International Consolidated Airlines Group S.A.

Good morning, ladies and gentlemen, and welcome to International Airlines Group Q1 2026 results. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session through the phone lines, and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to Luis de Ayo, Chief Executive Officer, to open the presentation. Please go ahead.

Thank you very much. Good morning, everybody, and welcome to the IAG first quarter results. As usual, I'm joined by Nicolas Cadbury, our CFO, as well as the IAG Management Committee. And for the first time, I would also like to welcome José Antonio Barronuevo, our incoming CFO, to the call. I'm pleased to report a strong first quarter. We grew revenue by 1.9%, reflecting continuing strong demand for our airlines and networks. We grew profit by 77% to deliver operating profit of 351 million euros. Our operating margin improved by 2.1 points to 4.9% in our seasonally quietest quarter. This good profit performance was mostly achieved before the impact of the Middle East conflict, which we expect to have a more substantial impact in the rest of the year. We have started this year in an incredibly strong position, so we are uniquely well set to navigate the headwinds that the crisis has created. We have leading positions across diverse geographical markets. We have leading brands across different customer segments in those markets. And we have structurally high margins supported by our well-established transformation program that help us to absorb some of the effects of this volatility. I will also mention at this point our capital light loyalty business, which grew revenue by 10% and profits by 32.6% at a 20% margin. And we have an incredibly strong balance sheet at 0.5 times net leverage. Finally, due to our cash generative business model, we are on track to complete the remaining 1 billion euros of our excess cash return by February, 2027, as we previously announced. Bringing this all together means that we have an opportunity now to prove how resilient this business is. We have faced macro challenges like this before. We have a well-established transformation program, which means that we are taking all the revenue and cost action that you would expect. And we are well positioned to take advantage of opportunities that arise as a result of the current market situation. So in summary, I'm very confident in the longer term prospects for this business. And now I turn over to Nicolas to take you through the numbers more detail.

Thank you, Lewis, and good morning, everybody. I'm pleased to share our first quarter results with you. Before I go to the performance, I just want to highlight that this quarter contains only a limited impact on fuel costs from the Middle East conflict. We expect subsequent quarters will be impacted to a greater extent. Focusing on the first quarter, we delivered a strong operating profit of €351 million, up €153 million versus last year, driven by the strong passenger revenue growth, partly offset by an increase in fuel costs in March. The increase in operating profit benefited from the early timing of this year's Easter holidays and a small impact from the closure of Heathrow Airport on March 21st last year. We've seen strong demand across most of our markets, particularly in our premium cabins and in both the North and South Atlantic markets, which represents about around about half of our capacity. Garga revenue reduced slightly year on year, driven by the normalisation of the Red Sea related pricing surge, particularly in the first half of last year and a small reduction in tonnage relating to less Middle East capacity. Other revenues saw a small increase year on year at constant currency, with a reduction in third party MRO revenue at Iberia due to a change in how certain components are charged. And this was offset by the continuing growth in our loyalty business. FX, particularly the impact of the weaker USD against both the euro and the sterling, drove a benefit of 48 billion euros to the profit in the quarter. The right hand side of this shows the strong performance of our businesses. Our leadership positions across diverse markets and strong brands drove this exceptional performance, with all but Aer Lingus delivering improved results in the quarter. Aer Lingus saw a larger seasonal loss year on year, driven by the ongoing high level of capacity from competitors into Dublin, putting pressure on yields, together with the Manchester-based closure costs. British Airways delivered high profits and margins year on year, driven by strong passenger unit revenues, which increased 8.5% in the quarter. BA saw strong demand across its long-haul network, in particular on North Atlantic and short-haul leisure routes, in addition to a strong business travel market. Iberia delivered an operating margin of over 9% in the quarter at 1.6% points year on year, driven by a strong revenue and improved cost performance. Iberia saw strong demand on routes to Latin America and the Spanish domestic market. Welling also delivered and improved results with a smaller seasonal loss year on year, driven by a strong revenue performance. The performance of Spanish domestic routes was particularly pleasing, although routes to the UK and Italy were a little bit more challenging. At Loyalty, including our BA holidays, continue to deliver high-quality, high-margin asset-light earnings, with profits increasing over 30% in the quarter and margins increasing to over 20%. The growth in profit came mainly in the Loyalty business, driven by non-airline partnerships, with the Holiday business flat year-on-year as we invest in the Holiday platforms. Looking forward, we expect Loyalty to deliver just over 10% earning growths for the full year. Turning now to show our regional revenue performance in more detail. The revenue performance was extremely strong, with passenger unit revenue increasing 8.2% at constant currency and 3.5% on a reported basis. Capacity was broadly flat during the year, less than we guided at the full year results due to the cancellations of flights to destinations in the Middle East, which would normally be fully reallocated to other markets at short notice, and due to the availability of aircraft due to ongoing technical challenges. We were very pleased with the North Atlantic performance, where unit revenue increased by 6.8% to constant currency on a small reduction in capacity. The underlying performance sequentially improved compared to the previous quarter. And whilst the North Atlantic performance worsened for Aer Lingus, driven by intensified competition, performance of British Airways was notably strong. BA saw strong demand in both business and leisure segments for both premium and non-premium cabins, and business segment revenue grew from all points of sale, but notably strong from the North Atlantic point of sale. Latin American Caribbean continues to be our strongest long-haul network performer, with unit revenue increasing by 9% of constant currency on year-on-year and increasing capacity of just under 2%. All three cabins for Iberia contributed to the strong performance, in addition to both the Spanish and Latin American point of sale. Domestic saw very strong unit revenues, which increased 18% at constant currency on a 2.5% reduction in capacity. Performance was strong across both the Canary and the Balearic Islands, in addition to the Spanish mainland, partly benefiting from the disruption to the train services. Unit revenues on European routes increased 6% on a 1.6% cutting capacity. Ellinga's short haul performance worsened as a result of additional competition. BA and Iberia saw strong performance in business and leisure segments, with Welling seeing benefits from improving their revenue management approach and the timing of the Easter holidays. Africa, Middle East and South Asia was impacted by the Middle East conflict, with cancellations on routes to the Middle East in March, offset by benefits from customers shifting travel away from the Middle Eastern hubs onto routes in South Asia and Africa. And likewise in Asia-Pacific, routes benefited in particular from passengers avoiding the Middle Eastern hubs in March, with Far East routes seeing good growth in both business and leisure segments. Total unit costs improved by 0.5% and non-fuel unit costs improved by 0.9% year on year. Fuel unit costs increased 0.9% in the quarter, whilst fuel rose during the quarter, particularly from February 28th due to the Middle East conflict. This was largely offset by our hedging strategy and the timing of the pricing of our commodity contracts. The Q1 cost performance benefited from the FX movements of 4.6%, increasing plus 3.6% on a constant currency basis. This partly reflects the pay deals, the impact of employee national insurance increases in the UK, supplier cost increases and the higher ownership costs driven by investments in our new fleet. Capacity will be lower than the 3% increase I guided at full year results in February. And whilst we're taking constant actions to mitigate the increase in fuel price, the lower than planned capacity grade will be a slight headwind on non-fuel costs. Adjusted EPS increased by 56% in Q1, reflecting the strong performance in the quarter with adjusted profit after tax increasing by 71%. Adjusted EPS increased by 56%, lower than the increase in profit after tax, due to the positive fair value movement on the convertible being included in profit, but excluded from the EPS calculation. This was partly offset by the lower share count due to our share buyback programme. Our balance sheet continues to be exceptionally strong. It continues to strengthen further during the quarter. Net debt reduced both year on year and quarter on quarter, falling to 4.2 billion euros at the end of March, reflecting the strong profitability and seasonal working capital inflows and the build-up of bookings for future travel ahead of the peak summer. Likewise, net leverage fell to 0.5 times, reflecting lower net debt and strong profitability. Q1 saw one A321 XLR delivered, and we still expect to take delivery of 17 aircraft this year. And lastly, we expect to spend about €3.5 billion on CAPEX this year, slightly down on the €3.6 billion guidance in February, but mainly just due to small phasing changes. We remain committed to the investments we are making as part of the transformation programme, such as the commercial replacement and BA, which is delivering benefits for us this year. But on that note, I'll hand back to Luis. Thank you.

Thank you, Nicolas. With regards to the Middle East situation, we have already taken decisive action and we continue to ensure that we are controlling the things that we can control. Firstly, looking at our network, we have reallocated our capacity that used to fly to the region, which was about 3% of the total group capacity. In the short term, some of that has been added to routes where there is currently a deficit of supply that was previously flown by the Middle East carriers. For example, British Airways has added flights to Bangkok, Singapore and the Maldives. Some have been reallocated back to core markets, such as by Iberia and Boeing, replacing Tel Aviv flights with more flights in their domestic markets. Further out, we are also expecting more demand on routines which might previously have gone through the Middle East, such as from India to the United States. And British Airways are also adding some alternative winters and capacity to the Caribbean and Sri Lanka. We have also decided to use some of the spare aircraft capacity to add resilience to our schedules, which have been affected by engineering and maintenance supply chain issues. We are continuing to review our plans for the longer term should the conflict and higher fuel prices be sustained. On fuel price, we continue to be well hedged for the rest of the year. This allows us to protect customers to some extent from the volatility and allows us to take considered decisions on pricing and capacity. We are confident with the fuel availability through the summer due to our positions in our main markets and the fact that we have invested in self-supply capability in our hubs. Today, the situation is more about price than availability. We are also working with governments in needs of our home markets as well as within the EU to ensure that the industry is getting the support it needs to navigate this crisis. Moving on to our outlook for the rest of the year as well as into the longer term. As I mentioned at the beginning, we start from a very strong position with our diversity of markets and brands, high margins and a strong balance sheet. Demand for travel continues to be robust in our main markets, and we have seen resilient book revenue at 80% for the second quarter, which is in line with the historical level. But the impact of the higher fuel price will inevitably lead to lower profit this year than we originally anticipated. We are now forecasting a total fuel cost for the year of €9 billion, which is €2 billion higher than the €7 billion scenario for the 31st of December 2025 that we presented at our full year results in February. We are actively addressing these headwinds and as a result, we expect to recover around 60% of this fuel cost increase this year. This will be done through revenue and cost management, reflecting the different markets in which our brands operate, as well as the benefits of our transformation program. For example, this includes the revenue uplift of the new British Airways commercial platform, which last year included a new revenue management system, a payment system and website booking channel. We are using data-driven software and insights to deliver more efficient, lower-cost operations, such as with the AI-based engine maintenance tool that we are developing around the group. And our investments in new, more efficient fleet will play their part. And we have a strong track record of execution to ensure this is achieved. You can be assured that we know what to do and that we will take the right actions to ensure the long-term success of this group. We continue to expect to generate significant free cash flow, but for it to be slightly lower than the €3 billion for this year that we guide at the results in February. And based on our strong cash generation, we are on track to continue the remaining €1 billion of excess cash returns by the end of February this year, as previously guided. Meanwhile, our long-term prospects remain strong, if not even stronger than before. We expect it to be difficult for less strong airlines to cope with the high price of fuel, which can lead to opportunities for us as well as a more consolidated industry. And our business model and strategy will ensure that we remain one of the best performing airlines groups in the world. And on that note, I will open now the call to questions.

Ladies and gentlemen, we will now begin the question and answer session. To ask a question on the phone line, please signal by pressing star one on your telephone keypad. We ask that you please limit your questions to a maximum of two. We will pause for a moment to assemble the queue. And your first question comes from the line of Alex Irving from Bernstein. The line is open.

good morning thanks for taking the questions two from me please the first is on winter capacity you said that your plans for q2 and q3 but what are your early thoughts on q4 lower contribution quarters hedging starts to roll off could capacity even be down year on year second one louis let's pick up on the last comment that you made you rightly point out your margins are higher your balance sheet's stronger than competitors in your main markets Do you expect competitors to retrench, enabling you to invest cyclically and capture share? And if so, where do you see the biggest opportunities, please? Thank you.

OK, so good morning. So when we reported the full year 2025 results, we expected an increase of capacity for this year of around 3%. What we are saying now is that we are going to reduce to 1% more or less. For the Q2 is 1% and for the Q3 is 2%. We are not talking still about the Q4 because still we are working on the program. And to be honest, the capacity is going to be also affected by this situation. But in principle, the growth that we expect for the year is going to be around 1%. So the second question about opportunities that we can have. Yes, as we said, we have started this crisis in a very strong position. We are well-hedged. As we said, we continue with our transformation. So we are going to navigate this crisis much better than others. And we have seen in previous crisis that these bring opportunities to the table. We have seen the situation, for example, of Spirit in the US. We are sure that in Europe, some airlines are going to have also difficulties. And some of them also, they will need to reduce capacity. And that can be an opportunity for us. So usually after this crisis, we are even stronger than we were before.

Your next question comes from Jamie Rober from Deutsche Bank. Your line is open.

Good morning, everyone. Two from me. So firstly, in terms of the revenue and cost initiatives to recover the fuel cost headwind, where are you finding it easier to increase fares without too much impact on demand? Any comments on forward bookings or forward pricing would be welcome. And what specifically are the cost initiatives that you refer to, please? And secondly, in terms of jet fuel supply, in addition to some shortages in Southeast Asia, there have been a few reports of issues in Europe, places like Italy, Sweden. Have you been completely unaffected so far, and do you expect that to remain the case? Thanks very much.

Okay, good morning. The pass-through, we said that we expect to recover around 60% of the higher fuel costs that we are going to have. And yes, it's a mix of revenue and cost management options. For sure, the revenue improvement that we are talking about is an average. And we are going to have a variation by market and also by segment. We are going to have a stronger recovery for sure in long haul and premium markets. and we are going to have more difficulties to increase the pass-through in more competitive markets like Europe. In terms of cost, what we are doing is reviewing all the discretionary spend that we have. We don't have any plan to cut investments because at the end we continue with our plans to be stronger for the future. but we continue with our transformation program to be more efficient. And about the fuel shortages, so I think all of you are receiving mixed messages about fuel. But for us, all the job that we did previous to this crisis for many years, is delivering results now. So it's true that there is less jet fuel coming from the Middle East, that there are other regions with record supplies, for example, the US, and this at the end is a global supply chain. So all the action we did in order to increase our self-supplying are working now, and we are confident that we are not going to have any issue for the summer in our main hubs and main markets. Asia was concerned some weeks ago, but now we know that Asia is also building up reserves. So that's the reason of the confidence that we are going to operate the schedule that we have for the summer.

Your next question comes from James Hollins from BNP Paribas. Your line is open.

Thanks very much. I'd like to start by saying best of luck to Nicholas and thanks for everything. And hello to Jose Antonio. And Nicholas, I'm going to send you off with a particularly annoying question, which is around full-year cask ex-fuel or unit cost ex-fuel. It was guided down 1%. Very obviously, you removed that because you cut around 2% points of capacity. I was wondering with obviously Louise's take on some cost actions, discretionary spend, et cetera, how close you might still get to down 1%, and should we still assume two percentage points of FX benefit? And then one for Lynn, if she's on, on Aer Lingus. Clearly, we've had troubles with strikes. We've now got seemingly ongoing troubles with competition on transatlantic. Is that getting worse, and is it time to start thinking about the transformation plans, network considerations, et cetera. Thanks very much.

Thanks, James. And I enjoyed working with you too. So thank you for that. Just on fuel casks, you're right. At the year end, we said it would be down about 1% overall. And I don't think we'll be far off from that, actually. The reason we haven't given guidance is we don't quite know what the denominator in the ASK is going to be in Q4 yet as well. But my anticipation, it would be kind of closer to flattish overall.

Yeah, morning. So on the Ellinga side, there's various reasons why I'm positive about the outlook. Certainly, Louise has already commented on the transformation programme. That's delivering and going well. But we do need to go further to get to this 12% to 15% operating margin, and we're all very focused on that. Cost reduction is a major part of the transformation and accelerated that cost reduction programme. get to your your question around capacity and you'll have seen part of the impact in q1 this uh in q1 2026 was the closure of manchester now manchester was profitable but it wasn't profitable enough uh to get to the 12 to 15 operating margin overall for our leaders and that's why we took that decision to close the base so what we're what we're looking at now is what's the right side of network for 2027 um particularly given we expect some of this fuel price increase to uh continue into next year and importantly it's how do we tackle the seasonality We can make good money in the summers, but we're a very seasonal country. And as we carry the cost through winter, that's increasingly a problem in this fuel price. So the more we can reduce our cost profile as the year goes on, the more we can keep our flying programme intact.

Cool, thanks. Your next question comes from the line of Stephen Furlong from Davie. Your line is open.

Yeah, morning, guys. Two questions. Just on first one, short haul. I mean, you obviously stated that the short haul market remains competitive. So just on the general pass-through column of 60%, I mean, is it in short haul almost close to zero? And is it just too many seats in that market? Second question on LATAM and Iberia. Certainly nothing really changes in terms of... your view on that market in its entirety. I'm thinking of the one or other will acquire a minority stake in TAP. Does that change anything at all for Iberia's excellent performance and branding? Thank you.

Just on the short haul, we are getting some pass-through on short haul, but you are right, it's towards the lower end, it's not at the 60%. The other thing on short haul, of course, you get a shorter booking curve, so we get less visibility going forward. So it's harder to call what that will look like overall. But as Louis said earlier, you're getting much more traction on pass-through on that kind of higher premium, particularly on the North Atlantic overall.

Well, first, on the short haul, there is a portion of our short haul, which is the domestic space, which is having an evolution in itself. You have seen that in 2021, our overall domestic performance has been very strong with an increase of, in cost of currency, 18% of the rest. And that is driven by two main factors in the domestic. One is the fact that the train disruptions have generated increased demand that we believe is going to be structural towards the flight traffic. And in the second place, we've also seen some increased demand after the disruptions in the Middle East that seem to indicate that there is also an increasing demand following people that are moving away from other Mediterranean areas, in particular the Spanish islands. going to latin we continue to see a very, very strong evolution of the market. So no any significant changes. There are some elements that are reinforced in this. For instance, we've been commenting how Madrid is evolving as a new Miami. We are now having another half a million people that are moving in 2026, their residents to Spain and Madrid in particular. So continuing the same trend that we've seen in 2025. And to be honest, We don't see any influence of our Plan de Vuelo 2030 flight plan due to the TAP possible evolution. As you remember, the TAP interest for the group was specifically for the Brazilian market. It's one where IAG and IBEV are not particularly present. So, therefore, our potential and development in the region remains independent from the group decision on TAP.

Harry, your line is open.

Hey.

Hello? Hello, Harry. Go ahead.

Hey, can you hear me? Yeah. Okay, great. Sorry. First question, I mean, it might be some bad maths involved, but I think when I back out your kind of revenue pass-through comments, it might imply that pricing might be similar to the Q1 rate for the rest of the year, the plus 3.5%. So is that what you're implying with your pass-through figures, or should we be assuming that RASP will accelerate into Q2 given that's what some of your peers have been highlighting. And then second question, I just wanted to follow up on Jamie's question earlier, just on the stickiness of higher prices and whether you are seeing any kind of less willingness as time goes on for passengers to pay elevated ticket prices in any long haul markets. Thanks a lot.

Yeah, your calculation on the first question is about right, roughly, if you do the maths on it. So not such bad maths. So I missed the second question.

So can you repeat the second question, please?

Yeah, the second one was a follow up on Jamie's question earlier, just on the stickiness of elevated ticket prices and whether you are seeing kind of less willingness as time goes on for passengers to pay elevated ticket prices in any of the long haul markets.

To be honest, for the time being, what we see for the second quarter and the third quarter is that the trading remains positive across the group and very strong with resilient demand. So we don't see any weakness for the time being. So we are going to continue with the current schedule that we have.

Great. Thank you. Your next question comes from the line of services from Raymond James. Your line is open.

Hey, good morning. For the first question, I was just wondering how much of 2Q and 3Q were sold prior to kind of the crisis and the increasing prices and just curious what the kind of the post-crisis draft trends are that's showing up in the kind of the new booking. And then for the second question, I was just kind of curious on your South Atlantic, what your point of sale is.

mix was and and what the impact of kind of the strengthening uh some of the centering uh latin american currencies might mean for uh revenue and demand so on the first question about what was pre-sold i think when we did our q uh february results uh we said that q2 was about 40 sold overall now it's 80 i don't think we gave a number for q3 overall um but we're about just under 40 sold currently so

And on the South Atlantic, you've seen in Q1 that despite the currency effect, the risk of South Atlantic has been incredibly strong. We have an increase of 9.2%. And there is a track record of resilience of demand in travel in South Atlantic market, despite the volatility of the local currencies. This is something that we have seen all along the last decade. So, in fact, we are not seeing any impact of demand related to that at this stage.

Thank you.

Your next question comes from the line of from RBC Capital Markets. Your line is open.

Yes, good morning. The first question is, is there any reason why Q2 should diverge significantly from the 60% fuel recovery rate in full year 26 as a whole? And then secondly, how have you approached hedging since the war?

all opportunistic given the volatility or followed your policies as usual thank you uh just in terms of the head kind of the pass-through um i think like other people called actually it's kind of lower in q2 because you have that 40 already booked so it's more like kind of probably 50 percent uh for kind of q2 overall and then it grows as you go that go through the year. In terms of hedging, it's quite difficult to be opportunistic at the moment because it can fluctuate by plus or minus 5% during the day. And what you look at on the screen isn't necessarily there when you come to buy it. So it's much more volatile than that. So we're really just continuing with the kind of existing hedging the policy that we have, slowly as it goes, continuing to hedge and not taking any kind of big calculated risks or opportunities either way.

Thank you.

Your next question comes from Andrew Loebenberg from Barclays. Your line is open.

Oh, hi there. And Nicholas, it's been a blast working with you. Thank you. What can you tell us about the back of the bus? Obviously, the front of the bus on Long Haul is good and it's all very constructive, but just how weak are things in the back? How does it compare North Atlantic against South Atlantic? And what are the levers you've got to try and improve potentially the performance in the back? And then otherwise, What can you tell us about trading on holidays? Obviously, you know, the likes of 2EJ2 and EZ have all been somewhat cautious on holidays. I think VAHOS was a really nice momentum driver. How's that holding up in the current strange situation?

Okay, so first of all, the back of the aircraft, as I said before, we continue seeing... A strong demand there. We don't see any weakness for the time being, but maybe a strong new one to come in.

Yeah, I think long haul economy and long haul world traveler plus are performing robustly. I think, again, the fact that we have a greater mix of premium economy versus economy is also helping with stickiness and pricing. And we do see that across all of our main markets. And as Nicholas mentioned in the intro, You know, the fact that people haven't been traveling as much over the Gulf has been benefiting the economy capitals where BA is providing an alternative. And as we said, the North Atlantic has been robust as well.

And same applies for South Atlantic. I mean, if you look at the tourism data for Q1, and in particular for Southern Europe and Spain, we have an increasing tourism from the U.S. to Spain of 11% in Q1 and 9% from Latin to Spain, so extremely solid. And then we've got Folies, maybe, and then you want to come in?

Sure. Yes, I think on the holiday side, I think we're seeing a mixed performance. You know, we're clearly seeing weakness in the Middle East. Dubai was our number two destination, so that has clearly had an effect. But we're also seeing some strength elsewhere as customers change their travel plans, particularly places like the Caribbean, the Indian Ocean are particularly strong. And we are seeing... customers book later as well that's a trend I think that the market is talking about too one thing I would say is that we're seeing more revenue growth from our BA club members and they're booking higher average revenue for booking so that's helping us through this and you'll see more initiatives this year coming to encourage our BA club members to book with BA politics

Your next question comes to the line of Gerald Koo from Panmure Librarian. Your line is open.

Hello everyone. The obligatory two for me. Firstly, can you explain how fuel self-supply works? Who are you cutting out? What advantages does it give you? And how does it work when you're presumably still using common infrastructure at the airport? And secondly, on RASC, you've given a constant currency number. Are you potentially able to separate out the uplift from mix as well to illustrate how much premium is helping you, please?

About your first question, we have in the UK and Ireland our own supply of fuel and our own inventory at the airport. that helps to the situation. It's different in Spain, but in Spain, we don't have a problem because we have a lot of refineries. So VA, for example, has a license to put fuel in Heathrow. We also have long contracts with the different providers that I think that gives a lot of stability. I think we've got two or three benefits.

One, we do strategic contracts with big providers, which gives us supply certainty. Two, it's more efficient, actually, in terms of self-supply. And three, it allows us to forward buy opportunistically when we have constraints in the market like we have today. And the fact that we're able to have more control over our supply situation with volatility in the market is a big advantage that will play out for us over the summer.

It's a big investment as well. We've got a port at the Isle of Grain. We've got trains that come twice a day. So it's something that's difficult to replicate. And it's been something we've been working on for 10 years. And I'd just also comment that we have the ability to supply via the Isle of Grain and then cross into Dublin as well. Just to ask you a question, Gerald, about kind of RASC and splitting it out. I'm afraid we don't normally do that, actually, overall. So probably we'll go into that detail overall, I'm afraid.

Your next question comes from the line of Maniva Kayani from Bank of America. Your line is open.

Yes, good morning. So I wanted to follow up actually on the previous question where just to understand what sort of RAS trends have you seen on bookings kind of post the start of the award and the fuel price spike? Because what we've heard from others is a big increase in fares. Your peer talked about 14% on average increase. And your partner, American, talked about like 25% increase on fares to London. So kind of what are you seeing on that fare increase? And then kind of related to that, on your fuel recapture, and maybe you talked about it earlier in the call because I joined a bit late, like your 60% seems to be lower than what others are talking about, both in the US and Europe. So what do you think is driving that and is that, do you think fares will come down? Is that what you're assuming? Because fuel prices will, based on the forward curve, fuel prices are expected to come down. So if you can give a bit more color on that 60% for the rest of the year. Thank you.

I'll probably combine those two questions together, if that's okay. It's difficult for us to comment on other airlines. We're not quite sure what their assumptions have been. What we're just thinking is just what we're seeing at the current moment. As we said, we've got good visibility through Q2, a little bit into Q3. Visibility into Q4 is fairly limited at the moment. So it's the... i wouldn't kind of comment too much on that at the moment overall i mean in terms of the 60 pass through um if you do that if you do the maths it means you've got to go get a four or five percent uplift in your in your um in your kind of yields and load factors overall uh going going through and you'll see as we said earlier you'll see that slightly different across the different routes you're seeing it strongly across the north atlantic The South Atlantic is good, although you've got a bigger mix of economy cabins, as we just said, and it's a bit harder to pass through in Europe at the moment because it's quite competitive overall. So it's a mixture of those overall.

Your next question comes from the line of Conor Dwyer from Citi. Your line is open.

Hey, good morning all. um first question i had um was around consolidation you spoke a little bit um about being approached and i just i'm obviously not going to ask you for any names but more so you know if we think about what exactly would you be looking for um as the you know perfect fit is it something to you know bolster your share in a particular long-haul market is it perhaps to you know bolster your feeder traffic into your hubs you know what are the um the kind of attributes of a company that you would be looking for. And then secondly, around the commercial transformation, it's been mentioned a couple of times on this call from BA. So from Sean, really what I'm looking for is a bit of an update there in terms of how far along are we on that, how much has been spent, how much is still to be spent, and when we would expect the meaningful benefits to flow through for that business, if not all already. And thank you very much. And finally, Nicholas, it's been a pleasure. All the best in the future.

Thank you. Thank you. So about the consolidation. So what we say is that the current environment may create consolidation opportunities, but you know that in IAEA we are always highly disciplined about these opportunities. Recently, for example, we withdrew from the TAP binding because we thought it was not going to deliver value for our shareholders. So when we analyze the different options that we can have for the future, and we are always screening the market, We look for opportunities where we can apply the model that we have at the group. We can improve the performance of the different companies and also for sure they can benefit from the strength of the group. Having the objective that we always said, a margin between 12 and 15%. and a margin similar. So I think that's the screening that we do. And if we see an opportunity, we will explore it, but it's not a must for us to have more companies in the group.

And on the commercial transformation, I suppose there's many dimensions to it. I think last year we rolled out a new payments platform and over the summer we rolled out a new revenue management system. And I think we're very happy with the results that we're seeing. We've a lot more dynamic pricing, particularly across our long haul network, which gives us shorter step ups in terms of trading up. And also we're seeing much better ability to manage what we call O&D flows across connecting markets. So that's working well. Payment platforms are working very well. If you look at BA.com and the replatforming of that estate, the selling element of that is more or less there. The vast, vast majority of all of our bookings now are going through the new platform. And we're seeing increases in look to book, increases in average revenue, big increases in CSAT. And again, you know, we kind of tipped over the critical point in the January sale and we scaled the penetration of that platform from a selling perspective over the quarter. Where we're at on the servicing side is we're very close to getting our app out there. We've got about 12,000 users on the beta version at the minute. Again, that's working very well in terms of trials from a servicing perspective and really, really big increases in CSAT. I think that will make a big impact on the servicing side of things. But a lot of the selling benefits in the new platform we're already unlocking. And again, we're kind of very encouraged where we're heading. I think going forward, we will do a lot more on the shop order, settle, product management kind of vision as we work to kind of roll out Nevio between 27 and 2029. So a lot happening, but some big milestones to drop as well in the coming weeks.

Your next question comes from the line of Jared Castle from UBS. Your line is open.

Thank you. Good morning, everyone. And Nick, from me, thanks for over a decade, I guess, as a CFO at companies that I've followed. Just in terms of buyback, you seem to be going at a very good pace. I mean, you talked about finishing by the end of the year, but it looks like you'll finish sometime during the summer. With potentially limited opportunities for M&A, should we expect that you give a bit more back to the market, let's say, with... Q3 reporting. And then maybe one for Sean, but could you just give an update in terms of conversations with the pilots on pay and how far away are you in terms of whatever the terms are that you're willing to offer versus what they want? Thanks.

Just on the share buyback, we're coming up to finishing the current tranche of 500 million in the next couple of weeks. So as soon as we finish that, we'll get on to the next tranche as well, which we're looking forward to as well, especially with the share price where it is today as well. So a good opportunity as well. So we've said today that we'll get on with the next billion and that's what we're focused on at the moment. We'll keep you informed. But I can't think why that would change at all.

Yeah, in relation to Pilot Sook, it was obviously a very close palette, and we're now just surveying feedback from the community. I don't think it's just as binary as something like value in the deal. I think we were looking to modernize and transform a number of developments. We're just reflecting on how various parts of the pilot community are feeling about those changes. And look, timing is everything as well. We were running an engagement over the course of know some some turbulent times and we have to factor that in so we're regrouping we're engaging with uh or representing the bodies and um we'll take stock of of the feedback we get and um and sit around the table again there are no further questions at this time i would like to hand back to luis diego for closing remarks

okay so thank you very much for being here today as you have seen another strong first quarter and as we said before we started this crisis in one of the best situations in the market and We are sure that we are going to continue navigating the crisis and we are going to be stronger at the end, taking the opportunity of all the transformation initiatives that we are having in the business. So thank you very much and see you for the second quarter. Bye-bye.