The Air Canada Anko Inherits

0:00Jay Shabat: Hello and welcome to the Airline Weekly Lounge. I'm Gordon Smith, joined as usual by co-host Jay Shabat. In this week's show, we're talking Air Canada and China.

0:25Jay Shabat: Hey Jay, how's it going?

0:27Gordon Smith: Hey Gordon, we missed you last week.

0:28Jay Shabat: Oh, you're too kind. I was at Disneyland Paris, which I don't know. It's obviously very nice, but it's not for me. It's really, really not for me. I would have far rather been in this hot seat, enjoying a conversation with you, talking all things aviation. But back to normal programming this week. And for anyone that sort of had their ears pricked when I said the intro, it's called Air Canada and China. These are two separate discussions, but Air Canada does have a little bit of an interest in what's happening in and around China, as I'm sure we'll get into in part one. But these are two separate discussions insofar as part one, we're going to be discussing Air Canada tied to our feature story in the latest issue of Airline Weekly, which was published yesterday, as we're recording here on the 8th of September.

1:14Jay Shabat: And then part two, Jay, correct me if I'm wrong, we're going to be looking at China's big three in particular, looking at some of those Q2 earnings which came out of them. And spoiler alert, they weren't great. So some serious red ink being spilt there. I think you said oceans of red ink in the write-up yesterday. But let's start with our attention on Montreal and what's going on there, Jay. Why are we discussing Air Canada this week?

1:38Gordon Smith: Well, let's start with a little stroll down history lane, if I may. Going back to 2003 was kind of an important year for Air Canada because it was the airline filed for bankruptcy. and shortly thereafter it came, you know, restructured, came out to 2004, I guess it was. And the rest of that decade, it was still a very distressed airline. It actually almost went bankrupt again in 2009-ish during the whole global financial crisis. the next um you know the first few years of the 2010s were also kind of not so great for air canada they started making money but not not very much so the real turnaround came 2015-ish 2015 between between 2015 and covid so you know right before 2020 uh air canada was earning operating margins annual operating margins between six percent to eleven percent so you know give or take up and down, which not bad.

2:46Gordon Smith: They historically, though, even in those quote unquote good years, they were underperforming their U.S. peers. So there was always this sense like, yes, we turn things around. We're not the old bankrupt Air Canada anymore. We're a lot more stable. We're a lot more profitable, but still not quite where we want to be. Okay, so then COVID came. And I always like to say Air Canada experienced what, in medical terms, you hear people talk about long COVID. Well, Air Canada kind of experienced about a long COVID because the airline markets were closed in Canada for longer than they were in the US and longer than they were in a lot of other places.

3:31Gordon Smith: So it took them, it was quite some time before they really got back on their feet after COVID. So here again was another, you know, big shock to the system. You had, you know, first that early 2000s or that was a fuel shock. Then you had the, you know, global financial crisis. Then you had COVID. And it always seemed to hit Air Canada more than average. Then what happened is, you know, coming out of 2020, it was like about 2023, Air Canada came out of the COVID crisis rather strong. So it earned, you know, 11 percent operating margin in 2023. Then that went down to 8 percent in 2024, went down again, 6 percent in 2025.

4:15Gordon Smith: So you can see we're sort of trending down again back into that area where, you know, the airline is doing fine, but not to the point where it can, you know, beat its chest and, you know, throw a parade for itself. So that's sort of I just wanted to give everybody a context, some background about where the airline stands as a new CEO starts in January. So the current CEO, Michael Rousseau, well, I guess he's, I think he's still there. He's going to be leaving very soon. I can't remember when his last day was.

4:49Jay Shabat: Don't quote me on this, Jay. I think he left at the very end of August, but he's hanging around in an advisory capacity. And obviously we've got Anchor joining in January. But the board, I believe, is, I'm sorry, the executives are reporting to the board until that time.

5:04Gordon Smith: Yeah, thanks for that clarification. So he's, yeah, he's just, Michael Rousseau is still there as an advisor. And then Anko Vanderwerf, who's currently the CEO of SAS. Prior to that, he was CEO of Avianca. He will become the CEO of Air Canada in January. So that's your background. Now, just wanted to next talk about some of the challenges that Air Canada faces as Anko arrives And as the year enters into its final quarter pretty soon, we're about a couple of weeks away from the end of the third quarter. So one of the things that really hurt Canada last year was they did experience a flight attendant strike, labor unrest.

5:50Gordon Smith: And it happened during the peak summer quarter. Now, this is a very seasonal airline. Historically, it's always been that way where, you know, summers are great for Canada. They typically outperform even some of the better, you know, some of the stronger U.S. carriers. But winters are tough. And it kind of makes sense that, you know, you're going to attract fewer, many fewer visitors to replace like Montreal in January. So it's it is a seasonal airline. They've tried to address that through various means. And one avenue for trying to smooth out that seasonality is adding routes that tend to peak counter-seasonally.

6:31Gordon Smith: So places like Bangkok that might peak in the winter, they've, I think, made some progress in that regard. So I mentioned the labor strafe last summer. They also had that crash when it was actually Air Canada Express plane at New York LaGuardia that experienced a crash. Obviously, that was a big setback earlier this year. We have the U.S. trade tensions, which were really bad in 2025, you know, spring of 2025. I think over the sort of toward the latter half of 2025 and into 2026, some of that got a little bit, kind of cooled down a little bit. In fact, Air Canada actually added back quite a bit of trans-border capacity.

7:16Gordon Smith: They even added some new U.S. routes from that downtown Toronto airport. But just in the past couple of weeks, tensions have flared once again.

7:25Jay Shabat: Another trade dispute between the U.S. and Canada.

7:29Gordon Smith: Now, Air Canada has been, we'll talk about this in a moment, but Air Canada has been hurt less by that than some of their rivals. But just keep that in the back of your head. obviously we had the fuel shock which has you know characterized the last few months that's been painful for all airlines air can is also experienced not just fuel inflation but also labor cost inflation they've recently signed a lot of new labor contracts not just with the flight attendants but pilots and other groups as well plenty of non-fuel cost non-fuel non-labor cost inflation going around the industry as well. Air Canada, or sort of Canada, it's also a market where airport costs tend to be very high.

8:11Gordon Smith: So, you know, long-term challenge, this is probably never going to change for Air Canada, is that it is a high cost place to do business. That said, they do have a labor cost advantage versus the U.S. airlines. And we'll talk about their quote-unquote sixth freedom strategy in a second here.

8:32Jay Shabat: Give our listeners who are maybe not quite so familiar to Canada, before we get into all of the opportunities available to Air Canada, a quick competitor assessment. As I see it, you've got WestJet, which is pretty strong, but not maybe quite as bullish on long haul as it once was. Transat, which obviously had the merger that didn't happen. And then Air Canada, that's pretty much in terms of domestic, meaningful, international?

8:58Gordon Smith: Yeah, no, I think, yeah, that's a pretty good summary of the competitive set within Canada. And one, you know, I think what's been very helpful for Canada is that a lot of these competitors that you just named have experienced a lot of, for one reason or another, various degrees of distress over the past couple of, you know, call it year or two. If we take WestJet, for example, and Porter Airlines, which has become a more, let's say, aggressive competitor because they're now flying larger airplanes, Embraer airplanes, both Porter and WestJet have much heavier exposure to the U.S. leisure market than Air Canada.

9:48Gordon Smith: and that's the market that's been really really depressed um with this whole trade war and you know back and forth insults and um or maybe it's just one way insults out of you know well no comment on uh but uh the um the the just the whole canadians just don't want to go to the u.s anymore um for vacation so if you look at you know canadian travel to vegas and florida and cal it's just dramatically down from where it was two, three years ago. That's hurt WestJet and Porter

10:21Jay Shabat: more than it's hurt Air Canada.

10:25Gordon Smith: Now, Air Transat is an interesting example. You mentioned Air Canada had a deal to merge with Transat, which is, think of Transat as, you know, there's Air Transat, the airline, but it's owned by a travel agency, which gives them a rather strong distribution particularly in the province of quebec so it's a you know pretty formidable network um they fly you know the model there is uh um you know just building on the seasonality challenges that i talked about earlier the model there is you fly to europe in the summer you take those planes you turn them around you fly them to the caribbean to you know various mexico sunshine destinations in the winter and you know i think they've done a decent business

11:09Jay Shabat: with that over the years. They have kind of run into some difficulties.

11:14Gordon Smith: Last couple of years, COVID was really rough on them. They had to take a big loan, government loan, that they only recently had to renegotiate. They're still kind of paying that back. Cuba is a very important market air transat, and they can't fly there right now because of fuel supply issues, et cetera. So they've had their set of problems. And then, as you mentioned, some of these smaller, low-cost carriers like Flair have just never really established themselves as strong competitors. So in that sense, Air Canada goes into his 2027 approaches. They go into the new year with some favorable competitive situation because their rivals are more trouble.

12:04Gordon Smith: um i do want to mention also that uh air canada has a very lucrative loyalty program not it's not quite you know the rules the laws in the u.s and canada are different they can't quite monetize it to the same extent that the u.s guys do but they were able to um well they have more than 10 million members now and again you know this is delta has i don't know is it 200 million members so you know very vast difference in in in size here but even with those 10 million members, they were able to sell a portion of the plan, a minority stake in the plan to a group of pension funds slash private equity and able to monetize it for a nice, a healthy sum, which advances the airline's goal of eventually achieving an investment grade balance sheet from ratings agencies on Wall Street.

13:02Gordon Smith: So that's been very helpful. I know you've written about that as well, Gordon, the loyalty program, if you wanted to add. Yeah, yeah.

13:10Jay Shabat: All I would say is anyone that's listening to the show who's got a Skiff subscription, Airline Weekly subscription, jump in there because we've gone into a lot more detail, both in the issue and on skiff.com or on the Aeroplan deal, which was, I think, led by Blackstone, the sort of huge sprawling private equity group. But it is also, you're written in the TNCs that they can buy back that share. I think within five to six, seven years, something there or thereabouts. So an interesting one. You could compare it to longaging your house and getting the equity and everything else. But we won't go into the weeds of that discussion here.

13:42Jay Shabat: But sure, it's a fascinating topic. Jay, let's talk about the opportunities for Air Canada and some of the exciting elements, the new toys that Anko's got to play with. Lots of challenges. And as anyone who's read your feature story this week in the latest issue of Airline Weekly knows, it's not going to be plain sailing. You're going to have to look at the headlines here. today around tariffs uh you know the beef between ottawa and dc it looks like it might get worse before it gets better um certainly as as we're recording here but let's focus on some of the positives for anko let's get the mood music playing positively for once what do we have in store i'm thinking maybe the xlr could be quite an interesting little piece of equipment for for Franco and his route planning team?

14:24Gordon Smith: Yeah, absolutely. So, you know, a very instrumental tool for, or let's say strategy that enabled Air Canada to go from this, you know, once bankrupt, almost twice bankrupt airline into, if not a super profitable airline, one that's very solidly profitable, very financially stable. A big reason for that, one of several reasons, but certainly a very big one was this whole sixth freedom strategy. I kind of alluded to it quickly earlier. This idea that sixth freedom just refers to, you know, the civil, basically ICAO, which is part of the United Nations, you know, many years ago came up with these, you know, different, they call them freedoms.

15:10Gordon Smith: So, you know, first and second freedom, just very basic, you know, you're allowed to fly to my country, you can land in my country, you know, there's different levels of freedom. So sixth freedom is one where you're actually able to fly, take passengers from country A to country C through your own country, which is B in my example. So a very critical aspect of Air Canada's network strategy is that they sell tickets to passengers flying between the United States and the rest of the world. Now, they can't operate nonstop flights from the United States to the rest of the world, But as long as they're moving those passengers through one of their own Canadian hubs, in this case, either Toronto, Montreal, or Vancouver, that's totally legal.

15:59Gordon Smith: And that's totally something that they're very aggressively doing now and have been doing for many years. And that's worked very, very well for them. Um, so they, uh, you know, and a good example of that is, you know, flying someone from, let's say, you know, Washington or California to Europe via Toronto, you know, to France via Montreal. So they do a lot of that. They're actually the largest, I believe, foreign airline in the U S, um, because of all those, you know, uh, they, they were able to support a lot of flights into the U S not just because there are people traveling between the two countries, transborder, but because of the connecting traffic.

16:41Gordon Smith: So that's a very big point. Now, to your point, they now have new tools by which to exploit that, one being this Airbus XLR. Now, you were gone last week, running around Disneyland with Mickey Mouse and Donald Duck. And Meg and I were talking on the podcast about this XLR and how American and United were using it. Well, similar case for Air Canada, they're using this XLR to Europe. They're opening some of these European routes that might not have enough traffic to support with a larger aircraft. Just a week or two ago, they announced, look at Nice, is that Montreal Nice? I don't have the exact ones in front of me, but looks like they're doing Oslo, Shannon, Basel, and Switzerland.

17:30Gordon Smith: So you can see just, you know, some of these secondary European routes with the XLR. They also have, you know, just so not to neglect the heavier metal, they have 787-10s that are coming later this year. That'll be an excellent transatlantic aircraft for, and transpacific, for routes with a little bit of, you know, meatier demand. And then ultimately they'll be getting A350-1000s too. Not the super, super long range versions that Qantas will fly, but that plane will replace some of their 777-300s, which are aging and which are the largest aircraft in your Canada fleet. So yeah, a lot of new planes coming their way.

18:19Jay Shabat: Loads of new planes coming their way, Jay. And I think it's really interesting that airlines are using these new aircraft, not just like Canada, on new routes. You can also supplement existing routes. So we've seen that with Etihad, actually. Yeah, they've got the new 321s. I was on the inaugural flight from, it wasn't even an inaugural flight. It was the factory pickup flight from Finkenwurde, just outside Hamburg, back to Abu Dhabi last year before it all kicked off in the Middle East. but they are using that and uh antonio antonio antonio nivish you'd think that would be a name i can pronounce given like where i'm based antonio nivish the ceo of etihad he made that point he says yes it's not just about opening up brand new city pairs it's about enhancing uh city pairs that you've already got so he highlighted bangkok is an example of a route that's obviously very well established but you might not be able to justify putting a new wide body on there or you might not have access to the wide bodies depending on what the oems are up to but you might have the ability to put in an xlr and air canada doing exactly that on the heathrow route so they are returning to uh they call it the day tripper route uh operating from toronto marking the airline's fifth daily flight from toronto to london heathrow popular for its morning departure time from toronto the day tripper enables customers to fly back across the atlantic during the day arrive in london in the evening without losing a night's sleep that's whether you get to sleep on the aircraft or not um but importantly that is being used uh operated by rather the 321 xlr so a great example of a very very well established route uh and one that's being um plumped up even further with the xlr so not just these slightly quirky ones to oslo and shannon that you know would be always sort of narrow body marginal wide body anyway even your trunk roots uh you can put an XLR on there.

20:11Gordon Smith: Yeah, absolutely. So yeah, a lot going on for Air Canada and we'll see if they can, you know, one, use those new planes to boost their margins overall. And then also just to what extent can they expand overseas, continue to expand overseas going forward? One of the, interesting new routes that they added with a wide body just in the past week or two is to Guangzhou. We're going to talk about China in a moment. That is the third largest market in China, Guangzhou, the mainland China, after Beijing and Shanghai. So it seems like the opportunities just keep coming. It's hard to say that they're getting to the end of the line here in terms of what they'll be able to support in the future, especially with all these new planes coming online.

21:11Jay Shabat: Yeah. And the beauty of having the Vancouver hub as well, along with Toronto and Montreal, giving them that real geographical benefit and also looking at the diaspora of the various populations that are based in these respective cities, ignoring all the sixth freedom stuff even if you're looking at ond traffic there is a really nice spread across uh those three obviously the francophone uh countries exactly really tapping into montreal etc but we're going to a lot more detail in the in the feature story we don't have time to go into everything here today jabe so uh if you do want to know more about air canada and what's waiting for uh anko or we believe at least we'll be waiting for anko in his inbox uh go to airlineweekly.com and you can get the latest feature story before we get into the break i just want to have a quick plug for the skift aviation forum not to be confused with the skift global forum which is also rapidly approaching because we do have two uh speakers of note jay we've got mark nasser who is the chief operations officer at air canada he'll be joining us on stage at the twa hotel on november 12th in new york city and we've also got kevin jackson the president of porter airlines if you're not already signed up to join us in new york along with uh not just mark and kevin but the likes of Luis Gallego, CEO of IAG, David Nealman, Sarah Nelson, John Ackerman, Mark Nassau and Kevin, we've already discussed, Drew Wells, there are so many others still to be confirmed as well.

22:28Jay Shabat: Go to live.skiff.com. And if you are an Airline Weekly subscriber, you should have a promo code in your inbox or take a look at the most recent Airline Weekly issue. There's a promo code in there for a special exclusive rate. Okay, Jay, time to jump into the break. But before that, a quick reminder to send any questions or comments that you might have for us to podcasts at skiff.com that's podcasts with an s at the end and please don't forget to follow or subscribe to the podcast wherever you're listening or watching and if you are enjoying the show please remember to rate us five stars or leave us a post for review so we can continue to spread the word about the airline weekly lounge don't go anywhere we're talking china in part two hello and welcome back to the airline weekly lounge i'm gordon smith joined as usual by co-host jay shabbit part one we were discussing air canada part two jay we are crossing the Pacific and talking China, looking at some of the financials that have come out of China's big three.

23:19Jay Shabat: And for anyone that's new to the podcast or just needs a little bit of a sharpening up on China, we're talking around the big three, Air China, China Southern, and China Eastern. Is that right?

23:29Gordon Smith: Mm-hmm. Yep. And Air China and Beijing, China Eastern and Shanghai, China Southern and Guangzhou. So all three just right up. If you go down the Eastern coast of China, you'll more or less hit those three cities And those are where those three airlines are based. And, you know, bottom line here is that they all had horrible bottom lines. They really just had terrible, terrible, terrible losses. And give you the numbers. China Southern, this is for the second quarter, the April to June quarter. China Southern, negative 13%. Air China, negative 14%. China Eastern, negative 15%. So negative 13, 14, 15.

24:10Gordon Smith: um not uh not pretty at all so we'll get into a little bit you know why uh why that is why they're having so so much trouble and i guess the first you know just the obvious thing that pops out is that they are just heavily exposed to the fuel shock these are airlines that are not hedged at all and at the same time as their costs are going way up if you look you know most of the world's airlines have very sharply rising costs because of what's going on in fuel markets. But you'll also see their revenues are going up a lot. The US carrier is a good example. They're not hedged either, but their revenues are going up a lot to offset the fuel inflation.

24:54Gordon Smith: Not for the Chinese airlines. So these are airlines that are suffering tremendous fuel inflation, but at the same time, having a lot of difficulty just raising fares. And the reason for that is just very intense price competition and domestic markets specifically. Why is competition so intense? One reason is that there are just a lot of high-speed trains everywhere within China. So they're competing. You can even go, and I've done it before, Beijing to Shanghai is a route that normally would be an airline market. I don't know what it is in miles or kilometers, but you can do a high-speed train in four or five hours, something like that, roughly.

25:44Gordon Smith: So you just have tremendous competition. You also have a lot of airlines themselves in China. It's hard to find particular markets that individual airlines dominate you know i can say to you gordon uh delta what what market comes to mind where they absolutely dominate atlanta yeah and i can say to you you know uh american and dallas and charlotte whatever you don't really have that in china you know air china has a beijing hub but so does china southern uh china southern has a guangzhou hub but air china has one you know over next neck real nearby in shenzhen so and then you've got cafe pacific of course over hong kong which overlaps in some you know international routes in particular so uh it's just yeah really really competitive china eastern i think all through all three of them chinese china eastern has is based in shanghai um air china certainly has a shanghai hub guangzhou uh china southern does quite a bit of activity in shanghai shanghai as well i'm not sure if that's considered a hub for that.

26:57Gordon Smith: So that's, you know, gives you an idea of why they're just having so much trouble increasing fares. Yeah, there are other challenges that some unique challenges that domestic mainland Chinese airlines face. They do have what you'd probably characterize as a suboptimal fleet. One reason is that, you know, I think a lot of the Boeing and Airbus orders that come in are very much tied into geopolitics and diplomacy. And, you know, you might argue that they're China or China Southern, you know, this airline or that airline. Well, they could really use more 787s just as an example. But you can't just pick up the phone with Seattle and say, you know, hey, there's a lot of politics involved in that.

27:46Gordon Smith: They're also forced to fly these chinese-built comac planes which at this stage anyway are have nowhere near the same economic efficiency the same fuel efficiency as let's say a 737 max or an a321 neo you know so a little bit suboptimal on the fleet and then there's been a lot of you know i think the economy in China is just growing a lot more slowly than it was, you know, if you go back during the 2010s, for example. So they have that as well. Certainly a lot of export growth or certain, you know, sectors of the economy that are performing very well. You know, if you think about some of these electric vehicles, a lot of the Chinese technologies on the cutting edge, but even some of the car companies themselves are struggling financially because of the competition, you know, difficult raising prices.

28:43Gordon Smith: So I don't think the economy's just particularly all that strong. However, there are some silver linings here or some things that are going well.

28:55Jay Shabat: International perhaps? What's that? International perhaps?

28:59Gordon Smith: Yeah, I think international is okay. I think there's some markets that are doing okay. I think they are picking up some of the, let's call it, gulf diversion traffic. Passengers that might have been going from Europe to Australia through Dubai. You can go through Guangzhou or Shanghai or Beijing. And I think it's pretty clear that the big three have picked up some of that traffic. China Southern actually gave some data. uh i don't know how the exact number in front of me but they did see a very large increase in that sixth freedom traffic that i mentioned earlier so country a to country c through guam joe some of

29:45Jay Shabat: the prices jay you know so now it's probably more relevant for me than for a u.s traveler but coming from europe down to australasia some of the prices especially in the business class cabins when you are up against your Lufthansa and your references and your British Airways and everything else, they are eye-wateringly, I'm careful to call it good value because it depends on what you describe value as. Let's just call it for what it is. They are low prices compared to the competitors. And it's obviously for the individual traveler to determine what is best for them. But when you're on Skyscanner or one of the other price comparison websites and you put in your A and B cities, London to Sydney as the most classic jaded example.

30:29Jay Shabat: Wow. Even taking into account the slightly subsidized fares that we're seeing right now from the golf carriers, the Chinese operators are sometimes a thousand euros plus cheaper than even the cheapest golf carrier. And that's obviously going over Russia as well, which can save you time. And that's a whole different discussion for a whole different day. But yeah, the fact that you are cutting out the Gulf, which for some people is a plus, plus you're saving time, plus you're getting a thousand bucks off the next cheapest fare. If you are price sensitive, it can be a very, very compelling case.

31:06Gordon Smith: Yeah, that's interesting that it's, yeah, that's so much cheaper often than other carriers. So they are getting some of that business. And Air China in particular said that they, and I'm not sure that they're alone in this, but they just happen to be the one that specifically said that they are seeing premium traffic increase, just as we know is happening all throughout the global airline industry, a lot of additional premium traffic. Yeah.

31:36Jay Shabat: You mentioned China's southern sixth freedom traffic. I do have a number here. That's the traffic between two foreign countries connecting in China. China Southern's sixth freedom traffic jumped 27 % year-on-year last quarter, which is pretty meaty, but still not enough to raise that bottom line. And just some serial numbers as well, which you were gracious enough to include in the last issue of Airline Weekly, Jay. You were looking at some of the numbers. So the good news, sea capacity to South Korea up 11%, Singapore up 30%, Russia up 26%, the UK up 62%. The mainland Chinese domestic, meanwhile, has grown 20%.

32:17Jay Shabat: But it's not all blue skies because capacity from China to the US is just 30%, 3-0 % of what it was pre-COVID. Pre-COVID, yeah.

32:27Gordon Smith: I wanted to just make that clear. Those are pre-COVID. Not year on year. Right. So, yeah, those numbers, I think, are very instructive. There's been dramatic change in China's international airline markets. and I think you read the numbers. It's clear that there's some, you know, some markets from China that are way, way, way down, just a fraction of what they used to be. You mentioned the US, you mentioned Japan, Taiwan, Philippines, Thailand, but then there are some that are much, much larger than they used to be. And you mentioned South Korea, Singapore, Russia, UK. And then, yeah, that Chinese domestic market is up about 20%, which is not a huge, you know, that's not a huge, you'd be talking about seven years now, so it's not a huge amount, But they have been able to, you know, grow that or they've been able to.

33:14Gordon Smith: They've grown it, you know, whether or not they've done so profitably, obviously not last quarter. And I'll just end by saying that if you, you know, if you're wondering, well, is this just a springtime fluke? This quarter is the third quarter that we're in right now. Looks pretty horrible, too, because now one there's actually one aspect. besides the export sector of the Chinese economy that's actually performing very well, and that's Chinese domestic tourism. And there was actually, just by chance, there's actually a, we're talking here on Tuesday, September 8th, the Wall Street Journal has a big feature story on that today about how well Chinese tourism is doing.

33:58Gordon Smith: And you'll see, you know, in our feature story as well. We mentioned that. That is one aspect that's kind of going well.

34:06Jay Shabat: Thanks for that recap, Jay. Super useful to get an insight on what's happening in China and interesting as well. Like you say, never representative, just look at one quarter in isolation, but if Q3 is also looking a little peaky as well, that's maybe not a great indicator for the full year results, but we'll obviously keep an eye on those, Jay. Any indication as to what our theme might be for the next issue of airline weekly too soon to tell yeah too soon

34:33Gordon Smith: to tell because we're kind of in that slow end of the quarter period so we have to see what comes in we do have a gn airlines um the uh still yet to report they're um a laggard as uh they often are um i don't that's uh no judgment there you know i don't think it's not necessarily a bad thing but

34:52Jay Shabat: they but they are they are a bit slow but when they do deliver the results they're usually pretty good.

34:57Gordon Smith: I'd rather have good results than early results, right? So, you know, better good and late than early and bad. So yeah, if they want to, you know, they have the right to report whenever

35:08Jay Shabat: they want if they're going to deliver such great results.

35:10Gordon Smith: So yeah, so we should, they'll be coming in this week. Depending on the way it usually works, depending on, you know, they'll do an earnings call, they'll, you know, release some reports, maybe a presentation attached, like a PowerPoint tech, perhaps. And depending, you know, if there's a lot of new and interesting material to share, if it's enough that merits an entire feature story, we might, you know, that might be something we do. But otherwise, what else is going on? We've got, it's not this week, but next week, we've got Morgan Stanley is hosting an annual conference. They do it every year in California.

35:50Gordon Smith: It's called the Laguna Conference. And I know for sure that United and Southwest are going to be there. American was there last year. I didn't see that, you know, anything formal notification that they will be there this year, but I suspect they will. I'm not sure about Delta, but the, yeah, we'll have that as well. So yeah, there's always a lot going on.

36:11Jay Shabat: Always a lot going on. Yeah. Boeing CEO, Kelly Orberg as well.

36:15Gordon Smith: He'll be there as well. Yes.

36:16Jay Shabat: That's on September 16th. But of course, Jay, we know the most important event in September is the SCIF Global Forum. It's not too late to buy one of our last remaining tickets. That's in New York between September 22nd and 24th. I'll be on stage with Cornel Coster, the CEO of Virgin Atlantic, and also Hamad Ali Al-Khata, the CEO of the Khata Airways Group. Live.skif.com for the latest agenda and also to secure your ticket.

36:41Gordon Smith: We look forward to seeing you there in New York, Jay.

36:44Jay Shabat: Lovely to speak to you as always. And I look forward to seeing what the next issue of Airline Weekly holds, whatever it may be. A quick reminder as well, that email address, podcast.skiff.com, if you have any ideas, questions, comments, etc. for the show. Great. Thanks to Jay for joining me this week. Thanks as always to our producers, John, Monica, Kelsey, and Will. And thanks to you, wherever you are in the world. Thanks for listening. We'll catch you next time. Bye for now. Whether you're listening to us on Spotify, Apple, or wherever you get your podcasts, please remember to subscribe, rate us five stars, or leave us a positive review.

37:13Jay Shabat: This really helps us get the word out about the Airline Weekly Large, so we can continue to bring you this podcast every week, absolutely free of charge. And if you're watching us on YouTube, be sure to subscribe to the Skiff channel and hit the notification bell to find out whenever a new video drops.