Asia Aviation Public Company Limited (AAV) Earnings Call Transcript & Summary

[Interpreted] Hello again, and I would like to welcome you to Investor Day 2023, or from our AV Group or Thai AirAsia, I am the Investor Relations Officer. And I am going to be your MC for the first half of today. So we are here at the Asia Academy. It is the Academy for the crew and pilots that has been officially opened last year. And you will be hearing from our speakers today about what is the background, what is the history of this academy. So we have the sale side by side, investors and also analysts, who are joining us in this Investor Day. We have ESG, we have bank personnel and also a number of other participants. Thank you very much for your time today. So I would like to go over the agenda very briefly about what we're going to cover in our talk today. So [ Khun Jo ] will be the chairperson opening for our event today. We have 4 key main sessions starting from [ Khun Top ], who is going to talk to us about the post pandemic way forward. And also next is going to be Ms. Mun Ching who is the Group Sustainability who is going to talk about climate change and the way of our approach. And this is something that is quite new and happened only 2 to 3 years ago. And after that, we're going to have a break. So after a break, we will go on for another hour for the next session. And we're going to be hearing from the Head of Engineer Ramp and Safety for another 40 minutes, and it will -- we're going to end by the Head of Business Development, who is going to also talk to us on the business perspective as well. And we're going to end with Q&A. So if there is any question, please write down or please keep your questions with you, and we're going to allow you to ask questions during the Q&A session. And after that, we're going to go on excursion. For the excursion, if you have time today, you are more than welcome to join because this is going to be a once-in-a-lifetime experience for you because during the emergency on the aircraft, we're going to demonstrate to you how we should react. And we will try to wrap up everything by 15 past 5 or 5:30. So for the restroom, we have -- in this conference room, we have only one exit and you can exit that and take a left turn to the toilet and also downstairs for the assembly point. We are going to record this event as well. So you may have -- so I would like to ask for your permission to allow us to use your photos during this session. So I would like to next invite Mr. Tassapon Bijleveld or [ Khun Jo ], our Executive Chairperson, to preside over the opening.

[Interpreted] Thank you very much, and good afternoon. Welcome. And may I carry on in Thai? I think you have a translator, I think like a UN meeting. [Interpreted] An official welcome and hello to all of us. We have not been meeting quite -- for quite a long time now when I walked up to this auditorium. So I got asked a number -- the same question, for example, like are we doing better? Or what is the way forward? So these are the questions that I got. So my answer to you is that we are now recovering, and we will -- this will be touched upon by Khun Santisuk as well. Now we can see that the load factors are better. We have better revenue, better pricing. We are now facing lack of aircraft really. And also people ask me about the opening of China as well, it is improving, but I -- we would like it to be better because when China is reopening its country, it was kind of out of a blue really. It has not been publicized or they didn't tell anyone about opening the country, and that will be touched on by Klong Santisuk as well. So we are here at the AirAsia Academy. You may ask why it is so big. Well, we built this when we were quite flexible in terms of financial. And in terms of our finance, which is pre-COVID and during COVID, we just kind of closed down this place, and we just reopened it very recently about a year ago. In terms of the calculation, you may ask, why do we need a lot of stories, a lot of buildings in this complex. So we think that if we have 80 aircraft in AirAsia X, if we have about 20 aircraft, the number of people that would require training in this academy would require this -- the facility of this size basically. So originally, we have a meeting room at Don Mueang Airport and also in-flight facility. And the second and third floor are all packed at our previous facility. And also the swimming pool, we will have to use the swimming pool at the Thai Airways facility or some swimming pools at universities depending on the vacancy or availability of these facilities. And also, when we are trying to have a training on the slide -- on the slider or other types of emergency training, basically, we have to look -- use the facilities of other companies. So we think that we should have our own training facility, and that is the background of this facility. This facility is located on [ 19 rai ] of area, and it is very close to Don Mueang Airport to ensure that the commute to and from Don Mueang is going to be easy. And also, we spent about 3 years in investing -- in building this facility and with the investment amount of THB 700 million. And for aviation training, if we're going to use aviation training, it's not going to be enough. So we have the concept that this academy should be a learning center for all professions. But we are focusing on aviation industry and hospitality and service industries. We would like this academy to be the place where you can learn soft skills. It can be seminars facility for all of you. We also have catering, so you can actually hold or organize a party or an event at this facility, but we're focusing mainly on training. And in the past, in some courses in some curriculum for example, the CRM that our pilots and crew members have to take as well. And it focuses on the comprehensive perspective. For example, OTP functionality. These courses are also taught to the general public as well. And most recently, we have GlaxoSmithKline or GSK, who use our facilities to have their people trained about emergency training as well. Because if you're going to do a team building in other facilities, the experience that you get will be very different from this particular facility. And also, this -- so basically, this academy is open to other professions, other disciplines, and it is a way to generate further income. And what we have already -- because during the COVID times, we did not lay off anyone. So there are some of the crew members and some personnel that decided to resign in order to pursue other profession, but we did not lay off any one. So when we resume our business as usual, we can basically take off our business operation. It's like over the last 2 years, we just hit pause when we were watching Netflix. But when everything resumes we just hit play again and we can resume our business as usual. And that is the reason why AirAsia is able to basically resume its business in a very efficient way. And also, we have aircraft that have to go through maintenance before resuming its flight because it has been parked for quite a long time, and [ Khun Top ] would be able to shine a light on that topic as well. Now with the personnel that we have at already because we did not lay off anyone, we have a very efficient crew members and pilots that are more than ready to resume their operation. And that is something that we are looking forward to. And also we have a training center that we think is the best. CAE is the simulator service provider for pilots, and it is the biggest in the world and the head office is in Canada. So the training center -- so basically, they said that the best training center is in Canada. But the second best training center is basically in Bangkok, which is here at our academy. And we think that this academy will provide more than an aviation service, but we are going to cover hospitality and service industries as well. And this is going to be the place where you can learn soft skills for professions in Thailand as well. Thank you very much.

[Interpreted] Thank you, [ Khun Jo ]. And moving on before I invite our CEO, I would have to tell you that -- so there are some investors calling us. As [ Khun Jo ] has said, how many -- when would we fly 53 aircraft and carry 20 million passengers like we used to, so I would like to invite [ Khun Top ], Santisuk Klongchaiya, our CEO, to tell you more details about this. Please go ahead, [ Khun Top ] Santisuk.

[Interpreted] Good morning -- good afternoon, sorry. Good afternoon, everyone. So first off, welcome, everyone to Thai AirAsia Airline, the most punctual airline in Thailand. We are not look only imagining things or thinking about it on our own, but there are two institutions certifying this. The first one is Cirium. Cirium relates to aviation businesses and they're renowned and Cirium says that we are the most on-time airline -- in the top 3 most on-time airline in the low-cost carrier in the world. And also, we are on the top list in Asia. We actually outperform Japanese airline. And the second organization is OAG. They said that we are the top most on-time airline in -- out of all categories, including the full fare and low-cost airlines. And why do I bring this up first? Because I believe that this factor, the punctuality shows our potential and our ability to manage and administer things well. And second, we have our commitment to provide the best service for our passengers, which actually impact the brand loyalty and to our services and also the relationship with our passengers. And these reports are not popular vote, but we -- it's actually collected from the actual statistics from the takeoff and the landing, and we actually -- it's kind of like we're earning the gold medal in Olympics, and they have actually measured that we are on time on how many percent and then there are statistics coming. And so as I said, -- this is an important factor that makes Thai AirAsia successful. Pre-COVID. And during COVID, we were able to survive, [ Khun Jo ] said that after COVID, we are ready to move forward because we have the efficiency to provide our service and we are punctual. And as I said that this is our commitment to our passengers and passengers will have trust on us. And the quality that we provide, the punctuality that we provide is the basics. And if you want to travel between 2:00 p.m. to 3:00 p.m., then you can go during that time without any delay. And I think that this is a very important factor that makes us successful and makes us be able to provide quality service. And also, we received other awards. We received the Best Low Cost Airline from Skytrax and for the 13th consecutive year and the passenger actually voted this. And actually, we are the only airline listed in the THSI or Thailand Sustainability Investment, and we have the qualifications in terms of we do and conduct sustainability-related activities, and there will be a session on that as well. And as I said, factors -- success factors in the past year. To conclude, we actually achieved 9.95 million passengers, and we had THB 17 billion in revenue, and we have a market share of 34% in the domestic market. And I believe that the market share will grow continuously and we keep -- because we keep our aircrafts, we keep our personnel and all our 53 aircraft -- actually, we have 63 aircraft, but we returned 10 according to the contract. And actually, like every time we return the aircraft, we would be delivered with new ones. But during the COVID, we didn't receive new ones, so we returned 10. And with our 53 aircraft, that is the fleet that is more than other competitors by like 3x. And our net competitor has less than 20 aircraft. And so with our capacity we are able to retain our market share and we are able to grow our domestic market share further because we have the fleet, we have the capacity to actually accommodate domestic and international market that is about to be open. And in terms of liquidity, last year, we could retain our liquidity, and we were able to pull cash from doing HLB and LBN, also sales and lease and also we issued bonds as well and also debentures to retain our liquidity and at the -- towards the second half of the year. So we got cash from our operation that is sufficient. And so in the past, we have questions like how much cash do we use. But of course, like during the pandemic, we don't have any cash, but during the next half of 2022, we have positive cash flow. And in terms of the organization, we did rightsizing. We did restructuring and also we have enough human capital, and we have the right attitude, we have the efficiency in our work, and we are ready to grow. And of course, in the past 2 to 3 years, we have gone through difficulties during the pandemic in 2020, 2021 and continuing into 2022. And this is the wounds that we experienced and we're going to actually make these wounds better. According to TRIS Rating in the past in the period, we used to get BB- rating. I just -- we just talked to TRIS it was upgraded to BB+. And it is a positive sign that our wound is recovering and actually saying that we have the opportunity to recover and grow strong. And as I said, there are still wounds and it will show in the financial statements and we will look that if we proceed further this year, how can these things be improved? And in terms of assets, for sure, we have less cash. We used to have THB 4 billion plus cash during -- before COVID. And the second part, on aircraft, with the new accounting standards, we can -- you can see that the value of the aircraft has increased, but that's because of the new accounting standards. And as the previous speaker has said, this facility is one of our assets. And before that, it was like a land, which is valued around THB 600 million, but now the value increased to THB 1.5 billion. And also, our liabilities, we have less interest-bearing debt, from THB 10 billion to around THB 7 billion because no one would lend us money. And also the next part is on liabilities that we lease the aircraft. And so this will swing according to the value of the money. And if you see the financial statements, you also have to consider the FX as well of exchange rates, and so there may be some losses in terms of that. And so this also, you can see the number in lease liabilities. And in terms of equity, we have around THB 8 billion. So we don't have to increase any equity anytime soon. And so next, on the cash flow, as I said, that the last quarter of last year, we have around THB 1 billion coming in, and the situation is gradually better, and we still need to work on it. And what do we have to do? The first and the most important thing is that we have to resume our capacity, resume our flights. And on the right-hand side, it's ASK when we talk about aviation business, we talk about ASK or Available Seat Kilometers, the seat times the distance, kilometers. So it's kind of like a unit volume. And so within 2023, 85% has come back compared to pre-COVID. So the ASK or the volume has recovered around 85%. And on the left-hand side, we have passenger carried. We used to have 21.5 million passengers in 2019 and -- in 2023, we forecast that the number of passengers would be around $20 million, which is 90% of what we used to be able to carry. And that is the capacity and the volume that we expect to have or see in 2023. And when the volume has resumed, would we have the ability to make or generate profits? So that actually depends on the revenue and cost. So revenue -- RASK is revenue per unit and CASK is cost per unit. RASK, mainly this year, I think that we would reach at THB 1.8 or THB 1.8485 or approximately around that figure. And the factor comes from the higher fare in the past period. Of course, there is a high demand in traveling. And after many countries have reopened, and you can see that the tickets to Japan from Thailand is higher because there's more demand. And the world also has more demand in traveling, but the supply is limited. We still have restrictions in terms of airports, in terms of personnel and therefore, the demand and supply is not in equilibrium and therefore, the price has been pushed up. And the other one is on fuel surcharge in foreign market, we do collect dispute surcharge. But for domestic flights, we would talk to the CAAT and to let us increase the price ticket due to the price of the fuel. But I think that all the domestic flights fare has increased just to cover the fuel cost. And so the rate fare is higher and also the RASK therefore will be higher. And the second part is CASK, which if you look at the number during the pandemic, it's -- you can't really look at that number during that time because we only have expenses and costs and all the costs are escalated. Without any good reasons, we don't have any -- we could not fly. We only have costs. So we could do at THB 1 ex-fuel in 2019. And this year, I think that we are on track. We should be able to go back to the previous pre-pandemic level, we can see that the cost of maintenance in the past period. As I said, that we returned 10 aircraft, and that also have associated costs of around 20% to 30%. And we wouldn't have any of such costs because it's onetime costs. And so we don't have to return the aircraft and we don't have that. And on utilization of the aircraft, we would increase utilization because there are more flights from India, from China, and so usually, these flights are red eyes. So it's a flight during night time, so we can utilize the aircraft more. In the past, we didn't have China or India. So we have to do during the day. But now we have flights from India, from China, we can fly more. And therefore, the utilization of aircraft will increase from before to 12.5 hours per aircraft per day. And so that will reduce the CASK and I believe that the difference between RASK and CASK will be enough to actually make or generate us profit in 2023. Those are the internal factors, whether by the external factors. Here, you can see from the slide, this is the plan, the tourism development plan the third version really, and this has been declared by the government for the first time this year. So -- and they said that 25% of the GDP will come from the tourism sector. And this is just to show you to paint a rough picture that whether it is this government seems we are going to have a new government very soon. I -- but no matter who it is, I believe that every government will have one single thing that they aim for, which is to support the tourism sector. So tourism is basically one main engine that is working in full operation in the economy of Thailand. So in Thailand, I think that tourism is going to have a very bright future for the next 2 to 3 years. But bring things closer to home in this year 2023, I believe that China is going to be a very strong variable to our tourism sector for this year 2023. Our original figure of last year from the tourism sector, it was speculated that we will have about 20 million tourists in this year 2023. But when the tourism sector was very on the rise, we have about 40 million tourists the TAT estimated that the number of tourists will be about 20 million. So once China declared its reopening of its country, the TAT also changed its figures or its speculation from 20 million to 25 million tourists as well. But now we are estimating that it will be about 30 million. And of that amount, the Chinese tourists will constitute about 7 to 8 million tourists. And the TAT is also working very, very hard in order to pull back or attract more Chinese tourists. And the Chinese government declared the opening of its country in January. Now it's March. We have about -- do you know how many Chinese tourists have already visited our country? So year-to-date, on a quarterly basis, from January 2, to this day, we have about 5.5 million Chinese tourists or plus or minus that amount, so 5.5 million. Apologies, 5.5 million in total, but we -- and of that amount, it's about 390,000 Chinese tourists, but they're still following Russia, South Korea and Malaysia. So Chinese tourists constitutes only 8% of the current tourism -- current number of tourists. I just went to China last month, and I went to Guangzhou, and I talked to the Chinese travel agents and our personnel and also the government sector as well. in order to find out why the percentage is not higher. But what happened -- what I know is that the latest wave of COVID was during January was during January in China. So basically, even with the peak of the last wave of COVID, China decided to reopen its country. So basically, they were -- they reopened their country amid the COVID crisis. So that is why the number has not been bouncing back as we expected. And also, we have expiring passports -- 1 million of expiring passports for Chinese tourists, and that's why they would need about 2 to 3 months in order to renew all those passports to cover everyone. And the third factor for China is that the readiness of the airports. Like in Thailand, we have airports in Don Mueang, Phuket and in Chiang Mai, which are ready for operation. But a number of airports in China, they are not ready. They are lacking the manpower, they're lacking the basically capacity in order to operate the airport at full speed. So -- but we believe that 2 to 3 months from now or the second half of the year, the number of Chinese tourists will be rising. And it's like when now Thai people we are going to Japan like A lot of -- a lot of Thai people are now heading to Japan and you can see time people everywhere in Japan. So it's going to be the same. But for Chinese tourists to come to Thailand, I believe that Chinese service will not go -- will not be going to Europe or America, but instead, they will choose to come to Thailand because due to the distance between China and Thailand, the food that we have and also the hospitality that we have to provide for them, they will choose our country first. So the target here is that -- the best case scenario, we are expecting 30 million tourists and of that amount, 78 million will be from China. And we already opened flights to China, 8 flights to China, whether it is to Guangzhou, San, Chongqing, Guangzhou, Kunming, Nanjing, all of these are flights to all these destinations are already opened. We used to be operating about 140 flights to China per week. Now we are reopening 40 flights. And in the -- in the second quarter, we are going to open another 100 flights. And towards the end of the year, we are trying to resume as many as possible to get as close to 140 as possible as well. So that's something that we're doing. We are at ready with our manpower, with our aircraft. We are more than ready to be reopening our presence in China. We have the personnel who are also working in China and coordinating with the Chinese government relating to the licenses and permits. So when the opportunity comes, we'll be more than ready in order to reopen our business in China. But looking further beyond, even beyond 2023, I think for the next 4 years, this figures, these figures may be -- may change. But towards the second half of the year, we will get to see clearer if we will have a higher number of Chinese tourists. So within 2026, we think that our -- the number of passengers will grow to 26 million pax. And our fleet will increase from 53% to 72%, and our revenue will touch THB 60 billion. So that is something that will happen with our readiness to resume our flights and our readiness to really move forward with our capacity and our potential with the efficiency of our operation and management, as you can see that we were able to provide the most on-time flights in Asia and in the world. And apart from that, there are also other businesses that we are interested in as well, whether it is the ground handling. And the head of ground handling will be touching upon this matter as well. We are interested and we have the capacity to really provide ground handling services and also the ramp services and also cargo services as well. If there is going to be an auction, we will be more than ready to join the bidding and also to submit the tender offer. And these are the businesses that we have already the capacity as well. And we also have the ADE and MRO. And our group in Malaysia also -- there is a company within our group, which is the ADE, which provide MRO businesses. So we have the personnel, we have the know-how. Also for catering, we have the opportunity to really provide a catering service to other airliners as well. And for training business, as you can see that we have the facility already in full operation here as well. So we -- and as the share person has already provided that we are going to share our expertise in trainings and the basic aviation practice, there will be more and more airliners that will be using our facility to provide trainings to their personnel. So this is something that we can turn into a business opportunity. And also, we have the super app, which will be providing services on the lifestyle platform and more particularly, the OTA or to book tickets and book hotels. So these are the other businesses that we are going to be operating as well. So if there is any question, we will have a Q&A session towards the end of our conference. So please keep your questions with you for the time being. And please ask them at the Q&A session. So that's it for me. Thank you very much.

Thank you very much, [ Khun Top ]. So this year is going to be a good year for us. We are now bouncing back and recovering very well as well, and we can expect higher revenue at lower costs and also towards the last -- the second half of the year, we are expecting to see higher number of Chinese tourists, and we are going to update you on any changes if there is any. Right? So we have shift sustainability of the group, Ms. Yap Mun Ching, who will be sharing with us how we have been in a journey. So yes, the stage to you.

All right. [Foreign Language] Good afternoon, everybody. So my name is Mun Ching. I came up from Kuala Lumpur for today's session. So fortunately, I don't speak Thai. So I hope it will be okay for everybody. But my purpose here today is actually to share with you our preparations for net zero. So over the last 2 years, we have done a lot of preparations and I'm happy to tell you that we are now in a pretty good place. And one of the reasons I want to share with you is to let you know that all these items will also require us to work together with each one of you to realize our goal as well. So our campaign here is talking about doing more with less, which is really the essence of AirAsia from the very beginning. Efficiency drives us and efficiency also helps us cut fuel, which makes up about 50% of our cost, 40% to 50% of our cost. If we can cut fuel utilization, that directly leads to reduction in carbon emissions. But at the same time, it's not going to burden us with a lot of carbon offsetting cost because that will actually be consistent with our business model well. So how have we been doing? So in Thai AirAsia, we are listed on the Thai Stock Exchange. So we have been listed in a THSI for the fourth year in a row continuously since we started assessment. So some of these audits are published in our sustainability report, which will be coming out very shortly. So I think [ Khun Top ] has mentioned that our OTP is very high, it's 92%. But I want to bring your attention to our oops -- carbon -- is there a pointer. So the carbon intensity ratio, which has been coming down. So it's 67.7 grams per seat, and that came down from 72.9 grams per seat. So carbon intensity is how we measure how efficient this airline is in terms of our green performance. The lower the carbon intensity the better it is. So that is also something that airlines are measuring against each other. The other thing I would like to point out is our self-check-in. So COVID was an opportunity for us to get people to start adapting self-check-in and you can see that the percentage has gone up 47% of people are now doing self-check-in. The other one I would like to point out is our social aspect. Aviation is traditionally I've been innovation for 15 years since 2004 and has traditionally been quite male-dominated. And I think AirAsia has changed that conversation quite considerably. We are now, overall, including all our operations staff, about 36.3% women. But if you remove the operations staff, we are very equal. So that has been a big achievement. If you look at it on a global point of view, we are actually performing well above global average. If you're talking about female pilots globally is 5.8%. AirAsia as a group is 6.1%. Thai AirAsia is about 8% women, okay? The highest in the world is India is about 12%. So we are always looking to increase that. And it's not actually just about AirAsia, it's about society in general as well to encourage women to join this profession. So some of my colleagues here, we all started many years ago to pass -- and we can see the change has happened in the industry. So we take a lead role in that, we're very proud of that. But beyond Thai Stock Exchange, we also benchmark globally against some of these parameters. So we are in as a group listed in the Kuala Lumpur Stock Exchange, and that one is benchmarked against the FTSE4Good Index, that's a U.K. index. We also are assessed according to the S&P CSA assessment, which is ranked for Dow Jones Sustainability Index. We scored 40%. We're not there yet, but we believe that we will get there in 2 years' time. The other one that has been something we're very proud of is the Bloomberg Gender Equality Index. We submitted for the group for the first time last year, and we exceeded the score to be included in the Bloomberg Gender Equality Index. The only reason why you are not in the index now because we have to still get back to $1 billion market cap because Dow Jones and Bloomberg is only for companies that are USD 1 billion market cap. So we will get there, hopefully, next year. So the last one is TCFD. For some of you in the banking sector, you must have heard of this task force for climate-related financial disclosures. So essentially, they started from the banking industry. They want banks to identify what is your climate exposure to climate change. So banks have also passed this on to companies. The SET has already announced that they want companies in Thailand, public listed companies to begin TCFD alignment starting this year. Now we're already ahead of that. We already started last year. We have already done two of the first steps for TCFD alignment. We have identified our climate risk and opportunities. We have identified our internal carbon price. At the moment, we are starting on the third step, which is really to do climate-related climate scenario analysis -- so if climate change gets to 1.5 degree, what will be the financial impact on AirAsia, if it gets to 3% -- 3 degree, what will be the financial impact on AirAsia. So these involve a lot of data, and we are a data-driven company. So it was really what we have started on in the last 2 years to use this data to work out what will be our exposure to climate change. The other things that we have done is we've done a group-wide exercise to identify our targets, our medium term and our long-term targets that's published in our sustainability rainbow. We have also published a sustainability policy, which will be rolled out across all our capital companies from airline to delivery to MRO. And the last thing is, again, gender. So you see the items down there. Blue compares against medium median wage -- sorry, mean wage and red compares against median wage. If you remove operations staff, meaning pilots, cabin crew, and you will see that women in AirAsia actually makes slightly more than men, which we're happy with, of course, as women in aviation. But of course, if you include all operations staff, you will see that the male pay gap is still much higher, mainly because a lot of that is driven by pilot who have a lot more years in seniority. So for us to address the long-term gap, an important thing is we have to get more women into operational roles as well, which is an ongoing task that we have. So that's basically how we use to benchmark ourselves and to continue addressing the gaps that we have. Now net zero. So this is a big topic for everybody in sustainability. Where are we in net zero? And I have to tell you, aviation industry is actually one that is really on the forefront because we are the first industry that has global targets to meet its regulated targets. This is not voluntary target. And I'll go into it a little bit more. So from our perspective, there's a scheme currently is developed by the United Nations Body called ICAO. It's got CORSIA. It's got carbon offset and reduction scheme for international aviation. So this scheme is currently voluntary for state participation. And the moment the country participates, it becomes mandatory for the airlines in the country. In 2027, this becomes mandatory. All countries will be part of this scheme. Now where we are concerned, AirAsia, all our countries are part of this scheme. Malaysia, Indonesia, Thailand, Philippines and Singapore, are already members of this scheme, which means all our airlines have to be compliant to regulated amounts of carbon reduction. Now going beyond that because CORSIA only covers international aviation, but of course, climate change, you can't only tackle international aviation emissions, you have to tackle everything. That's why the industry is moving towards net zero. So what does that mean? This graph, very simply, I just wanted you to take one point from this. To get to 2050 net zero, we have to identify how are we going to reduce our carbon emissions. And to aviation, there are four ways to do it. The first is our aircraft. This is why our fleet replacement is so important because a newer plane will generate less emissions. Now we have purchased 362 Airbus 321neo. Currently, that is the most efficient narrow-body aircraft in the world. There's no other aircraft that is more efficient or more advanced than this in terms of carbon emissions and fuel efficiency. So this we are going to get our new deliveries coming in again in 2024, okay? We're going to get 16 planes from 2024, and that's going to go up progressively until 2035. By 2035, all our claims will be completely 321neos. That will take care of both our fleet upgrade as well as capacity expansion because every one of these aircraft will have 50 additional seats burning the same amount of fuel. If you consider it empty currently and the future plane, same fuel but more seats. So that helps us keep our growth of ambitions at the plateau. So we don't add a lot more. Now that will help us reduce our carbon intensity by up to 20%. So this is a major pillar of our green strategy. The second one is something called operational eco efficiency. It's also known as green operating procedures. Now how do we define -- how do we explain this? So if you are a driver, if you drive, how you drive your car determines how much you consume if you press on the pedal and you drive very fast, your fuel consumption goes up. It's the same on the plane, how a pilot flies will determine how fast you burn. How fast do you climb, now in a flight, of course, my colleague, [ Khun Bijleveld ] is going to probably explain more. In the flight path, the most new consuming period is where you take off and when you land. In the middle cruising is where you average of. So when you have a very short flight, you go up and you come down, the fuel consumption is much higher than if you have a long flight, you go up and then you go for a long cruise and then you come down, say, in Hong Kong compared to a short flight to Haji. So how we climb the flight will also determine how much we burn. Now we have one of the best efficiency programs in the world. I'm very proud to say. A lot of people do not realize this. But at any one time, we have 20 procedures running at the same time. And we have very advanced software to track every single flight, every single procedure. So we know exactly which plan is doing what, which pilot is doing what. And this is part of the reason why our compliance is very, very high on this because some of the measures that we operate, the compliance is 80% to 90%. So I'll give you one example, which will be easy for you to relate to. That's a procedure called One Engine Taxi. [Foreign Language] so much so that Airbus will invite us to share with your partners or with their clients. So One Engine Taxi means that when the aircraft lands, it arrives at the tarmac, and it has to get to your board the gate. This is the time when the pilots can turn off one engine. So when you're on ground, they only need one engine to get to the gate. That helps you cut a lot of fuel. How much? If you look at it in percentages, it can sound very little. You can sound like 0.1%. But when I tabulated the numbers, in 6 years, we saved USD 22.8 million in fuel just from this one procedure alone. Now this is just one, but we are running 15 at the same time. So this is the impact. So a new one that we are looking to implement is this one called RNP AR. So as we upgrade our aircraft and becomes more advanced, aircraft now have more advanced radar. So if you imagine a flight path, you think a flight path is straight. It really isn't. It actually is quite curvy and because in the old technology, a lot of it is based on land-based equipment to guide you. My colleague Bijleveld will talk a little bit about that. But what I want to talk to you is about the financial impact of it. So if you look at Thailand, this is currently not yet implemented in Thai AirAsia, but we've already done our studies to see if we only apply this to 20% of flights on these 4 airports, which are Don Mueang, Hat Yai, Phuket and Krabi, we can save USD 1.15 million per year in fuel. So I'll give you a context of how much is safe is in Malaysia. In Malaysia, in 2019, we saved THB 286 million from green operating procedures, out of which 12% comes from RNP AR. And that is only by implementing RPA in the smaller airports. We have not yet implemented in Kuala Lumpur. So now we are working with the government to implement in Kuala Lumpur. And once that happens, that's going to increase the amount that we can see. Now how many airlines are doing this if I'm honest, not many. So in Malaysia, only AirAsia is using it. But actually, we think all airlines should be doing this because this is not just about us saving. But if you're going to talk about cutting emissions, in the industry, then these are the procedures that will help us get there without costing a lot of money. So impact wise, this is what it is. So I pulled out this data from the annual reports of other airlines. So you can see the orange line is actually Easyjet. The blue line is Ryanair. The yellow line is Silkair. In 2019, when we were operating at peak we are about 15% lower carbon intensity than Silkair. We were lower than Ryanair, which makes us the airline with the lowest carbon footprint in the world, right? So that changed a little bit during COVID because as I mentioned, a lot of border closures forced us to reduce our flight length. And as the flight length comes down, the carbon intensity goes up. So as we increase our flight length with new flights going back to China, these numbers are really coming down, right? So just now, you saw our number just now was 67, 67 grams. So it's lower than our 2021 figure. So what I'm showing here is group figures, right? But high figure and the group figure average is about the same, right? So this is the impact of what we've done in the last 20 years of AirAsia's history. So what is the new thing that everybody is talking about sustainable aviation fuel. Now what is sustainable aviation fuel? it's a biofuel, it's produced from two types of feedstock. One is we call a first-generation feedstock, which could be a crop. It could be palm oil, sugar, sugarcane, it could be soya oil. Second-generation feedstock relates to waste material. It could be used cooking oil, it could be agricultural waste, it could be municipal ways in fact. So currently, there are very few producers of SAF in the world. In Southeast Asia, there's only one airport that supplies SAF at a Singapore Changi Airport. Singapore supply currently is imported from Finland. Produce using cooking oil from Asia. So the cooking or from Asia gets into Finland process and sold back to us 5x the price. Now a lot of focus has been on SAF. They want airline to use SAF. It's not that we don't want to use that. The SAF is not available, and it's crazy expensive, have got price quotations. SAF is between 3 to 5x the price of jet fuel. So if you use this, it could kill the industry. So that's why our message is that the efficiencies will be more important because that will help us recover, but at the same time, they deliver our carbon reductions. So -- but are we cutting off SAF? No, we're not. Because we know that to reach net zero, all four has to be used. So what we are currently doing as a group is to start planning for our SAF requirement. Now what gives us an advantage. SAF is currently -- has so few producers is monopoly pricing. There's only one supplier in Singapore there's no published price. What you're charged depends on how much you're buying. So if Thai AirAsia buys it alone, your price will be very high. But because we are as a group, then we have strength to bring prices down. That, in future will be the competitive measure of every airline. The airline that best manages its cost will be the ones that will have a competitive edge. And this cost is measured in future in terms of carbon no longer just a financial cost. So what is the plan for SAF production in the region. Beyond Singapore, Malaysia wants to implement in 2025. What we have heard is that in Thailand, PTT would like to have its own SAF production in 2 years' time. Do we have any preference? No, because our consumption is going to far exceed what many of these would require. So if I forecast our AirAsia requirements in 2035, AirAsia alone can consume as much as the output of one refinery. So it changes how we view and how we can meet investment decisions in the future. And right now, it's really about identifying where all these supplies are coming from. -- who we can partner with, how we can invest in research to improve SAF quality and accessibility, okay? And the last one is carbon offsetting. So I mentioned CORSIA earlier. So what CORSIA scheme is captured in this graph. What it says is the industry has agreed that we will cap our emissions to the 2019 level. Now if not for COVID, the emissions would have gone up, there will be no dip. It will have gone up. And by now, we should be buying carbon offsets. COVID bought us a few years' time. So you see that after 2019, emissions went down, but it's going to go up again. So the current projection for recovery is 2024. So by 2024, all airlines should be ready that they have to offset. And then you will see another big jump in 2027. Why? Because as I mentioned earlier, CORSIA is currently in a voluntary phase. By 2027, it's compulsory. That's when India and China will enter the scheme. Prices will shoot up if you're not prepared for it. So a good airline that has a good sustainability strategy, will start thinking about where your supply of SAF and where your supply of carbon offset is coming from. If you are an airline that does not have a fleet replacement strategy and does not have green operating procedures, what you have to spend on carbon assets and SAF will be a lot higher. So that's why -- by doing this, it's a way for us to also manage our future costs vis-a-vis the competition. Now what are our obligations looking like, okay? If you look at -- this is some of the projections. So right now, if you see the top bar, 10% of our flights is considered a CORSIA flight, which is currently included in CORSIA calculations. Now in 2019, you'll see that 49% of flights are actually to India and China. So we can expect currently Thai AirAsia, CORSIA regulated obligations will be low and it will ramp up in 2027, assuming that we -- our network is about the same. So it is important for us now to plan, okay, to start now, so we know how to trade in carbon, how to purchase staff. But by 2027, we will be ready when the supply goes up. So what is the amount looking at currently, the average pricing of CORSIA eligible carbon credits is about $3 per ton. So we did a kind of forecast. It goes up by 10% every year. Our obligation from 2024 is about $125,000 and then it scales up to $1.5 million a year to $2 million a year. Now this money can change also how we interact with our social commitments. If you're going to spend this money, Thailand has to be ready to supply the credits. Now is this a problem now? Yes, it is. Because right now, only these certifications are accepted by CORSIA. This is not determined by us. This is determined at the international level. Thailand, I know you might have heard of T-VER credits, but T-VER credit is not included in this scheme currently. So one of our discussions with the government is what can we do? What can we do to help? So we also would like government to also move T-VER standards further up. Another thing that Thai government is doing, I believe, is also it has been submitting T-VER standards to ICAO to be included in this scheme, right? So this captures it. Currently, if we don't address this issue, there's only one project that we can confirm in Thailand that we can offset, only one project. And if we don't address this, that would mean that we will have to buy credits from outside of Thailand. And Thailand will not be able to benefit from it. So a lot of our engagements right now has gone beyond aviation. It's really also about the environment. What is Thailand's green economy going to be, what is it shaping up going to be because the main funding is going to come from the aviation industry. It's still the only industry that is regulated to offset. So I just don't want to go too much of this. All this is going to be living targets. We learn more every day. The market is still shaping up. So we are planning our target, medium-term, short-term targets, and is going to be adjusted as we go along, as we get more information. Some of it will be related to our environment targets, our emissions target, some of it will be our energy utilization targets. I'm also looking into our MRO facilities, how we're introducing renewable energy to manage that part as well. And also, our waste management is another very important part because aviation waste is a huge part, whether you're talking about parts, or whether you're talking about liquids, right? So how do we manage this? Financing our transition cannot be done just by an airline. It requires all these parties to come in. Firstly, consumers need to be educated that they will have to bear some cost of carbon transition. So how -- what form does that take? Very likely it's going to be a voluntary offset to start. Eventually, there's going to be a small offset fee that we included in transportation fees. This is the direction that governments are heading towards. Currently, nothing is implemented yet airlines are doing it on a voluntary basis. The pickup rate in Asia is quite low, but the awareness is coming up. So one of the things that we are doing is also to educate consumers that this is what offset fees do, how it's being used, how is it going to go into the green economy. The second one is from airline obviously. So we are investing huge amounts into our fleet upgrades into our efficiency program. 321neo retail price is, what, $70 million? Yes, I don't know. I mean, I read it's about $70 million for one 321neo. We are investing $362 million. So a lot of the investment is already coming from the airline. What we are investing in green operating procedures is millions every year, to train, to improve our aircraft technology, to get new software. So all that is coming from airline. What we are asking for is governments to be more involved, streamline the air space, reduce air congestion, improve airspace management, all that can help cut. Now, to give you a number. In Europe where they have 1 EU control, the government to European air space. If they fixed EU airspace, they can improve fuel consumption by 10% to 15%. That's in EU, where it's quite advanced. So in Asia, there's a lot more room that we can do. And we don't even have 1 central body. If you want to talk about this, we have to talk to 10 different governments. So that is continuously something that we do as a group in AirAsia because we are in so many countries. Another thing that countries are doing also is providing soft credits. It's very hard to tell us to buy a fuel that is 3x or 5x more expensive. In the U.S., they have a program. For every liter of fuel you get, government will give you a certain amount to help you bear the cost. This hasn't come down to Asia yet. And we like governments to think because it is a competitive thing. If airlines in the U.S. is getting these credits, and we are not, then we will eventually be losing up on debt, all right? And then we have airports. In some airports in Europe, Heathrow, for example, an airline that buys staff, the airport will give you some incentive, right? They will give you, okay, I'm going to pay $0.50 for your staff. They have a pool of money. So the airport has a role to play, how they manage airport is also very important to maintain our efficiency. When you build a huge airport that also means we have to taxi such a long way on ground. I mean I was in Singapore recently. It talks about being very efficient, but we were on the ground for a good 15 minutes. Just driving from the parking bay to the runway took 15 minutes. There is a huge amount of fuel being wasted. And we, as an airline, have no control about that. So we need governments to understand that they play a role in ensuring this as well. And of course, the last one, some of you here, is ESG financing. Now ESG financing, what's is that? Here's where the opportunities are. Now some of these instruments have already come up for shipping industry, for the fishing industry. If we are meeting all these targets, we know that banks also have to meet their own ESG targets in your portfolio holdings. So what are you doing for that in terms of loan and asset management? So some countries, they are already ESG-linked financing for new aircraft. Cathay Pacific, for example, just funded their 321neo using ESG financing. What does that mean? That is tied to, not just financial targets, but it has a reduction -- carbon emissions reduction target and fleet renewal target, both of which we have no issues meeting. But this is a product that's not currently offered in Asia, or in Southeast Asia. Okay. Japan has some products. Korea has some products, but none in Southeast Asia. And we are looking for financial institutions who are willing to explore this with us, not just on environment, but also social targets. There's currently none, all right? Green research is another one. Universities that may be working on carbon credits that may be working on SAF research. Currently, the SAF is based on using used cooking oil. All the used cooking oil for the foreseeable future is already bought up. So if we, in Southeast Asia, whether it's PTT or Petronas wants to produce SAF, what are we going to use? There's nothing left. Unless we do new research to find the suitable speed stock that we have in this region. Last one, obviously, I've reshared with you the quantity that AirAsia will use. So it's important for us to plan ahead. Are we going to invest in our own carbon projects? Are we going to just buy it in the market? Maybe we should buy our own solar farm because we are going to be using the energy, and we can sell credits from that. And the last one is SAF development. As I said earlier, I was talking to our Board Chairman in the group. And I said to him like, "Okay, we are going to be consuming so much, we'll be consuming the same amount as an entire refinery's output." And he just joked, Oh, so what do you mean? Do you mean we should buy our own refinery. And I said, do you know that United Airlines just announced that they are buying a stake in a refinery. So some airlines are really making those decisions today, having planned out what they will need in the future. So these are some of the opportunities we hope if there's interest in financial institutions that we can explore together and we're open to having further discussions about that. And so that's kind of where we are. A big part of my job today and this year is to communicate this to all our stakeholders, whether it's the public, the government, yourselves as investors and banks. And this video is something that we produced last year, which will kick off. So it sort of captures what we hope to have an easy way to connect with an audience what sustainability is for AirAsia. And I will just play the video right now. [Presentation]

Okay. Thank you, everybody. I will just leave my e-mail. That's it. Okay. That's an e-mail. So if you have any questions, feel free to connect with me. I'm also here for the rest of the day. There is a Q&A session. Another thing that we are doing currently is we are also publishing aviation sustainability handbook because I find that when I talk technical terms, people don't understand. So we're going to make an easy handbook for easy reference, and we're publishing that in June. If you are interested in getting a copy that e-copies, there will be physical copies, please let my colleagues and my team know, and we will ensure that you get published. Another thing is we will also be hosting a full sustainability day in AirAsia in Kuala Lumpur, where we also shows, we bringing our visitors to our engineering complex where you can see how we manage our equipment, our waste? How high tech facility is? When I myself went there I was surprised, I've been in AirAsia for so long, when I thought I was thinking, "Wow, I can't believe you run this airline on this facility." So we like to invite people to understand more and to also visit these facilities. So if you're interested, again, please let my colleague [ Tong ] know. Thank you very much.

Thank you, Mun Ching. Very informative. [Interpreted] So Khun -- so Mun Ching has rendered a very good informative session. And in the overview, this is our commitment to operate in a more sustainable way. So we're going to take about 10 to 15 minute break. Please resume at 2:40. Please enjoy your break. [Break]

[Interpreted] [indiscernible] Investor Relations team. We have already been covered -- we have already covered the overview of AirAsia for the next 3 to 5 years and also the perspective on ESG sustainability. Now we're going to be covering the operational perspective on innovation, technology and also safety. What we are doing, what we are trying to do as a way forward? And we are honored by [ Khun Tek ], Mr. Banyat Hansakul, Head of Engineering. We have [ Khun Hong ], Chatupong Hongwiset, Head of Ramp and Ground Services. And also, last one on the panel, Mr. Kullavat Loykulnan, the Safety Risk Manager. Also, we have [ Khun Tong ], who will be the moderator for this session. Without further ado, [ Khun Tong ], the floor is yours.

[Interpreted] So thank you. Thank you, [ Jay ]. We -- I just talked to the panel. So we are going to make it quite informal and more casual for this panel discussion. So all of you, you've been with AirAsia for 17, 18 and 19 years. So they are basically the expert in their field I would like to invite the 3 panelists to basically share with the audience here with our 3 questions. The first one is to, from your perspective, since you're the expert in engineering and ramp and ground and also safety risk manager. So in the long term, for -- like in the next 3 to 5 years, from now, what is the technology? What is the industrial movement that you can expect? And what is your perspective on that change? [ Khun Tek ], the floor is yours.

[Interpreted] So thank you and good afternoon, everyone. I am from the engineering side. I'm not really a speaker. So if there is anything -- so apologies for mistake in advance. So [indiscernible] has already mentioned about the RNP AR. So RNP AR for the operation of AirAsia, we are -- we have a very solid foundation, and we are basically the pioneer of all technologies relating to aviation industry. So the AR technology has been mentioned and -- by a number of airliners really, but no one took initiative because by applying the AR technology, it requires a number of organizations and involvement from a number of sectors, really. Safety is another matter that we have to take as a priority because AR can basically help us avoid terrain and also bad weather as well. And we, with Katmandu airport, it is a very -- a tough terrain. So the airport is required to have the AR technology. And pre-COVID, we almost complete -- we were at the stage that we were almost complete with the AR technology, but with COVID pandemic, we have to slow down the process. Now that we have to resume our business, we think that it's not going to be a difficult task anymore. And the RNP AR technology is basically how we save or be more efficient in terms of fuel use and be more efficient in our landing process. Instead of using the ground station base, we can use satellite technology to assist us on that. And with the -- our good performance, our performance can actually be better. It will help us with the operation. And for the economic side, we already covered that as well. Another plus is the environment, is the environment benefit, which is when we can save more fuel. So this is -- RNP AR is basically the way to go for us. And we are going to start that at Don Mueang airport, which is our home base and also Krabi and Hat Yai airports as well. So as you can see here, this is the stakeholders that are involved in our process. On the left-hand side, upper left corner, we have the GE Aviation, who is basically the knowledge provider. The knowledge base for TNP AR is not only going to be important to aviation sectors only, but also to AEROTHAI, which is the Aeronautical Radio of Thailand, and it is basically the regulator. And we will also be working with the CAAT the Civil Aviation Authority of Thailand, which is a regulator. So we need the collaboration from all these stakeholders to really solidify the airport charge. And also for our airline, we have already adjusted the configuration of our aircraft. Since our aircraft is new so the configuration is quite easy, and it has been done already. And for pilots, for pilots, they have to go through training as well. We need the procedures to be put in place in the event that the equipment has been running the RNP AR. So basically, we're in the process of running the simulator. So for -- we have also the off-spec specification, the CAAT has the off-spec specification, which is basically a list that we have to comply with. If we comply with everything on the list, we will be able to submit that form in order to request for permission to operate the RNP AR approach and also to prove that our aircraft is ready, our pilot has been trained, not only in Thailand, but also this can be used in other countries as well in the future.

[Interpreted] [ Khun Tek ], one question for you. So is this only for Airbus or Boeing as well? Or -- and also the RNP AR will have to be applied in all airlines as well?

[Interpreted] So it can be used is compatible with Airbus and Boeing. So the Gen 4 aircraft, they will have the compatible configuration. But the process itself is new, but the configuration is not. So we would meet also the AEROTHAI and also the CAAT to work with us as the regulator and government agency that is working in this regard. And we also are -- we have been sponsored by GE as well.

[Interpreted] So thank you very much. [ Khun Hong ], in terms of ramp and ground services, I believe there is something new that you can present to us as well.

[Interpreted] So for ramp and ground operation, this year, we have a plan to implement a fleet management plan to manage our ground equipment. Currently, our ground equipment, we have about 700 items all over the country. So the utilization of those items are quite hard to manage. But the tool that we're going to use will allow us to manage it -- manage all of them even more efficiently. We will install the equipment in each of the vehicle that we own. And what we can see is that we can -- we will be able to locate it. We can see the locations and also the path that the vehicle took and that can allow us to basically manage the -- how we utilize all these items and also allow us to save further cost, whether it is a fuel charge or other costs related. And another plus for this tool is that we can also study the behavior of the drivers as well. We can see whether the drivers have any risky driving habits or behavior. And also we can study the speed that all the sudden breaks application in this vehicle, and that can also increase the safety for our passengers. So, from I understand that in the overview of RAM and ground, we work with airports a lot, right? So we heard the term smart airport or AI airport. So I think that it is basically the obligation of the airport to took initiative. But since we are an airline, how can we participate, or in what aspect can we be more -- can we participate basically? So basically, the Department of Airport is also in charge of this. So we believe that we will be using the facility of the airport through the automation system, whether it is the check-in system, the boarding system, we are working closely with the Department of airports. So it's like we are basically the user, but we -- but do we have to provide assistance to the airport as well? Well, we can be the adviser. We can provide advice. For example, AirAsia in Malaysia also apply the FACES system already.

So now I would like to now go over to [ Khun Ong ].

[Interpreted] So good afternoon. Once again, I am from the Safety Risk Manager. So before answering the questions of [indiscernible], I would like to just explain to you this image. So as you can see, this image -- the safety risk, you can see -- you may think that the Safety and Risk Department is the department that burn cash or burn expenses, but that is only the tip of the iceberg. What is under the water surface, which is the foundation the iceberg is basically when we have to prevent any damage and loss. We have to prevent the damage, a loss of the aircraft, which is in the value of THB 1 billion. And the cause that we don't have -- the expenses that we do not have to pay because no incidents happen basically because we have a very solid safety system. And we also have the nonmonetary value, for example, the damage to reputation or our goodwill or the disruption of our operations. So these are the things that we can undertake in order to prevent the damage and loss. So as a way forward of our safety department, since AirAsia is an airline that is very serious with our expenses, but for safety, we are also prioritizing safety as the #1 rule as well. And one of the technologies that I would like to mention today is the basically backbone of the safety department, which is the reporting system. Whether it is the incident, the accident that happened and also the potential hazard that may happen, we have the red eye system. And instead of buying the software from the software house that are available in the market, we develop it ourselves, and we can basically save about USD 55,000. And we also have the flight data analysis program, or AirFASE, and I'm going to go into detail in terms of what AirFASE can do. So, AirFASE will collect data. All data relating to the aircraft, whether it is in wins flight when it is on ground, we can collect all these data and to be used as the -- for analytical purposes. And I can go into detail about what the data will look like. So these are the 2 examples of the technology that we're using for safety purposes. So in terms of the way forward, now we are basically -- I would like to touch upon the safety approach. The safety approach can -- we have 3 safety approaches, the reactive approach, proactive approach and predictive approach. So if there is an incident, for the reactive one is when the incident happened, and we investigate, we come up with the procedure how to prevent the incident from happening in the future. What we add into this scenario is that the proactive approach. The proactive approach is that we do not wait for the incident to happen, but we may have the data from other airliners, and we can use the lesson learned from other airliners in order to develop courses and develop curriculum to train our personnel. And the way that we are trying to go, which is the third approach, is the predictive approach. So since we are the tech-driven company, we use a lot of data. We use a lot of technologies. We want to be able to predict incident even before there was any sign -- even before any incident happened to other airliners. So this is the predictive approach. So I would like to give you an example for the predictive incident -- proactive approach. So this is a preventive. On the left is what we call KYT, Kiken Yochi Training. This is when we identify the incident when we emphasize verbally and when we encourage people to take certain approach in order to prevent. So we have to communicate among our team members about what can be the potential hazard, what can be a potential incident? And the engineers also develop the ATC, or aircraft transit checklist, which is when we -- we have to inspect the vehicle or the aircraft prior to it taking in flight. So we will have the ATC personnel who will also conduct such a walk around in order to check if the aircraft is safe as well. And next is the proactive approach. So proactive approach will rely on a real-time data that we use. So for example, the aircraft condition monitoring. We will use real-time data so that we can get the notifications in a faster fashion. For example, something may happen on a flight when it's in the air, so data will be sent to the ground staff and the specialist will have the equipment, the spare parts all ready when the plane lands, when we can exchange or we can fix the problem in a real-time manner. And the most important part of the aircraft is an engine. So we'll have an engine monitoring program as well, which will basically monitor the health of the engine to see if there can be some signs from the engine in certain aircraft so that we can tend to the potential problem before it escalate to being an incident or accident. And also, there will be a special task force, which is basically the teams of expertise -- teams of experts. For example, we will have the [ internal ] protection team to always maintain all these equipment to make sure that they are all in full operation mode. So these are the teams special task forces that are going to be employed as well. And this is within the proactive approach. And what we are aiming to go -- where we are aiming to go is the predictive approach. We -- I talked about already the AirFASE So AirFASE is the data collector. So by being predictive, it means that each of the pilots will have the data when they control the flights. So basically, if I am a captain, and there is a data analysis that I may have a hard landing. So in a -- so if there is a malfunction to the wheel, the wheelbase of an aircraft or if there is a potential, and when we have the data, we will get the captain to train in order to avoid hard landing basically. So this is the predictive safety approach. So going over to the engineering side, apologies, I go -- so I have 1 more minute. So we have APU monitoring program. So APU is an engine -- a small engine, which is on the aircraft. It will distribute the air and also the power to basically ensure the airflow and also lighting system in the cabin itself. So we can predict the quality of APU in order for us to prevent the APU shutdown, or unintentional APU shutdown during flight or on ground. And also another example of our predictive safety approach. So we have the Elevate alert. So this is something that is still undergoing development. But when it's launched, all the data that we receive from all the systems that we have and also -- plus with the experience of our engineers, we will be able to basically issue notification or alert to relevant persons to ensure that we can fix the problem as efficiently as possible.

So that's the trend of ours. So [ Khun Ong ], when we talk about predictive approach, I've heard a lot of AI-related things. When we talk about predictive safety, what kind of accidents would disappear if we use the predictive approach? Can you give an example?

[Interpreted] So for example, an aircraft, if the pilot fly aircraft too fast, it's not good, right? It's like driving too fast. And if it's too slow, it's not good as well. The AirFASE system can actually track the way a pilot fly the fleet, and we can actually see the data like we can list the 10 pilots who have the risky behaviors who fly too fast before and then -- so that we can get this information and then pull these 10 people and get additional training so that these people can actually according to the flying standard. So this can actually predict what's going to happen and then you can tackle it in time. The pilots may not actually do it for real or fly too fast for real, but these data can actually predict that he has a tendency to -- so moving on to the second question.

[Interpreted] So we talked about the future already, and now we're talking about the present. We have been through the pandemic, the situation is better and what are you guys currently focusing on? Can we start from [ Khun Hong ]?

[Interpreted] As [ Khun Tek ] has already mentioned earlier that this year, the Department of Airport are actually looking for new operators from Chiang Mai, Phuket and Chiang Rai Airport to provide ground services. And we are also interested in providing such service because we have 20 years of experience, and we are sure that our service quality -- we can provide quality service, but the current operators are also interested. As you can see that the players, the airlines who are already providing the service, or the operators who are really providing service, they would also like to participate in this competition. So let's see what is the growth rate of each airport. Can you please like click down. Okay? So let's look at Phuket. According to the figure from the Department of Airports, within this 10 years, it would be the airport that can grow double from the present. And the passengers, in [ 2000 ], we will have more -- We will have international and domestic passengers as well. So that's 2034, and so that would be a very important and interesting airport to look at. And moving on to Chiang Mai , when we look at the Chiang Mai growth, airport growth because Chiang Mai is also very important tourist destination of the country, but we will also -- but there's a big focus on domestic flights. The growth rate, however, is also double, just the same as Phuket Airport. So let's look at Hat Yai, Hat Yai actually has the growth rate similar to other places, but the number of passengers or numbers of flights are not as many as Chiang Mai and Phuket. Most of the passengers are domestic passengers. And for Chiang Rai, the same way, the growth rate is similar. And the airport focused on domestic flights. And after looking at these 4 airports, 4 stations, these 4 airports have good potential to grow, and AirAsia is now conducting a feasibility study to become a new operator, and also we'll work with the Department of Airport on that.

[Interpreted] [ Khun Hong ], I understand that the process is public. We're waiting for the TOR, and we are going to look at the detail and assess later. So if it turns out that it's not cost effective and if other player gets to work on this 4 airports, would there be any other opportunities for us? Or do we have to wait?

[Interpreted] We have to wait because the big airports are Don Mueang and also Ubon airport. So we have to wait for a while. But the good potentials are these 4 airports. So we have to look at the TOR and assess it again. Yes.

[Interpreted] [ Khun Ong ], on safety, what is interesting on safety currently?

[Interpreted] So going back pre-pandemic, time, although we don't have any flags, but we are not just doing nothing. We are just like athletes. So if we want to jump really far, run really fast. Our core muscles needs to be strong. And so we have to strengthen our foundations in [ entire ] Asia organization. And we do supplement this safety training. As [indiscernible] has said that we will be the first airline to start when the border reopens. And so training is important, and we will still continue to conduct trainings. As [indiscernible] has mentioned earlier, we are not letting anyone go, we keep everyone with us. We retain all the employees, and we retain them. For pilots, we actually keep training them during the pandemic as well. The graph that I'm showing you right now is the forecast on the future shortage of the pilot. And the blue line, as you see, it's Asia Pacific. And at the beginning of 2023, we can see some signs that there would be a shortage of pilot in the industry and the shortage will be higher and higher. And you can see that it's the line is below 0 and 0 is equilibrium, but we don't have that problem. So until 2024, we wouldn't have that problem, the problem of pilot shortage. Being short of 1 pilot, we would have to train them for 6 months. And then the cost of training is THB 750,000 per pilot if we are lacking 10 pilots then just times it by 10. And so if we're trying to train, for example, a newbie, a new pilot, if we want to train a new pilot, it takes 18 months. So it -- and it costs around THB 2 million. And this would connect -- actually linked with the partner, the CAE, which is the building behind. As [indiscernible] has said, that they said that our facility is very beautiful, just second to Canada. But we -- our standards is the same as CAE. We are the pilot training hub. We were the new hub like in Bangkok, right? And we had actually implement and use the new technology. And you talked about NPR, we actually can train the new pilots and our pilots with that technology. The graph that you show just now is that -- is saying that there would be a shortage of pilot, right? And we -- our situation is quite good because we have sufficient pilots. But after this, do you think that the pilots would be incentivized to go out of -- or leave the company and go somewhere else. So if there is demand and with the same amount of supply, of course, pilots are specialists, like just other specialists. Of course, there would be such an incident, but the factor for a pilot to determine whether they would have -- they would want to change airline or not is the compensation, but also they would have to think about the stability of that airline as well.

[Interpreted] And okay. So moving on to [ Khun Tek ], what is the engineering current situation like?

[Interpreted] You can click on the right arrow, please. Thank you so much. So currently, we are having 53 aircraft in the fleet and now we have 45 aircraft. As [indiscernible] has said, by the end of this year, and I try my best that all the aircraft are coming back in the third quarter because that means more revenue that we can have. So -- and everyone can come back to work again, and we would be having this feeling to go back to work and start working again. What I would like to say is that when the aircraft like don't operate, they have stopped operating for 2.5 years. And of course, we have experienced a lot of things that we have not experienced before including Airbus company. And there are things that we never knew that would happen before. For example, if we park the aircraft, the bird may create the nest on it or something, and there may be some corrosion on some equipment. And there are a lot of other things that has been going on. And we just tackle it one by one. Of course, we used to park it in hanger like 2x -- 2 aircraft for the time, but now we're doing 6 per time. And also the raw materials, we have some issues as well, but we are good enough to tackle this problem. And we can actually work with over 70% of our aircraft. And we can't just do things like on our own sometimes. Sometimes we have to work with authorities, some -- the aircraft have to be air worthy. Sometimes it takes a month to review whether the aircraft is airworthy and it has to be authorized by the authorities from the Department of Airports. And so everything that we do, it has to be based on safety, and it has to be based on the repair manual of the manufacturer and the hanger. During COVID-19, we established the ADE company. So that looks after the engineering company. So that's hanger. And otherwise, we can't find the slot because everyone ramps up their feet. And it's good that China has reopened now. Yesterday, I saw Spring Air, they landed in Don Mueang, usually, they land in Suvarnabhumi, but Suvarnabhumi has some problem with ground handling, so they landed in Don Mueang instead. And they were just thinking about how long they would have to be landing here, when would they could go back to Suvarnabhumi. Then they -- I asked how many aircraft they have, they have 116, but they can actually operate only 70. And so they have the same problems with repair. And also, China is wrapping up themselves as well, and then they are trying to pass this critical point. In order to fly these aircraft, we have to ferry them again, and then we have to make sure that the engines are safe and sometimes we -- there is one period of time we had up repair in China. There were some limitations because of COVID. When there is COVID, there's limited manpower because there were some restrictions on health and whatnot. And the personnel were gone by half, and we had to send our people to help the repair so that we can get the aircraft back in time.

[Interpreted] Okay. That's great. And so when we talk -- you just talked about MRO, right? And you talked that it was an opportunity that we can explore because we have ADE in Malaysia. And for -- from your personal perspective, our readiness to do MRO, the maintenance repair overhaul. Do you think how much ready we are at the moment?

[Interpreted] So if it's of record, there are a lot of people that try to add AirAsia to help with their technical handling because now Thai Airways are reducing their sizing and so the foreign aircraft would have to ask Thai Airways to, whether they are ready to do the technical handling in the past. But now like they are only taking care of their own aircraft. They don't have technical support, and therefore, these foreign aircraft approached us. And in order to handle the customers' aircraft, we have to be approved by the authority of that country or that airline. So there are some procedures there, and we have to actually look at our own operation first. And secondly, and the system with the Department of Airport, there's a license system, which will allow us to do so. And so this is our -- considered our future opportunity as well. So first, we have to obtain the license and second, with our capacity and knowledge, of course, the A320 that we have, we have been working with them for over 17 years, including like the ones that are coming in the future. So there -- others are sure about our technical service provision.

[Interpreted] Okay. Last question, [ Khun Ong ], I would like to go to you first. We talk about long-term and short-term view. So I would like to now give you the floor to essentially -- as we are #1 in the domestic market. So in terms of operation, how do you -- how can we excel, or how do we excel?

[Interpreted] Well, in terms of safety, I do not have nothing to share really, but I would like to share with you a case from a number of personnel in many departments, whether it is from the pilots that the aircraft was hit by the bird and engine has faced some malfunction, but they were able to manage the flight and land safely. So we have a number of cases with the bird hit, but I would like to just give you 1 case, which is the flight attendant on the aircraft. What I would like to share with you is to share with you that safety is paramount. So basically, what I would like to share with you is this case that there is an older person with health condition coming back to Bangkok from Surat Thani, and he or she is boarding the flights from AirAsia. And the passenger passed out in the toilet on flight. And the flight attendant took notice and she followed the procedure and turned -- and opened the toilet and found the passenger passing out in the toilet. So basically, we call for the medical personnel on flight, and we were lucky that there was actually 1 doctor on the flight and the fight attendant was the assistant to the medical doctor who was saving the life of the passenger. And the captain in the cockpit was contacted, and the pilot communicated with the airport in order to have available the ambulance to take the passenger to the hospital. So after the CPR and the life-saving procedures, basically the passenger survived and lived. And the son of the passenger posted a post to basically thank AirAsia for saving his father's life. And also he apologizes for causing the delay as well, but the delay is not something we worry about. We just want to make sure that his father survives. So we try to embed the safety DNA in our AirAsia DNA. It is a DNA that -- how can that be in our DNA? So basically, our flight attendant even off duty, even when he or she is not on duty and they found some -- our -- one of our attendants was taking a horse riding lesson, and she found someone passing out the person was somehow fall from horseback and our flight can then use the AED machine and also to also conducted a CPR to save the person's life. So this is the DNA. This is something that is embedded in the DNA of all of us at AirAsia. So we have the competency, we have team work, and also, we have the attitude that are all the core elements of our safety DNA.

So thank you. Thank you very much. And also thank you for doing your best. And thank you on behalf of all those pilots and flight attendants who face difficulties in their work, but they were somehow able to manage land safely. Because I know that a bird hit is something that happened quite frequently, but we were able to overcome all those obstacles and bring passengers to their destinations safely as well. So [ Khun Tek ], you have anything to add?

[Interpreted] So Khun Mun Ching has already mentioned that we prioritize the reduction of carbon emission, so we have a plan to be implemented next year, which is the delivery of A321 that we have the backlog with Airbus. So the A321, we have 2 of them that is -- that are being used, which is the flight of network, particularly the flight to Fukuoka. So the current aircraft is a bit longer than usual. And it has the LEAP-1A engine, which is a new type of engine. It increases the capacity and also in terms of the capacity itself, we have about 236 seats, and it may touch 240 seats, and this is something that we are working out with Airbus. So it will also increase capacity and reduce the cost. So we are experienced. We have experience, whether it is the OTP, the passenger boarding so we were able to manage all that. And we have to really compliment the ground service and RAM for making this happening. And also for the aircraft itself, it is a new model. The efficiency is very important. So by having a new aircraft, we would require training. We would have to ensure that our pilot and flight attendant and also other technicians are ready to operate the new aircraft. And we prioritize as well our personnel in this industry. You can see that we have always -- we have always proved -- we always prove that we are focusing on OTP. And sometimes the OTP of other airliners can be very good, but they may use more resources. But for us, we do not have any spare operations. We fly with at our full potential. And having 1 spare for the operation, it means that we are having a THB [ 14 ] million but aircraft are sitting at the ready and may not be used. So it means that we really meet the standard, we really meet the goal in terms of the competition and also efficiency as well.

So [ Khun Hong ], the floor is yours.

[Interpreted] Well, the OTP, or when we mentioned OTP, I would like to just clarify what is ATP. So as [indiscernible] mentioned that we are the most on time, most punctual airline. We ranked #4 in OAG, and we rank #1 from Cirium as the most punctual airline in Asia. So from 2017, the figures, you can see that we are growing in terms of our OTP. I would like to just share with you about the OTP. If we want to achieve OTP, we have to start by having a good quality aircraft and manpower that is ready to provide the service. Our strength of AirAsia is that we have the low cost per flight because we are using our manpower at the best efficiency, and we have the proper ground time. It allows us to really utilize the aircraft as much as possible, and we have highly experienced staff. So the 30-minute on-time performance that we're achieving, we can see that over the period of 30 minutes, there are so many activities involved, whether it is to offload and unload packages, the refueling, maintenance or to just catering loading, these are all the activities you can see that have to take place in 30 minutes. And currently, we are trying to improve our OTP. So we have 3 things that we have to do in order to improve OTP, which is the first in collaboration, staff retention and aligned goals. So for collaboration, we are the airliners that has a counter, very strong culture. So our cross-department work is always being run very smoothly. When we implement new things within 3 days, we can -- we'll be able to fully implement the new things, the new approach with our 3,000 staff. And for the second element here is staff retention. When we are bouncing back from COVID, we are doing the rightsizing. So basically, it means that after COVID, we are able to resume at full speed. And the third element is to align our goals. Each department has its own goal. So we have to be aware. We have to raise the awareness. And also, we have to make sure that people, everybody involved know what is their duties within 30 minutes and that everybody knows that if they miss that deadline, what would be the impact? And if needed, the backup can always come in and help in order to ensure that we meet the 30-minute time frame. So I would like to touch upon the two topics here, which is the block time and weather forecast. These are the two things that we are using in order to develop our OTP. So block time is basically the time that we plan for that particular flight. We have to ensure that our block time and actual time is as similar as possible. So the -- for block time, in 2019, the block time of 2019 cannot be used at 2023. So what happens is that we have different environment. We have different air traffic we have different work surroundings, and we have different taxi time. What we have to do is that we have to think about what we can do in order to make sure the block time and actual time is the same, to reduce the chance of delay and to make sure that our operation is as efficient as possible. So with our endeavor, we were able to manage the block time and actual time to make sure that these two elements are as similar as possible. And the weather is another obstacle, another difficulty that we are facing, and it can cause delay in our operation as well. So currently, we pulled back the 3-year info, the 3-year data in order to identify what is the weather condition. For example, in Trang, you can see that during the period of April, during the period of April, Trang will be covered in fog during the period of 7 a.m., and there is a 20% chance that we will not be able to land our aircraft. But if we adjust the time to move it back 30 minutes, we will reduce the chance of not being able to land from 20% to 10%. So this is when we try to forecast the weather beforehand in order to adjust our flight time and reduce the chance of delay. And also the tools, the tools is when we try to find something for the employees to really use when they are working. Basically, we're handing them the equipment for them to work. And by way of example, I would like to mention to you that currently -- well, in the past, when we communicate, we will use the Walkie-Talkie, right? At the check-in counter to boarding gate, boarding gate to pilot, the pilot communicating with engineer with ramp. So all these communications are one-on-one communication using the Walkie-Talkie. Now we are trying to implement an easier technology, which is the line bot. So the check-in counter can send data through line bots and pilot can receive data from line bots and send that information forward. And for those who would want to know what they have to do and what would -- what is the assignment arrangement? We can just type questions into the line bot, and it can -- the auto message will be generated. So basically, this process will reduce the burden of communication. So we reduced the distortion of communication and also reduce the operation time as well. And this particular system can really reduce three minute per flight -- three minutes of operation time per fight. But you may think that three minutes is very minor. But three minutes can really make a change. It can allow us to really do something during that time. Okay, three minutes from 30 minutes can allow us to really do something during that time. So our resource utilization from the past to present, we are not investing in anything new, everything that has been developed is based on the efficiency of our staff. So the cost to improve efficiency is at zero. Thank you very much.

[Interpreted] So thank you so much, [ Khun Hong ]. I would like to talk to you further, but we are really running out of time. So I would like to thank all the 3 panelists [ Khun Tek, Khun Ong, Khun Hong] for being with us today. And also, I would like to pass the mic to [ Khun Tay ] for the Q&A session.

[Interpreted] Just -- May I take some time to rearrange the stage. So just the previous session would allow you to see the back-end work that we do for passengers -- and also, we talked about the future opportunities apart from the Aviation business. And in the next session, I'd like to advertise a little bit the place that we are here today in Air Asia Aviation Academy that is worth more than THB 1 billion. What are we going to do in this building apart from having training. So Khun Topaz Subunruk will tell you about this.