Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the first half 2020 financial results. All participants will be in a 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.
Yes. Good afternoon to everybody. Welcome to our first semester results call. Just to say that aside from myself, our CEO, Mr. Gerogiannis, our CFO, Mr. Kouveliotis, and our Treasurer, Mrs. Dimaraki, are all in attendance. All of us are available to answer your questions. We'll try to keep the presentation and the discussion broad and relatively short, so you can ask some questions on the broad direction of things in full understanding that obviously the current crisis is probably the strongest one that aviation has ever seen. I think it's accurate to say that airlines around the world and in Europe, in particular, are all more or less in a fight for their lives. That would not be an exaggeration.
It's also fair to say that while probably at some point early on in the summer, there was some expectation that possibly late Q3 or Q4 would see a more substantial recovery. It's now the case that because of the resurgence of the pandemic, as of early August and in an increasing manner since, people around our industry are now realizing that both the winter is going to be very hard and actually the, let's call it return to normality or to relative normality, will take a longer period of time than what had been initially anticipated. Having said that, as an intro, let me shortly go into the results of Q2. Why shortly? Because basically, Q2 was a quarter of inactivity. We knew that already when we spoke in May together, and then again when we released some data after our AGM in July.
We knew that the second quarter of the year was going to have very little activity. Indeed, flights were down by 82% due to the restrictions of the pandemic and the restrictions of movement imposed by states. In fact, the 82% was the overall share of the quarter, reduction of the quarter, but it was 95% and 92% down for April and May, respectively. As a result, passengers were down by 92%, and our revenue for the quarter was down to EUR 40 million, essentially 88% down from a number of EUR 347 million, or more than EUR 307 million revenue lost, foregone in the third quarter. Very much an inactive quarter.
This is the reason that looking at things like cost per ASK, revenue per ASK, or of course, utilization or any other figure other than the bottom line and the reduction of costs and the cash burn is not very significant. Practically, there was very little activity, as I just said, in the quarter. As a result of the very minimal activity, we recorded an operating loss, a pre-tax loss before extraordinary results of EUR 58.7 million on the second quarter of this year against EUR 31 million profit the year before. Despite significant efforts in costs, in non-flight variable costs, which I think are visible if you go through our financial statements in both fixed payroll related, but also other fixed overhead costs, which significant reductions were achieved.
Nonetheless, if you have no revenue, no top line what happens to costs has an importance, but obviously cannot drive to any positive outcome. In terms of what we did with our staff, due to the inactivity of quarter two, for the majority of the period, the majority of our staff, circa 70% of our staff, was in the Greek version of the furlough program. It's called suspension here in Greece, which the Greek state has instituted as of April. Indeed, 70% of our staff was in this program. However, with some additional benefits paid over the minimum by Aegean in order to reduce to some degree, mitigate to some degree the loss to their pay.
If we add to the first quarter that's already been published the results of the second quarter, as I mentioned, we go to an overall first half revenue fall of 64%, reaching EUR 187 million for our first half, with 2.4 million passengers altogether flown in the first half, down from 6.5 million passengers last year. Again, most of the delta comes from quarter two. An overall underlying pre-tax loss at EUR 132 million, adding the EUR 58 million of the second quarter to EUR 73 million of the first quarter, compared to only EUR 17 million of losses in 2019. Those are our underlying losses, pre-tax losses before extraordinary losses.
On top of that result, we have the effect of ineffective hedging, which for both quarters and indeed effectively for the whole year stood at EUR 68.5 million, primarily due to the amounts of fuel that we had pre-purchased but did not consume, either in the first or second quarter of the year, or indeed are not anticipated to be consumed in the last two quarters of the year, H2 of the year. All these are valued and estimated. Indeed, in the second quarter, we took a more aggressive, or probably more accurate estimate of the little flying we would do in the remainder of the year. As a result, we added the total of EUR 68.5 million of additional losses to EUR 132 million. Bringing our overall results for the period now going to an after-tax basis of EUR 158.8 million or EUR 159 million of loss.
Altogether, including the extraordinary results for the first quarter. Sorry, my mistake, for the first half, as opposed to EUR 13 million of losses in 2019. Just to say one thing about these numbers. The losses of the second quarter were pretty much spot on with the guidance we had given you in May 18th, and again after our general assembly for EUR 26 million- EUR 28 million loss per month for the second quarter. That's practically exactly the number that was added to our losses, including extraordinary for the second quarter. There's nothing surprising for these figures. In terms of cash burn for the first six months of the year, the total cash burn for the six months reached EUR 110 million, of which EUR 65 million was actually cash burn in quarter two.
Main reason for delta between cash burn and losses, main reason but not the only reason, is the inclusion of the ineffective hedging of the second half of the year, which will be paid for during the second half of the year in the first half losses as well. Also some deferrals and some other items, but the main item that is different is this one. Again, in a nutshell, I don't think we should stay very much on H1 results since they were pretty much expected. There was no expected significant revenue activity, and the costs when you don't fly very much are pretty much known. That's why our estimates were also very much online.
I think it's more important to talk a little bit about what has happened since the end of the first half or the second quarter when we started rebuilding our activity gradually as the pandemic receded across Europe, and equally importantly, as the restrictions imposed by countries started receding by Europe. Just to put some things in context. We know that between basically the 15th of June and the 15th of July was the time period that the main intra-European restrictions for travel were restricted, or I should say the absolute restrictions for travel were restricted. As a result Sorry, were lifted. I'm sorry. As a result, also activity started to build gradually from June and then into July and August. I would say that the market's initial, what's the right word? Confidence about two things.
Some measure of common protocols, which the European Commission attempted to establish in various meetings in June and early July together with IATA. Also the markets hope that, A, passengers would be willing to travel, and B, the pandemic second wave would not come before October, where things positive, let's say expectations that lasted for about 30 to 45 days from the 15th of June until the end of July. During that time period, both Aegean, but also pretty much all other airlines in Europe, were stating that they would be increasing gradually the capacity to the markets, the recovery rate of their flights, and expected demand between July going into August, from August going into September, and then from September to October. This was important because to some degree it shaped the capacity or the declared capacity of the market.
At the same time, it also to some degree shaped customer response. We did see in the second part of June and until for a good part of July, almost all of July, a rebuilding of the tendency of the customer to book tickets. Still within a relatively short horizon before the flight, but at least in a significantly different way than during the lockdown periods, obviously. Basically as Aegean, we started rebuilding our capacity significantly from June to July, from July to August. Driving up to round about 50% of overall flight activity in August, with a slightly lower number than that in international and a slightly higher number than that in domestic.
This was our aim. This was our, let's say, anticipation in terms of what we were trying to do. Unfortunately, what was initially a good period of sales for the first 30, 40 days from the 15th of June and on, started to reverse itself towards the end of July, beginning of August, when the resurgence of the pandemic again came back. I would say a couple of months earlier than the theory of the second wave anticipation for Europe. In fact, I don't even know whether there was a difference between the first or second wave. Certainly, what became apparent was that there would be, again, increased number of cases around Europe, throughout Europe. Again, unfortunately, in the beginning of August or since the beginning of August, we saw again a breakdown in the commonality of the response, even among European countries.
Not only did we have the scenario that, of course, many non-EU destinations remained inaccessible, and that has, of course, both a direct and indirect effect to our network. Whether it is the U.S. or Asia have an indirect effect, or whether it is Russia and Israel and Middle East and some Scandinavian countries that actually were outside our reach due to restrictions for the entire summer. Also even within the Schengen EU core, let's say, region, we started having from early August, again, restrictions either in terms of needing to not fly at all, or quarantine upon return, or pre-flight COVID testing, or post-flight COVID testing. All of these things starting to affect again the demand.
As a result, to make a long story short, we flew during the third quarter with, I'm going to give you an estimate of roughly 62% less passengers than the year before. The third quarter is going to have for us a little bit short of 2 million passengers. We achieved that by reducing the seat offering by around about 52%. The flights reduction and the seats reduction was significantly lower than the passengers achieved. Why? Because all airlines in Europe, including ourselves, have recorded load factors for the summer that were typically 20, 24, 25 points lower than our usual seasonal performance. For Aegean in particular, what used to be around 88% load factor in Q3 is going to look more like 65% load factor for Q3 for us this year.
Now, that means obviously that I'm not going to tire you with the exact curve of how things developed, but essentially we're talking about an initial surge of demand relative to what we had before, an equal gradual build up of our capacity and competitive capacity. Hearing about competitive airlines stating that they intended to operate up to 70% or 80% of their network initially for September or October, particularly the low-cost carriers. Then a gradual reversal in the market, which has led now to much, much more conservative expectations leading down to significant lower numbers than that. Q3, in a nutshell will be round about 2 million passengers, around about 22, 23 load points lower than last year. In terms of flights, around about 50% lower than last year. Again, with a different delta in international versus domestic.
Having said all that, Q3 is expected to bring a pre-tax result between EUR 25 million and EUR 30 million negative for the quarter, which of course might sound better than Q2 or Q1, but we have to remember that quarter where typically Aegean makes all of its money. We have a very seasonal operation. Last year in Q3, we had the EUR 91 million, I believe earnings pre-tax result. Therefore, we cannot say at all that the operation of Q3 has been satisfactory. However, if we go to other experiences similar to ours, if we looked in the past in around Asia to see what happened in heavy viruses and the effect of their local markets, we had seen there that it takes typically up to four, five or even six months once you reconstitute flights to have a positive margin. Here, positive margins were achieved.
The result, the fixed costs were diminished by some degree of flight variable margin, which is positive because it indicates that there is some ability, some demand for travel even early after the pandemic. However, what was here the case is that this demand, whether it is because it was only leisure driven, only long vacation- driven, not for city breaks, not for corporate travel not for even multi-location vacations, but rather just for the longer type of vacation in one location only for the summer. Between that and between the resurgence of the pandemic that, let's say, degree of support to demand was relatively short-lived.
Dimitrios Gerogiannis is going to tell us a little bit about what we did in the summer with regards to arrangements for our fleet and our personnel, and we'll get back to giving you also a little bit of an outlook for what we think might happen in Q4.
Well, regarding the fleet, we kept the order of 46 aircraft, but we have agreed with all participants, the deferrals for the period between 2020 and 2022. More specifically, we had 26 deliveries planned for the period 2020 to 2022, and we're going to end up having 15 deliveries for this period. We still continue to be one of the few airlines that continues to receive new aircraft, and this is important. At the same time, during this period, 2020 to 2022, we have 26 jets from our current ceo fleet expiring. A fact that gives us the flexibility to adjust to the realities that will emerge in the coming months, in the coming year, and adjust our fleet sizing to the new market realities. Short- term, we receive 5 + 4 new A320s until the beginning of 2021.
In total, the deferral of these deliveries contribute to a reduction of our PDPs by about EUR 110 million in the same period, 2020 to 2022. Important is to note again that through the expiration of our current ceo aircraft, we do have a lot of flexibility to adjust to the very difficult-to-predict realities that will emerge in the next year or two. Regarding now our personnel in the third quarter, as Eftichios mentioned, we operated significantly more flights, that resulted in bringing back our staff back to the operation. We stopped using the furlough program that was one of the horizontal programs that the Greek government established to protect employment. We stopped using the furlough program, we moved to the Kurzarbeit program that the Greek government adopted, which is again, a horizontal program for the Greek economy.
Which is a 50/50 employment scheme by which a person that's employed part-time, let's say 50%, is paid by the company for the 50% of his or her salary and he or she receives from the Greek state 60% of the remaining 50% of his or her compensation. About 75% of our personnel during quarter three was employed under the Syn-ergasia program, which is the Kurzarbeit program, as I said, and 25% was in full employment. We put a lot of emphasis during quarter three when our operations start becoming more substantial. We put a lot of emphasis on taking all possible health precautions to protect obviously our passengers, but also very important, our own colleagues.
We have applied very stringent and strict protocols in turnaround cleaning, in overnight cleaning, in disinfection of the aircraft, all the precautions of our frontline personnel in terms of using masks and all the other protective gear as has been prescribed by the local authorities. We have established also a program through which we do test regularly our frontline staff here in our premises, both cabin crew and cockpit crew and other frontline staff. We test them regularly every two weeks for COVID that's about it.
Okay. Just a couple more things to say about Q3 with regards to what happened in Greece relative to the rest of Europe. I think it's worth saying that the Greek tourism market did perform a little bit better or significantly better than the average European tourism market. As a result, what we saw in overall arrivals to the country was significantly less reduced than in other countries in the south. I think there was a significant gain of market share and gain of trust towards the country, which should not be, I think, under evaluated. We shouldn't forget about that. It's very comforting from that angle to see that not only people came, but broadly speaking, had positive experiences while here. That seems to build some confidence for people to come back.
Always within, of course, the restrictions of what the pandemic means, and the fact that, of course, it does significantly reduce the propensity of people to fly for different reasons, corporate and leisure. It's important to have the brand of Greece reasonably well protected within this. I think this is something that also has to be mentioned. Now, before closing our initial remarks, a word about the last quarter of the year. I would say, one would have expected better visibility. I would say, given how intensely the case number has been building up, given how quickly people like Lufthansa, Ryanair, Wizz, KLM, Air France, have been talking down their capacity and expectations for winter, we also have to say two things. One, that visibility is extremely low. Yes, we all expect to hear something from the pharmaceutical side before the end of the year, possibly vaccines, et cetera.
Today, bookings are very low. Booking period is lowest than it's ever been. Practically, it is under 20 days for all forms of travel within Europe. As a result, all we can say is that a reasonable expectation, providing there are no further full restrictions or lockdowns for the winter, we would expect to have in Q4, roughly a third of the passenger traffic of the year before. Again, that is a very, what's the right word? Obscured, let's say, forecast, because it's not driven by bookings, which are anyhow so short in terms of when they come. It's driven also by the hope that there will be no further, as I said, market closures.
What that means is that, again, tremendous underutilization for the winter and a possibility that we might have to resort again to some kind of furlough program for part of our staff if things indeed go down to that level or lower. I think that's the initial remarks we have. I'm happy to try to take some questions. We will keep our answers short and try to be broad. Gentlemen, ladies, please remember visibility is very low and therefore, accurate predictions are next to impossible. Thank you.
The first question is from Svyriadi Natalia with Eurobank Equities. Please go ahead.
Yes. Hello, good afternoon. Thank you for the very nice presentation and you covered broadly all the summer period and many things we would like to ask. I have a question regarding the amounts paid for cancellations or what you have been doing about that. There was in the press a big amount of money paid by other airlines and did this happen also with you? Did you give out vouchers or other forms of money to canceled flights and for the summer period also?
Well, we are a much smaller airline than the bigger airlines that you mentioned, so all our amounts are smaller. Nevertheless, what I can say is that there is a refund possibility and there is a refund process both for individuals and for travel agents. That, of course, there's been also vouchers issued as well. Between the vouchers that have been issued and the refunds that have been issued, I believe round about 75% of total outstanding cases have been handled. There is a residual, I would say, overall 25% of cases that are either pending or we have not received an application yet. Should these cases proceed, they will obviously cause another outflow of money for the company, whether it is in refunded amounts or whether it is in additional vouchers.
Also to let you know that effectively today, vouchers are not only refundable when they expire so that you get your money in the end, but also they can be used by other people. If a person does not use his voucher, he can give it to another person in his company, in his family, and that other person can use it as well. Therefore, it's not very distant from the effect of having money because if the particular person cannot use it, another person can use it. I hope I've given you a broad answer. I'm not going to give you super minute numbers, but I think we've given you an idea of what's involved in terms of the dealing with the overall issue.
Yes. Thank you. That covered quite the question. Thank you very much.
The next question is from the line of Labate Victor with Piraeus Securities . Please go ahead.
Hi. Thank you for taking my call. You mentioned that you expected deliveries of 15 planes between 2020 and 2022. From what I understand, you had a delivery of five planes in 2020, and we expect four other planes in 2021, the A321s. I'm just wondering what are these extra planes, and also by how much can you potentially reduce your fleet until 2023 since you have the flexibility to do so? What is the minimum size of fleet that you can achieve by 2023? My other question was regarding your total liquidity. What is your total liquidity available today, in terms of cash and lines of credit? Thank you.
First of all, just to make sure we don't have any confusion what Mr. Gerogiannis said five minutes ago, we used to have 26 aircraft to be delivered 2020 to 2022. That number is now down to 15. We have received already five. There's 10 pending for 2021 and 2022. I believe the number is four until summer 2021 and another six in 2022. In terms of planes that are not already here, not the five neos we already have, we have another 10 for 2021, 2022, from now until the end of 2022. In terms of aircraft departing or able to depart, is the right word because their leases are expiring, the number is 26 jets and two turboprops.
That does not mean that 26 jets will leave or that two turboprops will leave, but this is the extent of our "flexibility" with regards to the fleet. The contract from Airbus allows some additional flexibility in adjusting delivery dates, but I believe what we are more likely to use in the short term is basically how many of the expiring aircraft we will extend or not. The good thing about having many expirations is not only that you can allow aircraft to leave, but also if you want to extend, you get significantly better terms. As you might imagine, lessors are quite eager to keep aircraft with airlines these days because the market has definitely more supply than demand. In terms of liquidity, I believe the numbers are there in the statements for the six months.
What I can tell you again is that we burnt EUR 110 million for the first six months. We anticipate in the nine months to be EUR 160 million cash burn in the nine months, that is. To burn another EUR 50 million in terms of cash, not financial losses, but cash in the third quarter, to be at EUR 160 million minus in cash from the beginning of the year. What I need to add to all that is that we have not yet contracted. We believe about one or two weeks away from the final contract with the four systemic banks to get the 80% state-backed loan, which is EUR 150 million. We have not drawn on that loan yet. We are likely to draw on that loan in October. I would say our big problem is our losses. We do not have a short-term liquidity issue.
Okay. Thank you. Thank you very much.
The next question is from the line of Kumar Achal with HSBC. Please go ahead.
Yeah. Hi. Good afternoon, gentlemen. I had a couple of questions. First of all, I want to understand about your CapEx plan. Basically, I understand that in the second quarter you spent almost EUR 50 million on the CapEx, taking three planes transferring from the lease to own. What exactly is that transaction? Why you've done so, and then what is your plan going ahead? Are you sort of planning to take more planes on your balance sheet rather than selling these back? If you could please help understand that. Thank you.
I am a little bit confused exactly the direction of the question because I believe we have already emphasized three things. We reduced our incoming total 2020 to 2022 by 11 aircraft. That is obviously a CapEx commitment reduction. That in total brings, in terms of pre-delivery payments a saving of around EUR 110 million in the course of the three years in pre-delivery payments, again, I repeat. As we said earlier on, we've got a high number of lease expirations. How do we intend to finance these aircraft? It's a mixture of different products. We have some bank financing in the first couple of A321s we're picking up. Then there is largely the other aircraft that are coming within those two years are mostly from lessors, where we are taking from the airline, or there are aircraft that we have agreed to do sale leasebacks on.
Therefore, other than the pre-delivery payments that are to be made, which are for 2020, 2021, 2022, in total under the new program, excuse me, $175 million, roughly $180 million from September of 2020 to the end of 2022. Other than this amount of money, which is reduced, as I said earlier, by $110 million due to the partial deferral of aircraft, there are no significant cash outlay during the period. Other than the PDPs, the aircraft are going to be either direct from lease or from, what shall we call it, from sale leasebacks. In terms of your question, what is the CapEx in the first quarter or second quarter, there was a purchase of two ceos that was agreed last year and was executed, I believe, in January, which is probably there. That is the majority of that.
Then, of course, we all know that under IFRS 16, the leases also appear as liabilities and as assets. In the balance sheet statements, the balance sheet grows even when we add leased aircraft these days. I hope most of your question has been answered.
Yeah. Basically, just to confirm, in the second quarter, you are showing a purchase of tangible assets worth EUR 55 million. Does that belongs to the ceos?
Our CFO will answer that.
Yeah. In the second quarter, EUR 42 million on what you see in your financials are related to the purchase of these two A320ceos that occurred in that period, actually.
That was contracted last year.
Yeah. Which was contracted in 2019, and actually it includes the maintenance reserves also of these aircraft, which are related, which are linked to this transaction.
Right. Okay. Actually.
It does not have a cash outflow of EUR 42 million. That's what Michael said about the reserves, because the reserves are basically being recovered.
Right. Fair enough.
Sir, if you have any questions on the technicalities of that to call Mrs. Dimaraki offline because I think it's getting a little bit too technical for the audience.
Sure. The second thing also I wanted to understand about the staff furlough scheme. As you said that if the recovery turns out to be much slower, we might have to go for another furlough option. Basically what I wanted to understand is that what sort of options do you have in case the demand really turns out to be slow? Would you be able to continue with the current scheme wherein you said that the 75% employees will be on that scheme and wherein you will be paying 50%, or do you have any other furlough scheme wherein you can opt for that? What sort of options do you have for that?
First of all, there are two basic programs that are available by the Greek government. One is a furlough option or called suspension in Greek, that pays a minimal amount of money, EUR 570 per month to employees and removes all other costs to the employer, social security payments and whatnot. This is basically suspension. During that period or furlough, the employee cannot work for the company. There is also another program which is, let's call it the partial work subsidy program, which requires the employer to pay, as Mr. Gerogiannis said, 50% of the regular salary, and then the state contributes 60% of the missing 50%. Altogether, is roughly 80% of the salary for 50% of the work, and the employee works for 50% of the time. That's reduced work.
These programs are now available until basically the end of the year to the Greek companies that have been affected by significant revenue reductions. We anticipate that this will be extended exactly because tourism and transport are very unlikely to recover before quite late into H1 of next year. We expect these programs to b e extended. The Greek government has secured, and is funding these programs from a European program called SURE. That is already in place. As a matter of fact, the funds that Greece received were somewhat higher or significantly higher than what they were expecting initially. We are highly confident that this will be continued, but it's not written in law yet for after the end of this year. The difference between furlough and partial work is very clear.
If my salary is, let's say, EUR 3,000, and on top of that, some social security contribution, and I go to furlough, I cost nothing to my company for this month, but I can also not work for the company. If that's the suspension part, I'm only paid some money from the government. In the other case, I reduce my cost by 50% to the company, but I can also offer my services for 50% of the time to the company. Whether you use one or the other depends on how underutilized your fleet, your program is relative to normality.
Right. Basically, you're expecting this furlough program to be extended beyond the year-end. That's correct, right?
That's correct. It's an expectation, but not an assurance because it's not in law yet.
Right. Okay. Perfect. The other thing also I wanted to understand what is the situation with the political instability between Turkey and Greece. Has that been settled down completely or is that still going on? Do you see any additional risk?
I'm not going to venture into that. That's a little bit above my qualification. I would say that they are now in discussion, so I feel a little better than before, but this is not something that I can actually validly or intelligently comment on.
Right. Fair enough. On the demand side, also, I wanted to understand. Basically, of course, the demand is weak and as you said, international is probably more weaker than domestic. Particularly talking about the international demand, where do you see this demand is coming from? Is it from Germany, U.K., or what exactly how the mix looks like? Of course there are very few countries are now green. Where the demand is coming from actually when we talk about the international demand?
The steadier part of the demand has always come between Germany, Austria, Switzerland that sort of triangle over there where I think- I'm sorry?
Yeah.
Where I think the people, I would say psychologically perhaps, and medically have been affected less by the COVID. England is somewhere in between. It's a very important country, England and France are somewhere in between. We have significant reduction but also some strength of demand. Italy and Spain from the, let's say, larger European countries are certainly the lowest of the demand. To our east, unfortunately it's mostly non-EU so access is quite limited. Has been quite limited, whether it is north or southeast. The Balkans which were a very good source of let's say short haul international have been quite compromised by restrictions. Again, going back to the beginning, Germany, Switzerland, Austria, and France are among the strongest from what we have seen to our demand because you also have to consider we are largely Athens based.
We also have the Thessaloniki which is quite strong with Germany. That's more or less the picture.
Is this demand more of a leisure demand or is it sort of a mix of leisure plus business?
It's entirely leisure or VFR. There is very negligible corporate travel. Most large companies do not have travel in their policy these days, at least until the end of the year. We hear some for even beyond that. For international, it is very much leisure and visiting friends and relative driven. For domestic, okay, it's a little bit different because small businesses and self-employed people do travel around the country, so the bag is a little bit more mixed. For international, it is certainly leisure and VFR.
Okay. My last question, I'm so sorry for so long list, my last question. On the fuel hedging, ineffective hedging loss, you booked about almost EUR 69 million during the first half. Is that all done and dusted or do you expect some more losses in the third quarter and fourth quarter?
Providing we fly what we flew. We know what we flew in Q3, right? Providing what we estimate for Q4 is correct in terms of how much or how little we will fly, then the numbers are all in. The only way that there is more ineffective hedging to be added is if basically, instead of flying one out of three, more or less or one out of 37%, 38% for the last quarter, we end up flying 15%, in which case there will be some more ineffective hedging. I hope that will not be the case. I do not know that would not be the case, but certainly, also because the big hedged amounts run until September, October, and the amounts for initial hedging were significantly lower in winter, materially, it's quite difficult to see that number changing significantly.
Okay. Thank you so much. Good luck.
Thank you.
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 your attendance. Once again, we are going through definitely the toughest periods of aviation in a very long time. Certainly the toughest time for our company in a very long time. Visibility continues to be low, but we are working very hard to find solutions to individual problems. It's going to be a very uphill and very bumpy road with lots of fog clouding the way. There's no doubt about that. It's going to be a very challenging and difficult winter. As we wrote also very clearly in the press release with the results, we think it's very important, it is crucial that we have common protocols for travel that probably necessitate pre-flight testing for definitely non-EU to EU flights as of next year.
Possibly that same principle could be applied within the EU if it is considered necessary in cases where it is considered necessary. The clear position of our airline, and indeed pretty much every airline in Europe, is that pre-flight testing now with the thousands or hundreds of thousands or millions of tests being conducted around the world today, is quite feasible. It's getting cheaper, it's getting faster, and it's a much more effective way of protecting receiving countries or repatriating countries from the potential of disease, rather than quarantines or market closures, or actually upon arrival testing. For obvious reasons, if somebody is found to be sick, then they don't fly, and that protects both the person by giving him a more comfortable recovery period at his home, and of course the incoming country, and would allow the whole world to become accessible again as of 2021.
Something absolutely necessary for networks of airlines to gradually recover. Absent that, it's going to be very hard. We thank you once again for your attendance to our call, and just to assure you that we are looking at every possible scenario of how to best reallocate our network and our fleet in order to find ways to gradually mitigate the effects of this really destructive crisis. Thank you very much.
You may disconnect your telephone. Thank you for calling. Have a pleasant evening.