Deutsche Lufthansa AG (ETR:LHA)

CMD 2019

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Jun 24, 2019

So good morning, ladies and gentlemen, and welcome to our Capital Markets Day. Carsten Spohr just reminded me that we are always on time at Lufthansa, so the Capital Markets Day shouldn't be an exception. My name is Dennis Weber, and I head up the Investor Relations activities here in Frankfurt. It is great to see so many of you in the room this morning. Thanks for making your way to Frankfurt. A warm welcome goes out also to those following the event over the webcast. We appreciate your interest. Ladies and gentlemen, this is our 1st Capital Markets Day since 2011. We regard today's event as the starting point of an even closer cooperation with you going forward. We're committed to open and transparent communication with our analysts and investors. That is why the entire Executive Board of Lufthansa is on-site to give you more insight into our future plans today. Carsten Swohr, Chairman of the Board and Chief Executive Officer, will start today's presentations with an update on the group's strategy. He will be followed by Harvey Romaster, Chief Commercial Officer of our Network Airlines, so Lufthansa's Swiss and Austrian Airlines, will present our multi brand and multi hub strategy. He will also discuss the innovation in our commercial strategy, which will make a significant contribution to future financial performance. His presentation will be followed by a lunch, which will be served to my left. After the lunch at around 1:30 local time, we'll be back with a presentation from Thorsten Dierks, Chief Executive Officer of Eurowings. He will present Eurowings' turnaround plan, including a number of far reaching measures, which the Eurowings management decided only a good week ago. Detlef Kaizer, Chief Officer, Airline Operations and Airline Resources, will then update you on the key tasks and focus areas of his newly established board function. And finally, Ulrik Svensson, Group CFO, will conclude with a discussion of the group's financial outlook and the financial implications of what we will present today. The entire management team, and this also includes Bettina Falkens, our Chief Officer in Charge of Human Resources and Legal, will then be happy to answer your questions. After the official end of the event, which we plan for around 4 p. M. Local time, we invite those of you here on-site to spend more time with us over coffee. You'll also be able to experience our brand and our product in some more detail. Among other things, you will be able to take part in a short flight simulation and to participate in the flight safety training normally enjoyed by our crew staff. But before these more fun parts of the program, let us focus on business and join me in welcoming Carsten Spohr to the stage. Carsten, the floor is yours. Yes. Dennis, thank you very much. Ladies and gentlemen, also on my behalf, welcome to Frankfurt to the heart of Lufthansa, the Flight Training Center, not only on my behalf but also on behalf of my 5 fellow board members who indeed will be here all day to spend more time with you. And as I said to some of you over coffee already with the events of the last days, I do believe it is right to spend more time with each other, and I'm sure we have enough time to discuss that today. We actually are usually, we put about 500 people through every day on emergency cabin training, flight crew for the cabin, also for the cockpit. Of course, they also have to know the emergency procedures. And to be honest, we thought this is more fun than a conference room. What we didn't know is that there will be 35 degrees in Germany. But since you hit nothing more than being misguided, let me tell you, you have not been misguided today. There is a big swimming pool behind you. Usually, a lot of young people in flight not in flight uniforms, but in bathing uniforms practice evacuating people over open water, which we had never needed to do in Lufthansa. But this is indeed what this company in a way is about. So we'll spend more time on that later on. But more seriously on your part of the business, on our business, no Capital Market Day since 2011. That's a little bit embarrassing, I think, for us as a company. And when we invited you months ago for this Capital Market Day today, we thought this is a good time to present what we have achieved in modernizing Lufthansa over the last years, how we have done our homework to make sure that we maintain our leading role in the global aviation scene, and obviously, we prepared for that. But to be honest, when then last Monday happened, and I saw your reactions, your commentaries, also, of course, the stock price in itself, I realized that there's definitely another need for Capital Market Day besides presenting you what we have done. I think there is a need for more interaction with you. I think one of my takeaways from last week was that there is work to be done when it comes to our relationship with you in terms of trust, in terms of communication, in terms of yes, maybe making sure that we are sending the right signals and they are interpreted in the right way. So I'm looking forward to that discussion as well besides the pure ingredients of what we want to show you. This relationship to the capital market is important for us not because we happen to be a publicly owned company. It is so important because for us because we believe very much in one thing. And this is a famous triangle in which we believe that the stakeholders of a company our size, market kept double digit, at least normally, 130,000 people around the world working for us. And basically, every minute while we speak, 300 people booking a ticket on us. A company of that dimension needs to be stable in a sustainable long way. And for that, for us, it has always been the triangle where we try to establish the stakeholder balance between the customers, 1st of all, to be number 1 for them to be, for the employers, the best place to work for, at least in our industry and in our case, we're even among the top 5 employers in Germany, more or less every year. And of course, you put on top of that the owners of the company realizing that they have done the right thing investing into this company, this creates what we believe is sustainable balance of stakeholder interest. That's why, again, this day to day, it's important for us, not only because we believe that we have shown some success at least on the lower end of this triangle for customers and for our staff. We have received awards over the last years, probably more in the last 3 years than the 30 years before. Some of them are over here because they just represented to us last week in Paris at the air show. So I think our idea of becoming the number 1 in Europe again in terms of customer perception, Hopefully, you also, as customers, would underline we have been able to manage. When it comes to employees, as I said, one of the top employers not only in the industry but only also in Germany. But I always kept telling my unions, especially but also my staff, probably when it comes to an airline job, nobody ever left Lufthansa to work somewhere else in the same job. I'm not saying nobody left Lufthansa. Some of them even became analysts. But you don't leave Lufthansa to end up as a pilot somewhere else, as a flight attendant somewhere else, even as an engineer somewhere else. So I think attracting top talent in an environment which basically has full employment. I mean, Germany has this problem other countries would love to have. We do have it. I think this becomes more and more important in our home market, including Switzerland and Austria. Then the stakeholder, of course, we want to talk about most today, the shareholder. We indeed have, I think, shown some KPIs we'll be talking more about today, which hopefully speak for themselves. We've been doubling our ROSALIE in the last 5 years. We have been able to create a free cash flow of more than SEK 1,000,000,000 historically and also in the midterm looking forward. We have dividend just this morning. Payouts not only increased over time, but also in the way we structure them. So I think there is a clear signal that this company cares about its shareholders, and it's about creating value for them, what we do with the other stakeholders. This triangle also though is important because in Germany, and there is no doubt that culturally, this company is a German company even though it's number 1 in Europe and of course has more staff and turnover outside of Germany than in Germany. We very much believe in that triangle for long term success beyond individual companies. And if you look at the success story of the German economy, it is to a high degree based on the fact that stakeholder interests are balanced. So I think that is important for us, and I would not say anything different if I were presenting towards unions or towards customers. In the end, this is key. But let's talk a little bit more how we have come to where we are today and of course then spend the most time looking forward how we want to take the company to more successful level C. When we started as a new management team 5 years ago, it was obvious this company needed modernization. It was underperforming in many ways financially, also from a customer point of view. We were not number 1 anymore. Staff satisfaction was not at the highest. We had serious is this still working? Serious union issues in the air, blockades for decades, especially from the private side, about changing our collective labor agreement. So it was about modernizing the company. We put that in 7 fields of actions, as we call them, and communicated them to the top management and, of course, to the staff. And basically, it meant to have once and for all more customer focus again. Quality was what has been known for, for decades. We kind of lost that a little bit. We brought that back and ended up to be the 1st and only 5 star airline in Europe. It was always an issue for us that we had not been able to grow for many years. Since we were not in a cost position to grow, we basically had to stop our growth, which we all know short term might even be stabilizing profits. It might be a smart thing to do. Long term, in an industry growing as fast as ours, not growing basically weakening your strategic positioning year by year. So we had to find new ways of growing, but it had to be profitable growth, not growth in which we destroy shareholder value. So that, in the end, created Eurowings because we realized that our cost position, even with the cost reductions we were able to achieve, where it was not the right tool, be it Lufthansa, be it Swiss, to attack those market segments, which were much more price sensitive than the ones we had historically been successful in. Effective and lean organization, we have become, over the years, a too complex organization, partly because of the broad width of business segments we were in, and we come to that later on, how we try to focus that as well. You all know about our ideas about LSG. I have some other examples. But also the way we had numbers of management position, so how many hierarchy levels we had. So we decided to take a whole hierarchy level out and cut the leadership by 25%. Painful process because we also wanted to create for some new talent to be able to grace into the ranks. So we actually sent 30% of the managers home, brought 5% new people in, ended up with 25% less management and a whole management level less than the one we had before. Innovation, digitalization, surely the second one has become a buzzword. So I don't want to spend too much time on that, not because we don't do a lot, but it's such a word which covers everything. But when it came to innovation, we had lost a little bit our cutting edge, where we historically were known for the pride of the people in Lufthansa was based on that. And just being a follower in an industry which is changing so rapidly could not be our position. So we spent also some money on that, and I think in the end, be it products we put out on the MRO side or towards our passengers on the passenger business prove that we are back into innovation. Culture and Leadership, this company was not necessarily known for high performance focus. Being a Lufthansa staff member was part of being a family. Once you were in, you never go out. It was something which felt comfortable. The company had been privatized since 1995, but still some of that government owned attitude was still there. So I think it took a lot of management focus, manage to be honest, some conflicts, if you look at the unit situation, to make people understand this company is not only legally privatized, it's also mentally privatized. It's acting in a fast changing and tough environment, and there is no room for looking back too much but deal with the things which are happening every day. So that was probably the one you can measure the least, but maybe the most important or one of the most important. Value based steering, you had a big impact on that. Those of you who have been following us even before 2014, question for the capital market had always been where or how does Lufthansa decide where to put their money? They just love buying airplanes. 1 of you has written ones. They just continue to buy airplanes, but then suddenly some money goes into LSG. The most valuable, probable part for many years was MRO, maintenance, repair overhaul. Sometimes, we even owned a company which was doing ground handling. So how does Lufthansa in this, let's say, very, very complicated setup decides how to put their money and where to put it? And that's in the end, could only get one answer. It has to be a value based steering mechanism we had to introduce. That's how the ROCE was introduced as a key KPI, the key KPI I know it's 2 keys, but it is important. And I think some of the results which we present to you today, some of the decisions we discussed with you today have been based on that easy but important decision. And last but not least, and maybe in the end, if you had asked me for all the 7 fields of action, what would be the most difficult and in the end turned out to be the most successful was cost reduction. It was obvious Lufthansa has a cost issue, partly to be blamed on our home markets who come to that because it's always underestimated by our competitors, but the costs were too high to at least grow the company and even to maintain its size. So we not only cut routes and cut the number of aircraft to prove that to our stakeholders, we actually were able to bring down our CASK down. And we have now been able for 4 years in a row, Ulrik, to show CASK going down between 1% 2%. I've been around 20 years before that. I don't recall a single year where we didn't bring down our cost. Even we did bring down our cost, even in the years where we had sometimes huge growth, upper single digit, we for whatever reasons, usually because the unions took their share, were not able to show a CASK reduction. And of course, the biggest pain point here was the labor side. And you all might recall, it took us 3.5 years to fight with one part of our pilot group, the one of them core company, Lufthansa, over this old fashioned CLA, which resulted from the days we were government owned to bring down costs, especially pension issues, played a huge role here, but let's not spend too much time on that as we want to look forward. In the end, that all resulted in EBIT margin and ROCE margins more than doubling. And even with the apparently disappointing numbers we presented to the market on Monday, we're still way above what we've ever been to in Lufthansa the years before. So that, of course, is not comforting for us as a management team, not for you as you are watching us from a shareholder perspective, but there's also truth of the fact that even these 2 point something, which this year will end up with, are above what we have seen before, course, with the exception of the 2 years 2017 2018, which were much better. Beyond that, on modernizing the company, we focus on building on the strength which we had and have. Be it the strongest brands in our home markets by far, I would say we have the strongest brands in Europe, especially when it comes to long range of all European players. We have the best product in Europe, where competitors have more and more gone to solving their cost problems via the product side. We were trying to strike the balance between bringing costs down, as I mentioned, between 1% 2%, at the same time, improving product. I think it's obvious that we are the market leader in our key European markets. I'll come to that. And I think that being industry leading innovator, especially when it comes to aircraft technology beyond what the OEMs are doing, looking at Technik plays a huge role here, I think we have proven to build in our competitive advantages. Another highly disputed internal topic, and I think it's one which is not to be disputed with you, is the amount of focus in Lufthansa on its airlines with its other businesses. Before I took the current job in 2014, I was running the airline, the Lufthansa airline for 4 years. And I tell you, I and my colleagues know all the stories and the anecdotes. I physically suffered when some part of the top management in Lufthansa pretended that the airlines are the business of yesterday and the future is all about catering, maintenance, training, IT, blah, blah, blah. Meijs are more worth more than the whole airline. I was also felt personally offended, of course, but that's a different story. But I just knew that, that can never be right based on the fact that if you don't succeed in your core, everything else around you will not be enough. And this company is not Nokia, which maybe went from rubber boots to phones, but it didn't work out a long way either, or some other very rare examples where companies completely change the raison d'etre. I just believe that is not true for Lufthansa. And you were very helpful in those days because it was always the analyst who kept writing that all these fancy things Lufthansa does, in the end, don't make up for the weakness in the core. And I think what we show here that we have been able to bring the percentage of profits in the Lufthansa Group up by 18% to almost 80% coming from the airlines in the last 4 years has been a major achievement, not just on the pure financial side. Of course, this is basically the most biggest contributor to our increased profits, it was also so important culturally for Lufthansa to prove that in the core, we can create value for the shareholders, also for the staff by growing again, also by for our customers by investing into our products and new aircraft. So this thing, I tell you, it's a lot of emotions, a lot of energy, but I'm so proud to present you these numbers here today because I think without that, Lufthansa wouldn't be where it is today. And when we now talk about being able to focus on the airlines, it also means we have moved away from a defensive way to look at our business, where we needed to balance the volatility of the airlines, where we needed to balance the weakness of the airlines, where we needed to balance the cost problems of the airlines by other businesses to an offensive strategy, where the airlines are able to attack. Come to Eurowings in a minute because we all know that's the elephant in the room where we have to prove to you that we are able to do that. But when it comes to the other airlines, it's now about growth again, about being able to also, in an offensive way, participate in the global industry developments. So I think that is a huge step forward for us. At the same time, we believe there is big and high value in our non airline business, which I will come to in a minute and which we are not only proud owners of, but also, of course, in terms of synergies, take, in our view, high leverage by owning them, at least those we want to keep. But following that logic, of course, before we talk about the non airline business, let's talk about the airline business. We, as you all know, those of you who live in Germany anyway, those of you dealing with Germany know this as well, but I have to explain this chart with a few minutes. The German market, as wealthy as it is as wealthy as it looks from the outside of Germany, also the inside, to be honest, not everybody agrees, but I do. The other home markets we are at, Austria, Switzerland, Belgium, are by pure facts 4 of the top 5 most available markets in Europe. The only one missing here is the Netherlands and KLM, and we couldn't buy them. So otherwise, this chart would have been better. So we have 4 of the 5 top markets, wealthiest markets in Europe as our home markets. Based on that, we have the growth of our industry, which we all know is way beyond GDP growth. I want to be very honest to you, as I am also in public, I think this growth is too high. This is partly artificially created growth by too low prices. But one way or another, around the world, airlines, as we all know, aviation growth more than the underlying GDP. Around the world, it's 1.8 right now. I think in a mature market, as Europe, it should rather be less than 1.8 like in the U. S, but let it be 1.8, truly it's not 3.6. And we know that this price war, which has created that growth, is also part of our biggest problems. But let's stick with the wealth for a moment. That wealth in Germany doesn't come from one part of Germany. It comes from sorry, this is not the chart I was trying to show now. That wealth comes from a very much distributed way of German economic power and wealth. Whereas in the UK, for example, most of you live, more than 40% of the GDP comes from 1 metropolitan area, obviously, London. In Germany, no metropolitan area has more than 15%, which is not Frankfurt, where we have a hub. It's not Munich, where we have another hub. It happens to be the Rhein area, the Wuh area, Dusseldorf and Cologne. Our 2 hubs, Frankfurt and Munich, each only have 10% of the national GDP. Running an airline in such a market, there's actually one other example in Europe, it's Italy, it's not an easy one. Apparently, Alitalia had one answer, we had another one. Since years, we have been focusing on our hub model. And people like Harry Holmallister and myself who raced through the ranks in Gluftanda, it was definitely important to spend a few years in network because it was always clear that's the one thing we have to outmaster others because of that market structure, which is not perfect for an airline, right, especially not for long range, obviously. So and the big competitors in those days were, of course, always Paris and London, which basically could fill the aircraft without much feed. We couldn't fill a single aircraft with out feet. And I had a personal experience. Each of that 25 years, I came back from L. A. With my family a few years ago a few weeks ago on a 380, full to the last seat. I had to split up my family to find room. And then in Munich, where I live, I picked up my luggage. Out of the 5 0 8 people on board, 55 found themselves in the luggage belt. And nobody travels to LA with hand luggage. So all the other 450 went on through our hub in Munich to other destinations. And nevertheless, we can fill a 380 in Munich and even make lots of money with it. So that market structure, which we cannot change, has historical reasons. As you all know, Germany has never been a centralized country or once when it was terrible years. So good thing that this is how our country is set up. And at the same time, taking advantage of it is key of the Buseservinder business model. But it also means we cannot focus our operations to only Frankfurt and Munich. And for years, we have been trying to find an answer how we solve that challenge. And one answer was to create a better and more efficient hub model in Frankfurt and eventually with a second hub in Munich. I'll come to that. And the other one, we took a lot longer to find an answer. We lost sometimes up to €400,000,000 a year in operating aircraft in and out of Hamburg, Stuttgart, Dusseldorf, 2 other destinations but our hubs. Then eventually, a couple of years ago, we believe we found the answer, Eurowings. And again, you might be surprised by our position in such a positive way with the issues obviously being the elephant in the room topic of the day, and Thorsten will go into a lot more detail later on. We realized we cannot give up those markets. We realized we cannot continue to operate them with the Lufthansa brand because we lose those between €200,000,000 €400,000,000 We couldn't retreat like BA did and did London only. We had to find a 2nd tier platform, lower cost, more lean product. Obviously, Unis didn't like that. It took us 3 years to fight with our pilot union to push Eurowings through, not only to allow Eurowings, we even don't have a scope clause in Eurowings. So eventually, we were able Germanwings was the beginning to reduce those losses. And when we were just able to create value and broke even, Air Berlin went bust. And we realized the number 2 going bankrupt is a historical opportunity in a country with restricted loss restrictions. So we couldn't just focus on profit generation in Eurowings and let that pass by. So we jumped on that train with all the backs and forts and Mrs. Vestager and myself not being completely in agreement what should happen with Niki and parts of the business. Anyway, out of 140 airplanes in Air Berlin, we were able to bring 77 more or less to Lufthansa, including long range. But it brought down, of course, the commercial success overnight. Did we underestimate the complexity? We did. The only comfort is so did Easyjet and Ryanair, which have much higher losses per aircraft in the after air balloon demise than we did. No excuse, but it was the thing we had to do. But now I think as of today, this is what Thorsten Dierks, the CEO of Eurowings will present to you. I think it's time for next chapter After the consolidation chapter, bringing the Eurowings and Air Berlin resources together, it's now about changing from a growth attitude to a profit generation generating attitude. And that turnaround, Thorsten, will present in a few minutes. Basically, we will give up the commercial activities on long haul in Eurowings and hand that over to an embedded version in the Network Airlines. We will focus on short haul with a single type of aircraft, the 320, cutting our wet leases. We will go to 1 AOC in Germany rather than historical up to 3, and we will modernize the fleet and buy all those things combined with a 30% overhead cut and other things we show you, mainly on crew productivity, which is now able to be achieved after we get rid of the complexity of the legacy, we'll be able to bring down unit costs in such a way that this company will start to create value. Overall, all these activities have created a market position in these rich European richest European markets, the 4 Germany, Austria, Switzerland, Belgium, which we were able to bring up within the region to 80% over the Air Berlin transaction, resulting now in 80% coming from 63%. From our home markets to Europe, we have achieved a market share of 36%, growing it by 4%. And from our home markets to the world, we were able to bring also the market share up by 4%, resulting in 34%. And of course, that creates leverage towards your customers, the large German corporates, also, of course, creates leverage towards your partners at airports, handling air traffic control, wherever you need some size to really have some negotiating power, which is a fun job of Detlef Kaizer, the newest member of the Board. And that was, of course, the strategic advancement we could take out of the Air Berlin, which now needs to be followed by value creation, as I just mentioned. So how do we look at the 2 airline groups complementing each other? The 3 premium brands, Network Airlines, obviously, run the hub and spoke model, have looking at the awards, we get premium positioning. Whenever there is airline awards of best airline in Europe, the only thing which is changing is the order of these 3, yes? Regardless whether who the award is giving, the 3, we usually have the first three ranks. And of course, we have been able to grow profitably, but as you well know, reduced the growth there as well due to the overcapacities, at least within the short range European market. Eurowings, obviously, focused on point to point, also with the underlying IT, Navitaire versus Amadeus. We have positioned the product more in a value positioning way with much lower cost than the Network Airlines. As I mentioned before, we have been able to establish EOwings without any collective labor agreements restricting us in terms of scope clauses. And obviously, with the last years where we have given Eurowings a huge task of strategic jobs to be done, maybe to be honest looking back, maybe gave them too much to do in too short a time frame. It's now moving to a more focused business model. We're losing the growth, putting profitability first. And again, Thorsten will come to that in a minute. Few more figures on this decentral German market I talked about. The top 5 corporate customers of Lufthansa, none of them is in Frankfurt and Munich. They're all in other German cities. When you look at Paris, I learned that 85% of all top 40 French companies are based in Paris. In the case of Germany, this is just 40%, combined Frankfurt and Munich. So this market structure forces us to do the best of both worlds where we keep those two business models separate and where, in a commercial sense, we use them combined. So if you run a large corporate company in Dusseldorf or in Stuttgart, the wealth of Germany very much coming from those two regions, the short range needs of flying for the corporate travel but also for the individual travel, of course, is covered by Eurowings. And then when those people go on long range through the Meilster Moor program, through our corporate contracts, we attract them to fly Lufthansa, which is why or Swiss or Austrian, which is why we tend to have a much higher share with our corporate customers long range than many of our competitors. And of course, if you look at the very export oriented German economy, that is a huge advantage to have, and we're obviously trying the very best to leverage that. How do we leverage that? How do we actually manage the business? This chart is trying to explain that. Is there a full decentral model in Lufthansa Group as we historically had it? No. Is there a fully centralized model like the U. S. Carriers? No. It is indeed something in between for a very good reason. We use full integration powers where it creates value. For example, sourcing, purchasing of aircraft or other things or to decide on the capital allocation, which of course is done by us and the super in the Executive Board in a centralized fashion based on the ROCE I explained before, and there's no decentral power on that one. When it comes to the commercial activities, we do the 2 worlds. We get the combined commercial integrated model of the Network Airlines headed by Henri Hommeister, who treats those 4 hubs, Zurich, Vienna, Munich and Frankfurt, as one business like the U. S. Carriers do and creates the integration power of that integrated approach. When it comes to Eurowings, where the point to point model is in the focus, we keep them at arm's length, and they do their own things fighting their competition, which is other point to point carriers, obviously, mainly, of course, the remaining low cost carriers of Europe. There is some ties in between, as I just mentioned, corporate contracts or Miles and More, our FFP program. Besides that, 2 worlds. When it comes to operations, when it comes to labor relations, when it comes to cost efficiencies of airports dealing with airlines, when it comes to individual brand elements that the customer sees, we go to a more decentral approach, which is on the lower part of the chart. And there, we create the best of both worlds. We integrate the power, the leverage of Lufthansa with its 800 airplanes or 765, to be exact, wherever it makes sense. And we have internal competition. We have best practice competition. We have the customer individual approach to its brands and products wherever it creates value on the other side, which is on the lower end. And we as an executive board and I've been on boards in both ways. When I first came to the board, we were acting like a holding. It was a disaster. We just pretended to sit on top of everything and allocate money, and the others were running, trying to create value, fighting against other more than they were fighting against the competition. And the Board was far away, one of the reasons we took so long in taking decisions. Now we are much more integrated with the functional responsibilities we have, of course, especially Harry Ohmazda and Detlef Kaizer, but also Ulrik on the CFO side are able to go into the organization with their line of power. And many of the synergies, which were partly driving our profits over the last months years, I showed you before, doubling our ROCE's EBIT margins, came from that structure. Does it take more time for us and the board to deal with things? It probably does. Is there a need to rebalance that over time? There always is. But I think when it comes from pretending you are holding of airlines, which are independent from each other, and we all know there is one example where that works quite well based in London, where the overlap of the businesses is very little. Not that many people fly to Los Angeles via Dublin and come back via London. In our case, every day, people are reallocated over our hubs. Harry Homasser will explain that to you in a few minutes. And that's why we believe there is more functional responsibility to be handled at the top level. But there, where holding doesn't make sense, capital allocation, investment allocation, infrastructure, political lobbying work, there, we act as a holding on the upper end. Surely, it makes sense to bundle your sources when it comes to fighting monopolies. And I think in the last years, we have shown quite a track record of fighting monopolies. It actually started in 2015 with something not many people 2014, many people managed to really observe is when we went against the GDSs with our new distribution capabilities, when we introduced a fee for using GDSs. Quite a moving changed move in the industry, took us some holding our breath for a few days weeks. In the end, as you know, now IAG and Air France have copied us, and it is now the new standard. The next big challenge we had to fight, obviously, was the collective labor agreement of the core union group in the Lufthansa Airline. Remember, it took us 3.5 years, basically ended in 2017, started in 2014, but but it was well worth it. We were able to reduce unit cost in the cockpit by 15%. We were able to get digital turbo digit millions off our balance sheet debt because of the pension obligations we were able to change from defined benefit to defined contribution. But for good reason, a long and mostly fair fight we had with our union on that one. Airport infrastructure. With our 4 hubs being so close to each other, historically, was seen as a disadvantage. They wouldn't complement each other. I think the industry has changed its view on that. We are able to reallocate traffic streams from one hub to the other. We are able to reallocate even aircraft from one hub to the other. When we were starting to have serious problems with Frankfurt Airport, both on cost and quality, we told them we would start to relocate 380s. Initially, they wouldn't take this for serious. Now next summer, there will be as many 380s in Munich as there are in Frankfurt. So leverage wherever you have to overcome monopolies is key. I think we all know the famous McKinsey chart of the value chain of this industry, which has shows a nice relationship between number of competitors and margin. It's obvious this industry, from an airline point of view, suffers from too many monopolies around us, be it airports, GDSs, air traffic control, certain union contracts. And we, I think, in all modesty, have shown a strong track record, I mentioned some of them in the last years to fight those monopolies and to use our structure to leverage our competition between those suppliers wherever possible. That focusing on one element of that competition is especially true when it comes to our 4 hub airports, which we operate right now. In all four, we're enjoying a fairly strong slot percentage, somewhere between 59 in Vienna on the lower end and 68 on the upper end in Munich. If you look at the slots in the more interesting parts of the day, morning and afternoon, basically all these 4 airports are full, even Vienna. So that is, in my view, probably one of the strongest assets Lufthansa carries forward because this thing, those of you I think all of you live in Europe, will not change. The idea of European airports being expanded or even new airports being built is very, very limited, if at all. We expect actually between now and 20 34, an average growth between 0% and 1% of slot movements in our hub airports. So this is probably there for history. And to enjoy that slot capability or capacity creating a capability to optimize your own hub is huge. And when we come to the summary in the end, I will probably start just exactly with that, that looking forward, one of the key reasons to believe in more value creation happening in this group is our ability to leverage that slot situation in a growing market, which we all know we are enjoying to be living in regardless if it is twice GDP, 3 times GDP or even only once GDP. That, I think, is key for our competitive positioning, again, not just in any hubs, but in the hubs of the strongest economies of Europe. Now put all that combined, of course, these charts are also seen by our competitors. And especially when it comes to the strength of the German economy, it's not a surprise that over the years, always somebody wanted to come in. Because if you look from the outside, Germany with high economic development, high yields, high purchasing power and with a home carrier called Lufthansa with a cost disadvantage, why not go in with my low cost from Budapest or Ireland or Luton? I bring my low cost to Germany. I have the same high yields as Lufthansa, and Life is Wonderful. Milk and honey for any non German airline. Well, didn't prove that successful with Deutsche B. A, didn't really prove that successful with LTU, didn't prove that successful with Air Berlin, didn't prove that successful with Germania. Condor Thomas Cook, it's out to be judged how that will end. Of course, there's now new 2 new competitors, much more healthy, stronger competitors than all the others who have tried the same thing. And they all experienced the same thing. A market with high yield is not there because somebody is taking extraordinary margins. This market also has high costs. And if you fly from Dusseldorf to Stuttgart, your low cost potential is quite limited, too expensive airports, very expensive air traffic control. In midterm, you have German crews with strong unions who want their part of the share. You have handling agents who fill your aircraft with baggage, who eventually want to be paid by German drilling contracts. So we all realize, in the end, the high yield comes with a higher cost situation. That's why nobody really has been successful attacking us so far. Why am I much more positive this time? These 2 are rational players, very professional airlines. Obviously, I know the people on the helm. We know the top management. They are, in our modesty, professionals like us, which is not necessarily true for all the others who tried it. And they will not act in an irrational way. And also, they are all public companies. They also apply pressure on by you as you apply pressure on us to act very rational. Therefore, I think that, that price war Michael O'Leary called out, which indeed is happening and is the reason for our profit warning on Monday, will not last forever because these rational players will not do what others have done in the past. And in the end, we all know it has worked in the other saturated airline market in the world, in the U. S, where the top 5 players enjoyed 86% market share, where there's 50% in Europe. Personally, as a convinced European, we will not get to the same levels, I think, as in the U. S. There is more room for niches in Europe because governments protect the airlines. There is a different market approach by customers who like a certain level of differentiation. Even our Ryanair is moving towards more than one brand, which they have been laughing at us for some time, but I think we all agree there has been a value in that. So I don't think we'll see necessarily 80% in Europe soon. But surely, and we all agree on that, be it Willy, be it Michael, be it myself, we will get to more consolidation and somewhere in between the €50,000,000 €80,000,000 will end up hopefully being a more healthy market. London, always a good example of a healthy market with strong professional airlines fighting with each other but creating value for their shareholders at the same time without losing money. And that's why I think what you have seen, this is public numbers, that one of our competitors actually lost EUR 60 per passenger with revenue of EUR 40. The other one also not known for losing money. Easyjet lost actually €45 per passenger, which they made public and which resulted in, I think, SEK 7,000,000 per aircraft. I mean, it's not easy to lose SEK 7,000,000 with a long range aircraft per year, but to lose €7,000,000 with a short range aircraft for professional airline is not something these people will look at very long. We wouldn't, they will not, and again, it's our respect for each other, I think, which will drive a healthier environment eventually. One way to get to more consolidation, of course, is M and A. But to be honest, I think M and A is a little bit over rated in the media as being the only tool. And to be honest, in Lufthansa, we have a high hurdle to participate in M and A transactions. They need to be complementary to where we are in a regional sense. They need to be meaningful in size because the complexity is always there. It doesn't make sense to do that for just 5 aircraft. There has to be revenue and cost synergy potential. They have to be ROCE accretive. They have to allow us to maintain our investment grade rating, which was just, as you know, stepped up. And there obviously has to be a competitive cost base of our potential target, which we can further leverage in parts of the group. And only with those 6, yes, we will act. That's why I don't think we will act very often. That's why I don't think we will act very soon. And that's why I think M and A is only one way of consolidating the European industry. When it makes sense, like buying Swiss, like buying Austrian to get another hub Brussels, we will act Berlin, I explained, Berlin was not an M and A transaction per se because there was nothing to buy, but of course, it was considered to be part of an M and A idea. Yes, there is opportunities, and we will not be shy of using them, but these hurdles we've given ourselves are high. And that results, in my view, in a logic where fortunately, there's other tools for consolidation than just M and A. And the underestimated tool for consolidation, I think, is joint ventures, which are not the same joint ventures as in other industries, where basically joint ventures are ownership joint ventures, 2 or 3 individuals, companies owning a joint entity. That, as we all know, in aviation, at least outside of Europe, is not allowed or to a very certain limit, only allowed. That's why we create commercial joint ventures. I hope I will talk about that a little bit later on. But the number you might already know, 70% of our long range revenue, which is still the base of this company's also commercial success, comes from joint ventures. Of course, by far the biggest, Air Canada and United. But in the meantime, we have been able basically to sign joint ventures in all the major strategic long range markets which we have, which besides U. S. And Canada is China with Air China, Singapore and Australasia with Singapore Airlines and Japan with ANA. So that results in more than 70% of our intercom revenues being part in a joint venture, which is nothing else than being part in a higher consolidated market. And there's other things, wet leases, commercial ties with partners, which, of course, we do across the board. And I think in all modesty, there's probably nobody in the industry who masters this toolbox of commercial relationships with the same experience and knowledge as our people do. That's the feedback we always get from our partners. And that's not a surprise. We were the ones who created Star Alliance and other alliances were founded afterwards. Again, based on our need, also on the decentral German market and the other way around, anybody who flies to Frankfurt and Munich basically needs us as a partner long range to make money. I mean, who can fly a wide body to Frankfurt without some feet on the other side or some feet in Frankfurt? And that's why, of course, we are the partner of choice for those who want to go to the richest European markets, be it Switzerland, be it Germany or be it Austria or Belgium, as a matter of sense. Anyway, besides those airlines, as you well know, more than others, we operate a number of companies which are not only European number ones but even global number ones. And I will just briefly touch on them even though I'm fully aware that, of course, the focus today is our airline business. Let's start with the way we look at those subsidiaries. Basically, there's 3 things we look for: What's their market position? Are they in a structurally growing market? And is there a high level of synergies with the core business? When it comes to leading market position, all three major companies we own, Lufthansa Cargo, Lufthansa Technik, LNG, basically have a yes. By the way, the 4th company which you could add here would be Lufthansa Aviation Training, where we are hosted by today. But I wanted to keep it less complex, so let's focus on the 3 multibillion euro companies which we own. Structurally, the markets are all growing, well, they're core of aviation. It comes to synergy levels, we believe there is huge and unavoidable synergies with cargo. Half of the cargo is actually in the beddies of the passenger aircraft, the other half on board of freighters, and there's huge synergies with Technic. We believe there's much less energy. So the pure numbers underneath the line, there are billions of revenues last year and their margins, whereby the cargo at a higher margin than the others, don't necessarily drive our decision what do we keep and what don't we keep. It's above the line where we look to take decisions as well. And that's resulted, as you know, in our decision to divest LSG. Let's look at cargo first though, which briefly, at least, I need to touch because as you are here in Frankfurt today. I'm on as always to remind ourselves for cargo in Aviation, Frankfurt is what London is for passenger business. If you cannot make money here in cargo or in passengers in London, you better leave the industry, yes, because it's like fishing when you hold out the net and the fish just jump in. This is the home of the cargo gateway of the 3rd biggest export nation of the world. The other 2 are geographically huge countries, the U. S. And China, Germany being small. Every cargo flown by aviation by aircraft can be trucked to Frankfurt. And historically, Frankfurt has been the logistics center of Germany. So this is why we enjoy the much more profitable and successful cargo business here than our European competitors. And it will stay that way unless the German economy collapses, which it doesn't look like right now. Onethree of all German economic output is flown by which is exported is flown out by aircraft to some high degree by us. And as you all know, the German economic success of the last years, the growth has been more or less double of the growth of Italy and France and other European nations. The UK is to a high degree driven by export. 50% of all German GDP is exported. If you look at the German DUCs, 30 companies, 80% of their turnover is created abroad. So that, we believe, is a business to stay, also to stay in for us. And of course, the price you pay of being in the business is you have to have a huge level of flexibility. You have to be able to reduce capacities fast. We have given ourselves the task if within 4 weeks, we have to be able to breathe capacity with 10%, which, of course, is unheard of on the passenger side. In cargo, we have successfully shown that. As we just recently decided to get rid of the MD-eleven fleet, focus on 777 only and reduce the number of aircraft to single digit 9 only in cargo because if you need for more, you just lease something in, but you don't want to have too many cargo planes for sure because of the volatility of the business. Technik, number 1 in the world. Every 5th aircraft in the world, which is flown in the civilian side with 100 seats and above is maintained by Lufthansa Technik. Historically, also a cultural core of Lufthansa, for those who are not German, you might know that for engineering in Germany is still a solid fundament of many, many companies. I myself, I'm an engineer, and I think half of the German companies are run by engineers. It's in the very core DNA of what this country thinks it does well. And even though, of course, in Aviation, there's a huge service element on top of that, I think there's surely a historical element, but that has been part of the DNA of this company. But that doesn't matter nowadays looking forward. It matters are they able to create value, are they able to grow. The business has significantly changed. The modern aircraft, the new technology aircraft coming to the market are so complicated and so IP restricted that only few airlines in the world can maintain their own aircraft. Most of that business is now getting outsourced to companies like Lufthansa Technik. That's why it's a growing business with margins also to be growing in the future. And of course, also business where you always have to think about the right partnering when it comes to engines where the IPO the IP is key driver. The only way to participate in the business is by joint ventures. That's why we have joint ventures with all 3 engine manufacturers, Pratt, GE and Rolls Royce. When it comes to components, it's about outsourcing, also capital allocation of airlines giving their components to a company that opens a technique. So this business is changing, getting more difficile, more differentiated, more partner needs. But in the end, I think in all modesty, we are well positioned, we believe, to participate the growth. And just one number which shows the linkage to this business also to the OEMs in the world, that if you look at the contracts which we have signed in the last years with OEMs, be it Airbus or Boeing or be it the engine manufacturers, that all will create a turnover, just those joint ventures alone, by more than EUR 5,000,000,000 in the year 2,032, in 14 years, which is more than the whole turnover of Flusen Technik today. So basically, we already signed the guarantees for growth in that industry, in that business. And in the end, also the OEMs cannot have too many different partners in this maintenance business, and that's why we believe this is something which will create value long term and difficult to attack. LG, a little different, also market leader, actually number 2 in the world. Synergies are much more restrictive, we believe. We also think that in an industry where nobody else necessarily owns a global caterer, we might not be the best owner also seen from the perspective of LSG because they always come second when it comes to management attention. They always come second when it comes to capital allocation. So there is probably a better owner for them. If this is necessarily a once by 100% transaction or if there is a new structure being created, it will depend on our basically competition, which we are running between the potential strategic buyers. We will all go in 1 piece. We will go in different pieces. These are all the options we keep open to, in the end, create the maximum value creating outcome. These three examples are thing are just some top of the iceberg examples to show how we are focusing on the core business, and I'm not shying away as a Board to even touch the former holy cows in Lufthansa. Selling a company as a side for LNG has never happened in Lufthansa. Moving malign maintenance on Lufthansa Technik towards the airline, which will happen on January 1, is the first time since 1955 that Lufthansa Technik is not doing the line maintenance of one of the airlines in Lufthansa. So these are things which are culturally things in the past weren't even looked at or shied away from fairly quick. We believe, again, I come back to my opening chart, modernizing Lufthansa also means we have to touch those things when it creates value. And again, Malte More for us is a key commercial success driver of our airlines. Harvey will go into more detail on this. Rather than dreaming of IPOs and all that, we think using that to leverage our airlines is what we should be doing and will be doing. I come to an end, also in my last minutes here, by hopefully giving once again the message that balance of stakeholder success, stakeholder value for us, of course, focuses in the future more on the capital market, but will not force us to divert from our focus on customer and staff because it's once again that element of the triangle which we believe in. But also before I sum up with that, there's one fourth element coming more and more to our attention and something which needs our attention. And that's beyond the typical stakeholders, customers, shareholders and staff. It's the environment, the society we all live and operate in. And of course, the more commercial successful from the shows, the higher the expectations are from the public, from the media, from politicians, but also from our customers, also from our staff and meeting some of you. I also know from some of you to live up to our responsibility when it comes beyond commercial success. That's why I think we are well advised with the things changing in the world on the streets or in the government offices, to be ahead of that wave. Of course, the biggest driver is the environmental issue. We also, just a few days ago, in a public interview, opened up that we are willing to discuss ideas about having a CO2 element in aviation beyond what we already have, which is emission trading in Europe and CORSIA on the global scheme. We think there is a need to reduce carbon footprints on the ground beyond what we do in the air as much as possible. We want to move to 0 CO2 on the ground by the next decade with everything we do. Plastic, when you go to Asia, it's not about CO2, it's all about plastic. I was just there. Our staff, first question I got, Mr. Spohr, how can we and Lufthansa help to create less plastic waste in Asia? So this is something which I think comes from all stakeholder groups. We believe innovation, innovation leadership in the future also means to be well advanced on this one. And even when it comes to the social issues where we have Help Alliance, which helps young people around the world, basically supported by our crews when they go somewhere in Los Angeles for a day, they go to a hospital, they help the people in need is something which drives value in all three dimensions. In the end, that value creation has to be conclusive. It has to be something which drives each other. If you run a company where it is about creating value for shareholders or for the customers, something is wrong. We very much believe in that circle, where value creation for one stakeholder creates value for the others. Are we doing this in a perfect way? That's our job to make it better every day, and we learn every day. I'm not saying that. But the idea behind this, we strongly believe in. And I go back to I even think this whole economy in Germany is successful in a global scale to a certain degree because we're doing this better than others. And when it comes to success, long term success, this, of course, is more important than short term success. There's many things you can do short term to create value for one of these stakeholders. Stakeholders want more cash. Let's not buy airplanes, let's lease them and give you some cash. Short term value creation for shareholders. My staff wants more money to smile more, no problem, to give them short term more salary increase and to make them short term happy. My customers want Cavia, also in economy class, no problem for a few years before we go bankrupt on Cavia. But you know what I'm trying to get to. Short term, there's easy things to do with all 3 stakeholder groups. Long term, it's this element of balance, which we believe differentiates us from others and is a reason why we have been around successfully for a few decades and will be around successfully for a few decades. Next success, that's my last shot, I promise, before we can go to the pool next door, if we get a fresh up. Time is playing in our favor. And let's look at the 4 elements outside the box. The infrastructure, at least in our home markets in Europe, will maintain its constraints, And we put constrained infrastructure against some kind of growth. Obviously, those who own that infrastructure, like we do in Munich or slots, those who have access to infrastructure will gain in that supply demand curve. Industry consolidation, we all know, looking at the U. S, will help to become a more healthy industry, and we are on the right part of that consolidation game. Converging cost position of legacy and LCCs is a fact, While we are lowering our case case every day between 1% 2%, the case case our competitors are coming up. And we have a huge step forward with our cost in Eurowings stores, we'll show you in a few hours. So I think that also plays in our favor. And the things I just explained in the end, maybe sometimes a little bit boring German sustainable approach, boring Lufthansa sustainable approach in the end will pay off. And I think the Lufthansa Group is well positioned in many ways for that. And looking into the box with our strengths, I think if you put those things together, what's happening around us in the industry and what are we doing within Lufthansa to position and leverage our brand, our products, our market strengths, to maintain a clear focus on cash flow, to be committed even more than in the past to allocate our capital in a ROCE optimizing way and to be in control of the major profitability drivers will create an investment case, which we believe will outperform others. And with that, I very much look forward to your questions later on we all have given our presentations. And right now, let me just say thanks for listening in this little hot room. I wonder if we can take off our jackets and even our ties, but you are the guests. So I'll wait for a few of you doing that first and then I will follow because the air conditioning capabilities of this room, of course, is limited. Thanks for listening. No foot on the brake, please. So yes, good morning to everybody and an even warmer welcome from my side. As Carsten Spohr was already mentioning, feel free to order drinks, whatever. So I won't get disturbed through that. And Carsten Faub was giving, I think, a great update on the overall situation of the company and overall development. I try to focus now on the Network Airlines, on the commercial side, on the customer relation, let's say, like that, which we were working out and which we generate. So if this would work, I would be happy. So I'm happy now. So basically, our strategy is based on 2 sides of OneCoin. 1 is global market presence because we are global player and the other one is premium because we are in the premium segment. And having the start up here and the new team in 2015, 2016, it was really a very, very important decision that Eurowings was somehow put aside also in terms of brand and product management because this was giving us as Lufthansa, SWISS and Austrian the ability to position ourselves as premium airlines. Global market presence. What does it mean? Of course, we are global in terms of destination management, in terms of numbers of destination we are offering. But even more important is the design of the network, so the itinerary design. And you see it here on the chart, we are offering per day 41,000 itineraries, which is most probably a record high out of Europe, which is meaning that we are connecting region with global and the other way around. So you can fly, for example, from Paderborn, whoever knows where Paderborn is, to Rio several times a day, is really an asset and which is not comparable to the other hub systems you have in Europe. In addition to this, of course, hand in hand with this, the distribution strategy has to go. So just to globalize the network and just to have nice metal in the air, of course, is not enough. It's also the case that in line with this, the distribution strategy has to go. We have more than 8,000 bigger distribution partners in the world who are not just selling, but promoting our product. And this hand in hand is a global reach, which is really outstanding. What is it also bringing this kind of global presence is flexibility. Of course, in terms of capacity management, which is organized through 4 hubs, we are able to swap capacity around as we did between Frankfurt and Munich. Some might have followed it in the public press that we were moving 5 A380s and 3 A340s from Frankfurt to Munich to also move our market position in Munich. So it was not just a single case, but a context case, which was working very, very well so far. And this only can work if the O and D demand steering, the demand control, the multichannel approach is really working for all the hubs more or less the same way. So there has to be a bundled integrated approach. Otherwise, you will lose a customer. This, of course, is something we cannot afford. And in future, and this is about multi island integration, on the right hand side of the left hand page is that we also want to extend and expand our competencies, which we have generated throughout the last 3 years to others in terms of other airlines, which would mean consolidation of metal, which is fine. But even more important or as important is the consolidation in the distribution environment because everybody is looking very much on the consolidation on the metal side. But also distribution is very much consolidating, and we definitely want to be a player on that. And this means that we have to have an end to end development logic, yes, from the metal to the customer and the other way around and cannot just have frictions within the optimizing processes anymore. And it has to be customer segmentation orientated. And with this, I'm with a strategy of new premium here. You see that we are focusing much more in designing our products on customer segmentation. So the buzzword customer centricity really means something here. I come through this in more detail. We have won several awards, Carsten Spohr was mentioning already. And it's really good to see that when we talk about the awards, really Lufthansa, Swiss and Austrian are very much aligned also from a customer point of view, when 22,000,000 customers are voting Lufthansa First, ASEAN and Swiss number 23, then this means something. It means it's working. This integration is working well also from the customer point of view. And the premium growth, of course, is something which is always important for an airline. Of course, it has to be sustainable and profitable growth. We were showing it over the last year, so more than 10% growth in the last 2 years on the passenger side, not on the ASK side, which is also coming from optimizing earning capacity, aircraft productivity, all of that was helping us to really position ourselves also with better efficiency. And last but not least, and this is also the future view, we have to adopt our operating model because with the first step we were taking 2016, we were introducing the so called process orientation, which was helping us to get leaner, more efficient, more than 10% more passengers, 5% less cost in terms of ASK efficiency, of course, a very good story, but we have to be more. And this is more integrated, more cross functional, and this is also something we are working on for the future. So with this little start up, global market presence and brand positioning, I would like to start with the brand positioning. And you see here 3 brands which were not aligned in the year 2015 to 1 and the same approach. What does it mean? If we want to have some flexibility between the hub systems, I have to offer the customer a product which is more or less aligned similar. So when I rebook, let's say, like this, somebody who was expecting to fly from Hamburg via Frankfurt with Lufthansa to the world and I have to rebook him via Vienna, then the customer, of course, is expecting more or less the same product appeal, the same pricing appeal, the same frequent flyer program, the same philosophy in terms of servicing. And this alignment was taking place in the last 2, 3 years, which was helping us very much to be positioned as a brand in the same way, which is good, but which is also helping us to be very interactive with local brands. So all 3 are national brands, national heroes, yes? Austrian is a national hero for sure, Swiss is and Lufthansa is too. And the interaction through the organization, double headed organization, which is represented by the local Chief Commercial Officers here is very, very important. But what we have hardcoded integrated is IT. What we have hardcodedintegrated is process management. And what we have hardcodedintegrated is a governance model. So we have a common governance model, a joint decision making, which is based on transparency, best competence and best solution. And you see on the right hand side, and Carsten Spohr was also reflecting on that, how it is reflected in the market. So with this, I come to the multi hub approach, which is based on the 4 hubs you see here and which is generating, as we already mentioning, a lot of benefits to the customers, 41,000 itineraries per day, 19,000 flights a week was based on more than 560 aircraft, including wet leases and, and, and, and, and. What is really our effort, our approach every day is to optimize the connectivity to the world through a common O and D planning, through a common flight planning, through a common steering, pricing activities. So out in the market, we have about €4,000,000 prices, which are reallocated more or less every day. So more than half of that are adopted every day, not just through steering, but really to interactive price action. So we are very, very close to the market with that. And it's also true for distribution, global sales and very important in these days for common business application development and digitalization. Digitalization, I'll come later to, is, of course, very much a buzzword because virtual has to go together with reality, and this is sometimes not so easy, especially in the service industry. I'll come to this later on. And then of course, product has to be harmonized, as we were saying. And the innovation, yes, whatever is called innovation, we have a more or less central innovation driver, which is also kicking the hubs, yes, keeping them alive, putting initiatives to the hub from a central point of view or from a, let's say, bundle point of view, but also the other way around. And all of this is increasing. The market penetration, the future, let's say, development and, of course, the competence in relation to the customer. A further extension of our network competency is, of course, the joint venture model. Carsten Schwab was already reflecting on that, that most of the revenues of 70% is within the joint venture, somehow protected because we have friends and partners. So I can call United States and Canada my home market as United can call Europe their home market, at least our home markets in DACH B. And I also we are working on that, but we are getting further. I can call China my home market. I can call South Asia my home market and at least Japan my home market. This is very important because we have a context coordination there. We are allowed and we act as if we are one company, yes? We are allowed to have joint decision making regarding capacity management. We are allowed to have joint decision making regarding pricing. We are allowed to discuss our product strategy. We are allowed also to discuss common market actions if there are competitors, for example. And some are feeling this common activities in the meanwhile. And of course, all of this is based on a revenue sharing model and not on a profit model for a very simple fact. On the revenue side, we have a lot of influence through this coordination, common distribution approach whatsoever. On the cost side, I have no influence on what United is doing with their pilots, on what SQ is doing with their agencies whatsoever. So we keep the cost side out. Of course, it's just driving complexity and not bringing any added value for the joint venture in itself, which is, keep it in mind, a model which is working most probably better than just a merchant acquisition, where you have then the full responsibility. What we want to target is a customer and the optimization profile on the customer side is very much in the focus of the joint ventures here. To what is it leading, and there are 2 aspects. One is a customer aspect, and here we show the itinerary between Berlin and New York. We have a very, very full a very, very powerful combined system there, existing of our through our 4 hubs we are offering the itinerary through, in addition, the joint venture partners. And you see, for example, from Berlin to New York, we are offering 14 itineraries per day. 1 is nonstop. And you can start at 6:40 in the morning, then somewhere between 10 something and 1400 we have a lunch break, and then you can go on until 3 o'clock in the afternoon to fly with us. Who else has an offering out of our home markets as we have? And when you do an itinerary comparison to other hub systems, which are offering itineraries out of Europe. Lufthansa by far is the strongest. The next is IAG no, sorry, is Air France KLM and IAG is far behind. The reason for this is very much what already was mentioned by Carsten Spohr. The fact is that when you take Frankfurt, Munich, Zurich and Vienna together, all these whole markets together are half the size of London. And therefore, we cannot just copy and follow a benchmark IAG model. This would be completely wrong. Of course, we have a different market. We have a different customer profile also by the end of the day. And therefore, it was very, very clear that we had to find in terms of bundling up the competencies of the brand, of the hub, of the distribution, we had to find our own way. This is what we did in the last 3 years. And this is what we also want to extend then further to the markets when we come to this chart here, where we want to hand over the Business Intelligence, which we have worked out in the last 3 years, also to other business models. So when we see the left hand side where you have the classical, let's say, performers in the market, these are performing as they are performing. You also see that the Lufthansa Group, in terms of capacity growth, was performing below the market, which was somewhere before 4% to 6%, as it was shown. And we are clearly were below this ratio in terms of capacity increase, and we will stay below this ratio regarding capacity increase. But having the ability to plug in, yes, as well as in metal management as well as in distribution management on the customer front end to plug in others will give us opportunities. One opportunity, and this is discussed also in the public, is the tour operator, touristic, leisure, for us, premium leisure segment. So we are focusing more on those who are taking a cruise ship than ending up in a 2 star hotel in Parma de Mallorca, yes? But these customers, we will see several times through their lifetime also in our system, and there is an opportunity through the mechanisms we have worked out to have an own platform running in leisure markets and having a customer segmentation, which is an overall, let's say, an overall profitability optimizer for the, let's say, loyalty approach. I'll come to this in more detail later. We have examples already established. In 2008, Lufthansa Group was taking over Elweiss Air in Switzerland, which is working very much in combination with Swiss in Zurich. And they have somehow a fully aligned product. They have somehow a fully aligned pricing and string philosophy. They have somehow also a fully aligned product philosophy because what we are producing is, let's say, like this premium leisure. We cannot end up with economy 29 inches seats. This our customer, of course, would not buy, and this would deteriorate customer segmentation. But there is a market for us to extend in this direction. A second opportunity could be regional expansion, and there's a lot of debate regarding Alitalia and others in Europe who would like to come under our umbrella because I think the industry knows very much that we have a very, very strong commercial grip in the market, that we have a very strong global presence, not just in, let's say, the DACH B markets, but really in all global markets through the joint ventures and others. And this is also helping us to enhance ourselves not just in Europe, but also and this is, of course, very much analytic driven and not a quick done deal process, we also have to look that we can enhance our global presence because we are strong in the North Atlantic. We are strong in Asia. We are even stronger in Europe, but we are not so strong in Africa, we are not so strong in South America. And therefore, we have to see over this context that we are not producing for the future steps further O and D overlaps, but that we really generate new markets, as I said already in the beginning, through new segments to operator leisure whatsoever and through regional new itineraries, which we can then produce to new from new markets to new destinations. And this is a view. Otherwise, it would just be collecting metal and collecting seeds, which would not be enough. We have to increase our global presence and our premium approach. So and the logic behind is a little bit shown on this chart because when you see that we have 43% of the revenue out of the DACH markets, it's a quite high share and you can tick it off. But when you see that 12% is coming from the U. S. Markets, more or less U. S, Canada, sorry, and 10% is coming from the Asian market, which is more or less covered by the joint ventures, more than 60%, close to 65% is covered within our system, having our own 4 hub system, having our joint ventures here and there, yes, across the Tirat. And this means that more than 60% of the business is in our hands. We have to increase the share. And it's not just counting seats, it's recounting revenue. And therefore, Europe, the left 28%, of course, has to be the target. And we have to see that we are moving on that and that we increase the share further. And therefore, it's very much that we also generate, as I said, new segments and new actuaries. And you see that on the right hand side regarding the segmentation, we are very much in the premium business. 50% of our revenue is coming from premium, which is mainly seated 1st class business economy class. 50% is coming from pure economy class, but there's also room for improvement. I come to this through ancillary management, upselling, cross selling, whatever you do in other industries. And with this, I'm in the new premium segment. So all of that before was about globalization and enhancing globalization. Now we're getting regarding enhancing our premium approach. Everything starts with the customer. And we have to understand more about the customer needs. Of course, you know most probably better than I do, we are very much a commodity industry. We are very much living in the world one size fits all. And this is too much for too little. We give some passengers too much input and have too little output. And on the other hand, it's sometimes too few for too much, yes? And this, we have to reorganize ourselves that we are not losing in terms of customer valuation that we are not losing in this process. And this industry is not good in terms of customer valuation. And therefore, we are step by step implementing this customer segmentation and customer segmentation orientated approach, not just in producing new products, but also in generating upselling, cross selling opportunities. And when you go through the travel process, you see that we have very much invested, as Carsten Faure already was saying, through digitalization and getting this customer process, let's say, closer to us, yes, I always say we are in your pocket via app, via web and also via messaging. And the important thing is that this process design, this new process design is helping us in terms of self servicing because you can help yourself, which is bringing organizational costs down and customer satisfaction up. It's helping us to understand you better because when you're interactive through data collection, of course, and data availability, we understand your needs better, and we have projects running around that where we have started proactive sales, which is already contributing a small three digit million number in terms of revenue. It's important in terms of convenience management to understand what your understanding regarding convenience is. Is it a lounge or is it a different food or whatever? And more important and last but not least, but really the most important thing is that we can interact with you. Not just in terms of troubleshooting, which we have established 2 years ago or less than 2 years ago within Lufthansa through automatic rebooking, things like that, you get your SMS or e mail message if a flight is not going in the way as it was planned, but also in terms of proactive managing your traveling, also in terms of that we understand you and you understand us because this world through social media is getting more interactive. And if I have no idea regarding the preference and regarding the customer details, how can I be interactive through social media, through chatbots, messaging whatsoever? And this is very much a learning curve we are going through. All of this is a nice show as long as we don't have that. And this is a hardware. By the end of the day, we promise something, which by the end of the day has to end up in the passenger process on ground, in the aircraft, in terms of logistics, if it is catering, if it is other kind of service provision, and this has to go hand in hand. And therefore, this industry is not comparable with the Ubers of the world, who delegate all the real world to some people who would like to manage themselves, this has to be managed really in a context way that the passenger process is not breaking up between curbside to curbside management and that also and this is very, very important in terms of aftersales this is working. One example is the premium economy class here, which we have established in Lufthansa, Karsten already 4 years ago and in Austria in 2 years ago, which is paying off very, very well. It's a very special segment where you have to understand, is it an upgrading segment or is it a downgrading segment? And we very much had the fear at the very beginning that it is a downgrading segment. But as at least throughout the last 3 years, the brand pool, the loyalty pool was so strong that this whole thing was an upgrading story. And you see that per square meter, this is making 33% more than the classical economy class and having the pull strategy there, pulling from economy class to premium economy, this is really a generating money generating machine. And as I said, therefore, virtual reality and the reality in the service process has to go in line. Otherwise, in terms of profitability, this will not work. And therefore, we are also working on touch point management and, as I said, on being interactive wherever we can. With this, I come to the pure numbers of ancillary revenue. And you see where we have started in 2015 with something like EUR 280,000,000. Now we have reached more than double as high numbers, which is just a trend because this has to go on. And what we want to, let's say, establish in the next years, what we want to get out of the market is another upgrade of another 50%, which would mean that just based on not ticket related and series, we should make around €1,000,000,000 revenue. Now you might say this is only something. You have to take into account here that we are not counting, for example, white use, taxations, I don't know what, what is coming from exo gain factors into NCO revenues, what others are doing. And the one ticket which is sold per day by Ryanair in business class is also not accounted here because fare upgrades is not part of the ancillary management. It's simply part of the yield management. And therefore, the numbers are not easily comparable. But a boost of a further, let's say, EUR 500,000,000 within the next 3 to 4 years is also a great boost in terms of EBIT margin. Of course, the EBIT margin of this revenue is between 60% to 80%. So it's not 1 to 1, but close to 1 to 1 money in the pocket, and this is why we are focusing so much on that. This, in combination with the new dynamic pricing approach, is, of course, really in terms of presenting ourselves in the shelf to the customer a unique, a very unique market approach. Right now, we have 26 booking classes, 41,000 OMDs and 20 6 booking classes. So how much can you optimize there? Hamburg, Bangkok is the same than Hamburg Frankfurt. So then in addition to this, we were talking about ancillary revenues, how much ancillary revenues can you offer through 26 booking classes. So it's not too much. And therefore, full dynamic pricing is not just that we have the upgrading profile flexibility, yes, which is also mediocre in this industry. So when you start with €49, the next step is €89, so it's €40 or nearly 100% upgrading in terms of yield upgrading. This, of course, in terms of willingness to pay is not optimal. This is only one effect. More important is, let's say, on the long run, within the next 2 to 3 years, we can learn to individually steer the 41,000 itineraries, really market based, demand based. We can, on top, steer then our products. We want to offer in addition to that. And in combination, we create the best value for the company out of the customer needs there. And we are industry leading. We need NDC for that. Who was inventing NDC together with Jatta? It was the Lufthansa Group. We need one order for that because it's ticketing MCO approach, you can forget. It's much too complex for that. What we are talking at one order, Lufthansa is leading or the Lufthansa Group is leading in that. And you also need different form of payment. So all of us most probably think credit card is most modern payment form of payment we have, which is not the truth, especially if you go to Asia and there we are also leaning. So this combination of having all these adaptations in the selling process and in the commercial process is helping us really to stay the industry leader also in the future. Kors, and the left hand side, you might see a lot from other competitors. It's not just about bundling, yes? So it's nice to have bundled fares. And by size, it's 3 bundled classes and economy class. Of course, we have business class and 1st class bundles there. But it's more important to have the right hand side under control in future. Why? Selling through bundles is reactive selling. Selling through upselling, yes, you're booking economy class classic ticket, you want to have a lounge. And then do you want to have a special seat and then you want to have a special food whatsoever, can be done by proactive selling. Going in line with that, I said we have to be more interactive, knowing a little bit more about the customer segmentation, which means about you, it's giving us the opportunity to sell proactive and not just reactive, which is a high potential in terms of money making. And this is, of course, behind the €500,000,000 additional revenue we want to receive. But if we want to go through that, it never will work through the GDSs. And therefore, we already decided 4, 5 years ago to get away from the GDSs in terms of share. So it's not cost because the cost is covered by the DCC. It's not that we don't have a good relation to the GDSs anymore. We like them a lot because they're helping us a lot in some cases. But we need the content freedom. We need the pricing freedom, and we cannot be blocked by the mediocre capabilities of the GDSs in the future. We have to have NDC capability. We have to have our own dotcom branded approach. We have to have a white label branded approach and we have to have a white mixture of distribution available. All of this, of course, only can work if we have the right data management setup. And with this chapter, I start a little bit more regarding the future than where we are and the presence. And this is data management. Of course, we started 2 years ago an integration concept regarding customer data, which we simply had to stop through GDPR, through the different legal situation in Europe, and we are reviewing that and relaunching that. But this integrated data approach is giving us an opportunity to use data by sites the data we have in Meilz and More, I'll come to this later, to enhance the customer profiling and to enhance also proactive selling. A common ID management would mean that if one passenger is ticking off, saying yes to Lufthansa also would say yes to Swiss, Austrian and whoever, which is helping us to have more freedom in terms of data analytics. And of course, everything is data analytics in these days. And while our friends in Ireland were mentioning that they have 300 people found on data analytics, I don't know what we have established already a long while ago and enhanced our capabilities in Danzig, in Tel Aviv, in Budapest, whatsoever. And in terms of data analytics, I would say we have roughly 1000 to 1500 people working on that, very much product and process orientated. So it's not a zoo, yes, which is not organized. It's really very much process orientated data analytics because otherwise, You're losing too much expertise in implementing these things to the market. And this is what you see on the right hand side. We are working on 4, 5 bigger projects not to have just analytics and to be the best in analyzing the data, yes, but in presenting it in a way to the market, to the customer that you really have an upselling and cross selling effect that, of course, you have the best purchase also for the company here. And with this, I'm getting to the end, and this is about customer loyalty. So customer loyalty, of course, is very much regarding branding because the brand is presenting the corporate identity. And in terms of positioning, let's say, the first kick to decide if you want to choose a product or not. Then it's, of course, the product, the servicing, the people behind the servicing, the frankiness, the competence, which is getting more and more important in a complex world. It's not this easy deal I book for €39, and then I'm lost. I cannot do it as a global player because you might get lost somewhere where you don't want to be lost. So we need this competency approach, the servicing approach also on the HR side. And then in addition to this, we have our NICE MULTEMORE program. And when we don't ask the people who have beliefs, when we just ask our customers, 80% of our customers want to have Malte more aligned with the airline. And this is why, as Karl Johor was presenting already, we were pulling Maltemore again closer to the airlines because the customer is expecting a good redemption rate, a good relation in the launch, a hello onboard and so on and so on because this is really the footprint of loyalty. Loyalty is not to have 600,000 miles on account. Loyalty is also recognition, and it's also, of course, valuable approach and return. And with the 35,000,000 members we have in the loyalty program, we have the biggest membership in the industry with 75,000,000,000 miles accounted. We are the biggest program in the industry. And with all the numbers you see here, including the 200 e commerce partners who are important for future design of retail and things like that, we are by far the furthest in developing this program further. And you will see it in 2021, we will get to even an enhanced multiple program. All of this is leading, in terms of premium positioning, also to a positive yield reflection. In the premium segment, the yield from 2012 to now or even 20 14 to now was increasing by 8%. The overall yield in the Network Airlines, Lufthansa Network Airlines was dropping by 8%, but very much based on the price pressure at the lowest end. Those guys who are hanging around at the lowest end of yield are very much under pressure there because after low yield, there's no yield. And this is a situation where the industry in Europe is right in now. And if you're a little bit longer in the industry, I would not get nervous about that as long as you have the premium segment because this is what also happened in the U. S. Or in U. K. With Freddie Laker and France, yes? So this is something you can stand if you have the right customer profiling. And when we have a look at the 2019 development, we see that this progress is so this line is progressing and that premium is really helping us to keep our sustainable profitability. And just when you have a look at the bottom, also compared to IAG, and this is why I was saying that I never will copy another system because we have our own market and customer profile. Also in terms of RASK development, we are performing compared to the market quite well. So with this chart, I'm close to the end because the target setting for the future is getting out of the commodity, having tailor made products, not being 1 size fit all industry, having a dynamic offering of 41,000 itineraries with at least, I hope, 200 products per flight and more with direct customer access, being proactive and not just reactive selling and being in the market, which is not just treated but lead it by Lufthansa as a Lufthansa group, which mainly is the case already when we come to commercialization. This is why we say this will also contribute in a higher risk over the next 3 years because by the end of the day, customer value also has to be company value. So with this, I would like to end. The positioning is global. The positioning is premium. The positioning is best competence and the way forward. Global is done through our multi hub system with multi brand and multichannel approach. The premium approach is very much based on data management, customer centricity, having a good customer interaction in the presales, in the sales, in the after sales process, but also with our people, with our qualified people onboard the aircraft and in the ground services. And our competencies we have to enhance, this is very much a management issue. We have to push our organizations to be more agile, better educated and even more hungry. And this is what we are working on for the next 2, 3 years. And I'm quite sure that when we will see ourselves in 2021, you really will see an even more severe change within these three brands than you have seen in the last 3 years because we are close to finalizing some of the bigger projects during 2019 2020. And with our proudness and happiness, I would say this will really change the industry and the way forward. So as we say to the customer, say yes to the word and say yes to Lufthansa. Thank you. Now it's time for lunch. Yes. Thank you very much. You're now invited to lunch over to the left, and we'll meet here again at 1:30. Yes, good to have you back. I hope you enjoyed the lunch provided by LSG. You're now invited to listen to 3 more presentations followed by the Q and A. And the first one will be Torsten Dergs, Chief Executive of Eurowings. Torsten, over to you. Dennis, thank you very much. And ladies and gentlemen, good afternoon and also a warm welcome from Miseu. Now let's talk about Eurowings, and most of you obviously will expect me to talk about the turnaround and how we focus Eurowings in the next phase to really come to a new company setup and a real, what I would call, new Eurowings. And because of the mainly inorganic growth, and Karsten explained in the very in the last years, very fast growth, the company structure and the organization has become very complex. So we need to change the setup of the company. We have to simplify Eurowings. We have to rightsize Eurowings with a clear focus on short haul. But that also means that Eurowings will exit the long haul business commercially, and the long haul business will be transferred to the network organization. And therefore, also Brussels Airlines will move closer to the network organization. As a result, we will discontinue the integration of Brussels Airlines into Eurowings, and I will come back on this topic later in my presentation. So what we have prepared for you today and all the numbers you will see in my presentation are Eurowings short haul figures only without Brussels Airlines and obviously without long haul. But before I start to talk about the turnaround and really focus on the turnaround and the concrete measures that we will take, I would like to give you a little bit of an overview about Eurowings and what is our ambition. Because when I talk about the new positioning, I also talk about our role within the Lufthansa Group. And as I said before, the clear focus is point to point short haul. We would like to strengthen the number one position that we have in our home markets, and I will explain a little bit more in detail how we're going to get there, and achieve a sustainable positive EBIT margin. In addition to that, and I think it's important not to forget to complement Lufthansa Network Airlines for a joint market approach, for example, in the hubs and value creation. If you look at the short haul focus setup of Eurowings today, we fly 139 aircrafts at 13 bases with around 27,000,000 customers a year. With the tremendous growth that we have seen in the past years, we have achieved a clear number one position in our home markets, and these are economically very strong markets. And if you would add up, and Carsten had showed you the GDP distribution in Germany, if you would add up the GDP contribution in Germany just by Dusseldorf, Hamburg, Stuttgart and Cologne, it would be at 31% of the overall GDP of Germany. So this, if you look just look at these four markets, decentral markets, it's a big, big market in itself. And we enjoy market shares. Look at Eurowings, more than 30%, even more than 40% in all of them. And if you combine this with the Lufthansa Group Airlines, a market share of in all these catchments more than 50%. And these catchments are what we call high value catchments, because we have a strong corporate demand, I. E. Business travel, and we have high purchasing powers in these catchment. And above all, we have deployed 83% of our capacity at highly utilized airports, giving us an advantage on competing routes, I. E, higher frequencies and also a better flight schedule compared to our competition. And this is due to our slot portfolio. To give us our customers a superior choice, we have located 63% of our aircraft in markets where we have a market share of 35 percent or even higher. And if you look at our commercial side, 25% of our customers are loyal business customers. They fly every day with us mainly on domestic routes, but also from Germany or Austria or Switzerland to other places in Europe. For 2 operators, we are providing the best in class IT solutions, And this is enabling us to sell more than 110,000 seats per week. And that makes us the clear number one leisure and tour operator airline. And last but not least, with our best rated mobile app and our really innovative e commerce website, we are the first choice for our customers and boosting sales through these channels. And this has been and will be in the future our main distribution channel. Leveraging this commercial strength gives us a real competitive edge compared to our competition when it comes to wing to wing competition. And we have seen competition already reacting. If you looked at Ryanair, they reduced capacity of the Cologne Berlin route. And Easyjet, they closed their base in Hamburg after we have ramped up our operation. And this leads into a significant yield premium of 10% to 45% compared to our competition despite a strong price competition. Given the competitive environment and the market wide price deterioration that we see, particular in Germany, we are impacted mostly in Berlin, obviously, but also in Dusseldorf and Stuttgart, where Lauda is very aggressive, especially on our Palma routes. So we will focus much more on ancillary and develop our ancillary portfolio to upsell customers and achieve an even higher market share on the ancillary side or an even higher share of our revenues through ancillaries. And I will come back later to show you how we will do this. So before we start focusing a little bit more on the turnaround program, let me say and summarize where we are at the moment. Our past year's growth came at the price of an increased complexity. And Carsten explained to you, since 2014, we have grown the company to improve our position in the core market, but that also created complexity in integrating all these different company, but also increasing our cost base, especially last year. And obviously, last year, not only for us, but for the whole industry, was a difficult year in terms of operational performance. So what we have done beginning of this year is that we invested another EUR 50,000,000 to stabilize our operation. And if you look at where we are at the moment, operational performance, punctuality, we are one of the top 10 airlines in Europe when it comes to punctuality from January until April. Now we really have to focus on simplicity. We have to focus on rightsizing the company and remove the structural disadvantages that we have created by this tremendous growth over the past years. How we manage the turnaround. So this page gives you an overview of all the measures that we will address, and I will come back on all these measures with a slide in detail. But let me explain it to you. 1st of all, as I said before, we will exit the long haul business by moving over by transferring the commercial responsibility for our long haul business to the network organization. We will refocus our short haul network to really focus on our core markets where we enjoy higher returns. To address structural cost improvements, we will reduce to 1 AOC in Germany. I will come back to you why it is so important to do so, because this drives also in productivity, productivity on the crew side, but also on the aircraft side. We have to modernize, but also harmonize our fleet. We are still flying -eight aircrafts, 70 seaters, which we have to up gauge and roll over with modern 320 aircrafts. And finally, obviously, we have to decrease overhead costs. That's also driven by the complexity that we have in our organization. And last but not least, and I already mentioned this, if you look at our digital initiatives, they are mainly, mainly targeting our sales capabilities, addressing direct channels and digital channels, but also helping us to increase our ancillary revenues. So let's start with a focus on short haul. As I said, Lufthansa Network Organization will take over the commercial responsibility for the long haul business of Eurowings with the benefit of an increased connectivity for our customers, but also with higher synergies, in particular in sales, in distribution, but also on the IT side. We can now work on just 1 IT platform instead of integrating 2 IT platforms. We will start in Frankfurt and Munich already with the next winter flight schedule, but that obviously needs a realignment also of Brussels Airlines. Therefore, we will discontinue the integration of Brussels Airlines into Eurowings and bring Brussels Airlines closer to the network organization. The projects are kicked off, obviously, we have to work on the details how this change will now happen in the coming months. We will come back to you with more details on these plans after the summer. Simplification and rightsizing of the company. We'll first focus our short haul network by strengthening, but also defending our core markets. And I already showed you our core markets in Dusseldorf, in Stuttgart, in Cologne and in Hamburg, where we enjoy high returns, where we have the right slot portfolio, where we offer the right frequencies and also the right flight schedules for our customers. Secondly, we will review all other markets where we will certainly develop profitable markets and profitable routes, but where we will also close unprofitable basis and discontinue unprofitable routes. As you could see in the last years, capacity in terms of ASK has grown rapidly by 19% CAGR. Now given the market environment, the overcapacities that we see in the market and the economic development, we plan to moderately grow ASK by only 1% per year, but and I think this is very important, but produced with a 10% to 20% smaller fleet. By increasing the gorge size, that means we will go up from 149 seats, where we are today, in average to 167 seats in 2022 by mainly replacing the Dash 8. I will come back to this in a second. And obviously, by increasing aircraft and crew productivity. Back to the 1 AUC in Germany and why it's so important. The only way to integrate the Evolent assets in 2018 was to use the structure of multiple AOCs for hiring the crews, for the CLA negotiations in the given time frame, but also for the parallel transfer of aircraft. But that led to a much higher degree of complexity. Just one example, we cannot on short term exchange crews or aircrafts from 1 AOC to another AOC. And obviously, we have higher proceeding proceedings number of proceedings and therefore proceeding costs through this multiple AOC setup. Already this year, we reduced the number of AOCs from 4 in Germany to 2. 1 is we sold LGW. And by the way, LGW, the operator of the Desh Air aircraft, was an important asset to buy from Berlin because we used it as a transfer vehicle for aircraft, for crews and mainly for slots. We sold them because it was pretty much clear that we do not want to operate -8 aircrafts in our fleet going forward. So we sold them, and we leased back wet leased back capacity. I will come back to the outphasing of the dashes in a second. And the second one is, we are transferring the Eurowings Europe base in Munich to a German AOC. Furthermore, we already implemented 1 AOC per base in Dusseldorf and in Berlin. And we are now starting the implementation of 1 AOC in Germany as a next step. Let's talk about productivity, and let's start with crew productivity. Where we are today. Because of our legacy, especially in German wings, we are bound to pilot contracts mainly it's mainly on the cockpit side to pilot contracts under Lufthansa CLAs. And as a result, an increased number of crew redundancy and higher labor costs. Increased crew proceedings are driven by nonconsistent home base principles and the multi AOC setup that I explained to you. Because of the multi AOC structure, we also require a higher standby quota. Improving the block hour rate per crew per year from 530 where we have been last year to our target number of EUR 750,000,000 in 2022, we'll decrease our CASK by 0.02% until 2022. So how do we want to get there? An accelerated transfer of pilots with contract under Lufthansa CLA back to Lufthansa. Applying a much stricter home based principle will allow us to reduce crew proceedings. And certainly, the main driver to achieve a block hour rate of 7.50 block hours per crew will be the increase of days of duty and daily flight hours. Implementation of the measures to a certain extent could be achieved by fluctuation, but when necessary, will also require social plans that we need to negotiate with our social partners. Beside crew productivity, we need to increase aircraft productivity to reduce our cost by another EUR0.01 sorry, EUR0.1 EUR 0.1 to be very, very clear. Not just EUR 0.01, EUR 0.1. Based on the inorganic growth of Eurowings, we operate a very heterogeneous fleet with by the way also very with several sub fleets. The average fleet age is 11 years. But the age spread in our fleet is 25 years, where the youngest member of our fleet is only 3 years old, while the oldest is already 23 sorry, 28 years old. On top of this, a complex maintenance home based structure leads to inefficiency in planning and execution. This will be solved with a new maintenance concept that we will implement already in Q4 2019. As said before, we will reduce the number of aircraft in our fleet by 10% to 20%, while we moderately increase capacity. This could be accomplished because we raise aircraft productivity to 3,300 block hours per aircraft per year until 2022 and increasing gauge size, mainly again by replacing the Dash 8 aircraft. Moving to 1 AOC, we'll also reduce the number of necessary aircraft reserves and aircraft transitions between different AOCs. Talking about our fleet. Today, we operate a fleet of 139 aircrafts, again, Eurowings only, Eurowings short haul, of which 15 are wet leased -eight, 9 are well leased narrow bodies, 7 well leased Boeing 737 from TUI and 2 Airbus 319 from Czech Airline. The remaining 115, our own Airbus 320 family. This year already, 9 of the oldest and most expensive aircrafts will be phased out, and we start to return the narrow body wet leases. In addition, as of 2021, we will discontinue the wet lease of the Dash 8. Obviously, also going forward, we will use wet leases during the summer flight schedule to balance our capacity needs. And as of 2021, we will start to roll over the oldest and the most expensive aircraft we have in our fleet with 320neos from the Lufthansaar Group's order book. 4 of them will arrive in 2021 and 16 in 2022. Overall, the modernization and mainly the harmonization of our fleet will give us the benefit of another 0 0.03¢ CASK reduction. The complexity in our organization also drives the overhead cost. Talk about the long haul business, our Berlin integration, multi AOC setup, but also in the past, the Air Berlin integration. Given all the measures to reduce complexity I just explained to you, we will also have to rightsize overhead costs to the market focus and the size of our production. Our clear guideline is the benchmark with our competitors, and we already applied these benchmarks in our target costing approach. Further standardized processes and an increase of automation will also help us to reach our target. While we'll optimize the internal versus external costs to become a much leaner and more efficient organization. We are planning for more than 30% reduction of overhead costs, and that will finally lead to another reduction of CASK by EUR 0.15 Last but not least, we strongly believe in digital channels and products for all our customer groups. That's why we so much focus on the entire travel chain and the digital channels. With the setup of Eurowings Digital in 2018, we laid out the foundation to boost sales in all direct and all digital channels and to come up with much more offers, which are tailored for our customers, which are relevant for our customers and where we can really manage as the willingness to pay of our customers. That had led already to an 11% increase of ancillaries just in this year. And more digital self-service will be available to our customers already later this year. This will further reduce costs on our side and increase customer satisfaction on the other side. For the coming years, we are planning to increase our ancillary revenues by at least 9%, as I said, by offering more tailored products, more relevant products, fare related sorry, flight related, but also non flight related to our customers. In addition to that, just this month, we have implemented a new catering concept, buy on board. Except for our business passengers, we are only offering these buy on board services to our guests. We are lowering our cost on the one side, it also gives us the opportunity to sell relevant products on board to our customers. So if we look at all the different measures that I explained to you, we will reduce our CASK to EUR 0.052 in 2022. We will achieve already a CASK reduction of 0 0.05 percent with all the measures we have started and will finalize this year. So our estimated cost for this year is EUR 0.061 €0.03 reduction will be driven by higher productivity, another €0.3 by the fleet modernization and harmonization, €0.15 by overhead cost reduction and sales channel splits, more product alignment and other measures will bring us another EUR 0.15 so that we will end up with EUR 0.052 in 2022. And by the way, if I may remember you, in 2017, before the Air Berlin integration, we have proven that we are able to reduce our cost. We reduced our cost in 2,007 by 6% already. So we are confident that with all these measures, with a clear focus and the rightsizing of the company and mainly with the simplification of Eurowings, we will achieve these cost reduction. To give you a better overview of this turnaround plan and when things will happen, Most of the measures already started, but obviously some of them will take time to have the full impact. Exiting the long haul business and refocus the short haul network will take until 2020. Again, as I said, we kicked off all the measures together with the network organization. We kicked off the projects. We are now working on the details, how this transfer will happen, and then we'll come back to you with all the necessary details. The realization of 1 AOC in Germany obviously requires renegotiation of existing agreements that we have with our social partners, I. E, with the unions. And within these negotiations, we have to balance different interests. But obviously, we would like to try to find a solution much earlier than indicated here and be much faster in implementing this one AUC in Germany. Improving the productivity is an ongoing activity with an increasing impact over time, and that's also true for the modernization, harmonization of our fleet. It's also an ongoing process. But you will see the main impact in 2021 when the -eight, so the turboprop aircrafts will leave our fleet and when we'll start to roll over the oldest and most expensive aircraft in our fleet. And then the benefit of the decreasing of the overhead cost we will see in the years 2020 and 2021. And finally, focusing on direct and digital channels even more than we do already today to introduce more customer relevant and ancillary services and also products and also offer more self services that will improve our overall performance. To summarize, all these measures implemented, we will create a new Eurowings, a complete new setup compared with today's setup of Eurowings, a much leaner, a much more focused company, simplified and right sized. A point to point short haul focused airline, focusing on higher yields in our home markets, economically very strong markets, where customer appreciate our brand and our products with optimized flight schedules and frequencies that perfectly fits the demand. And don't forget, our customer different customer groups. On the business side, as I said, 25% of our business customers are very loyal business customers. They have different demand than, for example, a leisure traveler only traveling twice a year with us or compared with an individual traveler just for a weekend trip. So we are offering different products and different services to these different customer groups. But in the future, we will be much more also, as Hari explained, with all the data management we are doing in the background, offering based on the insights we generate, much more personalized, much more individual products. Obviously, where appropriate, we will complement Lufthansa Network Airlines, mainly in the hubs, but not only for higher value creation and profitability, leveraging our strong market position that we have in the hubs, but also in the non hub catchment, as I explained to you before. And most important, last but not least, we will improve our financial performance, breakeven in 2021 and a long term margin of more than 7%. Thank you very much. And now Detlef Kaisa will talk about operational excellence and resource management. Again, thank you. Good afternoon also from my side. As I'm the new kid on the Executive Board block basically, maybe let me briefly introduce you to what my area is all about. It's both it's twofold. It's about resource and operational standards. By resources, what we have tried to do is we try to gather everything that is needed to provide the airline business with the necessary assets basically, which is fleet, crew, fuel, infrastructure. Infrastructure is a lot about what we do with system partners. So it's about airports, air traffic controls, federal police forces, etcetera. On the operations standard side, it covers the classical ones, which is flight ops, ground ops, but also technical operations. This is where we strive to gain more synergies in the group. This is where we foster more best practice exchange. But then we also, when it comes to safety and security, want to make sure that while we optimize, we never touch upon our high standards of safety and security. There is one topic that we added on this one, which is the operational excellence, which was clearly driven also by the development in especially last year, which is that we have to see how we can cope with the limited infrastructure capabilities in this industry, and I'll come to that later. So we started this as a mega project on group level with lots of projects in every individual hub, but the plan is to turn this more into line position in the future. And last but not least, we have also established what we call performance monitoring as we figured that we need to steer the operations with a huge diversity across the globe, way more on standardized KPIs with clear cut performance dialogues, transparent target setting, etcetera. So we established a new position and this one in a new role that will push this in the future. So let me start with some vignettes of what's covered by operations, as you can see them laid out on the right side. And starting with the most interesting one as an aerospace engineer that I am from background, which is the fleet. On the fleet, basically, we changed the strategy already 3, 3.5 years ago and that we gave ourselves a clear cut set of guidelines that not try to predict the future like 10 years out and what is the right airplane to buy and what kind of numbers and so on, but rather have some basic rules that are intrinsically always right as we think. And one of the basic principles that we want to apply is to have way more flexibility in the fleet. And so what we do is we have a so called corridor planning, and we increase our flexibility in shifting airplanes within the group. This is also true for how we allocate the fleet the airplanes, for example. So when we buy new airplanes, they're first of all what we call a gray fleet. So they're not tail sign dedicated to any kind of airline, but they reside with me basically, my organization. And then we'll decide on which airline will get these airplanes in the necessary or the required point in time. Basically, the airlines have to deserve the planes, so say. So we come to this great fleet kind of logic. We've come to more flexibility when it comes to operating planes. We increased the share of smaller airplanes on the intercontinental side. So we went for A350, as you've seen in our last campaign in Boeing 787. So we think that 4 engine airplanes are a dying breed, and I think none has been sold since 2014, except I think for some A380s. But we clearly believe more now in the A350 and Boeing 787 type of airplanes for flexibility. We gave ourselves breathing corridors when it comes to the fleet. So we will always make sure that by the structure of the fleet, we can breathe in and out. So basically, we can decrease the size of the fleet when necessary. But we can also upgoat basically or uplift basically the numbers, for example, by lifetime extensions. So there's always room to maneuver and to react to market demands. And basically, what we're doing, we're distressed testing our fleet structure on scenarios of crisis that can come up and which we've seen in the past, and we always make sure we are reactive enough with our fleet. We've reduced the complexity of the fleet. So we are clearly pushing for standardization. This is especially true for the short haul fleet. I'll come to that in a minute, where we try to reduce the complexity of the fleet to make them way more interchangeable by standardizing them way more. Financial stability, we're clearly sticking to the investment limits and use this clearly as the cutoff line for what we can achieve basically and what we can buy. And we're also way more practically looking into used airplanes. We've done that. We've gained quite some experience through the Erboulin case, so to say. We started that a bit before even, and we're doing more of this in the future. And finally, when it comes to flexibility and procurement, we are using a more modular approach right now. If you've seen our last inter campaign, we have not gone for huge allotments basically, but we've rather cut our demand for long range planes into several campaigns that we run-in the future because what we've seen is also that it's way more effective basically to play the competition and to write specific market cycles and opportunity versus just getting the scale effect along and lock yourself in for a long period when buying huge lots. So that turned out to be very positively for us. And then the further rules on this one, we clearly want to strike a better balance when it comes to the OEM balance basically, Boeing versus Airbus. And part of that was also the reason for our selection of aircraft types in the last campaign. And when buying, for example, we also try to avoid the green banana effect basically. So we will not be the launch customer of brand new airplane types. When we buy the planes, we might consider leasing or something, but we will be more careful when introducing technology in new aircraft types when buying the airplanes. So with this set of rules basically, we have given ourselves like 3 years ago. We are following up very rigidly on them. This is how we ran the last campaign, and we will run the next campaign. And basically, maybe here one picture on what does it lead to when it comes to flexibility. This is the fleet flexibility going forward with kind of 10 years perspective. And you can see that we have the capability to basically breathe out, so react to down cycles by almost 20% and breathe in by about 5% if needed. And the way to do that, of course, is to do early retirements, lifetime extensions and things like that, but also to use more depreciated aircrafts, keep them longer or basically to also put like slight rights in the contracts, which we have done for delivery schedules. So and we are trying to keep up this flexibility corridor in the future and always match this with our stress test scenarios and make sure we can be reactive. So talking about the last campaign. If you follow that, what we have done, we have ordered 40 airplanes, 20 A350s, 20 787s plus options. And this will lead to reduction in the types of airplanes that we have from 14 down to 8 different types by the mid of the decade. So and this will substantially basically reduce the complexity of the fleet. And that will, of course, then lead to a responding decrease of cost when it comes to crew training, maintenance and the operations as such. And of course, the new airplanes are also way more efficient, especially when it comes to fuel in the future. So this is what we will do on the long range or what we have done now on the long range and we'll proceed doing. What we've also done when it comes to the A320 family, where we are already very standardized and gone to 1 single type or family type basically. But in the past, basically, we have seen that even the A320 family basically then went into subformers of different engines, different configurations and so on due to many reasons. But what we have done now is we have installed a very rigid standardization process. As an aircraft specification board. Our new airplanes will follow one standard. We are partly reconfiguring old airplanes where it's still valid. And we are coming to a core fleet that's very standardized and therefore also, for example, easy to exchange among locations, hubs, operations, etcetera. So we will also do way more standardization in the short haul fleet where it's not so much only about the aircraft type, the subtype of the airplanes. Along with the new airplanes comes the topic of fuel. And Carsten already mentioned a few topics on sustainability, which is big on our agenda. But here maybe one point on CO2 and fuel. Basically, as just said, the new engine types basically allow us to reduce the specific engine fuel consumption by 25%. And that will lead to the fact that, so to say, our fleet going forward will cope with the growth of our plant growth basically by being CO neutral and cover all the growth still by being CO2 neutral, which will then make us CORSIA compliant, so to say, which, of course, is a very positive effect of the renewal of the fleet. But of course, we also do what Carsten said about emission trade certificate trading and so on. But we are also looking very much into detail into fuel and fuel technology. As you know, Lufthansa was leading when it came to or comes to biofuel. We did our experiments with flying airplanes with different fuel, left and right basically. And we also know what it can do, but we also know where the complications are. For example, when it comes to the supply of biofuel, which is very limited in reality and is still very expensive, way more expensive, in fact, it's more expensive than traditional fuel. But we think there is a future in alternative fuels, probably more in synthetic fuel, not so much in biofuel. And we are very engaged in this one. So we are part of consortia that are trying this now and that are trying to establish certain supply chains. For example, in the north of Germany, where you have a surplus of renewable energy, we have refineries and we have the Hamburg Airport. We are part of a consortium that tries to make this going now producing synthetic fuel and then using this in our planes based in or stationed or fueling in Hamburg. Next to fuel, basically one of our resources topics is pilots. And pilots is next to airplanes is a very sensitive topic, of course, in airline and a very important asset. It was, I think, a great success that we agreed with our pilots on the corporate labor agreement. What we did after that agreement is we immediately opened up again our flight training capacities. And basically, within very short time, we put all our flight trainings up to a level where we can again produce about 500 pilots per year. So we put them put all our flight training activities under one roof. We are heavily aligning the standards across all our airlines. We increased the advertisements basically for the training quite a bit, very successfully. We opened up the schools to new markets. And basically, we can see that this is working. And again, these schools will now produce about 500 pilots per year, and the classes are filling up. And we will see the first pilots coming out of these schools in about a year's time, yes? So that has shown us that we can very, again, flexibly react to the demand when it comes to pilots as we think pilots will rather be a scarce resource going forward. And but we are able basically to produce the pilots in the numbers that we need. Next topic, operational excellence. As said, we've seen in the last year how this whole industry has come to a limit of what the infrastructure can take, and there are many players in this game. There is air traffic control, there's airports, there's, of course, the airlines and so on. And what we've done 1st and foremost is that we ourselves basically looked at what we can do operationally that can stabilize the whole situation. So one thing, of course, is to beef up resources, and this is what we did. So we increased the reserve level up to 37 airplanes, which is, I think, almost a viable airline in itself. We hired new mechanics. We also hired other personnel and call centers for customer care and so on. But 200 mechanics, which are hard to get, but we got there. We got the numbers. And basically, we invested a lot, for example, in customer information. We are way better with our IT systems to inform the customers. We are more reactive when it comes to rebooking customers, for example, also on to train connections. We've focused a lot on getting the first flight right basically because if the first plane is late, of course, it sums up the delays during the course of the day. So there's special focus on getting the first planes right out of maintenance and so on. And of course, we're also working on cutting down the turnaround times significantly. So we have new boarding procedures. We have special like Formula 1 type of quick turnaround procedures that we use for heavily delayed airplanes and all these kinds of things. So in total, there were more than 400 measures developed, which are now in implementation, lots of them already ready for the season. And we are pretty confident that they will come to impact already this season and that they will help to get down the irregularity cost dramatically. As you can see, these summed up to more than €500,000,000 in 2018. So I think this is a very important issue topic. And what we've seen so far is that for the 1st part of the year, basically, we were able to reduce the technical cancellations dramatically by more than 50%. Eurowings, as Thorsten already said, has shot up in the ranks of punctuality from CHF 44 to CHF 5. And already also in when it comes to punctuality performance during the critical Easter season, we have which was kind of the stress test for us, We have seen that we could beef up the punctuality by 7 percentage points. This is by no means benchmark or great, but it's substantially better than last year. So we see that the levers that we started end of last year seem to work. But of course, in these kinds of environment, we are dependent on our system partners, and managing these system partners is part of my board area. And we mainly see these 3 partners here, which is Air Traffic Control, it's the airports and the security. These have a major influence on punctuality. And we are specifically managing these now, way more intense than we did in the past. We put our forces together from our political experts basically, from our technical experts. We instilled new people that do just focus only on system partner management. And also and what is not on this picture is basically what you all can also see, it's not just these kind of system partners, but it's also the aircraft OEMs that give us a headache right now because even technology wise, you can see that there's a lot of engine troubles in the industry right now. Production numbers are not where they are. So we are also in very intense interaction, of course, with our suppliers for the aircraft. Let me show you some examples of what we are doing there. When it comes to airports, what we are doing there is we are trying to play also the strength of the multi hub system by installing real competition among the hubs. And it works. You've seen that we shifted capacity from Frankfurt to Munich basically, and immediately, it's way easier to negotiate and discuss. And we have very intense discussions with Frankfurt Airport about quality, about cost, about the type of cooperation going forward. And I think these are very fruitful discussions. I'm pretty sure that we will come to a new level of partnership and arrangement in the near future, in the next few months probably. And so this logic of applying real competition among the hubs clearly works. And we will go on with the system and invest into these kinds of competition a lot also when it comes to investments into infrastructure going forward. One other topic, which is giving us in terms of punctuality probably the biggest headache is air traffic control. And you probably all know the reports that are out there from your control, from Eamon Branden and so on, but the situation is pretty dramatic from our perspective, especially dramatic in Central Europe and in Germany. What you see here on the left is the number of delays basically and how they shot up from 2017 to 2018. And just to give a little bit of an explanation is what you see on the right side is, so to say, the manning or the crewing of air traffic control in Karlsruhe, so right next year next door. And they're responsible basically for the centerpiece of Europe when it comes to en route air traffic control. And basically, what you see is the curves. The top curve is the manning in 2017, then comes 2018, then comes 2019. So every year, there's fewer controllers available because what they've missed out is on a decent air traffic controller planning basically. So it's a huge lack of controllers, about 200 in that one. And that, of course, has a dramatic impact. Part of the root causes is that in Europe, air traffic control capacity is planned in 5 year cycles and not rotating. It's like, as I always say, communism, it's 5 years and then you look at the next 5 years. So if industry is more dynamic than what was planned in this 5 years plan, you come into trouble, and this is exactly what has happened. So what are we doing about it? Of course, we are dealing here with government owned entities, kind of monopoly situations. And but of course, we are trying to push a lot on the political side, on the public side, but also, of course, in daily interaction with these kinds of organization. So we push a lot on DFS, Deutsche Fluxetjung, for example, to come to a higher degree of automation. We can see if you compare effectiveness of air traffic control that for example Maastricht, air traffic control in Maastricht, which steers the northern part of Germany, yes, is way higher than the effectiveness of the German air traffic controllers on comparable jobs. And part of that is because they are high automated in Maastricht, yes? So we are pushing a lot in that direction. Then we try to cooperate with Deutsche Flugzejorgen to fix this summer, and one part of that is to agree on extra shifts for air traffic controllers. And after a month of negotiations where we were also supportive, basically, they agreed with their unions on extra shifts. So we will see extra shifts this summer a period of 2 to 3 months where the FTV controllers can beef up their capacity of what they can make available. And of course, we are very close to the network manager and the other U Control management when it comes to management of route restrictions, releasing city pairs and all these kinds of things basically on a daily basis. So we're very close to these kinds of organizations now and putting a lot of pressure on this. Same is true when it comes to the next topic, which is security processes at airports, which all give us a pain every day, and we are absolutely not satisfied. We think a major lever to improve the situation is technology. You might have experienced when you fly out of Munich, there is a test line in Munich, in the center part of Munich, where they have new scanner technology. The throughput is more than double of the classic technology. There's also some improved technology out here in Frankfurt, which is like 40%, 50% more efficient. And what you can also see outside of in the Frankfurt terminal that there's a construction site where they built 7 extra security line of new technology, which will have a boost for the summer month basically to release the pressure on the security check-in, for example, here in Frankfurt. So we're pushing a lot on this new technology side. There's also one specialty here is that in Germany, the federal police is in charge for planning and steering the security processes. We are basically in negotiations and get positive feedback on that. Airports and airlines, so for example, Fraport and Lufthansa, can take over part of that responsibility and steer the whole process in a different way, let me put it like that. So there's general alignment with the ministries that this will go in that direction. What we have also done is basically to relax security is that we applied new luggage rules. I don't know if you've experienced it here in Frankfurt, for example. We are checking the luggage basically before you go through security, free of charge, but it relaxes the whole boarding process, but also the security process. So people come just with the amount of luggage that is valid basically. And just in 1 month, we took more than 200,000 pieces of luggage basically out of that process. So there's a lot that is happening there. Again, on pilot level or little islands of excellence, I think, on the short term. And longer term, we will see more way more structural things like this rollout of new technology where we agreed with the Ministry of Transportation in a Ferris here basically on a master plan for rollout of this technology. Digital. No speech without digital. Basically, what we are doing right now is we on this layer of harmonized processes that I talked partly about, we are now looking into keeping our core systems up to date, like our crew management system, which is very essential for crew effectiveness, we will invest into this one going forward. And 1 percentage point of effectiveness in crew management basically will turn into a lot of economic potential. So we will renew this over the next years. We have basically in house the standard for maintenance, management and steering, let me call it like that. It's a system called AMOS, done and produced and sold basically by Swiss RS, Lufthansa company. And it's not the full standard in the group Lufthansa group as of today, but we will make this now that full standard in the group. So and then there's other systems like Netline and so on, Lido. So we will fix the basics. We will update them to the news generation, and that is happening as we speak. Most of these projects are in implementation. But then on top of that, we will go more also into the next generation, what you might call artificial intelligence or big data. So how can we come to the next level there? And basically, what we have initiated is that we are starting to plan how we can cooperate with the digital giants on how to become better in a couple of use cases in the next 12 to 24 months. Some of them I mentioned here, like prediction of rotation robustness, crew availability, technical readiness and so on. This is currently going on. We have some good first experiences, but this we will turn into real cases in 12 to 24 months. And then we will come the plan is to come in the midterm to a whole operation suite basically that's giving our experts decision support based on big data and artificial intelligence. So it's an exciting new area, and we are looking very intensely into this one. So summing it up where this all lead to. In the end, we are confident and committed to a target of 1% to 2% cost reductions of the operations cost with a lot of what I said, operation excellence, digitization and so on. And this is what we are committed to achieve all in all. So in summary, as key message, just to pick out again 3 vignettes here. So on fleet, which I think is essential, it's the currency of an airline, so to say, We are at a point where we aim to maximize the flexibility that we have by minimizing complexity and being as reactive as we can to market dynamics. When it comes to system partners, we want to go on a new level of how we cooperate with the system partners and how we steer and manage them. And we will put this into our processes and our org structure, and we see some very good first results in this one. And on digitalization, we will fix the core. We are in the process of fixing the core and pulling up to the next level, and we are looking into investing into the next level of digitalization and operational excellence. Thank you. So next I think is Ulrik. So finally, the numbers. Despite our new guidance last week, I would argue that we have reached a total new level for Lufthansa, both in terms of size and most important, profitability. On the right hand side of this slide, you see our return on capital employed development over the last 10 years. This is return on capital employed before tax, making it comparable to what our competitors are doing, and typically, we otherwise show it after tax. Clearly, this number will go down in 2019, but this price war will not continue forever in the European market. And I thought we start by focusing on our guidance from last week. We spent quite some details on it in the conference call we had, but I think it's well worth spending a couple of minutes on why and how did that come about. We came out with a statement in mid April that based upon our bookings, our RASK was expected to increase in the Q2 compared with the Q2 last year. That was also backed up by a slowing in our ASK growth in the summer months. Now the RASK did not increase. As we all know, it is the last passengers entering our aircraft, which is making our profits, in other words, our short term bookings. Now we are seeing in Europe that we are filling our aircraft to a higher degree than earlier with low yielding passengers. And this is one of the reasons we have also changed our long term RASK not long term, but our full year RASK guidance for this year. This is, of course, is burdening Eurowings most, where the absolute majority of the revenue comes from Europe. And on top of that, we have, of course, delayed, which Thorsten has spoken about, when it comes to the turnaround of Eurowings from a cost point of view. In such a market situation in Europe, self help is a very important agenda. And looking at our CASK, and Carsten already mentioned it, our CASK is reducing for the 4th year in a row in 2019. That is totally unheard of in our Lufthansa history. Contributing here, of course, is the labor agreements we did, where only on the cockpit, we have had a SEK 150,000,000 saving, very much backed up by defined contribution in our pension being changed from defined benefit as it was earlier. We also took out one level of management within that reorganization we did. Fleet modernization, you have heard Detlef speaking about, for example, taking out the Avros in Switzerland, and Munich and so on. The good news here is there is still a lot to do. We started our agenda of cost cutting somewhat or substantially later than some of our competitors. And as Torsten showed earlier here today, we expect Eurowings to reduce their CASK by 15% until 2022. Also in MRO cost, there is a lot to do, but it's not only progress, as you have heard, on the maintenance cost. We also have a little bit of a headwind here. We spoke on the conference call about the engines on our 744-eight, where we have a headwind for this year. Standardization of aircraft is a very important part of reducing the CASK with A320s as an example, seat standardization, but also all form of operational standards, which Detlef just went through. Crew complement, why should there be a different crew complement when we provide more or less the same product in the different airlines? Procurement, we just hired a new head of procurement coming from ABB. Typically in airlines, procurement is not a strength of our industry if you compare with many more traditional industries. So here, we will drive a much more aggressive approach. So we expect CASK to continue to reduce 1% to 2% in the Network Airlines. It will be a bit less in 2019 due to the maintenance headwind we just spoke about. Lean culture is an important part of making the company more efficient. We started already in 2,006 with the lean introduction at SWISS. Now today, there are different forms of maturity within the group. And of course, this is a very long journey. It's more like a mindset. But the experience from the factory environment is very much applicable in an airline as well. Everybody is saying, of course, we are already doing it, but in reality, there are very few of our units which are really living according to the lean culture. Operational examples, we already heard the example of the Munich Hub, where the lean is helping with the operations to how to turn around an aircraft. Both Kasten and I have been there looking what they are doing. And you would, of course, have thought the turnaround of an aircraft is something we refined many, many years ago. From a finance point of view, I think it's good news. There's a lot of potential still there. If we can reduce our delays, you heard the number earlier, we had spent SEK 518,000,000 on the regularity cost last year. If we can reduce delays by turning around the aircraft quicker, we have a large benefit. Running an airline, I mean, are hundreds of small processes, which needs to go right every single day. And the one who get that all right is having ultimately a much higher profitability. But also in my area, in the admin area, there's a lot of things to be done. It doesn't need to be physical like a turnaround in an aircraft. So for example, in the procure to pay process, we are aiming to doubling the automation we are doing compared with the present situation. Jumping to the balance sheet. Our interest bearing net debt is constant compared with the growth of the airline over the last couple of years. We have a net debt of SEK 3,500,000,000. In addition, this year, we have, of course, the effect of the IFRS 16, which adds on another SEK 2,400,000,000 in leasing obligations. Our pension obligations have reduced over time due to getting rid of the defined benefit and replacing it with a defined contribution program. Lately, the pension obligations have marginally increased, and that is due only to the fact that the discount rate has gone down. Our net debt to EBITDA is EUR 2.4 percent, going up from 1.8 percent, and again, this is only due to the IFRS 16 effect. Our strong balance sheet is solidifying our investment grade rating. We are today at BBB, and that is indeed helping us with our financing cost. We have a total gross debt of SEK 6,700,000,000 and our average financing cost, if you exclude our hybrid bond, is only 65 basis points. This is probably among one of the lowest financing costs in the whole industry. This slide shows the CapEx average per business unit over the last 5 years. And correspondingly, you see the average return on capital employed for each business unit. We allocate our CapEx where we have the highest profitability. And we only do CapEx with helping to increase our return on capital employed. One exception here, of course, is Eurowings. We saw that as a unique opportunity to help to consolidate the German market. It surely has not paid off yet, but we are absolutely confident it will. As of this year, we have a new bonus system for all of us in executive management. It is better aligned with the interest of our shareholders. The short term components is EBIT growth and EBIT margin. A smaller part of it is NPS and employee engagement index. The long term components is very much return on capital employed, bearing in mind how capital intensive our industry is, but also how our share price is comparing with the DAX. There's also an element of sustainability very much focusing on CO2. On top of that, there are minimum investment criteria for us in management. So Carsten has to invest 2 years of salaries into Lufthansa shares and for the rest of us, it's 1 year. Of course, all of us are already large shareholders. But I can assure you, we suffer as much as you are doing with the present development of share price and profits. It will mean, of course, substantially lower bonuses and our private wealth is decreasing. So we are very much focused on making sure our profits are increasing in Lufthansa as soon as possible. Going over to CapEx. Majority of our CapEx is, of course, fleet, including engines and cabin. As Harry showed earlier, our long term growth in term of ASK is 2%, which means over the next 4 years, it's only actually 32 aircraft, which are growth aircraft in our CapEx plan. Our average fleet CapEx over the last 4 years is SEK 3,500,000,000. And what that we showed you earlier, we do not only get a more efficient fleet from a CO2 and noise point of view, but also from a cash cost point of view. The absolute majority of the aircraft is purchased. In our own balance sheet, it's actually only 6% with an operating lease. And why is that? Well, typically, all our aircraft are used until the end of their economic lifetime. And through our rating and the Lufthansa name, we can buy and finance these aircraft much cheaper than we would have in operating lease. Of course, short term, it would have been easy to improve our free cash flow by having a larger part of operating leases, but that would have been long term the more expensive solution for Lufthansa. We will, of course, continue with operating leases where it makes sense from filling a capacity gaps point of view. Total CapEx for the whole group expect to be SEK 3,600,000,000 for 2019, the same number as we have guided for earlier. It will be a similar lever in 2020 and then it's most likely to go up in 2021 depending on the deliveries of the 777s or not. We're looking at the CapEx bar chart on this slide of SEK 3,800,000,000 in 20 18. It's important that, that SEK 3,800,000,000 actually includes SEK 500,000,000 in capitalization of engine events, something which were not there in 2014 2016. So this is just an accounting change. That's one part of the reason why the CapEx went up so much. Free cash flow is very important to us. Over the last 5 years, we had on average SEK 800,000,000 in free cash flow. It was extra strong in 2017 where we had stellar results and some of the accrued costs were only cash relevant in 2018. And this is one of the reasons why there is a large gap between 2017 2018. Now looking forward, clearly due to the weaker results we can see in 2019, also free cash flow will be weak in 2019. But medium term, we expect free cash flow to be above SEK 1,000,000,000, driven by profit improvements, but also working capital. We heard about the new hire we have done in the procurement area, and one of our responsibility is clearly to work on accounts payable. Just to give you an example, an increase of 10 days in accounts payable would mean SEK 600,000,000 in freed up capital. We are committed to generate attractive shareholder returns. And in that light, we are changing the dividend policy. We're now changing it to 20% to 40% of net income. We are basing it on net income, which is more in line of common practice in most industries. That means it will be a larger share of our net income, which goes to our shareholders. But we have also increased the spend going from 20 to 40, and that's very much aimed at continuity of the dividend in absolute terms. So for example, in 2019, when our profits are actually declining, it's not our idea to reduce the dividend in absolute terms. Of course, if there would be another September 11 look alike event, we will have to look at that again. We will adjust for extraordinary gains and losses when we look at our net income. And maybe this is a good moment to speak about use of cash. Clearly, starting with 1, we are committed the dividend levels we are having today from an absolute point of view, and we will increase this dividend when the profits are increasing. Secondly, we are committed, of course, to continue with CapEx in aircraft and cabin. It's very important for us from a premium product point of view. But only lastly comes M and A. And when we're speaking about M and A, since there have been quite a lot of articles about Condor, I thought we'd just spend a couple of minutes on that. In the press, it's been clear that Condor is a low margin business. They have a large CapEx need in front of ourselves and there are large pension obligations in the business. It's also clear from the press that the seller expects substantial amounts for selling the business. I think that combination makes it unlikely that Lufthansa is going to be the winning bidder for this business. In our final slide, I just want to summarize some of our financial messages we've had today. Our great brands and products will continue to drive high yields at the Network Airlines. We will continue with a very disciplined growth, which will also drive profits. Harry has shown some innovative initiatives, which will contribute 3% in RASK by 2022. But irrespectively how the market is going, we have an important self help agenda. We will continue to reduce CASK by 1% to 2% in the Network Airlines. Eurowings will reduce their CASK by 15% 2022, which means long term that business will generate a 7% EBIT margin. There is a strict return on capital employed focus, including a new bonus scheme for ourselves, which will drive improvement over the cycle. We have a mid term objective of increasing free cash flow to about SEK 1,000,000,000. We have a new dividend policy, 20% to 40% of net income distributed to the shareholders. And finally, we have a disciplined M and A strategy. Thank you very much. Yes. Thank you, Ulrik. So while we're getting ready for the Q and A, I think we need 2 additional desks here. May I remind you of the feedback form, which you should find on your desk. We'd be very grateful if you could fill that out and return it to us at the end of the event or also after the event. Thank you very much. So when it comes to the Q and A, I think you're familiar with the rules. Would you please state your institution and your name so that also those who don't do not know you, including those who follow the event on the webcast, will know who is speaking. Thank you very much. Asked what these floats are. You ever seen on our long range wide body aircraft this box in the door you're not supposed to sit on? In those boxes, you always find one of those rafts. If we ever put you down in the middle of the Pacific or Atlantic, 50 of you have to fit into 1. So if you think this is hot and miserable today here, imagine being on that. All right. So let's kick off the Q and A session. I'll try to treat everybody fair by moving around the blocks basically. Why don't we start on the right hand side? James, you want to ask the first question? Thanks. I don't know if you're clear on how many I can ask, but I think I'll go with 3. Sorry, it's James Hollins at Exane BNP Paribas. The first one is on miles and more. I was just wondering how you can better monetize that. And ideally, maybe put a number on how much it contributes to the group now and clearly where we think that can go certainly relative to the U. S. Airlines on that? The second one is on Eurowings M and A then. This is for Ulrik. On the call a week ago, you have what seemed to me very, very clear that there will be no M and A in Eurowings until it's turned around. It now sounds like it's just not Condor at least, probably not Condor. I was wondering if you could just clarify whether you would do M and A in Eurowings in the next few years? The third one is for Thorsten. Just on the long haul side, perhaps just run through the emotions of you losing long haul effectively. Was that a massive disappointment to you? Do you think you can do a much better job now? Is it something that maybe was in the planning that's just come a bit earlier than expected? Thank you. Harry, start with Yes. So Meitze Moore. Luckily, we really can measure what you were asking for in 2 dimensions. One is how much out of our total revenue is coming through multiple members, which is more than 30%. So it's really in terms of loyalty and instrument to have not just market share, but also value. And even more important, when you cluster it to the most premium customers, for example, like the Honorable, so the Hon's, the Hon's are making between 25% to 50% of their revenue in the premium classes on long haul. So this is really a contributor also to the long haul traffic. And taking this in combination, it's really a steering mechanism. So we can even, through redemption or accrued policies, steer also some kind of demand through that. And having implemented cash miles, cash and miles, for example, also in terms of redemption, knowing that partly these tickets are paid by miles, we are also cashing the other part in by hard currency, which is also then contributing in addition to the normal loyalty program to the liquidity cash position of the company. So this is hard measured facts. Then answering the question about Eurowings potential acquisitions. I only mentioned Condor because there's so much press about it. There is no doubt that Eurowings will first turn around itself. But when we are at the 7% EBIT margin, yes, then we can speak about acquisitions again. But that's not tomorrow. Ulrik, I couldn't agree more. And coming to your third question on the long haul, to be honest, it's not about emotions. It's not about disappointments. It's just focusing on the right things, and this is exactly what we are doing now. Eurowings, as I showed you, has grown tremendously over the last years. Longhorn was part of it, and now we believe that we can do this much better together with the Network Airlines through the commercial responsibility with the Network Airlines. And so together, we can do a much better job and Eurowings be focused on what we are really good in, and this is short haul, and this is focusing on our key markets. I think to Torsten's defense, when we introduced Eurowings long haul, it was never meant to be an essential part of the Eurowings business model. It was the other way around. In the hub airlines, especially in Lufthansa, we had scope clauses. We couldn't do any long range there but with a high labor cost. But we knew we need a second platform for long range like Edelweiss in Switzerland, Level in IAG. It was obvious we need a lower cost platform. Basically, we threw it over the fence to Eurowings. This was before Air Berlin because we thought there would be a home for it. Then Air Berlin came, and in the end, probably there was too much at a time. And probably I have to take the blame for that, that Eurowings had to solve too many open issues of the Lufthansa group within the Eurowings business model. And now being able to detach it, I think, is, 1st of all, very fair to Eurowings and shows that we have other options in the group. There is no more scope class now. And we can have an Edelweiss type operation as we have in Switzerland, also in Germany without needing Eurowings for it. Next question comes from the middle box. Jared? Thank you. It's Jarrod Castle from UBS. Also 3. You mentioned Eurowings margin 7% plus. Why this compared to kind of, I guess, Easyjet Ryanair? Secondly, just on the Network Airlines, do you care to give kind of a long term target that you think you could get to on the margin front there, just like you've given for Eurowings? And then lastly, I think in the past you've said that the network airlines would grow at roughly half the industry rate. Now you're talking about 2%. Do you see the industry growing at a lower rate going forward over the next decade? Or do you just think it's best for you to be a bit more capacity disciplined? Thanks. Yes. So starting with the Eurowings and basically comparable easyJet levels of EBIT margins that they are having today. Clearly, as Thorsten chose, we have a very much more high yielding market than most of our point to point competitor carriers. So this is all about reducing cost. And I think it's too early to say, can the 7% be more at some stage? But since most of this is indeed in our own hands, we feel very confident that we can reach the 7%. I don't know, Torsten, if you want to explore anything on that. No, I can emphasize on what you said. In the you will also see, if you just look at the margins, if you really would compare Ryanair and Easyjet in our home markets. As Carsten said before, flying from Dusseldorf to Stuttgart is much more expensive than you would fly from Wedze to Memmingen. I think that you also have in mind, so airport ATC passenger charges are much higher. And therefore, I believe looking at our plan, but first of all, achieving our, again, turnaround and our turnaround targets and breakeven in 2021, 7% is the right number for us at the moment. When it comes to the Network Airlines long term targets, we are not ready for that yet. So at some stage, we probably will come back, but not today. Growth? And regarding capacity growth, I think we have to keep in mind that we are, let's say, serving different markets. So when it comes to Europe, it might be that we will see a little less than the 6 0.8% we have seen in the last years there, and I think this is our expectation. But when you go to the intercontinental market, the Chinese market is very, very active and growing as the population is, of course, getting more and more valuable. Also, the need for travel will rise. And also, when you look at the other end of the world, which is the U. S. A. Mainly, U. S. A. Is driving very much of the continent, not just in Northern America, but also in Southern America for growth. And when you see the capacity allocation for the next 3 years forward, mainly the capacity growth is coming from the U. S, China and other Asian regions. Jamie, over there. Afternoon. It's Jamie Robofen from Deutsche Bank. 2 from me, please. The first one was just around the decision on the dividend. At a time when the free cash flow is a bit under pressure and when, by your own admission, you're involved in a fair's war to defend market share. Could you just expand a bit on why it's the right time to move away from the previous discipline on the dividend? And the second one maybe for Thorsten regards Eurowings. What would need to happen for it to take less than the 3 years you've shown to move to one AOC within Eurowings? Thanks. Starting with the dividend side, where clearly there the 20% to 40% range, which still is conservative compared with many other industries. I think it's important to say, however, that the most important statement probably today is that we are happy to stay with the absolute terms because clearly, we want to show continuity to our shareholders. And we have maybe fairly received some criticism over the years that there has been too little distribution to the shareholders. And that's very much what we have been listening to. In terms of the strength of our balance sheet, of course, this 20% to 40% is absolutely still a conservative approach. On your second question, when AUC faster than in 3 years, obviously, we have to negotiate existing agreements, CLAs that we have with unions. As I said before, we are also bound to CLAs that would impact the Lufthansa. So we carefully have to balance the different interests within this negotiation. Obviously, we want to close this much earlier and find solutions much earlier. Thank you. Johannes Braun, MainFirst. Also 3 for me. Firstly, on free cash flow, that EUR 1,000,000,000 target, firstly, what is midterm in your mind? Also, what EBIT level does that free cash flow target based on just to get a sense of cash conversion? And also why is it not embedded in your management compensation scheme, the free cash flow? Second one on Eurowings. I think the cabin union has already opposed to the plans. How will pilots react in your mind? Also, have you already discussed it maybe with the pilot union? And then lastly, on ATC. My understanding is that ATC fees are based on a cost basis. So isn't the flip side of ATC now being pushed by you and also your peers to staff up that fees need to be increased midterm? And is that included in your plans, in your business plans? Yes. So starting with the free cash flow. Medium term, 3 to 5 years, answering to that question. We are not giving a well, we have deliberately, as you know, not giving long term EBIT target. So we will now not do that through the back door, if that was your sneaky question. Why is there not in the management conversation any free cash flow element? Well, I guess there is there implicitly by our return on capital employed because the more clearly working capital we have tied in, the less our return on capital is going to be. So it is in there, but in a more indirect way. Who had the second one? Eurowings Unions. Yes. On the Eurowings Union, the cabin haven't opposed. So the discussion we have with the UFOR at the moment is on a different topic. And obviously, we will start negotiations now with the unions on the cabin side, but also on the cockpit side as soon as possible. And to be honest, given the discussion we had so far with both of them, obviously, also they are interested in to getting a much leaner structure and that one AOC would give us this structure. It will be not easy, but obviously, we need to start negotiation first before we start talking about it. On ATC, I think what we talk about mainly is, if I may use this term as rollover. So with after the controls retiring and gaps that are there that have to be filled. And the effect should rather be the opposite as the younger ones are way cheaper than the older ones leaving. So net net, I think this will rather be positive in all dimensions. Andrew? The middle block, 3rd row. Thanks. It's Andrew Lobbenberg from HSBC. Can I ask 3 on Eurowings? Firstly, I think you've given us the detail of a targeted breakeven in 2021 for Eurowings. But as I understand that is short haul for Germany only. So just so we've got a scale for it, how much did we lose on long haul and Brussels in 2018 or indeed on the outlook for 2019? In terms of moving towards 1 AOC at Eurowings, is it straightforward that that is the Eurowings Germany that we're targeting? Or do the union sensitivities see us going back to Germanwings in the context that we've got already some pay disputes going on there at the moment? And then a more general or philosophical one, perhaps coming back to Carsten's discussion at the start. Carsten, you explained really clearly that Germany is such a decentralized economy that it's critical to have a really powerful network in points like Hamburg and Stuttgart to own your home market. And to own the German corporates that are in those cities, that makes sense. I see why we need good domestic links, good city links to major places in Europe. But why does that necessarily mean that you need to knock 7 bells out of Uncle Michael flying to Palma for £2.50 to euros 50. So why do you need to have such a large entity flying down to the beaches? So maybe I start with a combination of Essen Brussels and long haul. In 2018, the net of those two numbers was a loss of SEK 60,000,000. German Wings? Yes. Then the next question on 1 IOC, is it then German Wings or more or is it Eurowings Germany or more German Wings? To be honest, so far, we keep all our options open. And again, we need to start the negotiations with our social partner first. Palma and philosophical, I like that link. Andrew, only from you could there be the idea of making PAMA philosophical. PAMA is one good example how in this industry supply and demand are driving yields. Couple of years ago, the yields to PAMA were among the highest in Europe because PAMA was booked out, was attracting traffic and tourism from other parts of Europe. And you go there on a Friday afternoon, it was cheaper to go to New York coming back on Sunday evening. Now the opposite is happening. There's over demand from the airline side to Parma. Hotels are only 80% booked, so the market is collapsing because Turkey gets it all. That has an impact. But I think the real truth about the Parma is something different. I think our no, no, but beaches, I think basically our 2 Irish and English competitors are out there to kill the next German airline. And exactly where Condor is flying, they are applying the ticket prices of €9, €4, and there's a logic behind it. In their view, consolidation is needed, and they probably think 3 airlines are enough. They know they cannot kill us, so it's Condo which is out for prey. I think once that has happened one way or another, you also see palm oil yields or beachy yields recovering. But it's very nice to be nice is the wrong term very obvious to be seen that those ultra low cost fares, which I also go against in public, as you know, because I think it's ruining our picture in the political scene. They're very much on the road where Condo is operating. So it's out of Dusseldorf, out of Stuttgart, to a certain degree, out of Berlin to the beaches. And once that market is consolidated, I think yields will recover. And don't forget, it's one of the top O and Ds in and out of Germany. I mean, Parma is huge as an O and D, but you didn't ask for some Parma, but that is probably an extraordinary issue. So I think the overall issue is consolidation is driven and Condor is out there to be the next target, I think. Not by us necessarily because for us, it creates maybe more problems and solutions, but for the other 2. Just a second. I will need the mic. Sorry to hold the microphone. Can I just come back to Thorsten? You said that all options are on the table, which includes German Wings. But German Wings has Lufthansa Passager full caffeine pilots in the front. Are you imagining that that is a possible way to get your 15% reduction in unit cost? Andrew, I think it's a little bit more complicated than that. In the new collective labor agreements with the mainline pilots, we agreed that the Eurowings sorry, the Germanwings AOC will be kept alive until summer 2022. And the last pilots of the Lufthansa collective labor agreement have to leave by then. For new entrants already today, the Eurowings and the Germanwings and, by the way, the CityLine AOC, both offer similar or, to be honest, exact entry rates. So I think there is one element of getting the higher paid collective labor agreement Lufthansa pilots out of Germanwings, which is going too slow, but in the end, by the summer of 'twenty two must have happened because we allowed to close down the AOC by that summer. If we have an agreement, as Thorsten said, where we can achieve that before, we might be able to do so. But summer 2022, we can close down Germanwings and then obviously, the transfer of pilots one way or another is finished. Neil Glynn? Thank you. Neil Glynn from Credit Suisse. If I could ask two questions for on Eurowings for Thorsten and maybe one for Harry. Just on the Eurowings side, first of all, I guess, you were targeting breakeven for this year, and obviously, that's deteriorated. But just interested to help us better understand the starting point. Can you confirm what proportion of your roots broadly are breakeven or better for this year just to understand? Because obviously, you don't compete against Easyjet and Ryanair on absolutely every route. And then secondly, on Eurowings, there was a lot of detail provided, which was very helpful. I just wanted to be sure you provided detail on ancillary ambitions. But is your base case underlying yield expectation to be broadly stable going forward? Or just trying to understand how conservative you're being over the medium term given competition. And then a question for Harry. I think Premium Economy was introduced in 2014, and I see Premium Leisure is 10% of revenues now. Just interested how that's built? And to what extent do you see that as a growth opportunity as the demographic ages in Germany? Okay. Let's start off with you talked about the routes and the number of unprofitable routes. We are not disclosing these numbers. But obviously, we do continuously a review of all our routes. We just last month, we closed Berlin to Nurnberg. Just to give you one example, we are doing this all the time, by the way. But now obviously with the new rightsizing of the network, we will have a much deeper look into the overall network and focus on our what I call the key markets, and you have seen them on the slides, being Hamburg, Stuttgart, Cologne and Dusseldorf, where Germany is producing 31% of the GDP. To your second question on ancillaries, how conservative our outlook is, especially on the top line, I would say we are conservative. If let me say one thing, the RASK would stay stable over time, our EBIT margin over time would be with the cost reduction achieved, margin would be higher. Yes. Regarding the, let's say, potentials in the economy market or anyhow in the market, I think we wanted to present Premier Economy as one example. So let's start at the very end of the cabin, and let's work forward to premium economy, what's the idea is. So at the very end of the cabin, we have something like a 30 inches 3 abreast seat, something like that. With the standard catering or not, we will see. And from there, you can work on. You can buy an extra seat, little seat free whatsoever. You can buy more legroom, which is then something like Economy Plus, and you can walk yourself forward in terms of upselling into the premium economy. And this is what we have to learn that we find the right point of decision making. This is why I talk about proactive offering, yes, right point of decision making, which is different for a family father than for a businessman than for, I don't know what, a backpacker, yes? And we have to offer the right thing. Of course, a backpacker and I would offer premium economy, but maybe more legroom for the bags because he's flying no bag, right? So things like that. And this is exactly a learning curve we are going through now. We are testing a lot in the market. We are also testing around with dynamic pricing right now, especially at this end with OTAs. So this is not so much under the brand of Lufthansa, but under different brands. And all of this learning then will be introduced into the machinery, which we are working out in terms of control, which is revenue management, res, which is reservation systems and own booking capabilities through.com airline.com and whatever is there. And step by step, we will migrate it to the market up to 2021. Thanks. It's Daniel Ruska from Bernstein. 3 of our main number one for Thorsten. The when the group introduced Eurowings in 2016, there was an element of a commercial layer of kind of Eurowings Aviation Company in the middle and combined with kind of a plug and play approach to the different operators. And maybe you haven't looked at that concept, how has your kind of view of that concept changed because it didn't really feature in the presentation today? 2nd probably towards Ulrik on the free cash flow. Would it be a fair assessment that compared to 2018 delivering a substantially higher or better free cash flow in 2019 or 2020 towards your target level will be quite challenging? And what if would be the key upside opportunities you would point towards in that, let's say, 24 month time frame? And then strategically, taking one step back maybe for Carsten, with the flood of planes unlikely to subside anytime soon or at least in the 12 to 18, 24 months maybe, especially on short haul, Is this just a case we have to wait until capacity fills up, demand catches up and fares start to rise? And if yes, how long will we have to wait? Okay. Let me start with your first question on Eurowings, namely Eurowings Aviation. You called the platform plug and play. To be honest, one thing is clear, plug and play, just buy an airline and plug them in, and next day everything works. That's most probably not possible. But if you look at, and I said before, the Air Berlin integration, I think we have shown with this multi AOC startup that at least within this integration phase, it works. But then you create additional complexity because you now have to pull up functions out of these AOCs into this platform, and then you have to integrate and create efficiency. This is something where we said the role model is working. We believe in the role model. But at the moment, one AOC in Germany, this is what we are focusing on. Then we have an AOC in still in Austria with Eurowings Europe. And I think for this, the model will work. And then as we said, let's discuss about adding more, as you would call it, plugs going forward when we have shown that we will be able to come to 7% or higher margin. Looking at the free cash flow, how will the free cash flow be better 3 to 5 years from today? There are clearly, the largest lever is to get up to EBIT. On top of that, we have the working capital we spoke about, accounts payable, for example. But also at the present free cash flow in 20 18 2019, there are some tax payments which are not applicable for these periods, which will, of course, not be there into the future. So I think these are the 3 largest elements. You're very happy you have a very conservative CFO, okay? I mean, when I get crazy on cash flow, I just tell them, if they want more leases, give them more leases. And the free cash flow goes like that. So I think that demand for cash flow is a little bit one dimensional. You will never allow that. Don't worry, and I wouldn't either. But I mean, the cash flow with 100% buying of airplanes cannot be compared to our friends in the industry who have 50% leasing. We all know in 30 years, it comes out the same or in 25, but right now, it doesn't. So I think you understand our conservative approach and give us huge credit for it. But maybe more of the question that should be answered by me was the last one. Shall we wait, Daniel, before all the airplanes are filled up or before airplanes disappear? Why am I a little bit more optimistic than some others for the next, let's say, you said 18, 24 months? Eurowings lost more or less €1,000,000 per aircraft out of Germany in the last year's numbers. Our competitors, who are known to be much more profitable than Eurowings, lost between 7 $8 per aircraft in Germany, public numbers. I don't think they will keep all the airlines aircraft in Germany. They can put them in other markets where they have much higher profitability. The 7 37 MAX issue is not over yet. So I think eventually, through the whole system, including leasing companies, there's less new aircraft going into the global market, of course, than we all have planned. And eventually, that could result in more reduction of growth than we all had anticipated because somehow this aircraft will be missing somewhere. Also Airbus is turning out less aircraft per month than they were all planning because of issues in Pratt and Whitney, the LEAP engines and all that. To be honest, the supply chain of narrow bodies more than wide bodies is on the edge around the world. So I think there will be less new aircraft flooding the market than we all had anticipated. And last but not least, I'm convinced there will be more bankruptcies, and not all these aircraft coming out of bankruptcies will find new homes in Europe because especially again for the 7 37 MAX issues, there's a big need of aircraft in China. So when I talk to the leasing companies, they're already having better deals to put aircraft into China than to put aircraft into Europe. So bankruptcies could, in my view, little different than Air Berlin, where it was more and more 1 on 1 result in part of that capacity showing up somewhere else in the world rather than in Europe, especially as we all know, since most of the airlines that go bankrupt usually have 100% leasing aircraft. So I'm more optimistic than some others. Damian Brewer, middle sector. Damian Brewer from Royal Bank of Canada. Two questions, please. First of all, just going back to the very early part of the presentation, it only looks like about 4% to 5% of miles and more members have some sort of affiliated credit card. Could you explain why that is and whether there's any opportunity to do a little bit more there? It looked like €1,500,000 on the slide out of about 33,000,000 €35,000,000 I think. And then secondly, while that's being checked, can I just follow on from Daniel's question? You obviously are now planning growth sort of 1% to 2%, depending whether it's Eurowings or the network airline. If the bankruptcies don't happen and the exits don't happen and the competition continues to grow at 6% to 7%, from where you stand today, are you now prepared to see market share even within Germany and stick to that 1% to 2% growth? Or would you then revise that ambition if the competition doesn't pull out to preserve market share? Harry, you have the answer for the Meitze More? Yes. Meitze More has two answers. So when you read the 1,500,000 branded credit cards, we allow the customer to use them more often than once. So maybe you have to take a multiplier. Then, of course, it's a higher ratio than just 5%. But even more important, and this is added way we are generating out of the group is AirPlus, which is working in combination with the TMCs, with the travel management companies or is acting itself as a travel management company, whereas the Maalto More credit card is more or less an individual current credit card, not just targeting tickets purchase, but also targeting, let's say, customer loyalty in terms of the fact that you can gather miles through paying through this credit card. So it has a different approach in the market than just selling or purchasing tickets, depends on the customer or supplier side. This is more related to AirPlus. And AirPlus is in itself a business, which is promoting our revenue by, what was it, the ratio, something like 30% of the premium is coming out of AirPlus and activities. Daniel, when it comes to market share defense or whatever you want to call it, I think the time this war will go on will depend on your patience with the attackers. The attackers are losing more than the defenders, and I think we have the business model behind it, hopefully explained to you today, justifying why we need to stay strong in Dusseldorf and Stuttgart. That logic doesn't apply to those attacking us. So I think the market and in the end, the shareholders of our competitors will, I think, have a higher say on how that war will end up or how long it will last with us. For us, there are some very basic issues which Thorsten pointed out. Dusseldorf, Cologne, Hamburg, Schuttgart, 31% of German GDP. Dusseldorf is not restricted. We definitely will not move away from there, and there's no need to. Berlin is a different case. It's a terrible market. Everybody is losing money in Berlin because it's a low yield market. So I think that is less attractive and less strategic even though from the outside it's overseen as a German capital. But again, based on the German economical structure, it's probably the least important European capital in that regard, like Canberra in Australia probably. And that one, we I see less strategic. I think that's more optimization of a business plan. And then there's other markets. To be honest, there's no slots. There's everything available. So if you move in and out of Nuremberg, in and out of Hanover, I think it's more about making money or losing money. But it's those 4 catchments. I think you mentioned today where probably nobody wants to move out from a Lufthansa point of view, and we will not. But this is not where we lose the most money either. It's I think there is no need to grow more, to be honest, because what we have right now does defend our market position, if that was your question. And there's no need we will not going to have the airplane to grow more because we will retire airplanes. There's new airplanes available. So I think the upside potential of increasing our growth after today's decision is very limited, and there's no need. Alex Bechs of Kieren International. I just wanted to touch base regarding the compensation last year for customers due to delays and cancellations with the sharp increase in punctuality at Eurowings. What number are you using for your guidance this year that you would have to pay to your customers? Yes. So clearly, what we're doing this year, we are investing as well in terms of more reserves. We have more space in our flight schedule. So even if we are reducing irregularity cost this year, we will, through our investments, basically making this a zero sum game for the year of 2019. From there on, we are gradually expect that, of course, to reduce. But for your models for this year, it's basically zero effect. Michael? 2nd row here, the middle block. Michael Koen, Societe Generale. Back to Eurowings once more. So obviously, we know more than 77% margin is beyond 5 years. But can you be any more specific on that? And also on capital return, we know the fleet size will go down, but will also be modernized. So more than 7% EBIT into what kind of ROCE would that translate? And then on one on fleet growth. I think overall, you plan to grow the fleet by some 30 aircraft with Eurowings shrinking. So my question would be, where do you expect the most fleet growth to happen? Thank you. Yes. When it comes to which year which you saw Schaller Homes look alike trying to ask us, I don't think we are prepared to say which year is long term. No. To be honest, first of all, I would like to see the breakeven in 2021, which is 2 years out from now. And let's focus on this, implement all the measures. And as I said before, I'm quite happy that it will go upwards from there. But it pretty much also dependent, sorry, on the market development. And again, we're discussing the so called price war. We're discussing other impacts. So I think having an outlook for the next 2 years, I think, is and not talking about specific years afterwards is quite prudent. On aircraft allocation, as Del has pointed out, what we do, we call it the gray fleet approach. There's a top down process and a bottom up process. Basically, Detlef, who's in charge of the fleet, has a fleet plan when our aircraft coming in. And of course, the 32 you're referring to can always be reduced by retiring aircraft older. We have a lot of 320s in the so called ESG, extended service goal. They are between 25 30 years old. They can be put on the ground right away, and this number can be brought to 0 or even negative if we need to. So anyway, there's up to 32 we can use for growth. And Harry's people and, of course, Thorsten's people come up with the network results of the various bases and hubs. And then we basically allocate according to the ROCE principle, where would an aircraft investment create the largest value for our shareholders, and that's where we put the aircraft. So right now, Switzerland, of course, has created lots of value for us, has received the biggest investments. There's infrastructure constraints in Switzerland, so this cannot go on forever, but you can always put larger aircraft there, smaller away. The second one has been Munich. We have been taking small aircraft away from Munich, put larger, newer aircraft there, 350s, neos and the smaller aircraft either were retired or were partly put into Frankfurt to make sure we don't lose slots here because as long as the airport cannot take more capacity on the passenger side, we are helping our friends from Frankfurt Airport reducing the load on the airport. So that is how we can allocate aircraft according to the ROCE principle, of course, in the framework of infrastructure constraints, cost and quality at the airport, which airport can take growth, which rather not. We are not worried about not finding room for these aircraft because if we did have worries, we can just take all the aircraft out. Stephen? Stephen Furlong, JV Research. For Carsten, a question on you're worried or you've any comment about kind of external factors that impact costs in the industry? Like, for example, you hear about governments looking at things like taxes on aviation fuel and things like that that could, in effect, limit the return on invested capital that this industry would be able to make? And the second kind of one, do you think that in terms of consolidation, I think you said like maybe we get to kind of halfway where the U. S. Is now consolidated. Do you think that's a kind of a 5 year process or a decade? Or it depends on many different things? Well, see, that's a very good question. I think for an industry, you're definitely right. Let's assume there's a CO tax or let's assume fuel goes up to twice, the industry will lose the ability to create value. In the game theory within the industry, this could be an upside for Lufthansa. Even the 9.11 scenario would increase the relative positioning of Lufthansa because it would kick out so many weaker players that whenever the industry is back to normal, we will stronger than before. We don't want that for many reasons, don't get me wrong. Fuel price doubling for whatever, war in the Gulf or CO2 on top. I mean, with our balance sheet, with our yields, Harry is able to achieve, who can pass it on as easy as we can? Again, there will be less demand. Don't get me wrong, there would be a crisis. I think we all have been around long enough. But after that crisis, growth has always come back in this industry, we would be stronger. So will the others. So I think that question almost leads to your second question. The more headwinds, the more crisis, the more government regulation because of CO2 there is, which short term and as an industry one might not want, the faster that will accelerate the process to clean out this industry, which will make us one of the winners. So being a positive person, I can live with both, okay? No crisis makes my life easier and sleep better, but I have to wait longer for the industry to consolidate. Some huge headwind, crisis, CO2 issue, blah, blah, blah, will give me short term less sleep, but will accelerate the time when this company is even more on the winning service industry. Follow-up question over here, Alex. Yes. One more question, and it refers to the complexity of the fleet. Kaesen, you mentioned not long ago you would look at a MAX, the 737 MAX. Why would you even look at it? And as a follow-up question, the 321 XLR listening to Airbus seems as one of the most attractive average costs per mile. Is that a plane that you would actually look at rather than the 787? Well, the MAX shows you the ability of Lufthansa as industry leaders. I only mentioned it once and really runs to buy 200. So now more seriously, there is 2 suppliers of OEMs. And all of us who are serious players in the industry, IAG, Lufthansa, Delta, American, we all want both of them to be healthy and strong because that's the least competition we have remaining, right? We tried to keep Bombardier there, as you know, didn't work. Embraer is gone. One day, the Chinese will come, but this will take some time. So I think for the industry, it's very healthy to have 2 similar good products and suppliers competing. And when that aircraft is back in the air, it will be a safe aircraft. So whenever any of us look at aircraft, we would do what IAG has been doing, what we would be doing, you would look at it. Is there any way a risk that aircraft gets a certain image issue? Surely, it's so long it lasts. And just yesterday, I saw the American CEOs are now saying they will put their staff on the aircraft first. They will put themselves and their families on the aircraft first. If you say those things, it shows there already is an image issue. But in the end, anybody going out for aircraft, assuming that the aircraft are licensed and certified and safe, we'll look at everything. But for us, there is no need. The XL air, the 321L air, as you know, for us was not much of an issue. It can only basically go from the East Coast of the U. S. To the most western part of Europe. Brussels would have been in, but already Frankfurt is out. The new XL air could be used in our network, also for maybe some African destinations. So I think we look at it like we look at every new airplane. But in my view, it's a niche product in the end. I've just flew on the 2nd best airline in the world after Lufthansa Qatar Airways with Harry from Doha to Addis for a management meeting. And we had to go quite a detour because of the closed airspace. We were in this, to be honest, good business class of Qatar Airways. 4 hours, I mean, 4.5, it just doesn't feel right to be in a narrow body for 4.5 hours. The noise, vibrations, the toilets, it's just not a wide body experience. So I don't think that this will be such a big game changer as some people think. It will be a niche product and maybe even for us, but it's not going to be a game changer. I just would say one little additional thing, and this is below in the under so in the bulk area, where we normally on intercom flights transport something like 10% to 15% of our revenue as cargo, this aircraft is not a cargo provider. So why should I take maybe a 0.3% cost advantage against a 10% to 15% revenue disadvantage at Sufthansa. Of course, others might not have a cargo organization like we have. Roxanne, Harappa, Kepler Cheuvreux. Two questions on Network Airlines, please. First, significant direct connectivity between Eastern Europe and Western Europe is increasing. How do you see Austrian positioned medium to long term? And do you see optimization potential between the network of Austria and that of the other network airlines? And second, medium to long term growth of the sector is expected to be driven mainly by Asia, Latin America and Africa. What are your targets? And how do you see you positioned in Latin America and Africa medium term? Thanks. Maybe I just start with from a financial point of view. There is a new team in Austria since basically summer last year. They worked very hard on changing the whole setup of Austrian. There's probably there's already been quite a number of announcements going to an A320 fleet, getting really down with our cost side. It is indeed, of course, challenging with all the low cost competition as you are pointing to, but there is a very clear elegant on how to turn on that company. But as long as the low cost competition is as tough as it is for the moment, it will take some time. I don't know, Harri, if you want to add something to that. Yes. So of course, I'm very much also in terms of operational business, day to day business and what's in Austrian business. And maybe we do not remember where we have started, but when I started the interrelation with Austrian, Austrian had EBIT margin of minus 12%. Now it's somewhere with 4%. That's not ideal. But when we see the gravity of move, it's a huge gravity of move, which we have done so far. And as Ulrich is saying, it has to go on, no question. And of course, focusing on cost, cost, cost is an issue. But also secondly, and this is something you were mentioning already, network optimization. So we were reducing, let's say, the freedom of planning for the local market exactly for this scheduled period. So with Austrian 2.0 and the intercom network, we were putting more integration of the Austrian network design in a way that it is fully integrated into what we are offering in our shelf. So it's more or less a shadow of the Frankfurt, Munich and Zurich Hub, and this is working very, very well, especially on the intercond business because when you see the deterioration of results compared to the, let's say, gravity of low cost attack, yes, there is a disaggregation. And this is coming through the network optimization, especially on the intercontinental side. And then coming to the market development, I think I was referring a little bit to that when I was talking about extending our competencies also to other regions, which is not just Europe, but Europe as well. But we also have to look that we do not have too much O and D overlap and where we have to enhance our service, Latin America and Africa, So to find partners who have some competencies there, of course, we would prefer to just have a copy of what we have, and this is also reflecting to what Ulrik was saying a little bit now, acting with Eurowings in the touristic environment, what is the value of Condor then. So this, of course, is part of a detailed analysis, and this has to be part of a detailed analysis. And this is why merger acquisition and even joint venture management is not a quick run, but it has to come from the customer relation, which is normally the O and D and itinerary print. Any more question, anybody? Malte over there hasn't asked a question yet. 2nd last floor. Thank you. Malte Schulz from Commerzbank. Two questions from my side on network. First of all, on Swiss, particularly on profitability of the Geneva operations. I mean, I haven't heard that something in a while. Just can you update us on how profitable it is and how it does compare to Zurich? And you also piloted there some more cost cuttings like stripping out more or less fruit there. Is it something you want to roll out maybe also to Austrian or so? And second question would be then on 1st class profitability. I mean, you mentioned already that Premium Eco is your most profitable class by if you measure it like in profitability per square meters or so? How does 1st compare to it? So thank you for the question. So regarding SWISS and Geneva. So this has a long history also with 5 persons. So this was one of the first Supervisory Boards Board of Directors meeting we had in Dale in Basel regarding that. So where are we now? After this long history, we can say we are generating some profit out of Geneva, which is good. But basically, yes, it has to do also with the machinery we are flying there. The C Series is a very competitive aircraft, especially the C300, which is now the Airbus 220300, is a very, very competitive aircraft simply due to the fact that it is producing more or less the same cost per seat as an A320, but is generating less overall cost, which is helping, of course, in terms of yield management because less capacity you have, the more you can do regarding upselling. We are not stripping the food out of the aircraft, but we are testing and Geneva always was a test bed for different business cases and one was a food approach. Now we are testing a new approach to the market because when we ask the customer, how do you find your nice economy class sandwich, there were very few smileys on that. So why don't leave why shouldn't we leave the customer more freedom to choose what they really want to have and then they have to pay a little bit for that? They we are generating a great value out of that, not just for the airline, but also for the customer because the take rate is quite high. And what we learned is that especially local food, yes, and this is not the sandwich, it's more the Swiss cheese plate and things like that, the local food is very much deserved by the people. And this shows that, of course, we are living in the global industries, but the heart and soul is very much with the national print we have in Europe. So this we can reflect through this also in terms of having a more customer related food selection. The disadvantage, you have to pay a little money for that, but this is working. So regarding 1st class profitability, this is a fantastic question for marketeer. So when I was talking about market segmentation and we were ending at the lowest end in economy class, of course, we do not sell tickets in Europe for €35, one way for simply profitability reasons. The idea is to have a push effect and to upgrade, as we were discussing, this €35 through the lifetime cycle until the customers leaving the aircraft again to a better yield. This is not working for everybody, but this is working for many of the customers and will be even better in the future. When I'm in the 1st class segment, yes, I'm at the very other end, we have to see that it has a huge pull effect. In Switzerland, 40 more than close to 50% of the revenue, the horns, so the best miles and more members are doing with us is in 1st class. In Germany, it's close to 25% in Frankfurt, a little bit higher than in Munich. So shall I lose the loyalty of these customers not offering 1st class anymore, which is the same as losing the customer not entering my shop with €35. This is really revenue management, product management and also, let's say, customer segmentation management at its best what we are doing there. And my belief is we even have to do more in terms of customer segmentation management to have the people to jump over the fence to the next class. And the 1st class has a huge pull effect there, which is which cannot be calculated by a simple stupid seat allocation calculation, for sure or not. We have to understand the market a little bit better. For premium airline, of course, if I would be the Irish guy, I never would fly 1st class, he never would have an opportunity to upgrade one passenger there. But for us, it's really also the pull effect through the whole machine by the end of the day. I think we have time for 2 more questions. One was over here. In Germany, what is your relation to the Deutsche Bahn? Do you see the high speed trains as a threat for you, especially targeting the corporate business in Germany? Or you see it more as a chance of feeder feeding your hubs with combined tickets? Oh, it's both. Depends on we love them to feed us in our hub, like Cologne, Stuttgart, if there is an airport which has a train station. If they build an airport like in Munich where there is no train station, it doesn't happen. It takes you 40 minutes from downtown Munich to the airport. So even if the train from Nuremberg is 1 hour, it takes you 2.5 hours total, we have to fly 4 times a day. Crazy. On the other hand, yes, on Munich, Berlin, they took part of the traffic from course, Eberlin is gone. So there could be those routes where we compete. Hamburg Berlin, one of the strong German O and Ds, we gave up because it's a better product to do it by train. So there is no such thing as one relation. They are a big feeder of us. We have commercial relationships, radar and fly and so on. And I wish I had their public support. But what if I have to pay the price of being re nationalized for that? I'd rather stay with you as shareholders and don't have the support. €18,000,000,000 is a good amount of money. We should think about that. It's crazy. You still lose money. So one final question before your closing remarks then. Anybody who has not asked a question yet? 2 of you have? Oh, no, it's a very difficult choice. Chad, why don't you go? Thanks. Just a bit of color on LSG. Can you give a bit of color in terms of interested parties and maybe just kind of number or maybe just kind of the timing. Are we going to be 12 months' time still this process is going on? Or is it something which is coming to an end this year? And I don't want to box you in because obviously you've got negotiations. But at very least, is this 12 months or less? Yes. So maybe I start on that side. We have 3 interested parties. We are looking at Europe first, and Europe is clearly the business where we are very keen to have a long term partnership with someone also creating a premium product in our hubs, which makes it slightly more complicated than to just sell it like any normal company. And this is why it takes some time. We do expect to come to a conclusion who is the winning partner this year when it comes to the European business, and then we will look at the rest of the world afterwards. Thank you. Any closing remarks? Well, I have one thought in my mind. I know Ulrik will tell me tonight, Carsten, you shouldn't have said that. It was such a good market day, and then you came with this. All these questions on Eurowings, again, I called them the elephant in the room when I opened up this morning. And I hope you didn't get the impression that we are hiding anything, including the way we presented, the things we have announced to the public this morning. We actually while we speak, our top management is trying to explain to the staff. So we're doing the things which need to be done in Eurowings because we just ask them to do too much at a time, solving too many issues of this company at the same time. But in the end, don't get me wrong, this is Eurowings. It's Europe, and it's a part of what we do. In the old days, we lost €400,000,000 a year on non hub. We balanced it out at minus €200,000,000 We've got to plusminus0,000,000 then Air Berlin brought us back to minus €200,000,000 Let's say one day, we're bringing to 7% margin, and this is a 200 plus. Thorst will be the hero. Cargo makes €250,000,000 a year. Technik, not a single question of you, makes €500,000,000 a year, every year. So I think we should not overestimate the importance of this for our global positioning. And this is my real closing remark. In the end, this is a global industry. I'm very convinced globalization is one of the meagatrends of our times and will continue in different ways. Free trade being questioned, environmental issues coming up, no doubt, will change. But also the young people in the room, I think, will look back 20 years from now saying that globalization was a big bigger trend of their time. Globalization, our industry means there is eventually room for 12 players: 3 in the U. S, 3 in China, 3 in the Bosphorus Gulf region, 3 in Europe. And on top, maybe 1 low cost carrier in the U. S, Southwest and 1 in Europe, maybe 2, I don't know. In the end, the 12 of us need to fight that global fight for the industry, which is, again, an industry which grows industry people feel attracted to, not only customers but also staff and even investors, as we all know, invest more in this industry than pure rational would prevail, sometimes good, sometimes bad. And that is what we are really fighting in, the Champions League of those top 12. And we are well positioned, I think, in many ways. Well, Harvey's explanations, product, marketing, pure numbers. I know Ulrik never likes to be talking about turnover and number of aircraft. I do it anyway. Last year, we passed American Airlines in turnover to be the largest airline group of the world. I know in the end, it's about top bottom line, not top line, but things are Yes. This is not what we speak about tonight, that's for sure. Right. That's why I mentioned it. Also number of aircraft, I don't mention because, of course, it doesn't matter how many aircraft you have if you make enough profit. But also in terms of global fleet, there's the 3 Americans with more than 1,000 aircraft, China Southern with Lufthansa in the 800 range, and then there's others, 500, 600 and below. So I think in the end, it's how do we position ourselves for that global competition to create value for shareholders and for customer and staff. I'll come back to my chart because it helps each other. Eurowings is an important element of stabilizing ourselves for the global environment because we need a strong home market positioning, which we don't have on one location, like our friends in New York, London, Paris, Tokyo, Shanghai, okay? That's why we're doing this. That's why we spend management time on it. But in the end, we're not doing this all for competing with Easyjet and Ryanair. We are doing the whole thing to be global competitive in this fascinating industry. And that's what we believe we are in a very sustainable way. I do understand that sometimes messages which create short term excitement are sometimes more cherished than long term sustainable things. But in the end, we are boring. We are German. We are Lufthansa. We love to be boring because we are dependent on and you can depend on us. And I think we use your capital in a sustainable way, including the additional responsibility beyond the 3 stakeholders we talked about today, which is the environment, the society we live in and all that. And we all know we can do things better. I think we were quite open about correcting some things we did wrong in Eurowings. We'll fix them as fast as we can, and we are surely committed to that. But in the end, it's this global competition we want to position the company for even better than we have in the past. I think we showed in all modesty the track record of the last 5 years. I'm just as disappointed as you are that we had to announce on Monday we go back to 2% to 2.2%. Percent. It's not as what we hoped. It's still the 3rd best result ever in the history of this company. And we promise you, we'll get better, and we'll bring it up higher, but also in the Hesto scene in the perspective of being home based in a market with huge overcapacity. Think that is quite a result we are proud of with all the things we hopefully showed you today we want to get better at. So thanks for your support. Thanks for your interest. And hopefully, the interest goes beyond the numbers. That's why we put up a few things here, which our staff will be proud to show you. And thanks for living through the heat without escaping to the pool next door. Thanks. Yes. Thank you. Thanks,

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