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Good morning and welcome to the Air France KLM first quarter 2026 results presentation. Today's conference is being recorded. During the presentation, participants will be on listen mode only and analysts will be able to ask questions by dialing hashtag 5 on their telephone keypad after this presentation. At this time, I would like to turn the conference over to Benjamin Smith, CEO, and Steven Zott, CFO. Please go ahead, sirs.

Thank you. Good morning, everyone, and thank you for joining us for Air France-KLM's first quarter 2026 results presentation. I'll start by highlighting our key achievements for the quarter before handing over to our CFO, Stephen Zott, who will provide a more detailed review of our financial performance. I'll return later for some closing remarks before we open the floor to your questions. Before diving into the details, I want to highlight a critical point regarding the quarter. While fuel prices have surged since the start of the Middle East conflict, This impact is not yet visible in our first quarter results due to a lag in fuel pricing. This is a vital distinction as these costs will weigh on the upcoming quarters. Overall, the first quarter represents a solid start to the year, defined by strong commercial momentum and disciplined execution in a volatile environment. We carried over 22 million passengers, up 2.3% year-over-year, confirming that travel demand remains resilient. Furthermore, we demonstrated our agility by swiftly reallocating capacity following the suspension of services to the Near and Middle East. Group revenues rose 4.4% to 7.5 billion euros, fueled by higher yields in our network activity and a strong performance in maintenance. Unit revenue grew by 3.4% at constant currency, supported by our premiumization strategy and reduced industry capacity in March. Simultaneously, we reinforced our strict cost discipline Unit costs increased by only 0.5% as we balanced investments in our premium offering with productivity gains and the benefits of fleet renewal. As a result, our operating result improved significantly to negative 27 million, a 301 million euro step up compared to last year. We also moved forward with our fleet modernization with next generation aircraft now representing 36% of our total fleet, an eight-point increase year over year. As I noted, these solid results do not yet reflect the full financial impact of the current crisis. Stephen will come back to this in more detail, including the measures in place. Moving to slide four, it's important to contextualize our performance within the current situation in the Middle East and the specific complexities it has introduced to our operations. The conflict has directly impacted Gulf carriers that up to conflict already covered more than a quarter of the traffic volumes between Europe and Asia through their mega connector hubs. The disruption of these flows has created significant imbalances in global travel supply and demand. Furthermore, the conflict introduced even more airspace constraints and higher spot fuel prices, all of which contribute to a more demanding operating environment. In this context, our group has once again demonstrated its resilience and agility across three pillars. First, our limited exposure to the Near and Middle East at approximately 2% of group capacity allowed us to swiftly withdraw capacity from the region, ensuring that no aircraft remain unutilized or grounded. Second, our hub-and-spoke model and diversified network of over 300 destinations enabled us to reallocate that extra capacity to markets where demand remained strong. And third, by actively managing east-west traffic, we responded dynamically to supply demand shifts, rerouting international long-haul flows through our hubs in Paris and Amsterdam while capitalizing on rising yields. I want to emphasize that while our agility allowed us to mitigate the disruption and recapture demand, the situation remains uncertain. Looking ahead, as previously mentioned, we anticipate that we will not be able to fully offset the impact of higher fuel prices in the quarters to come. Moving now on to slide five, I'm very pleased to announce the successful completion of a major step in our strategic roadmap, and that's the transfer of Air France's Orly-based routes to Trans-Avier France. This move is central to our ambition to strengthen the group's efficiency and long-term competitiveness. Operationally, this transition planned over the last three years, has been executed seamlessly. We have maintained comprehensive coverage on key domestic routes, including two daily flights to Marseille, eight daily flights to Nice and Toulouse, respectively. Load factors are already exceeding expectations and continue to build. Furthermore, operational reliability has been exceptionally strong with a 99.9% completion rate. Beyond operational success, we are seeing encouraging commercial traction The strong update of our plus and max fares reflects higher customer satisfaction with the Transavia product and a clear appetite for our premium ancillary offerings. Financially, this transition is a structural turning point for Alphonse, effectively addressing the historically loss-making domestic point-to-point segment. By consolidating Alphonse operations at Paris CDG Airport, we are already seeing improved hub feeding, greater operational efficiency, and increase booking volumes on connecting groups. Looking forward, we will continue to maximize demand, support customer migration, and further leverage Flying Blue across the group to drive loyalty. So I'll now hand it over to Steven, who will take you through the financial results in more detail. Steven.

Yeah, good morning, everybody, on this beautiful day in Paris, where it's much more peaceful than it is in the rest of the world. So let's go to page seven. If we look at the result, it gives a bit of a surrealistic view, which doesn't show yet, as Ben mentioned, the current fuel price increase, and at the same time we already benefited from all the measures we took in the unit revenue. So if you go to the picture at the right top, you see that we had a positive impact of the fuel price, and that comes that the fuel price is actually having a delay before it gets into our system. Places where it takes almost three weeks before we pay the fuel price. We have places where it is one week. So let's say on average it's around two weeks. And then you see that the fuel price impact on itself of the spot is around 107 million. And at the same time, we get the full impact of the hedge, which is 164 million. So we have a 60 million gain just out of the situation. But of course, this fuel price will get into the system later. in the month to come. If you then go to the unit revenue, you see the unit revenue is up 3.4%, but be aware that the March unit revenue is up 12%. So there is a big impact for March and that resulted at the end of today that we have an improvement of our result because the unit revenue increase is already kicking in. The fuel price is even positive due to our hedge strategy and at the same time, you see that the unit costs are quite well under control. We are at 0.5% despite the weather impact which we had in January, especially in Amsterdam. If we then go to page 8, you see the view over the business segment. So let's start on the network. Passenger business unit revenue up 5.1%. And also there, if you split it, you will see that it is more or less flattish up to February, and then it is spiking with 14% in March. On cargo, you see a slight decrease, but we should keep in mind that we had last year the front-loading because of the tariff announcements in the U.S. So last year, the unit revenues in the cargo were up 16%, and that is also reflected if you look at the cargo unit revenue in this quarter. Year-to-date, until February, we were at minus 6%, but in March, we had an increase of 7% of our unit revenues, which in total gets to the minus 0.7 if you take the mixed difference between January and March. Then on Transavia, Transavia you see a steep increase in capacity, and that goes hand-in-hand with the unit revenue decrease. Ben explained the rationale for this, so we grew, especially on Transavia France, but also Transavia Netherlands grew by the upgaging of our fleet. And last but not least, if we look at our maintenance segment, you see a minus 7 million. We have a negative impact from the dollar due to the fact that we have more maintenance revenues than maintenance costs. So the impact of the dollar is around 17 million. We saw a stronger maintenance performance in our components business, especially in Amsterdam. So that's good to see that the back on track is working there. But at the same time, we see more complications in Paris on the GE90. But overall, it's mainly impacted by the dollar. If we would not have this dollar impact, the maintenance business would go further in profitability. Then, going to page 9, where we see the results of Air France, KLM and Flying Blue. Let's start at the bottom. Flying Blue, you see a significant increase in our performance. We have now the full impact of the AMEX contract, because it gets, let's say, operational from the 1st of January, what we signed, actually, last year, and that resulted in an increase of our profitability by $32 million, bringing our margins up to 30%. Then KLM, we know that KLM had a very difficult January. It was around $18 million impact of the weather disruptions, but you see that the back on track is starting to work now. They had a unit cost decrease in the month in this quarter. So all in all the KLM performance is quite going in the right direction with also seeing that the operational performance if we keep out the snow was quite good in this quarter. So if you put back this 80 million to the results you see that they are also close to break even and they will improve let's say with around 160 million compared to last year. And then Air France benefiting from the strong improvement of the unit revenues which we just saw. And same story, we didn't have the fuel price impact yet in place. If we then go to page 10, on the top you see an increase in capacity, an increase in load factor, an increase in yield. First, you see again that the premiumization is working. So in the first and business class, you see an uptick in the load factor and you see an increase again in our yield. So all in all together, it is... Let's say 8% in terms of unit revenues. Then our premium economy. We keep on premiumization of our economy sector and you see that we increase the capacity and at the same time we increase further our yields over there and this is a very profitable segment so we are very happy that we are growing in this segment further and it's well appreciated by our customers. Then on the economy, you see an increase of 2% of capacity, the load factor more or less flattish, and then at the end it was a plus 2% and mainly driven also by the month of March. If you look on the right bottom, you see that the March impact is significant, an increase of load factor close to 3% and an increase of yield close to 9%. So you can imagine that it has a big impact on the unit revenue picture. Over the world, the West is still holding strong, so increasing capacity. In Latin America, we increase also the load factor, and you see yields going up between 6% to 7%, so strong demand over there, and we are also able to push up the prices over there since the crisis started. And then on the right, that's very interesting to see, we put them together, Asia and the Middle East. We are not so exposed to the Middle East. That's only 2% to 3% of our revenues, And you see if you put them together and we know that there's only one month in after the situation, you see that the yields increased by 8% and the load factor increased by almost 2%. And we were able also to reallocate capacity to that segment. And especially, of course, in the month of March in Asia, we saw unit revenues in that segment over the 30%. So all in all it's quite strong, even in the short and medium haul you see that we are able to increase the prices year over year to cover our increase of fuel price which didn't come yet into our system in the first quarter. Then if we go to page 11, I think you see a further evidence of our strong unit cost control. First, we had the customer conversation mainly related to the January situation, so actually if we would not have that, we would have a flattish unit cost. We gained almost 1% in productivity. We still had the impact of the Schiphol charges, and we are welcoming, let's say, the new announcements of Schiphol, but this still has a negative impact in the first quarter because the charges are not yet reduced, and so it was still increasing year over year. Then the premiumization didn't have a big impact in this quarter. That is just a seasonality impact when we, let's say, take out planes to, let's say, to put them in modification and planes are coming out. For the full year, we expected 0.5%, but in this quarter, it was just 0.1%. So I think the unit costs are well under control, and we keep on keeping our guidance between 0% and 2%. As Ben mentioned, we are taking more measures to, let's say, to keep control and to keep control of our financial results. First, we stopped hiring for the support staff. We have 500 million on discretionary spend where we are cutting significantly by reducing significantly any cost related to consultants, any cost related to internal travel. So we are cutting all the costs there which we can to the maximum. Of course, we keep on recruiting operational staff because we need them to keep our operations running. And we also will, in this 500 million, there's also a part related to training, which we will keep on continuing. Then on the cash flow, which you see on page 12, the main outlay is, of course, that after 17 years, I think, we paid now the cargo claim. So that is an impact of almost $370 million. If you take that out and you take into account the payments of the lease debt and the net interest, you see that we were improving our cash flow with around 100 million. And on the right side, you see that we reduced our net debt. We are now at the lower end of the guidance at 1.5 at the end of March 2026, which is a reduction of 0.2%. versus the beginning of the year. But we are always helped in this quarter, as we all know, by the strong ticket sales, which we still have to fly in the second and the third quarter. Let's then go to the outlook, because that is actually maybe more interesting than what we did in the first quarter. If you look at the outlook and we look at the fuel bill, you see that we have an increase of the fuel bill of $2.4 billion. That includes our hedge results, so the hedge results brings a $1.5 billion reduction of our fuel bill, but the net impact is still $2.4 billion, with a significant increase in the quarter two, where there's $1.1 billion, and it slides away because the forward curve is still in degradation for the coming quarters. You know we have a hedge strategy which we have opened, and publicly we kept on our hedge strategy until the end of March. Then we took a pause because the forward is really moving with all the news coming from the truth platform. But our teams have the room to take action if they see that there are big decreases in the market, especially for the year 2022. So they have a room of 2% of our consumption. So they have room to act quickly because before we sit together, then there's another message on the truth platform which can impact the price. So we have a technical approach. We will see in the coming weeks what we will do and how we will continue our few hedge strategy. But for 2026, we are almost 70% hedged already for the full year because we continue that part. If we then go to the The bookings, so we still see that there is travel appetite. Actually, you see that the gap in booking load factor is reducing compared to what we saw in the previous quarter. So in the long haul, it's just 1% down, where we were more in the range of 2%. You see that on the short and medium haul, it's even up. And Transavia, despite the growth in capacity, you see it's going up with another 1%. Then the big question, of course, for everybody is how much of this 2.4 billion are you able to compensate through your revenues? Now, let's go to the month of April. So based on the actuals of the first 24 days of April, we estimate that the yield in the month of April for our passenger business will be up 1%. 9% year-on-year X currency, and that reflects approximately a recapturing of around 60% of the fuel price increase in April. So that is what we are currently seeing. So all the tariffs, let's say the increases in price which we put into the market, are there to compensate also the fuel costs, but we are not able in the second quarter to fully compensate that through our revenues. Then if we go to page 16, we have slightly downgraded our capacity. We still see that for the quarters to come, especially for the summer, there is still with the current fuel price, it's still profitable to fly all these routes. We look at the flight contribution level. And as we all know, the prices in these months are at such a level that you can even compensate for the higher fuel prices. Then the question mark comes more, what will happen in the winter? And I think nobody knows yet what will happen in the winter. And there we take a little bit more cautious approach because we need to act. If this fuel price stays at the current level, we will, of course, be agile and will reduce our capacity. So for the long haul, where we previously guided at 4%, we are now at 2% to 4% for the short and medium haul. It's stable, but we went down actually a little bit in our own view, but it is more or less stable year over year. In Transavia, where we were previously at 10%, we are now at 8% to 10%. So we reduce our capacity kindness with 1%. Of course, we take tactical actions. If you see that the flight contribution is negative on flights, but for the moment, we see quite good bookings coming in also for the summer. Then on page 17, now group capacity I already explained. Unit cost, we keep our guidance. So 0 to 2%, including 0.5% related to the premierization. On the net capex, we will also act on capex. So we will be very cautious on our investment committees. So actually everything which is not necessary, but if it's still necessary for our strategy, we will continue on the capital expenditure. So we have discussions on the IT side. but for sure we are continuing our innovation over there to make sure that we are getting even stronger out of this situation. But it will be below the $3 billion compared to the previously $3 billion which we stated to the market last quarter. And then on leverage, the Net Depth Current EBITDA, We were in March at the 1.5. We expect to end more at the higher end of this range, but that, of course, all depends on the circumstances which are happening in this world. So with that, I hope that I gave you enough coloring so that there will be no questions, but probably that will not be the situation. So I hand over to Ben.

Okay. Thanks, Steven. So we're now ready to take your questions. I think the operator will give the instructions on how to do so.

Ladies and gentlemen, if you wish to ask a question, please press hashtag 5 on your telephone keypad. If you wish to withdraw your question, please press hashtag 6. The next question comes from Alex Irving from Bernstein. Please go ahead.

Good morning. Hope all is well. A couple from me, please. First of all, how do you think about capacity planning, not just the short term, but the longer term? And what are the merits of bringing forward the retirement date for some older sub-fleets in the higher fuel price environment? Which ones of those would make the most sense? And second, why did you only cut 1% from capacity growth for this year? Why are you so confident that yields will continue to absorb the additional fuel cost into, let's say, Q3 and beyond? And if I can sneak a related question in here, how much of your strong performance do you think is due to temporarily attracting more than your natural share of transfer traffic given the strikes in Frankfurt? Thank you.

Hi, Alex. Okay. Well, my initial reaction, probably the same as yours, is why don't we have the opportunity or why shouldn't we be canceling more flights or pulling airplanes out, especially older aircraft? But the teams here have done extensive studies. on which flights would be still flight contribution positive despite the future forward curve of fuel prices. So almost 99% of what we had planned for the summer will be flight contribution positive. So we'll have some slight adjustments, minor adjustments to capacity, and we plan on maintaining the entire fleet of the older airplanes, which would include the Airbus A330s at both Air France and KLM. And depending on how things play out for the latter part of the year, we could look to readjust that and early up the retirement of those airplanes. We had already scheduled to retire the fleet of A330-200s at Air France next year and shortly after the A330-200s at KLM. But as of today, we anticipate to fly pretty much the whole schedule of the two main airlines in the group through the end of the third quarter.

Yeah, so I think that gives a light of the 1% capacity. So we don't expect that much capacity cuts coming from our network. The prices are really steady. and we will adjust if needed, let's say, in the winter season.

And with respect to the gains or the incremental revenue that we're seeing because of the ongoing strikes at Lufthansa, yes, well, it's now going on several times that we've seen this, and naturally, with flights being relatively full with what is going on in the Middle East, we are seeing yields going up by default more so than It would have been the case that we looked on that we're not on strike. And then, of course, on routes going westbound, we are seeing increases. So, obviously, that's positive for us, and we'll continue to watch that. But, yes, definitely positive for us.

All right.

Thank you.

The next question comes from Jared Castle from UBS. Please go ahead.

Thank you. Good morning, Ben, Stephen. Gerrit, you need to do something on your connection because it's difficult to hear you.

Sorry, is that better? Much better.

Okay. I mean, you were saying that, Stephen, that you're passing on about 60% of the increase in the fuel cost. And I guess for the full year, we're talking about over $2 billion increase. I mean, should we assume that the net headwind on your earnings is approaching $1 billion? Secondly, if I may, you also spoke about CapEx being below $3 billion. Can you maybe quantify kind of the magnitude in terms of how much below $3 billion and, you know, the areas that you might look to cut CapEx, please? And then just lastly, I mean, you've obviously said you're going to progress with TAP. So, you know, just any initial thoughts based on, you know, the initial due diligence or views in terms of, How do you see that opportunity? Are you more excited, less excited? Do you think you can do a lot more with it than maybe you initially thought you would be able to? Thanks.

Okay, Gerrit. The first is 60% is a proxy or for April, but we have, of course, the actual yields for the first 24 days, and we know already what we have sold, so that is not so difficult. I think the 60% is more a proxy for the second quarter. I think for the third and the fourth quarter, as the fuel price is still very volatile, it's very difficult to say. So I'm not going to take any bet on this at this moment. But you will know that the fuel price is still in backwardation. But if there is happening something tomorrow positively, because that can sometimes also happen, then it will also steeply drop. So let's take it more for a proxy situation. for maybe the second quarter than for the full year. I would not take anything for that. And then on the CAPEX, yeah, what I said, but it's strategic. We will continue for sure. We look at the innovations, but we try to limit it. And what we can further delay, we will further delay for the most. But let's say we are already in, as you know, for four months, and so don't expect that there will be a CAPEX split of 20% or something. it will be more limited. You can more talk about, let's say, a range between 5% to 10% or something. That is what we are going to do.

And I think on the CapEx, Hi, Jeroen, I think on the CapEx mitigation, we went through this exercise during COVID, so we have got a lot of experience in this. There's a chance that just naturally we may take a few delays from Airbus, which will push CapEx into next year, not to not linked directly with this crisis. So, as Stephen just mentioned, we will see some reduction in CapEx, but we're not looking at a massive reduction at this point. With respect to TAP, so we've, as you probably know, we put in a non-binding offer, and the next phase is the binding offer, which will be in the next couple weeks. And we have intended, we have indicated our intent follow through. There's only two bidders, ourselves and another party. And the strategic importance of TAP to us remains the same. The geographical location of Lisbon to build on top of our already strong position in Latin America is still very important. We have our historic relationships with an airline in South America. Brazil being our most important market, so the way we view Latin America has not changed whatsoever, and we'll put through the strongest bid that we can.

Yeah, and on top of that, let's say we will do a more in-depth due diligence. So, of course, the data room, because it was open to, let's say, all the competitors for this bid, We will now do an intensive due diligence on, let's say, the financials and also on the legal. So that is what we are going to put in place in the coming period. And then we come most likely with a binding offer at the end of July, at the beginning of August.

Thank you.

The next question comes from Harry Gowers from JP Morgan. Please go ahead.

Yeah, good morning, everyone. A couple of questions from me. The first one, I mean, you've given the Q2 kind of book load factor in the presentation, but any concerns on forward bookings when you look a little bit further into peak summer and Q3? And, you know, are the elevator ticket prices starting to put people off traveling at all into peak summer? And then second question would be just around Asia . Harry, Harry, Harry, Harry.

Harry, the first question was pretty clear. The second question, can you get closer to any DSM antenna? because we lost you no it's not better enough no it's not better but why don't you send an email to Michiel on the second on the other questions and we'll get back to you later I can already come with an answer on what you say about the peak summer and what's Q2. So you see Q2. For Q3 we see more or less the same booking trend as what we saw last year. Of course the pricing is different because we increase our prices related to the fuel price, but we see the same kind of trend. So it is not weakening, it's also not strongly increasing, but we see the same trend as what we have seen in the summer for 2025 and that also gives us confidence keep the capacity, of course, in for the summer. Any other questions, please send it to Michiel and we will answer them later.

The next question comes from James Hollands from BNP Paribas. Please go ahead.

Thanks very much. For what it's worth, I think I can hear all my analysts and mates pretty well. I might be your line, but I'll give it a go anyway. Just wondering if you had any comment on jet fuel shortages, clearly a topic of the moment. So I was wondering if you just wanted to give an update on whether you are seeing any shortages, whether it's Asia. I assume you'll find in your hubs. And then secondly... Clearly you guys are closer to the regulators than we are. I was wondering if you were expecting any fairly immediate EU action on some regulation changes such as allowing cankering, that type of thing. I hope you could hear that. Thanks.

Regarding the fuel shortages, we have not got any issues today. We don't see, you know, from the Dutch state or the French state, We've been working very closely because it's not only aviation where there's a concern of fuel availability. In the short term, we don't have any indication there'll be an issue. Outstations, you know, we have six stations around Asia where there could be a concern. At least on the next short while that we're looking at in terms of stock, what could be available in, you know, after the next two, three months. But today we're not in a position to give you, you know, a viewpoint. Our assumption today is that we don't have any issues with stock, at least through the end of Q2.

And on the regulations, what is for us very important, and we have those discussions also with the government and with the EU, is that we have not a difference. Let's say that it's allowed to use yet fuel with the specification of the U.S. because we are flying on those planes continuously with U.S. fuel. And second, it is more a difference, if I understand it well, related to freezing temperatures, which are not expected at all to happen during this summer. And by the way, we know that in the U.S., it's usually more colder than it is in Europe. So we have to get an alignment over there so that we have access to get fuel coming in from the US.

Okay, thanks.

The next question comes from Stephen Furlong from Davie. Please go ahead.

Yeah, morning, Ben and Stephen and team. Would your expectation this year be that the transatlantic, there's certainly gonna be a decent element of pricing power, given, for example, all of the US airlines are on heads and talking about recapturing a increasing proportion of fuel as they go through the year. And then can I just contrast that with short haul? Maybe it's more of the low cost sector, but some leisure companies, airlines have reported delays in bookings and I think some of this is the media comments that there could be cancellations because lack of fuel so kind of it's related there to what Ben you said just in the previous question that I think the media commentary on supply is slightly distorted from what is reality. Would you agree with that or not? Thank you.

Hi, Stephen. Yeah, on long haul, pricing pressure, yes, we're somewhat hedged, whereas U.S. carriers are not. So on the transatlantic, we are and we expect some increased yield because of that situation. So that should be positive. However, we are in a JV situation. across the Atlantic, so some of that will be shared with our partner. But, yes, that's a positive. In terms of demand, as of yet, we're not seeing any impact from what we expect would be associated with any fear of a lack of fuel and a potential cancellation of flights. Long haul. On the short haul, we have quite a bit of exposure with our low-cost carrier, Transavia, to Northern Africa, where the segment of customer is a little bit different. It's a lot of VFR traffic to Algeria, to Tunisia, to Morocco. So the booking patterns and the reasons for travel are quite different than someone doing a city-type break. So we're not seeing, as of yet, any change to those patterns. We do expect, depending on what kind of messaging goes out and how how customers who take those types of terms might react to the current situation and probably be in the same position as other low-cost carriers. It is a bit early. We're not seeing any material yet for the summer. But on a big portion of Transavia's capacity, it is assigned to markets, and we have segments of customers which don't fall under a typical intra-Europe type of segment.

Great. Makes sense. Thank you.

The next question comes from Andrew Lobenberg from Barclays. Please go ahead.

Hi, Ben. Hi, Stephen. Can I come back to the two acquisitions? I know you were asked already about TAP, but how are your thoughts about that transaction in the context that we're limited to a minority stake at the moment? How Concerned are you about it being a minority? And then can you talk to us a little bit about SAS? I know the competition policy process evolves, but I think they're unhedged. So does that mean that you get them for a very advantageous price, since I think the price was just straightforwardly linked to their EBITDA. So a little bit on that. And then if I can hop in on, I think, the question that Harry asked, which is, Asia and the unit revenue windfall. You had over 30% in March, you told us. How are those Asia unit revenues looking in April, and how quickly do you expect them to drop away? As Harry said, the Gulf carriers have got a lot of planes in the sky, even if they're quite empty. Thanks.

Let me start. So yes, on SES, as you know, we have an EBITDA multiple and let's say it's based on the net debt. So for sure the current circumstances have an impact on the price, but we also agreed a minimum price with the private equity firms. So that is also in place. We cannot get the company for zero if that is your expectations. And then if we go to April, Then on April, indeed, we see the same trend as what we have seen in March. So there's no impact indeed yet from anything for booking away to the Middle East carriers. But, of course, receipts are available and they will be put in the market. The question mark is how many people are taking that route at this moment. But up to April, we didn't see any impact of that from bookaways.

Hi, Andrew. And in terms of maintaining yields, as we've seen on Asia, I think what is turning out to be a great opportunity for us is customers that we did not have or customers that we used to have trying our service, flying nonstop on routes where they may have been making connections before, is a good opportunity to acquire customers at a much lower price than if we were just going after them in a regular way. and it gives a good opportunity for our sales team to leverage a status match with Flying Blue, et cetera. So it's a great opportunity for our sales team, despite this crisis situation, to go after new customers that we hope we could keep in the future, so obviously specifically corporate customers.

Thank you.

No, we're not finished yet, Andrew. And then you can come back. And then we had an answer. Because it was also the question before. So on the yet view, so we have hedged, let's say, if you take the 70%, for instance, in Q2, that is the oil package for sure. And then there is a part which is related to the liquids to make out of oil products. And there we are around 50%.

And do you have another question, Andrew?

Yeah, no, sorry. I asked first. Actually, I didn't ask about fuel, but that's interesting. And how you feel about a minority state rather than a majority?

Yes, so let's say we cannot say anything about that at this moment, but we know what are the conditions from the Portuguese state, and that is, let's say, the 45%, which is for sale. So we know what are the conditions from the Portuguese state, and we are in discussions with the Portuguese state how we get back to that.

Okay, thanks.

The next question comes from Antonio Duarte from Goodbody. Please go ahead.

Good morning, Ben, and good morning, Stephen. Thank you for taking my questions this morning. The first one is related with the cargo yields. Of course, Q1 impacted the comparable, impacted from the front landing seen in Q125, and also aware of the unpredictability of cargo yields. But if you could give us some color going into Q2, that would be appreciated. And my second question relates to your unit costs, ex-fuel, etc. In your FY25 results, you seemed confident that you could aim towards the lower half of your range. And now considering, of course, all the dynamics that have been on over the quarter, as well as the ship all temporary discount on airport charges. If you could give us some more color in how confident you are regarding this, it would be appreciated. Thank you.

Yeah. Thank you, Antonio. Let's first start on the cargo yields. So the cargo is always a very short booking window. So it's very difficult to predict exactly the future. We put in place a system that we will recover the fuel part of our revenue. So that is in place at the moment and it's also what we're expecting. And if you look at where we are at April, we are even slightly better than what we see on the passenger business. But then again, we only have the April numbers in. We can look at the two weeks bookings ahead and then it's still signed. We need to keep in mind that, of course, the Middle East carriers kept their freighter still flying and they're still having also their planes flying. And the package is less worrying where to go. So that is true. But, of course, people also avoiding the Middle East given the fact that they want speed for the products and they want to be sure that there's no interruption. For now, we see quite good cargo yields, but the question mark is where it will go further because we don't have any bookings in, but we put in the pricing mechanism towards the market that we will get a part of the fuel increase through our revenues. Then on the unit cost, I didn't say that we are ending. So we ended the first quarter at the low end of the range. we still think it will be between 0% and 2%. And, of course, we're welcoming the simple discount, so that's helpful for our unit cost. But we are confident with the range we give to 0% to 2%. Of course, if we cut capacity, that has an impact on the unit cost. But at this moment, we don't see that it will have an impact on this range.

Just one more comment on the unit cost and how that relates to, the recent announcement by Schiphol for the temporary reduction in their costs. This is the first positive news we've had in a long time out of the Netherlands when it comes to costs associated with operating at Schiphol. I mean, the government with taxes and charges at Schiphol, so look at it very warmly. I mean, it's very good news. And the discussions we've been having with the Dutch state regarding how we make Schiphol and the Netherlands much more – competitive for connectivity is going, you know, in a much more positive way than it has in the past. As you know, as we all know, Schiphol and the Dutch state have a long, long history on overperforming from a connection perspective, and the value of that and what it brings to the Dutch economy is now at least being, you know, is being recognized by people who were not in positions of influence in the previous government, so we're really hoping that we can translate that into something that turns positive for us, and then one of the positives, of course, is a lower unit cost.

Thank you, Jeff.

Ladies and gentlemen, as a reminder, if you wish to ask a question, please dial hashtag 5 on your telephone keypad.

next question comes from mark zack from kepler shivru please go ahead hey thank you for taking my question um first just the clarification when you discussed the operating results from klm of france separately and it felt like you only you said that only for france there was a delay in the fuel cost booking. Is that correct? So for KLM, the operating result is already kind of reflecting March fuel cost. And then related to that, obviously for the group with higher revenues that you were already able to harvest but fuel costs not yet reflected, one might say that the results are a bit skewed. So what would be the additional fuel costs in March if they were like booked on the spot without any delay due to contracts or anything? And then the second question, I guess you also heard that one of your US competitors talked about pricing power and industry in the latest earnings call and said that overall airlines have probably underpriced the services. Would you agree to that? And assuming that fuel prices come down later this year or next year, would you expect that ticket prices will not reflect the fuel price reduction, rather stick at higher levels? Or would you expect that ultimately ticket prices will come down to really reflect the entire potential drop in fuel prices once the crisis is over? That's my question. Thank you.

Thank you, Mark. Let's first start on the delay in fuel price. Sorry, that was not my intention. They both benefit from that delay. So they both have a delay in their systems, and it's actually more or less working the same. So that is not at all my intention to say that KLM didn't benefit from, let's say, the fuel hedges versus the spot. And your question about the spot, the second one, at group level indeed, so just maybe to restate it, maybe I was not totally clear. So if you look at what we paid for the spot, it had an increase of 107 million impact in March. That is the impact in the – and it's in euros, so in dollars you can increase that number. And then on the hedge, we got back $164 million. So there's a total gain of $57 million, which is reflected in the 86, where there's also a part related to February because we had a positive impact on the Q price year over year up to the end of February. So to make it completely clear, I hope this answers your question. Then on the pricing power, yeah, of course, there is a big relation with the current situation. So it's part of the fuel price, and we are quite well hedged compared to, let's say, all the competitors in the world. So at certain areas, we gain, of course, pricing power to increase prices for that reason. But if oil prices and fuel prices are getting back to where they were, I think we get more to the normal pattern what we see, but we still expect that we can increase our unit revenue because we have the premiumization strategy. And we also have the strategy more to gain from our domestic market than from the connecting market. So it is really focused on the premium and to make sure that we benefit from that in terms of unit revenues.

Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for closing remarks.

To who joined us today, thank you very much, and we'll see you in three months.