Ladies and gentlemen, thank you for standing by. I'm Constantinos, your current call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the first half 2022 financial results. All participants will be in listen only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman. Mr. Vassilakis, you may now proceed.
Good afternoon, everybody. Welcome to our six months call. We're happy to report that the second quarter of 2022 was a lot closer to normality and a lot closer to our regular performance than we've seen in the COVID years. Therefore, in the second quarter of the year, we approached the market with roughly 86% of our pre-COVID ASKs, and we achieved 94% of the revenue that we had in the same quarter in 2019. An improvement in terms of how much we approached our pre-COVID numbers and revenues versus ASKs offered to the market.
Of course, a very significant increase relative to an encumbered quarter of 2021 from EUR 108 million of revenue in the second quarter of 2021 to EUR 327 million, just 6% below 2019 and 200% over 2021 in our second quarter. The corresponding results in terms of passengers were obviously in the same direction from 1.2 million last year to 3.2 million this year in this quarter. A very significant improvement towards normality in load factors, reaching 79.2% from only 66% the year before.
Despite, of course, a highly inflationary environment in various elements of costs, including the dollar and most intensely than anything else, the fuel. We did manage to achieve a positive result in the second quarter of EUR 17.8 million pre-tax and roughly EUR 11 million post-tax, which is 56% of the equivalent performance, I'm sorry, of 2019. I think the most important thing to say, considering the course of events of the year, is that there was a very gradual and, with an exception of about 4 weeks around the initiation of war in Ukraine, a very gradual and consistent build of demand, bookings, which led us already in the second quarter of the year while we still had flown revenues lower than 2019.
While the activity was lower than 2019 to have solid revenues, basically cash inflow to the company which relates to the potential and the value of the forward months to be actually quite a bit higher in the second quarter of 2022 than this equivalent quarter even of 2019. Which of course indicates not only strong cash flows, but more importantly a strong quality of demand, both in terms of passenger count, but also in terms of yields for the summer. Indeed, since we are now towards the end of the third quarter, I'm sorry, we can say that the third quarter performance has been very much in line and even ahead of our expectations in the beginning of the year and in the course of the second quarter.
Therefore, that we think this has changed our expectation of profitability for the full year, strengthening an expectation for a positive result, and indeed being in a position to predict that for the third quarter, which typically for the company, the result of the third quarter is in excess in terms of profitability, in terms of the total result of the year, that the result of the quarter itself, the third quarter for 2022, will be certainly no less in revenue or indeed no less in profitability in terms of absolute number for the quarter than it was in 2019, which of course was our best year, including for the third quarter.
Very much a positive trend driven by several factors, of course by the worldwide and European-wide recovery of demand, the special, I would say appeal of Greece, where we have seen flights to Greece recovering significantly, more substantially. Indeed, they are one of the few countries in Europe, the only country in Europe, where EUROCONTROL reports more flights to, for the summer months, relative to 2019. Practically also the only country where the numbers of arrivals on a year to date basis by the end of August for the overall country are very, very close to 2019 levels despite of course, the very heavy shortfall of the first quarter and the second quarter, which was made up, in arrivals on the third quarter.
Greece, a very attractive location, of course, presenting us with an advantage and a disadvantage. Advantage in terms of customer demand, disadvantage in terms of the fact that many airlines, a low-cost network, have actually flown Greece to Greece with significantly higher capacity than in 2019. Significantly over 100%, 120, 130% of 2019, even though in their overall, performance, since 2019 they're actually lower in recovery than us, but a hell of a lot more investment, to our country.
Within that environment, which is strong in demand, but also very strong on competition, we're happy to say that we seem to be achieving very positive numbers that are significant enough in improvement in quality to compensate for the largest part of the significant increase in the various different kind of costs which come with of course, unprecedented level of inflation, increasing dollar, increasing fuel, and especially jet fuel, and of course, interest rates at the same time. A very dynamic course for the year.
We are happy that we have achieved actual growth over the levels of 2019 during the summer months relative to our performance from our bases in Heraklion and Thessaloniki, where the market in one case in Heraklion is growing, but in Thessaloniki, the market is contracting relative to 2019. We're actually gaining in absolute numbers in Athens, which is still in a certain way affecting our performance because Athens and Thessaloniki are the only places in Greece, the only main airports of Greece, where we've got overall as a country, lower numbers than 2019.
In those in both those airports and of course in Athens, which is the most significant hub, the only hub and the most significant base for us, there the numbers are still lower than 2019, but recovering in a very strong direction. There we're retaining our share, while in Thessaloniki and Heraklion we are increasing our share. Overall, I would say that the status of Greece as a country that is appealing is up. The competition is significantly stronger than the past, and still Aegean is performing very well and recovering quite well. I think this has to do, of course, with our relationship with customers and how we serve them.
It has to do, of course, with the gradual increase of numbers of the new A320neos and A321neos in our fleet. This year was a big year in arrival of aircraft. We were supposed to receive a total of 12 aircraft for the year. There have been delays, significant delays in the delivery of the aircraft. The entire logistics chain in production, in engines, in different areas of logistics, as you know, have been burdened by the recovery post-COVID and by the resurgence of demand. Therefore, we were not able to achieve the expectation of the number that we were expecting, and planes are typically delayed between 2 and 4 months.
Their gradual entry into the fleet definitely gradually changes our economics and allows us to partially offset the inflationary pressures coming from the, what we call environmental parameters that affect all airlines and airlines in Europe, which of course, unfortunately include the rate of the dollar relative to the euro. Our investment in aircraft is paying back. We were able in the summer to achieve a load factor of 84%, which is very close to the levels we were during 2019, about a couple of points below. Due to the average increase of the size of aircraft in terms of passengers per flight, especially in international flights, we are a little bit higher.
Also, it's been, we have to say, an important year because we have effectively completed a very significant effort which involved exiting from the type of the Q400 by Bombardier to enter into ATR 72-600. A large number of aircraft coming in, nine aircraft in total between November and June this year. A complete overhaul, of course, of retraining our crews, retraining our technical staff in order to accommodate the new aircraft type. I think a timely introduction from the point of view that the fact that these aircraft are significantly more efficient, fuel efficient than the Q400, which is also a positive evolution for us.
However, a difficult path to be performing in the face of the high number of acceptances of new aircraft and high number of redeliveries of older aircraft that we are going through due to our main A320neo delivery process. Now, on the negative side, anyone involved in the airline business this summer is very aware, and passengers are aware too, that there were problems across the entire chain in terms of the operation of airports, in terms of the speed of security, in terms of the amount, the number and the experience of handling agents around Europe, in terms of ATC delays because the space was jammed by the closure of Russia and Ukraine as airspaces, and therefore more aircraft go through central corridors of Central Europe, causing more delays.
All these things put together with logistics issues which have to do with different suppliers and different production have created certainly a very difficult operating environment, where on the one side, we're very happy to see strong demand and indeed demand that allows for yields to partially compensate for the fuel levels that we've been paying. At the same time, not being able to serve our customers with the quality levels that we would have liked to have had in terms of on-time performance and of course their overall experience in airports, baggage handling and whatnot. This is something that all European airlines face. I would like to say that Greece has been a couple of clicks better, and also Aegean has been a couple of clicks better than the average. We haven't had cancellations.
We haven't had cancellations to a great extent because we made a significant investment in training people before COVID, especially pilots, and we were able to increase our our headcount again after COVID in a much more efficient way than many of our competitors. Therefore, we were able to avoid cancellations, which are definitely the most frustrating thing for customers. However, the other elements of performance have also suffered, and as a result, we have been very active to be in contact with our customers and try to mitigate the effects of these different unpleasant experiences with communication, with small improvements in their loyalty program, with small gifts, in a way to show that our airline is always closest to the customer, even in times of significant difficulty in operations like this summer.
Having said that, to a certain extent, some of these issues are to be expected when an overall European system goes from essentially idle to the sort of spring increase of return and then summer peak of return of demand. It's good to note that from the end of July and on, we've been on a steady path of increase of all the elements of qualitative performance that affect customers. Also we have been continuing our investment in deepening our loyalty program in terms of offer to our customers. We've introduced offers that allow our customers to bundle tickets on specific destinations and achieve lower prices. We've invested in our lounges and continuing to invest in our lounges in renovation and expansion throughout the year.
We are very eager to capture and take advantage of the qualitative shift in the mix of people coming to Greece, and we're very eager to serve this, let's say, more demanding customer base, which is also able to pay a little more. We're very happy to note that our club class composition of traffic has steadily increased both for our domestic and international service, and this has been an important part of bringing up our revenues and our yields. Definitely, that's a direction we want to continue.
Overall, certainly it's been a very, I would say, encouraging return and reconditioning of our ability or reconfirmation of our ability to generate cash flows, revenues and profits, which of course we have to say, as strong as it has been in the summer and as well as we see it continuing into September and October, we have to have a caveat of risk for the November, December part, the part of winter where we know that leisure demand towards Greece is very minimal and where we expect, of course, the effects of the high cost of energy to the consumer, European consumer and the Greek consumer to be most, I would say, visible.
Therefore, a very good performance and forecasted performance, not only for the third quarter, as we see today, but a significant question mark about the weight of winter and of course, the way that things will normalize from the point of view of inflation, of fuel, of fuel levels and, expectations of demand, for next year, which is too early to gauge. The positive, the two positive elements to keep, and I will stay there and then open the floor for questions, is that the country is performing very well as a destination, A, and B, despite significantly increased levels of competition, exactly because the country is attractive, Aegean is very much holding its own in terms of revenue reconstitution and in terms of direction of profitability, even within a very adverse fuel and US dollar environment.
We hope that as our refleeting and overall reorganization effort continues, we will be able to strengthen our competitiveness, and be able to take advantage of the shift of demand towards our country. The fact that after all, our country, unlike Europe, had a very, very different last 10 years with very depressed consumer spending, very depressed real estate prices, very depressed employment levels, and these things are now recovering. Even within a weaker European environment because of energy, we expect Greece, both because of tourism demand, but also relative improvement of employment and real estate pricing and the investment climate relative to four, five, six years ago to fare on a relative basis better. This is my opening statement.
Happy to take any questions so we can clarify some things that I basically covered on a very basic direction and sense. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of Natalia Svyriadi with Eurobank Equities. Please go ahead.
Hey. Yes, hello, good afternoon, and thank you for taking my question. I was wondering if we could talk about a bit the jet fuel prices, the fuel cost increase, and if you have a hedging for the next year and if you believe this, you know, the rate, the increase in prices will, you know, actually manage to cover and all with all the costs going around. This is on the cost. I was wondering also if you could give us, you said that they have the delays and your refitting schedule, if you could give us more details how many aircraft you actually got or you are expecting till year-end on this basis. Thank you.
Okay. I will start from the end because that's the simplest one. We were supposed to receive 12 aircraft for the year. Materially, eight of them were supposed to be ahead of the season, meaning by the end of June. By the end of June, I believe we had received four aircraft. More or less, we operated in the peak with four aircraft, four new aircraft less. We compensated by retaining some of the older aircraft, but we had four younger aircraft less than expected. These aircraft are being delivered these months so after the season to a great extent. For the overall year, the effect will be that from the 12 aircraft, we will receive 10 of them.
As you understand well, for the seasonality of demand to Greece, receiving aircraft in September, October, November is not very much used when you haven't used them in the summer. In the overall year, only two aircraft will be pushed on to the next year. Unfortunately, we operated this summer with four new aircraft less than we had expected. We received, by now it's up to eight, I believe, our acceptances. We only flew the full summer with four of the new ones that we received this year. To be fair, this is if Airbus is performing at level 90, Boeing is performing at level 60.
In a way, we should be thankful that we have only the delays of Airbus, although if there are any people from Airbus on the phone, I will tell them it was a terrible effect to Aegean and to everybody else. That's the part about the aircraft delays. Of course, it doesn't change the numbers that we eventually get just the arrival times. The repatriation, the reclaiming of our pre-delivery payments. It affects our operating costs to some degree because we operate a lower mix of new aircraft, and it affects our cash flow because we get less of our money back or we delay to get some of our money back from the PDP payments.
In terms of hedging, we I think you know that we've been around 45%-50% month by month this year, and we are at 25% for next year. Of course, the levels where we are hedged for next year are lower than what the spot rate now but higher than the rates that we had enjoyed in our hedging this year. In terms of predicting where the fuel will go, well, I'm sorry, but you know I would be doing a different job if I could do that well.
I'm not gonna say anything other than to say that what has affected us in the last four months more than the price of Brent has been the jet fuel crack spreads, which means that what's pushing up the cost for a lot of airlines, and there's been a lot of articles about that, is the shortfall, relative shortfall of jet fuel production by various refineries in the European area. That's actually what has sustained jet fuel on a significantly.
Today, we're paying the same jet fuel prices we were paying in March when the Brent was $114, and today the Brent is circa $92, and we're paying the same jet fuel price, which means that the spreads of the refineries are significantly higher because the demand supply equation leaves it there. That reconstitution of refineries shifting to jet fuel supply is equally important to us and all the other airlines as the reduction of the price of the Brent. I think that's all I can tell you on that direction.
No, that was very clear. Thank you. Thank you.
Oh, I'm sorry. One more point. I think what's been established this year is that when you have a cost that is so common across markets, you see that airlines have to discipline their strategy in terms of what they charge, because they have no other choice. Indeed, we have heard from many people in the industry, most famously the chairman of Ryanair, who, of course, as a company and as a person have championed in the past the super low fares, who has actually stated that we should expect fares to be going up for quite a bit because that's where inflation and that's where fuel and that's where the overall operating parameters within Europe lead.
It's clear that we're looking at that direction, and it's something that has to be applied by all airlines, at least in the next couple of years, where we expect between inflation, commodity prices, interest rates, and everything that is constituting the cost base, including of course the rate of the US dollar to be in disadvantageous levels.
Okay. Thank you very much.
The next question is from the line of Achal Kumar with HSBC. Please go ahead.
Yeah. Hi, good afternoon, and thank you for taking my question. I had a few questions, please. First of all, in terms of network, so basically, of course, you've been consolidating in Athens due to, of course, seasonality factor and the competition. Now, given that the recovery in Athens has been slow, although recovery in beach routes are quite fast. Do you think you will have some changes in your network strategy, and you'll deploy more capacity in beach routes rather than Athens? Secondly, do you think this winter could be rather a weaker winter as compared to the last winter?
I mean, the pre-COVID levels because the recovery in Athens is going to be slower than pre-COVID, do you think? That is my first question.
It's true that starting from 2021, the recovery of the regions was higher than the recovery of Athens initially because people were concerned about basically, you know, large concentrations of people in cities, and they preferred sort of less urban destinations. We have seen that trend gradually mitigate, but it's true that the increase of the resort, I would say the island, areas have been significantly higher. Now, our ability to compete is reliant on network flows, and it is reliant on a certain amount of balance between incoming and outgoing passengers.
Because Athens and Thessaloniki are the two main cities of Greece where you can expect to have international routes and more decent balance between incoming and outgoing passengers, meaning leisure incoming and Greeks traveling for business or leisure themselves to a certain degree. Those are effectively the only two places where you can see that. They will always remain at the center of our strategy, and we will always attempt first to develop from these two areas. The other thing what we have seen is that, of course, it's better to concentrate your operations in by having more aircraft in more significant, let's say, in more significant airports rather than trying to spread yourself too thin. Heraklion has become, which is the main airport of Crete, also with Chania, another focal point of development.
What I can say about our network strategy going forward, you should expect to see our growth to come from Athens, from Thessaloniki, from Heraklion and Chania, not from the smaller airports of the country, regardless if they are developing in a positive way or not. The reasons are because of the balance of incoming and outgoing to some degree, and because of how different and how much better the seasonality, of course, is in Athens and Thessaloniki. If our operation is seasonal by a factor of two today, if we attempted to grow significantly more from the islands as opposed to from Athens and Thessaloniki, our seasonality would become a factor of four, and that would make it very difficult to have a profitable operation.
Therefore, I think you should consider that our network strategy will remain concentrated in Athens, Thessaloniki and Heraklio, and that the growth is gonna come primarily from there. That the fact that two of these places haven't recovered yet to a full extent it just allows us some more opportunity for recovery, I hope, in the years to come. We're not gonna shift to a more island-based operation.
Right. Are you expecting winters to be weaker than pre-COVID levels?
Well, I would hope they should not, because our winters in Greece were already extremely weak. In fact, in the past, in the winters, there was very little margin creation in the winter to support our fixed costs. Therefore, as you may recall, we would tend to lose something between EUR 15 million and EUR 17 million per month for the difficult months of winter and the worst months, of course, which are the big Q1 months. I would not expect our operations results to develop worse than that.
Especially this year, because there is this whole financial and psychological, I would say, you know, issue with what's going to happen with energy, gas supply, petrol supply, electricity costs in the winter in Europe, and because there is this measure of uncertainty, I think it's difficult to make predictions. Actually, I would expect things to gradually improve in winter because in the past we had a low, very, very low starting point. However, this year I don't think anybody wants to make predictions for November, December or January, because of the whole energy crisis situation.
Right. Fair enough. My next question is around your fleet strategy. Coming back to the last question and then you were discussing. In terms of fleet strategy, now of course there have been some delays. My first, I mean, couple of points here or the questions is that, are you going to extend some of the leases which are going to expire next year? I mean, because previously I think you were not very clear and it was left to the demand recovery. Now what are your views in terms of extension of the current leases?
Secondly, because the high energy prices, the demand for the secondhand aircraft is very low. So if you're going to hold the leases or extend the leases, what kind of option would you have to renegotiate the leases so that that could offset the higher energy prices, please?
Well, okay. First of all, the one thing that again this year has shown is that you do need to take certain precautions so that deliveries do not affect your ability to operate. Because when you have such a short season, effectively four and a half months, five months to make the substance of your profitability, you know, and then you're facing very weak winters, it's very important that you are able to operate during this time with the right fleet and the right amount of fleet. Therefore, yes, you do become a little bit more reluctant to let things go unless you're absolutely certain that the delay issues are addressed.
I would expect yes to still allow a lot of the aircraft that expire to go, but certainly also to extend some. There's enough healthy competition there between the suppliers, which as you correctly say, on principle would rather see their aircraft stay with you so you can reduce a little bit the cost. However, we have to note that the main thing that will support you is the gradual increase of the components of the new aircraft in your fleet and the fact that gradually going forward by winter, in the winter periods you use only your effectively only your new fleet or by 80%-90% only your new fleet. The older part of the fleet, which is retained, is flown for a few months in the summer to complement the additional capacity.
As a result, when you fly an older aircraft less and you have significantly lower capital costs, then you have a decent balance. If you recall from the past, Kumar, we've always said that it will always make sense for Aegean to have some older aircraft because unfortunately we're not able to utilize our whole fleet around the year in a more or less even way. We're not even approaching some of our northern European competitors. Yes, we will retain some of the aircraft expiring. We will be conservative to try to in retaining some aircraft. We've got enough choice, so we can still negotiate down lease rates.
However, the main mitigation of cost will be that gradually every month our inventory of new aircraft builds and therefore every month we improve a little bit or a lot what percentage of our operations we perform with a higher fuel efficiency, higher seat count and lower maintenance cost aircraft. I hope I've answered your question. Again, you will have seen statements by Airbus that, you know, some decisions like re-expanding their production that's pushed back a little bit because they recognize they're not being able to do it. I think everybody in the industry expects that the delays in producing aircraft will also be there to some extent in 2023.
Yes, we will be a little bit conservative and try to avoid some of the issues we had this year where, for instance, we did have to do two wet leases from third parties that will have a net significant cost of around EUR 6- EUR 7 million of additional cost to what would have been there if we operated our own in the summer period. We will certainly opt to have a few extra of the currently used aircraft around to cover any potential delays. We will not take the risk to be required to do wet leases, which are much more expensive as we had to do this summer.
Fair enough. Thank you, Mr. Vassilakis. The other thing I wanted to understand about your domestic economy, of course, as you rightly said, Greek domestic economy is doing wonderful. It is improving sharply. Do you expect that could result in a sharp recovery in the domestic demands?
Well, first of all, I didn't use the word wonderful because that would sound too political. What I did say, and it's objective, is that, you know, after going through a long period of crisis, you know, six, seven years ago, five years ago, we had between 17% and 23% unemployment. Today we've got around 10% unemployment. I think that real unemployment is even lower than that. Therefore, if more people are working than four or five years ago, I do expect that our economy on a relative basis will perform better than the rest of Europe.
Also because we have seen it both in countries like Greece but also in Portugal because prices particularly of real estate but also of cost of living are lower than the rest of Europe and they dropped back because of the crisis that these countries had the last 10 years. There is now a higher rate of resurgence in values, a higher migration of people from abroad that want summer homes or to live permanently, taking advantage of working remotely in different European businesses. Also, of course, the pure tourism part. Yes, we do expect the economy to be a little bit better or a lot better than the average European economy, which was pretty much full employment up until a couple of years ago.
Now, whether that is going to be big enough to offset the effect of what it means to be paying a higher electricity bill for a Greek home, well, I cannot tell you that. I'm not a good enough macroeconomist. I would like to hope so, but I don't know. You know, I will leave it at that.
Okay. Sorry, last two questions. I'm so sorry it's a long list. One question is straightforward. Do you have any capacity guidance for this year, given that we are already in September? Now what kind of capacity growth do you expect in terms of seats or ASK, whatever? My second question is that, you know, given that of course you have quoted July and August as a very, very strong demand, I mean, you can see a good demand. Then, you know, given that Germany and U.K. are the two biggest source markets for the tourism, and both are under tremendous pressure, U.K. in particular. I mean, what would.
Don't you think there any impact as such? Do you or do you see any impact as such? What, how do you see that? I mean, you know? That not reflecting in the sort of guidance for July, August.
First of all, in terms of in terms of ASK capacity, I believe through the summer and the last part of the year, I think the months are all going to be between 94% and 98% of ASKs relative to 2019. With the delta effectively coming downward from domestic and slightly upward in terms of ASKs from international relative to 2019. That's the capacity outlook. In terms of passenger outlook for the year, I expect us to be between 12 and 12 and a half million passengers for the full year.
In terms of revenue for the year, I expect us to be between -5%, let's say -6% and -3%, in a very good scenario very close to 2019 for the overall year. Definitely a significant recovery but not a full one in terms of ASK or passengers. In terms of revenue, it's gonna be a lot closer for the full year. Profitability, I already gave you a guidance, a very significant guidance for the third quarter, saying that I believe the third quarter will be no lower in absolute profit for the quarter than the profit of 2019. That we have uncertainty of course for the performance of the fourth quarter.
In terms of UK and Germany, UK is our smallest overall share. We have effectively UK from the major markets is the only one where effectively we fly to London, Edinburgh and Manchester, and only three cities and only from Athens. In total, it's about four flights a day. Germany is about 20 flights a day or 24 flights a day at peak. Significantly higher exposure to Germany than the UK. Also the UK for us because it's mostly London, it is also significantly dependent on Greeks traveling to London, not only on Brits coming to Crete, because we don't have any exposure for you know the major leisure flows that go directly to Heraklion to Crete to Rhodes to Corfu to Mykonos Santorini from the UK.
We do from Germany and France and other markets. I'm not so concerned for the U.K. due to the significance it has. Germany of course, if there is a change, then that will affect us. However, what is being discussed in the market is that 2023 is likely to be kind of a battle between slightly or significantly more restrictive household economics and residual pent-up travel demand. We don't know where that balance will be. Certainly if there is a significant shortfall in Germany, we would feel that. U.K. wouldn't make a big difference for us.
Perfect. Thank you so much, and wish you good luck.
Thank you.
The next question is from the line of Yiannis Kalogeropoulos with Beta Securities. Yannis, go ahead.
Hello, gentlemen. Good afternoon. I have two questions. One regarding the percentage, the current percentage of fuel hedging that you have. Where does that stand now, right now as a percentage? I mean, is it below or above 50%, let's say? The second one has to do with your dividend policy. Supposing that for the full year you turn in net income positive, are you planning to resume with dividends distribution to shareholders? Thank you.
I have two definite answers for the last question. One, we are certain that we will be profitable this year. After all, if I told you that our quarter three is going to be no less than quarter three, 2019 as a quarter, that effectively secures a significant amount of profitability. One. Two, no way we will distribute a dividend this year, and very, very unlikely we would distribute a dividend even the year after that. It's very important to rebuild our capital base to a significantly higher level, even than it was before the COVID crisis, because we expect our balance sheet to expand as we are accepting new aircraft, and therefore we also need a higher capital base.
No dividend expectation for this year regardless of what, how positive the result will be, and very little possibility of distributing income from 2023 into 2024 unless 2023 ends up being a very, very magic year. I think that's a clear response to that. In terms of hedging for this year, we said that in the beginning. Roughly speaking, we are at 50% for the remainder of this year at levels that are about $640-$650 per metric ton for jet fuel. For next year we're around 24%-25% at levels around $800 per metric ton.
Obviously we have been significantly less aggressive in buying fuel forward for 2023 because of the levels that both Brent, but more significantly jet fuel crack spreads stand today. Which is why we are at a lower hedging level in 2023 than we would typically be six months before the beginning of the next year or five months before the beginning of next year.
Okay, that's clear. Thanks a lot.
The next question is from the line of Vijay Singh with Fiera Capital. Please go ahead.
Hi. I had a question on hedging, but it has been answered, so thank you very much.
As a reminder, if you would like to ask a question, please press star one on your telephone. Once again, to register for a question, please press star one on your telephone. As a final reminder, to register for a question, please press star one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.
Thank you all for attending our call today. As I said, happy to report positive results and a very positive trend in the summer. Looking forward to talking to you again sometime early November when I hope we'll be publishing our nine-month trading update. Of course, then you will have a much clearer picture for the year and, of course, a first outlook about what we expect to do capacity-wise, destination-wise, and how we feel about the overall demand situation for 2023. Thank you very much and have a nice weekend.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good afternoon.