Jazeera Airways K.S.C.P. (JAZEERA.KW) Earnings Call Transcript & Summary

[Audio Gap] [Operator Instructions] Bara, please go ahead.

Good afternoon. Thank you, Hatem, and good afternoon, everyone, on the call today. It gives me great pleasure to hold this call at a milestone as Jazeera Airways turned 20 on the 30th of October 2025. I'm joined today by Krishnan Balakrishnan, our Deputy CEO and CFO. But before we start, we'd like to say a couple of thank yous to everyone on this call and to take this opportunity mostly to thank our founders, our investors, both past and present; partners, including Airbus and CFM; and importantly, our customers and our people, the heartbeat of Jazeera. On today's call, you will hear Jazeera Airways set new financial records in the press releases that were released to the market. We have informed the market and the stock exchange that Jazeera Airways delivered a record-breaking Q3 2025 profits. In conjunction with our 20th anniversary celebration and third quarter profit surged to KWD 13.5 million, a growth of 16% and 9-month net profits jumped by 60.3% to KWD 23 million. So -- but what's really important is not only the financial milestones, what we will share in today's call is these significant milestones are going to be progressively better, as we tap into a more positive and buoyant Kuwait, and to show you how we are lined up to take off as we double fleet and passengers to 10 million across Kuwait and the network. But before we unpack this call and presentation today, here is a short video of how Jazeera has played a significant role in Kuwait in connecting people, communities and, importantly, cities and some key headlines on this quarter as it has been a very packed and busy quarter. As you can see, in the last 20 years, what started with a vision with clarity, purpose and focus has now evolved into Kuwait's largest airline by market share today. Jazeera has played a significant role in connecting people, families and loved ones, not only from Kuwait to the wider points in the network and 3 continents, but across the GCC. And it is now deeply etched in Kuwait's history and in Kuwait's aviation growth. Kuwait is home to Jazeera and one where we build opportunities, jobs and grow the aviation hub in line with Kuwait's Vision 2035. In line with that, you will find that Jazeera in this quarter, we have been extremely busy. We have grown our engagement with one of Kuwait's most iconic soccer clubs. A. The Qadsia engagement shows how deep rooted the engagement in Kuwait is. Our community who we connect point-to-point in this quarter have seen Jazeera launch flights into Abu Dhabi, Al Ain, Abha, Damascus, Aleppo, Kraków, Prague, Sochi and Moscow to just name a few. Just getting into Damascus, which has given us the competitive lever with competitors flying in those points and Aleppo has returned Jazeera to our network after 14 years. The launch of direct flights to Aleppo was actually after 15 years, and our first flights will commence from the 5th December 2025, and we are getting some huge response to what was once the most biggest city in Syria with 2.5 million population. We're very bullish on Syria and the wider GCC markets as we see network opportunities open up in an immense way as the regencies reduce uncertainties and markets opened up. Jazeera, with its safety as the #1 priority and value on 28th of October actually hosted Kuwait's first International Aviation Forum. This was a world-class forum attended by manufacturers, Airbus, Boeing and CFM and partner airlines, including Turkish Airlines, Qatar and regulatory bodies, including Kuwait DGCA, EASA and IATA came together. Jazeera has shown Kuwait that it is able to bring and connect people with a shared responsibility on safety, and we have really put Kuwait on the map from the safety aspect. And moving ahead, just on the eve of Jazeera turning 20 on 29th of October, Kuwait launched Visit Kuwait. This is a phenomenal opportunity for Jazeera to pursue, as all of you on this call have asked numerous questions in many quarters, be it Rohit, Krishnan or myself as to how does Jazeera build directional traffic. We now give you the answer. Kuwait is opening up. Visit Kuwait is not about just opening Kuwait up to tourism. It is more than that. It is about bringing people into Kuwait through Jazeera Airways, Kuwait Airways, the national carriers and other carriers who fly in. But keeping in mind that Jazeera and Kuwait Airways have got more than 65% of market share to bring them into Kuwait to fill up the hotels, to fill up the restaurants and to have the multiplier effect in the economy. And we're very pleased just today, we've launched a number of campaigns and are seeing some positive reaction in the market. Now let me cover the agenda proper, on each earnings calls as we do. So I've given you an introduction, and I will take you through the operational and financial highlights, give you some color around performance. And more importantly, I think most of you who are waiting to see what Q4 and what the future holds for Jazeera and the outlook, and Krishnan will cover the terminal and give you a wider view on the financial details you need. Now once again, welcome to a record-breaking quarter and 9 months. Now this has been achieved through consistency sustained, I would say, sustained consistency in a very difficult quarter, impacted by 2 wars earlier in the second quarter coming into the third quarter. But what Jazeera did in 3Q 2025 in the operational headlines, as you see in front of you, is passenger numbers actually grew by 3.3%. That is significant given the challenges in the relative quarter in '25 versus '24, keeping aircraft the same. Load factors, of course, were impacted by minus 2.5%. This is basically the impact from the tail end and of the effect of the war. The summer season actually normally kicked out in the first half or very early in October or late in July; however, what happened with the war in Q3 is that it got delayed to the tail end, but Jazeera did very well in terms of pushing aircraft utilization, driving up yields. Aircraft utilization rose by 2.9% or almost 3% in the quarter relative to 2025. Yield rose by 4.5%. You'll see that again, one of the transformative efforts in ancillary play out very nicely in this quarter. RASK obviously was impacted by the impact on load factors, but CASK excluding fuel, came off by almost 4%, which is very positive. But CASK excluding fuel for the quarter rose by 3.3% with a one-off effect that Krishnan will cover off in the financials. The 9 months, as you know, has seen a 60% jump in profitability with passenger numbers at 1.3% growth, load factors marginally off at 1.6%. Now you have to keep in mind, in Q1 and Q2, we're seeing phenomenal growth on RASK and load factors. And if that trajectory had continued in a [ PSAM ] situation, the impact on Q3 would have been very different in the 9 months. So hence, you see a marginal dip in load factors. Utilization was high at 12.3% in Q1, 2, 3, given the effect of Ramadan in Q1 and 2. Yield was strong at a 3.3% growth coming into another strong quarter and 9 months given that last year, during the first 3 months -- first 3 quarters, we experienced growth. So this is growth on growth. RASK was marginally down due to the load factor effect. CASK and CASK excluding fuel, were both down, showing you the efforts of the low-cost DNA projects, the transformation that is happening in Jazeera from ticket to tarmac is all paying huge cost savings, and Krishnan will cover that off in the financial details. In the third quarter, financial headlines, revenue grew by a strong 7.5%. Again, if you look at the effect -- tail end effect of the war and you discount that and then you see how both average fares and yield has grown, that is a phenomenal effect for Q3, a growth of 7.5%. Operating profit handsomely grew by 17.2%. This is both an effect of the higher contribution margins we are seeing in the business. Now one of the fundamental reasons there is, we laid it out very clearly in Q2 when we commenced flying into Syria. What was a very tight and operationally dislocated network for Jazeera has opened up. We are seeing some huge savings across the network. Our flights to Beirut and back are showing almost a 90-minute reduction of flight times. Our flights to Europe are seeing between 20 to 30 minutes of flight times, similarly to Russia and to the wider network as well, going northwest. So that has been benefiting us in Q2 and Q3 in terms of better operational performance. Net profit grew by 15.9%, and there was no difference between the gain on foreign exchange. In fact, we did better. In Q3 of 2024, there was a gain of KWD 0.9 million, while the gain on ForEx in Q3 of '25 was only KWD 0.7 million. So even with the disadvantage of KWD 200,000, we came in much better in terms of net profit in the quarter. Now the icing on the cake is the 9-month performance in 2025. Revenue grew by 4.9%. Now keep in mind my comments on how Q1 shaped out, how Q3 shaped out and how Q2 shaped out and how Q3 was going on a trajectory until we saw the India-Pakistan war, and we saw the 12-day war with effects on the network of the FIR weeks before, weeks after and a shutdown in between. We performed consistently, and we delivered smashing results of operating profits of 28% in this -- notwithstanding this difficult period that Jazeera has seen in Q2, Q2 and Q3 for the 9-month result. Net profits were stellar at KWD 23 million for the 9 months in 2025, this was a growth of 60.3%. You can discount the marginal ForEx profits and loss, but either-wise, Jazeera came in very strongly in this 9 months of 2025. Now again, returning to one of -- I would say, one of the key levers we talked about transformation in the business and what we're going to do in ancillary as we're doing in the cost base and bringing in the value chain of businesses we'll talk about is ancillary. Ancillary revenue has seen growth both in the quarter and 9 months. The third quarter growth was at a stellar 42.7%. Now per passenger growth was at 38.2% given the fact that in the quarter, we carried more passenger relative to 2024. The 9-month effect is also very strong with similar trajectories in ancillary revenue, total revenue and per pax revenue. Now if you then reflect back to where 2024 was and the growth we showed you in 2024, again, Jazeera has delivered in a very sustained and consistent way growth on growth. We committed to targets, if you reflect back in Q4 and Q1, and you will see that Jazeera has actually come ahead of targets, if you reflect on the numbers we shared on the 5-year trajectory. So ancillary revenue will continue to be a significant asset and engine of growth for Jazeera, and there's a number of initiatives that we'll roll out in Q4 and Q1. In a couple of weeks or close to the tail end of 2025, Jazeera will roll out its amazing new website. Its world-class mobile app. We are looking at the end-to-end aspects of customer journey with Litmus and Salesforce. So a number of projects have been incubated over the last 12 to 18 months and will be delivered in Q4 and Q1, converting not only a higher revenue per passenger for 2026 and as we push out in 2027 in the next 5 years, but more importantly, giving our customers the experience they want, a seamless, affordable customer experience across the airline and the terminal. Coming into market share and passenger distribution, I am pleased to say as we celebrate 20 years of flying in Kuwait, we have now become the largest airline by market share, not by fleet, I repeat, not by fleet, by market share. The way we utilized the aircraft, the way we have built direct point-to-point connectivity in Kuwait, and you'll soon see that we've actually flown to 72 points this year compared to 64 points last year. We are pushing the boundaries of growth on direct connectivity in Kuwait. On an overlap basis, market share remains stable at almost 37%, but from a distribution point of view, you'll see that the GCC tapered off from 36.3% to 33.7% only because of the growth we have put into Beirut, into Damascus, into Sochi, into other destinations across the network. However, the GCC will be our #1 point of focus as we go ahead with growth in the foreseeable future as we have launched more points. We've tripled our points in the UAE from 1 to 3 with Abu Dhabi and Al Ain. We've expanded into summer operations into Abha, and we have a lot more GCC destinations on the cards as the region sees some semblance of less geopolitical uncertainty and growth. Now in terms of the network and operational performance, you'll see, as I covered, we have flown into 72 destinations for the 9 months in 2025. We have expanded that by almost 8 new destinations relative to the 64 we operated in the 9 months of 2024. This has allowed Jazeera to test new markets with the current finite fleet of 23 aircraft we have, and we are tremendously pleased with the outcome we have seen in these markets and very positive and bullish on how we're going to deploy the growth aircraft we actually need yesterday. As you know, we are building our network and building the fleet from 24 to 50 and will build customer base and passenger numbers from 5 million to 10 million. It is very important for Jazeera to establish relationships with airports, with governments and with stakeholders across not only in the GCC, but the wider catchment up to, I would say, 7 hours and 15 minutes if it's required to fly an A320neo profitably across the network. So stay tuned for more exciting news at Jazeera Airways. And once again, this has been a stunning, stunning 3 months and 9 months results in 2025, and it has come at a very apt time as we celebrate 20 years of flying at Jazeera. Let me now hand over you to another impressive element and asset in the portfolio, the terminal. As you know, not many airlines in the region or in the globe have got a terminal attached to the portfolio. So let me now hand over to Krishnan Balakrishnan, our Deputy CEO and CFO, to take you through the amazing terminal, the improvements and also give you a cursory detailed view of the financials. Thank you.

Thank you, Bara. Good afternoon, everybody. So first, let me take you through what we have done. While we await approvals from the government for expanding the current terminal, we have been trying to enhance the capacity within the available space by making a few changes across the terminal. Let me quickly give you an overview of what we have managed to achieve. Inside the boarding on the air side, the capacity of passenger, seating capacity earlier was only about 900. Now we have managed to increase it to 1,200, which is a 33% increase. The business lounge, which has been approved has got now 72 passengers capability of seating. It's a very, very nice facility, which I would encourage all of you to actually visit and try. So this is an increase of 80% from 43 seats to 72. The number of gates that we were operating were 5. Now we have increased that to 6, which is a 20% increase. The retail outlets, we could not lease out for some time because of the renovation work going on and certain delays from -- for approvals. Now we have managed to commit 95% of even the land side retail outlets, which is an increase of 35%. The number of the toilets that were available earlier were hardly 5 on the air side. Now we have increased that to 30, which is a 500% increase. Smoking room, there was 1 earlier. Now we have increased it to 3 in different locations. The immigration queuing capacity by changing the way we manage the queue, we have increased it to 150. Earlier, we used to manage about 40 people in the queue at any point of time. The kiosks, usage of kiosks, we are now focusing on. It has already increased compared to what we had earlier this year. We have increased it by about 800%. And this will not be the end. We are focusing on increasing it even further. Now I will take you to the next slide on the parameters for the 9 months and the third quarter 2025. So most of it has been covered already by Bara in detail, but I will just highlight a couple of them because they are relevant for the next discussion. The seats, we increased by 6.6% in the third quarter and 3.4% for the 9 months. This increase was not by increasing the number of aircraft. It was mainly by increasing the number of seats on each aircraft. So in 2024, we were operating all the aircraft with 168 seats capacity. We were only selling 168. And this year, we have been selling 174 seats on each flight because we changed the seat configuration. Now that has given us a good boost in the seats. While the sectors increased by about 3.6%, you see the seats have increased by 6.6%. The other benefit we got in this quarter, thanks to the efforts that have been taken, like Bara explained earlier, our yield was 4.5% much better than the previous year. And for the 9 months, it is 3.2% better. Going on to the next slide. The revenue went up increase of 7.5% quarter-over-quarter mainly because of the yield improvement, of course, the higher number of seats available and, therefore, the passenger numbers. The operating expenses were 5.1% higher. This reflects a better percentage than the increase in block hours, which was about 5.4%. The operating profit, of course, was 17.2% because revenue was better than -- revenue outgrew the costs. So that helped us to improve the operating profit by 17.2%. The net profit, of course, driven by the better operating profit and despite the higher taxes was 13.5% -- sorry, 15.9% better than the previous year at KWD 13.5 million. In terms of the balance sheet, the cash balance remained strong at KWD 53.2 million, mainly because of the cash generated from the operations. And of course, we had certain credit facilities, which we have used earlier in this year. The fixed assets decreased because of the disposal of an engine primarily and, of course, the normal depreciation. The liabilities also have reduced because we have settled one of the term loans with the strong cash flow, we have reduced our interest cost by paying certain loans earlier. Going on to the next slide. I will request Bara to please take you through the outlook. Thank you.

Thank you, Krishnan. Now as we started the call on a very positive and buoyant Kuwait, as you can see, we have launched in terms of travel outlook, Visit Kuwait and the facilitation of both the visa procedures have improved from a seamless point of view with online visas now available on the MOI site in Kuwait, stimulating inbound travel and enhancing tourism capabilities and capacity. Just on the 26th of October, his excellency, the Prime Minister of Kuwait launched and opened the new large and very advanced control tower in Kuwait and the third runway. I repeat, Kuwait now has got 3 runways, enhancing very significantly operational capabilities and, more importantly, growth opportunities for Kuwaiti home-based carriers. Oil prices are expected to remain within a reasonable price trajectory. Despite the war that we experienced in May and then June, July, you'd see that oil prices has hovered between the late 50s to the early 60s to not more than the 70s or USD 72 max a barrel for Brent. However, we continue to track the Brent barrel crack, the crack spread. Though the crack spread is now in the early 20s, we are positive that with refining capacity and the imbalances in the markets that we see, that will play out itself. However, given the significant depression we have seen in oil prices, we continue to take a very cautionary approach when it comes to hedging to a much more protected short-term hedging opportunity approaches within the framework that we will plan to do in the foreseeable future. For the fourth quarter of 2025, on balance, in terms of the fourth quarter of 2024 relative to the fourth quarter of '23, we're expecting a more positive quarter, albeit and a caveat, I'll add, if there are no regional uncertainties or surprises. We have seen some very good indication that Kuwait is opening up, travel is opening up and markets are allowed to open into Kuwait with visa-free access as well. Let me name you a few. We launched Armenia, Yerevan in Armenia. It is a visa-free destination. For the expat community, the larger expect community, be it the Egyptians and the Indians, they now have access to Moscow and Russia. There are many markets, including the Caucuses, including Georgia, Azerbaijan and the CIS are opening up to travel for both the Kuwaiti citizens and the residents and more importantly, the wider and larger expat population in Kuwait. So that is a tremendous positive outlook for Q4 and the years going forward. Now we also expect in Q4 to see more travel normalization. As you know, early in the year, the traffic rights, the bilateral traffic rights between India and Kuwait grew by almost 50%. 6,000 seats were added to the baseline of 12,000. At Jazeera, we are pleased with the add, but we could do 50,000 seats. But we are happy to hold the 6,000 seats in growth for now and take on further growth as we expand and take on more fleet. In addition, Syria opened up. We have been hugely, I repeat, hugely successful in reconnecting Kuwait to Damascus. We saw very high system-wide load factors. In fact, our performance in the Syrian market is much higher than the rest of the network, given the vacuum that existed for a very long time in the market for direct connectivity. In summer, we actually operated on certain weeks on double daily flights. And we're very bullish that this Q4, when the travel season and the peak season returns in December, the Levant, including Amman, Beirut, Aleppo, Damascus and the wider markets, including Cairo, which is one of the best-performing markets in KSA and the Caucasus and Central Asia will be very busy. On top of that, the VFR demand and the leisure demand has now been supported by a stronger lack of Hajj and Umrah flying. At Jazeera, we did more Hajj flying this year than we've ever done before. We, in fact, will be doing more Umrah flying as we taper on to the opening opportunities we have in the wider region, including Iran, Iraq, and we're waiting for more sensitivities to ease and less uncertainties in geopolitics, but we are seeing very good progress in that respect. Seat densification program has gone very well, and we will be able to complete that by 1 quarter or pretty much just before the peak season in 2026, somewhere in May of next year, and we will load the summer inventory, and we are pushing to almost loading 1 million leisure seats next year in 2026 as we build out direct connectivity. For those on the call who have followed us in '24 and '25, we started 2023 with 500,000 seats. We grew this year to 700,000 seats, and we are very bullish in terms of how yield-accretive and how positive summer performance is out of Kuwait, and we are focused on putting at least 1 million seats between Kuwait and the wider leisure network across Europe, across the GCC, across many markets, including Russia in summer of 2026. The icing on cake in this call, apart from the results that we've announced is that we are consistently delivering every single aspect of intention we have on transforming the business and reducing our cost base. You recall, we purchased 6 aircraft in Q4 of 2024, giving Jazeera a significant tailwind in terms of having not only a lower unit cost of aircraft, but giving us the latitude to use our aircraft into the networks where some of the aircraft previously from a lease basis were not been able to fly in certain points. That has given us a wider network point and, hence, you saw the 8 destination growth we've delivered for the 9 months. But very importantly, one of the key aspects of what we told the investment community is that we are not going to leave any stone unturned when it comes to cost transformation. I'm very pleased to say on this call to all the investors, the wider community that Jazeera will now control its destiny in ground handling. By Q1 of 2026, Jazeera will bring in-house what was outsourced for the last 20 years in the business above the wing operations and below the wing operations. If you do recall, we announced the hire of a significant talent in the business with Alp Ersoy joining Jazeera from Sabiha International Airport with an amazing background in running ground operations. If you had known our hire of talent, then you would have figured out in terms of where we are going. And this is exactly where we want to be and where we will be, not only in ground handling, but in other areas where we can retain the margins within Jazeera and we can grow a wider contribution margin and a profit EBIT margin in the business. So this will be an internal capability, and we are planning and building out. And hence, you would probably have seen a huge hiring exercise at Jazeera as we onboard almost anywhere between 400 to 700 team members into the business, depending on the in-source and outsource formula that we'll choose. Again, I'll emphasize, we will not stop there. Extending an affordable airfare model in Kuwait or anywhere in the world will require us to focus on cost, cost and cost. We have done very well in the network in terms of building out ancillary revenues, building out a world-class website and mobile app that we launch, building up a bundled proposition, but in the low-cost business, it's all about cost. You'll see Jazeera roll out a number of initiatives as we have done in the whole 9 months in Q4 and the following years as we embark on greater growth. Thank you. Now I think, Hatem, I think the key performance metrics here has been covered by Krishnan in some -- in one way or another in his remarks, and we can open the floor for questions. Thank you.

[Operator Instructions] We have the first question from the line of Nishit Lakhotia.

Congratulations on a strong quarter. I have a couple of questions. First, on the terminal side, why has the management decided not to show terminal revenues and costs from this quarter? I mean this is not the right way to go on the transparency side. So I'm kind of surprised that terminal details on the revenue profitability and all is not there. And also, the numbers are now different in the point in time for terminal passenger as well as ancillary, if I see for the last 9 months. So if you can just give a comment on why the numbers retrospectively for last year also has changed. And following with that, I see the lease income was lower in third quarter this year versus last year third quarter. So why is that the case? So that's just the multiple questions on the numbers there. Secondly, on the delivery of the leased aircraft, you have redelivered one of the lease aircraft. So what is the fleet size currently after this lease aircraft was delivered back? And does that mean you won't be subleasing any aircraft for the next 6 months? I mean, just these 2 for now, I have many more, but I would just want to leave some questions for later or for others.

Thank you, Nishit. And to be more precise, you asked 4 questions. They were not just 2 questions, but we will certainly cover all 4 questions. Look, on the terminal revenue and aspect itself, you can be assured, we are principal in terms of the highest level of transparency, and Krishnan will kind of cover off in terms of our approach now in segment reporting and give you some thesis in terms of why we have taken the approach. But let me first cover off the last question, which was your fourth question. And then the third question was lease income and then you have the terminal ancillary composition and then, of course, why we did the revenue cost split. Now on the aircraft per se, if you look at it, we had 24 [ tails ] this quarter. We obviously wanted to keep one of the A320ceo, but due to market circumstances and economics, we are also very sharp in terms of aircraft pricing, we will take on board and in terms of where we see opportunities. We agreed with the lessors to release the aircraft back to them. Obviously, we wanted a longer-term lease; however, the economics did not work for us. Now having said that, you'll notice that we've actually delivered a larger number of passengers, 3.3% growth in passenger numbers. You missed to ask the question how we did that. That's with a lower load factor. That's only precisely to the fact that we went on a high seat redensification program. When I came into the business sometime in March, April, and we shared the prospect of changing the low pass 180 seats, there was kind of questions asked, will the Kuwait market be receptive to this? I can assure you all on the call, we have actually seen 100% load factors in peak summer months on 180 seats on the CEOs, and we're waiting to configure the NEOs to 180. Of course, there was some technical considerations that delayed the effect, but it will happen in Q1. So yes, it's -- the leased aircraft was redelivered, but the other silver lining in there if the investment community picked up is, we actually operated a lower aircraft count, but deliver higher pax numbers and almost KWD 4 million to KWD 5 million more. Let me get Krishnan to explain the other 2 questions. Over to you, Krishnan.

But Bara, before that, on this question, was this lease aircraft redelivered towards end of third quarter? Not during the third quarter, so these numbers won't matter, right?

The leased aircraft was not deployed on revenue -- any revenue capacity throughout the quarter. Throughout the quarter. That explains it.

So you had 23 planes. You had 23 planes for the quarter?

Absolutely. Absolutely. Let me hand over to Krishnan.

Nishit, so we will first address the second question, which was the lease income being lower than the previous year. The reason was last year, we had an aircraft on wet lease to a party outside for a much longer period; whereas this year, we have not given the aircraft on lease. So that's why you see the lease income being lower. In terms of the terminal segment reporting, definitely, the intention was not lack of transparency. The point was we have been monitoring the costs of the operations. And therefore, the arrangement between the airline and the terminal has been renegotiated and redrawn with effect from January 1 of this year. And as a result, the transfer of income to the terminal has been reduced as a result. So that does not mean that we have not taken that income. It is an income shown in the airline. So it's only a question of how we reflect it in which segment. Now because of this reduced income in terminal, it does not qualify under IFRS 8 as a segment. It does not cross the threshold required to be reported as a segment. That is the only reason that we have reduced. So yes, the income very much remains in the group, and it is reflected in the airline.

[Operator Instructions] We have a follow-up from Nishit Lakhotia.

Yes. So the other thing that was interesting that you mentioned was the ground services. Can you possibly give an idea of what kind of -- by when should we expect you to be launching the ground service? I'm assuming that is only for the T5. So what level of commitment and time lines because this is not a very CapEx-intensive, but yes, this could be a very OpEx-intensive exercise in terms of the manpower cost is generally 70%, 80% of this kind of business. So if you can give us some idea on how this will affect your numbers? And when should we see this reflecting both on the revenue and cost side through the year next year, maybe is it from beginning or later next year? Anything on that side?

Thank you, Nishit. Again, a very good question. On an annual turn basis, the program to do flying to something close to 20,000 single sector departures out of Kuwait or relatively around 40,000 in and out. You're right on the OpEx and CapEx aspect of it. Typically, airlines choose to prefer to outsource capacity when they are marginal and they don't have scale. Jazeera has reached a point where you have scale and you can have spread the network across the various intervals of arrivals and departure over a 24-hour period. You're right in some of the aspects and comments you've made, the intention of doing that for Jazeera is fundamentally to keep costs low in the business. If you look at one of the things that I'll ask the investment community to actually probe is you look at ground handling costs across the region. And you see various multiples from rack rates and published rates to where certain airports where you have monopolistic players charge versus relative to duopolies or where you have an open market. In Australia, Asia, elsewhere, you see very fair rates given competitive elements in the market. However, taking control of ground handlings for Jazeera at this stage for us is a very critical milestone and cornerstone to safeguard costs. I repeat cost, cost, cost again. Because if we do not do that we are of the view in terms of projections that what could be an opportunity to reduce costs as we grow our business and grow into more than 40,000 to 50,000 single departures out of Kuwait relative to the 20,000 we have now, we will see an explosion of costs. And hence, we have taken the preemptive approach of establishing Jazeera Aviation or Airport Services. Of course, Airport Services has a terminal under the belt. And now the beauty of having a terminal and having a ground handling opportunity is an opportunity you cannot ignore because typically, ground handlers do not own the terminal and terminal owners sometimes own the ground handlers, but they are not owned by an airline. So here, you have an airline that not only owns the terminal now, but now has the leverage of owning ground operations front of house and back of the house above the wing and below the wing. So you then look at the whole customer journey from the moment the customer takes the first step into the terminal in Terminal 5 to the point they depart from the tarmac in Kuwait, we own the experience in totality. That's number one. So we control the destiny. We own the whole complete customer experience. The very important point on cost is, we are averting and avoiding future cost increases in the system. And hence, we've embarked on this. Our modeling has been very clear. We will be able to achieve a cost point almost equal and if not, I would say, lower, let us deliver this to you, lower than the current cost elements that Jazeera has been seeing for the last 20 years. The only say is almost because we need to prove ourselves and we need to deliver this. And the way we will deliver this is a phased implementation in order not to break the core operations for an airline. So we will first do above the wing, all the check-ins staff and the front of house will be done by Jazeera before the end of December. And then by Q1, we are running -- of course, it is only prudent that on the onset, we will carry a little fat in the system in terms of having manpower and equipment to supplement the operation. And by Q3, Q4, we will be able to fly. And when we do that, we will control the whole operational excellence. We will control safety as our #1 priority as the airline who is providing the services back to the airline. We will then push on operational reliability and push for the 90% on-time performance that we require. And fundamentally, we will improve customer experience and achieve the lowest cost per turn in Kuwait that Jazeera would have ever seen in the last 20 years for the next 20 years. Thank you.