TUI AG

Thank you so much, and good morning, ladies and gentlemen. It's my pleasure to welcome you to our first quarter 2026 results presentation here at the Congress Center in Hanover, where we will be holding our AGM later this morning. My name is Nicola, and I'm Group Director in Western Relations at TUI, and I'm delighted to be joined for the presentation by our CEO, Sebastian Ebel, and our CFO, Matthias Kieb. We look forward to sharing with you the details of a very positive start to the new financial year, along with an update on current trading and the reconfirmation of our outlook. In the interest of time, we will keep the presentation brief before we open the floor for your questions. We kindly ask you for your understanding that due to the AGM, we will need to limit the session for one hour. And with that, I have the pleasure of handing over to Sebastian.

Thank you, Nicola. A very warm welcome from all of us here in Hanover. The sun is shining, the first time since a couple of weeks, but the snow is still outside, but we hope now for warmer weather. You know the agenda. It's very similar as you know it. I will do a short introduction about the last quarter. We are very happy about the result. Last year's first quarter was good. This year it's even better. We have seen an increase in EBIT of 26 million despite the cost of the Melissa hurricane of Jamaica. I will talk about this later on. And this improvement is based on a positive HECS trading momentum, but also an improvement in market and airlines. And we have seen strong demand in holiday experiences business, and we have seen the right demand for our risk capacity, which we wanted to fill as much as possible with the right margin. And you remember... that the main target for the retail is also for the sales activities to fill our assets. And by having this positive momentum, we can reaffirm the guidance, the EBIT guidance for 26 of 7 to 10% growth. And we also see this growth for the coming years. If we go into the details, The first quarter in holiday experiences, we were able to improve the result by 18 million, despite the one-off impacts in hotels. The Jamaica, you remember Melissa, who was affecting the business in Jamaica. We had to close hotels, the Rio hotels, the Royalton hotels. for the whole time, the first quarter, and we'll see it later, we also had to cancel a significant amount of flights from the UK to Jamaica. Nevertheless, if we take the one-offs out in hotel resorts, we would have seen a $6 million improvement. Without that, we are $19 million below. And exclusive Jamaica, you see that the occupancy... even in winter, grew by 1%, and the average daily rate grew by 5%. Cruise is very strong. We have seen a significant improvement in result, despite a significant higher capacity of 16%. Occupancy, we're up by 3%, almost reaching 100%, and having the same daily rate, an outstanding result. And also amusement, and winter is not so important, has seen a slight improvement. When we look at market and airlines, we also have seen a 10 million improvement versus prior year. This includes a negative impact of Jamaica, 6 million. As I said, we had to cancel flights to the island, and this had a 6 million impact. For us, it has been important, and it is important, and it will be important that we have the right risk capacity, because with the right risk capacity, we can protect ourselves. our margin and the growth today in the future should come from dynamic packaging and that we did that quite well. This quarter is shown by the load factor which went up by 1% and what we see is also the first benefit of our cost reduction program. Some special items we have seen and initiatives we have seen in the first quarter. We are really proud that we announce our market entry and open our network in Romania on Thursday. I will be there. And it will be after check the second, which we opened two years ago. It's doing very well. It will be the second market which we open. We had a pre-launch a couple of days ago. We see quite promising demand and good margin. And, again, it will help us to fill our assets well. in Europe, but also outside Europe. We also are increasing our river cruise fleet. A second night ship had been launched, and we operate now successfully six vessels. We have put a lot of effort in improving further development of our app. We, as you may recall, we are bringing all activities on the same global IT platform. The app was the first platform which we not only harmonized, it's the same one. And now we do see day by day the benefit of doing so. If you look at the app today, the AI application is really a success story. And we have seen a significant increase. conversion, growth, and uplift in bookings through the app. And the app is the most efficient way to book and to keep customers and to increase retention. And we are very happy. And the potential for us is huge if we compare us with best of breed. We also signed a partnership agreement with Jet2 on the amusement activity platform. We are very thankful for the trust Jet2 gave to us to integrate the amusement platform after Booking.com, after EasyJet, and LastMinute.com. It's the fourth big wholesale partner. We don't take it for granted. It's a big obligation for us, like for booking, like for EasyJet, like for Last Minute, to deliver outstanding products to the Jet2 customers. We are growing on the hotel side. We have a strong pipeline, as you know. We opened five hotels in Africa. We opened one hotel in Vietnam. So these are, especially these are the two reasons why we are growing and we want to grow further. Sustainability is... is key of our DNA. It's not a trend which may have faded away a little bit. For us, it's very important for our customers, for the climate, and it's commercially a sound business case, and that was recognized by achieving the A-writing of the CDP. And Matthias, if you'd like to go into the numbers.

Thank you very much, Sebastian, and very good morning also from my side. Thank you for joining the call. As always, I want to give an overview about the performance, then the EBIT bridge, and then details to P&L, cash flow, and the balance sheet. And Sebastian, as you said, we are very pleased with the first quarter results and this first step into the new fiscal year. And if you look at this, it's really great that we not only have an operational improvement of the numbers, 77 million, the highest underlying EBIT that we've ever seen in this quarter, but also another progress and step improvement in our balance sheet and the underlying financial profile. Net debt improved another 0.5 billion year-on-year. This includes a 0.2 billion FX impact, but the underlying decrease, 0.3 billion, is coming from all the measures that we undertook over the last 12 months. As elements of this progress, I would like to highlight one. We've now also taken the final cruise ship from Morella into ownership. And as you may have seen and recall, we have also repaid early the outstanding remaining amount of the old convertible ship. And as you said, Sebastian, today is the AGM where we will return to dividend payments. That is, for all of us, a very important and great moment. So for the details, as I said, EBIT Bridge, P&L, cash flow and balance sheet. As you saw in the front section, there's really a strong underlying development in all segments. In the hotels, please remember the impact that Jamaica has. Second, that we had a positive one-off last year of around 15 million. We also called that out. And against that, we have the results in this quarter. So overall, an operationally positive development and a negative impact through these one-offs or the not repeat of one-offs. Then you see the very strong development in cruise, and I think it's really great to say not only the capacity addition and the earnings that come from that in TUI Cruises, but also the constant improvement in Marella and in the operational development of TUI Cruises. So alone, the rate increases in Marella. For the winter, we talk about 5% again. I think with the ships that we have and with the concept, it's really a fantastic achievement. amusement, really good development, strong cost control, and then... As mentioned, even despite the impact that we also see there on Jamaica with the long-haul business, a very strong operational development, and it's so important to manage the capacity, one, and second, to make sure that we continue to deliver in our own assets and business in all any experiences. And with the 77 million, a really strong start into the year, 26 million more than we had the year before. Now, to the P&L, two things to highlight. One, it's the first underlying result, which is positive pre-minorities in this quarter. In tourism, you normally have a negative result, also operationally in the winter. So, this is even more so very pleasing to see. Also, as a result, our lost per share halved effectively for that quarter year-on-year. And one contributor to that is another improvement in the interest expense that comes from all the measures that we did, in particular the lease portfolio restructuring and taking the ships and ownership. So that's another $10 million improvement that helps us to reaffirm our guidance of 325 to 350. On this number, please remember that most of our payments Dates for financial instruments are more in the second quarter, so quarter two, quarter four, so we can't take this times four. There's a higher interest payout in Q4 and Q4 compared to Q1. With that to cash flow, and cash flow is in line with expectations, the very important element is that the structural savings that we worked on and that we achieved, interest payments, the fall away of the regular contributions to the UK pension scheme, and reduction in the lease and asset financing repayments, that helps to offset the higher interest. investments that we wanted to see in the hotel segment and that we need to do in context of the Boeing delivery portfolio. And all in all, a 50 million improvement in the first quarter on the cash flow side. Coming to the balance sheet, and as I said, the 0.5 billion improvement is driven by the improvement that you see in the lease portfolio aircraft and ships in particular and includes also 0.2 billion fx movement now this strong performance and the strong advantage we will not see this coming going through the rest of the year because we will see more aircraft being delivered i think this year sebastian we talk about up to 15 maybe a bit more of planes coming from Boeing, so that will, because they directly move from balance sheet, impact that, but overall we continue to see a further improvement of net debt in the full fiscal year. And concluding from my side, because we got the question a lot about the mechanics for the dividend payments, so today is the AGM, we put that to vote, shareholders are expected to approve the dividend payment, and then tomorrow we will pay into the system, so our shares goes ex-dividend, and then on the 13th there will be the payment date from the system to shareholders. And with that, back to Sebastian on the way forward, how our bookings and the guidance look like. Thank you, Matthias.

So a good start into the new year. How does the future look like? What do we expect? If we look into hotels and resorts, we do see that the available bed nights will significantly grow in the second quarter, but also for the full half year. The occupancy for the second quarter is on the same level like we have seen last year. This excludes the Jamaica effect. We are with 4% below. last year when it comes for the second half year. That is not a concern to us because we're still in the ramp-up phase when it comes to Jamaica. But also what we do see, by the way, this is also very valid for market and airlines, we see a late booking trend. The average daily rate increase is about 3%, which is a healthy number also to cope with the cost inflation. On cruise, the outstanding picture remains. What we do see is that The capacity growth is getting smaller, but it's still significant. Occupancy is 4% with respect to 3% in the second half. And you should recall that the ships are 100% full, so this will further reduce to zero. But what we now can do is to optimize the price because we are so well ahead in being booked the ships. Amusement, we expect a mid-single-digit growth for experiences. And this in a market which we do see is a very good result and shows that Musement is doing an excellent job. But when it comes to market and airlines, and I would like to start to reiterate again, we slightly reduced our risk capacity. It's all about to sell the risk capacity, flight, hotel, phone assets, in a way that we protect margin. The growth should come through the dynamic products. And by having said so, we will see a winter on the same number as last year, especially when we take into account the last-minute business. What we do see, I just looked, for example, for the number of yesterday, we see that after the strong winter we had, where the footfall was significantly down for retail, we see that the weather has normalized significantly. in the last four, five, six days, and therefore the business have immediately picked up significantly. And for summer, we are slightly below last year. Also there, we are very confident that it will move into the same level as last year, and the focus is on protecting margin, and the focus is on filling our risk capacity to fill our aircraft and our hotels. We are well hedged, as you can see, and the hedge position gives us an opportunity with today rates. And by having said so, we can reconfirm the guidance, the increase in EBIT by 7% to 10%. And as said, a good start in the first quarter. We are confident for the second quarter, and we also expect a good summer. There's one chart left, the summary, and just to repeat, both sectors support each other. The vertical integration makes our business model strong and resilient. The marketplace benefits from the exclusive products and the holiday experiences benefit from the strong sales. And together, we protect revenue and margin. And as I said, this should bring us to the ambitious growth guidance we have given. And therefore, we also could... reiterate not only the dividend proposal for today, but also for the coming years, 10 to 20% of the underlying EPS.

Thank you, Sebastian. Thank you, Matthias. We are now available for Q&A.

As a reminder, if you'd like to ask a question on State School, please press star followed by one on your telephone keypad now. Our first question comes from Karan Puri from J.P. Morgan. Your line is now open. Please go ahead.

Hi, thank you so much for taking my questions. I've got two quick ones, one on the summer trading that you just mentioned. So tracking at minus 2%, how confident are you to hit your 2% to 4% operating growth guidance in that context? If you could take that one first, and then I'll move to the second one.

As I explained, we are confident that we will achieve last year's levels.

And I think you also asked about the revenue guidance, 2% to 4%. I mean, if you look at Q1... On constant currency, there's a 1% improvement. Now, we will also see an increase of sales from our holiday experience segment. It also needs to be factored into this revenue guidance, and that's why we're overall reiterating our guidance also on the sales side this morning.

And what I would like to remind you, the strong growth in TUI cruises, you don't see in the TUI AG numbers, not in our numbers, because the revenue is not consolidated. So this significant impact is not impacting TUI. So this is outside the consolidated TUI revenue number.

Understood. And second question was actually on your partnership with Mindtrip and other LLMs. Is it possible to maybe share some early indications of progress made with these partnerships? Anything on the distribution unit economics will really be helpful here.

Yes. So distribution is changing. We very much believe in retail. That's key. And it's commercially a sound case because the margins because of the early sales are strong. We're seeing a and expect a very significant change from web to app and to LMMs and social media. And we put a lot of effort and investments into creating an outstanding app. We have releases every two weeks. It's really improving a lot. And we do see that in the numbers, growth numbers in the significant improved conversion. So every two weeks you will see new applications, including AI applications and new ways of search. We have started collaborations with LMNs, Mindtrip. We have started to sell to JetGPT. So I'm really proud that we're there on the lane to overtake. and at the moment we do see that we get the first numbers of traffic. It's still low. It's still more that people get information, but they can book with us as well, and we really want to use this channel as good as possible.

Thank you so much.

Thank you. The next question comes from Andrew Lobbenberg from Barclays. Andrew, your line is open. Please go ahead.

Good morning. Hi there. Thanks for taking the call. Can you just help us understand these hotel KPIs with and without the Jamaica impact? I mean, are you able to tell us what the occupancy is in Q1 and Q2 perhaps, you know, with Jamaica included? so we can see the sequential trend through to the second half, because I'm seeing some investors concerned about what that means for the hotel trend, but that's not quite understanding how you're presenting those KPIs. And then just a second question would come down to the reduced interest costs and the impact of bringing assets back onto the balance sheet. Can you just explain whether these gains are one-off or whether they are sustainable? Are they one-time things if you bring the assets on balance sheet or are they all enduring improvements to the interest cost? Thank you.

I think we have stated that the Jamaica effect was $15 million on the hotel side and that should be reduced to 5% to 10% in the second quarter. which means that a significant part of the 4% is based on the Jamaica effect, and there we would expect till the end of the second quarter this should be very much normalized to it, and that's why we feel confident about the occupancy for the hotel business in general.

And on the interest results, what you see for Q1 versus last year is really a structural improvement. And we had last year a better interest environment with regard to interest income. And also we had a smaller one-off during the year that we also published. It was in H2. And that's why the guidance... The lower end is in line with what you saw as a full result in last year. But the improvement, that's what we worked on, is really structural. So it's replacing leases from the past that are not with regard to market terms that we can get today with more attractive instruments or with cash proceeds.

Okay, thanks.

The next question comes from Leo Carrington from Citi. Leo, please go ahead. Your line is open.

Good morning.

Good morning.

Thank you. If I could ask two questions, please, both really about your demand. Firstly, in terms of the demand against your risk capacity adjustments, can you give a bit more colour of what the shape of these adjustments are? Is this certain destinations, certain dates, or across the board? I'd be interested to know how you are planning for this year. And then secondly, in terms of how we should understand consumer preferences, what's your view on the differing trends between the hotels, which is perhaps more competitive, later booking trends versus cruise, which seems to remain very strong. Is it the products? Is it demographics? I'd be interested. Thank you.

As you have seen, the occupancy in Markland Airlines in the first quarter was up 1%. This you can put into relation to the slightly lower number of customers. What we have taken out in capacity is not our own flying, not our own hotels. It's third-party commitments. We had full chargers, allotments, guarantees, and that we have reduced significantly because we also believe that this capacity is available dynamically. And we just wanted to make sure that our risk capacity, the ones which we produce ourselves, we can fill for a decent margin. So it's all about third-party capacity. We haven't seen a negative impact on the hotel business except the Jamaica business. And this is not a surprise. All the hotels, the Rio hotels, the Royalton were closed. The Rio hotel started to get open in January. The Royalton hotels will be open just before Eastern because they used the time for renovation. So this is an impact which we couldn't avoid. We do see that the business is healthy. Of course, there are markets which are stronger than others. What helps is the international sales organization we have. If one market is less good, the other one is better. When it comes to consumer preference, one thing is clear for us. That's why we invest so much in international sales activities. We want to make sure that if one market is weaker, we can get the customer from somewhere else. Therefore, the share of international customers in our own assets is growing and that gives us the confidence to really see, again, outstanding numbers there. If you look at the overall demand, the one group which is buying later are the families and also this is understandable to see.

Thank you. Please can I ask a follow-up on that first point on the risk capacity? Do you get the sense that the allotments and the hotel capacity that you've not taken on this year has gone to other tour operators? Or is it possible that you could actually fill it dynamically later in the season?

Yes, that is very clearly the concept. It doesn't mean that we don't have a great relationship to the hotel. it's sometimes also the wish of the hotel, it's the wish of ourselves, because then it's up to the hotelier to know what is the best price he wants to offer to get the volumes. And this uncertainty, what is the right price, we take away if we still work with the hotelier on a very exclusive basis, but having a a risk capacity, which is mainly not there anymore, but the capacity we use is by getting dynamic rates. So the model is, in the longer tail, changing to dynamic. And this is something which we will see huge benefits in the future.

Thank you. Thank you. The next question comes from André Julliot from Deutsche Bank. André, please go ahead. Your line is open.

Good morning.

Good morning.

Two questions, if I may. First one on the source market. Could you give us some more color about the trend you are seeing in the UK and in Germany, which are your two first markets? In terms of destination on the other side, You are mentioning that Greece, Balearic, Turkey, and Egypt are very strong. Could you also give us some more color about the trend you're seeing if you have some new destination emerging? And also, what is the most profitable one or the one on which you see the strongest operating leverage? Thank you.

Yeah. I will not give you the details which one is the most profitable one. I do apologize for that. Egypt is very, very strong. Bulgaria, Tunisia, so the lower-cost countries are strong. Greece and Spain are stable. Turkey is suffering at the moment because of high inflation and low inflation. currency devaluation. And it's more a family destination. If you look at our clusters, we do see strong demand for Zanzibar. We also see good demand for the Middle East, for Asia. We see less good demand for the U.S. And if you look into the main markets in Europe, the Eastern European markets, that's why we are so happy to move into Romania. Germany and the UK are stable, but with significant competition. Germany, as I said, will see a catch-up because we had Since the week before Christmas, minus 5, minus 10, minus 50, half a meter. Snow and the footfall was really one third of what we had seen before. So that's why we expect that Germany will be stable or will see a slight growth. And I would say that the UK market is stable. The sun and beach market, especially mid-haul, is strong. On the long haul, there might be some more weakness, but that's what we have to wait for.

Thank you. Do you see anything specific on the source market and destinations that was not anticipated or something which is really scary or anything special?

I mean, we are happy about the strength to Egypt because we benefit from us. Turkey is... a concern but I mean that's the good thing if you are more and more going to dynamic if you can bring clients from A to B that a lower demand in one destination is need some re-planning, but didn't kill profitability. So that's good. I mean, maybe it will be interesting to see how the demand to North America will develop, but we don't fly to it. It's very small. It's not relevant for us. It's nice to have, and it's Clearly has an impact on the revenue numbers, but it's from a profit point of view, a very, very small. I think we have one flight per week to Melbourne in California. That's all. So there is no in one hotel in Miami, the real hotel. So the exposure is very, very minimal. But of course, it has an impact on the revenue side. Okay, thank you.

The next question comes from Kate Zhao from Bank of America. Kate, please go ahead. Your line is open.

Thank you very much. Good morning. Thank you for taking my questions. First, I want to ask about your morning. I want to ask about your River Cruises product, which you kind of highlighted as part of your markets and airlines on one of the slides. Can you talk to us about the market opportunity there? It looks like you guys are adding something. capacity and what's your sense of the latest demand and pricing trends? Is it healthy? Is it stronger or weaker than ocean cruise markets? That was the first question. And the second question on amusement partnerships, you're highlighting kind of new partnerships with Jet2 on top of existing partnerships. Can you help us understand the long-term market opportunity with these partnerships and how is economics looking compared to kind of your own traffic? And also over the long term, what's your margin goal for this business? Obviously, you guys are ramping up profitability. What do you think is the long-term realistic margin goal theoretically? Thank you.

So on cruise and river cruise, the demand is big. I mean, there's one major difference for a new ship. The profit is 60, 70 million for a river ship with maximum 200 passengers compared to 3,000, 4,000 is limited. But nevertheless, it's a great product. You get access to customers to bring into the TUI ecosystem, and therefore we like it. So strong demand. The good thing is, and you may have heard a lot of orders saying, but the restricting factors are the slots in the harbors, in the city harbors. And that protects very much the margins, and we are very happy to own the slots, and therefore it's a very stable business. Can it scale to 10 ships, 12 ships? Yes, but it's still... 10 ships with 200 passengers, which is just half the size of an ocean cruise ship. So it's nice, it's profitable, but it's especially good for the TUI customer ecosystem. On the partnerships, yes, you're right. It's one out of four, and there are smaller ones as well. And I think it's great if our partners can sell more to their customers, profitable, and it's good for us as a producer. We have two focuses, or a lot of focus, but two main focus on growth. One is through the wholesale partnerships. Second, on the own products, because our business model, or it could be, but we have decided not to do, is not to sell the long, I mean, we also sell the long tail, but that's not where we spend the marketing money for. We spend the marketing money to sell the own products, where the margin is not huge. 10%, not 12%, but it's 30%, 40%. The catamarans, electric bicycles, whatsoever, the special entries into Colosseum and other things, to really where we have created with our own buses, for example, own products because there we have the big customer base. We can fill them from the first day onwards and they bring us a good margin. So if we say 5% or 7% growth, It's mainly on own products and less focus on the long tail that comes along with the customers we have gained. And we hope, of course, if the customer who lives in Berlin wants to buy a theater ticket in Berlin, they also use our app. But there the margin is two euros or three euros, very limited. When this customer, for example, buys a transfer at Mallorca Airport, the benefit is 20 or 30 or 40 euros. So that is, it's not scale. It's really, of course, it's also scale, but it's scale more from B to B, and it's more really incremental significant margins through own products.

Thank you.

As a reminder, that's a D star followed by one, so ask a question today. Next question comes from Richard Clark from Bernstein. Richard, please go ahead. Your line is open.

Good morning. Hi, good morning. Thanks for taking my question. Three, if I may. Just wanting to kind of loop back on the philosophy around the shift to dynamic packaging, and I think you say it's around sort of preserving margin. If we were to look, you know, next year into sort of 2027, I guess with, You know, you'd expect lower lease costs on planes, lower fuel costs with a weak dollar. And so the profitability of flying is probably going to increase for you. Could that possibly lead to a lean back into risk capacity, or is the direction of travel always going to be towards more dynamic packaging, irrespective of what the cost environment is? And then the second question just on cruise, I guess pricing up 1%. You said in your prepared remarks you see some opportunities to push a bit harder on price, maybe beyond the current capacity growth. I guess you must be selling cruises more than a year out. So what is the pricing looking on that? Is there some expectations maybe into 2027 that we can start seeing cruise prices up sort of mid-single digits? And then lastly, a very quick one, but do you get any sense that you're losing any demand – because of the World Cup in the summer of this year? So any sort of, you know, UK or German customers traveling over to the US for the World Cup rather than maybe taking a two-year holiday?

Thank you for the question. It's maybe an aspect I didn't get. We are in the middle of the transformation in market and airlines. And the transformation is on the market side and on the airline side. On the market side, it's especially to connect NDC airlines. To give you an example, last week, or on the weekend, we integrated Finnair NDC into the Nordic system, and by getting this contract, we have seen a significant uplift for lower distribution. Of course, Finland is a small market, but with this contract, to get more and more carriers on the low price tariffs, which we haven't had yet. This will help us to get the content and to get the content for the best price. The second part of the transformation is airline. And in the airline, we had five airlines or six airlines. which were run separately. We brought the airlines together as one airline to AOC UK because of being part of the Europe and the European airlines. We have seen by bringing it together on the operational side a huge cost improvement If you look at our denied boarding compensation, it's one-third of what it had been, because now the Belgian, if there is an AOG in Germany, the Belgian airline can fly, and so on. What is still missing is the one commercial piece. So if you are a Spanish customer, you don't find a Spanish website where you find the flights to Frankfurt and to London. That's We're just doing it at the moment, as I speak, to bring this into the market. And we lose 20% or 30% of the demand because we haven't run the airline like an airline. And by commercializing the airline, and we will see, despite the operational benefits, which we really realized this year, we will see the commercial benefits from next year onwards with a significant impact for the summer. On price increase, if we would, I mean, when we increased the demand in the last 24 months, not the demand, the demand as well, but the capacity by 45%, 45% increase to increase demand. And I must say, I was skeptical about not selling the volume, but the price. but it was selling by far better than we had anticipated. And if we would have known the strong demand, we could probably have risen the price by 3%, 4%. Fortunately, we are very well sold. So what we do now on the pricing side has an impact, but because the volume is small, the impact is limited. So the big impact will be in the coming years where we are good sold above the years before, but still a quite significant volume to be sold. And the last question, the World Cup. I don't know. the effect had been strong 15 years ago. I would say 16 years ago. It has become smaller and smaller year by year. One reason is 16 years ago there were hardly big TV screens in a hotel or in your hotel room and you haven't had the live transmission. Today it's very different. People can watch the game they want to watch on an iPad, on the computer, and therefore I would say, yes, there is an impact, but this impact is small.

The next question comes from Christian Nadelke from UBS. Christian, your line is open. Please go ahead.

Good morning. Thank you very much for taking my – good morning. The first one may be on the markets and airlines, the splitting capacity, dynamic versus risk capacity. I think it used to be 15% dynamic, 85% risk. I don't think it changed that much. But could you tell us, how do we think about this year? We think about low single-digit declines in risk capacity and 8% growth in dynamic capacity, or what's the range of outcomes for this year? And the second one, Could we go a bit in more detail through the EBIT breach in markets and airlines year over year? You have the forecast or the outlook for strong growth versus the 200 million EBIT last year. Can we talk about the moving parts? Because we have the cost cutting, 30% of the 250 million, that helps. But in the same time, we do have some wage inflation. We do have some inflation, I would guess, in your overhead and distribution costs. your book revenues for the summer are down 2%. Now, I'm making an assumption here. If the overall revenues are down 2% year over year, that's 400 million lower revenues in the tour operator. How much are you cutting from your capacity cost year over year on accommodation, airline, and so on? Could you tell us a bit more the moving parts there and what gives you confidence that you can indeed grow the EBIT in a strong way year over year? Thank you.

First, our main profit, and therefore I'm always a little bit puzzled why so many questions come to market airlines. The main driver for us is the holiday experience business, and the distribution makes sure that our assets are filled well. When you look at the dynamic share market, or the decrease in the risk capacity, it's not on our own assets, it's on third-party assets. So it has no impact on our own assets, and therefore in the first quarter, for example, the load factor on our airline has even increased by 1%. If you ask about the split, we're not talking about a two-digit percentage. It's a small or a medium-big one-digit percentage.

Towards 20%, maybe.

Yeah, towards 20%. The future growth will come, of course, from a dynamic package. And we, due to the cost... cost measures we want to and will reduce the overhead distribution IT cost in relation to the revenues.

Thank you.

You have no further questions, so I'll hand the call back to the management team for any closing comments.

Good. So we have had a good start. We are confident about the future for this year. Therefore, we could reconfirm the guidance. And we will benefit from all the measures we have taken, right capacity, better cost structure, higher efficiency. And we are middle in the process of transformation to prepare the company for growth. And therefore, we are very confident with the guidance we have given.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.