice. Creditors have been very supportive. If they're not, we would have [indiscernible] ground. We would have stop accounts wherever we will be able to fix our planes, whatever. I just got off a call. Many of our lessors said we can speak. We're very proud to be associated with AirAsia, and we supported you in COVID, and we will support you now, right. No one has had a problem with us. We haven't had any retail claims. We haven't had anyone put any planes on grounding loses, okay? The last 1 is fundraising. There's some crazy numbers being thrown around this place. Number one, during COVID, no 1 wanted to lenders one, right? So the people that lend us money, lend us at high interest rate. In 1 of our companies, we were paying 17% interest rate, 17%. The loan shaft is cheaper, right? And so what are we doing? That's Farouk's job when he's not in [indiscernible] is to refinance those loans to cheaper rates. We already started that process in Capital A. Our engineering company borrowed money at 17% is now refinanced to 8%. Who will do that, right? Many Malaysian banks didn't want to talk to us before. We got our first loan from Arab Malaysia Bank. So we said $1 billion, we put out so many press releases. Our accounts are public, where did this $3 billion come from. Our accounts are there, our creditors are there. Everything is there. We've been consistent USD 1 billion, right, which is mostly to refinance expensive loans and clear some of the creditors, right? That's it. It's irresponsible to go and just pick a figure from the sky. No analysts wrote $3 billion, no influencer wrote $3 billion, but the press put $3 billion, from where. I'm an accountant, where did this $3 billion come from? I don't want more debt. I don't like that. I don't think anyone here likes it, right? We want to be debt free. In 2019, we had no debt. All I talked to [indiscernible] and Farouk is I want to be cash flow positive and had no debt again like [indiscernible], right? We don't want that. So if I can get cheaper debt, will you do it? So you know I'm not someone that gets upset very easily. I can sometimes understand Donald Trump when he goes crazy on the press, right? What we like to dismount very calm. But when you wake up in the morning and you see USD 3 billion loan, where did that figure come from, right? I ask Farouk, where are they getting these numbers? Are they seeing different accounts from us. So it's -- he's been very transparent. He's put out many press releases, many analysts briefing $1 billion. And our target is to get that December, January, something like that. And we're very confident of getting it. But it's mainly to reduce my interest cost so I have more cash. I only think about cash, I don't care about the P&L so much. Cash is what's important. So today, I'm trying to be as transparent as possible from [ Integra ] account to planes fundraising. We can't put out fake information. Farouk has put out what we're going to work. And the banks know and we are negotiating with many banks to see who will give us the best deal. And of course, local currency banks are the best banks, right? Because we match our liability. All our loans are in U.S. dollars, right? But my earnings are embarked in ringet, in rupiya. So I want to match the loans as much as possible. And so now, banks are more confident of this, we are -- decided it doesn't help, but again, no one's changed anything, no one's call back anything. But we will continue, and we're still very confident of December, January in getting that refinancing. And it's principally and you can ask Farouk later to refinance our existing debt, which was taken during COVID, right, but very high rates, okay? Another figure that's been thrown around is $18.7 billion of liabilities. We have 200 planes. So you have to put in the balance sheet, those planes. Most of that $18.7 billion is planes, right, because the new accounting standard is you capitalize the lease for the next 12 years. So it's just future liabilities. They're not due tomorrow. I think $13 billion of the $18 billion is leases. Then we have prepayments, we paid for the engineering already. So the liabilities and nothing like -- I'm not going to go into an accounting lesson and nothing like $18.7 billion. That's irresponsible as well. We book in a future commitment of 12 to 18 years for leases. We pay every month. When you say $18.7 billion, the public thinks it's due tomorrow, that's not correct, right? That's why we feel we have to do this to correct some of this information, right, which is irresponsible as far as I'm concerned because you're damaging a lot of people's lives with this kind of a reporting. So in my 25 years, this was the strangest article I've ever seen in 25 years, right? So talk about the liabilities, most of those liabilities are on planes, which have 10 years of 12 to 20 years, some of our planes are 20 years but the accounting standard makes you book in the liability because we have signed a contract for 20 years, but it's not due now. Okay. So we're okay. We're sustainable. We're good. Thailand is strong. Indonesia and Philippines will grow, and Malaysia is strong as well. And that's timing. Sometimes we pay for engines first for Thailand. Sometimes they do so, the [ Intego ] goes up and down, right? But it's all in order. This is for the Thai press mostly. So I mean this is a summary of what I've said, we're back to drawing in the fourth quarter. We have adjusted our cost structure and our revenue structure to deal with the increased costs the fundraising, again, as I said, is targeted towards refinancing it's $1 billion, not $3 billion. We do not need riveright? I mean if someone wants to give me $ 2 billion for free, I'll take it. For sure, I'm not going to borrow an extra $2 billion and pay interest for what, when I don't need it, right? And because we're open and transparent, I think some of our partners are on this call, I said anyone who wants to come to this call. I wanted to Instagram live rejected by copyright. You want to [indiscernible] live other things. So by the way, they're going to say that we are cutting cost, is very hot. Can we ask the Grand Hyatt to turn the [indiscernible] on up? It's [indiscernible] we keep talking, as we're talking to you, we're not running away. Everyone is here. You can ask me any question in whatever language and I will answer to my best ability but I can, right? Of course, I'm not going to get into specifics on some future. Thank you thank you very much. Can I just say 1 thing? Firstly, we're fighters. We've built this airline from 2 planes, right? I don't think many people did what we've done, right? Me and Tesupon when the music business. One week before started Thai AirAsia, we were with a [indiscernible], okay. That's true. That's why our first plane was [indiscernible]. Karaba represents a lot of what we believe, right? He's a man of the people. His songs and his lyrics is all about AirAsia, giving people a chance to dream, whether it's my staff, whether it's my passengers. My #1 priority is my stand. During COVID, I let 2,500 people go. All of them are back. That's my #1 job is to make sure everyone gets paid and can survive. These articles don't help me, but they make me stronger to prove there. But #1 is not proving to everyone. Number 1 is to protect everyone's true. We were from the music business. What did we know about planes, right? When I asked him when Shin Corporation asked me, do you have a CEO, I said yes. I didn't, and, I called [indiscernible] to come, and he was still in all music. But that's our beginning. We were humble beginnings, but look at what we've built. And we're not about to give it up to anything. I'm not here to talk about other airlines. Some airlines may take advantage of this, make [indiscernible] whatever. It's not my business. I'm not here to run down anyone. I'm here to focus on ourselves, right, and prove to the market. 25 years, we've thought here. We're not going to give it up. We're going to come back stronger. Okay. So I open to any questions now. Thank you very much.

Okay. Thank you very much, Mr. Tony Fernandes. We will start with the Q&A session. We will begin with the questions from the participants in the room first. So for our media friends turning in virtually, please feel free to do your questions in the message box. Just remember to state news agency when submitting the question. [Foreign Language] Okay. We can begin with the question first, just raise your hand.

I'm [indiscernible] from Bloomberg. I have 3 questions related to the fund raising. So the first is what steps has AirAsia taken so far to raise the planned $1 billion internationally and MYR 700 million locally? And what state are the discussions currently at? The second question is what discussions have taken place with banks, bond investors or other potential lenders. What has the response or level of interest being so far? And my last question is what financing structure are being considered? And what does AirAsia expect to complete the fundraising?

I love Thailand. How does [indiscernible] become Ice, but very cool. It's like, I always tease our CEO. His name is [indiscernible], call me A. So -- I forgot the question. First question is, let's do the response first. All right. Actually, I had to tell I'm giving Farouk a hard time because 1 bank is pushing me and saying we're too slow on a bond, international bank. And just last night, I would say, hurry up, they are selling to me to say they like the structure. This is 1 of the biggest banks in the world, okay? So response is good. We have many choices. I'm trying to get the cheapest choice, okay. Timing, as I said in my talk, December, January. We have banks from Europe, banks from the U.S., local banks. That's my priority, local banks. We have bond investors, we have Middle East investors also surprising, we have a term sheet from the Middle East, signed term sheet guarantee to fund, right, USD 1 billion. I'm holding off because I want to try and get the best view, right? So level of interest, very strong. No change despite this press because they see the numbers. They know our business. They see all our numbers every day, right? And so no change in interest, right? Of course, when they see an article, some of them will follow up and say, what's this about, right? So we tell them. We say, go talk to wherever you want to talk to, right? Timing, December, January. Thailand is doing some staff Malaysia is doing some stuff, Indonesia -- all different types of capital. Indonesia will be share capital. Most probably, Philippines will be share capital. We're looking at bonds and debt in the other 2 countries, right? The response has been good. Did that answer your 3 questions?

[indiscernible] presentation. I'm [indiscernible] from CTS International. Yes, I want to ask a question on the Interca transaction, specifically on the receivables that is owned by the parent group. So what's the main source of that you can comment? And I think according to some article, the payment for tickets for Thai AirAsia goes to Malaysia first and then parent pay back to the Thai AirAsia.

Yes, that's because we have 1 website, that's how it's always been done for 25 years. So the cash comes in and then we pay and then Malaysia pays for some things for Thailand, engines, deposits, lots of things. So that's why it's lumpy, right? But as I've said, the seasonality will go up. And it also depends on engines. It's a suddenly in the second quarter, and we have a lot of engines. So it goes up. So that's it. And because the payment terms, I mean, we're very transparent, we show the aging, right? And of course, the aging isn't just all sales. Sometimes it's engines, sometimes it's maintenance, all kinds of things. But I knew discretion was coming up, so I looked at it myself. And I think by fourth quarter, it's I mean it's substantially down, but it will go up again, it'll go down. This is how it is. There's nothing extraordinary. It's business as usual, right.

So you mentioned that it is going to trend down in the second half.

Second half, and that is seasonality.

And do you expect to be structurally down next year? Is that the level that we're seeing right now at the peak of what...

What is the big difference is maintenance, especially on engines? We had 64 unserviceable engines because of COVID. And GE just couldn't do all those engines at the same time, right? So there's a lot of engines that have gone in, and that's what -- but once that's done and it will probably be by the second half -- first half of this year, next year, then it will be mostly just normal business, and it will trend down for sure. But it's lumpy because of other things in there.

If I could ask another question on your hedging strategy? So you mentioned...

I don't have a hedging strategy because we can't hedge at the moment because we can't -- we're still -- cost is too high for us. I'm not a big believer in hedging. If I can do a mechanical hedge, I will do that. And that [indiscernible] desperate to do a hedge before the walls I saw was going to happen or we couldn't get the credit. So mechanical hedging means if I sell 6 months ahead, I lock in those sales, right? So there's many monthly short-term hedges, but they're very expensive right now because of the volatility. So once we have credit, and Farouk has already started talking to me about it. We would do jet for a start. We wouldn't do Brent. And secondly, we would do short-term hedges mimicking our revenue term. okay? So if we sell 6 months, we hedge 6 months, that percentage. So you protect those sales. So if I hedge at $85 before the war, those sales would have been protected, right, but I wasn't able to.

Mr. Tony, I'm [indiscernible]. I have 2 questions. The first 1 regarding the Thai AirAsia. In the next phase, will be able to still maintain the first -- the #1 market share. What's your strategy , what's your pen to control the cost, will you need to reduce your staff of any furlough plan.

No. I mean, again, let's do that first question first. We had plans during COVID. We ask people to go and leave. We did all those things, but everyone comes back. There are no plans at the moment. Cost actually human cost is not a large element of the cost structure. But the other more important things. It's really hot I know no, but they don't have Ice. So we, yes. Okay. So no, the cost structure, the main cost is to cut loss-making rules. That's where most of the cash goes, right? And to return planes that are burning too much fuel. Really no plans on following anyone. I cannot guarantee that. I don't think any airline can guarantee that if this war goes on forever, right? But no plans at the moment. To maintain market share, I don't really focus on that we just do what we can. And we generally have been #1 in Thailand, and we continue to grow. So 1 anticipates our market share will continue to grow. I mean many airlines have come since we started [indiscernible], many other low-cost carriers in China, et cetera, but we've always maintained #1. It's not our ambition to be #1. Our ambition is to provide good service, good product and grow. So our strategy is not to be #1, but we seem to continue to be #1. And how do we maintain that number one, low fares, right, which is generated by low cost, and a good product. I think we didn't win world's best low-cost airlines 16 times in a row, if we're not good. Our investor in Indonesia says, you have such a good brand, you can grow very quickly with the right support, right? He's investing in the brand and if I am being very open. We hired in Merchant Bank yesterday, and we're going to rush as quickly as possible to bring this new capital in, but he invested in the brand. The brand is very strong. AirAsia has a very strong brand, which is why you are right about us all the time, right? That's just the way it is.

One question from me. Do you have a plan if the war continue like maybe 1, 2 years. Can you [indiscernible]. In the worst case, it will continue to increase intensity? What would you do?

Yes. We will start a drone business, low-cost drones. No. I kind of try to answer that, but I'll be very clear now, right? You go from $85 to $200, you have to readjust your revenue structure and cost structure. We've now readjusted to about $170 million, $180, right? If it goes up, we have to readjust the game, right? Through pairs. That's the only way. I mean, every airline will have to increase their fares. It's impossible to -- unless you have billions of dollars of cash and you're just going to burn it, you either increase your revenue or cut your cost. So -- we are now in a situation where I don't look at the war anymore. I think it's going to end. But, hey, I have no idea. Initially, we were told 2 weeks right? So who knows? All we can do is we've taken the business from 85 to 160, 170, 180, depending on the month, right? That's been the biggest jump. Unless it goes to $320, then, of course, we need to take time to do it. But I think oil will be maybe 200, 210 whatever. So the big readjustment has been made, right. And I hope Donald Trump goes back to the apprentice TV show, that's how I know him because I did apprentice in Asia, right.

Sorry for asking another question. So you have mentioned -- you have mentioned in your speech that they are -- all planes are operational, right? But according to your financial report, it said 161 planes out of 239 planes are operational. So which 1 we can rely on?

I don't know where the -- I'm just telling you right now, as of today, firstly, because I know your guy in Hong Kong is obsessed with this. No planes are grounded from nonpayment, confirmed. There are planes in maintenance. Every month, we have C checks, 20 to 25 planes, right? And then we have engines, we're ready for engines to come and they just finish the [indiscernible] GE. So they're all maintenance related whenever the gap is. And again, I'm glad you asked that question. The fact is when you have 169 versus -- I'm operating with 1 hand tied behind my back, because I'm paying for those planes, right, but I'm not operating them. So by October, I anticipate to operate. There will always be planes maintenance. Every month, there will be planes maintenance. So just to confirm to Bloomberg, there are no planes grounded due to nonpayment. They are all maintenance related. And I'm hoping by October, it will just be C check maintenance. That's why I'm looking forward to the fourth quarter, it will be the first time we have all our planes back -- minus the monthly maintenance planes. Well, now it's cooler. Did you pay the bill.

Excuse me, my name [indiscernible], a stockholder. I just would like to know the account receivable, mainly from the from Malaysia.

Yes. I mentioned it already. It goes up and down. Firstly, I didn't talk about stock price because that's not my job. My job is to tell as much information so that you can make a decision. I apologize for the stock price, but I'm in the same position as you, okay? Probably worse. So -- but the receivables from Malaysia is up and down, why it's higher, is because we have a lot of engines that are going in. But the question here was when does it kind of get stabilized, I'm saying by the fourth quarter because most of the maintenance will be done. So it's going down over time. And I think by maybe first quarter, second quarter, all the maintenance will be done is just sales, the normal business operating.

Okay. Because I were already like the accounting reserve, excess payment treatment.

Yes, yes. No, nothing to worry about. I give you my phone number later. So you can check with me every month. Okay, it's in order. These 2 guys always check with me, A and [indiscernible]. You can get that phone number also. Okay? Again, it's great a shareholder is here. Thank you. I will work damn very hard to get the price up, but I don't control the market. I control the performance of the company with my team, right? We control it. And we're here to be as open as possible. There is no issue on the Intercom. We're very transparent. We don't have to put the aging, but we took -- we put it. So we try and give as much information as possible. The rules don't say we can just say accounts receivable. But we put the aging. So we want everyone to know as much as possible. That's our style, okay? I would say buy more shares unofficially.

Sorry, we will do the questions following the question that put. [indiscernible]. Given volatile oil price and rising airport tariffs is the low-cost high-volume model still structurally viable in Southeast Asia region or [indiscernible] permanently altering your customer proposition.

Where are you? Maybe you take your mask off. I can't hear your question.

Okay. Sorry. Given volatile oil price and rising airport tariffs right now, if the...

Yes. I mean -- okay, your first question -- you have 2 questions, right? First question is how do we deal with rising costs? And is the low-cost model structurally damaged, right? What was the second question?

And are fare hike permanently altering your customer proposition, fare hike?

Number one, the danger is people try to change the model. I mean, even [indiscernible] everyone, we -- of course, we look at it. Should we put more premium seeds should we have more leg room, et cetera, right? I think good low-cost models stick to their models, whether it's Costco, whether it's UniCloud, you don't have Costco trying to be something different. We're a low-cost airline. We focus on low cost. The 2 things you have to deal with is, AirAsia, will not be the only airline that's forced to raise fares, everyone has to, right? So number one, as long as there's a difference between us and full service airlines, then there will always be an arbitrage in people will fly us. Does it get to a point that people can't fly because it's too high, which is really your question. I think we're far away from that point because airfares have gone up quite a bit from 2019 but demand is still very strong. The elasticity of flying is very strong, right? So American Express, Visa have all done studies to say that it will take a long time before there's demand destruction in airfares, was the #1 discretionary is travel. When I was young, maybe I was lucky to go to Pennang by car. Now all kids expect to go everywhere, right? Disney Land, whatever, right, well as parents under pressure. Everyone wants a holiday. So I think -- to answer your question, you can see from 2019 to now, airfares have gone up about 40%, 45%, but demand hasn't changed, right? I think there's a long way to go before there's demand destruction, right? Your second question. Okay. Yes, Ice. Come and sit here. You're getting questions from everyone in Bloomberg, Bloomberg Malaysia and Bloomberg Indonesia.

So AirAsia said, it is returning 25 old planes, but it is also getting rid of new few efficient planes being delivered by Airbus, right? But during the conference, you said AirAsia doesn't need to monetize new plane delivery. So...

No, no, no, I didn't. I didn't, be very careful. I said that we have the potential for people who think there's a massive cash surplus in our order book. If you think we're short of cash, I have a huge profit in our order book. I said very clearly, I'm not going to use it, but I'm just telling people that is a massive asset in our balance sheet. We bought planes at 1 price. The planes are now worth a lot more. You bought gold at 1 price. [ Petra ] has a lot of gold in the house. She's waiting. She can liquidate that gold and by me and [ Tesafone ],right? So that's all I'm saying. I'm not saying I'm monetizing it at all. I want to grow, okay. Are there questions online? Okay.

Maybe the final question before going online. Beyond the cost structure and the oil problem, how much from Thailand -- I know you're from Thailand. [indiscernible]. Beyond the oil structure from [indiscernible]. Beyond the oil problem and the cost structure, what is your point of view regarding the Chinese airliner trying to compete with the low-cost service in Southeast Asia, especially the price war and the [indiscernible].

Well, there's a point where we can't compete. So we pull that at some routes, right? A couple of things I asked the Thai government, make sure we treated fairly in slots. Chinese airlines get good slots. We sometimes don't get good slots on the other side, right. Then that's 1 of the reasons. If we're landing at 2 in the morning, but the Chinese airline comes at lunch time, it's not a fair competition. But in the end, if we can't compete, based on that slot, we had to pull out, which I think is bad for both markets. But we're still very strong in China. We're the #1 going to China. We're adding more routes into China. Most airlines have contracted in China because a variety of reasons, most Chinese are seeing in domestic markets. But we're not a one-trick pony. We're big in India. We've created -- I mean, Malaysia has like 9 flights on Bangkok. That's why it can come so often now, right? It's like going on a bus, and we're adding another flight as well. So -- we're not just about China. China is a good market, we're India. Japan is very strong for us. Now we're developing Kazakhstan. We have ASEAN is very good for us. And so -- but ultimately, if we can't compete, we pull out, right? But I'm hoping we get fair competition.

Okay. Moving forward, we'll go to the online questions.

Ice another question on planes?

All right. The first question from Malaysia from the start, was specifically, are you asking the government to do, if anything, in terms of fleet size, profitability leverage in the markets you want to operate?

Nothing, nothing. We haven't had -- we're not getting anything from the government. I don't know where the story comes from, right? So officially, I'm saying to you, there is nothing from the government of Malaysia. And again, for the Malaysian press, my sources have told me the government never had any discussions with anyone and they said it makes no sense to even talk. And this is from the highest levels, okay? Just to kill that bit of.

Okay. The second question from the start. How comfortable are you with AirAsia liquidity position? And what gives you confidence that the group can meet its obligations without a major government-backed rescue.

Thank you [indiscernible] zen. I said there's no discussions with the government. We told you we have $1 billion, so we're confident. And we're very comfortable with our liquidity. We have over $1 billion of cash, which I can confirm. And I've mentioned what Farouk is doing. Who are you testing so much, thanks. So yes, so let me answer it properly. One, no discussions with the government. Two, we do not need rescue bailout, whatever. These are words that we've never talked about. If Malaysian banks will give us a better interest, why not? [indiscernible]. That's refinancing, right? Same for Thailand and for Indonesia and for anybody. Two, do we have enough liquidity? I've confirmed our liquidity is over $1 billion. I've confirmed what we're looking for in debt financing, $1 billion. I confirm that we are looking at raising share capital in Indonesia and Philippines. And I go to the Philippines on Tuesday, and I go back to Jakarta next week. So yes, we are -- there's no question of sustainability. We have been through 25 years of this business. We have been through more than any airline has been through -- and we've also -- I just want to say, we've adjusted our cost structure by Capital A, and we're hoping to invest in Thailand and Indonesia MRO facilities, right? We want to put a big investment into Thailand or MRO and Indonesia and hopefully, later the Philippines. ADE is very fantastic, but it benefits the airline tremendously because the cost structure goes down. Teleport that is run by a Thai is a record profits. It just raised $50 million from BlackRock. And it is contributing more to the airline in cargo, right? AirAsia move protects ancillary income rather than we lose all the passengers to travel agents, 40 years. So -- there are other things that are working to reduce. Everything is about cost for me. Everything is about cost. That's why I fight so hard for lower airport charges, et cetera. That's why it was AirAsia that pushed for the reopening of [indiscernible], right? [indiscernible] is going to be closed down. It's AirAsia that is trying to persuade the Cambodian government to keep the old airport. It's AirAsia that pushed the government in Indonesia to reopen [indiscernible] Airport, right? So we're all about trying to lower the cost. That's my #1 is efficiency. And that's why I like because it helps me to be more productive. It's not about people reduction, it's about increasing productivity. That's what -- and we're talking about just now.

Okay. The next question from Reuters Hong Kong. The first question from this is on the 158,220 jet orders signed in May, do value more than roughly $19 billion at list price prices, have you begun making predelivery payments on Airbus? Are you current on our PDP obligations across the adverse order book, given the liquidity pressures the company has planned?

I'm not going to talk about individual creditors. That's -- that's not what I'm here for. But we'll be announcing something pretty exciting with Airbus within the next few weeks. So read between the lines. our relationship with Airbus is fantastic. And we'll be making a pretty exciting announcement with regard to our growth and our strategy with Airbus within the next month.

The next question is, several media outlets reported this month that Malaysia's Finance Ministry has hired alteration consultancy to access [indiscernible] needs, can you confirm this was alternate appointed by the mutual finance by AirAsia itself of both.

Not by AirAsia. And I don't know Alton until I read in the press, I had to ask Farouk -- and actually, [indiscernible] has worked for ADE, our engineering company that finance asked them to review that. So I don't know [indiscernible]. We haven't appointed them. I don't know -- a lot of this stuff is new to me, $3 billion, [indiscernible] whatever I don't know. I theme-park in the U.K. called Alton Towers, but not aware of this.

Okay. Next question from CNBC Singapore. With fuel costs rising and geopolitical uncertainty, has the bar for opening a new route become higher? What would make a new market worth the risk now?

Well, we just opened Kazakhstan in Thailand, where we can give an affordable product that will stimulate the market and create excitement. We're still doing it. I think what we did in Istanbul is a precursor to what we want to do in [indiscernible] tying up with Pegasus is very exciting. And 3 more low-cost airlines have approached us in Europe who want to do more stuff. So yes, we're not slowing down our growth. Again the bottom line is, can we create a market at the price that makes money. That's basically the point. And if it's a new market, that's the first point. If it is a market with other airlines, can we provide better value. That's it. So in some of the Chinese cases, we can't. So we leave, right? But that won't be forever. At some point, even the Chinese airlines have to make money as well, right? So I'm being very open and transparent there.

The next question from CNBC as well. Beyond fuel savings, where do you see AI making the biggest difference to AirAsia's business? And where is the company putting the most investment on.

Look our partner is Google that has been fantastic. They've been sending me messages of encouraging. And 1 of the great things about the article that came out is you know who your friends are and we have a lot of friends. That really is very comforting to all my suppliers calling me and saying, we're behind you. We've been with AirAsia for 25 years or 10 years or whatever thing. Google is 1 of our key partners in this project. So to answer your question, operations is the main one. Fuel is my #1, obviously, $190 oil at 1%. That's a huge number. Revenue management staff optimization, carrying bags, moving around things, accounts, accounts. I really don't want to ask my CFO anymore. I want to be able to do it myself. And I want all our staff to be able to make good route decisions, good analysis of how we use our planes, which cannot be done right now. So enterprise -- and then customer. I don't want to talk too much about customers, I don't want to give all our secrets away today. But a lot of fantastic customer-enhancing things which will be coming out in the next 3 months, okay? We learn a bit from Kakao, we learn a bit from WeChat. We put our own flavor into it. And I think it's really exciting. So 2 sites, operations. and commercial. There's a third one. We try and make it easier to work in AirAsia. So our ID90 product is now driven by AI. So our staff [indiscernible] Poppy can fly with his friends doctors whoever to go for holiday with an ID90 ticket. So before they had to see when to book, but now with AI, they can see when is the best time to fly. Have you used it [indiscernible]. Very good. I thought so. I wouldn't ask, a, because he doesn't have a life. So he won't be traveling much. And [indiscernible] has his Jazba, so he's not traveling anywhere. Ice, I missed you. You have 10 more questions. A lot more Ice, you have to wait. You have to wait. You have to wait, wait, wait, wait.

Okay. Now we move to the Philippines from TV 5 Manila. How that fuel price on the uptrend again given the tensions in the Middle East, how will this affect there, especially moving into the Christmas rush in the Philippines?

Yes. I mean, inevitably, fares had to go up, right? That's -- but most of it has gone up already. That's why I said the restabilization has happened. In some cases, the fares may go down. It's a mixture. Some we can -- so without giving away too much of our strategy, some is fair, but some of you trying to increase the load factor. So if you're 80%, you try and push to 90% with a lower fare. But overall, you get income and you get more ancillary income. So -- it's not just about fare increases, but I think most of the fare increases have come up. If it goes or stays at 190 for a while, then we will have to readjust fares again. But I think for the moment, East, West have become an oil expert. I mean moving up oil. I've always been an oil expert. But now I track tankers. You ask me how many tankers went over the Strait of Hormuz, I know I am on tankers.com. So every day I wake up and look at how many tanks crossed the Strait of Hormuz, right? East-West pipeline will be back in a few days' time, and there's a few more new pipelines opening. Right now, there's 20 million barrels of oil that go through the Strait of Hormuz. If you listen to Donald Trump, it's all there. But I don't listen to Donald Trump. I listen to tanker.com, okay? So we're about 60% to 70% replaced. Now also oil consumption has gone down. China is buying a lot less oil, et cetera, et cetera. So I think even at this war situation. And it's the worst now you have Gutie, you have Strait of Hormuz and you have pipelines. So we at the worst situation now. And obviously, for us, jet crack has gone up a lot, but I think it will get better, right? So look, we're trying to avoid -- I think 190 for a long time, definitely, it was going to go up. But I think for most people, they bought their Christmas tickets already, so it should be okay.

Okay. Next question is from Compass Deli, Indonesia. What is AirAsia's outlook for Indonesia? Does the company see Indonesia as a key growth market. Or it is expecting to reduce capacity in the country.

No, we have reduced, we have reduced like every airline in Indonesia. And I'm very bullish about the 2020. We're coming back. I was in [indiscernible] yesterday, as I said. And I'm going back on Tuesday, I've been to [indiscernible] 3 times. And on Monday, Tuesday, I go to Philippines. Thursday, I go to Philippines. So I've been very bullish. I spent most of my time in Thailand. And now going to Jakarta, and I'm very confident of our Thai operation. That's why I've been spending a lot of time. Me and [indiscernible] we're very excited about the future. I actually ask him to spend a night with me where he rejected. I said you can sleep in my apartment today, but you'd rather see Ice. So Thailand are feeling good. So now we're focusing on Indonesia and Philippines, and I'm feeling very good about that. So I'm really focusing on the future and helping the team the team managers day-to-day and the forward sales, right?

Stefan Compass [indiscernible]. With what indicators or market conditions would -- looking at before deciding to increase the capacity?

Yes. We're -- I mean all Bo, are you on the line still? No fire him. So we're looking...

Yes, I am.

You just saved your job. I think from the last I saw, I don't want to give misinformation. We're looking to regrow, I think you said 15, 16 planes at the moment, and we're looking to regrow to about 20 next year?

Yes.

Yes. Okay. So we're starting to regrow next year. Captain Sadikin, and our CFO are doing a fantastic job. I met all our staff, and that's what I'm doing. I'm hoping to meet the Thai staff on Monday for everyone to know and ask the same questions you guys are asking as well here. But yes, very bullish on Indonesia. Really having a good time in Jakarta, and we see a lot of growth in other places. Just to let you know, the beauty of our network, right, I had to see someone in the North of Malaysia, in Cuda and AloStar. And I couldn't get the right timing. So I flew to Penang. I took a car to [ AloStar ]. And then I had to come to Bangkok. And my office originally was sending me back to [indiscernible] and taking another flight. I said, why don't I go to [indiscernible] and it was my first time I never did it. I took the border crossing. It was fantastic, easy. I got my mango across with the salt, it kills you. And then I took the [indiscernible] fact, you saw many Instagram, Hagai staff, we're really happy to see me like the whole of Hagai AirAsia came out on to the Aero bridge, which I posted yesterday, I think. So we have a fantastic ways of moving around. I crossed the border. I took AirAsia from Hagai to Bangkokay, and I was in bed by 11:30 dreaming of Ice.