Thank you very much. Good morning, everybody. I hope you are well and healthy. This is important in these times. Thank you very much for joining in the Q2 results call. I'm not 100% sure that I understand who turns the pages. Are we turning the pages? Okay, good. We will be actually now turning to page number four, please. Undoubtedly, COVID-19 is the greatest crisis for tourism and TUI, which has ever happened. We were just in Q1 in full steam ahead, as you know. In January was best booking month in the year, up 14% customers, 17% revenues for summer bookings. Then suddenly, mid end March, stop, no revenue. This is unprecedented and I think, no revenue until today, it's an interesting experience also for myself to run a company without revenue.
We managed to secure liquidity very fast, you will see that in the slides, and reduce fixed costs. We are thinking about the time after the crisis. It will be a company with more debt and also for significantly more debt. A company with a little bit uncertainty, we believe, for next year. The revenue might be, or the demand might be on levels of 2019, but it might also not be on the levels, depending on the vaccine, depending on the perception, whatnot. We believe in 2022, we will have full demand and strong growth. We see traffic on our web pages, we see bookings, and I come to that in a minute, are very strong. Demand is there, but the crisis, the pandemic is not over. That's the reason why we said we need to be significantly changing our company.
More lean, more agile, less capital, less investment, and much more digital. We said we want to become a digital platform company anyway. Therefore, we have launched a program to save 30% of overheads. That will affect 8,000 roles. We launched the program in the company. We announced it this morning, and it's now progressing. It will touch all parts of the business, but mainly markets and airlines as 80% of our overheads are actually in this area. People continue to have a passion for holidays, and we are a very trusted brand with a long history. Therefore, there's no reason to assume that the market may be not there, that we will not have a prosperous market environment. That's very important because without a market, everything would be very gloomy. With the market, I think it's more a matter of time until we come back.
Definitely safety of our customers, employees are our main priority. We are very open to prepare for a responsible restart. We want to restart. We see the demand. We only can start and want to start when it is safe. Turning to page number five, what has happened? As I said, when you watch the dark blue boxes at the bottom, we had an exceptional start in the summer. The strongest January in company history. After the Thomas Cook collapse, it seemed to be an enormous record year. The COVID incident happened. Actually, not the COVID itself. That is something that started in China last quarter, but all borders closed. Travel warning into all countries. No business within a couple of days. Liquidities squeezed by cost running could save money, and we will see that, and also prepayments flowing out of the system.
The positive working capital actually going back to customers, at least partly. We found solutions in order to mitigate, but at least partly, the debt is actually very special in our industry. We reduced costs, we acquired the liquidity, and that is actually the KfW loan. You will see that in a minute. We talked about it. The loan is a facility in the frame of our current RCF. It is actually a bridge loan of EUR 1.8, which is due in 2022. We'll talk about that in a minute. Now what we are doing is actually, we are preparing for an integrated startup of our summer holidays. We have travel warnings largely in the countries until the mid of June. There are strong indications that at least partly, the destinations will open, and also that actually source markets will be allowing us to send customers.
We believe it could be in the order of magnitude, late June, early July, that we actually can resume business partially into areas which are safe and where we tested. We did the first test of our hotels right now, test runs in Mallorca that were very successful. All of travel and leisure travel can be safe. The second thing, as I said is our restructuring, digitalization, realignment, restructuring program, which we have launched, which should give us a cost-based advantage of 30% overheads. This is in the order of magnitude EUR 300 million-EUR 400 million yearly benefit. That is something which should be achievable. We have identified the broad parts of our program. I come to that in a minute. Could we have known better? That's the question. Why is so hectic?
Why is actually we have the suspension of all travel and suddenly we need money and the RCF is partly not released and then we go to KfW, and we have all this turmoil and then we need to be so under time pressure. Could we have seen it earlier? I think the timeline here shows it would have been difficult to digest. I mean, the China COVID was end of December. We had 30% up in booking. We had the financial year 2020 Q1 results 11th of February. We were up 14% again, revenue 17% because prices were up 3%. There's not an indication. Italy, that is actually north of Italy. We saw a little bit 21st of it, but it's still 12% up and still 37,000 customers per day net growth.
Even a week later, Tenerife closing with the hotel, you remember that, still 28,000 net growth. By the way, this even is seasonality because we have the first week in February is stronger than the second, is stronger than the third. We see the more or less the 13th to the 16th, where actually it all collapsed and that actually the ports closed. The borders closed within three days. That was the Friday and Saturday and Sunday, we came together as a team and actually said, "Okay, that's it. Let's see how we secure liquidity." You see that this is actually a very immediate situation. I think also unprecedented in the timing of the events. Now, how do we see the situation and the suspensions? On the next slide I have put the stuff on.
Largely until mid-June, we see the suspensions. Now, at least in Germany, I can say, and I'm talking to the officials here a lot, there is an enormous pressure of opening borders. I mean, people don't accept that Europe is closed. You have that in the neighboring countries to France and to Switzerland and to Austria, but also to Denmark up in the north. There was even a legal case which was won by customers who said, "I want to travel to Denmark." The court said, "You cannot suspend it. That is not reasonable." It needs to be adequate and reasonable. We, I think, can prove now that we have actually prepared our travels in a way that it is safe. Now, we also don't start from zero. For the summer season 2020, we still have a booking level of 35%. Normal would be 59.
No, 59 is much better than 35, but 35 is much better than nothing. If we can reinvigorate the travel, and if we said, for example, just Mallorca was possible, we would actually start rebooking customers from other places to Mallorca, fill our planes and fly. As I said, we have done good testing and certification of our hotels in Mallorca. For example, that shouldn't be a problem. The same holds true for Greece, for Cyprus, for Croatia, for Bulgaria, for the Canaries. I mean, all of them have one thing in common. They don't have COVID infections. That's not a good reason to assume that travel to there shouldn't be possible or shouldn't be safe. For winter, we opened the first, and winter was actually in the U.K. We have now 8% up in volume, and the average sale price on last year's level.
Also last year was good in terms of the winter bookings, no reason to assume it will be weak. Summer is the most promising thing. I mean, the most interesting and promising thing. We have more than double the volume we would expect. More than double the volume of last year for this year. It's more volumes. It's a couple of hundred thousands. It shows that there will be catch-up effect. At least from now, we cannot see that actually volumes will not be there. Prices are a little bit deeper than this year, but that's again, very early days, and it's also related to partly discounts we give in order for early bookings in order to fill next year. I would say a very healthy situation for the future.
That indicates to me as soon as travel will be possible, customers will want to go. That said, we need to be making sure that actually we can provide safe and non-risk travel that will be at top of mind as well. I come to that in a moment, how we do it, what we do. Before that, I hand over for a session of Birgit to actually take you through the financial impact as well as what we did in terms of cost and also the KfW facility.
Thank you, Fried, and a warm welcome also from my side and hope you are all healthy and safe. On the first slide that I'm going to present on the COVID-19 financial impact, as you know, our business is seasonal with a corresponding very seasonal liquidity swing. COVID-19 led to an immediate cease of global travel operations, which led to an immediate liquidity need due to the customer refunds and the coverage of fixed costs, as you all well know. As you can see from this illustrative graph on the left-hand side, at the end of March, we usually have quite high customer deposits on our balance sheet with a further steep increase during Q3. You know that, we call that a typical seasonal tourism swing.
The suspension of all operations as of March 16 led to the fact that a positive seasonal swing did not materialize, moreover, customers could request cash refunds for canceled holidays. At the end of March, we had EUR 3.4 billion of customer deposits on our balance sheet, and this situation led to an immediate liquidity need due to the typical working capital pattern as well as a fixed cost coverage against a standstill on revenues. To address the liquidity needs due to this working capital pattern, we took immediate action and secured the KfW bridge loan in a record time, and we also initiated other mitigating actions apart from, of course, the drastic cost reductions. There were other mitigating actions like incentivizing customers to rebook to a later date.
We opened the summer season 2021 much earlier than we usually do. We worked with various European governments on a voucher refund mechanism to save liquidity in this crisis situation. The current trend is that between 50% and 40% of customers are taking a voucher credit or decide for a rebooking, which we consider a success and demonstrates that people are willing to go on travel with TUI as a trusted brand. Based on the current scenario, we estimate customer refunds per month to be estimated at a low to mid-single digit EUR hundred million.
When travel resumes, and that is what we try to illustratively show, because we do not have a date yet, we expect a steep recovery of working capital, and that is represented by these light blue dotted lines and they vary, as this is a data point, obviously, that we do not have at the moment. Moving to the next slide, please. Thank you. During the suspension of all operations, we undertook significant crisis measures to limit cash outflows through an extreme reduction of cost and expenditures to an absolute minimum. From capital expenditures to marketing, salary costs, accommodation, rental, and lease costs, all expenditures have been cut or paused, reflecting our strict cost discipline required during these very exceptional circumstances. This has been a top priority for the business as a whole.
Everybody was focused on that, and the overall fixed monthly cash cost base has been substantially reduced by around 70% on how we calculate a fixed cost. Let me explain that. Advance contracting to secure committed capacity for the season ahead is the base of our business, and thus we typically see a high level of operational leverage. In a normal year, circa 63% of our cash costs across the business are deemed to be fixed. This translates in a normal year into a cash outflow in a range between EUR 700 million - EUR 1.4 billion per month, and of course, the latter during the peak season.
We reduced this range substantially during the COVID-19 crisis. We managed to reduce costs to an absolute minimum and expect our cash fixed cost base to be reduced to a minimum range of between EUR 250 million-EUR 300 million per month as long as our operations are suspended. Please note that this number excludes cost of payment obligations below EBIT, for which an average run rate of circa EUR 50 million per month can be assumed. The largest cost base for the group is accommodation, where we invoked the force majeure clause on hotel contracts. Incremental aircraft leases have been renegotiated with our lessors, as have payments with landlords in our hotels and resort business. Cruise ships have been laid up, saving around 60% of monthly costs. We took the difficult but necessary decision to reduce staff costs worldwide from April onwards.
Short-time work, pay cuts, furlough, unpaid leave, or other staff cost saving measures were applied across the group. Whereas our business was, and of course still is, a dual path. We have participated in government job retention schemes where available. These substantial measures across the business have helped to deliver a 50% cost saving in salary cost in May, with 90% of our employees participating in the above measures. Let's go to the next slide. TUI was the first company to, in February, we said it, to successfully obtain a KfW bridge loan as we applied immediately after the announcement of the program by the German state. We received the approval for a EUR 1.8 billion KfW bridge loan facility just 10 days post application.
We were able to apply with this level of speed as we had our financial scenarios proactively ready and could present a comprehensive liquidity picture during the weekend of 14th and 15th of March, which now seems a long time ago. We presented an exhaustive scenario analysis of the situation and the financial requirements, including a solid repayment plan under the agreed scenario. During the whole process, we were supported by our existing banking consortium, and I would like to thank all parties involved for this extraordinary and joint achievement. The EUR 1.8 billion support is an extension to the existing EUR 1.75 billion revolving credit facility, and you can see the details of both facilities on the right-hand side here of the slide.
As already announced in our ad hoc statement, under the terms of the loan, the annual dividend will be suspended during the course of this credit line. Both covenants, net leverage ratio and interest cover relating to the existing and also increased RCF, will be suspended for the next 18 months. Covenant testing will resume in September 2021. Finally, at this point in time, we have cash and available facilities of EUR 2.1 billion, and this is a reduction of EUR 1 billion since our last announcement, which we did on the 27th of March, as we needed to cover cash outs for fixed costs, a certain amount of customer refunds, and the repayment as scheduled for financial maturities in the amount of EUR 450 million. Around that, yeah. Moving to the next slide.
As I mentioned earlier, we work on liquidity enhancing measures such as the earlier discussed fixed cost reduction and also the mix of voucher refunds credit mechanism. We easily work on other levers, and that's also what you see here. We immediately suspended investments and reduced our CapEx cash out. We already discussed earlier that TUI would be more rigorous with CapEx going forward, and we are taking it very serious. You know that also from all of our last conversations. We will reduce our investments with 50% to a level of maximum EUR 450 million this year from our earlier guidance range of EUR 750 million-EUR 900 million prior to the Hapag-Lloyd transaction. We expect some tax relief due to acceleration of refunds and deferral of payments, and here also the partners are actually very supporting.
The Hapag-Lloyd cruise transaction will lead to a cash inflow of approximately EUR 600 million, as you know. We will reduce the capital intensity of the business, including the sale and lease back of assets. When the business restarts, we will see a significant working capital inflow, that is very important to note throughout this cycle. All these measures will contribute to the improvement of our financial profile going forward. With cash and available facilities, as well as the liquidity enhancing measures, TUI has sufficient funds to cover the coming months. Of course, we remain proactive. As you have seen from the KfW bridge loan application and how fast it went, we are equally proactive at this very moment.
We are currently evaluating a variety of options with the aim to best position TUI's balance sheet and liquidity through an extended period of disruption and post-crisis. One thing is sure, we are strongly focused on rebuilding our solid balance sheet profile post-crisis. As I also said earlier, a prominent driver is the restart of our operations with a recovery in bookings resulting in an immediate and substantial working capital inflow. Let me with this hand back over to Fried.
Birgit, thank you very much. You see we have secure liquidity. We have a solid situation in terms of cost. Things are in control. We are managing also liquidity outflow to customers on a daily basis. Is the question, what do we do next, right? The one thing we are doing is, of course, we are trying to find ways in order to allow revenue in again because on a permanent basis, loans and bridge loans and debt doesn't replace revenues. Therefore, this is the utmost importance. As I said, we have good booking status still. We have good forward bookings and next season the question is when can we start? Here we have worked on a 10-point plan together with actually all partners who have similar low COVID-19 infection levels or even lower. I talk about Canaries, Balearics, Greece, Cyprus, Croatia, and others.
I think travel to these countries would be possible if allowed. I think demand would be high. I think we have a program in place, I come to that on the next page, which actually allows for safe travels. It's important to our customers, equally, it's important for customers to travel. In the public, I see pressure building, because there's not a good reason to close borders. As I said, even the first courts have ruled that closing borders is not appropriate. In the destination, also it's very important. Customers want it, destinations want it. Destinations in many cases, tourism is the most important economic sector. In Greece, for example, 20% of GDP or 18% of GDP, of course in summer double because it's only half year season. Missing the summer is a huge issue for Europe as well.
I hear and I see that actually that is taking ground and therefore I'm quite hopeful that in June or beginning of July, we will be able to resume business. We are prepared. That's what we say. You see on the next page the level of detail we have. This is actually at holiday 2020 secure, safe travel during COVID-19. It is actually touching all touch points, addressing all touch points of a customer flight and destination hotel cruises. It's exactly what we do. We are even designing holidays for safe travels. For example, we have put our cruise ships to actually northern Germany. As soon as possible, we will be offering three to five days cruises. The North Sea is anyway very popular with 1,000 guests.
1,000 guests are the limit which the German government has anyway agreed that 1,000 in a certain destination is possible. We are even preparing designed holidays in order to be attractive. It's not in our hand to open the holidays, but it is in our hand to be prepared. Together with our partners and destinations, we have now the program and we are now also negotiating thoroughly. This is actually number one priority because it resolves a lot of problems. It resolves the problem of revenue particularly. It also resolves the problem of liquidity, because as soon as we open our business again, there will be liquidity inflow for positive working capital. By the way, even having closed summer and only for winter and next year summer, we have EUR 50 million inflows already today per month.
It's something, as soon as the markets open, liquidity, I would assume, is not the issue. Anyway, what will remain an issue is debt, because we will have debt and the first dimension remains to be seen how much of the credit facilities we will be using. Debt will be an issue, and it needs to be repaid, that's very clear. Therefore, we have now put this three-pronged plan for the future of TUI. The first one is actually reducing cost. How we do that is, we accelerate the transformation project we have been planning anyway. We are more ruthless in merging tasks and organizations across the group, and consolidate global IT structures. It's not just taking off people and assuming it will be working. It is the challenge of reducing people and increasing quality.
One of the things, just to give you an illustrative example, we have 25 call centers in the world with hundred million of cost. It's not a good reason to assume that this is optimal. Quite to the contrary. If we wanted to outsource it to a third party, we could save tens of millions per year immediately, but of course it's close to the customer, we need to be careful, but it shows what kind of potentials are still untapped. I have launched the program together with the colleagues this morning, 30% cost reduction in the order of magnitude EUR 300 million-EUR 400 million yearly cost benefits will affect 8,000 people. This is, I would say, bread and butter. This is nothing to discuss about, it's just execute. It's not risk that it will not happen or whatever. This is relatively easy.
We get into the middle column. In the middle column, we have historically in the last phase of transformation became product centric. We invested more into cruise ships, into aircraft, into renewal of aircraft, into hotels. This is over. This is over, and for two reasons. Actually, for three reasons, if you like. The first one is we have debt, and the money is not easily available. The second is we have an oversupply, and we will have an oversupply foreseeable in the next year. When you have oversupply of assets, investment into assets is not very good. If you had undersupply, then you have good yields. If you have oversupply, you better trade. We will be more asset light, and we will be using many means. Off-balance sheet structures, selling and leasing back or managing back hotel assets.
Looking at the stature of our airline size, as well as ownership structures in terms of aviation. We will actually look at the clear fixing and divestment of non-profitable businesses. This is a little bit more. In the past, we have been maybe not as strict as we could have been. I tell you now, either you fix it immediately or it will be a difficult time. This is a little bit more, how do you say it? It is a more strategic move. I want to say one thing. This doesn't mean we will not be content-centric. We just will not do bricks and mortars. Content-centric means control of product, control of brand, control of distribution, control of customers. This will stick. Differentiation, this will stick. What will not stick is actually investment into bricks.
If you have oversupply in bricks, earning money from bricks will be not that easy. We say asset light because selectively we might be wanting to own bricks still. Cape Verde is a typical example. When you have 100% of five-star hotels, then it's difficult not to own the bricks. Other than that, we will be seeing that we actually can get much more asset light than we are today. I could do the same thing with ships. We talked about Marella anyway. We showed what we did with Hapag-Lloyd Cruises, a deal which will be closing in June, by the way. It is what we will do. The first reason was debt. The second reason was actually overcapacity because of uncertain demand. The third reason is on the right side.
When you want to become a digital platform company, that is what we said, articulated before, assets don't fit. As we accelerate our journey now to become more digital, we can invest less. What does it mean more digital? Online strategy. People have been using online purchase means in the crisis when they had to stay home. Will they shift back? Maybe not. People are okay with using online services, in-app service in destinations. We see that. We have actually accelerated our online strategy there. All touchpoints across the value chain. The last thing, which actually is the first bullet on this right column, is that we increase accommodation-only, flight-only and dynamic packaging. When you have an oversupply, these kind of free available goods, which are also shorter booking cycles, will be important. We have good experience in our GDN.
We have very good experience in our overland business in Germany, where we have 1 million customers. We will actually accelerate our accommodation-only. Flight only, we have also good experience with third-party flying or to our flights to third-party customers. We have good experience as well. We will have another P&L for sourcing, we will actually also think about the future of package. This future of package needs to be more flexible, more dynamic, more customer-friendly. All of that is the digital backbone of our systems as we have announced them anyway. The difference is we execute faster, no euro for legacy IT structure. That is actually 100% focused to the future, zero focus for legacy. That is the difference. With that said, I would actually come to the half year results, you see that on the page.
Five months were still okay. Not only okay, it was good. 6% revenue, plus 21% EBIT. More or less everything stopped in March, and that's what you see. Maybe when we go to the bridge, next slide, you see a lot of moving parts back and forth. The only big thing which I want to highlight are the EUR -470 on the right side. The blue box explains what it is. The EUR -470 is mainly loss of contribution EUR 242. This is actually the missing business. There is no business, no contribution. You should be seeing this repeating over the next months. A little bit less because we have been saving costs. At the same time, volumes are a little bit bigger. We always said our costs are around about EUR 250 or whatever, and this is the EUR 250. That is the missing contribution.
This is actually what we'll be repeating. You see a second. Why do we not see the 470 for the next month? You see, for example, hedge ineffectiveness. We bought, of course, for the travel we sold, we bought future. Hedges for our fuel, for EUR 60 per barrel, and now it's EUR 30. Of course, this needs to be accounted for, and that's what you see here. The 146 are actually taking care of the ineffective hedges until June. Therefore, it will not repeat. Also it might even reverse a little bit if the oil price comes up or whatever. The big step is done here, and that's part of the 470. You see smaller numbers. Repatriation cost, of course, will not repeat. Celebration impairment, so we dry docked the ship.
I would say we took the ship out of the water because there will not be any business anymore, EUR 19 million. That's, of course, book. The MAX costs are very minor because they don't fly, and will not repeat because when they don't fly, they will be zero. More or less what you can say is EUR 240 will repeat in some form or shape, EUR 146 will not repeat in some form or shape. That's a pretty good indication, I think, for the future months, if you don't take into account the payouts to customers. Payouts to customers are difficult to judge. In some of the countries we have the vouchers, in some of the countries we don't have the vouchers. Even if you don't have the vouchers, in some countries, you have state guarantees, in some countries you don't have state guarantees.
This makes a huge difference. Also, what makes a big difference is if the ministry say there will be no summer vacation, or if they say there will be summer vacation. If you can redeem the voucher soon, everybody accepts a voucher soon. Birgit talked about it will be something low to mid hundreds millions. As we said, it's just working capital. As soon as the business comes back, and even if it comes back, something comes back. As it doesn't come back for summer at all, we still have EUR 50 million inflows. You can imagine what happens if the business for the summer, at some form or shape, will be resuming. That said, we have a couple of more slides.
This is actually one more slide, and I thought we had also another waterfall, but this is more or less what I expected, the EUR 470. You see a little bit of segmental reports. In all fairness, I will not even touch that. It is meaningless. If you have a time like this who cares about these numbers? The numbers are actually distorted, as you can see everywhere, because we have one month of no operation. That actually is not very meaningful. If you have questions, we are very willing to answer them in the later stage of the conversation. With that, Birgit, I think you will take the people through the P&L, right?
Yeah.
Okay.
Indeed. Let's go through the income statement. Here, as I did during the first quarter as well, I will focus on the year-on-year comparison with pro forma IAS 17 figures for the first half instead of the IFRS 16 numbers for comparability purposes. Here you can see, obviously, the turnover year-on-year was flat, reflecting the lost revenue from the travel suspension in March. The underlying EBIT decreased by EUR 527 million, mainly as a result of lost contribution and costs arising from the COVID-19 travel suspension and Fried just talked about that. The adjustments are significantly better year-on-year, as we booked a EUR 91 million gain on disposal from the sale of our German specialist businesses, Berge & Meer, and Boomerang, which closed in October 2019.
As a result of the positive adjustments reported, EBIT is down by EUR 432 million compared to last year. Group results after minorities are down by EUR 505 million, translating to an underlying EPS of EUR -1.31. Referring to the reported figures under IFRS 16, and as flagged during our IFRS 16 call in December last year, both depreciation and interest charges are higher as a result of IFRS 16. Okay, we move to the cash flow slide. As you know, before the COVID-19 crisis, we launched a dedicated program on cash flow with a target to generate positive free cash flows for dividends, and we were very well on the way to deliver.
You can still see the impact in the first half of 2020. Unfortunately, now due to COVID-19, the situation will be different, but at least you will see that we were very well underway. Managing cash flow and liquidity is our number one priority, and you will equally see from this chart how quickly we actively address the cash items in our remit. Group underlying EBITDA reflects the impact from the COVID-19 travel suspension, and we more than offset a decline in operating cash flow by a reduction in our net investments as we cut all major projects during the current period of travel suspension. This leads to a free cash flow of EUR -1.4 billion, slightly ahead of prior year. Please note that the disposal proceeds from the sale of the German specialty business during Q1 are equally included.
Free cash flow after dividends ended at EUR -1.7 billion, up from EUR 170 million versus previous year. This includes dividend payments for 2019, as the payout was mid-February before the COVID-19 crisis. Please note that the cash flow from financing has increased because we have drawn down from our RCF to help fund our seasonal working capital requirements. As you can see from the IFRS 16 column of the cash flow statement, the higher operating cash flow is offset by a lower cash flow from financing due to increased payments for finance lease liabilities. The total cash flow, as you can see here, is the same under IFRS 16 and pro forma IAS 17. One final comment here again, this year's net CapEx and investments will be reduced to circa EUR 440 million, a reduction of at least 50% compared to previous guidance.
Asset and debt financing is expected to amount to around EUR 400 million. Please note that these numbers are pre the effect from the Hapag-Lloyd Cruises transaction. Moving to the next slide. The movement in net debt. The first half closing net debt based on pro forma IAS 17 numbers increased to around EUR 2.65 billion, in line with the usual seasonal swing and driven by the discussed development of free cash flow in the first quarter. Referring to the last line of the table, you can see compared to the previous year, that our seasonal swing in net debt has improved by EUR 348 million, which is predominantly due to Hapag-Lloyd Cruises now being reported as a disposal group.
Regarding the other elements of the movement in net debt, apart from free cash flow, asset financing increased according to plan, with roughly two-thirds related to committed aircraft re-leasing of new Dreamliners and the remainder related to cruise ship financing of around EUR 120 million. As expected, due to the first time adoption of IFRS 16 and associated lease liabilities, net debt is higher based on reported IFRS 16 figures. Lastly, on the next slide, I'd like to remind you of our withdrawn guidance. On the 15th of March, we withdrew the group's full year 2020 financial guidance based on the current unpredictable situation. As you will all understand, we also refrain from issuing a new guidance as uncertainties continue to exist. As already mentioned, we need to waive dividend payments for the term of the KfW credit line.
With that, I would like to hand over to Fried Joussen.
Thank you, Birgit. That's easy, because now the slide is actually the first slide again, right? In summary, big crisis, short-term liquidity management, reducing fixed costs. It's not too difficult. That's what we did, and we have now decent liquidity for some time, and we will relaunch the business hopefully soon. Now, as soon as the business will be relaunched, we will actually go from liquidity to P&L and manage P&L. That means profitability up, investments down, cost down, agility up, quality up. Cost down and quality up. This will be the digitalization project, 30% cost down at source was in focus. As I said, we had a very strong January, the strongest in company history. The reason for that, because customers want to go on vacation. There's no reason to assume that will change. We had a good discussion on business travel.
Business travel might be different. People might be used to online working and home office and will not travel. All indications I see is that people want to go on vacation. Just viewing a movie of a destination is not good enough. The market will be there. Traffic on the website is good. Future bookings are good. As soon as we are allowed to do business, we will have good business. TUI will become leaner, less capital intensive, and more digital. I think that's good. Every crisis is a chance. Thank you very much. We are open for your questions.
Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to cancel your question, please press nine and star again. Please press nine and the star key now to state your question. The first question comes from Jamie Rollo from Morgan Stanley. Please go ahead.
Thank you for taking my question. I hope everyone's well. Good morning. Three questions, please, and maybe I'll ask them separately. First, on the liquidity, it looks quite tight, that EUR 2 billion, given you seem to be hinting at maybe a billion customer deposits outflow, and there could be, I guess, another billion on the trade payables plus the cash burn each month. I'm just wondering, you seem to be relying on the markets reopening. The question is, what happens if markets don't reopen and your operations remain suspended for a bit longer? How many months liquidity do you think you have, please?
I can already reply to that, Jamie.
Yeah, please.
Thanks for your question. I understand your question, of course, because nobody knows when travel resumes. At this point in time, as you said, customers are willing to travel, but it's uncertain as to when that happens. What we can tell you is that, as we demonstrated also, it started during the weekend when the COVID-19 crisis started, is that we are on top of things and we were the first to go to KfW. We had our scenario planning ready. We could never have gone so quickly if we didn't have our scenario planning already ready before that, because that normally takes a while. We have also the successful execution, of course, of requesting the KfW bridge loan. TUI is obviously very important also to Germany. I would like to point that out as well.
I'll go quickly through the levers of liquidity, but this time, again, we are proactive. We have our scenarios ready. Only when will travel resume, that is a big unknown, of course, but we do have options, alternatives. What I can tell you, and that is what you have done, because I looked at your analysis, that we have a fixed cost run rate which is about EUR 250 million- EUR 300 million a month. You can think of customer refunds in the same order of magnitude as what I just mentioned on the fixed cost run rate. We also expect the Hapag-Lloyd proceeds not to forget in the next month. The bookings for summer 2021, we see them already as we reopen.
We think of other items like sale and leaseback, you could think of that, and other items that we mentioned. What I can say is that we are proactive and we do everything that is in our remit and we can currently announce a EUR 2.1 billion liquidity, which is probably more than you would have imagined when we talked two months ago.
Yeah. Jamie, it's good. I would have bet you are the first and you have three questions, and I think it's an important question. Liquidity is at top of mind, and this is not only CFO, that's also me. Every day, me personally looking what we pay. In the first months, you saw the liquidity drain, which is much bigger, so the past, which is gone, because we had to resolve some financial instruments. Operationally, it was much less and the savings only kick in right now. As Birgit said, let's assume for a moment EUR 250 cash drain from fixed costs. My personal view is we will be on top of things. We have now a 50% repay rate. My view is as soon as we see a little bit light end of tunnel, it will be another problem because then also cash will be flowing in.
As Birgit said, the EUR 650 from Hapag-Lloyd are to come in June. That doesn't say liquidity will be lasting and it's obvious there. We also look at parallel, of course, plan for the worst, hope for the best. We are looking at our options. We will see the options. The options will be more probable than in the first round. That's also clear. In the first round, the banks could have gone away. The KfW was not there. I'm in a positive mood. Of course it is day-to-day management and liquidity is number one, number two, and number three priority.
Okay, thanks. Just on the second question, which you touched on other options to increase liquidity. On the sale and leaseback idea, could you please quantify the value of the 100% owned assets the company has that are not encumbered by debt already? What is the quantum of assets that you could raise money against, please? As an alternative to that, are you considering equity as an option rather than just simply adding more debt? Thank you.
Okay. Yeah. Jamie, first of all, we don't disclose. Of course we have levers. They are not huge. They are significant. We don't disclose yet what is an option, what is in our hands. The other one with equity, if possible, it's not the right thing to do. The equity markets for us at the current share price levels are not efficient and very dilutive. Also not accessible, by the way, in the time we need. That said, this is our foresight for next half year, I would say. Of course, we are looking at all options. If possible, we will do something else. I think there are enough other options, which I'm absolutely clear are possible. Yeah.
Okay.
Okay.
Finally, you mentioned Hapag-Lloyd. How certain is that deal to go through? How did you expect to raise the debt? Does TUI need to inject more cash into that JV?
No. Certain? No. No equity injection. Certain, yes.
It's raised the debt, has it already?
Huh? Sorry. You know that, yeah. TUI Cruises is fine with.
Yes
TUI Cruises is fine with liquidity.
It's raised the debt to fund the Hapag-Lloyd acquisition, has it?
Yes.
Yes.
Okay. Thank you very much.
The next question comes from Jaafar Mestari from Exane. Please go ahead.
Hi. Good morning, everyone.
Hi.
I've got three quick questions, please. The first one is just on cash burn since April. EUR 2.1 billion liquidity today is about EUR 1 billion lower than at the end of March. Even if we exclude the debt repayment, it still looks like EUR 700 million of cash over six weeks. Could you maybe just break that down for us between operating cash burn, financing, and working capital, just so we can see what gets better from here? Second question on consumer behavior for the rest of 2020, maybe even 2021. What sort of destination mix and product mix do you think you need to deploy?
Did you assume demand will be very much the same, it's just going to be an uncertainty on volumes? Are you adding, remixing different destinations closer to home, domestic trips, short trips, et cetera? My last question would be on the long-term capital structure. As you said, you may have enough loans and bridge loans and debt, for now, but I guess there's an entirely separate question, which is, what is the long-term sustainable capital structure for a business like TUI? What sort of level of leverage and what sort of debt versus equity mix would you feel comfortable with over the long term when this is repaired?
Birgit, do you want to start?
Yes, I'll start with the last question. Of course, currently it's a bit early to talk about that because we do not know when travel resumes, and as I said before, we have various scenarios. Of course, adding substantial debt and depending on when travel resumes, because this is a really big factor, when travel resumes, and we did that modeling as well, the working capital inflow is really very substantial. Suppose in a worst-case scenario, you would have to add more debt. Of course, we need to think of solutions for a healthy balance sheet that speaks for itself. We are looking at a variety of options, and it is really way too early to talk about that. Also, obviously, you need more data points. When does travel resume is already one of them, but I do understand your question.
On the cash burn so far, we have a portion of, let's say around, let's say EUR 350 million-EUR 400 million of commercial paper also and the laterals are included and the rest is, as we said, taking down fixed costs substantially and also with the customer refunds. There you will start seeing the repayments and it is towards the rate therefore also for your models, what I just mentioned, it's same order of magnitude as the fixed cost run rate. That is what you can take. Actually, it demonstrates that we were really very focused on cash, and as Fried also said, it's also in our daily cash call, so we really have a cash tower in place, where we discuss everything that comes in and out. I think that that gives a perspective.
Yeah. Maybe a couple of remarks on my side. The first one, the repayment of customers and also the payment of hotels, both are a part of the other, let's say, same order of magnitude. I can tell you, we are sticky on this because it's also very clear the longer we actually keep our cash together, the more likely it that it will be kept in the system. Also with our hotel partners, like with all other partners, we are agreeing payment schemes that we pay a part and everything else will be paid once the business is resuming. Everybody needs to suffer a little bit. If the revenue is gone, then the revenue is gone. Being part of the TUI family has significant advantages for them because we will restart the business together with them.
We will take an appropriate contribution from their side in order to be part of our family. In terms of traveling, I think what we are preparing for is very clear. We are preparing for destinations where we can control safety best, and that is areas where COVID infections are low, areas where we have limited connections to the general public, if you like. Islands are good. We will be very careful with excursions and mingling up customers with locals and so on. That's also accepted from their side. Coming back, it will be also south of Europe. We need to have, and we want to have medical service close by. We will not eliminate the risk of infection, but we will mitigate the risk of infection, right? Nobody can eliminate it, but mitigation. What do we do if things happen?
We have concepts in place, but that, of course, in Europe, easier than in places outside Europe. It will be Europe's good. As I said, cruises will be limited in terms of load factor, and maybe even Germany first, so that we are starting from here and do shorter cruises and so on. It will be a little bit more close by. One thing is also clear, we will be opening hotels in Mexico soon for Mexican and American customers. That's very clear. These hotels will also open, and the offers will be there. I just believe that the long-haul flying will be something for the summer. It's maybe not the right thing. Now, it is anyway bigger in winter. Therefore, we are now pushing a lot for local and for European. Hope that helps.
Thank you very much for that. I guess my question on the cash burn was more backward-looking. I just meant really, it looks like EUR 1 billion lower liquidity over the last six weeks, EUR 300 million is the debt repayment. Could you maybe give us some color on the other EUR 700 million that you've consumed over six weeks, please?
It's actually a mix of things. I would say on the operational cash out, let's say it's really in the run rate that we just mentioned. That is already one thing. The rest, also, for instance, customer refunds and also some insurance covers, et cetera, that we had to cover. It's actually fully in line with how we modeled it.
I think, if I understand your question correctly, you think, is it really as low as we think going forward based on the experience in the past? First of all, when we started the business, then the cost structure was not that worse. It was not EUR 250-EUR 300. The first two weeks you'll see more. You had the commercial papers which actually had to be returned. You see a little bit of reserved cash as well. Cash collaterals for actual travel, but this is full season effect, so it's not repeating. That actually brings us to the amount. We have now a daily projection of actually what the cash payments are, and I can assure you, I personally sit in the call every day. It's not the first time I manage a company for cash.
When you manage a company for cash, you don't care so much about the P&L effects. We are managing the company for cash, and we will be doing that for the next two or three months, however long it takes, until we have a full restart in the system.
Okay. Thank you for that.
The next question comes from James Ainley from Citigroup. Please go ahead.
Good morning, everybody. Thank you for taking my questions. Three questions from me as well, please. First on your commentary about shifting to more asset light, how are you particularly thinking about the structure of the airline and provision of aircraft lift context? Because it's fully outsourced. Second question is, could you give us a breakdown of the percentage of customers whose holidays are canceled? What % accept credit notes or vouchers? What % would book refunds? What level of discount you're giving to those?
Yeah. Sure. Third one?
The third one is just, can you update us on the status of the compensation from Boeing, please?
Okay. With Boeing, we are in good negotiation. No further status, I'm pretty hopeful that it will be resolved in so far future. The assets of the airlines, not having an airline is not an option. It needs to be more intelligent. An airline is an essential facility, one thing is also clear, we need to right-size the airline. We have to have an appropriate size and an appropriate structure, it's an appropriate asset structure. We have been thinking about that quite a while. Now as we don't fly, it's maybe a good opportunity to focus a little bit more on that. The last one was 50% return rate of not voucher. You also asked policy incentive for a voucher. This is different in different countries. I would say on average 15%, maybe 10, 15%.
Also please remember, 10%, 15% is not physics. At the end of the day, in U.K., we give 15% online discount. At the end of the day, don't put discounts on discounts on discounts. This will be a little bit smarter than that. We are face value, I think in U.K. is 15% on average. In Germany, I think it's EUR 100 for a full-paying member of the travel group. As a family, as a parents, two children. Anyway, we are playing around a little bit, and at the end of the day, the more important point is the conversion of the redemption of the voucher is good.
Did you say 50% of people take demand cash refunds?
Yes.
Yeah. Okay. Thanks.
The next question comes from Richard Clarke from Bernstein. Please go ahead.
Good morning. Thanks for taking my questions. Three if I may. Just want to reflect on your comment of being a leaner organization going forward and cutting 30% of your cost. What would you expect to be the sort of top-line ambitions here? Would you still be looking to transport 21 million customers, or does that number come down sort of roughly in line with that 30% as well? Second question on your comment around disposals and disposing of non-profitable entities. I guess there's some probably pretty big chunks of your company, like the U.K. and Germany that can go quite close to that. How big could those ambitions of disposals be? What are we talking about there? Third question, just coming back to cash needs again. Obviously, you've got some support from the German government.
Are there any discussions going on with Spain or Turkey or the U.K., in terms of support that they might be able to provide given the importance of tourism to those countries?
Okay. Let me try to focus. Lean organization, of course, topline will be back, maybe not next year, but the year thereafter. If there's a vaccine, it will be growing fast. We are talking about a more lean and digital execution of exactly the tasks we will be doing in a higher quality with less cost. When we talk about the savings, it is savings on existing revenues. That said, maybe not next year it will come back. Therefore, we have a little bit more flexibility in the system. Long-term, it's just value increase or margin increase, if you like. How big is the ambition for disposal? U.K., Germany, where did you see the non-performing assets and you thought, okay, that's interesting. I think we are talking here France, and we are talking here other parts of the business.
We have a Spanish business. We have a MICE business and destination experience. We have a harbor handling business and so on. We look at a lot of businesses, but not the core business. We have local schemes to support labor. These are all local. We have local schemes to support working capital. These are local. They have European law, the countries have actually implemented very different things. On the KfW loan, this excludes, as to my understanding, third country support. Even if it was available, it's very clear that these kind of facility is a global facility. By the way, that was one of the big issues that this is supporting our global activity and not only German activity. It was one of the big successes of negotiation initially to achieve that.
You can see with other companies, other airlines, that this can be quite a distraction if you don't achieve that. You have one company, and how can you make sure that the money flows the ways and you cannot pay the money? The money is the money. At the end of the day, it's difficult when you look at prepayments from German customers to a certain hotel. How do you want to do that if a certain money is only granted to secure certain parts of the business? The KfW facility is a facility which is a global facility, but it excludes the like government scheme in other countries. Does that answer your question?
Yes. That's clear. Thank you very much.
The next question comes from Adrian Pehl from Commerzbank.
Yes. Hi, good morning, everybody. Also good to hear that you're safe and healthy. A couple of questions. First of all, on your presentation on page 12, actually where you outlined potential destinations that might open up anytime soon. I was just wondering if that portfolio that you mentioned there would be already sufficient to make you satisfied for the summer season, i.e., if Spain mainland does not open up, Italy or Turkey. Is that still enough for you to have a decent business for this year's summer. My second question is coming back to KfW a little bit. Obviously, in spite of the fact that you are quite confident on Hapag-Lloyd Cruises sale, I'm just trying to get my head around why the amount has not been EUR 3 billion, for example, since liquidity still obviously appears to be tight.
What are the prerequisites for a higher amount, and can you get additional money if you find out finally it's probably not enough? A question on actually sale and lease back measures that you just announced. It's probably a chicken and egg problem, isn't it? Otherwise, if markets do not open up, then actually the sale part of the sale and lease back is probably a bit difficult in terms of pricing that you might get. Any comment on that? Very lastly, you obviously got new shareholders since April, Mr. El Chiaty. I was just wondering and curious to hear your thoughts, if you had already some contacts to him and does he have any ideas strategically or what's the situation there? Thank you.
Maybe you go first.
Yeah. I can go first on the amount. I understand your question with the information you have today, middle of May, you could think, oh, why is it not EUR 3 billion instead of EUR 1.8 billion? You need to think in how it was. Maybe you remember where you were in middle of March, there was a totally different situation. Nobody would have expected we would sit here today like we are sitting around the table with the spaces in between, et cetera. It was a completely different situation. At that time, we were counting with a resumption of travel as of the beginning of June. Everybody thought even there, yeah, well, that's a very terrible case. That is in light of that you need to see this development of the COVID-19 crisis. I think it's for many companies the same.
You can only act with the information you have on that specific day because nobody knows. That, I think, would be the response to that.
Yeah, absolutely. Birgit, that's true. I remember the Sunday where we said Adrian, it's also like, you sit there and say, "Okay, guys, we need to make sure that we get it, right? Okay, fine. We will have liquidity for the next three days. Okay. That's interesting. What can we actually do?" My point is shooting EUR 1.8 was EUR 1.8. We could have shot EUR 2.1. We could have done whatever. At that point in time, it seemed to be EUR 1.8. We went through the door two weeks later. We were the first one approved, government backed, and so on. Also don't underestimate, the EUR 1.8 does actually two things. The first thing it does, it locks in the banks, the banks are at the table. Everything is good. The banks are there, KfW is there, that's good.
In case we would need more, I think now things are at the table. Nobody knows. If it only comes back 30% in November and hell breaks loose or whatever, we will be taking care of it. I think the chance right now to secure additional money are better than securing at that Sunday, 16th of March. I have been in the room, Birgit has been in the room, many of the team members here have been in the room. Interesting days, I tell you. Hindsight is easy. We could have said EUR 3. We could have said, knowing that Lufthansa need EUR 9, maybe we should have said EUR 3. Water under the bridge. Destinations for summer. I would say if we open Mallorca, Canaries, if we open Greece, let's say these three, Cyprus is smaller, but if we open the three, I am happy. Okay.
We are not managing the company for P&L, we are managing the company for cash, remember. If this comes in, cash is not a problem. If it doesn't come in, then we will have discussions. If it comes in, cash is not a problem. P&L will be maybe more difficult. That's something when we rebook customers, we have enough volume to fill these destinations. I think customers have enough flexibility just to go on vacation when it's safe. It's good. It's maybe even better to open half of the destinations and fill everything than have the full destination and everything is still stopped. We take whatever it is. As soon as we can really start selling summer this year, the liquidity issue will be less of a problem because then immediately you have a flowing and working capital.
That's, I think, the most important thing. We take care about cost and P&L when it's appropriate, but now we take about the cash, and that's the reason why it's important that it opens. Sale and lease back, of course, today, sale and lease back is nonsense, right? Because you have distressed assets everywhere. We are preparing everything in order to be, as soon as we have a little bit air under the wings, off we go. Then we have El Chiaty. Hamed is a good friend and long-lasting business partner. I know him and his family, and he is trusting in the tourism business. He is trusting in TUI, and he knows us very, very well and the situation very, very well from all kind of aspects for a very long time. He is one of the longest lasting business partners.
That he invested 5% is maybe not a bad sign. Therefore, I think also for KfW and for other people who have actually loaned, if the equity side is also moving, usually it's also good for the bond side and for the bank side, the loans.
Perfect. Thanks for your words. Thank you.
The next question comes from Cristian Nedelcu from UBS. Please go ahead.
Hi. Thank you very much for taking my question. Firstly, on liquidity overall, could you tell us at the end of the summer, what's a comfortable level of liquidity for the businesses? EUR 1 billion, is it more or less? Secondly, on the data that you are disclosing, it seems that net debt is going to move to somewhere around EUR 4 billion or a bit above EUR 4 billion by the 11th of June when you're going to restart operations. On a metric, what's an acceptable level of financial leverage or sort of net debt EBITDA? What level you think is sustainable on a metric? Lastly, looking at the recovery overall, could you tell us a bit more what the cash break-even occupancy for your hotels or for your cruises, or give us a bit of color how we should think at first stages of a recovery?
Equally from the working capital point, what happens with all the people that have already paid the advanced payment? Is it fair to assume at the beginning they will be the ones that they will travel? Effectively, how do you think about the lack of cash from that lack of cash coming in, new cash coming in? Thank you very much.
I had difficulties to understand everything, to be honest.
Yes, it was very hard. There was a lot of background noise. On the additional debt, because that's also a question that I believe you asked. As I said earlier, because I already talked about that, it depends on the travel opening scenario, of course. As we indicated, we have a run rate cash out that is for fixed costs for customer refunds, et cetera, and some other small items, and we indicated that also in the presentation. This will lead naturally to an increased debt provision as Fried already said. It depends on the opening of travel. Of course, then we are actively managing that, and we have a variety of options, and then we will address it in order to make sure that we have a healthy balance sheet going forward. That's what I can say about it.
Yeah. The other questions I would like to answer, but I didn't understand them. Do we have an understanding?
Apologies about the background noise. The question was, what's a comfortable liquidity level at the end of the summer for a business like TUI?
Yeah. Okay. No, I think the interesting thing is usually we have the summer positive swing and then winter negative. When your summer is more or less zero, you know the winter is very positive, right? As soon as the business starts, even if it doesn't start in summer, it starts in winter, you will have immediately cash inflow. The liquidity is really only a problem until you have business. Actually it goes. Now, let me talk a little bit about debt. I'm not a financial guy, I'm just a CEO. How I see it, of course, we have no additional debt. We also have enforced two years of non-dividends. That's very clear. Calculating EUR 300, EUR 350 or whatever per year is EUR 700. If you then say, Marella we wanted to put anyway, if possible with Hapag-Lloyd into TUI Cruises, that will de-lever.
When you think about possible rightsizing. Just assume for a moment we had 15 airplanes left. This would immediately not only save cost, also de-lever the company significantly. Therefore, I would not be too worried. It's not that we have done less business, but we will have oversupply of airplanes everywhere because definitely business travel will not happen. We will have access to supply even if we rightsize the airline. My personal view is if we look at our assets, if we don't invest into hotels like we have in the past because there's enough volume offer anyway. My view is our business is big enough to generate enough cash. We just did a lot of investment in the last years because the business was growing so fast that investment was a good policy.
I think for the next two years or three years, we will not invest into hotels. We will invest into IT, we will not invest into hotels, we will not invest into ships, we will, if possible, do as little as possible with aircraft. You will see much less investment. You will see no dividends. You will see a little bit of capital restructuring in our balance sheet. As I said, I'm not a CFO, from a CEO, it doesn't sound odd. What is cash burn?
Yeah. That would be, let's say, around 35%-40% of the total cash fixed cost burn rate that we indicated, I would say currently, that's what we currently see.
Thank you very much.
The next question comes from [Alexander Katzela] from Barclays. Please go ahead.
Yeah. Hello. Thanks for having my question. Actually, I have a couple questions and mostly basically of all the scenarios maybe you had in mind when you asked for the state guarantee. Now we're a month, two months later, and I'm just wondering, where do you see yourself in these scenarios you anticipated? Are we now in the worst-case scenario for you and the EUR 1.8 billion was basically still taking this into account, or are we now in a situation which it seems to be that the business is worse off than anticipated?
On top of that, it would be great actually if you could also walk us through maybe how you see working capital in a ramp-up now, if for example, if travel resumes then in June, July, how this plays out for the next maybe two, three months and then how you see then the winter season looking like.
Okay. The first question was about liquidity versus the initial case that we made with the resumption in June. There, we can clearly state that our liquidity provision is better than what we originally planned. That is good news. As to the scenarios, as you can imagine, it's difficult for me to disclose all the scenarios as we do not know when travel resumes, we have various cases. Of course, it would be not very sensible if we wouldn't. We do have scenarios, but I cannot really go into the details of that. Your last question was on the working capital inflow. That is, of course, because you will see also a very large one-time effect because obviously currently we don't have any revenues. And your payables are, let's say, 30 to 60 days.
On average, 60 is what we target for. There you will see a one-time effect. Of course, we also have the seasonal pattern, as you have seen from that illustrative graph that you can even add to that. That's why the working capital inflow, once travel resumes, is pretty significant.
Okay. If I may, a follow-up actually on the Hapag-Lloyd acquisition. Just wondering, the proceeds you expected are roughly EUR 650 million, no?
Sure.
On page 21, you actually have a line item that is saying that the disposal group here of Hapag-Lloyd Cruises, there is a net debt position of EUR 329 million. Is this correct?
This is the direction of the company, huh? Sure.
Yes, that is correct. Yes.
The EV would be then basically this plus the EUR 650. My question also is actually, is there any cash in the Hapag-Lloyd group we have to involve maybe on the current liquidity?
No, that's a net position.
Yeah.
Yeah, maybe you can answer, [Wolfgang].
The EUR 600 million is the cash inflow, clearly debt leaves the group. This is a net position. You have to add this on top plus the equity we give in. If you remember, we've been stating an enterprise value of EUR 1-EUR 1.2. If you deduct that, you come to that number.
Okay. Understood. Brilliant. My last one, actually. Could you provide maybe a better granular overview of the capital structure at the moment, maybe by line item, how much is on the commercial paper or other facilities and how much basically of this is available. Basically a split of capital structure and liquidity.
Yeah, we will follow up on that with you. Is that fine? We'll do that immediately. Yeah.
Brilliant. Thank you. Thank you very much.
The next question comes from Mark Irvine from TUI. Please go ahead.
Hi, good morning. I think that's me, Mark Irvine, from Stifel. Just two hopefully quick ones, lastly. One on third-party hotels and one on the MAX aircraft. Just on the hotels. With the force majeure contract, what does that mean for the relationship with those partners? Have they generally accepted that the pain needs to be shared? Does it affect the ability for you to secure inventory with those partners for next season, so summer 2021? Just a little bit about the force majeure would be helpful. The second question is just on the MAX aircraft. In light of your comments about becoming more asset light faster, how much flexibility is there on the downside with that framework agreement? Can you get out of it totally now that the world looks so different? Maybe just an update on the flexibility on that contract. Thank you.
Okay. MAX aircraft first. With Boeing, we are in discussions, as you know, in good faith. We will resolve it, I'm pretty sure. The motivations on both sides are high, but we have less order book than we have aircraft in the fleet. We have flexibility. We can shrink the fleet, but we don't need to touch the order book. I think we have enough flexibility we need. We will right-size the airlines, but the order book might not be, or will not be potentially affected. That's our today's position. Second point, hotels. Yes, we have payments which we don't give to hotels. Yes, that's true. We have payments which we give to hotels. The negotiation is very clear. We are an industry without revenue. Tough luck. You have been benefiting.
Everybody has been benefiting from a great industry and the vertical integration, and so on and so on. Now everybody has to contribute. That said, it's a strong bond, and we will be able to negotiate mutual beneficial deals. These mutual beneficial deals means we pay less now, and we actually therefore do commitments for future businesses and work together with the parties. When we start up, they are considered specifically as core. With some of our partners, we still have the prepayments, and we will actually make sure that the prepayments will be up and will be served first, and the volume will be going there. We are in this industry with most of these hotel partners for tens of years, if not 50 years. It is now one of the most unprecedented, and maybe the most unprecedented crisis.
As we are in problems when we don't have revenues, our travel agencies are in problems. The downstream business, the upstream business with our hotels are in problems. It's not like a happy birthday party, everybody can have wishes. We are actually into it together. Of course, we will make sure that our value chain is intact. We will make sure that the hotels are not disappearing. We are interested in a big offer. At the same time, our first priority needs to be that the cash doesn't flow out just meaningless to hotels or meaningless to customers. This is each and every euro, each and every day, and it must be a good reason to pay.
The good reason is actually a past reason because we have done business, but it's also a future reason because we have a good agreement or we have a strategic alignment, and so on and so on. I think here, we are just doing a professional job. By the way, I don't think very different from others as well. I have a feeling that we are getting along quite well.
That's helpful. Thanks.
The next question comes from Rowland Clark from Barclays. Please go ahead.
Good morning. Thank you for taking my questions. Just two quick ones. There is a lot of attention in the travel industry on customer deposits and refunds. Do you think that this could ultimately, in the future, we could be looking at the treatment of customer deposits by travel companies changing in some way, perhaps excluding this from working capital? Then my second one is, hypothetically, if the travel lockdown does continue through the summer, is the communication line with KfW still open, that you could turn to that as your primary solution? Would you as your primary solution? Thank you.
Okay. KfW is one of the options, that's clear. There will be other options as well. We don't have the luxury not to look at options. We will look at options. As I said, capital increases are maybe not the most efficient thing to do. Anyway, we will look at different options. If you ring-fenced customer deposits, it would more or less destroy the industry. The nature of the benefit of the industry is its positive working capital. The positive working capital has been the engine of that industry. Think about it, customers give money, we invest, help with the hotels to invest into offers. The offers generate offers that in turn generates demand at lower prices and an oversupply, and therefore it's a self-fueling engine. As long as the industry grows, it's beautiful because it's more and more fresh money.
As we believe the industry will be growing fast, it has been outgrowing GDP in the last 15 years. It is a beautiful model and You break it if you ring-fence it, right? Therefore, it's in nobody's interest to ring-fence customer deposits. What we do, we are securing customer deposits, and that's something which is also very special because there is no other consumer goods in the world which is actually secured as a prepayment of a customer. In terms of the certainty customers have that they can get and demand their money back. I think, the nature of the industry is actually in nature of positive working capital.
That's great.
The last question comes from Alex Brignall from Redburn. Please go ahead.
Yeah. Morning, guys. Just one last from me. On capacity plans, you're 35% booked. It would be interesting to know what you have done to capacity since we last heard from you.
Oh, no. What is that? Sorry, Alex, I think I didn't get you. I think you said the capacity plan was 35% booked. That I understood. Yeah. Okay, maybe it's gone because now we lost him, I think. Or are we lost? Operator, can you say if we are lost or if Alex is lost?
No, we are not lost. Just one second. I will get him back on the line. Now he is back on the line.
Okay.
Hi. Sorry, I'm not sure if you heard me the first time. You're 35% booked now. Could you tell us what your capacity plan has done since you last spoke to us? Within your capacity plan, how much of it is your own capacity versus capacity that could be taken out with force majeure clauses that isn't yours, as it were? Thank you very much.
For the 35% was largely committed, that's clear. The wholesale model is largely committed. Of course, we try now and we will get all of capacity as it's force majeure. Also we will be focusing to serve our capacity or the capacity industry we served. For the utmost important now, because it's again, a P&L question, right? The utmost important is liquidity. Liquidity doesn't matter. I think in liquidity terms, we would be happy to wherever it opens. Let's assume for a moment we were average booked in all countries and in all destinations. If now Mallorca opened first, we would of course offer to everybody who is not Mallorca to go to Mallorca, right? We will actually make sure that we fill as much as possible. Everything which is possible.
I just want to thank you very much for all your questions, and I think we need to close. I want to close the meeting with a very positive message I got from the wires. Obviously, the minister for internal in Germany has said that latest in 15th of June, he will open all borders. Let's see. I don't know. Hopefully, it's true or not, but I see that as a DPA ticker. I have them all the time on my phone. If it's meaningful and if it's true and if it's not something which is fake news at the end of the day, that would be a good message as part of our half year results. Thank you very much for being tuned in. As I said, we take care of liquidity. We look that we don't have cash outflows.
We look at that we get enough liquidity for actually the time that we don't have business. As soon as we have business, liquidity will immediately focus. The focus will go from liquidity to P&L, that means limiting the damage of debt. That's the question of how can we do profitable business, how can we actually make sure that the profits also in turn become cash again in order to limit the debt and we will refocus the business, save the cost, make it more lean and more digital. The company will be a little bit different. As Birgit said, we will be very disciplined on investments. Because not only we are disciplined, because it's also not a good thing to do for the time when you have an oversupply. It's a self-fulfilling prophecy, if you like, as well.
Thank you very much for being in the call and talk to you soon.