Hello, good afternoon, everybody, and welcome to our results presentation for the first six months of 2025. Just to remind that, along with me, I have Michael Kouveliotis, our Deputy CEO and CFO, Styliani Dimaraki, our Treasurer and Investor Relations Director, and also Anthi Katelani, our Investor Relations Manager. All four of us are here for you. I'm happy to answer any questions after my brief remarks. 2025, the first half is again a quarter and two quarters where we had, I would say, modest growth driven by our, particular, restrictions in terms of how many of our NEO aircraft are actually flying versus the ones grounded for GTF.
Within the confines of those restrictions, the additional challenge of around two and two months in the second quarter where our important nearby markets, Israel, Lebanon, Israel in particular, Lebanon, and Jordan, we were not able to fly to due to the situation there, what's going on between Israel and Iran, and the effect it had for the whole area and our inability to fly for around about two, two and a half months, which ended on the second week of July, if memory serves. Within the restrictions that we had, I think we've achieved a very strong set of results. We've managed to provide a revenue increase of 5%, which is 1% higher than the ASKs, the ASK growth we put into the market, which was 4%, which meant that within an increasingly competitive environment, we have managed to actually increase our RAS marginally by 1%.
This was done in both quarters in terms of growth. As you have already seen, the first quarter was significantly stronger in terms of ASK development versus the second. That is part of two things, one planned and one unplanned. First of all, we have indicated also in previous conversations and discussions with you that we see a gradual extension of the season. We also see an increasing pattern of Greeks traveling more. Within those two effects, we see ourselves operating, growing more in what used to be referred to as the lowest months, so Q1 and Q4 relative to Q2 and Q3. That is also related to restrictions in ATC and airport capacities around our country. That's the first part.
The second part is, of course, what I referred to earlier, the fact that not being able to fly to Israel, where at the peak of the season, we have around about six flights to seven flights, even a day from different places. Plus, Jordan and Lebanon, that add basically make the total amount of flights lost to be nine for a period of two, two and a half months. This cost us around about 100,000 passengers on these routes. On top of that, we lost around about 35,000 passengers on connecting routes. In a way, the connects losses are more costly in the sense that those seats are not typically, with a cancellation of flights close to departure, you're not able to redirect those lost connect seats to other routes, to other sources.
Within the confines of that, achieving a revenue increase of 5%, and achieving a significant increase in our bottom line, and a modest increase in our EBITDA, are, I think, significant positives, as well as, of course, continuing to build, to have extremely strong cash flows where, despite a payout of dividends of circa $70 million, and an increase to our PDPs paid into Airbus by another $40 million. So a total of $110 million that have been spent this way. We still had an increase of circa $60 million, $70 million, I'm sorry, in our available cash, to $840 million. As we highlighted also on the report, on the release, this is before, of course, the issuance of our early July bond of $250 million that has further added in the beginning of July to our cash availability.
It's fair to say, of course, that the development in the same way that we lost passengers and capacity, both capacity and passengers and dropped stability in the second quarter due to the geopolitical problem. At the same token, we did have an advantage from the development of the euro, and the development also of the fuel price. There are effects both ways, positive and negative, which we can discuss in detail if you like. Overall, we're happy with what was done within the context of the restrictions that I previously announced or described. Within the difficulties that we're having with the fleet, the positive element is that gradually we are flying more and more of the 321neo derivative.
In particular, as you know, the big delta in seat capacity and inefficiency per seat comes from increasing the mix of those aircraft of the fleet due to the fact that they have a 220 seat capacity relative to 180 to the 320neo and a 174 on the 320ceo. The important thing for the company is that going forward, all the remaining Airbus deliveries that we are to take are indeed of the A321neo type. That is going to be building our efficiency going forward. It's also important to understand that we are now in September 2025, entering, I would say, the period for the next 12- 14 months of a maximum number of aircraft that will be on the ground awaiting these checks. Why?
Because the aircraft that we have received up until the first quarter of 2024 were the ones affected with the initial defective or potentially defective part. As a result, those 28 aircraft that were accepted until April 2024, when they reach between 2,000 and 2,500 cycles, they need to go for the preventive checks. That maturity level is coming at its peak, from what was basically last year eight and what became 10 at the peak of this summer. Right now, we're at 11 to 12, and we will reach between 12 and 14 for the next 12-1 4 months. We're at the maximum part of the restriction in terms of how many aircraft will be on the ground.
On the other hand, as we accept more aircraft gradually, we expect to have, of course, a higher number of flying neos and indeed a higher number of flying A321neos, which will be contributing to our efficiency and to our competitiveness. I also need to say that I think there are adjustments that we've made in our network this year that have worked well and have allowed us to offset the effects of additional competition in several different markets and the consistent growth of the market to Greece in excess of the rate that Europe's overall shortfall is growing. Adjustments in the network have helped us retain profitability.
At the same time, I think it's encouraging to continue to see that our business class product continues to have increasing penetration, still not at the level that one would like, but certainly much higher than in previous years and much, much higher than pre-COVID. We've now, I think this is an important aspect, especially as we're going towards the direction of introducing longer distance routes with the A321XLRs and the A321LRs that are coming forward. We believe that this will also further help in this dimension and will have a reflection on what we should refer to as a traditional network as well. Another issue I would like to refer to is that certainly, there is no shortage of disruptions from air traffic control all over Europe, but also particularly in our country.
We are significantly active in a hopefully constructive and consistent way over the last four or five years, at least with our local authorities. We hope that in the next months and years, the amounts that have been paid in by all airlines, including Aegean will finally be used in an effective way in our local market in order for the problem to be gradually mitigated, because it is becoming significant for the quality of service that visitors to Greece overall experience. We consider that a very important issue which needs to be addressed, and we have highlighted that perhaps not in an equally aggressive way as others, but we have highlighted that consistently over the last four or five years. We have made, I believe, specific suggestions on how parts of these issues could be mitigated. Finally, before we take questions, a word about our investment in Volotea.
It's now been exactly a year since we started to invest in that company. I have reiterated that in the annual results, I said we got what we expected in terms of results from Volotea for 2024. I'm happy to report that it seems to be going positively and indeed in a more positive way for 2025. We are significantly positive about the prospects of the company going forward. It is not yet beyond all possible risks and burdens because it was burdened during COVID by significant losses and significant debt. However, things seem to be evolving in a positive way. We think that in the next six to eight months, we will be called to make some decisions together with other shareholders about some additional injections of capital in a more significant way.
Depending on exactly the outcome of these conversations and the performance in the company in the meantime, we will also take our decisions about how to further proceed there. Overall, I think we're happy with the results, and we also think that it is possible in the future, regardless of the amount of equity that we'll own in the company, to develop a somewhat complementary service to the regions of Greece. The reason it hasn't been done actually already is mostly because Volotea, much more than Aegean is restricted by the unavailability of aircraft in the market. We are restricted by our GTF, pride and weekly cycle. Therefore, we are both relatively conservative with our capacity development over the years. We will need some more time to develop these particular commercial synergies. Overall, we're happy with the cooperation.
In a nutshell, also, one more thing to say, expect our ASK developments in the market to be somewhat higher, around about 3% in ASKs in Q3, and significantly higher than that, between 9% and 10% of ASKs in Q4. I think it's fair to say that there is, again, a mix of factors going forward affecting our expectations. Demand is strong. Competition is also strong. There are fair pressures in different markets, not everywhere. Some markets are developing positively. I think to a great extent, what we have come to expect is an annual improvement year on year, particularly on the September to December period, as opposed to the June to August periods, because frankly, people are gradually changing their pattern of travel. Even though families will always need to travel for leisure at peak, the rest of customers seem to be modifying their behavior more.
We begin to see a spill of potentially positive results, also, in the latter part of the year. I'll stop here and listen to your questions, and hopefully, we'll give you a better idea of where we're at. 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 and 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 comes from the line of Andrew Lobbenberg with Barclays. Please go ahead.
Hi there. Thank you so much for the clarity on capacity for the rest of this year. What's the right way to think about what we get in 2026, given the more crowding but more delivery? Could you perhaps give us some more color on which markets are seeing the tougher competition and which are less? You also spoke of doing some network adjustments that were positive. Can you remind us what those adjustments were? Thanks.
Thank you for the question. Let me first say that I'm not going to respond to specific network questions because if I respond on where our RAS is improving and where it's deteriorating, it's like guiding other people to, you know, to go after that. It's a mixed bag, and we are very dynamic about it. I think all airlines have become significantly more dynamic about network adjustments. There are opportunities, and we tend to make, I would say, you know, 2%- 3%, 1%- 3% ASK differential shifts in our overall market within a three-month cycle. Whether that's up or down and where exactly it goes is something that we look at diligently and on a continuous basis. I think the process itself is what brings the improvement. It's not specific trends in specific markets.
Again, if you are to look at most incoming markets, most international markets to Greece, you will find between a 4% and a 7% capacity growth in all of them. You can just not look at capacity and competition and adjust in advance. Now, in terms of the aircraft, there, I can be much more specific. Today, we have taken delivery of 36 NEOs, out of which this summer, 10 were idled. We have 26 aircraft flying. Last summer, we had, if memory serves, eight to nine groundings with a total of 33 deliveries. There were actually only 33 minus 8, 20. Whoops, nope, it's wrong. It's 30, no, 30 minus 8. There were 22 aircraft flying. There were four more NEOs flying this year than last year. Next summer in peak, we expect to have 45, 45 minus 12. That makes it 33 aircraft flying.
Basically, you see an evolution where eight grounded becomes 10 grounded this year and 12 grounded next year at peak. At the same time, you see 22 aircraft flying in 2024 at peak, new aircraft, of course, 26 this year and 33 next year. What is particularly relevant, relevant even more than the increase in this number, is that this year we had 12 A321neo flying. Next summer, we'll have between 18 and 19 A321neo flying. So 50% more of the larger derivative at work, which is what we expect more than anything else to support our results. I hope at least on that part, I have been specific enough for you.
That's helpful. Thanks. Can I just come back on the network? I appreciate the commercial sensitivity. In that second quarter, we saw more growth on the domestic than on the international, which reverses recent trends. What drove that? Was that really influenced by the Middle East, or was that influenced by commercial decisions by you?
I would say both. Certainly, the reason that you didn't have growth on an international network was the Middle East. We were planning to have small growth in the second quarter and a little bit more in the third and more in the fourth. Actually, the maximum growth quarters for international were Q1 and Q4 by design. The lowest was going to be Q2, and in the middle was going to be Q3. Why? Because last year in Q3, we were not flying to Israel and Lebanon and Beirut on and off. One of the things that confuses the comparisons is that if you have markets that you're coming in and out, not by choice, but rather by what's going on in geopolitics, that makes things more confusing. If we look at the year overall, we were not planning to have more of an increase in domestic than international.
We were planning for an equivalent level of capacity increase of both. It turned out to be a little bit different in Q2 due to what happened. What I can say about the network is that within the international network, certainly we have emphasized a little bit more shorter destinations. We do have, even if you're looking at the pure international network, a little bit of a drop in the average distance that we cover when we fly internationally. That's as specific as I can be to give.
No, that makes sense. Thank you.
The next question comes from the line of Jakub Caithaml with Wood & Co. Please go ahead.
Hi, thanks for the presentation. Three questions also from my side. On pricing, I understand that you are pricing slightly more softly in the summer than last year. Any comments on the extent of the softness? Also, could you tell us how the pricing was evolving during the individual months of the third quarter? Maybe related to that, are you now and to what extent flying back to Israel?
Okay, again, I'll start from the end because it's easier. Yes, we're flying back to Israel, and we're flying to Lebanon, and we're flying to Amman and Jordan. We hope to increase our flying in the Middle East and with some new destinations also in North Africa in the next six months. It is very important for us because we also sell connectivity through Athens to ensure that near destinations with a distance between one and a half and two and a half hours flying, in particular to our south and to our east, are well connected and that Athens and Aegean Airlines or Aegean and Athens are considered a valid route to the west, to the north, to the Balkans.
Actually, even before we discuss flying further away like we plan to next year, we are back and we are eager to expand our presence in different markets around there. Of course, I recognize that the stability of the region is not exactly stellar. As we try to develop our network, we will have some instability depending on how conditions between the nations evolve. By the same token, I'm sure you understand that these markets are largely underserved. Therefore, when things are normal, you can expect a decent return, especially if you are positioned somewhere like Athens, which is convenient for these people either to come and visit for Greece and spend the holiday or business here, or indeed just transit through Athens to another destination in Europe. Yes, these markets are important and we will continue to try to develop there.
We will accept that this might mean that sometimes we might have to stop for periods of time. We, of course, are very careful to make sure that we fly when other Western carriers fly and when our people are told that the situation is secure enough for us to fly. We don't take risks of that kind knowingly. Number one for everybody else is safe operation. For all of us, it's a safe operation. In terms of month-by-month evolution, I will say that international fares are somewhat lower, not in an alarming way. We are at the same time somewhat better, one or two or three passengers more on average on people per aircraft. That's on passengers per aircraft, either because we're growing the aircraft or because we're getting small increases of load factors. There is some measurable offset. Overall, the effect is there, but not super significant.
We will have to wait a few more months to see how this evolves. At the rate that we're going now, we feel that it is likely to expect an improvement in our overall results for the year. Of course, one can never take this to the bank unless the whole year or most of the year is behind us. That's the most I can give you in this direction.
Thanks. Just a quick follow-up on the Middle East. In terms of scale of the return, I mean, by September, are you back to where you would have been?
Yes.
In your original expectations fully?
In terms of capacity deployed, yes.
Understood. Thank you very much. The second question also on growth and pricing in the fourth quarter, where you are guiding for a brisk growth of 9-10%. What kind of yield or risk implications do you think this will have? Can you comment on the competition schedules, how they are looking for the shoulder season and the winter?
The competition is also more or less applying higher increases in the winter than in the summer in terms of capacity. This is a pattern that we have seen for the last three years. Their capacity is higher also in winter, more so than in summer. I don't have yet visibility on what the overall effects on RAS can be. I would expect in terms of international fares, which is not necessarily RAS, the things to be a little bit softer again, following the trend of the summer. I would consider that more likely than the reverse. I have to say by the same token that we have seen, and I've seen other airlines refer to that, an increasing trend of last-minute bookings. It is becoming somewhat more difficult to be able to forecast exact RAS or exact load factor.
Got it. Thanks. Thanks very much. This is very helpful. Last question from my side on engines. You mentioned that, if I understood correctly, the powder metal engine issue can be resolved in 24, 28 months. Just to confirm, is this referring to today or is this referring to end of June? The broader question on engines, could you share anything at this point on your expectations regarding the availability of the HS Plus HUD section upgrades in 2026, 2027? How many of the engines may be able to get this that you will be sending for shop visits? Is there anything that you could share on the advantage engines availability and timeline?
Okay. First of all, I'm not sure I'm qualified to answer all of these questions, but I will at least answer the questions referring to the dates and the significance of the number or the level of the number of the grounded aircraft. As I said earlier in the discussion, the highest number, a number between 12 and 14, it will go up and down between those two figures, will exist between September 25 and October 26. From October 26, we start having a decline, which will gradually lead to something like seven aircraft in, I would say, September 27. Between September 27 to March 28, it will probably go down to zero. This takes into account what we have been promised in terms of slots for induction of engines for the next 12 months, and then some expectation for, in an equivalent fashion, for 2027.
Unfortunately, these numbers are moving targets, but we believe that these numbers that we're giving are relatively conservative. We are continuously discussing and pushing Pratt & Whitney to give us priority in slots. We, of course, have said many, many times that the compensation that we get does not fully cover the losses that we have from higher maintenance, less efficient fuel consumption, and, of course, loss of seats per flight. The compensation barely covers the lease cost of the aircraft that is sitting down, but it is not covering the opportunity cost of not flying the improved aircraft, which is, of course, the reason why we made the investment.
On top of everything else, it makes our balance sheet more bloated because there are a significant number of idle leases, which are booked as a liability, but what we will receive as a compensation is not booked as an asset, not forward, only once we receive it. Therefore, you have a level of inefficiency in your balance sheet, you have a level of inefficiency in your cost, and you have a level of inefficiency in your utilization, which is, of course, the same thing as cost. The 24 to 28 months is from the date of the announcement, meaning yesterday. That's why I think the 28 months will expire around about early 2028. I hope I have been thorough enough in the response.
Thanks. Thanks very much. This is helpful. I understand that at this point, it doesn't make sense to discuss the potential engine upgrades from Pratt & Whitney, where they may be replacing some of the parts in the HUD section of the engine.
Mr. Kouveliotis would like to respond to that. Here he is.
The advantage of the engine, yes, as the specs presented by Pratt & Whitney are promising, and we are expecting when the time comes to have more durability on simul wing. Actually, it's quite early to have a clear opinion and view because we are expecting to deliver some of the first engines of the advantage within 2026. Again, it's not something very, very firm. We hope and we believe that this is going to be an improvement, but too early to have.
I mean, in a nutshell, all of us knew that the Pratt & Whitney GTF engine was a new technology and that it presented potential benefits of evolution with versions coming out that would further improve mostly the fuel efficiency. That was always the case there. Unfortunately, as you know, for the last two years already and for the next two years, as we've just said, this whole situation has been clouded by the problem regarding the early inspections and the effective grounded aircraft. I think all of us need to get ourselves out of the first situation before we consider the second. Yes, we all think that there is potential for this engine to evolve in a positive way. Let's see the main problem we get out of the phase before we start counting what the benefit of that might be.
Frankly, we are also all eager to make sure that we keep on the pressure to Pratt & Whitney to maximize either direct payouts for compensation, which are there, but they are inadequate, or indeed to accelerate the availability of slots so that the problem can be dealt with more expediently.
Fair enough. Thanks. Thanks very much.
The next question comes from the line of Achal Kumar with HSBC. Please go ahead.
Yeah, hi. Thanks for taking my questions. I have three, actually. First of all, in terms of competitive landscapes, you mentioned the increasing competitive environment. I just wanted to understand how the competitive environment looks like at Athens International Airport versus the regional airports, the beach cities. Especially if I look at the table, it looks like the traffic growth at the airports operated by Fraport was quite slow. 1% flight growth and 2% passenger growth in the first half. Do you think with these kinds of demand, growth slowed down, the competitive environment could remain strong, or do you think there is a possibility people could sort of take out the capacity? How do you see the demand versus supply going forward?
Certainly, the demand growth, sorry, the supply growth has been slower overall in Greece than in the past two years, where you know we were in 2023, still in the, let's say, recovery path post-COVID, and 2024 had a strong follow-on both for Athens and some and all the regions. This year, we're seeing certainly a resurgence of growth of capacity to the north, to the Thessaloniki market. Still, some significant growth in Athens, but Athens is beginning to be significantly restricted both by ATC issues and also by terminal issues. The airport became facilitated, which is level two, this year for the first time. It will be even, I would say, more effectively facilitated because the ATC restrictions have been better translated into the coordinators' planning next year.
That should, hopefully, allow us to operate a little better and at the same time make it a little bit more difficult for too many people to add capacity. I think Greece has had a very good run in terms of capacity development and demand development, and I think we should all be a little bit more moderate on what we expect going forward. Now, this is still early to talk about what will happen next year. The only thing that I am certain about is that there will be some capacity growth. I would expect it to be, again, somewhat at least 1% or 1.5% higher than whatever the average capacity growth to Europe is going to be.
We are now based effectively in a material way in four airports: Athens, which of course is the core of the network and the provider of all the connectivity and the network synergies; Thessaloniki in the north, where we have significantly invested this year and where we expect to invest even more next year; Larnaca in Cyprus, where we also have invested this year and we expect we will invest some more again next year; and Herakleion in Crete, which is a very important, the second airport in the country, but has been restricted in terms of capacity for many years now due to the terminal, basically, not the terminal, the airport and the terminal itself. Herakleion is going to be replaced by a new airport in Crete, probably March 28, so two and a half years from now.
We have two more years of operation on Herakleion, and we certainly consider Herakleion and the new airport of Herakleion a potential area of growth for us in the future. These are the four places out of which we will be developing our capacity. I would say, if I were to say what's going to have the highest growth into next year, possibly that would be Thessaloniki because Thessaloniki is among the main Greek airports, the one which has lagged behind in terms of recovery from post-COVID. The average in Greece today is about 30% higher capacity in passengers relative to COVID, 30%, 32%. Thessaloniki is, I believe, right now at 15% and has shown better recovery trends during the last 12 months. I don't know how much I have answered and how much more you need.
No, perfect. You mentioned that Athens International Airport remains constrained because.
I said Athens is beginning to be partially constrained. It's not Heathrow, right? Certainly, there are now times in the day, and there are a lot of times in the day where there will be significant difficulties in increasing capacity for us and for others.
Sorry, does that mean there'll be more opportunity or better opportunity for you to sort of get better pricing out of Athens if the capacity remains tight, do you think?
I promise to let you know as soon as I do, but I really don't know. I mean, you know, one would like to hope that, but in effect, what I'm mostly hoping for is that we reduce the number of operational, the amount of operational problems that we're facing. Greece, at this moment, is not ranking well across Europe in delays, in ATC problems. We're ranking quite low. It's impossible to escape the problems of your home country and of your hub if you are a carrier, particularly a carrier that does significant transfers in the airport. What we're mostly concerned about is to further improve the quality of our operation. The last three years have been very difficult in this direction for on-time performance due to these reasons.
We are more eager to see ATC problems and capacity problems expanded so that our operation regains both a certain amount of quality towards our customers, but also a lot of cost saving for us because delays in the air, delays on the ground, compensations for passengers, misconnections, all that stuff costs money and it costs to brand value. Those things are very important for us. We hope this will be corrected. This will not be corrected next year and probably not the year after that. Will this create the reverse effect of somehow being able to support RASC? Possibly, but I don't know. I don't know.
Right. My second question is around the cost. I can see in the first half, many of your costs have increased significantly. Your handling cost was up 20%, catering cost was up 14%, employee cost 13%, other operating cost 17%, while the capacity was ASKs up only about 4%. What's going on there? Particularly if the handling charges went up by almost 20%, as I said. Is that because the new airports are pretty more expensive? If that is the case, do you think the low-cost carriers will find it hard to stay? How do you see that?
Let me say this. Certainly, the handling cost increase is the most important one, and that is related to basically increased labor costs in the country, new contracts after five years, for the next five years, and that to a great extent has brought the increase in the handling cost. Catering is largely due to the higher amount of business class to some degree, but also to our effort to continue to provide a high-quality product. Perhaps we have overdone it a little bit there. The rest are not really significant. The part of the employees, the running rate as we go toward the year is actually at a much lower level. I would expect it to close the year between 9% and 10%, so significantly lower than 13%.
Obviously, we were overstaffed and we were overplaned as well in the second quarter relative to the capacity we actually displaced because, as I said, we didn't fly to three important markets, so that at least cost us 3% of our capacity for that quarter. Also, you have to remember that we are continuing to beef up the staffing of our MRO. The MRO itself has added about 170 people in the last 18 months, and that is an effect on the payroll cost that is unrelated to the size of the operation, I mean, to the size of the flight operation. That is a factor there as well. I think that's what I have. I think the operating costs altogether did not have a very significant increase. The overall operating cost increase of the company was 5% in the first half. This is the aggregate of everything. That's excluding fuel, by the way.
Including fuel.
Right. All right. So that includes fuel, which of course had a benefit, somewhat benefit because, of course, we were also hedged at the same time. The overall expense was 5% for the operating expenses relative to a 4% increase in ASKs, right?
Okay. My last question is around your long-haul network. You've just decided to start the direct flights through India, and you mentioned you're going to increase the long-haul operations. I just want to understand, is there any.
Longer haul, not long haul.
Yeah, exactly. Do you, I mean, apart from India, do you have any other countries in plan or in mind what countries you are thinking about? If you find these longer haul operations more profitable, do you think you can expand it or you're sticking yourself to four XLRs which are planned currently?
No, first of all, we don't have, we have two XLRs and four LRs. There are going to be in aggregate six aircraft that are competent to fly beyond six hours. We have told you in the past that we expect to invest these aircraft to a combination of routes that require the ability to fly further away, longer distance, but also to routes outside the EU that require a different aircraft configuration than the one that we're flying intra-Europe, which means a higher level business class because when we fly today to Saudi, as an example, or to Dubai, and we call ourselves a full-service carrier, we are competing with carriers on the routes to Athens, as an example, to Riyadh or to Dubai, where we have effectively an empty seat between three seats in business class, but other people have dedicated significantly more comfortable business class products.
The investment in the LRs and the XLRs is a combination of an effort to try to test longer distances, but also a recognition of the requirement to be able to serve customers outside the European Union in a product that looks more like the competitors that we have to face that don't call themselves low-cost carriers in these markets. It's a combination of quality and ability to fly longer. Our experience needs to be created out of the hopeful success of these initial efforts, be it how the improved product will be received in Dubai or be it how well we will do on the routes to India. That's priority number one for the next two years.
Given we're getting two aircraft in 2026, two aircraft in 2027, and two aircraft in 2028 out of these six, as you might imagine, it will take us at least until the end of 2027 to understand the initial response to these efforts. Beyond deploying these aircraft to India, and beyond which, by the way, India has got, as you know, many possible major destinations you can fly to. We're starting with Delhi and Mumbai. It doesn't mean that we'll be restricted to that if we seem to be doing well in that route. It's very important to note that just two days ago, we announced a signing of an MoU with IndiGo to develop code sharing to the Indian market. They will also be flying to Greece as of next year.
Through their presence in India, we will have access and distribution to, of course, all the places within India that they fly to. That's very important for us because Greece is small and India is big. It's important to be known also in that country. No, I don't have a particular idea of where beyond India. What I can say for sure is when and if Russia comes back in line, Russia is going to be served by some of these aircraft, mostly due to the comfort level and less so due to the distance. The Indian market has got a lot of potential for development in the Middle East, whether it is Saudi Arabia, Dubai, or some other potential destinations that are going to take up capacity of these aircraft. Until the end of 2027, I doubt very much we will see some other routes.
If there appears to be some seasonal lags where we can try some long-haul leisure routes like Maldives or Seychelles in the winter for Greek people to fly out of Greece to go there, that will only happen if the seasonality pattern of usage of these longer distance aircraft seems to be such that it allows for idle capacity to go in those markets. We will not discontinue India to fly for three months to the Maldives for a few Greeks to be able to go there directly unless it doesn't make sense to fly to India in the winter. Our hope is that it will make sense to fly to these markets around the year.
Our hope is that through flying to these parts of Asia that we can reach, we can further improve our seasonality because the pattern of travel of some of these nations is not exactly the same as Europeans. They tend to be a little bit less seasonal or place some more interest in winter. Of course, whether that is with final destination Greece or somewhere in Europe, in both cases, it's interesting for us because we need the connects as well more in winter. No, we don't have yet too many other ideas about where these aircraft might fly.
Perfect. Thank you so much, and wish you good luck.
As a reminder, if you'd like to ask a question, please press star one on your telephone. The next question comes from the line of Vangelis Karanikas with NBG Securities. Please go ahead.
Yes. Hello, and thank you for taking my question. Just a follow-up on unit costs for the second quarter. If my estimations are correct, there was around a 7% increase in unit costs, excluding fuel at the operating level, EBIT. This seems a little bit high given the euro strength. Can you give us some more color behind this increase? Is it something that we could expect in the coming two quarters of the year? Also, if I may, perhaps some color on some big deviations into expense lines, other operating expenses, and leases. Thank you.
Yeah. Again, underutilization of aircraft will cause costs to go up. In Q2, we had basically three aircraft that were supposed to be flying in those eight to nine daily, two and a half to be precise, of aircraft that were supposed to be flying to these routes that were discontinued due to the geopolitical part, idled, and also the people manning the aircraft, maintaining the aircraft, supporting the aircraft. The loss of 2.5% or 3% of expected capacity does not bring you, excluding fuel, as you said, an equivalent amount of saving because a lot of the things there stay constant: the aircraft, the people, and the infrastructure to support them. That's the reason that you had this particular spike in the second quarter, which is not the case for the whole six months, and it will not be the case for Q3 or Q4.
I said earlier on also that both employee expenses and some other expense would be mitigated. The ones that will continue to have a higher than the activity, let's say, increase are handling for sure, and to a certain degree, maintenance costs and catering. The reason for the increase in the maintenance cost is mainly the fact that we continue to operate the older aircraft, which are getting older due to the grounding of some of the younger aircraft. That's a problem that will be retained to some degree while we still have the GTF problem in the next 24 to 28 months, as I said earlier on. Now, in terms of why there is a drop in the operating, you call it in the leases, the leases referred to ACMI. They're not the long-term operating leases or finance leases which are dealt in EBITDA or EBIT.
Those leases were committed in 2024, used to cover charter operation, and we didn't use ACMI again this year. That's why there is a big delta on that line. A positive big delta on that line.
Mr. Karanikas, have you finished with your questions?
Yes, I have. Thank you very much.
Thank you. Thank you.
Okay. Is there another question?
Ladies and gentlemen, no, 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. I know you'll be eager to follow how we continue to do in the year. I think I have tried to pass on a cautious optimism for the overall year. Not saying that there are no challenges, but that we think between the advantages and the problems we'll come out ahead to where we were last year. I think in an airline where you see the cash flows as positive as ours, you shouldn't be too worried. Having said that, enjoy the rest of your day, and I hope to talk to you again in a few months. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling and have a good afternoon.