Good day, and welcome to the HY 2019 Air France-KLM conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Ben Smith, CEO Air France-KLM, and Mr. Frédéric Gagey, CFO Air France-KLM. Please go ahead.
Good morning, ladies and gentlemen. I am here today with Frédéric Gagey, and we are very pleased to welcome you to this presentation of Air France-KLM's 2019 first half results. Firstly, thank you for joining the call and for your flexibility on the change in schedule. I'm going to share with you a number of strategic decisions contributing to the simplification and modernization of our fleet. First, a few comments about our group's activity in the second quarter of 2019. Within a challenging environment, owing to the current geopolitical tensions and economic uncertainties, Air France-KLM posted a robust second quarter with a 5.1% increase in passenger numbers and a 0.9% improvement in passenger unit revenue. The group increased its operating result, reflecting continued execution in unit cost reduction, which enabled us to more than offset rising fuel costs.
In line with the net debt over EBITDA target of below 1.5, the group further strengthened its financial position. The group reduced its net debt by EUR 466 million compared to the end of 2018. After the strategic update, I will hand over to Frédéric Gagey to take you through the detailed presentation of the second quarter results. Moving on to the Air France medium-haul fleet with its Airbus A320 family aircraft. We are currently operating Airbus A320s, Airbus A319s, Airbus A318s, and the larger Airbus A321s. This medium-haul fleet is aging, and a portion is due for replacement in the coming years. I'm pleased to announce that to begin renewal of the medium-haul fleet, Air France has placed a firm order for 60 Airbus A220-300 aircraft, with an additional 30 options and 30 purchase rights.
The Airbus A220 is the ideal aircraft for the Air France short and medium-haul fleets for several reasons. One, it's an environmentally friendly aircraft with 20% fewer CO2 emissions and a 50% reduction in noise. It's also economically and operationally efficient, with low aircraft and trip cost. Two, it is the right size aircraft. Three , it is a perfect fit for the product proposition we are currently developing. I'll start with the first point, cost. Airbus A220s have a significantly lower capital cost in comparison to other next-generation aircraft of comparable size. Together with Frédéric and our strategy, fleet, and network departments, we have carried out an in-depth review of financial scenarios for the fleet. Compared to other aircraft types, the Airbus A220 scenario will result in significant CapEx savings.
The Airbus A220 has a lower trip cost compared to the current A320 family, mainly thanks to its fuel efficiency. Compared to the existing fleet, it will thus generate an EBITDA improvement. If necessary, the terms of the agreement with Airbus give us the flexibility to postpone deliveries of firm orders. In addition, the 30 options plus 30 purchase rights for additional deliveries to replace the remainder of the old generation aircraft in the medium-haul fleet provide us even more flexibility going forward. Another important factor on cost is the fact that the engines on the Airbus A220, the Pratt & Whitney geared turbofans, provide the most fuel-efficient engine technology. The fuel burn per seat of an Airbus A220 aircraft is 20% lower than previous generation aircraft, and the fuel burn per seat is even below the A319neo.
Combined with the lower capital cost, the fuel efficiency will deliver lower trip costs, lower than the existing Air France fleet and other comparable aircraft. The Airbus A220 scores very well on environmental factors and is the quietest and cleanest jet aircraft of its size. These environmentally friendly aspects are due to the efficient design of the aircraft, with advanced materials used in more than 50% of the primary structure, meaning both lower weight and required maintenance costs.
It is a truly next-generation aircraft. Concerning its size, with 150 seats, the Airbus A220-300 is optimal to replace Air France's current A318 and A319 fleet. The range of the aircraft allows it to operate all the current routes in the Air France medium-haul network. With its unique and top-of-its-class characteristics in terms of customer comfort, the Airbus A220 is a perfect fit for the product Air France offers its customers.
In terms of cabin layout, the most noticeable feature our customers will notice is the seats. They are the widest in any single-aisle aircraft currently on the market, given the five abreast seating configuration. While the large stowage bins allow one roller bag for every passenger. We are all very pleased this aircraft will join the Air France fleet in the coming years, and we strongly believe that the Airbus A220 is going to be a key factor in making the Air France short and medium-haul network profitable, as well as enhancing our value proposition to our customers. During the 2018 annual results call, I mentioned the early phase-out of three Airbus A380 aircraft whose leases were expiring, and that we would be reviewing the remaining seven A380 aircraft.
As you will have heard, not only from us but also from many of the A380 operators globally, the profitable deployment of the Airbus A380 aircraft is limited due to the high cost of operations, in addition to the challenges faced in terms of operational performance. We see other operators reducing their A380 fleets as well. As for the seven remaining aircraft at Air France, a fleet of this number of aircraft is suboptimal, as it would require a minimum of one spare for six operational aircraft. We would also be faced with a major cabin refurbishment program for these A380 aircraft to upgrade their product offer, each costing upwards of EUR 35 million. In addition to required maintenance costs, meaning an investment totaling EUR 85 million per aircraft would be required.
An early phase-out of the Air France A380 fleet will result in a substantial CapEx savings estimated at EUR 400 million. It will thus come as no surprise that we have decided on the early phase-out of the A380 aircraft. Financially speaking, there will be some one-off costs, and we will also be accelerating the depreciation of the aircraft. The total amount is estimated at around EUR 400 million and will be spread over the 2019 to 2022 period. New generation aircraft will replace the A380, and several types are still under consideration. Negotiations with the manufacturers are in advanced stages, and we will keep the market informed in due course. We can, however, disclose that we will require no more than nine new wide-body aircraft to replace the A380 fleet.
The early phase-out of the A380 aircraft will have a profitability uplift starting from 2022 and will generate positive equity over time. We announced at the end of June 2019, another important step to simplify and rationalize the group fleet. Air France and KLM will swap their remaining firm Boeing 787 and Airbus A350 orders between them in order to realize fleet efficiencies through harmonization of similar aircraft at both airlines. The implementation of the swap between the airlines means that in the 2021 to 2023 timeframe, the six remaining Boeing 787 ordered for Air France will be transferred to KLM, and the current seven Airbus A350-900s on order for KLM will be transferred to Air France. KLM presently operates 13 Boeing 787-9s and received its first Boeing 787-10 in July 2019.
This fleet will further grow to a total of 21 Boeing 787s by the end of 2020, to which will be added the six Boeing 787s initially intended for Air France for a total of 27 aircraft. With regards to the medium-haul fleet of KLM, we have announced in June our intention to purchase up to 35 Embraer E195-E2 jets with 15 firm orders and purchase rights for a further 20 aircraft of the same model for KLM Cityhopper.
In order to enhance its existing network and to permit the efficient development of new routes, the Embraer E195-E2 will be a welcome addition to the KLM fleet, giving greater capacity flexibility and help to manage down costs. In addition, the environmentally friendly E195-E2 also supports our sustainability goals with lower levels of noise and emissions. Now I will hand over to Frédéric for the financial presentation.
Thank you, Ben. Good morning to everybody. I propose now you go to slide number 12 concerning the financial result of this second quarter. As indicated by Ben at the beginning of the presentation, we can consider that this second quarter is solid in the sense that you see a strong development of the activity and operating result of EUR 400 million, a margin of 5.7%, and a relatively significant reduction in the net debt.
So, all in all, it is a result which are satisfactory. Of course, when you look to the evolution compared to last year, which is a slight improvement of the operating result, you have naturally to take into account the fact that last year's second quarter in Air France mainly was impacted by the strike, with a global effect, which has been estimated to EUR 260 million at the EBIT level.
By themselves, this result of the second quarter and this margin close to 6%, I think can be considered as relatively satisfactory. You also see that the ROCE over 12 months sliding is at 9.3, which is also a level which is acceptable, and as indicated by Ben, the ratio adjusted net debt on EBITDA is below 1.5%, exactly 1.4% for a 12-month period finishing June 2019. I go move to the slide 13, where you have the evolution of the result activity network, including cargo. We have a good development of capacity in the passenger activity, + 3.9, positive unit revenue, plus 0.9% for the passenger activity. I will come back later on the development of the unit revenue per networks. Cargo, there we have more negative signal. One is mainly the unit revenue, which is down - 7.5%.
It is a relatively important decrease, clearly related to all the problem today in the world exchanges due to the commercial war between U.S. and China, and some economic or macroeconomic negative evolution in some part of the world. Clearly, it was not the type of number we had seen in 2017. We don't know yet what will be the trend in the next quarter, but clearly, since - 7.5% of unit revenue for the cargo is not a good signal. Transavia is developing well. Again, we have increased capacity for the combined Transavia Holland and Transavia France by 9.2%. In spite of this relatively aggressive growth, the unit revenue is also developing positively, + 1.3%.
The margin is quite high, 10.4%, bit decreasing compared to last year, but still a very good margin, which is partly explained by the fact that we are entering the touristic period, and also by the shift of Easter during the second quarter compared to last year. Maintenance is increasing the margin at 4.9%, and the revenue is increasing significantly at +12%. We are back to an improvement of the margin of the maintenance after a bit more difficult year in 2018. We had already such an evolution during the first quarter of this year. All in all, for the group, a margin of 5.7%, increasing compared to last year. Again, I will come on that a bit later on. Partly explained, of course, by the strike effect in Air France for the year 2018.
I go to the next slide, which is the split of the unit revenue compared to the last year. We have given to you the unit revenue during the second quarter, during the six months, per networks, to indicate two things. First, during the presentation of the Q1, we have indicated that the unit revenue globally will be slightly positive with a good long-haul and a negative short-haul, due partly to the base effect of last year after the strike of the railways company in France.
I am happy to say that we have been relatively precise and accurate. You see that the long-haul unit revenue for the quarter is in fact relatively dynamic, +2.3%, with a positive number everywhere but in Latin America. In Latin America, with the difficulties mainly in Brazil, Argentina, you see a drop of the unit revenue by 10%. Concerning the medium-haul, point to point is negative, -9, but medium-haul HOP! is neutral at +2%. Let us just say that we have been, in fact, relatively precise when we have given the future or expected trend in terms of unit revenue.
One remark, however. If you look at the result for the six months, so the half one 2019, you see that the development in the long-haul is a bit less dynamic than what you see during the second quarter. Just to say that the second quarter is a bit exceptional, and that when you are looking at the six months is something which is a bit more neutral or shy in terms of evolution of the unit revenue in long-haul, which is, let us say, slightly positive, +0.8%.
Again, a negative in Latin America and a positive in all the other sub-network. If I go to the next slide, which is the split of the capacity. Clearly, evolution of the unit revenue has just been commented. You can also make quick calculation to show that mainly in long-haul, we have, generally speaking, both an increasing load factor but also an increasing yield. It is not only the load factor evolution which is explaining the unit revenue trend, it is both the load factor and the yield paid by the passengers. You have also to keep in mind that the ancillary revenues are still quite dynamic, + 20% compared to last year, supported by the branded fare and the new distribution capability system we have put in place already two years ago.
Note also that the premium segment is relatively resilient. During the second quarter 2019, we have a unit revenue which is up 1.5%. Unit cost. Unit cost is relatively good in terms of posted number. The reported change is + 1%. When you correct for the currency effect and the fuel price effect, we have, at constant currency and fuel, unit cost decreasing by 2.3%, which is a result of a good level of productivity. Labor productivity is improving by 3.1%.
The fact, and which is going into the negative direction, you have to take into account the effect of the two wage agreement which have been signed both in Air France and KLM last year, and which are clearly influencing the evolution of the staff cost. Keep in mind that in Air France, following an external consultation study, which has been managed during this second quarter, there will be a new plan on cost evolution, simplification, efficiency of processes, which will be launched back in September.
The fact that last year was impacted by the strike, played a role in terms of unit costs. We had last year, as you know, quite high customer compensation costs, which are, of course, and happily, decreasing in the year 2019. I move slide 17. In the first quarter presentation, we show you the evolution of the operational performance of Air France.
You know that it is one of the priorities given by Ben to the management of Air France Group. Let us say that the result for this second quarter are acceptable. You see that in terms of on-time performance, Air France is ranked 16 in June, 12 in May, and 14th in April, which is not too bad. If you look more precisely among the European legacy carrier, Air France is at the top in terms of time performance, number three in May and in June. On the right of the slide, you see the evolution of the net promoter score also in Air France and KLM. The trend in Air France is positive, coming from 12 last year and 19, 2017, and now being at 24 in Q1, 25 in Q2.
There is still a gap compared to KLM, but for Air France, the trend of evolution of the net promoter score is positive. I go page 18, which is speaking by itself, evolution of the EBIT between Q2 2018. Clearly a positive contribution of the unit cost estimated to plus EUR 135 million. A negative effect of the fuel price, ex currency, which is mainly explained, of course, by the hedging delta result. If you compare 2018 to 2019, I will come back on that a bit later on. In fact, the fuel price is declining in 2019 compared to last year with a positive impact of EUR 78 million, but all this effect is more than compensated by the fact that the hedging is less positive in 2019 compared to 2018, even if it is still positive.
During this second quarter 2019, the currency impact is almost neutral, slightly negative, EUR -18 million, it's positive on revenue, negative on fuel and on cost. When we sum up the three elements, we have EUR -18 as a total. Next slide give a split of the group profitability between Air France and KLM. What can we see? If I take the top of the slide, when you look at the second quarter, Air France is improving but by EUR +130 million compared to last year. As you of course know, we have to take into consideration the strike effect. KLM, which is more like for like, because happily, there were no strike into KLM last year.
You see that the change is negative, EUR -70 million, and a reduction of the operating margin by 2.8 percentage points, even if, of course, the operating margin is still at a quite high level of 8.9%. The result when you look at the first half are comparable in terms of trend to what we see on the second quarter. The reduction of the margin to KLM is - 3.7, and the margin is at 3.8%, taking, of course, into account the first quarter, which traditionally is with a lower margin. Air France has, over the six months, still a negative operating margin, even if it is improving compared to last year by 0.8 percentage points in terms of margin, sorry. Net debt. A good evolution of the net debt, relatively high level in terms of free cash.
The adjusted operating free cash, which is calculated excluding the IFRS, we use old methodology to calculate this adjusted operating free cash as many other companies are doing, is positive at EUR 351 million, which is higher than last year, where it was at EUR +141 million. In terms of evolution of the net debt, including IFRS 16 calculation or methodology, it was at the end of the last year at EUR 6.2 billion, it is at the end of the second quarter at EUR 5.7 billion.
A significant decrease of the net debt, which allows the net debt on EBITDA ratio to stand at 1.4, being below 1.5. Let us speak now about the outlook. First outlook on the revenue. I am slide 22. As usual, we present you the long-haul forward booking load factor for the period August, December.
First remark, in July, the load factor, which will be published soon, is equivalent to last year. No improvement in terms of load factor. As you know, in this summer period, the load factors are traditionally extremely high. For August 2019, we are for the time being -1 in terms of long-haul forward booking load factor, but we are close, of course, to the real one.
September +1, which means that when you see that all together, we expect for the second quarter, a unit revenue, which is expected to be flat compared to last year. Something a bit less optimistic compared to the result I showed you before concerning the second quarter. For the last part of the year, the long-haul booking load factor are clearly up compared to last year, +3 in October, +2 in November, +3 in December.
A bit difficult to say how it will translate in terms of unit revenue, because that period, of course, is a bit farther, but let us say that it is rather a good signal, but don't be too optimistic for the time being. We have to go a bit closer to the period before to draw any conclusion. If I move to the next slide concerning the fuel bill, nothing new, we are still at EUR +550 million compared to last year, which is close to the number we gave at the end of the first quarter.
As indicated in the slide, if you look at the last line in the figures, just to remind you that the hedge result last year was EUR 800 million. For 2019, we expect at the current forward curve to have a hedging result close to zero.
In fact, EUR 50 million. As explained before, a large part of the increase of the fuel bill year-over-year is explained by the fact that the hedging is less positive in 2019 compared to 2018. Page 24, the guidance for the full year, not many changes compared to what we indicated during the first quarter presentation. One exception is the capacity in Transavia, expected in the previous guidance between +9% and +11%, now expected between +7% to +9%. The fuel bill a bit decreasing compared to the last guidance, where we indicated an increase compared to 2018 of EUR +650, now EUR +550 only, so a reduction of EUR 100 million. Currency effects still estimated to be neutral. Unit cost still estimated to be -1% to 0%.
As I told already, we think that we will be, by the end of the year, rather in the good part of the indicated range. CapEx 3.2, given in Q1, 3.2 confirmed today. The net debt on EBITDA we show below 1.5, as indicated also during the Q1 presentation. I have finished the presentation, and with Ben and all the team, we have today Erik, the CFO of KLM, Stephen, the CFO of Air France, and Marie-Agnès, of course, the queen of the financial communication. I open the line for your questions.
Thank you. If you'd like to ask a question at this time, please press the star or asterisk key followed by one on your telephone. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We will now take our first question, and this comes from Jarrod Castle from UBS. Please go ahead.
Thank you. Three, if I may. Firstly on RASK, it seems like there's a positive mix towards leisure rather than premium. Any comments if this is more a concerted effort or if there's any softening in business mix? Secondly, some good performance on the North Atlantic, can you give some color in terms of what you're seeing in July and August and whether or not there's relative weakening compared to Q2? Lastly, balance sheet. You continue to bring down the net debt to EBITDA. Some color on where do you stand on potentially getting towards investment grade rating and the criteria behind that. Thank you.
I take the last one first. We had some discussion six months ago with bankers and with credit analysts. To be transparent, they consider that when you have an adjusted net debt on EBITDA close or below 1.5, they consider that you are not too far from investment grade. After that, they have so much of criteria, but 1.5 is something which is really acceptable for bankers in terms of investment grade. Concerning the evolution of the premium and the economy, I have to say that during the second quarter, the premium is not too bad. You have seen the number. If you come back to slide, sorry, to the slide 15, you see that the premium RASK is at + 1.8, while the premium economy is at + 0.7.
When you speak with the sales people concerning the development of the demand for the global contract we have with the firms, for the time being, there is no specific alert that the situation will be deteriorating. Of course, when you look sector by sector, you can have some change. Let me check. Of course, the drilling is a bit better. Automotive is a bit more negative. All in all, the development of the demand and the turnover, when you look at the global account compared to the economies, the global accounts are still relatively effective in terms of the development of sales.
Just North Atlantic, any commentary around that, please?
On the North Atlantic, concerning the issue of the number of the second quarter and what we expect on the third quarter, I would say that possibly the development of the RASK could be a bit weaker in the North Atlantic third quarter compared to what we had in the second, but it is still in the positive area.
Okay. Thanks very much.
Thank you. Now we move on now to our next question. This comes from Stephen Furlong from Davy. Please go ahead.
Good morning. Well done on the fleet order. I just have two questions, maybe for Ben. Where are we with Transavia? If the scope clause go, how big do you think the Transavia fleet could be, and where would those aircraft be deployed or just broadly? The second question, and I appreciate that the investor day is not till November, but I'm just thinking in terms of Air France, obviously knowing that has lower margins than many other airlines and indeed in KLM, where do you see is the biggest opportunity over the medium term for Air France and the biggest challenge? That'd be great. Thank you.
Regarding Transavia France, where today there is a scope limitation of 40 aircraft. We're at 30 aircraft today. There is a consultation vote, referendum vote that the largest union representing the Air France pilots, it's currently out. The results of that vote should be known today. If the vote is positive, we will then have this new opportunity to grow Transavia France. Where we would look to grow Transavia France would obviously be where we compete heavily, in and out of France with the low-cost carriers. These are the routes that we're looking for. How fast we would grow Air France, the Transavia portion of Air France, would depend on how we balance out the other opportunities. I think the first item for us is to at least have the flexibility to deploy Transavia wherever it makes sense.
We should know the results today, and hopefully it's positive. If it isn't, we have some other avenues to address this sector. On the second question regarding Air France, we haven't just started today. We've been studying, the entire management teams at Air France have been studying how to reduce the gap in terms of operating performance, financial performance between Air France and the rest of its European peers. I would say the number one item that we're focusing on is simplicity.
Air France is a very complex company. This in itself, will drive cost savings. Of course, with all of the negotiations that were agreed to over the last nine months, there's an enormous flexibility now to drive productivity gains. We still have a lot of work to do, but these are two of the items I can share with you now.
Okay. Thank you.
Thank you. Now we move on to our next question. This comes from Neil Glynn from Credit Suisse. Please go ahead.
Good morning. If I could ask three quick ones, please. The first one with respect to the long-haul forward booking strength that you've highlighted. Clearly, your guidance is that the third quarter unit revenues will be stable and obviously a bit early to talk about the fourth quarter, I'm sure. To what extent are you booking earlier at lower prices? How do you explain the disconnect between those long-haul forward bookings and the guidance? Is it maybe just short haul? Second question, KLM margins peaked a couple of years ago, and they're coming down quite sharply, as we saw in the first half. How concerning is this at a time when you're using KLM as a benchmark and an aspiration for Air France employees to be more productive and more profitable?
The third question on 2020, the fuel bill is guided flat in euro terms, certainly into next year. Just interested in terms of squaring the math on that. Does that actually imply that your capacity growth will be pretty flat into next year? In USD terms, your jet fuel price looks like it'll be slightly up next year. Just interested in your capacity plans, if you could confirm them as an input to that fuel calculation.
First, concerning the relationship, which is the long-haul forward booking load factor and unit revenue, I think that what we indicate is relatively consistent. You see that for the third quarter, we are flat if you saw that the three months forward-looking load factor. As a consequence for the long haul, we explained to you that probably the third quarter will be with a flat or flattish unit revenue. I think that it is relatively coherent, I think. Yeah. I miss something in your question, or I think that we continue to apply the rule where we consider that flattish forward booking are a good indication also of a flattish unit revenue.
What is true is that for the third quarter, it means that the evolution of unit revenue in the third quarter will be a bit less positive compared to what you have seen in the second quarter, where, to be honest, the result are extremely good. Apart of the South America, you can observe that the unit revenue in the Value Stream network is extremely positive, which was a very good result for the second quarter. For KLM, perhaps Ben, you want to indicate something?
Yeah. The KLM performance, when you look at it relative to some of its peers, is in line. We are focused also on a simplification process there, which will help us in getting rid of the last 747s, help this swap that we recently decided to do between the two units. Air France and KLM will also help. That'll bring us down to two cockpit types at KLM. We fly the 787 and the 777 on a dual rating in terms of our pilots. That puts KLM in a unique, efficient position. We do have talks going on today, negotiation going on with some of the staff at KLM to ensure that the contracts remain productive. If you look at the performance of KLM relative to some of its major peers, it's relatively in line.
Concerning your last point on the fuel in 2020, to be honest, if I make a reference to page 23, this page is more to share with you first evolution of the market price for the Brent situation in terms of hedging. Take that more as an indication of the hedging situation in the market rather than an indirect indication about the capacity concerning the year 2020. Yeah? We have not yet totally defined, of course, what will be capacity development next year. Look at that page more as a source of info concerning the hedging and the fuel price.
Thank you. We move on now to our next question. This comes from Daniel Röska from Bernstein Research. Please go ahead.
Good morning, gentlemen. Three from me as well. Number one on the fleet order. Am I assuming that the smaller aircraft kind of fits with the strategy of the dense network, i.e., that's basically replacing the A318, A319, and there isn't a large change to the network strategy or the deployment compared to the A318, A319? Just sort of thinking about the network strategy behind the A220. You already commented on Transavia, could you shed a little bit of light on how you're looking at the French non-Paris métropole? Kind of thinking about HOP!, the Navette, kind of the Air France product and the Transavia product. How do you envision to take kind of the non-Paris métropole forward in your strategy?
Are you going to talk about Transavia, but could you kind of also elaborate a little bit what your findings are when you're thinking about the pilot contracts at Air France and KLM? Are they in good shape? Do you think you're in a relevant range to your relevant competition? Maybe especially, how you think, or what is there you would like to change on that contract on the pilots for KLM and Air France when you consider short-haul production and competition?
We're very excited about the Airbus A220, the 300 series that we ordered. The amount of flexibility and the unit cost of that airplane will enable it to operate any of our current medium and short-haul routes, either domestic France, Europe, and if you look at the range, this airplane can also fly outside of Europe. In today's Air France contract, the pilot contract, there are some restrictions on the stage length of where we can fly narrow-bodied aircraft. I think this is something that we would look to improve with the Air France pilots. The relationship today with the Air France pilots, I think it's extremely positive. I've been here 10 months, but from what I understand from my colleagues, it's the best we've seen in over 40 years.
Extremely respectful, a lot of trust, and an enormous amount of transparency, and I just see this increasing. I perceive that this will only get better in the future. From the KLM side, very engaged staff at KLM throughout the organization, not only with the pilots. It's always a lot of public interest when it is time for negotiations, and this is expected. We're confident that there will be a suitable resolution to the negotiations that are going on today at KLM. In terms of optimizing the domestic network on our Navette shuttle between Orly and some of the larger French stations, as well as a potential expansion of Transavia, as well as the restructuring at HOP!, this is a big exercise, a big study that is currently going on.
The result of a potential expansion of Transavia played a big role in this, and how we optimize our position at Orly when it is slot controlled. We do have more than 50% of the slots and ensuring that we get maximum profitability from that situation is being studied on. In terms of the point-to-point network that does not touch the Paris métropole, once we have a very good understanding of what is feasible in terms of restructuring HOP! and how we rationalize that fleet and how we view moving forward in a proper way in the domestic area, what will be the impact, further impact of the TGV?
What will be the further impact of some future taxes that could be imposed on us, all play into how we're going to move forward in the strategy. Making domestic France profitable is a huge effort, something that we must address. All these pieces are interlinked. The A220 is a great tool. HOP! needs to be restructured. Our position at Orly is key, and the future number of aircraft we can operate at Transavia all plays into how we will optimize the French market.
Excellent. Thank you very much.
Thank you. We'll now move on to our next question, which comes from Savanthi Syth from Raymond James. Please go ahead.
Hey, good morning. Just on the fleet reconfiguration and simplification, which includes this morning's announcement. I was wondering if you could talk about how we should think about the kind of the cost benefit of just having a more simplified configuration and maybe the revenue benefits as well, if you plan on having more premium seats over the next few years as a result of these changes.
Second question for me, just wondering how we should think about CapEx over the next few years with this new fleet order. Lastly, the third question is, with LATAM, which is weaker this quarter, a weaker trend this quarter, I thought we were expecting it to bottom. Just wondering how we should think about it as we go forward, that bottoming or if we are probably even going to see an improvement there. Thanks.
Okay. I'll start with the fleet question, and I'm assuming you're referring to Air France. Just get a clarification, are you also asking about KLM as well?
Mostly Air France, but just general, the movements on the fleet side.
Okay, the wide-body fleet at Air France is extremely complex today. We have, of course, Airbus A380s. We have two versions of the 777, the 300ER, the 200ER, of which we have seven different configurations. We have A340s. We will have the first A350 coming online in September. We have seven 787-9s, and we have A330-200s. There's an enormous amount of work that has to go into simplifying this fleet. Obviously, the decision to remove the A380 is a big one. This aircraft, as I mentioned earlier in my remarks, from a financial perspective, is becoming very difficult to maintain and produce adequate returns and the operation performance. It's the poorest performing aircraft we have from an operational perspective.
Of course, the way we plan our bank structure here at Charles de Gaulle Airport, the amount of flights we need to feed this type of aircraft will be putting a lot of strain on the airport. That's why this decision was made. It's the right decision for Air France. On the 777 fleet, we are going through a reconfiguration to reduce the number of variants from seven down to three. That should take place over the coming years.
The A340s will be removed over the next two years from the fleet, and we will standardize the A350s, the 789s, and the A330s around one configuration. The A350s and the A330s will be common type-rated with our pilots, and we will be able to back up from an operational perspective, the 777. The operating performance of this fleet will obviously be much improved.
The costs that currently incur in ensuring that we run an on-time performance with a flight completion that is adequate with this type of complexity will be greatly improved as we go through this simplification. When you look at the cost that Air France has to include managing this wide-body complex fleet, I believe it puts us at a big disadvantage and adds definitely unnecessary costs. This is a major part of our simplification process going forward. Obviously, what had to start was getting labor stability at Air France, which took a lot of effort on the part of the entire team at Air France, making some very tough decisions around what we would do with the A380s.
With the A380 decision having been made, how that impacts the rest of the fleet now puts that into a clearer view. Of course, making the decision on the A220, we're all very happy and pleased with that decision because of the flexibility and the performance of the airplane. It puts us in, I think, the fact that we will be ahead of all of our major competitors with an extremely efficient airplane, I think will really help the performance of Air France in the future.
Concerning the CapEx.
Sorry, just to follow up on that.
Sorry.
Sorry, just kind of curious if that was more than 2022 type of savings or we should start to see it even starting next year?
I would say, we are already, in terms of how we deploy the current fleet. We are immediately reducing the number of configurations on the 777 down to 5. Within the next nine months, we will have started an extensive program to reduce the types of configurations even further. We are isolating the types of airplanes on specific routes. We are looking to move the bulk of our A330s onto our Africa network. A lot of efforts like that to reduce the spread and the impact of any disruptions we may have and the ability to back up the fleet. That you can see started in less than a year.
Thank you.
Concerning the CapEx, two or three remarks. First, the decision of plan, the withdrawal of the A380 is positive in terms of CapEx. First of all, we will avoid to make the cabin refurbishment, which was an extremely high CapEx, estimated at EUR 30 million per aircraft. Second, due to the age of this fleet, we expect now to have the engine shop visit and the airframe structural check to be extremely costly. Which means that the question for us, why do we invest around EUR 85 million per aircraft to continue to operate them? Due to the current situation, the fact that the Airbus has stopped production, is it not wise to stop the operation of the A380? We do it progressively. The last one will be phased out in 2022.
Clearly one element in the decision was the fact that for each of the aircraft to operate them longer will ask extremely high level of CapEx per aircraft. Of course, we will have to replace these aircraft. We have not yet done anything. We'll come back to you later on when we will have taken a decision. First, clearly, the decision was to save all the CapEx needed to maintain the aircraft in operation. Concerning the A320, there's also, of course, an investment. First, keep in mind that the aircraft is cheap, cheaper than, for example, a A320 or A321neo, which is something I think quite important when you look at the level of investment.
As indicated by Ben, we expect also a return in terms of EBITDA relatively soon when we will have introduced the aircraft into the medium haul fleet. Last element, as you know, at least it is a personal approach, I like, of course, to speak about CapEx, but I really prefer after the adoption of IFRS 16 to look at the adjusted net debt on EBITDA. As you know, you can play with CapEx and free cash by changing the percentage of the lease fleet.
Yeah.
Means that thanks to IFRS 16 now, we have a global reference rule to analyze the situation of the leverage. Means that I will more focus to the adjusted net debt on EBITDA that only by itself as the CapEx level. In any case, we will have, of course, to come back to you concerning the future evolution of the leverage, it is planned to do that, of course, for the market day in November.
What I can tell you about South America, Air France has a long history of operating in South America, and what I just said recently with all the various fleet types that we have. One of the advantages is we've got a lot of capacity, a lot of flexibility around the size of aircraft that we use. We do operate to several cities in South America, more than daily service. This gives us some flexibility to either up gauge or reduce the number of frequencies to improve result. Obviously, difficult to do that in the very short term, as we plan out on six months, 12 months schedule, we do whatever we can to optimize around the new market conditions that we see there.
All right, great. Thank you.
Thank you. We now move on to our next question. This comes from James Hollins from Exane BNP.
Hi. Good morning. Three from me, please. Just on the fleet renewals or the A380 in particular. If I was a betting man, I would guess the A350 is the most obvious replacement for the 380. You seemed, Ben, to make a very serious point about not ordering more than nine of them. Clearly replacing seven 500 seaters with a 300, if that were to be the way it is.
Are you making any sort of indication with that statement that capacity planning within Air France, we should be thinking something around where we are this year, low single digit through the longer term? Then a couple of regional ones. Just back on LatAm, actually, Brazil is certainly your largest market, nearly 30% of your capacity down there. I saw some comments from Iberia that maybe Brazil is starting to look a little bit better.
Clearly, double-digit RASK decline in Q2 would suggest not yet. I was wondering if you could make a comment on that. On Asia, obviously some pretty ugly terms from Lufthansa yesterday on China. You were clear to point out China is a bit tricky now. To sort of hone down on what you mean by that, I think it's 25%-ish of your capacity on Asia. You did RASK up 3.9. Is it really strong elsewhere? Is China just starting to get a bit more funnier, or is China actually maybe not as bad as we think? Thanks.
Sure. Okay. On the replacement capacity for our A380s, there are three aircraft that we're looking at, and I think we've already been public about that. Some people have written about it, and I'll just clarify. We are looking at additional 787-9s. We are looking at the A330-900neos, and we are looking at the A350-900s. We are being very conservative on CapEx. There are several other ways for us to look at this. I think nine aircraft would be the maximum that we would order to replace the A380s. There are other older airplanes that are not scheduled to leave the fleet at this time. Were the right offer were to come in from Boeing or Airbus, would we look to replace other aircraft?
As I said, we are being very conservative on CapEx, but at the same time, with upcoming potential reconfiguration projects that we see in the coming medium term, would that make sense? We're very happy to be in this situation where we have plenty of flexibility, and we have absolutely, I would say, no pressure on us to have to make a decision immediately. That's on the A380. All the choices that are out there are, I think, a definite improvement for us from an EBITDA perspective. The fact that we already will soon have 10 787-9s at Air France, and we have 28 A350s on order for Air France, does put us in a position where we could order either one.
With the KLM side of the business now focusing on the 777 and the 787 with additional 787 requirements at KLM, we can continue to leverage the wide body requirements of both airlines. In terms of overall long-haul capacity, Air France has a very well-diversified network that I think we can continue to optimize, both from a O&D perspective, particularly into and out of Paris, where if you look at the top 25 markets in and out of Paris, I think there are quite a few where we can perform better on an O&D basis. I think it's important for us to really ensure that we optimize the mix of connecting and O&D customers here, so that's one of our exercises that we're going through. The removal of the A380 will make that a little bit easier.
In terms of Brazil, yes, it is our biggest market in South America. We are seeing signs of improvement. We have two flights a day to São Paulo. Sometimes for some part of the year, we do have more than daily service to Rio de Janeiro. We have our new service to Fortaleza. We do have some partnerships in South America which help us with feed. We are well positioned in terms of how we can react. As I mentioned earlier, we don't have our largest configured airplanes into Brazil, so we can easily up gauge without changing anything. We can easily down gauge as well. We are watching it very closely and obviously planning for maximum scheduling for maximum profitability.
In terms of Asia, yes, it's somewhat tricky for us when we have one of the key routes or one of the key flights operated by an A380. One of our two flights to Shanghai is operated by an A380. In a challenging market, to have to design and plan around this aircraft into that market where the other three flights are operated by 777s, the amount of connecting traffic we need and the two different revenue management strategies that have to go into place in a market that is extremely difficult, I think will become easier as we move forward.
Does it make sense at this time for us to look at secondary markets with some of the smaller airplanes that we have and the more efficient airplanes that are coming into the fleet? Yes, Asia has been a challenge, continues to be a challenge, in particular for the Air France side of the business within the group, the 380 does not help.
Sorry, Ben, can I just come back on that fleet harmonization or your views on fleet harmonization? Obviously the KLM's not flying any A380s, replacing them, I guess, is a straight Air France decision. You're talking about the Boeing 787, which you just flipped to KLM. Is that actually a realistic Air France option, given you're meant to be moving those out to KLM and this is replacing A380s in Air France?
Yeah, most definitely. With the requirement immediately for nine aircraft to replace the A380s, to have a fleet of 19 787s is perfectly adequate. Eventually down the road, we will have to replace our A330, 200s, and the 787-9 is smaller than the 350, 900 platform, so we'll have to evaluate whether having a greater number of airplanes and the efficiency that provides, if it weighs off what some of the other options are. Of course, the 787, there is the -10, which as we progressively remove our older 777s in the future, the 200 series, the 200ERs, we do have 25 of those. A 787 platform at Air France is definitely something that is an option.
Okay. Thanks very much.
Concerning your two remarks on the market, yes, we agree with Spanish colleagues. When you look at the price in the systems today concerning South America, we see a very slight improvement. For the time being, we can expect some improvement mainly on Q4, but I think it will be something not impacting globally the unit revenue, but we also see this positive signal. Concerning China, the same. The same, sorry, as your comment. We see that with the development of the commercial war with the U.S., evolution of the consumption in China, there is a bit of slowdown in the demand addressed by the Chinese market. I agree with both of your comments concerning these specific markets.
Is there any area where Asia is particularly strong?
Sorry?
Is there any area where Asia is particularly strong to offset that, or is China weakness just starting?
Look, we're quite pleased with our performance in Japan. We do serve three markets there. Well, two cities and three airports. Our position in Tokyo is very strong, with three daily flights. Obviously with all that's going on in Tokyo over the next year, and the Air France brand, which is very strong in Japan, we are pleased with that performance there. We also have a strong presence with KLM in Japan. From a group perspective, I believe that we can continue on that and strengthen that position. If you look at the big markets, we're focusing a little bit more on Air France today. Japan is up there. You look at the United States, you look at Canada, you look at Brazil, you look at Japan. These are the big markets where Air France has an excellent position.
I think we can continue to exploit the brand as we have a stronger product offering that is dependable and better understood. I can share some positive news with the people on the call today and those around the room. I've just gotten word, just got a text here, that the vote has been ratified. 78% of the pilots who voted on the Transavia file has moved forward. We do now have full flexibility with the Transavia project and the Transavia brand here in France. Very positive news there. We're actually all smiling in the room here.
You can now tell us what number of planes you're going to have?
You have to give us a few minutes to digest.
Okay. I'll come back later. Thanks anyway. That's enough for me, too.
Thank you. We now move on to our next question. This comes from Andrew Lobbenberg from HSBC. Please go ahead.
Hi there. Congratulations on that vote. Can you talk a little bit about the French environmental tax and how you see that developing politically, and otherwise, how we should think about that impacting unit revenues next year when it comes in? Could you talk a little bit about the dynamics on the board between the French and the Dutch political representatives? I think at the time of the investment, they spoke about building together a working group to advise on strategy. Have they given you any advice? Are they going to, or are you just going to work with the board directly? Just finally, can you update us on what the status is of the partnerships that are building the JV with your rate of the investment into Virgin, please? Thanks.
Again, beginning with the JV with Air Europa and the JV with Delta and Virgin, things are, I would say, going on as expected. We are now discussing with the Brazilian authorities concerning the JV with Air Europa, and we still expect the answer from the U.S. authorities on antitrust immunity for the three-party JV in four. There is nothing strange except that it is a relatively heavy administrative process. Concerning the French and Dutch situations, there is no political representative, if I may, at the board of Air France and KLM. There is administrator. Some of them are French, some of them are Dutch, but I think there is no political game by itself at the board of KLM, if I can insist a bit on that.
We are just with the support of the administrator, managing the business of the group, and this is the most important task for these people. What we heard recently, however, is that the working group will not give any conclusion before summer. The process is a bit postponed, but I have no precise information when it will be. Concerning the French environment tax, as usual, I can just repeat what we think here in the group, but I will say also in other airlines. We are preparing to pay for the CORSIA system put in place by ICAO concerning the fuel and the climate. We are involved in the ETS system put in place by Europe, which cost tens of millions for the group and to, I suppose, any airlines in Europe.
Now we have also to take into consideration the specific French tax, which is also impacting potentially the profitability of the group. We just think that three systems is a lot, and that we will see next year what is the impact on the unit revenue for the French market. Are we able to compensate and to transfer the cost to the passengers or not? Frankly, if we want this system to be efficient, at least looking at the climate aspect, the only solution is to transfer the cost of this tax to the passenger in order to have the impact of the price elasticity. If it is just for airline to absorb that and to reduce their profitability, it will be totally neutral in terms of demand for air transportation, which means that the goal will be totally missed.
Okay. Thank you.
Thank you. We move on to our next question. This comes from Michael Kuhn from Société Générale. Please go ahead.
Hello, good morning. A few remaining from my side. Firstly, you mentioned in the presentation, that you are currently doing further studies about the efficiency at Air France and potential further measures. Are further voluntary departure programs a potential option, and when would we know whether that is the case? Secondly, you had a pretty high P&L tax burden, specifically in the second quarter. Was there a special reason and is this a recurring or a non-recurring topic? Last but not least, you were able to further reduce net debt EV/EBITDA 1.4 times. You mentioned you're close to investment-grade status now. What does that mean for your thoughts about shareholder returns and when will we hear again about that topic? Thank you.
Thank you. I can start with the first question on the restructuring and the transformation of Air France and what will be included in that. You've seen the first steps. As I said, getting social stability was key. This Transavia, lifting of the cap is a big positive for Air France. Ordering the A220 was another key step, and then moving the A380. I'm going through repeating what you all heard already.
In terms of what else are we working on, the list is enormous. Air France significantly underperforms in Europe, and our goal is to get it up to industry standards or even surpass that. Voluntary departure programs, or partly voluntary departure programs, we do have many employees that are pushing us to put these in place. We are not quite ready to move forward with an additional voluntary departure plan.
We already have one in place in the French provinces. I would suspect that we would have the need to do them in the future. What is positive is we do have quite a few employees that are looking for these. I can't be specific today about when and where. With the type of transformation and overhaul that we are just starting to do with Air France, this is something that we can share with you in the future.
Yeah, for the tax, you're right. I think Q2, there is a relatively high income tax into the P&L. If you go to the first quarter, you will see that it is the contrary. As a consequence, if you look at the half-year result, you will see that we have an income tax, which is totally normal. It is more a technical issue. Mainly at Air France, it was too low in Q1, too high in Q2, but it's at 12 for the six months.
Concerning the 1.5. I think that you know the story of the group. We were with adjusted net debt on EBITDA, we were close to six or seven some years ago. Which means that we have made a tremendous set of action in order to come back to a normal situation. I think that now is the case. My personal feeling is that, in fact, 1.5 is an extremely satisfactory level. We will discuss that in November, as I said before, responding to somebody else. Looking at the impact of the A220 plan in terms of CapEx and also looking to the effect of the A380 phase-out. I think that best for that and to share with you a global trajectory of the group for the next years with some targets will be done in the market day in November.
That does mean that in November, you will also specifically inform us about your plans on future shareholder returns?
We will share with you what we want to share with you, but at least we heard that there is a strong demand on that point specifically and on some others also. Yeah.
Excellent. Thank you.
Thank you. We move on now to our next question. This comes from Damian Brewer from Royal Bank of Canada. Please go ahead.
Yes. Good morning. Thank you. Just three sort of housekeeping questions left, really. First of all, on Transavia, with the reduction in the full year growth, that kind of implies H2 would do about 6% growth. Could you indicate whether that is particularly biased in terms of reduction to the fourth quarter, or whether that is spread equally across the second half of the year?
I'm just thinking if Q3 grows a similar 9% to 10%, that implies Q4 is close to flat. I just want to understand that. Secondly, on the A220 order, particularly the sort of additional 30 plus 30, how much of that is contingent on what happens with the French eco tax? If it's too high or allocated in a bad way, would that indicate you'd look at sort of more capital reduction out of the French domestic business? Very finally, because no one's asked, on the MRO business, you're up 11%, incremental margin running ahead of average margin, so profitability up there and the order book up again. Is there anything special going on there, or is this just a continuation of the trend we should expect to see in future?
Okay. Perhaps Frédéric can answer question one and question three, and I'll go with two. The first part of your question, let me just clarify. I think we missed part of that because of the line here. What was it?
On the one about the A220, just want to understand how much of it's contingent on the additional orders and what happens with the French eco tax?
Okay. Yes, the A220, as you've now heard, is 60 firm of the 300 series, and 30 options, 30 purchase rights. A couple of things here. Yes, the eco tax will play a part in how many of these options or purchase rights we take up. We're in no rush right now. We have a large fleet of existing Airbus narrow body airplanes, some of them much newer than the ones that will be exiting. We have that flexibility. Were Airbus to introduce a larger version of the 220, that'll of course play into how we replace the second half of the narrow body fleet.
Now that we have this positive result from the main union representing Air France pilots, the ability to fly narrow-body aircraft on a much larger portion of our network will now come into play on how many of these airplanes that we will order and where we'll deploy them. Obviously, how the train in France may be supported, and what changes we see there will come into play as well.
Quite a few different items here, whether they're in our control or outside of our control, will drive our decisions on that. These are decisions we will not be making in the short term on the second half of the fleet. I'd say a big one, and I want to make sure that you don't underestimate it, is the fact that we can now fly narrow-body airplanes within the Air France unit, technically wherever it applies.
Prior to today, flying to South America, let's say, with an A321LR or 737- 8 MAX, not possible. Under the Air France current rules, flying to Beirut with a narrow body aircraft, not possible. Quite a few of the African destinations that are within a seven-hour flight range, not possible. This opens up a whole new range of opportunities for us to more efficiently fly to some of these destinations.
Concerning Transavia, if I understood closely your question, it is what will be the capacity evolution between now and the end of the year. If you take where we are today for the first six months, the capacity on Transavia developed by 14%, and it was a bit slightly below the budget. It's correct that for the second part of the year, it will be lower. As a result, for the full year, capacity will be at 10%, which is minus six compared to the budget.
There is this impact for the second part of the year, which will be mainly concentrated on the Q4, because the Q3 is still quite dynamic in terms of growth. I speak mainly Transavia France. It's mainly in Q4 that we will have a reduction in capacity compared to 2018. Concerning MRO, there is nothing special.
What I just say is that we share now with the controlling of MRO, the concern to be sure that they are more and more focused on the margin of the new contract. There is now a far better control than before concerning the ex ante control on the contract to be signed, to be sure that in terms of margins, they are at the level we expect. For the rest, nothing special except that, in fact, in Q1 and Q2, we are progressively improving the level of margin compared to last year.
Okay. Thank you. Could I just come back on Ben's response on the A220? Just to be clear, what you're saying now is that Air France potentially has the capability not just to fly A220, but to look at other narrow bodies and therefore, new markets or better ease into certain markets than you had before, or just a change in the way you address some of the sort of longer distance, but sub-seven-hour routes? Just to be clear on that.
Yeah. The contracts currently in place at Air France, between the corporation and the three pilot unions are, as you can imagine, quite restrictive, especially when it comes to certain fleet deployment capabilities. In this Transavia new deal or ratification, there were a number of commercial restrictions that were in place at Air France that had nothing to do with Transavia. A number of restrictions at Air France that were also part of the deal. One of the most important was the removal of a, it's a very strange term they use here. It's called a, I'm not quite sure what the exact translation is, but it was an uneven circle around Paris, an average of a three-hour type mission, that would be the maximum that you could fly a narrow body aircraft. That has been removed.
Wherever a narrow-body aircraft could profitably fly to, this now becomes a potential option for Air France. That, of course, changes the business case and the strategy on where we could fly these airplanes. Obviously, this played part of our analysis. When we ordered the A220, we did not know whether this was going to be feasible. That's one of the reasons why we ordered 60 and not 100 or not 120. Now for the second half of the replacement of the Air France fleet, it'll be done under these new terms and new conditions.
Okay. That's very clear. Thank you very much.
Thank you. We now move on to our final question, and this comes from Michael Schulz from Commerzbank. Please go ahead.
Hi. Thank you for taking my questions. Two are left. One also, first of all, on the performance between the hubs between Amsterdam and Paris. Is there anywhere where particularly CASKs are a little bit stronger? I mean, the 0.2%, or did you see it on both hubs similarly, particularly if you adjust for the strike effect? Related to it, do you see any impact from the kind of overcapacity you see in the German market between Ryanair and Lufthansa?
Does it not affect you at all? The final question is, do you also, looking that there's some more discussions of maybe some airlines being bankrupt, do you look at also actively participating in some M&A if there's some interesting slots coming up, or would you leave that all to your competitors and say, "Oh, yeah, consolidation is good, but we stay on the cusp line.
Okay. Today, of our three major airport operations where we have big operations, we have obviously Roissy- Charles de Gaulle, we have Amsterdam, we also have Paris Orly Airport. Both Amsterdam and Orly are at capacity in terms of slots. In terms of increased capacity, it can only come in the form of gauge. We don't expect any material change, at least in the near term, on the type of competition we will be facing those two airports. Of course, Roissy still has capacity in the midday and later on the afternoon, whereas the morning is closed. In terms of M&A consolidation, we have a lot of work on the Air France side of the business to ensure that it has a sustainable, profitable future. That is priority number one.
KLM, we have a model that works extremely well, that needs to be further optimized to ensure it drives industry standard or superior returns, whereas the Air France model needs a much bigger transformation as opposed to refinement. We are looking at every single opportunity in the marketplace that could add shareholder value, or it could put us strategically in a position to be in a stronger spot down the road. If something is interesting at the right price, rated, without a major transition risk, we would certainly consider it. As I say, number one priority for the group is to get Air France in particular, but the whole group to get the margins up, as quickly as possible.
Concerning your first point, I would say that the evolution when you correct for strike is equal between the two companies.
As I have Mike, this is the last question. I would like just to inform you that Marie-Agnès is moving now, leaving the financial communication. She will be replaced in September by Olivier Gall. Olivier is coming from the alliance department, and he knows a lot about network alliance. I'm sure he will contribute positively to the animation of the investor relations, but on your behalf, if you didn't do it already directly to Marie-Agnès, I think that we can thank her for her extremely valuable contribution, vis-à-vis you, vis-à-vis us concerning financial communication, financial information, et cetera.
But she's moving, but she's still working with me, so I am extremely happy also to keep Marie-Agnès close to me. Yeah. I think it is the end of the conference call. On behalf of Air France-KLM, myself, and all the teams, we thank you for your participation.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.