Wizz Air Holdings Plc

Good morning, everyone, and welcome to the full year 2020 preliminary results. In a moment, we'll be handing over to... Following that Q&A session, for the benefit of those dialing in online, there'll be a microphone hanging around the room. Don't worry, it won't amplify your voice. Just remember, we'll be taking questions from the room first before going online. And with that, I'll hand over to Joseph.

Thank you. Good morning, everyone. Thank you for coming. So this is reporting the results of the last financial year, fiscal 24. And I hope the way you come across with that is that we delivered what we told you to deliver. So this year was delivered in line with our expectations and our guidance to the market. Could we move, please, the slide to the next one? Okay. So net profit, 366 million euros. This is a turn of 900 million euros year over year. And this is net profit. But if you look at operating profit, it is the same number. So the business has turned 900 million euros over the year. And we are delivering it in line with guidance. Capacity, quantity, and growth, despite... The challenges arising from the supply chain on an ASK basis, we were up nearly 25%. And with that, we delivered a record traffic, of course, with 62 million passengers in the financial year. Previous record was fiscal 23 with 51 million passengers. We benefited from the revenue environment. ROSC went up mid-single-digit. 4.6% year on year, much driven by improvement on ticket revenue. COSC, we think it was a very strong performance. You recall that we were explaining that last two years or so we were operating business at suboptimal levels in terms of utilization and some of the operational kpis the financial year significantly improved on all the cons we will deep dive into into those and as a result you see cost improved significantly 15 and it is interesting to put it in perspective vis-a-vis the rest of the industry you will see that Some of our competitors actually have gone to the opposite direction with regard to cost creep, but we've been able to put cost under control. And as a result, we are now the lowest cost producer in the industry on par with the previous cost leader. And we're seeing that we are well set for building cost advantage, unit cost advantage from here on a structural basis. Operational metrics, much improved. Completion rate is back to standards, 99.4%. And we've actually got a head start in the current financial year. We said it's the best performing airline in the whole of Europe with regard to flight completion. On-time performance has improved a lot, still a way to go. But some of it is the function of the supply chain. Some of it is our own internal improvements, which we are... Working on utilization, went back to standards. Now we have reached fiscal 20 levels, pre-COVID utilization levels, and certainly be much improved versus the previous financial year. Total cash, 1.6 billion. We maintained our investment grade rating with Fitch. We have talked a lot about the Brett and Whitney issues, so I think you are fully aware of that. At the end of the financial year, we had 45 aircraft on the ground resulting from the GTF matters. As you were also guided, the company received compensation for that. So that was kind of a wash in terms of excess cost and compensation watching each other. Now, the good thing, just to put it off the front, is that Now we start seeing a turn as we speak. We are now receiving clean engines on the one side and we are also seeing improvements at Pratt & Whitney with regard to shop visit time needed to push through the engine, the shop. We received our second consecutive award from CAPA for leadership on global sustainability. And as you are aware, we just celebrated our 20th anniversary with actually a record day for sales. We managed to sell. a revenue of 37 million euros over one day, which is a new daily record. And during that 20 years of operating history, we carried nearly 400 million passengers. And I remember when I was in London on the day of the first flight, so that's 19th of May 2004, and I was interviewed by Richard Quest at CNN, and he Put it out like, Luca, you are the 57th airline just recently created. Who the hell do you think you are needed for? And, well, 400 million people decided to need this air, which, of course, makes us very proud. Could we please move the slide? So just to give you a snapshot where the business is at the end of the financial year, as you can see, capacity was growing significantly on C terms, 18%. ASK terms, that was 20-25%. As you recall, we are up 21% on passenger traffic. The fleet has been growing actually significantly. We haven't really seen kind of the full benefit of that due to the engine inspections. But at the end of the financial year, the fleet reached 208 aircraft. The age of the fleet continues to come down. That is important for operating unit cost purposes. The renewal rate is now over 60%, which is significant. So I would say that probably of any airlines on the planet with scale, Wizz Air is the most renewed carrier. Every seat count is now up to 224. That gives us a significant competitive advantage. Gauge comes with unit economics. So the higher the gauge, the lower the unit economics will become. And I think that gives us a structure advantage versus the rest of the industry. And upgaging continues to unfold going forward as we will essentially exclusively take deliveries of all the AC-21neos in the future. We are operating to nearly 200 airports over 50 countries. across 33 operating bases. And of course, with the growth of the business, our employee base also grew. We added 600 million jobs inside the company, of course, a lot more outside the company serving the business. We remain focused on sustainability, our carbon footprint, and we further reduced that to 52 grams. I mean, you will see that with a huge advantage, we are the leading airline when it comes to carbon footprint. Could we please move the slide? We talked a lot about operations and the challenges we face. we encountered over the years. I mean, you now see that significant turnaround has been happening across the operating metrics. Probably the most important one is fleet utilization. Fleet utilization is back to standards actually above fiscal 2011 when we operated the airline with 12 hours. of utilization. Now it's more like 12 and a half and it's a huge improvement versus fiscal 23. As you can imagine, given the The logic of the business model we implement, this is a very significant factor and cornerstone to the cost performance of the business because we have a lot of fixed cost in terms of fleet, in terms of employees, pilots coming through, etc. And we have to be able to spread the fixed cost and the higher the utilization we achieve, the better we can spread the cost. So the lower the unit cost will become. Completion rate, as said, Back to standards, big improvement versus previous year, but also above fiscal 2011, 99.4%. And as I said, we just had a head start in the current financial year and completion rate is 99.8%. And with that, we are the best operating airline in Europe. On-time performance keeps improving. I think we have to take note of the fact that we are in a more challenging supply chain environment still. That hampers our ability to perform on time. Nevertheless, given all the investments we have put in place for enhancing the resilience of the business model and the operating model, you now start seeing improvements actually happening. All in all, we're seeing that the fundamentals of the business are back in place. Operations have been turned around and now financially businesses benefiting from those investments and turnarounds. So with that, I would hand it over to Jan. Could you please move the slide?

Thank you, Youssef. So in terms of financial performance, very strong revenue results, 30.2% higher versus F23. And that's based on 25% capacity growth. So we're growing our revenue faster than that. And that's because of higher unit revenue. 4.6% higher unit revenue. At the same time, our fuel costs reduced year on year, despite the higher capacity. And that's a combination of price. So our fuel price on average was 18% lower year on year. The hedging program that we reinstated in fiscal year, F-24, and fuel efficiency driven by the market-leading aircraft in the A321neo. Non-fuel costs increased by 15%, which of course is lower than the 25% capacity growth, implying that there's a unit cost savings there, which we'll talk about in subsequent slides. In terms of EBITDA, we swung at 1.2 billion year on year. So 1.2 is the total EBITDA for the year, which is a very healthy number and helps towards our leverage. In terms of operating profit, as Joe mentioned at the beginning, we see a $900 million swing, so similar results in terms of EBITDA operating profit and reported profit. It's a very proud moment to talk about having a $535 million loss last year in the and a $366 million profit this year. So it's something that we're all proud of, and we thank the team for delivering this. In terms of cash, we ended up roughly the same as last year, slightly ahead, and that's despite a $500 million bond repayment that took place in January. That payment was paid out of cash on hand, and so no additional debt was required to service that. If I could go to the next slide, please. As mentioned, ASKs grew 25%. That's our capacity. Our revenue grew 4.6% in line with guidance. Guidance was mid to high single digits. In fact, all of our guidance metrics were met this year. But unfortunately, it was on the lower end of guidance. And so there's certainly work to be done and causes for that. We provided an indication as to where Revenue was under pressure this year, so ticket risk was strong, double-digit growth there, but ancillary declined, and most notably in H2, F24, due to challenges that we saw in the Middle East and in Israel due to the latest Israel-Hamas war. and then having to redeploy high insulated revenue capacity into other markets that were impacted by the seasonality, you know, November and then into Q4, as well as a shorter booking window for the holiday season. So there's a lot of opportunity there to bring that back in line. And as you'll see from our guidance later on, you know, we expect that to come back in F25. load factor we talked about. And so I think we can go to the next slide on this one. So in terms of unit cost, I think this is where we start to get really exciting and really punchy. And so as you can see, basically, most lines are either flat or have reduced. Fuel, we talked about staff increased, 9.1% increase in staff, although I point out that that's a much lower growth number than our competitor who saw staff costs increased by 20%. Depreciation went up slightly, and that's a line item that continues to be under pressure in the business due to the fact that we're taking on As many aircraft as we are, they're more expensive aircraft, and we're grounding a lot of our aircraft currently, so there's an inefficiency that comes through that. I would point out, however, that the cost impact on ex-fuel cask is mitigated by total cask, which we'll look at in a subsequent slide. Overall, the cost base was supported by the other cost line, And in there, we've provided a hopeful breakdown, which gives you some color as to what's happening. So you can see that there was an increase year on year in unit cost benefit on the sale-leaseback line. So there's two elements to that. There's an aircraft element. And so the aircraft sale-leaseback gains follow the fleet profile and the delivery profile. But what happened in F-24 and will happen to some extent in F-25 is that we started ramping up on spare engines. And the rationale for that is strategic. So we have the benefit of the Pratt & Whitney compensation arrangement, and that helps for... for parked aircraft, but we're, as I might remind everybody in the business of flying aircraft. And so what we wanted to do is make sure that we had support for the outer years so that we can continue the growth plan, which resumes after this fiscal year. And so we made a strategic choice to invest into engines, engines that we would otherwise need as our fleet grows, but that we could benefit from now. And so we've started securing as many engines as we could, either from from sale leasebacks or from third-party lessors or, in fact, leasing engines from Pratt as part of a strategic desire to build up our spare engine bank. That investment will pay off in F-25, 26, and 27. And there is, in fact, a payoff in F-24 because consistent with our aircraft financing strategy, we sale leaseback our engines. And if there's a benefit in F-24, so be it because at the end of the day, Having more engines available to us will allow us to put more aircraft back in the sky sooner and make us less reliant on compensation, even though, of course, we continue to benefit from that and expect to in the future. There's also the supplier compensation line there. And I would caution you to assume that all of that is attributable purely to Pratt. There are other suppliers in there that move the numbers around. So it's not going to be as easy to try and work out what our confidential arrangement is with Pratt. As you can see, disruption increased. And that is solely due to the engine challenges and the disruptions we had in the Middle East. over the fiscal year. And so you need to look at the combination of all these elements when it comes to our overall P&L and understand that we wouldn't have compensation without groundings. I think it's also important to point out that everyone focuses on the cost increase or the cost impact from disruptions, whether it's engine related or geopolitical related. But there's also a revenue impact, as we mentioned, in the form of the challenge we face when having to redeploy capacity. And so there's a one perspective would be to say if there was no disruption, you wouldn't have the benefit from the engine sale leasebacks or from the from the supplier compensation, but then at the same time, you'd have higher revenue. So what we're doing is basically trying to lock in our profit margin to a level where once we start flying again, we can take that margin and expand it. So that's the background behind this call out on the other. And I'm sure that there'll be lots of questions as we move to that phase of the conversation. So with that, could I ask we go to the next slide? This is a slide that we're very pleased to point out. What we've done is we've taken our total CASC, because at the end of the day, while we challenge our divisions to focus on ex-fuel CASC to make sure that we're bringing down the areas of the business that the line management can control, at the end of the day, we need to look at the overall difference between RASC and CASC when it comes to maintaining profitability, driving profitability, and delivering shareholder value. And you can see that in fiscal year 23 to 24, either unadjusted or adjusted to 1600 kilometer stage length. Either way, WIS saw a decline year on year in ex-fuel cask, whereby Ryanair saw an increase, a dramatic increase year on year. And then looking at the arrows on the top, you see that compared to fiscal year 20, so pre-pandemic, both of our cost bases are growing, which is expected in an inflationary environment. Ours is just growing slower. And that comes down to superior aircraft capacity, so the higher gauge. It comes down to the efficiency in terms of fuel, and it comes down to many of the cost lines where we are back to where we were pre-pandemic. So we're pretty pleased to be the lowest cost producer out there and to rebut any assertions otherwise. Next slide. In terms of cash, as mentioned, we maintain strong cash levels, roughly 30% to 35% liquidity in terms of what the ratio is versus revenue. Our net debt did increase this year, and that's driven by a combination of having more aircraft delivered, total aircraft in the fleet, including those that are grounded, as well as there was a working capital swing this year. And that is driven by the way that the Pratt & Whitney and other supplier credits are accounted for. When we agree on the credits, but they haven't actually been applied yet, they end up in a working capital swing. So it ends up driving up the overall net debt number. But as you can see, the leverage ratio has come down as you wouldn't expect it would. And it will continue to come down. And at this point, we're thinking that we should be down below 2 by the second half of F26. So that deleveraging will continue. And that's what's supporting the investment grade rating from Fitch. And we expect now with these results out in the public that we will re-engage with Moody's to recover that rating as well. Ultimately, the cash balance was driven by operating cash. And to some extent, some of the smaller loan facilities, the PDP facility will be fully repaid in the next 12 months. And we will be repaying our ETS facility in September at the same time that we surrender those emissions credits. So overall, pretty pleased with the cash position. And based upon our forecast, we see that balance increasing, assuming, of course, that there are no further unexpected events, which would be nice for a change. And with that, I'll hand it back over to you, Joe, on the ESG.

Thanks. Yes, thank you. So, carbon footprint is the result of basically three factors. Technology, the airline operates, gauge, the efficiency of the aircraft, and some of the operating practices when it comes to fuel burn. As you can see, with air... Anyway, you look at it, it is the undisputed leader of carbon footprint or emission reduction in the industry. We are almost 30% lower rate than Ryanair, the next best, and significantly lower than any of the other guys, other airlines in Europe. We have been recognized for this twice by CAPA based on objective measures and selection criteria. Of course, we are very proud of our credentials with that regard. And we continue to build our track record on sustainability. So you should be expecting us to to stay in the front row when it comes to a reduction of carbon emission. And as a matter of fact, if I look at all the commitments of these airlines, what they have made for 2030, they would be still nowhere near to where we are today. And we would continue to reduce, of course, our own footprint. So I think we are in a good spot with regard to ESG. Could we please move to the next slide? so i think comes to fun uh gtf so let's move the uh the next slide please uh so gdf uh at the moment we have uh 47 aircraft on the ground um we're seeing that we are at the peak as we speak and uh we are expecting uh basically two significant changes affecting the recovery of the uh of the gtf engine situation first now we started receiving spare engines uh clean of powdered metal, so those engines are no longer subject to inspections. And we are expecting the same to happen to new aircraft deliveries as of June. So as we speak, now the engines we are getting will be clean of powdered metal. Of course, all the engines we have been receiving to date, we remain subject to operating cycles. And if you really think about this kind of the way the math works is that you operate the engine for 18 months, remove the engine, put it in the shop. And depending how quickly you can push the engines through the shop visit, you will regain the engine. Somewhere around two years, I would say, from now on, when we're going to be at the end of the recovery cycle. But again, the good news is that new entrants coming are unaffected and not subject to inspection. So the other positive development is that for the first time now, we are seeing improvements at Brett and Whitney. We used to be taking the assumption of every shop time of 300 days and now we are seeing some engines coming out of Pratt after 180 days. So that's good. So clearly they have been able to improve their own procedures and their own production and supply of parts to speed up the shop visit process. So we're seeing that A lot of it is now becoming structural and quite likely that will create upsides for us with regard to regaining the engines after grounding. We are still making fairly conservative assumptions. So we are assuming 50 aircraft on the ground in the first half of 25. We may do a little better than that as a result of the improvements of Brett and Whitney. I think we have talked a lot about this, that we are protecting capacity by taking more spare engines. Jan talked about it, that actually this is a strategic investment for the company. We continue to take new aircraft deliveries, extended existing A321 CO leases, and also took a few market leases. leases, three dry lease aircraft and a few wet lease aircraft on a seasonal basis to make sure that we protect capacity. So net-net in financial year 25, we are expecting to deliver flat capacity as a result of all of that. And we also talked about the way we are compensated for that by the OEM. So no real change with that regard. So really the news I'm trying to break today is that probably a bit more upside now we are seeing versus kind of the dark picture what we painted before. Of course, our final objective is to get out of this completely. And we are taking all measures and actions possible to make sure that We get the OEM to collaborate on that to make sure that we come out of this ditch as quickly as we can and we can focus on flying the airline. I mean, I think we have become very good at parking aircraft, but our business is flying aircraft. So we need to get back to that model. So could you please move the slide, please? So margin expansion, we think we have a significant runway in front of us when it comes to margin expansion. Well, first of all, our operational performance is now solidified and we think there is more upside coming out of it. So aircraft utilization continues to rise. And this year we are expecting 12 hours, 45 minutes of operational fleet utilization of the flying fleet, of course. But that includes maintenance, normal maintenance aircraft, spare aircraft, everything. It's only the threatened with the related grounded aircraft that are externalized. On-time performance continues to improve and completion rate continues to improve. So we're seeing that we're going to be less prone to operational disruptions. It's unavoidable, but we're seeing the level will get lowered and we will be less subject to EU 261 compensation at the same time. So more to come on the operating metrics. Capacity protection. As said, we have taken a number of measures to make sure that we are protecting capacity, and that capacity remains intact as opposed to being subject to volatility on a continuous basis. So we're seeing that capacity becomes more predictable, more schedulable, and more rosterable from a crew perspective that I think are significant factors for operational and commercial stability. It's not only operational, but it's also commercial. don't want to affect the customers with constant changes, rescheduling and rebooking and those sort of issues. So we're seeing that the measures we put in place is not only protecting the numbers, but the measures also protect the stability of that capacity. And last but not least, everything is a double-edged sword. So obviously the bad news is that we are unable to materialize the growth opportunities in front of us, but at least we are taking the yield upside of that as now we ended up with scarcity of capacity, the business yields up against that. So we're seeing that that situation will continue to create upsides on pricing and load factors, and as a result will contribute to profitability. We expect the next financial year to be a significant growth year, so a 20% plus growth we are expecting. Again, still, we are somewhat subject to pre-term recovery, so we need to see how the process gets completed and how exactly we're going to be regaining the ground data. And also, there are some vulnerabilities with regard to... Airbus' capacity to deliver a new aircraft. I will talk about it. But fiscal 26, we think, is going to be a big year when it comes to gross. And our eyes are already on fiscal 26 because you can imagine you have to procure markets, pilots and cabin crew ahead of time to make sure that you are able to execute against that gross plan. Would you please move to the next slide? With regard to network, we are benefiting from a lot of maturity happening on the commercial side. And also we make sure that we protect our competing markets despite the scarcity of capacity. We are very focused on competition to make sure that there is nothing to be given up despite the capacity challenges. We have been investing significant capacity into Hungary, Albania, Italy, Poland, Romania, the UK. These are the most contested markets and we want to certainly protect our market positions. You can see on the next chart, the middle chart, how maturity has been rising. We used to have a lot of volatilities on network and capacity coming through the adjustments for geopolitical issues, the Ukraine adjustment, Russia adjustment, as well as the Middle Eastern adjustments recently, but now you are seeing that actually that network is significantly more mature going into the fiscal 25 period, which obviously yields profitability through maturity. And the third one to the right is really showing you the our own adjustments for profitability. So we looked at the performance of the business and you see that we essentially cut capacity in the underperforming quartile of the business and moved that capacity into the top performing quartile. So you're going to get profitability through that line as well. So I think it's a strong commercial plan. And now hopefully you kind of put the puzzle together. You see operations improving significantly and you are seeing the maturity and profitability coming through the plans on the commercial side as well. And of course, these are the major sources for profitability of the current financial year. Could you please move the slide? Yeah, I mean, Answering revenues, I mean, that's one of the areas we think we needed to address to make sure that we get more robustness out of answering revenues. Although I wouldn't think of answering revenues like coming totally incremental on top of ticket revenues. There is a significant cannibalization factor between the two. Nevertheless, we want to make sure that we are robust and we have been developing revenues or enhancing a number of products to make sure that we increase our market appeal. If you are interested, we can get into it later, but let's move to the next slide. So I think this is important. So this is showing you the free plan. Fiscal 25 is firmed up in terms of new aircraft deliveries, in terms of extensions of existing aircraft and market aircraft as well fiscal 26 is still somewhat in limbo because we know that Airbus will have delays affecting the contracted delivery positions what we are showing here to you is is the positions contracted as per contract today. But fiscal 26 and onwards, we remain subject to a contract amendment. So we are expecting 30, 30 plus aircraft to be less in fiscal 26 delivered to the business. So my expectation would be that during the course of fiscal 27, we're going to be hitting the 300 number. So quite likely fiscal 26 is going to end up with around 265-ish aircraft. And fiscal 27 is going to be around 300, 300 plus. So but time is approaching and basically we have less than three years now to go from 175 lines of flying essentially this summer. to 300 aircraft in two and a half years, three years down the line. So this is significant. This is much in focus with regard to operational readiness, commercial readiness, to make sure that actually we are ramping our execution capacity up against the fleet program. So this is significant coming. Would we please move to the next slide? ETS. This is just a short update to you as you know that the current ETS low-on system is going to be phased out by 2026. From our perspective now the playing field is going to get leveled. We have been hugely disadvantaged from the current ETS system as The system favored incumbents and we were not an incumbent being an up and coming airline. So we have been suffering significant competitive disadvantages from that. But now this is all getting levered. And as a matter of fact, now we start benefiting from some of the reallocation of free carbon units. So you can see that actually the whole ETS credit system is now turning into our benefit finally. Next slide, please. So outlook and guidance for the financial year. First, we are guiding net profit 500 to 600 million. And this is on the basis of flat capacity. This is flat across the year. So it's not like picking up in one period. Pretty much we see flat on H1 as well as H2. Some improvement on load factors. We are seeing an upside there. Current 90% is going to go to around 92%. ROSC, we are seeing high single digit. And I know that you're going to be testifying as though, okay, the other guys are saying this or that. But a few things first, we didn't overcharge the market last year. So our base is somewhat different. You remember last year for us was a big growth year. So as a result, this is somewhat dilutive to the revenue generation of the business. So we have a different base. Secondly, you saw from your slide that we are heading a very different direction on cost. Our unit cost is falling. Others are creeping. As a result, they talk more and more about revenue because that's what you do. When you don't control cost, then you bet on revenue. We still control cost and we remain focused on cost. But because of scarcity of capacity, actually, we're going to be yielding of the business. But don't take the misperception that Maybe summer is a benign environment and we just make so much money in summer to cover ourselves for winter. Actually, we think we're going to be heating up more in winter, given the situation in winter 2023-2024. We moved a lot of capacity and we shuffled. capacity as a result of the war in Israel. Gaza, we also beefed capacity up against the GTF groundings to make sure that we maintain utilization. So we think actually second half of Roski improvement is going to be probably stronger than the first half, but As far as we can charge at the moment, we see a robust environment for our capacity, and our guidance is empirically evidenced, of course, on a time-gone basis. Ex-fuel cost is going to go up, not necessarily because it's intended, but it's because of the groundings of entry. Let's not forget that around 20% of our capacity will be on the ground, or 20% of the fleet will be on the ground during the financial year. That grounded part of the fleet comes with a lot of capital costs, but we are unable to spread. Of course, we get some compensation for that, but we also have to carry some unproductivity as a result of building up pilot capacity, cabin crew capacity for future growth, but unable to operate that capacity over the short term. But I would say that that kind of a spike on ex-fuel cost is expected to be temporary. And as we are gaining operational integrity over the GTF engines, this is going to be eliminated. Fuel costs we expect it to be a flattish. So on that basis, we are expecting margin to expand and deliver 500 to 600 million net profit. I think that concludes the presentation. Thank you for questions.

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Morning, it's Harry Gowes from JP Morgan. I've got two questions if I can. As we're both first in asking on summer, or someone else does, there was a noise recently, some of your peers reporting softening in price, or at least maybe some more mixed messaging on the outlook. Is that something you would echo at all over the next few months and seeing Ryanair dumping their fares into the marketplace and everyone else has to follow? And then second one, maybe you could just talk us through the large working capital swing in a bit more detail and the outflow there for the year just gone. How much is just a bit of a timing component on the supply credits and anything else there on the receivable side and then into 25? Should we expect another outflow given the That's quite great. Thanks a lot.

Maybe I'll start off with a summer question. I know that there is a lot of anxiety and excitement around this matter in light of recent announcements by some people. You have to see the differences between airlines. So as far as we are concerned, we actually have scarcity of capacity versus demand for our services. So this is more pushing the yield up as opposed to going the other direction. And as I said, we didn't rip off the market last summer. When you rip off the market and you overcharge the market in a way, I think at one point it will start creating a plateau. You cannot do that every year. Unlimited. And I think this is what the issue is for many of the airlines. They've just gone up so much on pricing. I mean, you can track it, how much prices have gone up by airline. So there is a limit to it. As far as we are concerned, we're seeing the markets are robust. We don't really see any significant weakening of markets anywhere. I mean, we operate across a very wide geography now in Western Europe, in the UK, continental Western Europe, Central East Europe, Middle East, etc. And we think the demand is very, very robust. So we are not seeing a softening. But I think it is always down to airlines, how they see the pricing environment versus their own demand on their own capacity. So we feel very confident with that regard. I would also say that, and I would come back to the chart. I'm just asking the operator, could we go back to the chart that shows the cost performance, the comparison between Vizern and INR? It's slide eight. Slide eight. Okay, perfect. So I think this is probably your most stunning slide, what is happening in the marketplace. When your cost is creeping... then you only talk about revenue because you are no longer in control of your cost. When you are down on cost and you are reducing your cost, you keep focusing your business on that and you don't really worry about revenue because this is commodity and in commodities, lowest cost prevails and lowest cost wins. So we are very focused on cost and we want to make sure that, you know, costs... are under control, despite this kind of temporary spike of what we are seeing. But we think structurally we are incredibly well positioned to be the undisputed cost leader in the industry, coming from growth, coming from further renewal of the fleet, and coming from the continuous sub-gauging of the aircraft. And let's not forget that we have 300 aircraft, more than 300 aircraft on order that will be delivered. The other guys may have the same 300 aircraft, an order which you never know whether that will ever get delivered or when it's going to be delivered. So we don't have an issue with the delivery stream of aircraft coming, even if there is a bit of a delay, but not the same issues what the other guys are facing. So we're seeing that we are very well set for that. So our business should remain focused on cost as opposed to wondering about summer and winter and fall and spring, what happens to the consumer. Because if you are the lowest cost producer in the industry, no matter what, you're going to be winning. But in any event, even if I take the revenue side of the equation, we feel very comfortable with what we are seeing.

Yeah, and just to echo that point on the environment for the summer or for the year, we're guiding single-digit RAS because we're seeing demand. And we're not going to get into the sort of spiral that what happens if one person says something to the market and then everyone else piles in because we don't see justification for that yet. However, if you think about it, so we've got costs under control and we've got operations under control, which we do. Then, you know, you look at what's happening in the marketplace. There's a global supply chain shortage, both in terms of Boeing and on Airbus, as we know from our engine situation. Everybody is being forced to incur higher costs. Older aircraft, they cost more to rent. They cost more to crew. They cost more to fuel. They cost more to operate and cost more to maintain. So those costs are going to be hitting everybody else at the same time. Those costs have to go somewhere. They're going to be going into the revenue side because you have to recoup those costs. So the consumer is going to have to pay for them. We feel that we're going to be better positioned because we're still flying a newer, more efficient fleet, both in terms of maintenance, operation, fuel costs. And so we think we can control that and simply take the market pricing environment when it comes through. I think it's too early to say how this summer is going to play out. We're seeing Q1 perform very nicely. We have April behind us. April performed better than expectations. May is looking to be a very strong month. June and July are still coming together. And August is actually looking really strong because people know that they can block, you know, the holidays there. So overall, we're optimistic. And that's why we feel that this guidance is appropriate on the working capital. So, yeah, so there was a swing of around 600 million from year to year on the working capital. And so I'll break it down to two main constituents. One is the deferred income, which is the unflown revenue that we collect for future ticket sales. we generated unflown revenue in the period we just generated less than before and that's because if you look at the um the the uh capacity growth from f23 to f24 versus f24 to f25 you're seeing a dramatic difference right from plus almost 30 growth in the first period versus flat so we generated some working capital but not as much as in prior year that that contributed to roughly 400 million of the swing the other part is that when it comes to trade receivables and other receivables as i mentioned earlier There's a reconciliation that needs to happen between the launch of groundings. We didn't have groundings until the Q4, and then we had a massive grounding as happened in January as the service bulletin became effective. And what happens is that you need to then... calculate how many grounding days you have. That then needs to be validated and reconciled so that we're not falsely claiming groundings for issues that aren't engine related. That then needs to go through a process and work its way through the mechanism in the contract. The mechanism, as we discussed before, involves first a offset in credits and credit notes based upon other payables that we have to Pratt & Whitney. And and then ultimately, if there's a shortfall, then there's an element of cash that gets paid. And so that just has to work its way through. The contract is working as designed. In fact, we're in the process of closing off our audit. And last year, the half year when we when we disclosed that the contract had been signed with Pratt, The auditors were concerned that there was a risk that this wouldn't actually pan out as expected. That risk has been de-risked in the latest audit because they see that the evidence of this is coming together. So this is simply a feature of a new effect, a new impact to the business that wasn't there before. And that's causing that working capital swing.

Hi, if I may, James Hollins from BNP Paribas. Three, please. Just on the sale and leaseback income, just trying to model that fiscal 25. If we take engine and aircraft deliveries, is it safe to assume that sale and leaseback income might be maybe a third less year on year? Or am I thinking about that too simplistically? Second one. Again, if you are modelling like we are, when would you model compensation out to? Which quarter would you best guess it stops coming in? And then finally, unit ancillaries. I think on a per passenger basis, if we get rid of the ASK issue, you're about flat year-on-year in Q4. I was wondering maybe, assuming that is correct, you can sort of run us through the trends you might expect on a, either if you wish, on a per SK or per passenger basis, how ancillaries might play out this year. Thank you.

Okay. I'll take maybe the first one and the second one, and then maybe you or Robert can jump in on the ancillary. So in terms of, say, at least back evolution, we have this conversation and there's a debate as to whether it's part of our business. It is part of our business. That is the strategy that we've chosen. We buy well. We buy in bulk and we buy because of our buying power. And we get a benefit in terms of the purchase price. And whether it's engines or aircraft, it's the same. The engines might benefit from our scale. They also might benefit from the fact that we're in a compensation environment with Pratt. And the sale-leaseback transaction is our way to translate that benefit into the P&L. So we've talked about that. The... you know, the evolution of engine sale at least back, there were a few, there was a few in F23, there was a lot in F24, and there's going to be a few more in F25, at which point, as we've said in the presentation, we ended the year close to 40, We should be around 50 engines, and then that stream terminates. So I would say that the aircraft sale leaseback benefit will follow the delivery pipeline. So you can just sort of make an assumption around that. There's nothing different that's happening on the aircraft side. And on the engines, I would expect that to taper down. To your question as to whether it's a third of what it was in F24, I would say it might be a bit more than a third less. So closer to 50% less.

But I would just add to it that, I mean, that kind of goes reversely with compensation because if you take a spare engine, that helps us keep the aircraft flying. If you don't fly the aircraft, then it would become subject to compensation. So it's going to push in a way.

But I think the leverage effect of having an engine allows us to generate revenue, which of course is far more beneficial to a shareholder than compensation. So we think that the strategic direction on building up the engine bank was the right one because we're going to have these aircraft and these engines for many years, and it gives us additional protection down the road for the challenges that we might face if the advantage engine doesn't come in on time, if there's other issues that pop up, having additional spare engines is a valuable asset to have. In terms of the compensation progression, you know, we talk about 50 aircraft and seeing that run. I think it's fair to say that that will continue for the next couple of years. And unless, of course, the dramatic changes with Pratt. And of course, we'll keep everybody abreast of that when it happens. But all of our expectations, all of our modeling. And we're getting a lot better at doing so. I mean, I know the people in the past referenced F26 as being a sort of 30-40% year. That was off the back of a comment that was made before we had time to sit down and actually go through with granularity and use the benefit of the technical department and the financial department to really model what happens with regards to powder metal forecasting and the cycle counts based upon utilization, based upon unscheduled engine removals, so things like a bird strike or something that's unexpected, and what impact that has to the balance of the spare engines, the balance of spare aircraft that we want to maintain. And at this point, we're seeing that 50 aircraft level extend certainly into F-26, and we'll update you as soon as that comes through. But there's no improvement yet, although we're optimistic that there will be from Pratt. There's no improvement yet to report on

Robert, are you going to take the ancillary? There's a mic over here.

Yeah, on the ancillary question, yes, you're correct. Unit ancillaries were basically, revenue from ancillaries was basically flat in the before. So the drop-off you saw in H2 was heavy in Q3 and then flash in Q4, so a trend positive. Looking forward to this year, I think we're back with our consistent one We do have a number of improvements, which Joseph went through a bit earlier, especially around we have a new bundle that introduced four weeks ago, now full-scale across the network, and we have great performance out of it. We've seen great performance in testing. We also have some new products around subscription that we are expanding from the test that we started about a year ago. You'll see more coming on that later as we go through the summer. And then as well, we have some new products coming online as well, and some other, let's say, targeted areas. As we talked about, there was a geopolitical impact of where we had cancellations that were very good and sort of revenue contributors. Those are coming back online on the network. Israel is now up to about 60% of what it was last summer and will continue into the fall and actually have a lot of defenses.

Great. Good morning, everyone. I might be able to do three on the GTA. Just looking at the accounting, I mean, you received the compensation. It seems like you put the full benefit through your P&L, that fixed your cost, number you report. When you do the FEX, are you actually capitalizing the FEX? So the cost side is coming through as depreciation, or some are actually replacing the FEX. So I guess, is there a timing difference between recognition of the compensation and the associated costs? Secondly, I mean, have you got any of these engines back, these GTFs? I'd be interested in your view on kind of, you know, additional performance you're getting or, you know, in terms of comparability between the new GTFs you're getting, which obviously don't have this issue, and old. So what is the, I guess, efficiency of them or, you know, how well they're performing? And then I think you said, I might have misheard, you said January 26th all should be done. And you've got 50, no, you've got 50. Okay, I guess, question. So you've got 50 anyway, and is that the peak on average it's going to be in? Because if it's 300 days, you know, clearly sometime next year, early next year, you'll be done on those 50. So I guess, you know, is this the peak or is it going to be even higher than 50?

Thanks. Let me start with the second and the third one. So with regard to the GTF peaking, so we are at around the peak as we speak. So let's call it 50. So we're seeing that this is probably going to be it. Of course, there is always the home side risk to it, but we feel kind of comfortable with that. The way to think about the cycle is that engines delivered to us to date are other than the few spare engines remain subject to cycle limits. So after reaching the cycle limits, those engines will have to be removed and inspected. Roughly around 18 months, after 18 months of operations, you reach the cycle limits. So kind of towards the end of 2025, all those engines will have been removed. OK, then you induct those engines and then you push them through the show visits, which is to date up to 300 days. But now we are seeing some improvements of 180 days. So God knows what it's going to be, to what extent this is going to be a structural improvement of Brett and Whitney. But we have been modeling ourselves over a period of a year, but maybe there is upside to that. So what it means is that by end of 26, we should be done and dusted basically with the cycle. Again, this is an assumption. This is modeling. And that's how we kind of look at that. And gradually, the 50 will start reducing. So next summer, we are expecting the 50 to become around 35 on the ground. And it will keep improving until a certain point when basically you are going to benefit from more spare engines having on hand than engines on the ground. And you will become net positive again. This is going to be sometime in 2026. So I think that's kind of the way to think about the cycle. With regard to GTF new and old, there are two issues here. So the GTF engine is affected by two lines of issues, if you want to put it that way. One issue which is very predictable is the powdered matter. That's a contaminated material that went into the production of parts that got put into the engine and those parts must be removed after reaching a certain cycle limit and must be replaced. This is happening as we speak. I think this is what we have been focused on in our communications. Now the new engine is coming. We've already received the first pair engine and new aircraft deliveries will happen with clean engine as of next month. We'll be clean on that issue. So that is done. I mean, of course, you have to do the cycle of the incumbent engines. The second issue is kind of GTF 2.0. When basically when an OEM develops a new technology and it is classified as a breakthrough technology, obviously that technology goes through the maturity curve. You get kind of the childhood diseases out on the engines in the early phase of operations. The OEM takes note of those issues and they make engineering improvements to the engine. We are expecting the GTF 2.0 to come to market sometime in 2026. So that's going to be an improved engine. It is not just a properly manufactured engine. So powdered metal means a properly manufactured engine. That engine I'm talking about, the 2026 engine, is going to be an enhanced, technologically enhanced, improved engine. That's going to come in 2026.

And just on that first question, Jared, so just can I clarify, I understand the question on compensation benefit and how that's treated, but you said something about the fix and how that's capitalized. I just don't understand what fix are you referring to?

Obviously, there's a fix associated with repairing the engine. So does that fix get capitalized into your balance sheets as part of the cost of the engine and then you depreciate the engine?

No, because it's not our cost, right? It's a Pratt's cost.

Okay, so you don't do anything with the cost element?

No, we take the benefit based upon the lack of use of the aircraft? As part of the negotiated agreement, the compensation agreement that we have, because it's a manufacturing defect, not a design defect, Pratt has an obligation under the separate maintenance contract to provide services to us. We pay a rate based upon our flight hours and our flight cycles to some extent. So, yes, the fix is not on our cost. It's simply we get back actually an engine that depending on the extent of the scope could be a better quality engine because while the engine's open they take the opportunity to address other issues so it's actually a benefit for us once these things come back if we can get them through the shop fast enough and if you were flying that engine you're basically saying you would have got you would have made even more money than the compensation absolutely absolutely that's that that otherwise we'd be focusing on being a parking business okay thanks

Thank you from me. Firstly, page three, you mentioned the OEM support package of the release. You then say we expect to secure future compensation on similar terms for Q4 2025 and onwards. Any reason that package wouldn't be the same as the existing package? you finalise it. Secondly, I think it's page seven, you talk about some new fleet ownership structures that you've introduced. Perhaps you could add a bit of colour on those. Third, I suspect this is hard to answer, but on 20% potential capacity growth in 26, what do you think the route maturity would look like relative to the slide you put up? And finally, perhaps I could just challenge you know on the cost are you not a little bit conscious to hold up unit costs in 24 that include you know 250 million of sale and lease back games when you've admitted you've done way more transactions than normal obviously together with the 200 million of supply compensation where it is hard for us to judge whether you've been overall thanks well um maybe i would i would start with the uh

With the last one, I mean, we are guiding on unit cost and you can assume that this is based on proper planning and modeling. And I don't think that the unit cost performance is solely the result of kind of one of items and special elements of the business. And the unit cost is structurally moving to the right place. as a result of utilization and improved operational metrics of the business. So I'm very confident that Wizz Air is at the right place now, despite all the issues we are dealing with. You also have to be careful not to discredit us always on issues, but you also need to credit us on some other achievements what we are trying to deliver. So when you look at the benefit of compensation, you're seeing that this is kind of coming on top, but the business is observing the issues coming out of that. I mean, there is a reason why we are compensated. And the reason is not to make us feel good and happy, but the reason is, and you can expect that RTX is a rational company and they are not totally idiots just to throw money out of the window. It is because they cause damage to the business and they have to compensate us for the damage. I think we just have to look at both sides of the equation when we come to these numbers. So with regard to fiscal 26, the way I would think about maturity is that most of the of the capacity growth is going to come through adding frequencies to existing routes. I mean, the way we have been managing kind of the The downside capacity scenario was really through trimming frequencies. We would be adding those back up. So I don't think that you would be seeing an explosion of immature capacity coming through Fisker 2026. There is going to be an element of that, but I don't think it would go beyond the ordinary what we would do otherwise.

um uh you want to take the ownership so uh yeah so i'll i was going to do support but so in terms of new fleet ownership we still predominantly pursue the traditional vanilla saley spec uh transaction at the time of delivery We're seeing more appetite from lessors to denominate those leases into Euro, which is helpful, but still, that's the majority of our financing. However, we're looking at, I think, 27 deliveries this year, and then that number starts to increase, and we see dramatic growth in F-26 and F-27, on top of the 208 aircraft that we currently have flying, and we're running into challenges where Notwithstanding our credit rating and notwithstanding WIS, that certain lessors just have too much exposure to one particular name. Or there's other parameters where lessors have a limitation that they can't have X percent of an airline's fleet, irrespective of the exposure. And so we started doing JOLCOs back in the day to diversify away from the traditional operating lease model. And there's been a recent trend in the lessor community across the board, both in Western Europe and America, also into Asia, to offer a finance lease product. And that's what we're specifically referring to, where we started to look at basically full payout, full amortization, finance leases, where... Unlike an operating lease where you have to comply with return conditions, even if they don't actually make technical sense because the contract says so, and that creates a cost, you transfer title at the end of the lease. And then we have to then make an assumption on residual value and then what the future market looks like for us to dispose of that aircraft. The benefit of that flows through in terms of a different depreciation profile. And of course, you may not have the same return condition cost. And actually, when you see the maintenance cost in our cost lines looking attractive, coming down year on year, that's because as we extended some of those leases, we were able to defer unnecessary maintenance to the point where it was necessary. So that helped reduce our cost base in F24 as well. And then in terms of ongoing support from Pratt, yeah, so the deal that we announced back in November with regards to Pratt was always up through the end of this calendar year. We've made certain assumptions in terms of what that deal would look like because the profile of the compensation ebbs and flows based upon where the compensation is being consumed, whether it's through the day rate, whether it's through engines, whether it's through the support contract that we have to maintain the aircraft or the engines. And so what we've done is we've made an assumption going forward that if the solution is not fixed and the solution is basically getting the contract to perform the way that it was originally designed, the support contract, then there's going to be another conversation that's ongoing with Pratt. We have a daily conversation in terms of technical matters, and then there's a weekly conversation on the commercial matters. And those are ongoing, and we expect to have an arrangement done well in advance of the half year.

Hi, morning, Conor Dwyer here from Morgan Stanley. Three questions, but the first one is on the slide eight. So it obviously does show that the gap has closed between the two of you on a just the basis. But if I think about the guidance just for this year, by single digit and actual cost growths, including flat fuel, maybe makes you a bit closer to mid single digits. I think Ryanair all in is getting more close to up slightly. which with their low factor tracking down a little bit on a cost per seat basis, potentially just flat, that would imply the gap kind of widens again into this year. So just wondering how you kind of think about that and if that's just simply hit by, you know, at the moment, the groundings, and if you think that you can regain that gain you're showing there in more medium term. The second question is, you know, you're not, far off doubling your fleet between now and FY28. So I'm just wondering, you know, where are all these planes going to go? I can't imagine they're all gonna be just increasing frequency on current routes. And actually, more immediate term then, in terms of ramping up into next year with 20% capacity growth, how do you really manage that? It's a balancing act, I guess, in terms of not wanting to hire people too early, but you don't want to leave it too late and experience issues with ramping up. So, yeah, Nicola, that'd be great. Thanks.

Thank you. I mean, I think fiscal 25, from our perspective, is a transition year. I mean, we are still operating under suboptimal circumstances. 20% of the fleet will be underground. I mean, just look at it from the perspective of having a lot of capital tied into that part of the fleet, we're not able to spread it. And also look at it like, you know, as next year is going to be a significant growth year. So we will have to build organizational capabilities capacity for that operation. So we will carry on productive labor in the system as a result. So I don't think I would read much into the current financial year in fiscal year 25 because simply this is just a transition year. But structurally speaking, I think we should be where our competitor is. So you go back to pre-COVID times. We were on par. Even I would say that we were slightly ahead. This is where we need to be. And logically, this is where we should be. If you take into account the fleet renewal, if you take into account the difference in aircraft utilization, the gauge difference, et cetera, this is where we should be. Unless you assume that we are unable to execute. But I think the obstinate around is demonstrating that actually we are able to execute. And even I would say that the commercial planning demonstrates that we are able to execute even against extreme conditions. distress to the business like war in Ukraine, war in the Middle East, you know, or the supply chain related commercial hiccups. So I'm personally very confident that we are at the right place. Yes, there is going to be maybe a bit of a bit of a widening, but I mean, We shall see what the other guys are actually going to do. I mean, look at their numbers. I don't know what their guidance was, but actually they are up 16% on ASK-based unit cost in fiscal 24. With regard to next year's planning, I don't think 20% growth is anything special to this airline. This is the kind of growth that we used to deliver. But this is basically the business model that we have. high growth on the basis of trying to deliver the lowest possible unit cost in the industry and continue to stimulate the marketplace. So I don't think Fisker 26 is anything special in a way, but we have to plan on that. So this is not going to happen automatically to the business. So we have to plan on markets. That's probably the easiest part because at the moment, every single one of our markets are contained. All the markets in Central East Europe are lacking capacity. We are lacking capacity in the newly opened markets. So actually, this is not going to be a market issue where demand is. We've seen the demand is already there. We are undersupplying the demand. The bigger challenge is going to be sourcing operational capacity, pilots and cabin crew. And this is what we are planning on. And we're going to be advancing execution with that regard. That will create short-term gain. unproductive labor but I still think that Wizz Air is a hugely attractive employer in the marketplace given our continuing growth that creates career opportunities and perspectives for individuals so I think we will be able to attract the resources we need and let's not forget the critical resources here are the pilot force and we have been making lots of investments into creating our own pipeline as opposed to relying on the market. We are just about to open a new training center in Rome, Italy. We have a number of programs in place to make sure that we capture people at the early stage of their career. We train them up to commercial pilots and then we give them a long-term contact. So we think we are really good to go with that regard. Well, with regard to deploying the feed over the next kind of three years, medium term, The way we think about this is we have like three geographical pillars of the business. Central and Eastern Europe, Western Europe and the East. We call it Go East. So Central and Eastern Europe remains bread and butter. Growth in Central and Eastern Europe remains subject to economic convergence, GDP growth. If you want to run the numbers, whatever GDP growth the region delivers, you multiply it by two and this is going to give you the airline growth and If you look at the last 20 years in Central and Eastern Europe, essentially legacy carriers didn't deliver any growth on an aggregate basis. The entire growth of the industry was delivered by local carriers, mainly us, because we are the market leader. So you can run the numbers and we think Central and Eastern Europe will remain a highly attractive growth geography for the business over the next few years for sure, given the economic convergence of the region. Western Europe is a lot more selective. From our perspective, we made decisions to really expand in three markets, in London, in the UK, in Italy as a country, and Austria. Every one of these operations is profitable, so we're seeing that they are expandable, they are investable in the future. In London, we are seeing infrastructure constraints. So simply slots are just not widely available. But other markets, we don't really encounter those issues. So we think there are select growth opportunities in Western Europe. We don't intend to become a full-fledged Western European airline, but we want to follow through these investments in these three markets. Going east. From a growth perspective, that's probably the most attractive market given the dynamics, their economic conversion, economic convergence, their demographics, and basically the contained nature of the regulatory framework at the moment. So as soon as those countries liberalize the marketplace, like what it happened in Central East Europe 20 years ago, we create significant further growth opportunities. So we are on those opportunities. Obviously, we have to be measured because we see that Issues can happen, geopolitical or other issues, but we feel very comfortable that we are now having a good understanding of how the Gulf region works. Even we have been able to mitigate the Israel issues quite effectively with some short-term damage, but I think structurally we are fine. So we will continue to monitor how those opportunities come up and we will you know, invest capacity against those. But those are more discretionary in nature. I think the others, Central East Europe and Western Europe are more predictable, more plannable.

If I could just add to that, I think Alex Irving has a study that shows that Central and Eastern Europe could, in fact, absorb our entire order book. We don't even need to rely on those other markets, based on the statistic that I think is that there's five times as much airline capacity per GDP in Western Europe than in Central and Eastern Europe. So that's one data point. Just on the F-25 being flat, and what that does to unit costs and the gap between the two. I think if memory serves me correct, Ryanair is expecting to be F26 flat. So we'll see how they deal with the year that we're dealing with now in a year's time. The one point I should emphasize is that we haven't changed our ultimate to 2028, 2029, 2030 yet. fleet plans, right? There might be a dip along the way to get to that goal because of what's happening, but the aircraft are still being delivered. There's no structural shift to the right in terms of deliveries. And so in terms of our growth trajectory, it's still on track. I don't think that you can say that for, you know, when Boeing is producing, you know, a cap of 39 per month and in april 24 right i think that there's going to be some delays and so you know january 27 for the dash 10 max i think you know considering that the the dash 7 isn't even certified yet it seems like a bit of a stretch uh yes good morning it's rory co-name from rvc uh first you show where uh you've added capacity within opal flat capacity i was wondering if you could talk a little bit about which markets you've removed it from

Secondly, I wanted to attempt you to talk a little bit about rising trends. Some airlines have hinted to slightly weaker trends in calendar Q2. Rane talked about weakness in Western European leisure markets with strength in Central and Eastern Europe. Would you go along with that? And then finally, in this financial year?

I think we have We have commented enough on the pricing plans. I'm sorry, I'm not going to go into 9 a.m. flights on Tuesday morning, how they are tracking against previous years. So we are fine, no matter what other guys are saying. I don't think we created over-optimism like others before, so we don't have to correct ourselves. We feel comfortable with our guidance, and this is all empirically based, so... Please just take it like that. So with regard to... You want to take the working capital?

The other one was the pricing for Q2. So in terms of the working capital, we would expect that to turn around for two reasons. One is that the reconciliation is now mechanical and happening according to plan. And on top of that, we're going to see growth come back in the system. And that will start to drive the unflown revenue back up. So you would see a reversal of that swing from a working capital generation that happened in F23 to working capital consumption trend. in the following year. So it'll come back to a benefit to the company. Amaneba.

Amaneba Kiani, Bank of America. A couple of questions, please. Firstly, just on your loads outlook of 92% for fiscal 25, I think we're higher than the last pandemic in a flat capacity year. Why 92 would not higher? Second question on fuel hedging. Your competitors talking about a few tailwind this year, whereas yours is flattish. How are you thinking about your hedging strategy? Are you happy with that? Would you consider changing that? Then thirdly, just on your remaining fleet order, where are you on deciding the engines for that? And when would you, how are you thinking about that?

Yeah, maybe I would start with the last one with regard to the engines. So we have a number of aircraft unengined yet. I think we still have a good year to go with that regard. So we are not in a rush. We are negotiating with the parties. There aren't too many. There are two of them. But we are negotiating with those guys. And we feel appropriate from a commercial standpoint to confirm the selection. We will do that. But we have a good year to go. So we are not under pressure to make a quick move. You want to comment on hedging?

On hedging, we're pretty happy with where we are. We typically tend to stay within 10 percentage points of our peer group. We don't really think about it much other than in terms of execution. It's something that happens every month, and it's routine. And we calibrate based upon where the market is, and then it adjusts. So for us, we're happy with its outcome. We're happy with... With the instrument, as we build more liquidity, we'll look to figure out ways to use that liquidity to reduce ex-fuel unit cost. And one of the ways might be to change from zero-cost callers into call options. But at this point, we want to make sure that we... In the absence of long-term structural debt, which we're trying to retire at this point, we want to make sure that we build up more liquidity. And so we have a few other objectives to get through. Hedging is working, hedging is delivering, but it is not the biggest opportunity for us right now. We see a lot more opportunity to continue to capture the revenue environment as we expect it to increase and continue to drive down our unit costs.

I think on the load factor issue, I mean, first of all, on the principles, we are load factor active, yield passive. But any other day, the ultimate objective is to maximize revenue. And revenue is the function of the equation between load factor and yield. I don't think that there is like a written book. or a Bible on what is the right level of load factor. I don't know, to be honest, but we feel that given the current state of the business, 92% load factor combined with the yield, what we are assuming, gives us the maximum revenue. But the objective is to maximize revenue, not only one side of the equation. Maybe other guys think that for their business, 94% is a better number. I mean, Of course, we buy into the principle that the most expensive seat is an empty seat. And, you know, as a low-cost carrier, you have to be biased towards a low factor. But any other day, we are trying to maximize revenue. And we're seeing that based on where the business is at the moment, this is kind of the right number. If there is more upside to come, of course, we would take it.

This is from CD. I've got two questions here. First, you know, the stock cost... How much of the benefit you add, because you're not ramping up into the summer, you don't have the mobilization of school coming in. If you have to go around this summer, there would have been an additional cost there. So to leave that color on, what are the impacts of mobilization, just to get an understanding of what impacts you into the second half of this year. And then the second one is on the fracking with the engines. All of those 47 that are grounded only are actually on the test bed. Do you have any visibility to that level to understand where you are in terms of the engines and all of the shocks?

I wouldn't say that there's a dramatic benefit from a lack of staff cost met mobilization. I think we did put a hiring freeze in place, particularly when it comes to cabin crew, anticipating that we'd be in flat capacity. Natural attrition is bringing that number down, but I wouldn't say that there's a dramatic mobilization benefit or lack of mobilization benefit. On the engine side, Mike, was it? 30 is in the shop. 30 is in the shop, yeah. Yeah.

We track them every single day, every single gate. And we've even visited shops. We have people on site, right?

Yeah. I think this wraps up the time, right? Is there? Yeah. Okay. I think that was it for questions.

Thank you, Arby. Are we good? Okay. Okay. Well, ladies and gentlemen, thank you for coming. Thank you for your interest. I mean, I'd like you to take out of this meeting, like, you know, we deliver the financial year. I think we still have a transition year in front of us with regard to fiscal 25, but we're seeing that operations are under control, commercial planning is under control, and we are expecting further enhancement of profitability coming through the financial year, despite all the external challenges we are facing. Thank you.

Many thanks. See you in another 20 years. Many thanks for joining. This is the end of the webinar.