Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your conference call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the full year 2021 financial results. At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman. Mr. Vassilakis, you may now proceed.
Yes. Good afternoon, everybody, and welcome to our annual call. This year it takes place 4 or 5 business days after the publication of our results. I think by now you've had the chance to review them. I will keep my initial comments relatively short and allow earlier for questions, so perhaps we'll see where you're more interested to learn more. Obviously 2021 was also a very challenging year for all of aviation, including Aegean. It's a year that started with the company operating at a very low level of flights, less than 40% of its regular capacity and less than 20% of its usual passengers relative to 2019.
It gradually improved, of course, particularly after quarter two, reaching in the peak of the summer a level of recovery of activity around about 75%-76% relative to 2019 in terms of capacity and around 67%-70% in terms of passengers and revenue. Achieving in the second quarter, for the first time since the pandemic, a positive operating result and a positive overall result. Unfortunately, the last quarter of the year, while the season was modestly extended, in terms of demand, initially, due to the resurgence of Omicron and the restrictions that came along, we had a disappointing result in the end of the year.
The strong effect of Omicron basically reducing the load factors in our flights at the time where we had actually reinstated at 85% our capacity level relative to 2019, but only achieved in the last quarter 65%. A lower passenger recovery with a higher investment in flights, which could not be changed because, of course, we were very close to Christmas, and people had already booked in many different flights. We had to sustain a relatively high operational environment with a very low demand that was restricted by Omicron.
Of course, we were able to adjust that going into the year and now we look forward to a better summer, but certainly the closing of the year was weaker than we had well hoped during the summer and during the early months of autumn. All in all, 2021 was a year where we actually aggregated four very dissimilar quarters in terms of the quality and the level of the quality of the demand, the amount of restrictions and the level of the operation.
Overall aggregating all quarters, we achieved 7.1 million passengers relative to, of course, around about 15 million in 2019, and a revenue of EUR 675 million relative to EUR 1.3 billion in 2019.
Levels of recovery of circa 50% in overall revenue and overall passenger count. This came along with an operating result of a loss of EUR 72 million, which was of course a significant reduction relative to the 296 million pre-tax operating loss of 2020. Nevertheless, the result was, I would say EUR 10 or EUR 15 million worse than we would have expected in the beginning of September or October when the recovery was going quite well. Omicron definitely had an impact to us in our revenues. That was about EUR 20 million in last year and our bottom line, something around EUR 15 million all over last quarter.
Still, the operating result as a %, the EUR 72 million loss as a % of the EUR 675 million of revenue is actually to the degree visible to us from the currently published results of airlines in Europe. The lowest % of operating losses with regards to actual revenues for the year than any other European airline we've seen, obviously listed airline which publicizes its results.
A disappointing end of the year, but an overall performance which within this heavily burdened environment of the pandemic in the beginning and the end of the year still looks in our eyes at least to be on a relatively good level with regards to the aviation environment of Europe.
What we also have to highlight, of course, is what you already know, but it's important to restate.
2021 was a very important year, not only because we achieved finally after many quarters in the pandemic, a positive result, at least for one quarter, but also because we were able to complete the recapitalization process of the company and drove our capital back to EUR 213 million at the end of the year. Which again, I believe gives the company a positive balance sheet structure by comparison to airlines in Europe.
When in fact, we did not only increase our equity, but we also reduced our debt burden during the year, retaining basically EUR 350 million of financial debt, and which is lower than the EUR 475 million of cash.
If we aggregate the actual capitalized leases according to IFRS 16, we still come down to a very, very low net debt level, which again puts us in a very good position vis-à-vis our competition in Europe or most of our competition in Europe, especially after two very punishing years in the pandemic where airlines have depleted their equity and of course, to a certain degree, added significant debt burden. We feel comfortable with both our operating results relative to the competition in Europe and at the same time, also our balance sheet position relative to our competition in Europe.
Of course, that doesn't mean to say that the balance sheets or the profitability is at the level that it was pre-pandemic. I don't think that's feasible for anybody.
Once again, in 2021, the problem that remained, and it's the problem which we need to address going into 2022, is that there was a significant delta between the reinvestment in recovery in terms of what we operated in terms of capacity and what we achieved month by month in terms of passenger count, as percent of recovery relative to 2019. In other words, the load factors were lower by circa 18-20 points relative to 2019. This is the main figure that's important for us to address, and important, indeed, for everybody in Europe to address, if one wants to follow a path back to gradual profitability in our industry.
This is the number that we'll be looking to improve month by month very diligently during 2022. Another thing that I need to highlight with regards to 2021 was that the recovery of Greece itself was very positive in the direction of tourism. Greece recovered better than many other countries in the south, all the countries of the south of Europe, I believe, in terms of % of tourism arrivals relative to the years before.
Of course, remaining lower, but less lower, than some of the other countries or all of the other countries, which of course, allowed us to also benefit from that, while at the same time, of course, proving to be an attractive territory for foreign competitors to operate and to redirect capacity as they were seeking to see which were the more demanded, the more important markets for them to cover. That element also is an important element for the evaluation of what goes on in our country and our airline. At the same time, it was an important year for re-accelerating and re-investing in our direction of refleeting.
As you know, like most airlines in Europe, during the first year of the pandemic in 2020, we had pushed back some of our Airbus deliveries into the fleet. Doing that to avoid creating excessive overcapacity for our system, but also protecting our PDP, pre-delivery payment outflows. This was reversed as directed in 2021. We agreed with Airbus and our lessors and financiers to re-accelerate our investment into new aircraft. We also had a significant payout, more than $100 million paid out additionally to Airbus for pre-delivery payments during 2021.
Indeed, today we have already reached in the first quarter of 2022 the peak of the amount of pre-delivery payments that are standing in Airbus waiting for aircraft to be delivered to us. From the second quarter and going forward of 2022, the net pre-delivery payments between what we additionally pay in and what we receive, quote-unquote, when the aircraft gets delivered or when we do sale and leasebacks is going to be net positive.
We've already reached, as of the end of the first quarter of 2022, the peak in our I would call advance to Airbus cycle. That's important in terms of being able to do that in the middle of again a very difficult winter.
The second very difficult winter after the winter of 2021, 2022. 2021-2022 was also very difficult because of Omicron. We were able, therefore, to execute our commitments to Airbus, re-accelerate the handout, the $100 million plus additional investment, sustain the loss of the winter, and at the end of the year, still managed to have EUR 470 million of cash and EUR 100 million of loans less than the beginning of the year. I think once again, Aegean has passed the test of survivability and endurance in adverse conditions quite well. I would prefer to stop my opening statement here.
Just saying one more time that, yes, it's the second year we have operating losses, but we're encouraged by the fact that our percent of losses in terms of revenue seems to be lower than anybody else's we've seen publishing in Europe in the last couple of months where airlines have disclosed their numbers. At the same time that we feel strengthened in terms of balance sheet and also in terms of our rethinking process by the end of the year.
I'll be happy to take any questions, and I have my colleagues from finance and treasury along in case you want to ask something much more specific than that. I'll be happy after the questions to give you a brief impression about the outlook forward after we get by any questions you may have on 2021.
Thank you very much.
The first question is from the line of Natalia with Eurobank Equities. Please go ahead.
Yes. Good afternoon to all. Thank you for taking my questions. I have a question regarding the cost side. I was wondering if the extension of the government aid scheme you have, which is running until March, if I'm not wrong, which ends in March. If you see any potential for further extension. If you could see any more cost mitigating actions you could take, given the rise in, you know, in all the other pricing and costs and fuel increases. If we could see something, you know, that could be done. I was wondering also if you could give us a...
If you could remind us, actually, the pre-delivery payments due this year.
Okay. Let me start by saying the following. I'll start with again the last question you had, because it's the one that's easiest to answer. I believe at the end of the year, we had, what, EUR 170 million outstanding to Airbus?
Yes. 175.
At the end of 2021, we have paid in $175 million.
Euro.
Dollars to Airbus. This number as a whole at the end of 2022 is going to be lower by around about $40-$50 million. However, the way this is gonna play out, it's gonna go up by about $30 million in the first quarter. So you'll see that number getting close to $200 million or around about $200-$210 million paid into Airbus at the end of quarter one. Then from quarter one until the end of the year, the number will go down to $120-$125 at the end of the year. Why? Because basically, as I explained, it's a matter of when we get aircraft delivered.
Every time we get an aircraft delivered, effectively, the PDP payments for this aircraft are returned, one way or another, either by financing it or by doing a sale leaseback. They're no longer outstanding to Airbus. It goes up another EUR 30 million from what you've seen at the end of the year by the end of quarter one, and then it goes down by EUR 90 million for the rest of the year. Net-net, it should be down by around EUR 50 million, by the end of the year from where it is now, EUR 45 million-EUR 50 million.
That's with regards to pre-delivery payment, and it's never going to exceed the level that you see it in the end of 2021 at the end of any one of the coming years. All right.
It will rebuild again somewhat, but it will never go higher than the total amount you've seen it at the end of any year. That's the answer on the last question. With regards to the question on, I believe you referred to ERTE, which is the support for partial employment. The answer is I do not think it will get extended. Of course, we will try to get it extended. However, the materiality of it as we go into the summer months is less significant since our staff will indeed be effectively fully employed.
No, there is not going to be probably an extension to the program. If you need your staff in the summer, the effect is less significant than it would be in the winter.
In terms of what else we can do, in terms of increasing costs, well, you don't want my honest answer to that. Inflation is not something that a company, any company can deal with on an individual basis. What's clear is that we have around about 60% of our fuel needs hedged. We have at a level that is significantly lower, about 50% lower than the current spot rates of fuel.
We will be able this year to let's say recover from the point of view of hedging a little bit of what we lost or a lot of what we lost in 2020, which, you know, that was a major cost for us because we didn't use the fuel and the fuel went to zero. At the same time we've taken some swap positions on forward interest rates to protect the amounts we'll be paying for financing the aircraft going forward.
I would say what we've basically done in order to mitigate our cost is either hedge on the side of fuel or hedge on the side of, like, interest rates. Both of these, of course, being partial offsets for the effects of either rising fuel or rising interest rates.
I think what is clear for this year is that we need to achieve a revenue per flight improvement that is significant between addressing our load factors by carefully managing our capacity and at the same time, of course, getting, as the summer progresses, a modest fare improvement so that, the revenue quality, either coming from the load factor or coming from the fare contribute to get back closer to what we used to have in terms of revenue per flight and of course, also through that, address some of the inflation-related or commodities-related costs that I think we all face.
Okay. Thank you. That's pretty clear.
It cannot be too clear when you have pandemics and wars.
Yes. It's a tough period, so given the circumstances.
The next question is from the line of Achal Kumar with HSBC. Please go ahead.
Hi. Good afternoon, gentlemen. Thank you for taking my questions. I have a few. Basically, first of all, if you could please discuss your fleet plan a bit more, in a bit more detail. Previously, of course, you mentioned that while most of your leases are gonna expire in the next couple of years, your decision to return the aircraft will depend on how the demand develops. Now in the current situation when the fuel price is so high, would you really prefer to fly the older planes? Would you really prefer to retain those planes? What will be your strategy around that? If you could please discuss your fleet plan a bit. When...
When we are on the fleet, I also wanted to understand what drove your decision to buy ATR 72 planes. I mean, what is the strategy behind this decision to buy these planes? Linked to that, you disclosed that the fleet restructuring of EUR 29 million you booked in 2021. Does that belong to 8 Q400 aircraft which are returning earlier than planned? What is the kind of breakdown of EUR 29 million? Is that like how much is the penalty and how much for the aircraft redelivery conditions? Do you expect more of these kind of restructuring charges going in 2021? That is my first question.
Sorry for the long one, but that is my first question. If you could please help understand.
I'll start from the end again. No, the EUR 30 million, EUR 29 million that you referred to covers the entire restructuring cost of the return, the early return of the aircraft and any anticipated maintenance-related expenses with regard to that that were not. That provisioning amount removes any further possibility of cost from the Q400 aircraft. One. Two, why did we take it, the reason to return these aircraft early? Several reasons.
One, of course, was that this was an inherited sale and leaseback structure from Olympic prior to us buying it, which was done at really difficult, or I'd say negative, conditions. Expensive lease, bad maintenance reserve conditions, bad redelivery conditions, in terms of the airline, meaning expensive redelivery conditions.
In the last couple of years, two or three years, we have seen Bombardier, the manufacturer of the aircraft, effectively divesting itself from the type, which means that the level of support and at the same time the cost of the support for either parts or indeed maintenance-related work on the aircraft continues to increase, has continued to increase at a very alarming rate.
Indeed, most passenger airlines in Europe have already taken decisions to remove the aircraft from the fleet for this reason. In effect, what we did was, okay, we said to ourselves, we know we have to bite the bullet for the Q400. These are aircraft we already have. These are conditions we never secured for ourselves. We inherited them.
The factory is effectively discontinuing production and passed on the ownership of the type to a very small company, Viking, which has no significant capacity to support people like us. The whole industry is exiting the type, and it's being used primarily for cargo left and right. We need to do that. We saw an opportunity to find ATR 72-600s in the market, either to buy or to lease at better conditions than, of course, a couple of years back before the pandemic. We thought, well, we have one bad contract. Let's make sure the next contract we get are done at a good time.
What led to the decision is the fact that the pandemic has created a weakness on the side of the lease rates for the only effective turboprop type that's being well supported in the market, the ATRs. And therefore, the decision to do that, to have the eight Q400s exit and have the ATR 72s enter, was part of that. Now, it also happens that the 72 is significantly more fuel efficient than the Q400.
The only advantage the Q400 it has is basically range and the marginal delta in speed, which are only relevant if you fly the aircraft more than one and a half hours, which effectively we didn't. Why? Because anywhere with a longer duration than that, we need to fly jet anyhow, otherwise we cannot compete in the environment we're in.
Therefore, for all these reasons, and I think I've given you enough, we've accelerated the departure of the 8 Q400s. There is no more cost to be borne for these aircraft other than the restructuring costs you saw entering our results last year. The number of ATRs that are being pulled in our fleet are 9. They're ATR 72-600s. We are buying 3 of them, and we are leasing 6 of them.
This, of course, is part of the effort to make our fleet both more fuel efficient and also more efficient in terms of maintenance cost, because that was the biggest problem we had with the Q400. We think we have secured a very good support contract from ATR. As you know, ATR is also associated with Airbus. Airbus is one of the two shareholders of ATR.
We have not only leverage because of the timing, but also in terms of the relationship. That will help in rationalizing the cost of our fleet and the efficiency of our fleet going forward, we believe, in a significant way. Now, with regards to the overall fleet plan, I think I already said that yes, we are re-accelerating our orders, which means what? That this year we will accept a total of 12 Airbus A320, A321neo, and next year is another 10. Basically, we're making up for the postponements of 2021 by about 80%.
At the end of 2023, we will be very, very close to where we would have been absent the pandemic in terms of percentage of aircraft, not percentage, absolute numbers of aircraft received that would be NEOs. I think from the third quarter of this year, we will be able to produce round about 40% of our capacity with NEOs or ATR 72-600s, which means with the restructured, let's say, part of the fleet. By the end of the year, and especially for the winter months, we'll be able to produce more than 75% of our capacity going into the new part of the fleet or the new ATR part of the fleet.
As we accept more NEOs in early 2023, that number will carry us over also to the summer of 2023. Now, with regards to how many aircraft we're letting go, I believe this year we're letting go, other than the 8 Q400s, also another 3 Airbuses that are expiring before the summer. I believe 2 Airbuses that are expiring in the end of the year, so a total of 5. In next year, we have another 10 or 11 expirations, which certainly around about 6 aircraft will go away. Then, as you said yourself, depending on demand, we will decide on what happens with the rest.
We're already in negotiations with some of the lessors, and we're looking at different opportunities of how to best manage that going forward. In a nutshell, I think the numbers that you should keep in mind is basically 40% of our fleet will be significantly more efficient by the summer, in terms of capacity produced. 75% of our fleet will be significantly more efficient in terms of winter operations. By the summer of 2023, I believe 65% of our operations will be provided by new aircraft because by that time we should have already 26, 27 NEOs in our fleet and of course all the new ATRs.
As you understand, we prioritize the utilization of the new aircraft and assign them to much more heavy flight routes, try to fly them through the night. It's not at all on the same level of exploitation as the overall fleet. I hope I've answered as many of the questions as I could.
Yeah, no, that's really helpful. Then my second question, I'm so sorry. Could you please discuss a bit about how the summer 2022 trading looks like, including the forward bookings, and the fare trend? Also, it looks like the passenger traveling towards Eastern Europe. I mean, I think the confidence levels are low, especially due to Russia and the Ukraine situation.
How do you see the demand at the moment developing for the summer? How the fare trend looks like? Have you seen sort of some cancellations post this geopolitical tension in Russia? Finally, how do you see the competitive situation looks like? Of course, you understand a lot of airlines are flying through the capacity, but how the competitive landscape looks like.
The competitive landscape. Sorry. I missed the last one. Okay. I think, again, I will start from the end. Competitive landscape, it goes without saying that capacity in Europe will still be lower than 2019 level. That means there are excess aircraft around still. Of course, less than they used to be last year. That also means that people are investing aircraft where they see relatively stronger demand being stronger. It's very clear that once again, Greece is one of those places.
We see significant competitive interest toward the country, and we expect capacity levels to Greece as far as international flying to be between 7%-10% higher in the summer months than they were in 2019. That is channeled primarily to islands one more time.
There's a bigger delta there, perhaps +15% overall, with Athens and Thessaloniki being around about -10% in the peak of the summer relative to 2019. Our investment in capacity is going to be round about at the peak of the summer, it's going to be round about 5% or 6% less than it was in 2019. But we're also making a very big return to Athens relative to the operation level we had last year. We're starting again a lot of the routes we have discontinued. I believe there are 15 routes we'll fly out of Athens this year that we didn't fly last year. Of course, gradually we're rebuilding the capacity level as well.
The 5% number, of course, that I gave you refers to what we achieve at peak. We go to that number gradually from where we are today. The other question was... Sorry, I got the competitive landscape, outlook for the summer for bookings. Right. Bookings to hotels in Greece today are significantly higher in their books than they were in 2019.
Bookings to our company in terms of forward sales have reached a level of about 80%-82% of what a month in 2019 would be for the current level of trends we are receiving. Remember, we're still flying at a lower capacity than that. Okay, as we go forward, that increases. Bookings in...
If we look to February or March, we're talking about 3-5 times higher each month from what they were in 2021 in value. As I said today, they're around about 80%-83% of what they would have been in March 2019. In terms of whether this has been affected by the situation in Ukraine, by the invasion of Ukraine, the answer is yes, but not in a very significant amount. What we lost from the beginning of the war was a steady gradual increase. We had reached the level I'm describing to you relative to the performance of week by week, relative to the equivalent week of 2019 in the last week of February.
Instead of having that performance increase further, we saw it solidify, stabilize at that level. Of course, we would like to hope that if things quiet down, we will go to higher levels than that. At the same time, I believe what is clearly being created is a situation where people, due to the uncertainty, might delay their booking, but I don't think they're necessarily changing their way, their travel plans. We feel there is a significant amount of pent-up demand.
We hear from all sides that people are not canceling their hotel bookings, and they're looking forward to traveling in the summer. The overall demand, as far as we can see it today, remains strong.
Of course, we live in a world where there is a live war going on and where the heads of state of very important states, including the United States, including Russia, including European countries, make statements and predictions and I would say even threats to each other. This is a volatile environment, and we do not know whether from here we'll see an improvement, which is what we hope, or some kind of deterioration. The way it feels today, other than losing around EUR 30 million of expected revenue that we would have all year, in terms of the Ukrainian and Russian destinations or source markets.
Other than losing that and other of course on sustaining a significant cost from the increase of fuel related to this, I would say the remainder of the effect seems rather muted because people want to travel after the pandemic. We do, however, see, as I told you, earlier, a sort of a delay in the bookings and a later booking behavior which we have become familiar with more in the time of the pandemic. It doesn't look too bad.
It actually looks pretty good for the summer, but we should keep our fingers crossed because it's a very volatile environment and I do not know how long the statement I make will remain valid. It could improve or it could deteriorate.
Yeah. Thanks. You did not touch upon the fare trend. I wonder if you could please discuss the fare trend also. Basically in the current high fuel environment, would you be able to pass on the fuel burden to the passenger and if not, then how would you sort of protect your profitability? I know that you hedge 50% of the fuel requirement, but then, you know, the fuel price is really rising sharply and has gone up. How the fare trend looks like, I mean, is
I mean, listen. First of all, what we always do, we become a little bit more risk averse, so we manage our capacity a little bit more carefully for April and May. Our first reaction when the war started, 30, 40 days ago now, was to mitigate the amount of flying we do for April and May to try to build into the season a little bit more gradually and try to make sure soon that, as I said before, the combination of load factor and margin builds up as well as we can. Load factor is the first thing that we want to see improving, and it is the first thing that we should see improving.
At the same time, yes, of course, we will try to pass on a measure of the cost that we sustain due to the fuel. I think everybody will. But at the end of the day, the effectiveness of that always depends, as you know very well, on the demand versus supply equation in any given market, in any given route. But certainly we're trying to do that as well because there's not one single element of cost that is external other than our own fleet restructuring efforts that is actually a positive effect toward any airline in Europe to the degree that I can tell.
Perfect. Thank you so much. Have a great day. Good luck.
Thank you.
The next question is from the line of [ Madura Mary] with Axiom Ventures. Please go ahead.
I have a question regarding the hedging position. You said it's 50%. I understand that this is for 2022. I was wondering if you can give us some color for 2023 and also what is your hedging position against the US dollar for the two years.
Okay. For 2023, it's very marginal. It's a very small amount. I believe it's 5% or 7% of what we expect to consume in 2023. I believe it should not be increased at this stage because building the position right now would build it at a very expensive level, and we don't intend to do that. I think most airlines would probably follow this kind of tendency for right now. In terms of the US dollar, guys, can I have some numbers? Sir.
For 2023, we are covered for 28%, around 28% of our total estimated needs.
And?
For 2022, more or less the same levels.
Are you counting all the cash flow hedges or the open forward as well?
No, it's just the cash flow hedges.
The open forwards are open positions as well.
Yep.
If you add the non-hedge effective part, it goes up to around 40%, I think.
Forty.
Yeah.
Plus percent. Yes.
40% in total for 2022. The other number you mentioned, what? 20?
Twenty-eight.
28% for 2023.
Very good. Okay, thank you very much.
The next question is a follow-up question from the line of Achal Kumar with HSBC. Please go ahead.
Yeah. Hi, sorry, last question. Just a small question on the employee cost. I think you responded, but kindly still I think I missed. The staff costs in the last quarter has declined. How should we assume going ahead? I mean, do we expect the staff cost going up from FY 2021 onwards? How do we see this?
You should assume that in terms of any special programs received from the government, it will not be from Q2 and on any further assistance. Therefore, the cost will depend effectively on headcount and the degree of flying. Because we have a variable, we have people that we employ seasonally, and we have a certain part of the compensation of people that is related to how much they fly. It's going to go a lot closer to 2019 numbers minus more or less the delta in terms of employment.
The delta in employment rule of thumb is about half the delta in activity. I'm just making it simple so you can follow a rule. Otherwise, you know.
Yeah. Yeah. No, all that's fine. Thank you so much for that.
No.
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 the conference. I think what I partially said what I intended to say in the end in the answers to some of your colleagues. Basically our outlook for 2022 is positive within, of course, an environment of significant uncertainty due to the war and the price of the commodities that we are looking at right now.
However, what is planned in terms of activity from our side is an activity level that in terms of flights and ASKs will be round about less 30% than 2019 first quarter, round about 18% second quarter, round about at 2019 or up to -5% of 2019 Q3, which is the most important quarter, and round about flat to 2019 for the last quarter. That means that we will put to the market a number of seats between 15 and 15.2 million for the year, assuming again, of course, nothing further changes from what we see today, at least it doesn't become any worse from what we see today. That is a significant amount of return to market.
Of course, what we need to achieve is to go from the high 60 load factor levels that we achieved in 2021 to certainly over 75% load factor levels, which is in itself a circa 12%-14% improvement on potential flight revenue. That's the main objective. Today we are running in terms of forward sales, as I said earlier on, at 80%-83% of equivalent 2019 months in terms of revenue sold every month, which means of course that most of it refers to forward months. We are encouraged by that number, which is, as I said, for February, for instance, exactly 4.3 times the number that we sold in February 2021.
March 2022 is going to be forward sales, overall sales, a number which is gonna be higher than any month of 2021, including the summer months. Also, what was achieved in terms of cash flow breakeven, I believe in May for the first time last year, was achieved this year, basically after the 15th of February. So from the 15th of February and on, we are in a positive cash flow environment, which is good. Of course, we are looking at the cost headwinds, which come primarily from fuel, but also from other directions.
So this is important. What's important for this year is to achieve an improvement in revenue quality, as I said. In terms of policy, we are reinstating about 15 routes from Athens.
We are going, as we have said in the past, in a significant, what we call product offensive in terms of trying to go after the higher level clientele that's beginning to come to Greece in increased numbers. We have seen an increase in our business class product, and we want to build on that. We're working to improve the depth of our loyalty program. We have been working to improve the quality of our lounges in Athens and Thessaloniki.
We're inaugurating a new lounge over the next couple of days for non-Schengen customers in Athens, which is gonna be, I think, a game changer for the image of the company, especially for the image of the company to the international market.
We have proceeded already will be completed with the replacement of the Q400 fleet by the end of May with ATR 72-600s, which we expect will also bring some additional savings beyond, of course, the neo-acceleration, which has been going on for the last year and which we expect will bear fruit again from this year and into the next. All in all, we are positive about the chances to have this year become the first non-loss making year.
I hesitate to say the word profitable because that would also imply a significant amount of profit. Of course, we need things to quieten down. It'll be great news for anybody to hear about the ceasefire in the Ukraine.
That would certainly release people into booking more aggressively than they already are doing for the summer. It's very important for us that this happens sooner rather than later. Of course, we cannot control this. We'll continue to be very flexible in managing our capacity going forward and adjusting to the levels we need to have to absolutely achieve significant improvements in load factor and revenue quality relative to what we had last year, because this is a requirement in the current environment and this is the direction to which we have to return.
We're happy that our results compare well with other airlines in Europe for 2021, and we're encouraged that this will also be the case after a very difficult winter, after a very difficult Q4 and Q1 of 2022 due to the Omicron. Now that people seem to be in the phase of considering the pandemic something that they are more or less putting behind them, and as restrictions in all markets are gradually lifted, we should expect to see a further increase in the buying and the traveling pattern of people. We believe that we're well-positioned due to our product and due to our network in Greece to benefit from that.
I thank you for attending this call, and I hope that this is the last year that you'll hear us talking about losses. But of course, a few things have to stabilize in order for us to be able to achieve our objectives as well as the other airlines in Europe. Thank you very much, and talk to you soon.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.