Good morning, ladies and gentlemen, and welcome to the TUI AG conference call regarding the COVID-19 update and FY 2020 9M results. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your hosts, Fritz Joussen and Birgit Conix. Please go ahead.
Good morning, everybody. We are in a little bit of a special situation, not only because of COVID, but also because we are in different places everywhere. Birgit is in Belgium because of quarantine requirements. I'm in Düsseldorf, and we have our central team in Hanover. It's a little bit of different logistics, but I think we can make it work very well. One of the changes we are doing is actually that I have to announce which pages are on, because then it's flipped through by our assistant. We turn to page number five. I think what we can say, in the last quarter, we have actually done a successful restart of operation, and particularly then leading into July as well as August. The restart was of a size and stature that it generate immediate working capital inflow.
As you recall, one of the bigger problems was actually to repay customer prepayments, and that is something which now is actually fixed. Customers have actually received the repayments, and we are assured on that. Also we have enough working capital inflow to work on that. What we also said and what we did was we reduced significantly the cash fixed cost to a level of below 70%. Therefore, we expect Q4 based on what we see. The quarter which has now started July, August, and September to be broadly cash break-even on operational level. Anyhow, the situation is still volatile and there are the travel warnings coming in or going out and advices coming in and going out. Therefore, we applied for a stabilization package with the German government and agreed yesterday an amount of EUR 1.2 billion.
If we need it or don't remains to be seen. Plan for the worst and hope for the best. We are now in a situation that we have secured enough liquidity for winter and the time thereafter. That is something which is really reassuring, and that's of course, something which now lets us focus even more on operational level, which is important. Booking numbers itself, particularly for summer 2021, are extremely strong, 145% up compared to the previous year. That's a very good indication, and I come to that in the detail, how that unfolds into new booking and also amendments from this year. The good thing is also, by the way, that I want to say, even with the amendments, the price per booking are up. It's not only big volumes, but it is also on a very good price level.
Assuming that actually everything goes well in 2022, we see a normalized business, which we believe we will have more debt. Of course, we will look at the balance sheet restructuring. Particularly also we have launched this 30% overhead cost-saving program, and we are now disclosing that we will be doing more than EUR 300 million per year structural cost savings. I have brought with me major projects, a couple of projects, five projects, which are carrying almost EUR 300 million of the more than EUR 300 million. Therefore, it's also good for the follow-up and future disclosure of our savings program. That's opening.
When I look right now on page number six, we have been the first to start the business in many instances. That was mid of June, particularly from Germany through the integrated model we could agree, for example, in Mallorca, but also Portugal, to open the corridors, what we call the safe corridors. We were actually the first one also opening hotels worldwide. The first one right now doing, or one of the first one, I have to say there is one other small cruise company associated with it. Of the major cruise companies, the first one to open the cruise business again. We could actually through the integrated model, make integrated decisions to restart the business that was helping a lot.
When you turn to page number seven, what you see is that June was small, but in July, we actually went to 2,300 flights. In August, we are now at 4,200 flights, which actually will be even increased a little bit in September. Our program will be 30%. When you turn to the next page, I think it's even more reassuring what you see for July, and these are the numbers for July. You see we had 563,000 customers already. The thing which is very important as well, our book load factor was 89% on the aircraft. When you start the business, the most important thing is that you get the demand supply equation right in order to manage your cost. Of course, your cost will increase because you are using the fuel, you are unfurling the people and so on.
You need to do it in a way that's adequate to your demand. We had a load factor of 89%. August will be also very good. That is, as we believe, a result of our integrated model that actually the capacity planning and the control of the whole value chain allows that to happen. Now, that said, turning to the next page, I think another reassuring message we believe is that health and safety protocols and relaxing holidays are not a contradiction. We agreed with the destination countries and also with our partners, the extensive health and safety protocol, which you see on the left. Still, customers give us a rating for the average rating for customers for the holidays has been 8.5 of 10, so that is very high. A couple of remarks and quotes from customers.
The first one is saying, relaxing holidays are good holidays. I mean, yes, it is a little bit more empty than it has been before, but what customers value a lot that we take care of them, so that they feel safe. They are attentive to their health, and they feel that actually we are taking care of it adequately. Adequately means still they have enough freedom, still they have actually a nice and relaxing holiday. When I turn to the next page of my operational update, you see on the page 10, we had 1.7 million new bookings since the travel bans were lifted, since June. You see the seasons on the top left. New bookings for summer, 1.050. Total net bookings, so including amendments and older bookings, so the bookings which have been in the system, 2.4 million.
That is 30% of capacity. You saw our load factor, 89%. I think we are in a good shape. The bookings come in much more short term, so the new bookings will increase, because we have good visibility now for August, but September are still a lot of bookings coming in. Winter, you see that we will increase our capacity to 60%, but it is 60% of winter capacity, which is, of course, usually half of the summer. Therefore, we stay on a very constant level, if you like. Here you see the bookings need to catch up a little bit. That is not a problem. Quite on the contrary, that is a result of also the shorter booking cycles, which we see in summer as well. I think the very promising thing is then summer 2021.
Summer 2021 total net bookings are EUR 1.5 million. Last year, it has been EUR 630,000. We are up 145%. Even new bookings since June is EUR 430,000. Last year has been EUR 380,000. You see that even on 100% capacity level, we would be doing well. What we also do is we are careful. Particularly through also the Boeing arrangements we have been doing, we will plan our aircraft capacity and also commitment capacity in hotels to 80%, because this actually puts us on the safe side. We believe if the market will go on and it will be the booking like we see right now, it will be easier to extend capacity than if for whatever reason, in January, the bookings are not coming in as we think and so on. This advantage actually will be fading away, which we have right now in the systems.
It's better to be on the 80% in order to be profitable next year, guaranteed profitable next year. This year, liquidity. We have secured liquidity lines. Bookings for summer are pretty good. Load factors for summers are very good. Operational cash break even in Q4. Summer 2021 is a stunning number. It is, I think, almost 15% of capacity sold. It's not 1.5. It's not very low. Quite on the contrary, that, I think, is very reassuring messages. That said, I would like to hand over to Birgit in Antwerp to lead you through the financial section of our presentation.
Thank you, Fritz, and also a warm welcome from my side. I'm pleased to talk about the financial achievements during the standstill and the restart, as well as our current financial priorities. Let me start by saying that we have successfully delivered the previously announced cash fixed cost reductions of over 70% during the lockdown, and we also demonstrated our strict and rigorous liquidity management. Second, the restart of operations has led to an immediate inflow of working capital and is positive to our operational cash flows. The Boeing compensation has been finalized and the Hapag-Lloyd transaction proceeds are secured. We are, of course, like Fritz already alluded to, equally pleased to say that we agreed the additional liquidity headroom to manage the unprecedented crisis.
Going forward, our full management attention will be on rebuilding a solid and robust financial profile, and also it will all be about improving our operating effectiveness with the Transformation Program. Let me now further detail these achievements. You see that on the previous slide. You see that on the first slide detailing the German federal government facility that we secured. We were pleased to announce the agreement, as Fritz already said, for an additional headroom of EUR 1.2 billion. As Fritz also said, with this new stabilization package, TUI will have access to additional liquidity, which further strengthens our position in this volatile market environment, and it also better positions us in case there is a further period of disruption in our industry.
The liquidity headroom is agreed as a combination of debt and also an equity-linked instrument, as you could see from our communication yesterday. The package consists, therefore, of a further KfW loan, increasing TUI's existing revolving credit facility by EUR 1.05 billion. The drawing of the additional KfW tranche is subject to an issuance of a convertible bond with a volume of EUR 150 million, subscribed by the German Wirtschaftsstabilisierungsfonds, WSF, by the September 30th, 2020 at the latest. Furthermore, it is subject to an agreement with the bondholders of the EUR 300 million senior notes due October 2021 regarding a covenant waiver for a potential future limitation of indebtedness. On the next slide, you will see the details of TUI's government stabilization financing.
First, let me remind you that back in April, TUI was the first company to successfully receive the approval for a EUR 1.8 billion KfW bridge- loan facility from the German state, and this was just 10 days post application. The EUR 1.8 billion and the EUR 1.05 billion are an extension to the existing EUR 1.75 billion revolving credit facility. Both covenant net leverage ratio and interest cover relating to the existing and increased RCF will be suspended for the next 18 months. Covenant testing will resume in September 2021. The new stabilization measures comprise also a new element, which is a convertible bond for an amount of EUR 150 million that will be subscribed by WSF subject to the conclusion of a subscription agreement. The bond will have an initial term of six years, and bears interest at a rate of 9.5% per annum.
The remainder of the terms are described on this page. What I would like to point out is that the access to this facility will provide us with sufficient liquidity headroom in case we see a prolonged period of disruption or a second lockdown. As you can well imagine, during the period of crisis, the finance team has run through various COVID-19 scenario analysis, and I would like to share our most recent assumptions with you. The first scenario is our restart scenario. The ramp-up of operations is expected to work as communicated, and we see a continued positive inflow of working capital. In this scenario, we expect that the so far secured financing instruments give us sufficient headroom for the winter season to come and beyond, and it is unlikely that we need to utilize a second stabilization package.
A second scenario assumes an environment where the operational ramp-up is slower than expected, and where negative news flows about, for instance, increasing infection rates, et cetera, might have an impact on consumer confidence. Here we expect that we might need to utilize the second stabilization package to cover short-term liquidity gaps. We calculated a third scenario. This assumes major disruptions or a second lockdown, leading again to the suspension of large parts of our travel program, as well as an obligation to refund our customers. This is a scenario where we expect to utilize the stabilization package. In summary, the second stabilization package secures our liquidity needs even in a scenario of a second lockdown. Let's move to the next slide then. This is on Hapag-Lloyd.
The successful closing of the sale of Hapag-Lloyd Cruises to our TUI Cruise joint venture will enhance our liquidity position by around EUR 700 million. We received the first amount of approximately EUR 300 million of disposal proceeds already in the third quarter, and we received the second tranche of around EUR 320 million post the transfer of the ships in mid-July. Around EUR 70 million are to be received over the next two years. In Q4, you will also see the deconsolidation of around EUR 400 million of net debt and debt-like items. Additionally, we will also report a positive P&L effect in Q4 as we anticipate a disposal gain of EUR 400 million based on the effective valuation terms of the transaction. This transaction is part of our asset right strategy and combines Royal Caribbean's expertise with TUI's strong distribution power.
Let me move on to the Boeing agreement. As promised, we managed to agree a comprehensive compensation agreement with Boeing, which strengthens our liquidity and, equally important, also allows flexible fleet planning in time of the pandemic. As you know, the specific details of the agreement with Boeing are confidential, so I cannot really share them. However, they consist of three key elements. A staggered cash compensation to be received over the next two years, which covers a significant proportion of the grounding cost. A deferral of 61 aircraft by an average of 25 months, and this enables our fleet capacity to be flexed over the next two years, which is, of course, useful in the current situation. Credits against future orders. The deferral agreement will also reduce our financing requirements of the next two years whilst we rebuild our financial profile.
We are quite proud of this successful deal in a difficult market environment. This brings me to the liquidity position on the next slide. Yes, thank you. As already mentioned, during my introductory remarks, I'm very pleased to say that liquidity developed in line with expectations. During the half-year results, we talked about a reduction in liquidity from the March 27th, 2020 to the May 10th, 2020 by around EUR 1 billion. The main buckets were the repayment of commercial paper and bilaterals, customer refunds, and operational cash out. Since then, we have managed our cash outs for customer refunds successfully.
We executed on our cash fixed cost reduction targets, the ones that we discussed with you in the previous call, and we delivered on the promised cash-ins like Hapag-Lloyd and Boeing, because there were a lot of questions around that as well during the call last time. The positive contribution as per our restart announcement is well on track. We are also pleased to communicate that if the current scenario continues, we expect to be broadly operationally cash break-even during Q4. I will come to that on my next slide. Let me summarize first. On the August 12th, 2020 we can report EUR 1.2 billion of cash and available facilities, and pro forma, adding the new government-backed funds to with cash and available facilities would amount to EUR 2.4 billion.
This liquidity position makes us well-placed to cover our upcoming winter needs and also beyond, even in case of a second lockdown. With that, let me go to the next slide. At our H1 results, we discussed how the exceptional shutdown required significant group-wide cost reductions. Having reduced costs to an absolute crisis minimum, we expect a cash fixed cost outflow of between EUR 250 million-EUR 300 million per month. Additionally, we expected payment obligations below EBIT, such as interest, pensions, and debt repayments for around EUR 50 million per month. We also said we anticipated customer refunds of between EUR 250 million-EUR 300 million, a total of EUR 550 million-EUR 650 million per month. Under a restart scenario based on our current plans, we expect Q4 full year 2020 to be broadly cash break-even on an operational level. This is the cash view, including working capital.
For Q1 of fiscal year 2021, we expect a muted cash out of low single digits, EUR 100 millions, compared to normal years based on a less pronounced liquidity curve. Looking ahead, I will explain it on the next slide. Looking ahead, we expect full year 2021 to be a transitional year. As consumer sentiment for travel recovers, we expect a more normalized working capital cycle in fiscal year 2022. To summarize, we reacted quickly to reduce costs and to secure liquidity, and I can assure you, our focus on strict liquidity management will be continued. That leads me to the slide where you see the liquidity profile. As last time, I would like to guide you through our assumptions and how the results is expected to impact the seasonal swing.
You can see this from this illustrative graph again, the partial restart, and that is the light blue line, has led to an immediate inflow of working capital and is contributing positively to our cash curve compared to a standstill or a lockdown, and that is the dotted light gray line that you can see there. The main reasons are the reduced customer refund obligations, cash inflows as our customers are committing for summer 2020 and future seasons, and then a lower outflow of hotelier payments due to smaller summer business, and also a consumption of certain prepayments that we already made. Our liquidity enhancing measures, and these were discussed on my previous slides. Obviously, what I mean with that is a strong focus on cash and cost.
As I already mentioned, we expect to return to a more normalized working capital cycle in fiscal year 2022, when the consumer sentiment for travel is expected to recover. That brings me to the next slide. Yes, thank you. Now that we secured the necessary liquidity headroom with the additional stabilization package to cover risks, even in a case of a second lockdown, our next financial priority is to rebuild a solid financial profile. It does not sound so long ago when we presented our full year 2019 results, but also there, we said that the overarching target of the capital allocation framework is to maintain a solid balance sheet with a gross leverage ratio in the range of 2.25x -3x . This COVID-19 pandemic resulted in the withdrawal of our guidance, and it remains withdrawn due to the continued level of uncertainty.
This priority remains the same, and we need to rebuild a solid balance sheet profile post the COVID-19 pandemic. For this reason, TUI Group will now evaluate options to achieve the optimal balance sheet structure to support the business over the long term. With that, I think it is the right moment to hand to Fritz, because the Global Realignment Program that is underway is very integral part to that, and we can also show that we will work on operational effectiveness.
Thank you, Birgit. Very clear. When you look to page number 21, you see the components of our realignment program. It's not only about cost, it's also about capital intensity, and it's also about digitalization. Particularly when you think about capital intensity and digitalization, this has been part of the strategy which we have communicated to you already before the crisis. We wanted to do less investment on asset right strategy, as we called it. Part of it was the Hapag-Lloyd integration into TUI Cruises, where we generated significant proceeds, very good valuation, good deconsolidation of debt. Of course, we halved EBIT, but at the same time, synergies, we said would take care of it, that in two or three years, we would be at EBIT level of 100% again. That was actually before.
Also, the digitalization was an integral part, become a digital platform business, including the full digitalization of processes and a digital-first mentality in our operational business. I come to that in a minute. What is new is actually the reduction of cost, and we have communicated 30% less overhead cost. That was the target, impacting potentially 8,000 roles globally. How did we want to do it? How did we communicate to do it? Consolidation of IT structures, one process across all markets, merge and task and organization across the group. I will communicate in a minute what that actually will cost. I will also communicate major five initiatives, which actually are the cornerstones of that program. These five initiatives I will talk about already generate close to EUR 300 million yearly savings.
Everything else which we are doing on top of it will be bringing us to the way above EUR 300 million. We will, like in the synergy report, and some of you might remember of the merger of TUI and TUI Travel, communicate the savings coming forward. We talk about capital intensity. It's not that we sell hotels, or it's not that we sell cruise ships, but we will work on our capital structure, and we will work less, introduce or invest less. That's something which is also clear. There will be over capacities for the next years. To level demand with supply, it is anyway a good thing to invest less. Part of it was also, of course, the right sizing of airlines. We talked about the 20% less, and you saw it in the summer 2021 program, 80% of previously planned capacity.
The agreement with Boeing enables to do that, particularly in Germany, we reduce our airline capacity to what we call the winter capacity. We talked about the divestment of non-profitable activities, maybe the most prominent being France. Drive digitalization. Digital platform businesses thinking digital first, particularly you will see that in the extra significant reduction in workforce because all the customer journey processes, centered around the digital processes, particularly the app where we increased investment. We increase investment in IT while decreasing overall investment in IT, and even within the investment, decreasing legacy because we now have less business here, it's easier to do that. More or less all investment in IT goes into our new platform. Important here is that we are striving to save cost and enhance quality. Just saving costs are not the right thing to do.
We are a premium brand, we increase quality, and that's only possible because we think digital first. Overall cost reduction target to be over EUR 300 million first benefits in 2020. You can see the ramp-up of the program on the next page. You see also associated SBIs. The full benefit will be achieved on a running rate basis financial year 2023, but significant parts already in 2021 and 2022. When you look at now, what is this? What are the major cornerstones? You see five main projects, which I want to talk very briefly about. First, TUI fly in Germany. We have overcapacities in Germany in the aviation market. We communicated to reduce around 50% of the fleet. That actually also reduces headcount by half. Transformation plan presented in negotiations. The consultation have started. We have the backing through our reduced order book.
That is something which is on its way, and is in the execution. TUI France restructuring rollout, we have a mandataire ad hoc appointed. This is actually agreed even with the government. That is particularly, also a reduction of overhead, but also reduction of own shops. Also, evaluation of partnerships, at least 500- 600 roles reduced. This is actually in rollout and progressing now. DX, the restructuring program, we used to have 10,000 people, now we are down to six. As well as another 1,000 roles are being addressed. It's all, as I said, digital first. We have increased our IT capabilities, particularly the in-app development, customer care in-app, cross-selling in-app, CRM in-app. That is something which is more proactive and also we see that creates better customer satisfaction. Also reuse of the app is very high as well. The technical maturity is there.
Customers also, through the lockdown, are more used to actually use digital services, and we will take the advantage. TUI UK, the closing of 166 high street stores is communicated. That actually will then generate the associated savings, and is a big issue. Of course, again, here, people are more used to online shopping because of the lockdown, and we are taking the advantage. On head office, we will actually integrate all functional areas under one leadership. That is actually reducing duplication, streamlined service delivery, quality improvements. We can more automize because of the bigger scale. Restructuring plan is ready. It is already communicated to social partners and that's actually underway and committable. Only these five projects actually have a target saving of just close to EUR 300 million. We commit to above EUR 300 million. The 30% level would be EUR 350 million-EUR 400 million.
To illustrate, it's not only a dream, but it is actually very tangible projects which are in execution, we put this slide up. Maybe come to the quarter. I will just very briefly open hand over to Birgit, maybe just page 25. I just want to very briefly from my perspective, say a short word before handing over to Birgit on the bottom left box. When you look at the bottom left box, a -EUR 1 billion based on no turnover. That contains EUR 400 million, Birgit will talk about it, mainly through impairments because of the higher WACC we have right now. That's clear. I mean, the situation changed, the WACC changes, therefore, actually the valuation changes. Operationally, we talk about the EUR 700 million.
That dovetails quite nicely, I think, to the overhead cost reductions of more than 70%, which we communicated last time to you. As a sanity check, it's very clear that you see on the top left box, the revenue was minus 98%, of course, until end of June. Just the pilot projects, actually were operating in a limit of airlines traffic. Other than that, our business was in the total lockdown. I think it dovetails quite nicely to the communication we had done before. Maybe Birgit, do you want to take over now for actually the section here?
Yes, that's fine. Thank you, Fritz. Maybe let's move immediately to the next slide with the bridge. Here, as you can see, we saw a very successful first five-month period with a EUR 100 million improvement versus the same period last year. Here, on this bridge, we singled out the impact of the COVID-19 pandemic to our year-to-date results, for an amount of EUR 1.2 billion. Here I would like to highlight again, our achievements on the fixed cost reduction. We managed to reduce cost of sales in the third quarter by 78%. This demonstrates how quickly and efficiently we can manage down our operational gearing in an absolute crisis situation. I will then just quickly go over the impairment because thank you, Fritz, you already talked about them.
I can tell you for these impairments, the EUR 410 million you see there, in detail, we needed to impair EUR 200 million in hotels and resorts, EUR 133 million in our cruise segment, and finally, EUR 88 million for Corsair. In addition, we had to absorb an impact from the COVID-19 related loss for overhedged open contracts as a result of our business standstill and our reduced capacity assumptions. A topic that you probably remember also from last time we spoke, overall the net hedging ineffectiveness for the nine-month period amounted to the EUR 189 million. Let me quickly move over to the income statement. As last time, I will focus on the year-on-year comparison with pro forma IFRS 17 figures for the nine months of the fiscal year 2020.
I will keep my comments really brief as all figures are impacted by COVID-19, which makes a more detailed analysis somewhat meaningless, you could say. Turnover, yeah, Fritz talked already a bit about that. Let me immediately move to the net adjustments of EUR 220 million. It's driven mainly by restructuring costs relating to the Global Realignment Program, which we announced. The nine- million adjustments are composed of the following: EUR 217 million of restructuring costs, COVID-19 related goodwill impairments of EUR 53 million, the usual purchase price allocation of EUR 40 million, and also a EUR 90 million disposal gain from the sale of the German specialist business. Net interest results increased by EUR 31 million, and this is predominantly reflecting the drawdown of our RCF facilities to support the liquidity during the business standstill.
Moving to the cash flow statement, in this unprecedented situation, managing our cash flow and liquidity is the number one key priority. You will see per below cash flow, how quickly we actively address the cash items in our remit. Here you will see the working capital outflow that is the biggest item here. It reflects the customer refund obligations and the reduction of new bookings inflow during the COVID-19 business standstill for the majority of Q3. I think with that, the rest is more self-explanatory. The net investment maybe here still to make a small point that we reduced this significantly, immediately. Actually, we put all our projects on pause, to enhance liquidity. With that, let's move over to the slide on net debt. Thank you.
This time I will focus my comments on the net debt bridge from H1 to Q3 on the right-hand side of the chart. Net debt before lease liabilities increased by EUR 1.2 billion- EUR 3.8 billion. This is in line with our H1 communication of an expected EUR 550 million- EUR 650 million cash outflow per month for the cash fixed cost and the customer refunds. The outflow was mitigated by the received cash proceeds from our disposals. The position was also partly reduced by the Hapag-Lloyd reclassification as a disposal. Including these liabilities for the first-time adoption of IFRS 16, the nine-month closing net debt stood at EUR 5.9 billion. Let me summarize this financial section. All in all, the Q3 financials are, as you see and know, heavily impacted by the COVID-19 pandemic.
When the crisis started, we were able to analyze the situation quickly. This is also how we got through the first agreement with the German state only 10 days later, because we proactively analyzed. We also secured liquidity in now two tranches, and we executed rigorously on our cash reduction targets. We are also proud to confirm that the restart delivers on what we promised, and it contributes positively towards our cash costs, so that we expect to be cash breakeven on an operational level in Q4. As already mentioned, our next priority will be to rebuild the optimal balance sheet structure to support our business over the long term. Last but not least, as a reminder, our guidance is withdrawn, and the dividend payments are waived. With that, let me hand back to Fritz.
Thank you, Birgit. Just for me as a recap and summary, focusing on page number 33, just the white stripe line on the dark blue box. After a full breakdown and three months of no business at all, the integrated business model allowed us to have a quick restart and very efficient restart. 89% in the first month, 89% of a load factor. When you start from zero, more than a half million customers, I think speaks for itself. We take the advantage of the COVID-19 situation to accelerate our already initiated digitalization strategy. Ruthlessly, we limited all investment. There is no investments going out. Digital was increased as well as a focus away from legacy structure. More than 90% of our investments are now going into the future digital platform, we talked about the effect.
When you look at the summary of the next slide, this puts it very well. I think the restart more or less was about liquidity management, which is now finalized in terms of getting the access to an additional credit line, which we might or might not have to use. It is important to put certainty and reassurance into the business, just in case. Plan for the worst, hope for the best. Now we work on the balance sheet. That is important as well. When I see transition year 2021, our goal will be the return to profitability and actually finalize the digitalization, so the transformation agenda. By the way, I think when I look at booking of up 145%, there is a very good chance that we will be fine.
In year 2022, we believe, provided the vaccine is there, we will have back to normal, a more consolidated market. The demand will be back, and we will be EUR 300 million, hopefully more than EUR 300 million less cost, so more profitable. That means leaner, less capital intensive and more digital business. I think we will have, in hindsight, seen as using the crisis as a chance. That's it from my side as well. Now I would open the floor for questions. I will concierge the questions between myself, Birgit, and also the team at Allofa, and please shoot.
Thank you. Ladies and gentlemen, The first question comes from Jamie Rollo from Morgan Stanley. Please go ahead.
Morning, everyone. Thanks. I've got three questions about liquidity and cash, please. The first one, the June cash position is EUR 2 billion. I assume that's the same as the liquidity position as well. Yesterday, that was EUR 1.2 billion. It looks like EUR 800 million of cash burn in about six weeks. Your Q4 guidance, obviously, for a lot less than that per month. What am I missing there? I'm assuming the remaining hybrid loan proceeds are not in the EUR 1.2 billion. Secondly, if I could push you a bit on the cautious scenario. Slide 19 shows the liquidity dotted line dropping and then stopping at the end of Q4. Could you talk about for the first half, if we do see another lockdown, is it fair to say the maximum monthly EBITDA loss is now maximum EUR 230 million-EUR 240 million?
How much of the EUR 4 billion customer deposits are for that winter season? If you could finally, on that point, talk about the monthly interest costs now or even the annual interest costs post the additional KfW loan. The final question, I guess summing it all up, Fritz, you have interviewed talking about a rights issue. Could you try and size that for us? Should we assume that should come by the end of September for the going concern account and ATOL license purposes, please? Thank you.
Yeah.
Okay. Maybe Birgit, do you want to start?
I think I noted all your questions, but it's a lot to follow, and I have no assistants to do multitask on the question. I may have to ask you to repeat. The first question was about how do you get from the May half-year results to EUR 2.1 billion to the EUR 1.2 billion that we showed on the liquidity development. Is that correct, Jamie?
Actually, it was the end of June balance sheet cash figure of EUR 2 billion.
Yeah.
But I'm assuming that-
Let me take it from the EUR 2.1 to the EUR 1.2, and that will give you an indication. If you look at the starting point of EUR 2.1 billion, then you add actually back the Hapag-Lloyd proceeds and also Boeing, which gets you to EUR 2.8 billion. From that, you take the run rate of the refunds for three months and also some customer deposits. You get to around EUR 2 billion, and then you actually need to still deduct the standstill cash outs for three months, and then you get to the EUR 1.2 billion position. That is how this actually reconciles. You were asking a question about the liquidity profile, I believe. Here, what happens is what you see is a less pronounced seasonal swing versus what we normally would have. We show that during the previous results presentation.
Now you see that light blue line, which is more or less, it's going down actually slightly. That is because we have, of course, the cash-ins in the fourth quarter. The fourth quarter is broadly cash neutral on an operational basis. Also you see, what we said earlier, that it's a low single-digit hundred cash-out, because you also have some other effects. What we also can do is we can reuse some of the customer prepayments that were meant for summer 2020. We can reuse them for the summer 2021, so we have less of them. We also have, of course, less supplier payments because we had a much smaller summer. That's why you see the liquidity curve develop as it does.
For the first quarter of FY 2021, normally you would see a really major dip, of course, there are less supplier payments as well. That is what you see in the case of a situation with the information that we know today of the pandemic. Of course, nobody has a crystal ball. Should that change, with that, the liquidity curve change, that's why we also have secured now the second tranche of liquidity so that we have enough liquidity to cover all of these scenarios, as I said earlier during the presentation. There were other questions I think you asked on a potential rise issue. With that, let me tell you, we are now evaluating all the potential options for an optimal balance sheet structure.
This is also the transformation program that we just launched because we want to be much more effective going forward. With that, over EUR 300 million cost saving run rate commitment, That will substantially change our cost base, and that is a plus, going forward. Also on the assets, we will make a change, and we already announced that last time, to be more asset light. You saw that also with the Hapag-Lloyd transaction. That also helps. Then, of course, we will further look at other options. We need to evaluate the full spectrum. Is that answering your question?
I think there was a question too on interest cost, right?
Oh, yeah. On the interest cost. Okay. Here, I cannot really go into detail on the interest cost also for the second tranche. That is something we are not. It depends on whether we draw upon the second tranche RCF, of course. Indeed, our interest cost will go up. That is kind of normal if you do the math. It all depends on also how quickly we can repay the debt and whether we need to draw upon the second tranche or not. I think you've seen it also from now our third quarter results. You also already saw the increase in the interest component.
Sorry, you didn't quite answer my questions. Could I just maybe rephrase them? The first question was actually about the Q4 cash burn, because you've given us the June cash, end of June, not May, end of June, EUR 2 billion, and you've given us the middle of August liquidity, it's an EUR 800 million drop in the fourth quarter in six weeks, which is more than the whole Q4 guidance for cash burn. That was that specific question. The other question was looking forward on the first half, what is the maximum EBITDA loss now you've taken the fixed cost down? I think it's EUR 240 million, just confirm that. How much of the EUR 4 billion customer deposits are for that six-month period? In other words, what could the worst-case outflow be on that, please?
Maybe my line is a bit bad. On the last I didn't get. On the fourth quarter, what we did say, and I will just repeat that, is that on an operational basis, we are cash neutral. Of course, there are still other elements which are not operational and some net items, and there we can assume, and I will repeat it again, like the low single EUR hundred millions. That is what I can say about that. I'm not sure you'll see that when we report back in December that we will again deliver upon what we said. If the situation, of course, stays as is currently with the information that we have on the pandemic. If something dramatically changed, then that may change. Based on what we know today, it is what we guided for.
Why is there an EUR 800 million cash outflow in six weeks?
Let me remind you. The July cash outs are, in particular, refunds. This is phasing also, so including June and supplier payments, and we also have supplier payments which relate to the restart of the business. What I said when I talk about the Q4, then that is more in general, if you would divide it by three months. Of course, you are phasing from one week into the other. We're talking about cash and not about for instance, EBIT. That's just phasing of some items. Especially with refunds, you can imagine that that is not so clear cut by weeks.
I mean, Jamie, to be absolutely clear. When we talk about operationally break even, we don't talk about the historic burden of a refund of customers, which we had to bring assured in July, as well as supplier payments. The absolute majority of actually the liquidity development in July was both of these. They are overdue suppliers and refunds. Of course, now we are assured. This will be not an issue. Quite to the contrary, now we actually get more cash in than actually we refund through new bookings. When we talk about operational break even, that's what it says is that the operations, full operations actually are covered by the operational business which we have in that period.
That's also the reason why in Q1, as you see on the slide, the situation is slightly deteriorating again, because then you get a slightly bigger summer business with a phased cash out to suppliers, namely hoteliers. That actually reduces the liquidity position again. Particularly in July, but also beginning of August, we still had a significant refunds for customers and suppliers.
Got it. Can I rephrase my last question? The question was about the timing and the size of a potential rights issue.
Yeah.
expect that in the second half?
Yeah. Can I ask for your patience here a little bit? Because, I mean, the issue is, of course, in a highly volatile market, what we do is we will be prepared to take the chance. I mean, the message we want to say is we know that our balance sheet needs to be restructured. We will take the chance to do that. Of course, when and exactly how much will highly depend, of course, on the volatility of the market as well. The rights issue is, of course, one of the components. We have an approval of last AGM, but of course, that needs to be stacking up. Please allow us not to do comments on that issue now.
Okay. Understood. Thank you both very much. Best of luck.
Okay. Thanks a lot.
The next question comes from Adrian Pehl from Commerzbank. Please go ahead
Hi, Adrian.
Hey, good morning, everybody. Just three questions, I think. First of all, to be clear, what you've been saying on right-sizing of your airline. We talked about it probably previously, but I was just wondering, given your new announcements on cost, if you are contemplating on lowering the airline capacity any further? Clearly linked to that, obviously I know you're not commenting on any rumors, but potentially, you might look a little bit more closer on whatever kind of joint venture structure, and probably there's a German partner out there, for which it makes sense. I just wondered, what are your contemplations potentially around that and if there's something in the making? The second one is actually on the whole topic of hotelier prepayments and touristic prepayments. Can I assume that actually, also from a legal litigation perspective, you have sorted everything out so far?
Are there any remaining risks from that to be factored in? That is the second one and actually the third one is on you did some asset write-downs already, with the Q3 reporting. What is your view on that? Is there anything to come in Q4 potentially? Given that your equity ratio has been declining quite substantially, obviously as a natural consequence of what happened, can you rule out that this will be negative by the end of Q4? Thank you.
Okay. I leave the third one for Birgit, but let me answer the first two. The first one is the right sizing of airline. When you look at our short-haul fleet, we have been able to reduce our order book, or delay our order book significantly. That is around 30, 35, 34 next two years of MAXes we don't take. Now, in Germany, the biggest pressure we have, as you mentioned, is actually Germany. We have now 39 short-haul or mid-haul flights and we will reduce half, that is 20. When you also stack up that number with our overall short-haul, mid-haul fleet of 120- something, we will go down to around 100. This also includes a little bit of restructuring, which we already have initiated in the Nordics and a little bit of lightening as well as in the U.K., but a smaller piece.
The big thing is now Germany. You talked about future plans, and you talked about consolidation in the market. What we are doing aside of reducing capacity, what we say to the winter capacity, because we believe in the next years it will be fine. We need strategic access because it's infrastructure for us. We need to be guaranteeing that something flies to Cape Verde if we build a hotel in Cape Verde. More than the winter program, we might not want to fly alone and therefore we reduce it. What we also do in the same, we have actually separated all airlines into a separate entity, what we call a Teilkonzern. We have everything on the same platform right now on, for example, Navitaire, the same Navitaire platform.
That will allow us to operate the airline as a profit center and not as a cost center. When you operate as a profit center and you have an integrated full IT stack and operations integrated, you are partner ready. What that means more or less before it would have been difficult to think at all about partnerships. Now we are partner ready because we can connect very easy. That is something we will actually look at. More than that is difficult to say because we will be on the right size and we will be on process operations and IT and also P&L structures in a way open to partner and that then opens a whole array of options. We can either just interconnect with others, codeshare with others. We can actually have interlinkage.
We can maybe work even with aircraft which we don't invest, we have investment vehicles to run the aircraft companies and so on and so on. That before was not possible, now opens the options. Any specific we would actually talk about if when time matures. On the assets itself, I think the biggest asset disposal we have been doing was Hapag-Lloyd, that was even decided before the crisis was a very good strategic reason. One of the options, of course, longer term or on our watch list is definitely Marella. Marella will need re-fleeting at a certain point in time, maybe not now, definitely not now. When we do re-fleeting, we will not do in our balance sheet. That's also very clear. The queue of interested parties to work with us was long before the crisis.
It's a little bit shorter now. That's definitely something which is on the list. To give you another example, we will not rush into any kind of fire sale. Again, here, the liquidity line which we have been securing from the state also prevents that to happen. Birgit, do you want to say something? Or the Hanover team or whoever on the asset part?
Yeah, it was about the equity ratio.
Yes.
Yeah. The equity ratio in the group is not triggering a consequence. The relevant here is that it is about TUI AG as a legal entity. In the Q4, impairments were a COVID-19 triggering event, and this had to do with reduced free cash flows going forward, within an increased WACC due to our weighted average cost of capital risk premium. It is not an equity ratio really that will trigger the consequence. The equity at TUI AG at the end of this quarter was above EUR 5 billion.
Okay, let's go. Next.
The next question comes from Richard Clarke from Bernstein. Please go ahead.
Richard.
Good morning. Good morning, everybody. Three questions, if I may. The first one's just on the nature of your current deposits. I know you've said that you're done with the refunds. Can you give us some detail on how much of those deposits are holidays that were booked pre-COVID? Maybe to which seasons the current deposit levels relate to. Second question, on the convertible. Is the EUR 150 million, that's already been drawn, is it? You have to draw that today. Just on being able to avoid it being converted, it sounds like you can avoid it if you've repaid the other facility. Do you have to repay the first liquidity facility before you pay any of the second one? Will you need to repay the entire first tranche before you can avoid the convertible being able to be utilized?
The third one, hopefully something a little bit more positive, but you haven't mentioned in your release the Booking deal with Musement. Anything you can comment on that, the potential scope that you might have from that Musement deal and what else that might lead on to with Booking?
The prepayment is pretty easy. More or less everything you see right now, which is returned, is for travel which actually has been booked before the crisis. Particularly now, it's very encouraging. We had this travel warning or quarantining from Spain to U.K., more or less nothing actually returned there. Everything had been rebooked, for example, to Greece. Now, of course, particularly when you look to the future, now it's more the operational issue. It's not so much returning the money, but redeeming vouchers. You see that particularly in December 2021, the difference between the net bookings since June and actually the Booking status is EUR 1 billion, and that is actually a voucher. By the way, including the vouchers, the prices are still up. I think that's a good message. The convertible is only related to the second tranche of RCF.
The first tranche of RCF is not affected at all. The Booking is, of course, when you look at Booking itself, we are the sole provider now. Of course, the Booking business itself is very low. The first numbers are good, but of course, it is much lower than expected because the volume itself in Booking as well is not high.
On the refunds, per month, as we've said, we have a refund rate of EUR 250 million-EUR 300 million. The customer deposits at the end of the third quarter for the balance sheets were around EUR 3 billion, like EUR 2.9 billion, let's say. The change versus end of March 2020, when we were at EUR 3.4 billion, is related to refunds for summer 2020, but it's also including new bookings, because some people rebook for later periods, winter or summer 2021, and also sales of the restart. It's a bit of a mix, let's say.
Yeah. The main part of the refunds, of course, relates to, as I said, to pre-COVID Bookings.
Okay.
That's it.
Okay.
The next question comes from James Stanley from Citi. Please go ahead.
Hi, James.
Morning, everybody. Thanks for taking my questions. Just you talked about, or quoted on newswires as saying, as well as a potential capital raise, you might consider selling other assets. At a high level, what bits of the business do you think you could sell without undermining the integrated nature of the business model? Second, related to that is how does the lower cash resources impact your investment plans for the growth plans for the DX business and the GDNA TA? The third question is, can you talk a bit about your experiences of restarting the cruise business? What have you learnt about maximum levels of occupancy that you can manage on board? What are your plans for restarting port calls, and how are you therefore thinking about the capacity plan for your cruise business in 2021?
Yeah. Okay. The potential, to be very clear. If we sell, that was the communication of even before the crisis. If we sell things on the asset front, or if we divest or make actually, then we only do it if we keep control on the asset itself, the sales, the marketing, the product, everything. The best example is, of course, TUI Cruises. TUI Cruises is an equity, at the same time, we control everything which is necessary and possible. Yeah. I talked about Marella, for example, maybe other things to come, we don't sell, we lose control. That actually says already something, about this will never be a fire sale. We will be careful.
Quite to the contrary, if we want to scale on the digital platforms, then it's very clear that long-term, just to invest into assets, yeah, will maybe not fit 100%. We need to be careful what is in our balance sheet and how much invest, and where we invest. Yeah. That's what we said, asset light. It's not that we say we don't like it. Quite to the contrary, we like it. The financing structure must be right. On the experience on cruises, that has been good. The customers like it. The feedback is very good. The limitations right now is actually the opening of ports. We expect the first opening of ports will be happening in September, and that will be in the Mediterranean. We will put the ships there.
Today, we are satisfied with what we do, but of course, long-term, we need operations in Southern Europe. Definitely, if not even more south, particularly when the winter comes. Bookings for summer are good. Volume is good. Prices are a little bit weaker than this year. The yields are not where they should be 100%. On the other hand, I have to say that the bookings, for example, for overall, for hotels and that business is up on prices. It's still a little bit early days. There was one more question you had?
Well, it was related to the cruise business.
Okay, good.
What level of occupancy have you been running that on?
We just operate now on 60% level. The 60% level is cash positive. That we don't lose cash. That's the objective.
Do you think you can increase that 60% from here, or is that the kind of level you're planning to?
It's a pure decision of us to do that right now. The demand would be higher. When we operate the ship, we decided right now to do 60%. Over time, it will go up, I'm pretty sure, but for the time being, we operate 60%. It depends a little bit on the travel advices. Now, the most important thing is that we start to operate in the Mediterranean, and we get port openings. I think that is the next step to face.
Okay. Very good. Thank you.
Okay. Thank you.
The next question comes from Jaafar Mestari from Exane BNP Paribas. Please go ahead.
Hi. Good morning, everyone.
Hi, Jaafar.
Hi. I'd like to ask three, if that's okay. Firstly, on customer prepayments, you did flag that you saw an immediate inflow of working capital since you reopened. As you mentioned in a couple of your answers on this call, it hasn't been that clear-cut in June. Could you maybe give us some sense on how big those Booking-related inflows were in July and August after your rebalancing date? Second question on the same theme. Today, how much cash down payment has your average booked customer paid in % of the price of their holiday? In other words, when those customers who've booked or rebooked will eventually travel in winter 2020 or in summer 2021, will they have a significant cash top-up to pay to you, or will you pretty much have to provide the holiday on the basis of what you already hold?
Yeah, clear.
Lastly, just on the German Economic Stabilization Fund, the WSF. My understanding from a very bad Google Translate is that the fund is only accessible to companies that have not secured any other form of financing. Can you retain part or all of the now EUR 2.9 billion loan and find new equity or new bonds or new bank financing on top? Is that the plan, or would you have to actually refinance the entire EUR 2.9 billion in any balance sheet solution that you're working on?
Yeah. I'll leave the last question for Birgit. Yeah. Let me take the first. You cannot see the customer payment inflow in June. Yeah. The reason for that is because June was only the pilot, yeah, and it was not clear in June or the last quarter when actually everything else would be open. Usually, the structure is as follow. When customers start actually booking, then you have a down payment, let's say, of 10%- 20% whatsoever, yeah, depends a little bit on the plan, on the country and so on. The big cash in comes when you actually provide travel, because then the remainder is actually taken from the customer, and that is then the 80%- 90%. The cash in, you cannot see when you look at last quarter.
You only can see in July, where actually we brought 560,000-plus people on vacation, right?
That's the reason why June is meaningless. On the second question was about the vouchers. What actually happens is a couple of things. The first thing is, you have vouchers, people redeem vouchers. Of course, they get a discount with it. Now the question is, what do they buy? What we see, at least for summer next year, where we have significant numbers, and you see around about 1 million amendments already. That is the difference between the 430 you see in the slide and the 1.5. This 1 million, they have discounts, but the resulting price after discount is actually up. The reason for that is our CRM systems are now, of course, trying to upsell customers to more valuable holidays, if you like. That's number one.
The second thing you see is maybe also interesting, particularly now, for example, when we started to open Turkey, but also Greece. That is actually, again, a result of July as well as August. We have been successful of channeling demand into hotels where we had significant prepayments. Yeah. That actually says we have the cash ins without any cash outs, because the cash outs happened in the time before, and that was the question, do we have still supplement the hoteliers and so on? Of course, by doing so, yeah, it's enormously relieving the pressure to pay our hotels as well, because now we bring the business again and prepayments are redeemed, and that is, of course, something which is helping a lot as well. On the WSF, it's a convertible bond reliance.
We can emit the convertible, and then we can actually get access to the KfW line. Maybe to the detail conditions, maybe Birgit or Friedrich and Mathias also in Hannover, do you want to elaborate on that?
Yeah. The KfW is a bridge financing, which we will refinance in due course. What was important is to really first secure liquidity, as you can understand. That is what we did. As I also said earlier, we may not even have to access the second tranche based on the scenarios. Now, like Fritz also said, now is the time to evaluate also balance sheet options, and there's various things we are looking at. For instance, the asset light, which we already discussed, also the cost, and this has to be a recurring cost saving, which we are working on, and then other options. What is for sure is that we have the intention to drive down leverage going forward, and we believe it's very well possible as TUI is-- This is caused by the COVID-19 pandemic, but TUI is a great business.
It's a great brand. Customers want to go on holiday with TUI. Just look at the first five months of our results, where we really demonstrated that we are in a strong position, and this was also post the collapse of a major competitor. Also the forward business is looking strong. It's now all about also executing the alignment program, reducing cost, focus on cash, which we already did pre-COVID. As you all well know, we were constantly focusing on cash and also constantly focusing on getting the leverage down. This is just unfortunate that this happened, COVID-19. Now, after having secured the liquidity, even in a worst-case scenario, because that's what the second tranche is all about, it's more like a risk insurance premium, so to say, for anything worse that could happen.
Obviously, we will do everything to drive down the leverage and look at all balance sheet options that are available to us at the right moment.
Super. Thank you.
The next question comes from Cristian Nedelcu from UBS. Please go ahead.
Hi. Thank you very much for taking my questions. Three, if I may. The first one, you talk about an optimal balance sheet. Could you give us a bit of color how you define that? What is a sustainable level of debt in your view? Secondly, for FY 2021, could you give us a range of EBITDA expectations, a range of free cash flow expectations for FY 2021? If you can make a bit of reference to working capital, CapEx developments in your base case scenario going forward. Thirdly, I guess on advance payments, and you flagged earlier, people are Booking closer to departure date. How do you see that profile of bookings? I know, for example, January used to be the strongest month in bookings with 30% of the summer booked in January. Do you believe that could still be the case?
What do you think is that shape of the Booking curve over the next six months, nine months? Thank you.
Okay. Birgit will talk about the balance sheet. I think we have talked about net levels historically, we think we should achieve that range again. Let's talk about financial year 2021. We say we strive to be profitable. That means, profitable is definitely above zero when it comes to EBIT. Of course, we will see. That's a good question. How much and how fast things will come back? One thing that's very clear, short-haul Mediterranean summer business will be very strong, and you see that in the booking numbers. Yeah. You see that in the booking numbers, up 145%. What will happen exactly to long haul, what will happen exactly to the cruise business and so on, it's a little bit more unclear. EBIT levels will be positive.
That actually says we will actually restrict the investments into hotels and cruises to something which I would call maintenance level. Of course, we will change to digitalization. That will be the main investment area. Yeah. That will be interesting to see. Of course, it's much smaller. Also the delay of the deliveries of aircraft will be a huge benefit to our balance sheet as well. You asked about the booking profile. That will be interesting to see. Yeah. That will be interesting to see. The good thing is for 2021, we have already 1.5 million bookings in the system where we have actually either the full or partly cash. That is on the booking status, very advanced of where we have been last year. One thing is also clear, most likely, next year's bookings might be a little bit more shorter.
By the way, therefore, we don't assume that this advantage will persist, but it's nice to have it. Also when you look at the prices, I said we are up. Next year's prices are up high single digit, mid-high single digit. Because of the good booking profile today, for this 30 and 15% booking status, we are now significantly up. That's good. It's a good starting point, but it's difficult to say what will happen in January or February. Maybe on the balance sheet, Birgit, do you want to say what are we striving to do?
Yes. Indeed. As you know, for pre-COVID, we had a capital allocation framework, and there we set the leverage target ratio is between 2.25x to 3x . As you also know, we were really focusing on that pre-COVID, and as I said earlier already, we will continue to focus on that going forward and to really drive it to the lower end of the guidance. Before that, we still have some work to do because of what happened to us with COVID-19. Previously, we were well underway also with the Hapag-Lloyd transaction, the Boeing compensation, everything we did to focus on cash, also the business being where it was. Now we should go back to these levels, and we feel comfortable that we can grow out of this due to the things that I talked about earlier.
As Fritz said, you have the ramp-up of the bookings. You have the operational cost being taken out, the asset light disposals like for instance, that we did with the Hapag-Lloyd transaction. Where you actually have a combination with a strong other partner and you actually have synergies on the expertise. We are the distributor and for instance, in TUI Cruises, you have all the expertise on the ships, et cetera. That is a perfect combination as Fritz also alluded to. Then, we'll work further on the capital structure in all other means. You can understand that's it for now, in terms of what we can comment on that, because we have had the question already several times, and I seem like a broken record. Then on the guidance, because you also asked for guidance, and it is a bit early to guide.
That is also why we withdrew our guidance. As I said, with the finance team, we built several scenarios and we have a current scenario, which is with the information we all know around this call, but there's also other scenarios. It's too early. We don't have a crystal ball and nobody will be able to say what happens next. The only thing is that what we see now is as soon as the business picks up, TUI is in a good position to immediately pick up travel and provide service to the customers. You know I'm not so long in this industry, but it's amazing how quickly TUI can turn around and actually operationalize everything. I think that's important, also to know and, with that, okay, we cannot really say.
We consider 2021 to be a transition year, and 2022 for things to get back to normal.
Okay.
Thank you very much for your answers.
Okay. Thank you very much. I have been informed by the central team that this was actually the last question. Is that correct?
That's correct.
Okay. Thank you very much everybody for tuning in. Thank you very much. I think the COVID-19 crisis is unprecedented, but I have to say 1.7 million bookings since the breakdown, in the first month of operations, more than 500,000 customers on vacation through for operational break even on next year being up 145%. Promising trends. That's what I believe. Thank you very much and have a great day.