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It is well documented that Boeing is having problems with its seven three seven Max. However, there's another issue which has been hitting this industry very hard as well, and that affects airbus aircraft. Not all airbus aircraft, some airbus aircraft, and it concerns the RTX Pratt and Whitney geared turbofan engine. Now, if you buy an A three twenty today, you are given two engine options. You can either buy the CFM which easy Jet bought, or you can buy the jet
engine that comes from RTX. And that latter engine has been having major problems which has been hitting our next guest very very hard, and that is Joseph Variety. He is the CEO of with Air. His engines are RTX engines and they're having a major impact on his ability to provide capacity to the market. Josephs with us this morning. You've got numbers out this morning. Topline looks pretty much in line with expectations. New income. You've beaten there. But
this is a this isn't a carrier. The moment is, in some ways in survival mode, is you try and manage to do this problem which Withney engine issue. How hard is it hitting you right now? When is the peak of this problem going to manifest itself? And when are you going to start preparing for the kind of the growth phase when all the engines are back.
No, absolutely, I mean this is a significant issue we have been dealing we can be a continue to deal with in the next few years. So this is not something you can resolve overnight. Good news, we are going to receive the first engine with no problems, clean up all of these issues as of next months, and from that on this situation we start improving. So we are
probably peaking on the problem as we speak. By the time we're going to be completing the worst cycle of inspections, it's another two years to go off the speaking, but now we will start seeing some improvements. So this issue has been dragging us over the last six to twelve months, but now we are starting to sign up recovery and I think we're going to get better going from here.
Okay, how many engines you've got out now?
Now when you get them all back, how much extra capacity you're going to have? What are you going to do with that capacity? We need to start thinking about next year and what you're going to do with the business.
Then yeah, maybe the best way to look at this.
Today we are a two hundred aircraft airline two hundred and nine. Precisely three years now from now, we're going to be more than a three hundred aircraft. Some of our aircraft are grounded as we speak. We have forty seven aircraft on ground right now. Those will be recovered completely within the course of the next two years or so, so we will be back into gross overround twenty five to thirty percent of year after this year. So it's going to be a bit of a roller coaster. So
right now we are flat on capacity. We are protecting it, but in the next two years you're going to be seeing growth in excess of twenty twenty five.
Percent years A good morning. Have you been losing market share there in some places as a results of this and are you so? Are you confident that you can get some of that back with the capacity plan that you describe.
I think I just said it that effectively we are protected by or the supply chain issues because we are unable to run at the moment, but no one else is able to run because they all have their own problem. So I think it's a rather like statusco in the market. So we are not losing market share, we are protecting capacity. We are flying exactly the same number of seats this year as last year.
So we that regard we are fine.
But most importantly, you know now we need to look at the future because growth is coming. We need to start setting ourselves off for that from a market standpoint, detre between pilots and kevin crew to make sure that we're going to be able to deliver it.
What can you tell us about pricing. We spoke to the easy Jet boss recently and he was saying it's too soon really to say too much about the pricing outlook for the summer. What are you seeing.
Yeah, First of all, we are seeing a very robust market out there. We are operating across geographies, investing Europe, in Centralistian Europe, in the Middle East, and we are seeing a very consistent picture. The consumer is fine, demand is fine, the market is fine.
There are no issues. Now.
The problems some of the allies have that they overcharge the consumer last year and they cannot just keep doing it every year. So of course that is a plateau to it. But we said, is in the cost business. We are very much focused on unit costs to make sure that we are actually loading our cost of operations. We are in the business of commodities, in commodities lowest cost previous.
This is what we are focused.
On, and we are very happy with the pricing environment we are seeing out there.
Tell us a little bit about some of the kind of black swan events that we're watching, which Jet has to been operating in Israel, for example, if that conflict escalates, are you prepared to gain or deploy or get that market share back in other parts of the world.
I think we are prepared for everything. By now, I mean going through the last three to four years. One of the things we certainly have learned how to deal with blackstone events because we have had a lot of them. With regard to reshuffling capacity and that is a conflict or there is, you know, any big issues affecting the business, we have learned how to do that. We are a very flexible organization. Simply what you do is that you play according to market. You play according to the situation.
So if you are contained with regard to flying, you just move capacity over to somebody else. Let's not forget that we have a huge network footprint. By now, we are operating a two hundred countries. We have options to go for when we have to do that.
Talk to us a little bit as well about labor issues that seems to come up every summer, in terms of capacity at airports, in terms of negotiations with fight attendant pilots, et cetera. Your visibility on the labor story.
Again, we are we are good.
I mean, let's not forget that we are structurally a growth business.
We are growing the company.
As a result of that, we continue to create carrier opportunities for our people. You may be a pilot, you may be cabinettendant, you may be in a manicheri role. So people come to work for this on the one hand, for the spirit of the business, but also for the carrier opportunities that growth continues to create. So we are very attractive to the market. We actually never had labor issues ourselves. We have been dealing with lavery issues of others.
Us in the situation is a lot better this year than what it was last year.
Why are supply chain issues still hitting this industry as hard as they are? How long are they going to last. You talk to the OEMs US and bye. They still talk about their supply chains. They still talk about problems where years in the pandemic they haven't resolved it. How long is it going to hit this issue? How long can we expect capacity problems? How long can we expect that to impact fares personally?
I think supply chain issues will affect the operations of the industry over the next three to five years. Again, this is not something you can fix overnight. And if you look at the root causes of these supply chain issues, I think they are two forward. One, the whole industry has been structurally growing a lot more than it was expected.
And two COVID was such a big hit and such a setback for the whole setup that the industry is theory covering from that in terms of getting labored back into work, get focused on some of the issues which you let go during the COVID times. And this is a very robust industry. It takes time to move again. I think it's years still out.
There, all right.
Joseph Varady, the CEO of wizare joining us this morning on SAT talking about a variety of issues from a supply chain story to the labor story. We thank you so much for joining the program.