Earnings Call: Q1 2018

Apr 26, 2018

Ladies and gentlemen, thank you for standing by. My name is Emma, your Chorus Call operator. Welcome and thank you for joining the conference call of Deutsche Lufthansa. Throughout today's recorded presentation, all participants are in a listen only mode. Session. I would now like to turn the conference over to Andreas Haggenling, Head of Investor Relations. Please go ahead Yes, thanks Emma, and good morning, ladies and gentlemen. Warm welcome to the presentation of our group results for the first quarter 2018. I've got Ulrich Swenson with me today, our CFO and he will give you an overview on current development and of course present the financial figures for the first quarter. As always, you will have the opportunity to ask your questions after the presentation. Uli, please. Thank you, Andreas. Ladies and gentlemen, a very warm welcome from me too. Overall, we have seen a good development of the operating businesses in the first quarter of this year. The Network Airlines had performed strongly. They increased adjusted EBIT by 154,000,000 to 1,000,000. Lufthansa German Airlines has achieved a positive result with its highest first quarter margin in the last 10 As we already indicated at year end, the performance of the Eurowings group has been negatively impacted by significant one off costs associated with the integration of additional capacity after the exit of Air Berlin. But trading at Eurowings is very strong. Traffic revenues increased by 34 percent on a capacity growth of 28.8, with a 4.2 points higher load factor and at stable constant currency yields. Overall, the passenger airlines have continued to perform well with unit revenues growing up while unit costs continue to come down. And this despite the significant one off costs at Eurowings Group. Cargo has also continued to trade well. Its profit development has broadly offset lower results at Lufthansa Technik where profits are now normalizing after an outstanding performance in There's also the case for others and consolidation, which had a strong positive impact on the profits in the first quarter of 2017, and are now coming down is fine with the underlying profit development of the operating businesses, in particular, with the strong performance of the Network Airlines And Cargo, and above all continued unit cost reductions despite significant run off costs at Eurowings Group. Allow me a technical remark before we look at the recent developments in more detail. In the first quarter, we have seen the first time implementation of the new accounting IFRS 15 rules. As guided, this has reduced traffic revenue and fee expenses equally. As a result, reported revenues have remained stable despite strong growth at operating level. I will take you through these changes has been restated in order to reflect a true and fair view of the development of the Lufthansa group. A more detailed breakdown of the FEG is available in the next of this presentation. The trading environment was balanced in European short haul. The significant extra capacity in particular at Eurowings And Lufthansa German Airlines after the exit of Air Berlin could be sold at stable unit revenues. Trading on long haul improved as well. Transatlantic is strong with load factors and constant currency yield increasing on a moderate capacity increase. In Asia, And in Middle East And Africa, our smallest and most volatile region, load factor increases are basically compensating for the yield decline. Overall, yields saw a stable development on a constant currency basis. Due to increasing load factors, constant currency unit revenues increased by 1.2%. The unit cost development was negatively impacted by the anticipated 1 off cost at Eurowings. Nevertheless, we were able to reduce total unit cost. Constant currency ex fuel unit cost came down by 0.5%. The network alliance alone reduced constant currency exchange rate unit cost by 1.9%. We therefore continue to expect an overall reduction of 1% to 2% for the full year. Total revenues declined by 0.7% as a result of the first time application of the accounting rule IFRS 15 against a non restated 2017 figure. Excluding IFRS 15, revenues would have increased by 4.5%. Fuel cost increased by 1,000,000 on the back of slightly lower than expected volumes and the strength of the euro versus the U. S. Dollar. The overall profit improvement of the passenger airlines was 1,000,000. This was, however, largely offset by an altogether stable development of the operating service companies, and the significant negative impact from others and consolidation. In total, adjusted EBIT of the group remained on previous year's level despite one off integration costs and a significant negative effect for non operational elements. Against year end 2017, net financial debt decreased by 27.5% on seasonally strong cash inflows in the first quarter. Adjusted net debt over adjusted EBITDA for the trailing 12 months improved from one 0.7 times to one 0.6 times. This has contributed to Furl RIMPRO, our financial stability as is also reflected in the recent S and P upgrade of our investment grade rating outlook from stable to positive. Operating cash flow remained flow is mainly a function of the acquisition of Brazil Airlines last year. We had bought the company for a very low purchase price, but with a positive cash balance of 1000000, which had impacted the free cash flow at the time. Pension provisions increased by 1,000,000 versus year end 2017, mainly on the back of the reduced discount rate from 2.0 percent to 1.9 percent. The Network Airlines show the best performance in this quarter. They improved our adjusted EBIT by 1000000 to 1000000. Resulting in a strong margin This was particularly driven by Lufthansa German Airlines And Suisse. Lufthansa was the largest contributor to the adjusted EBIT improvement with an increase of 1,000,000 to 1,000,000. Swiss increased adjusted EBIT by 1,000,000 to $99,000,000. This is a very strong margin of 9.3% in the traditional weak first quarter. Order Airlines was affected by 3 Day employee meetings. If it had not been for that, profits would have remained broadly flat. Eurowings group saw a 1,000,000 lower adjusted EBIT of minus 1000000. This was largely driven by 1 off integration cost for the former Air Berlin assets. These one off costs are significant in the first quarter and will continue to be so in the coming months. But there's certainly a good investment in making Eurowings a better business going forward. Lufthansa Cargo continues its strong performance with an increase of adjusted EBIT by 1000000 to 1000000. This is a margin increase of 4.3 points to 10.1%. The strong trading environment is expected to continue in the next month, albeit against an increasing difficult comparable base. Looked as a technique saw adjusted EBIT decline by 1,000,000 to 1,000,000. The company is reporting against an extraordinary strong first quarter last year, which heavily benefited from seasonal capacity utilization in aircraft overhaul and timing effects. The weaker U. S. Dollar also contributed to the lower result. LFT Group is still affected by its ongoing transformation in Europe, but the benefits should becoming increasingly visible from now on. Others and consolidations, so our adjusted EBIT declined by 1,000,000 to minus $54,000,000. The first quarter last year saw a strong improvement in that contribution and we are now returning to levels of the years before 2017. In my last presentations, I had put a particular focus on return on capital and the finance strategy Today, I would like to show you a particularly successful example of investments here at Lufthansa Group. By replacing A340s at SWISS with 7 77 aircraft, we have reduced unit costs, including fuel, by approximately 25% for each of those aircraft. At the same time, we increased the revenue per slide on average by some 30% at 50% additional capacity. As a result, the margin on those flights increased on average by 10%. This is an extremely attractive business case, and you have witnessed the recent margin development at Swiss. Coming back to our results for the first quarter, we are very satisfied with the performance of the Network Airlines. We had anticipated a significant one off cost at Eurowings and addressed this in our full year call 6 weeks ago. We have reduced our plan organic capacity, drove slightly in light of the late deliveries of A320neos, weather cancellations and pre meetings at Austrian Airlines and strikes from the ground staff here at Frankfurt Airport as well as some slower growth at Eurowings growth. We now expect additional fuel costs of 1,000,000 This is lower than our previous guidance due to the lower capacity growth and weaker US dollar. The operational development will be good, even despite a significant one, of course, at Eurowings. What we can see today, it would not fully compensate for the still significant increase in fuel cost. Our guidance remains therefore unchanged. We continue to expect an adjusted EBIT slightly below previous year. With that, I thank you for first question comes from the line of Neil Glynn with Credit Suisse. Please go ahead. Great. Two questions for me, please. The first one with respect to seasonality, you've obviously achieved profitability in the first quarter of 18 following a loss last year. That's certainly something that's been a feature in the US as well as among some of your European peers a structurally improved, EBIT margins. Just interested, do you expect to be able to retain profitability in the first quarter going forward? And is profitability in each quarter a validation to yield management in a rising fuel price environment. Just interested, have you changed anything, or have you seen a, greater ability to manage yields upwards in a more consolidated environment as the fuel price rises and has that differed from experience in the past in a less consolidated market? Thank you. Starting then with the profitability in in the first quarter. As we all know, most airlines indeed are making a loss in the first quarter. So we are extremely happy about the development now of, of course, Suisse having a 9% EBIT margin in the first quarter and also Lufthansa getting very much into stable profit territory. And indeed, with the structural changes we have done over the last couple of years, we expect for Swiss and Lufthansa, this will continue with Austrian being slightly more, a leisure market it would be tougher, however. On the second question on yields, indeed, consolidation of the market is, of course, helping yields long term. But there's also a lot of other things we are doing when it comes to, changing our GDS relationship, changing how we do our bookings, which will come into place into 2018. Where Swiss is the first platform we are using that, which will help. But it's too early to say that we can, so say, compensate the fuel through the yield fully. Thank you, Neil. Next question and please. The next question comes from the line of Jared Castle with UBS. Please go ahead. Thank you. Good morning, gentlemen. 3, if I may, you obviously spoke about the dragon Eurowings relating to air Berlin. Can you give any color in terms of what your estimate is now for the one off costs relating to the integration and maybe just the profile as we move through the year, through the quarters? Secondly, just in terms of cost cutting, I understand kind of the slow start to Q1. Obviously, you're going to have a bit of catch up as you go through the quarters to achieve the mine one to minus 2, but also just in terms of the profile, how we should be thinking about, how that should evolve during the quarters. And then just, the balance sheet, obviously, seeing further strengthening and the rating agencies. So just just any change in your thinking in terms of balance sheet, capital returns, share buybacks, etcetera? Thanks. Hello? Yes, sorry. We were on mute. Thanks for your questions. And starting with the Eurowings. I mean, this is a fantastic once in a lifetime opportunity to consolidate the German market. And there are indeed a number of one off costs, but the majority of those costs are coming here in the 1st and in the second quarter. There are the classical project costs. We have spoken about repainting of aircraft. There are cost in connection with training and so on. But there are also MRO costs, the technical level of the aircraft we are taking all from Air Berlin was not fully up to Lufthansa and Eurowings standards, So there has been some less capacity due to maintenance, which we had to lease in wet lease capacity to cover. But this is indeed trailing off during the course of the year and going into 2019, those costs will have been fully disappearing. And we are very confident that the total group cost reduction of guiding 1% to 2% for the year will absolutely be there. And I think that's very visible with the Network Airlines who reduced their CASK by 1.9% in the first quarter. In terms of the rating agency, yes, you saw the increase of our S and P going from stable to positive, we have now a net debt to EBITDA of 1.6 We will continue as we indicated early short term to strengthen our balance sheet. We think there are opportunities to consolidate the market and we want to have opportunities, we will have to look again at what are our abilities to return some of that liquidity to our shareholders. Okay. And so just coming back to, a euro wing, are you going to give us a number for the costs of integration and ramp up, at any stage during the year. So we can see kind of how the underlying business would be would be performing otherwise? Yes. The the, it is clear that the CASK reduction within Eurowings without these one, of course, would have been negative. Today, it's up around 8% to 9% So that is basically the difference is the one of cost. The next question comes from the line of Anand Date with Deutsche Bank. Please go ahead. Hi, good morning everyone. I just had two questions please. I was wondering if we look at the load factor performance over Q1 and kind of what all the airlines are saying about bookings into Q2. Is it reasonable to draw conclusion that you guys are sort of volume loading as opposed to taking better price? And is that something that's a function of potential scrutiny around the Air Berlin deal or is that a new strategy, that you guys have in the revenue management system? And then secondly, just to come back to on Allotalia, we've been getting lots of press recently that your proposal is now top of the queue or front of the Q2 so to speak. Could you just give us an outline perhaps of what your red lines might be around how that deal would look So what sort of guarantees you might need, for that to really work? Starting with a sunny country of Italy, as we have said many times, Italy is a very important for us, it's the 2nd most important after U. S. And however, it's important to remember that the way Alita looks today is of absolutely no interest to us at all. We have handed in a concept to the Italians, how a 2 to the restructure airline could possibly look like in terms of size, costs, destinations and so on. But that, restructuring would have to be done by the Italians. That is something which we could not do as a new shareholder. So, there are many red lines, which basically means it has to be restructured first. So therefore, for the moment, this is just on a concept stage, and I think, is important to remember. When we look at see through factors and lead, I mean, clearly, the target of our revenue management system is to maximize the RASK, the total revenue There is no specific volume strategy. There's nothing which changed from what we have been doing earlier. So there's nothing to be read into that. Could I ask, sorry, a follow-up on both, if you don't see that something is happening on Alitalia that sort of fits with the model that you've proposed. Is it would it be reasonable that you would just look scale up, Ed Doniete or one of the other brands, and you can basically just cover Northern Italy, with your existing operations? Clearly, scaling up Adulameti and scaling up all the different airlines opportunities to make more commercial platform in Italy is an important ingredient. It is a very important market for us. So absolutely, we would scale up. And just one more, this should be very quick I'm sure Do you have any comment on whether your low cost long haul ambitions now have to change and whether you need to do anything a bit differently given what IAG has sort of done with Norwegian? No, not at all. Quick question, quick answer. Your next question comes from the line of Daniel Resco with Bernstein. Please go ahead. Hey guys, good morning. 3 if I may. Number one on the sector, you've pulled the pullback growth a little bit in the forecast due to operational reasons, but maybe looking out on the performance, you know, what the sector is doing, second half of twenty eighteen into twenty nineteen, how are you thinking about capacity growth? You know, is there any indication that that you're thinking a little bit more cautiously you want to do with capacity. 2nd question, on Eurowings, I know the original plan always was to consolidate within Eurowings and be more efficient running the different operators. Now you've decided also to keep SN Brussels as a full fledged operator in the Eurowings business unit. Is that in any way impacting what the Eurowings aviation game, Behar, can do in terms of synergies? Is it complicating and delaying the process? And, and last question, that may be something you've kind of touched on before. The tougher environment, earnings growth gets harder. You talked about how you think about the cash balance and you need a little bit of dry powder or maybe give it back, but any other ideas how you can translate that cash balance that's building up into earnings growth aside from consolidation in the market? Thanks. Yes. Clearly, the taking down the growth prospect from 7% to 6%. As you rightly said, it's all due to operational questions. Actually, we have 5, 6 different reasons I mentioned in my speech. So there is nothing there changing when it comes to, how we think about that capacity growth When it comes to Eurowings being our platform for consolidation, absolutely, that is the strategy going forward. But of course, acquisition opportunities never really come when you are most ideal. So from a practical point of view, the Air Berlin once in a lifetime opportunity came a little bit too early for us. And therefore, we are now spending a lot of energy on digesting and integrating that. And from that perspective, Brazil Airlines, is indeed coming a little bit later than we probably first had envisioned when we did that acquisition. In terms of, looking at our cash balances, we still have a net debt of 1,000,000,000 If, at some stage, there are no further good acquisition or CapEx opportunities, we would indeed look at how could a return of those balances look to the shareholders, but that is all too early at this stage. Yeah, maybe if I could follow-up on that one. I think the, you know, we've talked a lot about the M and A opportunity on airlines, in the European space. And I was just wondering, right, if you look cargo, Textnix or LSG, right? If there is, if there is any significant opportunity to increase in CapEx into those areas where you may be kind of holding back right now because you're still waiting to see how the consolidation game in Europe plays out? I think there might be some exciting opportunities within Technics, which is a good platform and a well run company. But that is too early to speak about what would those opportunities be. And it could also be the case that there are a number of smaller ones, which in that, as could adds up to some, to some amounts. The next question comes from the line of Andrew Lobbenberg with HSBC. Please go ahead. Oh, hi there. Can I ask a couple of questions on Swiss? First up, we think about the weakening, swiss franc, what does that do for the business? Frankly, I was surprised how all simply it traded with the strong Swiss franc, but what do we think about the weakening Swiss franc? And then staying with Swiss, it was clearly an awesome Q1 performance. When we get to Q1 next year and Swiss's profitability goes down. Are there any exceptional one off positives that you'll be tempted to draw out at that time? Is there anything that drove this performance. And then a third question, have you guys got any further with your homework? On the IFRS 16 burden, which is which is to come. Yes. Thanks for those questions on SWISS. As you know, I have a emotional relationship between some very happy to answer about the fantastic result they have. And, clearly, the Swiss franc is helping us because we have a lot of costs in Swiss franc. So when the Swiss franc is weakening, that is indeed a benefit for them, But I think one should see it also in the opposite direction. It's amazing how well they have been performing over the last couple of years despite of the very strong Swiss franc. And maybe now it's coming down to a Swiss franc, which is a little bit more reasonable to the euro. There are no significant Q1 one offs So indeed, this is really trading as good as it is. You had a homework question as well when it comes to the IFRS 16, And we will come back to the IFRS 16 in connection with our Q2 numbers it's a bit too early to say what it is. It's thousands of different contracts around in the world. As we all know, it's not aircraft we are leasing a lot of actual premises and buildings in many different places of the world. So that's too early to speak about. Next question comes from the line of James Hollins with Exane. Please go ahead. Hi, good morning. A few from me. Just on point to point long haul. Looks like it's been a pretty massive shift from, Asia Pacific capacity onto Americas, which assume might be, North America versus where we were 6 weeks ago in your presentation. Could you just check if that's correct and And is it due to Asia Pacific weakness or, just transatlantic strength? 2nd one, still looking at CapEx 1,000,000,000 this year. That is the question, not the statement. And also, does that change because of the Airbus delays, or is that obviously land in and do you get compensation from Airbus for that? And finally, are you one of the interested parties that has looked closely believe at Norwegian. Yes. Starting on the CapEx side, the SEK 3,400,000,000 cap guidance did indeed include the A320neos, which might be delayed We do get compensation when those aircraft are not arriving in time. So that is helpful. Even of course, we would have preferred to get the aircraft in time. On Norwegian, we never comment on any M and A transaction. Starting with your first question, long haul, there is a certain ship to America. But of course, it is from a small base. So it's not really anything really relevant. Your next question comes from the line of Johannes Huang with MainFirst. Please go ahead. Firstly, on the cost impact from the recent agreement with the Austrian union on Eurowings, is that significant at all. Can you give any indication on that? And secondly, again, back to extra unit costs, looking at the development, excluding the Air Berlin integration costs, I guess the main building blocks this year are the pilot agreement and also the management restructuring. Was just wondering if you can give us a sense of how much debt has already affected Q1 and what the phasing will be over the year. So will there be more impact from these 2 building blocks in the quarters to come? And then very lastly, when you talk to your corporate clients these days, is there anything that would indicate that they will get more restrictive on travel budgets going forward, like down trading from business class to premium economy or less travel in general, anything can see on that. Thanks. Yes. Starting with the unit cost, No, there's a steady cost improvement. And as you saw in the Network Airlines, we had 1.9% reduction in the first quarter. This is basically coming from all the P and L items we have spoken about earlier. So there's no specific phasing of those unit cost. We speak to our corporate customers. No, there is indeed no change we see very strong demand, both when speaking to them, so to say offline and looking into the booking numbers, So I think that is indeed continuing and a very strong, so to say, premium part of our cabin. There is indeed no change in Austria when it comes to the agreement of the wages, which will have any impact at all on our guidance. So the agreement in Austria was in line with your expectation. That's what you're saying. Indeed. Yes. Okay. Thanks. Next question comes from the line of Roxandra Haraldouza with Kepler Cheuvreux. Please go ahead. Good morning. Three questions, please. First time, a little surprise at yields in Europe were down 2.8% currency in Q1. With strong year over year capacity growth of low cost carriers during the summer flight schedule in Frankfurt, Turkey and Vienna, how shall we see about yields in Europe in Q2 and development, particularly in March. How should we think about the load factors during the remaining of the year? And then I reiterate the question I had in the last conference call adjusting for the fuel cost because the fuel guidance already accounts for currency changes. What currency impact do you expect this year? Thank you. Okay. Yeah. Starting with the currency, the currency impact is actually pretty much a wash. Clearly, it didn't it does have an impact on our yields, but we also have large savings predominantly, of course, when it comes to the U. S. Dollar saving on the fuel. So overall, for your modeling, I think this has not a significant impact. Looking at seat load factors going forward, now of course, in the months of April, you will see that we have an Easter effect, which means that We have less loads in the month of April, but a higher yield when you come into the month of May due to the the all the weekend holidays being moved. Then of course, you see the effect that there are higher seasonal factors, but lower yields. So overall, this is really much depending on which quarter you look like. You look at But overall, for the full year, as we have said earlier, we think that our RASK is going to be stable. And that's something we are indeed looking at going forward. You did have a, I think I actually covered both your horses by that one. Yes, you were asking about yields in Europe. I think that has been covered by Ullik with his answer as well. Okay. From your answer, is it fair to assume that, the positives you have from currencies on fuel costs are fully offset the negatives you have excluding fuel costs? So as I mentioned, in the currencies, indeed, the wash for Nufthans as a total because the currency impact on the yield is being compensated by the cost savings we have, specifically maintenance and fuel. The next question comes from the line of Damian Brewer with RBC. Please go ahead. Applications from previous questions. James at Exane asked about the CapEx guidance, but you didn't give us a new outlook Could you provide that please? Secondly, Eurowings, seems that there's about a 10% CASK differential. So it looks like there was about an million sort of one off cost in Q1. Again, I think Jared asked, but could you clarify what you expect that to be in Q2? And then a third question, we we the full year yield outlook or other RASK outlook is stable, which rather implies that H2 would see a decline. The logistics business outlook is for a decline in EBIT. Despite a 50% incremental margin in Q1 and they're still relatively buoyant if normalized market. So clearly something is going to go wrong in the second half of the year. What's stopping Lufthansa being capable of compounding earnings growth? Is there still inherent problems within the group? Or is the company just not capable of compound EBIT growth? Starting on the CapEx, well, indeed, our guidance is 1,000,000,000 in CapEx for 2018. So that's not a change in that when it comes your million number you mentioned there is not a bad assumption. When it comes to our guidance and our total EBIT being slightly below last year for the full year, it is just a function that indeed, we are getting much tougher comparables in the second half of the year. Nothing else. Okay. But just to be clear, economies do compound in their growth. You're saying that Lufthansa's earnings can't compound? I'm not sure I do even understand your question. Clearly, our revenues are increasing. But as we said earlier, we had a very, very good second half of the year. And there are fuel cost against us. And some of that, we can compensate by better operational performance, But at this stage, we think it's prudent to say that it's going to be slightly below last year when you look at the full year guidance. Thank you very much. Next question comes from the line of Malte Schulz of Commerzbank. Please go ahead. Yes, good morning. Two questions are left from my side. The first one is, if you look at your lower organic growth guide now. Will it affect also on the network airlines then evenly or do you plan to shift some of the more capacity rather to switch all of Tumblecore if you have better margins there? And the second one is, are you currently also already looking at alternative to the A320neo, if the problems are more severe than previously expected? When it comes to the Network Airlines, our capacity will short term not change. We are course, short term shifting capacity between the different hubs, for example, between new in Frankfurt, where we have, looking at the airport, where we have the best quality and the best pricing of the best cost. But otherwise, there are no large year changes going on there. Your second question regarding alternative to the A320neo, That's a problem for the whole industries. That is something which I think our supplies are working very hard to be resolved And in the meantime, we have to scramble with getting in capacity from other sites short term and get these compensation costs, which I spoke about earlier, but this is an industry problem, which will not change overnight. One follow-up if you're allowed. Will the compensation more than or at least offset the higher cost you have from wet leases or so and if there are other methods to get capacity? Well, I think there's more question between us and Airbus. Thank you. Thank you very much. From the line of Nuala McMahon with Goodbody. Please go ahead. Hi, morning. Just two questions from me. The first comes back to a question that was asked earlier on yields in Europe. So yields come in down 2.8% in the quarter. Can we get a bit more color on the reasons for this result given you had the benefit of half an Easter in the quarter? Specifically interested to hear how domestic German yields are performing? And then secondly, on North America, you'd quite a turnaround in your yield performance of 4% this quarter. Just wondering what were the main drivers of this? Yes. Starting with the yields in Uroland and Germany. What we see, of course, is a very large growth of Eurowings and Eurowings indeed have lower yields than Lufthansa Passa and the rest of the airlines So just due to their very strong growth, disproportionately, there is a mix shift when it comes to the yields. In terms of North America, we have strong trading in North America. There is underlying good demand and a good load factor. But of course, as you rightly say, there is a ForEx headwind out of U. S, but there is indeed also a very good demand out of U. S. So overall, we are very happy with the North American Development. Thank you. And just one follow-up question, if I may. In terms of the mix effect associated with Eurowings, what percentage of that was is included in the minus 2.8 percent? And what underlying weakness? That number I have to come back to you on. I don't have that in my head. We have a follow-up question from Annal Bates with Deutsche Bank. Please go ahead. Quick one. I was just wondering, if you could let us know, firstly, have you seen any benefit from the strikes at Air France or in France generally? Or is that really quite marginal? And secondly, did Q1 see any particularly material impacts from bad weather in Northern Europe or is that also relatively small? No, there are no real large benefits from the strikes there, France. And being a swede used to bad weather, a high single beam as bad as it's always been. So there's no real change there. That was the last question we had. And maybe I'll link some closing words. Yes. Thanks, Andreas, and thanks to all of you for joining our call today. And as I said before, we are indeed satisfied on how the quarter went. The unit cost reductions and the network airlines were very visible and will continue in the coming quarters. Eurowings will, of course, see further significant well, of course, in the coming months But this will not negatively impact our overall cost reduction targets of the 1% to 2%. Trading was good, and we'd expect in this to continue for some more time, but the comparables are, of course, becoming tougher later in the year. Nevertheless, we feel we are on track for what we have planned for this year. And I'm happy to discuss this with many of you in the coming months. Thanks for today. Bye bye. Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Have a pleasant day. Goodbye.