Good afternoon, ladies and gentlemen, and a warm welcome on board this Finnair flight to the future in this auditorium and of course to those of you following us via the webcast. During this flight, you have a great opportunity to get acquainted on Finnair's new strategy. This is of course, for the years 2020 to 2025. Our captain, Topi Manner will take you through the sky with of course, his excellent co-pilot, Niklas Ilebrand, who will also lead you the way with the great crew members of our executive board.
As you are already aware, we cabin crew members, the real ones, at Finnair have excellent service and safety skills on board our flights, and we have the ability to serve our customers with a warm and caring way, the Nordic way. Customers are our priority, and that is why we aim to take care of our customers proudly and committed. After all, we treat them as they were our guests in our home. We carry out our everyday work, keeping in mind our values, commitment to care, simplicity, and courage. These values guide us forward and enjoy the work that we do. Sustainability and corporate responsibility are important, especially for the generation of today, but the purpose is essential to all employees of Finnair.
During this flight today, you will get more information of our renewed strategy. You will be more aware of our operational excellence and how we create value for our shareholders. We will have two separate breaks during which you are served some snacks and refreshments outside the auditorium. We would like to wish you a very interesting day with Mr. Manner and Mr. Ilebrand, and with our executive board. Of course, we hope to see you on board.
Ladies and gentlemen, in case of an emergency today, we would like to guide you to the nearest exits, which are of course, over there and also over there. Enjoy your flight.
Thank you very much to our fantastic crew as always. My name is Niklas Ilebrand. I am responsible for strategy here at Finnair, and I must say that I am really excited for today and the chance that we have here today to introduce how we intend to take Finnair, as mentioned into the future. Finnair is a network airline, and what I hope that we can show to you here today is how we seamlessly and very straightforward connect the previous stages of the Finnair extensive journey to the next phase of the journey. We have a good agenda here planned for you today.
We will start out with Topi giving the highlights of the strategy and the next six years for Finnair before we go into a little bit more details on the network and fleets part and the decisions we've been making in that area, which will be presented by Ole. We will have a short break, as mentioned, with some refreshments, and then move over to operational excellence, which will be presented by Jaakko, who is sitting over there, who will explain to you how we intend to become even better in our operations. Both to create more value for customers, but also to make sure that we are efficient as an airline. We will then shift over more towards the revenue side, and Piia and Ole will explain how we will create value as a modern premium airline.
A short second break, getting then down to the numbers with Mika, in terms of how this all sums up from a financial perspective and how we intend to create value for shareholders and create room for the investments that we are planning in this period. Finally, we will be back with some closing words from Topi. The way that we will run this is that we will run the presentations, we will then do a short Q&A after each of the presentations. We will basically run the presentations through, then do the Q&A afterwards. With no further ado, I'd like to hand the word over to Topi.
Thank you. Thank you Niklas, and welcome to you all to Helsinki and to Finnair Capital Markets Day. To you all here in the room, but also to all of you who are joining via the webcast. It is great to have you participating. I have been now in the industry for a little bit more than 10 months and learning the ropes of the industry, getting to know Finnair as a company and the people at Finnair. I must say that we have a great industry. We have a fascinating industry and if possible, Finnair is even greater as a company. We have great people as you just saw, and they care deeply about our customers. They care deeply about each other. They care deeply about the results of this company.
During the past couple of months, we have been working intensely with the new leadership team, with the new strategy. The bottom line of that work is that we see. I see, a sustainable, profitable growth path forward for this company. Everything that you will be hearing today is about sustainable, profitable growth. It is a new phase for Finnair, and it is a notable shift from the previous phase that we had that was about accelerated growth. If you just look at things today, we are probably one of the fastest-growing airlines in Europe, with our capacity growth of 11%-12% in terms of ASKs during this year.
If you go back to our previous Capital Markets Day, that took place a little bit more than three years ago, today, in terms of capacity, we are 50% bigger than in the previous Capital Markets Day during that time. Today, we have more scale, and we can start benefiting from that scale in the future. To me, Finnair is a big-small airline. Big-small airline in a sense that we have strong safety culture. We have a strong safety record, operational quality. We are known as an airline that works, and that is appreciated by customers, and we have a high standing in the industry among peers. We are also a big-small airline in a sense that we are big enough to do things. We are small enough to get them implemented.
It is this implementation discipline, this implementation capability that in my mind, basically makes us stand out. We are agile. We are known to have made courageous and determined decisions in the past, like being the launch customer for Airbus A350 in Europe. Those kinds of decisions we will be doing also going forward. We want to be a modern premium airline in the future. That subtle, friendly service that we have, combined with authenticity, sustainability, not forgetting the Nordic and Finnish touch in the service, those are key components of being a modern premium airline, and we are ready to invest into this customer experience as well, as you will be hearing little later today. What the new strategy is all about, what kind of choices we have made, you will be learning in the next couple of hours, presented by our leadership team.
What the new strategy will deliver is improved profitability. In line with the targets that we communicated last Thursday, where the focal point in terms of profitability is that we will generate above 7.5% operating result EBIT over the cycle, with a buildup period of 12-18 months, and above 10% return on capital employed over the cycle with similar buildup period. As stated, it is a new phase for Finnair. We have been through many phases in the past and today we are a company transformed. We have a strong point of departure. We have more scale. We can start benefiting from that scale. We have one of the most modern long-haul fleets out there. Our brand is stronger today on our home market and beyond. We are recognized as an airline connecting Europe and Asia.
We have been investing quite a bit to digital capabilities, and we are known as an innovator. As an example, we were the first airline in the world offering Alipay as a payment method on board our flights in terms of in-flight sales, also including the Chinese airlines. We have a modernized culture. We have unique set of strengths. As an airline, we are all about connecting Europe and Asia, utilizing the short northern route, the optimal geographical position of Helsinki. We have strong position, strong market share in our home market at Helsinki Hub. We have unrivaled domestic network, and what we experience is more and more demand from Asia and Europe towards Nordics in general, and Finnish Lapland in particular. As stated, we are operationally a strong safety culture.
Customer experience and people experience, and understanding the causality between these two is an important part of our DNA. In terms of starting point, we have a solid financial position. We have healthy balance sheets, we have strong cash position, and we have investment capacity to future, to growth and customer experience. If you look at the previous set of financial targets that we communicated at the CMD back in 2016, I think that the bottom line is that we have been delivering on growth, we have been delivering on balance sheet. We still have an opportunity to improve our profitability. If you look at gearing, if you look at return on capital employed with pre-IFRS figures, if you look at capacity to Asia doubling, you can tick all of those targets off as being delivered.
We are well on our way, actually ahead of schedule in terms of having 20 million passengers by 2030. The operating profit 6% with pre-IFRS figures, that we haven't fully delivered. That is the key job to be done for the next phase to improve the profitability and that we will be doing. The roadmap to sustainable profitable growth is about growth in line with the markets. We estimate that that will be meaning a growth within the range of 3%-5% on average on annual basis during next year's up until 2025. We will be strengthening our customer offer. We will be increasing efficiency, and we will be strengthening our market position in Asia.
I think that we have been with the focus strategy on connecting Europe and Asia, we have been finding a good space on the market between the giant airlines on one hand and the low-cost carriers on the other hand. This focus has been serving our purpose well in the past. We will double down on this strategy going forward. The sharpened focus here is that we will be focusing our network to Asian megacities. Rather than adding new destinations to our network in Asia, we will be more about adding frequency to Asian megacities going forward. These are high-yielding markets. These are attractive markets. There are mega trends like urbanization that are supporting that focus. The average income of citizens, people in these megacities is increasing. There will be more and bigger addressable market. There are also limitations to airport capacity.
We estimate that the Europe-Asia traffic will be growing with some 4% on annual basis in the future. If you look at our market share, if you look at our competitiveness today, market share being a key indicator of that, our market share in the Asian traffic has been steadily increasing, and today is higher than ever on the markets relevant to us, basically on the routes where we are flying. More than 6% market share on those routes. Of course, there's still a lot of room to grow going forward. We have the shortest routes that is convenient to customers. That brings also operational efficiency with aircraft utilization, with crew utilization. We have long history in Asian markets. We have been in Japan and China for 30 years. In those countries, in Japan and China, this really matters. When I go there, it always comes up.
During that time, we have been building strong, long-lasting relationships that are helping our presence on the market. Then the short-notice route is also the most environmentally sound route. During our times of climate change, this is important. If you look at Airbus A350, in terms of fuel efficiency in terms of carbon efficiency a route of 8.5 hours to nine hours is actually the sweet spot in terms of sustainability. Many of the Asian megacities from Helsinki are within that range. Going forward, we will be focusing on the core, and the core is that we are an airline. The growth will come especially from the transfer traffic. Stemming from this focus strategy, we have an integrated business model, one company model, integrated model. About 80% of our revenue is coming from passenger revenue.
50% of our revenue comes from transfer traffic, and that is also the fastest-growing part of our business. Increasingly, we are a transfer company with a very strong point-to-point traffic to and from Helsinki, where also our market share has recently increased from already very high levels. The other business lines that we have, ancillary business, cargo business, and travel services are greatly synergetic to our model. With cargo, we only have belly cargo. We have invested to a new terminal. The climate currently is a bit tough for cargo business, but we are competitive. We are winning market shares also in cargo business. The travel services, namely Suntours and Finnair Holidays, make us strong on our home market in Helsinki Hub.
This integrated business model, combined with the culture that just heard from our cabin crew members, commitment to care, courage, and simplicity being the shared values. I think that the combination of clearly articulated strategy, integrated business model, one company model with that culture gives us a simple and manageable business. Our industry is not necessarily simple, but the company is simple and manageable. With the words of Da Vinci, "Simplification is the ultimate sophistication." I think that this actually is the secret ingredient in terms of implementation capability for us. We do have opportunities to improve. One of them is related to efficiency and productivity. If you look at a couple of years in the past, we have been growing our capacity Available Seat Kilometers with 8% on average. Our revenue during the same time has been growing with 5.5% on average.
Our operating expenditure, excluding fuel, has been growing with 6.1%. Cost growing faster than revenue. This is, of course, something that we will need to change going forward. We will need to turn the tide. Revenue will need to grow faster than cost going forward. That we will be doing. In terms of unit cost, this will be meaning that the unit cost should continuously and gradually come down from current levels. Jaakko our COO, will be talking more about this after a short while. The flip side of the coin in terms of profitability is of course, revenue. During the times of fast growth, our unit revenue RASK has been coming down with 2.4% on average on annual basis. This is actually not entirely uncommon for an airline that is growing this fast.
Going forward, we see a number of factors that will be supporting our unit revenue. One of them is that we are scaling back on our growth, sustainable growth in line with the market. We will be operating more mature routes that have been finding their customer base already. We will be focusing, as stated on Asian megacities that are high-yielding markets with positive mix effects coming from routes like Haneda in Tokyo or Busan that we will be opening as the first European airline to the second biggest city in South Korea. Also we see capacity adjustment actually taking place relatively fast in Europe right now. Perhaps especially in Northern Europe. The demand-supply situation is better, and the outlook for that is better in Northern Europe. These factors we see supporting our unit revenue going forward.
Added to that is the ancillary part of the business. I think that during the past years, we have been taking meaningful steps forward in terms of building capabilities related to ancillary business. Our revenue per passenger has been increasing, although stabilizing now lately. We have the capabilities and going forward with the plan that Piia and Ole will be presenting, we will be offering more choice for our customers, more unbundled services, more personalized offers, also on the back of changes in distribution, new distribution capability. This will be a key element of a modern premium airline. Together, these factors will be supporting our unit revenue going forward, so that we will be seeing stabilizing unit revenue, we will be seeing neutral unit revenue development during the strategy period. The retailing agenda is a big part of the modern premium airline concept.
Fleet investments during the strategy period are another big part of it. During the strategy period, up until 2025, we are preparing to make fleet investment decisions and invest, during this period, a significant sum to new aircraft. The indicative range of that being from EUR 3.5 billion - EUR 4 billion during the years until 2025. One third of this investment will be about growth. Two-thirds will be about replacement and renewal. We estimate that this investment during the next six years can be predominantly financed with our strong operating cash flow. Basically meaning that we maintain our healthy balance sheet position. The reasons why we are doing this investment, it is about modern premium airline offering that customer experience that look and feel to our customers. It is about fuel efficiency and efficiency agenda, reducing fuel burn and then materializing cost savings in the process.
It is not least about reducing the carbon footprint of our flying. That brings me to sustainability. Sustainability is the first word in the tagline of the strategy: sustainable, profitable growth. We want to be a frontrunner in terms of sustainability in the future. We have been doing a lot in this space also previously. If you go back to 2005, since then we have been reducing our carbon footprint CO2 emissions per revenue ton kilometer with 27%, especially on the back of us investing more than EUR 2 billion to new Airbus A350 fleet, the modern long-haul fleet that we have. We have been having our first biofuel flights back in 2011 already. We are committed to half our use of single-use plastics by year 2022. Zero landfill waste at Helsinki Hub is part of our plan.
We want to be a frontrunner in terms of sustainability, and we are currently working with a sustainability plan, with specific targets, specific customer commitments that we will be communicating separately, during Q1, in the beginning of the year. What is clear already now, that a core part of that sustainability plan is our commitment and target to go toward long-term carbon neutrality in our operations. These fleet investments that I talk about, they are a mission-critical part on this roadmap. Providing in our European business carbon reduction of 10%-15% for that part of the business. The range depending on our final choice of aircraft in terms of investments. If we look at the path going forward for couple of decades, new technology in terms of hybrid engines or electric flying for short-range flying, let's say approximately an hour flying, will be part of it.
We are participating a Nordic initiative to promote electric flying as we speak. Sustainable aviation fuels. First biofuels and a little bit later in the game, synthetic fuels with technologies like Power-to-X, Power-to-Liquid will be also a key element of this roadmap. Operational improvements 10-100 of operational improvements ranging from continuous descent approach that we are using for 80% of our landings here at the Helsinki Hub currently to Making the turns at the airport by means of electrified vehicles to optimizing our flight paths and flight levels. These are just the examples of a big toolbox of operational improvements that we can make to reduce the carbon footprint. Emission trading, European emission trading the cap and trade system will be part of this agenda, and we see that developing also going forward. Intermodality, collaboration between aviation and train transport is important.
We do not see train being a competitor for our short-range domestic flying, and Helsinki Hub here is getting ready to improve the train connections to the airport. Voluntary and non-voluntary offsetting initiatives in various shapes and forms through carbon sinks will be part of this plan. As stated, the target is that we go for long-term carbon neutrality, and we will be releasing the specific plan in Q1. We are already advanced in the planning, and that is why we can say that the financial implications of that sustainability plan toward long-term carbon neutrality are already baked into our financial forecasts up until 2025. They are factored in to the financial targets that we have communicated last Thursday.
This will be about continued growth in line with the market growth, strengthening customer offer, leading to stabilized to neutralized unit revenue, more focus on efficiency with constant gradual decrease in unit cost, and strengthened presence, strengthened position on the Asian markets. What it will deliver comparable EBIT above 7.5% over the cycle, meaning also that in the high part of the cycle, we would be expecting to be on higher levels of profitability. Return on capital employed more than 10% with same comments over the cycle. On-time performance, 85%. On-time performance measured with arrival punctuality with less than 15 minutes. Our current on-time performance arrival punctuality is 78%. That's actually quite good for an airline that operates in a country where it snows a lot during the wintertime. We want to be exceptionally good in this one.
This is a linear target up until 2025, and it is for the customers. Customers like punctuality. It's a key component of customer satisfaction. It is also about efficiency. With more precise planning, we can optimize the usage of our variable cost. We can avoid customer compensation cost. We can decrease costs resulting from delays like rerouting and things like this. This is something that Jaakko will elaborate on. All of these targets we want to achieve by making sure that our customer satisfaction, customer Net Promoter Score, and employee satisfaction improves. This is deeply in our DNA, and improvement is an ambition because we are already in high levels in these measures. Any given strategy, of course, at the end of the day is about implementation. Implementation is about people. It hinges on people. We have a new, strong leadership team.
In the leadership team, we have people who know Finnair inside out. We have decade-long experience of international aviation from various international airlines. We have new people with a fresh perspective from new industries. We have people who have been around the block not only once, but twice in terms of digital innovation, digital transformation. The team is fit for purpose and ready to get cracking in terms of implementing the strategy. This is not of course, only about the leadership team. This is about wider Finnair team. We do know that we can attract great talent to Finnair. We know that because during last couple of years, we have been recruiting 2,000 new employees. This is actually quite a lot for a company that today has 7,000 employees.
Just recently, in the Universum study that is made in many countries, we were rated as the most attractive employer, number one for commercial students studying bachelor and master degrees in business. For IT and digital students, we were rated as number six in the similar study. This in the country that has one of the best education systems globally. Our people are committed. When we asked from them on a rating from one to five that how proud they are to work at Finnair, they are giving a rating of 4.25. They are proud of the company and we are, I am proud of them. The people experience translates into great customer experience. Our net promoter score, customer net promoter score is 38 for all of our passengers. That compares well with our peer group, with the group of European airlines, actually very well.
With this group of people, we are confident that we will deliver on the strategy of sustainable profitable growth, and we will deliver on the financial targets that we have been setting for ourselves. Thank you.
Thank you Topi, for introducing the strategy. Topi will be back later today as well for the wrap-up and for a longer Q&A session. We have time for a couple of questions already now before we move in the agenda, if there are any. We have a mic, I think. Maybe that's easiest so everyone can hear.
Thanks. Pasi from Nordea. Well, if I remember right, Finnair explained at least last three to six years period that Finnair is too small to survive in a longer term when looking at the kind of the sector. Finnair actually needs a kind of a bigger partner like BA to be competitive. Just to confirm that you now actually do see that the independent pathway is the right one for Finnair. A second one, if I may, related to this growth target and investments. How come you can have only a 3% growth target if you are investing over EUR 1 billion to the growth? Is there some kind of mismatch I don't understand? Thanks.
Yes. On the first question, I stated if we go back to year 2016, and the previous capital markets day. From that day on, we have been growing with 50%. Our capacity has been growing with 50%. We have more scale today. When we say that we see a sustainable profitable growth path forward for this company, that means that we are predominantly focused on organic growth, sustainable growth as an independent airline. The landscape for consolidation in Europe, I think that it has been evolving a bit. We have been seeing consolidation taking place, quite a bit of consolidation taking place in Europe. Austrian Airlines, Swiss being part of that a little bit earlier in the game Iberia. Now, very recently, IAG acquiring Air Europa. That has been happening, and I think that it will continue to happen to some extent.
At the same time, we also see that sort of new flavors have been brought into the picture. For example, the national interests by government are probably in this geopolitical environment, more sort of clearly stated. Air France-KLM and the Dutch government buying into Air France-KLM is a good example of that. Alitalia could be another one. From our perspective as stated, with the focus strategy that we have, we see that we have been finding a good space for ourselves between the giant airlines and the low-cost airlines on one hand, and that is a profitable path forward. We of course, observe the market development, and if there would be a value creative opportunity for us that fits our strategy, then we of course, would be looking at it.
Maybe to add briefly to that, I think the other part that we have is that we have a very strong position in the markets that we operate in. We also have, which I think Ole will come back to, we also have a range of partnerships that actually makes us bigger than we are standalone, ranging from our joint businesses to a number of codeshares, et cetera, which plays a big role for us, of course.
Absolutely. Then to the other question about the investments and how do they stack up, Mika will come back to this. When we look at the sort of indicative number of EUR 3.5 billion-EUR 4 billion- Up until 2025, we will need to remember that one third as stated is for growth, two third for replacement. The current commitments related to upcoming Airbus A350s, the five of them, and that sum amounting to something like EUR 850 million is part of the EUR 3.5 billion-EUR 4 billion figure. Then the scale of the company has been increasing. That is simply where the sort of percentages might play a trick on you. Therefore, it actually stacks up.
Thank you. I think we have time for one more, maybe. Yeah s ure. Yeah. Jaakko.
Hi, Jaakko Tyrväinen from SEB. I've noticed that the Asian carriers have quite a bit increased their point-to-point traffic from Asia to Europe then especially on the smaller cities and not meaning the bigger hubs. How big of a risk you see this going forward? Is the Asian traffic growing fast enough to take off all the increasing capacity?
As stated, we have been competitive on this market. Our market share has been steadily growing. The market share on the Asian traffic today is higher than it has ever been. There will be more competition on the market, but at the same time the addressable market is growing. As stated, in the Asian megacities, there are megatrends like urbanization, the average income of people in those cities increasing. The market also grows. Then we come back to this, what Niklas already alluded to that we have also announced new partnerships. For example, with Chinese airlines. We have a codeshare agreement in place with China Southern. We have another one with Juneyao an East China Shanghai-based airline. Collaboration partnerships will be playing a role in this as well going forward.
Some of the Asian Chinese airlines that have been starting to fly to Helsinki, let's say Sichuan Airlines or Tibet Airlines, they serve a very different market than us. They serve different cities, and they serve very different customer base than us. By focusing on the Asian megacities, by focusing on being a modern premium airline, then I think that we can define a market for ourselves where we will be competitive going forward a high-yielding market.
Good. I think with that sort of network-related question, maybe that is a good segue over to Ole on network and fleet. Thank you.
Good afternoon. Good afternoon. Let's drill into network and fleet, following Topi's introduction. Of course, I'll start with a map. Of course, I'll start with Asia in focus. This is how we view the world from Helsinki. This is how we see Asia being connected with Europe. When we serve the Asian destinations, we are mostly daily services into those. Some of them were less than daily. Some of them we are double daily. In the example of Shanghai, we're double daily with a partner Juneyao. They fly at night, and we fly during the day. They connect perfectly here in Helsinki. In combination then with our own services, we can reach European destinations, providing more choice for you consumers than we can do ourselves. Partnerships is important and will be even more important as we move forward.
We are definitely well-positioned for sustainable, profitable growth. Geography is huge for aviation. When you plan your network, you always play it in line with what geography provides you with. I don't foresee that many changes when it comes to geography. Helsinki will be roughly where Helsinki is and Beijing will also remain roughly where Beijing is. Those remain fundamental constants. New technology comes in new competition comes in and markets growth less or more. We really believe that this strategy that we've embarked on for some years ago, and now we double down on, will work. We, I think in the past it showed that it does work. Again, strong partnerships not only in Asia but also in the U.S.
We're part of two joint businesses where we integrate vertically on the Atlantic with American, British Airways, and Iberia, on to Asia with Japan Airlines, British Airways, and Iberia. We're at 14.3 million passengers, so we're getting closer to 15 and we'll soon then be at the 20 by 2030 or maybe even earlier than so. Asia-Europe is big for us. 50% of our passenger revenues out of those, 2/3 is Asia-Europe. 2/3 is connecting revenues, and out of those, 3/4 is Asia-Europe. We are not that dependent on local traffic to from Helsinki to the cities throughout Europe. When the airlines with different business models comes to Helsinki, we don't have to go head-to-head with them. We rely a lot on transfer traffic behind Helsinki. Our model becomes more sustainable.
We can take an attack or two and keep investing in our strategy as we move forward. We have a strong Asia focus. We are also very happy to not be too much into the short-haul connectivity traffic, because in my words, it's dead. It's very difficult to make money out of it to transfer passengers within Europe. We're basically not in that business. We are in the transfer business, but only for long haul. We speak about growth. The last few years, we outgrew the market looking at 10% growth year-over-year. We're going to bring that down a notch. Quite a lot down a notch to half it, so 3%-5% growth, which is then what we expect to be at market pace.
We're going to sort of consolidate our position to some extent, which allows us to run the, what I call a tighter ship, and our revenue forecasting and our internal systems will be better in maximizing, optimizing our revenues. Thus, we should be able to also ensure that we have a stability in unit revenues or even an improvement in unit revenues as we continue with the strategy. If we look at something like a 5% growth year-over-year, when we're in 2025, we're roughly double the size what we were at last capital markets day. Daxing, the second airport in Beijing. We came online earlier this month. We're going to add Sapporo in December, so the next one in terms of new destinations Busan, Topi spoke about it, South Korea. We really look forward to that one.
We'll be the only European airline flying nonstop into Busan, and we're going to open up Tokyo Haneda in March. Today, we serve Tokyo three times a day together with Japan Airlines. All those flights sits in our afternoon bank, and I'm going to explain it more later on. In summer 2020, you have two time channels with us to get to Tokyo, one in the afternoon, or you can go at midnight. You can go to Narita, or you can go to Haneda. Haneda is the city airport in Tokyo and by many, the preferred airport. In 2020, we're going to operate more than 100 weekly frequencies to from Asia. Japan and China is our core, and then we do also cities outside Japan and China. Japan and China is our core. We will add those cities as I spoke about.
We're going to add frequencies, those that were less than daily, we're going to make those daily. Cities that were daily, we're going to make them twice daily. We have a network structure that allows us to add up to double daily services. If we're really good, we can do three a day as well looking at the network structure. Providing more choice for you, the consumer, and also allow us then to build a defensible network proposition in Helsinki, because we will have long-haul operations in all our time channels. When a flight comes in from Amsterdam, one of the products on board is Amsterdam-Helsinki, but it's one of probably 35, 40 products on board. We also have Amsterdam-Osaka product on board. We have an Amsterdam-Tokyo product on board, et cetera.
That's a very powerful proposition, and it's a good way of ensuring that we maintain to be the leading airline in Helsinki. Partnerships, t wo joint businesses where we integrate vertically with partner airlines. SJB stands for Siberian Joint Business, which includes all traffic between Europe and Japan. The tails are being serviced ourselves, Siberian and Japan Airlines, Japan Airlines being the leading airline in Japan. The other joint business is the Atlantic Joint Business, where we're a very small participant. We're very small. On the Siberian one, we're a very big one, if not the biggest. We have a strategic partnership with Norra, where we're also a minority shareholder in. They are an essential part of developing our network proposition on a daily basis.
When you fly within two and a half hours of Helsinki, you could very well be on a Norra aircraft, which are the turboprops and the E190s, but you could also be on one of our 319, 320s, 321s. Norra is very important for us. Cargo, another area of importance. Perfect fit to 350 for what we do on the passenger side. It's equally good for the cargo side. We have a fantastic facility. You'll see it when you walk out the door. It's a leading facility in Europe when it comes to air cargo. The digital integration done over there. When you look into the control room, it is really powerful how they track all the salmon and whatever we send on our aircraft. It's really interesting to see.
We continue developing new products new segments to make sure we're also a leading provider when it comes to air cargo. It's a really important area for us. To Topi's point, we're taking a hit right now. Demand is perhaps not as strong as it's been lately but over time, we firmly believe this will be really good support of our passenger business. They go hand in hand. For those of you who arrived earlier at Helsinki, I think you saw a better Helsinki airport than when you arrived three years ago. Finavia is investing about EUR 1 billion into the facility. When it's done, I think it's about two years. It's never done, but this phase is about done in two years. It's going to be a state-of-the-art facility. State-of-the-art for you who fly, state-of-the-art for us who operate.
It needs to work both ways. We are currently at three banks here at Helsinki, which is the early morning 5:00 A.M. through 10:00 A.M., and then we have the afternoon. When you fly to Asia, basically today, you're on the afternoon main bank or you're at midnight. Now we're going to build the 10:00 A.M. to 2:00 P.M., the midday. This will allow us to provide more choice for you, the customers. We're going to create more connect patterns throughout the day. Always, quote unquote, "Having a long-haul connecting to the short-haul services." That makes our ability to serve short-haul destinations in strong competition with other business models really, really strong. It also allows us to utilize our assets, our aircraft in a more efficient way than we do today.
It also allows Finavia, the airport operator to use their gates more efficiently, the runways more efficiently, and the whole investment becomes more efficient. By doing so, we expect that Finavia will be able to have a cost position that is more favorable to us operator than it is today. Because our joint proposition, our aviation system competes with other aviations throughout Europe. It's the combined strength of that system that makes the success. Finavia's success is our success and vice versa. The cost position is always critical. We try to build now a network that allows also Finavia to be more efficient in use of their assets as well. I think this will serve us really, really well as we move forward. The four banks also again, creates more choice.
If we going to add flights to Singapore, we can choose to put it in the midday, the late afternoon or midnight. We're not stuck with one proposition, one solution. That allows us to move assets around and optimize our assets at all times, which is really key for us. We can bring back Singapore early in the morning. We can bring back Singapore at midday. We can bring back Singapore in the afternoon. We can depart the U.S. in the midday. We can depart U.S. in the afternoon. We can bring them back in the morning. We can bring them back midday. Flexibility, optimization, customer choice. That's how it works. Fleet. We are today at 83 aircraft. When we look at 2025, we believe we're going to have some 20 more, about 100 aircraft. We need some more wide-bodies than we have today.
We need more narrow-bodies than we have today in order to do exactly those things I spoke about. More frequencies into the Asia cities, more frequencies into European cities. Make sure you have the connectivity. Make sure you have a customer proposition that is attractive to consumers. We invest, about a third of the investment goes into growth, to Topi's point. Two third goes into releasing some of the older technology and move new technology in for efficiency, noise, sustainability, and of course, customer experience as well, and reliability, which is something we also look at for sure, with on-time performance, et cetera , will have a positive impact from this. I have a plan where to allocate each and every one of those aircraft. I have a backup plan for each wide-body as well. We think our plan is very solid.
We know what we want to do with the investments we're going to make. Fleet age. We are currently at 10.2 on average. That's the age of an average aircraft in Finnair. The bigger ones are newer, the older ones are older. Our first batch of investment, I would foresee will go into the narrow-body side and to really have a real renewal of the narrow-body fleet as initial phase. Then we also need to address the wide-body side because as I showed you, we need more wide-bodies as well. Summary. Maybe this was a little bit quick, but Europe, Asia. If there's nothing more about that is Asia, Europe. Then when we're done that, we do Europe, Asia again. That's how committed we are. We know that works, that's what we're going to do. We continue to grow.
We're going to grow at half the pace compared to last three years, but three to five is pretty strong still. We're going to improve the utilization of our core assets that we have as a company, but also we're going to help the airport operator to make better use of their assets as well. Together, we become more efficient and our cost should come down. It has to come down. We invest in fleet for growth, operational efficiency, and sustainability, and of course, for you as a consumer as well, for better experience. Thank you. Questions?
Thank you.
Yeah, let's start here.
Thanks. Pasi Väisänen from Nordea. Well, I guess you have made some calculations and you have kind of already some insight from the new planes and new fleet. Are you able to gain over 10% return on invested capital for these planes you are going to place in Europe or in the feeding traffic?
Yes. Would be yes.
Yeah, of course, we have done the math and the investments go into the financial forecast. The financial forecast that we have on the back of the strategy that is advising us in terms of setting the financial targets is very granular. You can rest assured that we have been spending hours on that one. The nightlight has been really burning on that one, and that will be delivered. Coming back to your earlier question of the investments, I think that what came through in Ole's presentation very well is that wide-body investments would be included in that number. Also, it's a cross-investment number. It's not only about aircraft. There would be other types of investments included in that number as well.
Sorry, if I may just actually continue this issue. When looking at the last kind of 100 years is there any chance that you have actually ever gained over 10% ROI for the feed-in traffic planes? Have you ever been able to post over 10% ROI for the European feed-in traffic?
Yes. If you look at the history of airlines past decades, you know the Warren Buffett saying that it is true that aviation has had a bad first century. If you look at what has been happening during the past 10 years in aviation in terms of improving the profitability of aviation, that has been increasing tremendously, predominantly in U.S., also in Europe. If you look at what our peer group airlines, some of them, the best ones, are delivering, I think that it is achievable and we have done the math. We have done the math. We believe that it will be realistic to deliver on the targets.
We have a question from the online audience as well to chip in here, that is that with growth being based on Asian megacities, how realistic do you see the likelihood of us getting landing and takeoff rights, basically, into those airports?
If I just start on that one, then you can continue. As stated, we have been in markets of say, Japan and China for 30 years. We have been building long-lasting relationships. The aviation right discussions happens on governmental level, our track record in terms of getting market access is very strong in the past. The latest proof points are that Haneda, Tokyo Haneda, that most likely will be a crown jewel in our network in terms of routes. It's not easy to get an aviation right, a slot in Haneda. We got it. It's not easy to get an aviation right to South Korea to Busan, we got it. We got it as the first European airline flying a non-stop service to Busan. We have a track record on this one, and we have visibility in the future.
We believe that we will be getting the right aviation rights and the right slots also going forward.
Yes. Maybe just to re-emphasize, I think also the government has done a fantastic job over the decades in ensuring additional traffic rights for Finnair. Slots becoming a more and more scarce resource out there because airports there is not too much investment going into airports. How wonderful it is to have different time channels as in your choice in your portfolio. You don't need a specific slot in Tokyo. You can also take that one or that one even, because we can go in different time channels of the day. We're not that worried about that part. Also, as I said, we have a plan for each aircraft we're getting, and if we don't get the traffic rights nor the slot, the perfect slot for this destination, we have a plan B, we have a plan C, we move the assets then to other destinations. I'm optimistic.
Ole, could you explain a bit more about narrow body, wide body ratio and what it means for us?
Mika, the audience is supposed to ask the questions.
Thank you. Leading question.
The ratio between narrows and wides will change. We're getting to mature network now after years of investment into the network we have. As we go forward, we're going to grow the wide bodies up to 30. As I said, and the narrows doesn't grow as much. We get a different ratio between narrows and wide bodies. It just re-emphasizes our desire to be an Asia-Europe carrier. We're not only serving be it the Mediterranean cities, or be it London, or be it Paris, or the Scandinavian cities, but we're really focusing on driving intercontinental connectivity. We're staying away from continental connectivity.
Do we have? I thought I saw someone raising their hand.
Regarding your narrow body fleet. How satisfied you are with the current mix in your narrow-body fleet, including Norra? Then going forward to the renewal phase are you planning a single type of fleet or will it be a mix like you have now?
If I start, I think we're really happy with what we have. It's right for today. I am also equally convinced that it's maybe not the right thing for tomorrow. What will we have going forward? We will have something that brings low cost, efficient operations, and of course, a customer proposition that works. I'm not saying it's going to be all this or all that. It could be a blend of a couple of solutions as well. It's going to come down to price.
We have a couple of questions further from the online, which is a little bit risk opportunities. I guess, I'll take them in once, the two different questions. One is related to Norwegian and what sort of opportunities that we see from the changes in their traffic program. Basically. the second one is really about China and the China, U.S. trade war and tension and what sort of challenges or changes in environment that is.
If I start on the Norwegian bit, and generally the market situation as we see it right now. As stated actually, the capacity adjustment in Europe has taken place relatively fast during this year. About 12 months ago, there was a lot of talk in Europe about overcapacity on the market. If you look at the market growth now, it has been coming down significantly. Actually, probably the single largest phenomenon in this has been that according to Eurocontrol statistics and the latest Eurocontrol survey, the phenomenon of hot standby in European aviation has been quite common. Basically airlines lowering their aircraft utilization and therefore bringing down the capacity. This is something that we are seeing. The MAX 8 situation impacts a bit the capacity in Europe, but to much lesser extent than the hot standby phenomenon that I mentioned.
Now lately, on the back of that, we have been seeing also Norwegian focusing clearly on profitability, selling aircraft, scaling back their capacity also on routes relevant to us. The demand-supply situation in Europe in the relevant traffic to us is more favorable. The yield environment perhaps starting from August through September, October, as witnessed by our monthly traffic figures that we have been releasing, it has been better. That is certainly something that we are seeing impacting the business momentum for the short future now during the winter and into 2020.
I don't know whether you want to.
The U.S., China was the, I think that when we come back to the core of the strategy, it is about sustainable, profitable growth. We think that focusing on Europe, Asia traffic to Asian megacities is sustainable choice in the strictest meaning of the word. Also in terms of competition in terms of business resilience. There are number of megatrends supporting it. The population growth in Asia is extremely fast. Urbanization, average income growth, as stated. Meaning that also European businesses will need to fly to Asia to capture that market potentiality. I think that will prevail regardless of trade tensions. Just lately, we have been also, let's see how it unfolds and what will be the end game of it, but we have been seeing at least some suiting signals in the U.S.-China trade talks.
Therefore, we are confident that the choice that we have is serving our purpose well, both on short as well as on long term.
Any further questions in the room? Yeah.
Just wait one second. I will get you a mic so everyone can hear.
Thank you. Hi, Derek Wong from Investec. You are obviously capturing a lot of traffic from the Europe-Asia regions. Can you just comment on what kind of traffic you are capturing? Are these premium travelers or are these backpackers at the back of the plane? What does that mean for your yields? How is that going to change going forward?
If you look at the results, you see that we're not flying only backpackers. We have two cabins and they're both equally full. The premium cabin as well as the economy cabin. Piia and I will later on speak about introduction of a third product that we're planning. No, we're doing well in the premium segment as well as in the less premium segment. We have a 6% market share. It's such a fragmented market, and we think there is so much more for us to gain in these markets.
To add to that, I think that especially in the Asian megacities, we have been seeing a phenomenon of the individual travel gradually, steadily growing. If we look well into the future, then probably it will be less about group travel more about individual travel. That's one of the hypotheses behind us positioning ourselves as a modern premium airline.
We have three departures to Tokyo in about two hours. I would be surprised if there's any seat left in the premium cabins on any of those three.
Just one follow-up, in terms of seasonality of Europe-Asia traffic. Is it also very concentrated in Q3, or is it fairly stable through the year?
Quarter one is not the strongest. I've tried to educate passengers for years in trying to have a more average spend, but I failed miserably. I think we're going to continue to do so. There are peaks and troughs. Absolutely, that's just how the market is. We try to balance it off with some capacity adjustments here and there, then we use our pricing of course, to stimulate traffic when it's less demand. Yes, there are some fluctuations.
We have one balancing factor to the seasonality. As stated, we are experiencing more and more demand from Europe, as well as Asia to Nordics in general and to Finland and Finnish Lapland in particular during the wintertime. From a seasonality perspective, that interest and that trend is definitely a welcome development.
Look at quarter one, then we fly quite a rich program into Thailand, but it's not as rich in quarter two or three. We shift capacity around to maximize, to optimize.
Hi, Ben Hinshelwood at Commonwealth Bank. Just where are those transfer passengers going? Is it to the smaller cities where there's no point to point, or is it into major cities? I'm thinking about the Asian transfer passengers. Where are they actually heading into Europe?
To Europe, they go to all of those we serve. All destinations with nonstop. London, for instance is a huge destination out of Asia for us. Paris is a big destination, although there are ample nonstops out of Asia. Düsseldorf, you can't get to Asia nonstop. Helsinki is a fantastic choice. Twice per day, you can get to Hong Kong on us through Helsinki. It's all of those. The Madrids, the Barcelonas, the Düsseldorfs, Milans, Rome. The further down south you come, the less nonstop services you have into Asia.
We are in a network model, as stated. As the Asian traffic has been growing also, our origins and destinations in Europe have been growing. To give you a couple of data points, London during this year has been growing 17% for us in the midst of the Brexit debacle. Germany, on same levels in terms of growth. Similar levels of growth from Spain. Russia, 30% of growth, but they are connecting predominantly to our North American destinations. There is a significant growth in Europe in these types of cities, as stated as well.
Thank you for that. We have a number of questions also regarding financing of the investment, but I think we'll come back to that with Mika's presentation. I will leave those for now. I think with that, thank you Ole, and I think we will take a short break. A 15-minute break, and start back up at 2:40. I think the latest count was close to 150 people on the webcast. That's why we want to make sure that they're also able to hear this.
[Break]
All right, welcome back. We move swiftly forward in the agenda with the operational excellence, and Jaakko will take us through that part.
Hey.
Thanks.
Thank you, Niklas. My name is Jaakko Schildt. I'm a Chief Operating Officer for the company, and you're also welcomed on my behalf here physically and also online there in the webcast. Today, it's about Finnair new strategy, sustainable, profitable growth. One very vital part of that strategy is a plan what is about operational excellence. As mentioned earlier, we are in a very good place. We have an excellent safety record. Our punctuality and regularity is on par with our competitors. No matter we are not very happy about that one because we used to be the top-notch. Customers and our employees, they allow us. Mentioned earlier, 4.25% points out of five of our employees says that we're very proud to work for Finnair. I'm probably one of the live examples.
Out of my 30 years career, it's been more than a half in Finnair, and it's third time that I'm employed by this company. I really love it. Furthermore, we have also got a number of recognitions external, international and domestic. It's fantastic. Today earlier, we heard that we had been able to really grow significantly. It has been a good for Finnair. We have been gaining scale. However, it was also mentioned that there are issues that we haven't been really full taken the potential out from the benefits of the scale. The OPEX has been actually growing faster than the revenue, and that's of course an issue for an airline. It's a fantastic opportunity. We saw it. We engaged our industrial partner when we were preparing the strategy.
We engaged an industrial partner, carefully selected it, and we really looked at our costs, every line and every corner of the costs. We find a lot of good stuff. It was really actually delighted to see that after those years when we did a lot of restructuring on many places, we have a good standing. However, always when you scratch the surface, you see and you find an opportunities. We really did this company-wide 360 on every line of cost and everything, and we made the plan. The plan is going to save us tens of millions, and it's going to drive the CASK down. That's what we need to achieve our targets in sustainable, profitable growth. There are three key pillars what I'm going to explain little later, in detail. It's on-time performance, weight and fuel, automation and efficiency.
In addition to those three key pillars of course, we did a lot of analysis and we have a plan of business as usual corporate efficiencies in overheads. How do we run the contracted spend? We have a EUR 1.2 billion of contracted spend. How do we take even more further an approach to our providers? There are probably some providers even in the room who has felt the pressure already. Basically, not an area is not covered. Ole knows exactly what we need to do in commercial, overheads, Johanna on HR area, and so on. I'm very confident, I'm actually very happy of the approach, how we did the plan. Key pillar, on-time performance. Mentioned earlier, 78%. It's great if you look at the competitors. It's a good standing. However, the fact is that we have been on the top-notch.
We have been really on the par. I think we haven't done anything wrong, because it has gone down, because we have been really prioritizing the transfers. As mentioned earlier today, 50% of our total revenue comes from the transfer and two-thirds of the ticket revenue come from the transfer. The punctuality has been gone down because we have been waiting the connections to get them on board. That can't continue, because delayed flight still, it's really causing the customer inconvenience. We have a cost in case it's getting longer than 50 minute or it's getting longer, we are creating a lot of cost. It's direct cost towards the passenger, it's the rerouting care hotels. It's over time with Finnair and also with our partners and the whole network. We need to get back on track on on-time performance under the top-notch. We will.
It's key initiatives, it's planning, execution new word is actually the predictability, That's the secret. In our network system, we have 20,000 pairs of cities and connections what we make. It's a huge amount. It is a complex formula for the human being to figure out where does the operation, where does the punctuality comes out from. With the advanced data methodologies, we can really see things, and with use of artificial intelligence, we can already see the things what the human being can't see. It's also on on-time performance front, the old world was, "Hey, it's an ATC control. We can't do anything." That's not true. When we look at the data and we look at the history, we know it's every summer the Maastricht area, air traffic control is a bottleneck.
Why don't we plan and going forward, we plan our network based on those predictions. We can be much smarter. Furthermore, when we fly on airspace, the winds are different summer and winter. We can take the prediction and bake in that to our schedule, and we get completely different picture of our on-time performance. That's the planning side. Next is an execution. Disciplined execution. On a busy day, we have a 400 flight. Hopefully next summer, 60,000 passengers. Each of those flights have to be executed exactly by our people, by our partners and the whole network. Really focusing on that execution is the key driving forward. Weight and fuel efficiency. We have all the good reasons driving the efficiency on fuel and weight. Fuel is one of the biggest cost drivers with us. It's nearly EUR 700 million.
Less fuel we burn, more sustainable we are. On this side of it. Once again, we are in an area of planning and forecasting. Do we really understand what happens in our network? If we fly over Trans-Siberia to Asia, it's 10 - 12 hours. There is a lot of data points. There is a lot of stuff what we can analyze and really utilize the potential there. Here, of course, very vital is the investment, what we have done to the modern technology that they can really provide the data online. Flight optimization. The old world was that pilots are leaving to a 10 - 12-hour flight. They get the weather forecast, they get the wind forecast, and bye-bye. See you in Tokyo. Nowadays, we can feed the information online about the winds, about the weather, what's going on.
It can be thousands of EUR per flight with that real-time optimization. It's the technology and the investment to the new technology what allows it. Aircraft maintenance data, once again in a key role. We can understand what engine is performing well. Is the engine performing towards its performance targets? Do you have differences on engines? Do we have differences on the pilots? How do they use it, et cetera? It's number of maintenance activities. It's how do you keep the aircraft clean? How do you keep it aerodynamically fit? Small gap on the landing gear door sticking out to half an inch may cause some 0.1%-0.2% fuel consumption increase. It comes from the very small minor details. We are not bad on the fuel efficiency but even on this area, we have to be even better. Airport operations.
It's really number of issues in our operations, what we need to look at from the fuel perspective too. Here, on the operational side, the weight is really an issue. Actually, everybody in the webcast and in the room can contribute to this fact. I'm asking everybody to leave their extra five kilos off from your luggage next time when you go to travel. When you go to holiday, you will pack everything what your kids want anyway, and you don't need them. That's the biggest sustainability contribution as an individual on the travel. However, on airline operations, it is just a simple example. De-icing. We do de-icing in Helsinki Airport, which is of course a significant contributor to on-time performance.
If we do it at the gate when the passengers are boarding or if we do it at the remote de-icing area close to the runway, there's a 600 kilos difference of the fuel burn because when we taxi to the de-icing front, we keep the engines even. We shut one engine, we keep the engine running idle, it's a 600 kilos. It's really an operational detail on the number of things. It's also a lot of detail on the weight. Basically, every spoon and a cup and a napkin, what kind of carpets we are choosing, how full is the water tank before we are taking off. Everybody counts on the fuel and on emissions. If we can save 10 kilos of each A350 airplanes, that 10 kilos contributes 23 tons of fuel a year. It's a big lever.
Less weight, less fuel consumption, better cost, and better environment. Data analytics. I have been a number of times mentioning the data and how do we really use it. We have a roadmap which is created for the artificial intelligence. We have already number of applications in the test use and in a very short future we will have the real ones in the production use. I'm just using an example of running a daily operations. Existing decision model, we have a very competent skilled duty managers, long history in the company, in the front of the six screens, understanding what's going on and having a lot of predetermined formulas. These are the most profitable flights. These are the most expensive to delay and so on, and executing the decisions. 100 data points and we look at always back statistical data.
The new world is planned decision model mentioning 20,000 connect pairs. We have more than 1 million data points per day, and it's artificial intelligence-based decision-making. That means that we understand a cost of every minute of the delay of each individual flight real time. We have run the first test of this one, and I have to say that it was really surprising to see how much the most important flight varies on day by day. It is because it's about the transfer traffic, and it is about the 20,000 points in our network. This drives the traditional model. Okay, these are the two flights which we are going to impact. We are very sorry for the customers. When we run it AI-based, it may be that it's completely different flights which we are actually impacting.
This is really driving us further, and I would really like to say that we are an industry leader on this development in the aviation. To summarize shortly, we made the study, we engaged the industrial partner. We really looked at every line of our cost. The positive thing is that we found a lot of good things where we don't need to worry too much, but we need to be awake of course. We have the people and technology. We have a great execution capability. We started executing the plan already. This will save us tens of millions, and it will drive the cash down, what we really need in order to achieve the sustainable profitable growth. Thanks.
Thank you, Jaakko, for that. We open for questions on this quite important topic. We have here at the front.
Thanks. Pasi Väisänen, Nordea. If I remember right, roughly about three years ago, you explained that new planes, new A350 planes are able to save roughly about EUR 10 million per each. Looking at the kind of annual expenses or to support the operating profit, what was actually the true outcome from the savings? If that's true actually, would you be now loss-making without those planes? Thanks.
The loss-making answer probably. I think that the loss-making answer would be no. If I start on high level on this one, the sort of original business case of Airbus A350 has been working well. If we look at the sort of operational specifications and what were the expectations at that point of time, they have been sort of By and large delivered. We would be making a profit today without Airbus A350s, but we would be making a bit less profit than we would be making with them.
Yeah. Probably filling on that one, the 350 is meeting its operational performance kind of characteristics which are given to us. It's actually exceeding them a little bit. The answer is to the EUR 10 million, yes.
We have a question from the online, Jaakko, in terms of what sort of cost pressure you see, especially in relation to staff cost, maintenance cost, sales and marketing costs going forward, and how you see those developing.
Cost pressure is of course always on any business. That's for sure. I'm relieved to say that the study what we did on the maintenance, we are very competitive. With the staff costs, we are on par. Of course, on the maintenance side especially, I'm confident because we have a very relevant actually model insourced, outsourced with us. We have a lot of tool and capabilities to keep the cost on the right level.
Jaakko Tyrväinen from SEB. You probably know very well what is the cost of punctuality, and especially non-time performance. Could you elaborate a bit more on that? I.e. what would be your current profitability if you already were on the 85% punctuality target?
Have you done the math?
Of course, every night.
If we start from the cost of delay question.
Of course, taking in account of the complexity, we are spending, the direct cost for the irregularities currently is tens of millions EUR a year. That's the direct cost, meaning compensation to a customer, hotel, care, rerouting. Of course, it is like, what is the potential reputational image? The customer retention. It is the similar, what is the cost of NPS? Similar kind of challenge.
If you take 1% unit increase in OTP, what you will need to remember is that, when we look at it as of today it's a snapshot. You cannot completely extrapolate that into the future because it's an evolving picture as well. It is true that when we step by step, in a linear fashion go toward the 85% OTP target, the efficiency impact of that one will be notable. It is an important part of our plan to hit the curve of consistently gradually decreasing CASK.
There's a question from the online as well, which it's a long question but it's really about two things. One is turnaround times in the Helsinki hub. The other one is flight times or scheduled flight times. How do you see that in relation to OTP?
Those are, of course, the key parameters. What do we do in planning? We know exactly where we are and what we need to do. Of course, there are little bottlenecks that always we don't get that exact slot from the airport, what we want. We cannot really adjust it to 100% what we want. It's of course, we need to remember that our target is 85. Target having a 100 simply would be way too costly. Just giving an example. We have the de-icing season in Finland for a short period. If we would have two or three bad snow days a year, and if we would be investing amount of de-icing trucks what we need for those three years, we would not make the targets what we would set in our strategy.
All in all, in terms of turns, I think that we have an opportunity to still further standardize the turns, further embed those kind of standard procedures in our operations. Therefore, looking into turns, no matter whether we are talking about wide bodies or narrow bodies, will be part of the roadmap to get to OTP of 85%.
Any final question to Jaakko? Perhaps worthwhile to note in terms of efficiencies that the three main initiatives that Jaakko went through, the weight and fuel being one of them, on time performance another one, and the digitalization and automization being the third one, they are accounting for something like two-thirds of the total efficiency that we will be capturing during this strategy period. One third will be about all the usual stuff that companies will be doing, looking into overheads and all those kinds of things.
Looking into digital and IT spend and optimizing procurement, all of those things. They are part of the plan. We have the plan and then we are mobilizing the implementation as we speak.
All right. Thank you for that, Jaakko. We shift the focus back over to the revenue side and the modern premium airline with Ole and Piia. Here you go.
Thank you very much. I'm back. I spoke about choice the last time. I'm going to repeat myself and speak about choice again. I gave you the example of Düsseldorf, Hong Kong, where you can leave Düsseldorf midday on Finnair, get to Hong Kong the next morning, or you can leave in the evening and get to Hong Kong the next afternoon. The same choice also applies going the other way. We want to continue to speak about choice, but perhaps in a different dimension, and this will then sum up to how we intend to take Finnair to the next level.
Indeed, we are taking the company to a totally new level. We are becoming a modern premium airline. Modern premium airline is really customer focused, hungry for everyday understanding what can we do more for our customers? Modern premium airline is punctual, among the most punctual ones in the industry. It's among leaders in sustainability, but it's also commercially a very hungry company. Continuously looking for what can we offer more for our customers for the consumers in the marketplace, and where is that space in the market that we can go after and hunt for? To become a modern premium airline, we need to implement a number of things, number of small things, number of medium-sized things, and it's a journey that we have already started. This journey is worth EUR 10 million for this company. There's lots of money embedded to this one.
Some of them require investments, but mostly it really requires curiosity towards consumer understanding, and how can we create offerings that are valuable for the customers.
We start at a fairly good point, we think, and with a Net Promoter Score of over 38. We know some of our competitors are maybe in around where we are, some are a little bit behind. We start from a good point of view. Now it's about to go from as they say, from good to great. Nothing is necessarily broken. Create more choice for customers, ease of purchase ease of consuming, value to customers, and you get good value when you fly with Finnair. Whatever products you buy, however you bundle your products, and you have the opportunity to personalize your experience. You have the choice of the two Düsseldorf, Hong Kongs, and you have your choice to buy your seat, an additional bag, your water skis, and whatever you want to bring with you on this trip.
Maybe you want a special meal as well. Your ability to customize your experience is key as we go forward, because that's what customers comes to us and ask for and this is what we need to deliver, and we want to deliver.
One of the things that we will be speaking more during next year is introduction of Premium Economy. We are very excited about this one as the company, because basically we are opening up a kind of a new product for our customers. We asked our customers that if Finnair would have Premium Economy in our offering, would you use it? Would you travel with Premium Economy? Over 50% of our Economy Class, I mean, our leisure customers and Business Class customers said that they would be very likely to travel with that one or extremely likely. There is a clear demand for this one on the marketplace. Our expectation is that most part of the customers will come from quality-oriented leisure customers. Also in some corporates, there is kind of a restriction that people are not allowed to use Business Class.
This is really a fit for purpose product for that segment. For example, at this market situation where we are, we hear lot of good discussion for example, in our German market that this is a very interesting product for that market. Premium Economy is really about more travel space, more comfortable way of traveling for our customers. It's also about better service on board and also on the ground. It's really about that thing that for Economy Class passengers, there's more comfort and it's more pleasure way a more nicer way to travel. From the company perspective, the benchmark shows that the pricing of Premium Economy is typically 1.5 to two times higher than the yields that we do get on the Economy Class.
Overall, this makes it a really valuable real estate on aircraft and also the sales margins of this product. Our expectations are very high for this one. Let's put it that way. Another thing that we are working on at the moment is that we are renewing our fare brands. Fare brands is really about choice for customers. When you travel as a customer, sometimes you're going to London on a business trip one day. You need a lot of flexibility on your travel. Another day, you're going together with your wife or husband to a weekend trip in let's say, Prague as an example. Your needs are a little bit different. Having a really customer-driven fare brand structure is crucial for us because the needs of a specific customer do vary depending on the travel purpose.
This is something that we are going through at the moment. We'll be introducing our new fare brand structure during next year already. Key thing being really adding choice for the customer. One thing that we have already decided that we will do during the first half of next year is enlarging the Economy Light fare, which is a fare type when you can travel without luggage, also to our Asia-Europe traffic. That's something that we have had in Europe already for quite some time. In America traffic, but not into Asia. That's a decision that we have already made, that we will expand that to the Asia traffic. Of course, we're looking for very good results there as well.
Just to give you an example, the Americas traffic only last 12 months, the value of the Economy Light fare price has been more than EUR 7 million. These things can be very significant in terms of revenue and also profitability. FarePilot is truly about choice, and this is something that we will implement during next year. Topi spoke a lot about integrated business model of Finnair. Ancillary services and also travel services being key parts of our integrated business model, and how we can bring more value for the customers as well. Ancillary business last year was EUR 161 million in terms of revenue for us. We have a relatively good portfolio already in place, but we need to continuously improve the portfolio, make sure that there are products that are interesting for our customers, and continuously renew also the existing offering.
I personally get a lot of questions from customers nowadays that, "Hey, I'm going to a trip to Bangkok. How can I make my travel experience more comfortable? What can I buy more from you guys so that my travel experience is more comfortable?" This is the needs that we are addressing with our ancillary portfolio, making the travel experience more comfortable when customer is up for that. Travel services, meaning our holiday package business via Aurinkomatkat brand, and also Finnair Holidays has been also increasing very nicely and continues to be in the focus for us. Last year, the revenue was EUR 223 million. We continuously renew that portfolio as well to serve the needs of the Finnish market consumers. We continue to do so.
A lot of good examples of how we've been able to renew the portfolio and offering for our customers. Therefore add value. One of the latest one being that we just introduced a feeder flight concept, which means that customers living for example in Oulu, get a full package from Oulu, to let's say Lanzarote and back to Oulu, and get that whole package for them, has been really valuable for us in terms of revenue and also for customers, of course.
About 18 months ago, we implemented an origin destination system in our revenue management. This allows us to optimize revenues on all our flights every day, every week. That is based on really advanced analytics not only that, but also with really competent people. We have fantastic people in our revenue management. We have fantastic people throughout Finnair. Especially maybe my revenue management colleagues are really doing a fantastic job in driving those revenues. We will also now start adding a feature we call dynamic pricing that will ensure that we have the right price at the right time, in the right channel, in the right market at all times. This will drive value both for customers as well as for shareholders.
Ancillaries, the retailing part to optimize that further as well is a need when we bundle products or when you want to go unbundle and you pick your products off the shelf as you wish for your needs for that journey. We need to optimize this as well. We think this has a value of tens of millions on an annual basis in incremental revenues. When you look at bags at seats and other components in our retailing portfolio, this goes straight down to bottom line. We're really confident and optimistic about these features as we move forward. Better sales to more customers. We need to make sure we are with our products in the channels where customers buy their services.
Today, or for many years, we've been in not in the hands of, but very much controlled to some extent by the global distribution system, which didn't allow us to own our product and the way it was presented to agents or to customers. Now we are embarking on the New Distribution Capabilities and the Finnair NDC Partner Program has been launched. Did that on October 1st here in Finland. We have some 50 agents already signed up that we are in the process of connecting directly with Finnair as we move forward. Today we have about 10, generating some EUR 9 million. We're off to a good start just during the last few weeks as we got going on this. Now we're in control our product, and our offering, and our ability to do excellence in retailing is then in place.
Without the New Distribution Capabilities being introduced, we won't be able to deliver those features to customers. We will get this done now. We've already started, 2020 and 2021 will be intensive years for us as we keep developing this. We all like our apps, we all like our dotcoms, the same with Finnair. We have a new mobile app. You know that 95% of customers in China, they buy their service on the mobile apps? We in Finnair, we're way behind. We're at a much lesser extent buying on our mobile apps, but that's where it's going. The point is, it's different depending on which market you're in. We need to be with the right platforms in the markets in the right markets for the right segments at all times.
We're really happy with the latest mobile application we launched, with a really strong NPS and the new finnair.com as well, delivering value right off the bat 20% up in increase in average order value. The conversion rate, which is so important is up to 35%. We really focus now on our app, we really focus on our dotcom going forward, and we're going to keep evolving it, keep developing it, ensuring we have the capabilities required to drive our retail portfolio.
In the journey towards modern premium airline, that has a lot of value. It has value for customers in terms of a larger, better fit-for-purpose offering, easy buying, right pricing all the times, and the other things that we have mentioned during today. It's also very valuable for us as a company and for the shareholders. This is worth tens of millions. Like, Topi said in the beginning, we are confident that we can deliver a stabilized unit revenue moving forward. An increase of 1% in our RASK is worth EUR 30 million today. This carries a lot of value altogether. Where the value comes from is of course, that we are growing as an airline. Our network will be bigger, our ASKs will be bigger.
With this modern premium airline strategy, we are confident that we can fill those airplanes fill all of those three classes on the airplane. Also with stabilizing the unit revenue moving forward, that together creates a lot of value for the company and for the shareholders. How shall we do it? We will be focused on the product offering for our customers. We will have more products, Premium Economy as one example, or some implementations on the ancillary side can be examples of new products. We also put a lot of focus on bundling our products a bit differently, based on customer needs. A corporate customer has a certain need, and a leisure family traveling and leisure, another need. By bundling our existing offering a bit differently has value for customers and attracts customers.
One good example is that this year we relaunched our family package holiday in Aurinkomatkat family package holiday. We basically went back to what do customers really value and need, what is important for customers, and we refined our offering based on that one. We looked at our hotel offering, kids club concept, ancillary offers part of the trip, and basically the revenue of that product has been increasing 6%. On the campaign months, even 19%. Really valuable work just to look into existing offering and renew it based on customer needs. Another good example could be that we just renewed our upgrade product, which is basically an upgrade product from Economy Class to Business Class. The result of that renewal has been 60% increase in revenue, a lot of value.
The worst day in October was only 40% increase in terms of revenue versus previous year. Extremely valuable renewals and kind of new packaging of our offering. Another very important thing is pricing. Ole talked about how we shall move forward with the dynamic pricing. The industry benchmark says that with dynamic pricing, there's a potential of 2%-6% in terms of RASK. That's a lot of money for us as a company, and definitely we go after that opportunity quickly. Also better sales. Better sales, of course, meaning to customer and easier buying. We are optimizing the channel mix that we have in our existing markets and network that we operate. It does mean that there are variations between the markets.
I mean, in Finland, we have more customers coming to our direct channel, whereas in another market like China, the current situation is that there is less. All of these markets are developing all the time. We need to really optimize the channel mix in terms of sales. At the same time, we need to make sure that on each channel we sell as well as we can. Really improving the conversion rate through GDS channel, I mean, in our finnair.com channel in our mobile channel. Work really daily and weekly with optimizing the conversion and making sure that the purchase per trip per customer is on an optimal level, with also ability to create loyalty via that one. Good example is how our ancillary sales behaves today with the changes that we have done with our sales channel.
Via introducing the new finnair.com to many of our markets and also introducing the NDC, which has been there a little bit, a month about at the moment. Ancillary sales per pax on the direct channel is 70% more than it is on the GDS channel. In the NDC channel, the current, even though short-term results do show that it's 100% higher than on the GDS. This is the daily work that we need to do with optimizing conversion and optimizing sales on each of the channels. Another good example of better sales, what does it mean in practice? We just recently launched our new finnair.com in China market. With those results, we've seen a doubling of the revenue per session and doubling of conversion in that market. Extremely good results of renewing our direct channel in China.
These kinds of things we continuously see when we work forward with the small and medium-sized implementations with the modern premium airline. Bigger network, of course, also has value. It has value in terms of number of customers for us and us being confident on being able to be relevant for the customers and thus filling those airplanes. It also brings a more balanced origin destination network for us and flows for us, which also means that then in terms of revenue management, we can do more things if there's something happening in another market or another market. We have a bigger network and bigger origin-destination pairs that we can manage. That has value in that way as well, not only in the form of customers, which is very important, but also in the form of larger network that we can optimize revenue on.
One new wide-body aircraft for us means 150,000 passengers a year in terms of wide-body passengers. The growth also means a lot of customers that we can serve better. Like I said, this has a lot of value for our sustainable, profitable growth, and there's a number of things that we need to implement in order to get there.
Summarizing, retailing is a core element of our strategy as we move forward. It allows us to differentiate ourselves from the competition, and create value for customers, personalization. On our side also as Finnair, we need to be even more customer-centric in our culture. We have a fantastic culture. I'm six months with the business. Great people, great competent people, and a great culture. I think we just need to take it to the next level also in terms of customer centricity. At the end, we also need to ensure that Finnair stands out as a leading travel brand as we move forward. Thank you.
Good. Thank you, Piia. Thank you, Ole. Business as usual, we move forward with questions. We've received quite a few questions here on the online. We might not be able to answer all of them during the session, so we might have to come back to some of them just so you're aware of that. If we start with here in the room any questions to Piia, Ole? Yeah. Do we have
Nina Ebeling from LocalTapiola. On your path to becoming modern premium airline, I guess loyalty is one of the factors which is one of the growth drivers. Can you disclose how much of your current revenue comes from the different tier levels of your loyalty program? Also in addition to that, as you aim at attracting new clients on your Asian connection, do you have data on how many of those clients actually return?
Yeah. The second one, yes, we have data on how many of them returns. I don't have them. I need to come back to you with a reply on this one.
When it comes to the importance of the tier customers. Unfortunately, that is information that we are not disclosing. Let's put it this way, that the highest tier customers, they are important. They are important for us. We take good care of them. If we, in general terms, speak about loyalty and customer satisfaction, there is a correlation. The more satisfied customers are, the higher the Net Promoter Score, the more they buy, the higher the average purchase. Therefore, in our quest of being modern premium airline, steadily increasing customer satisfaction in the form of Net Promoter Score is very important.
That you achieve when you have on-time performance, when you have also relevance in the offer, that you really know your customer, you can utilize the data, you can put the right offer in place, when you combine that with great and friendly service, you have the magic formula.
Yes. Hi, it's Joonas from OP. Related to ancillary, I think your previous financial targets did include a target level or an ambition level for increasing ancillary per pax. The updated targets did not seem to include anything. Are you able to provide any update on what kind of level per pax do you see as viable in the upcoming strategy period?
Do you want to speak about this on general terms?
Yeah, sure. I can say that. We did have a target of doubling ancillary revenue on our previous strategy, and we will not reach that on that specific year, but it will take us one or two years to reach that target. Many reasons for that. One being that we constantly need to shuffle also between what is complementary, what is ancillary and therefore to optimize the whole revenue of the company. Not just optimize the ancillary part, but actually optimize the whole revenue of Finnair. That's one angle. Also to be really honest, some of the implementations have taken us a bit longer than we expected.
For example, we have prioritized the finnair.com renewal, which is a big thing for the overall revenue of the company in front of some of the let's say, smaller scale ancillary implementations that would have helped us to reach that one. Maybe to say overall, we are on a good level on ancillary per pax revenue and ancillary in total. There's a lot of potential that I believe that with the enablers that we have built in terms of the good portfolio, finnair.com mobile app renewals, and also the Finnair NDC Partner Program that we have launched, we have very good enablers in hand to have a good path forward.
Yeah, I think that is really the bottom line, what Piia is stating. You also gave good examples and good data points that what are the sort of sales pickups that we see when we have now launched very recently, the new finnair.com. What is the sort of increasing conversion rate? What is the increasing average purchase? Similar example of us selling through the new distribution capability with our agents. It's very early days. We are in early days of that path, but the individual data points are really encouraging. The growth rates are high.
That indicates that now when the capability is in place, that there is the possibility for the step change.
Perhaps an additional comment on our loyalty program. We are investing in a new loyalty program platform that allows us to serve our loyal frequent customers in an even better way than we do today, allowing them to personalize their experience, buy retail services in a very different way from what they do today. That's in the works and will be up and running late next year.
Maybe chipping in in between with a question from the online. We're actually trying to summarize a number of questions because there's a few around the Premium Economy in terms of when will it be introduced, how long time will it take before this is fully implemented, and also what are the sort of financial benefits do you see from getting that introduced? I don't know, Piia or Ole can start.
Yeah. Very good question. Basically in 12 months' time, the first wide body aircraft will go into that program, and in total it will take one and a half years that all of our wide body fleet will be equipped with Premium Economy. We will really implement it to all of our wide body aircraft. We see demand on all of the market areas for that we have. In terms of potential, it is very good potential altogether. We haven't disclosed that one. Of course, we still need to sell those seats, we are not there yet either. Altogether, all the indications that we get from the customer research that we have done, also the dialogue that we have had. Especially with our close partner airlines, we are expecting this to be a very good move for the company, also from profitability perspective.
Especially being upsell. The customers that we anticipate being interested about Premium Economy, they are basically two main groups. The quality-focused leisure travelers moving from economy to Premium Economy. Then those kinds of business travelers who are not allowed to travel in business class, they would be upgraded from economy to Premium Economy. Therefore, this is an additive case for us.
And maybe-
Yeah, sorry. My friend in Dusseldorf who goes to Hong Kong. If he wants to fly on us today, he cannot fly Premium Economy. He's not even looking at us. Tomorrow, he can look at us twice per day again because we have Premium Economy. We've become relevant for that customer.
Yeah. Maybe one more thing to add to this one is that at the same time, we are also right-sizing our business class. Because we are doing the retrofit to insert Premium Economy into our cabins, we are also looking at right-sizing our business class in terms of demand. That of course is an important ingredient of the business case as well.
Good. Further questions from the audience? I think we can take one more before we take another short break, if there is one. Thank you again, we take another short break before we get into the financials with Mika. I think we will start back at 10 to. Roughly 15-minute break. Thank you.
[Break]
Perfect. Welcome back, I guess for all the hockey fans, I guess we're going into the third and final period now. I will let Mika sort of kick that off.
All right. Good afternoon on my behalf. There are lots of familiar faces in the audience. That's only due to the fact that I've been 20 years with the company. I see kind of bankers I thought that I already had forgotten. But they are back welcome. I've been 20 years with Finnair as a treasurer, and the last post was as a revenue manager and now back to finance as CFO. As a long-term Finnair employee, I truly think that this is a truly balanced strategy. It fits all the boxes are ticked. Ole and Topi talked about our planned investments, and those planned investments during the strategy period of six years are, three and a half to four billion EUR. We have a strong balance sheet to support our future investments. Cash to sales 34%.
We had EUR 1 billion in cash at the end of Q3. Gearing ratio stood at 74%, and net debt to EBITDA was at 1.4x. All of those ratios are stronger than the peer groups' ratios. That's a very strong starting position. Okay. Now with this slide, I need to be extremely careful because some of the news media understood this wrong. The total planned investments during that six year period are EUR 3.5 billion - EUR 4 billion. These include all investments. The actual size can vary depending on the deliveries of aircraft, depending on the availability of delivery slots. This can truly vary. We don't know the exact details yet. These are planned, not committed. Okay. We have EUR 850 million of committed investments. Big bulk of those five Airbus A350 aircraft to be delivered in 2020, 2021, and 2022.
These investments, this EUR 3.5 billion - EUR 4 billion, these are at the core of our sustainable profitable growth strategy. Firstly, with these investments, we are able to lower the fuel burn and hence CO2 emissions. Secondly, they are at the very core of us delivering growth of operating cash flow, and hence dividends. Approximately one-third are for growth, two-third for replacement. As stated earlier, with this investment plan, we will grow our capacity by 3%-5% on CAGR basis. Okay. Then the question some of the bankers and analysts have been asking, how do we fund these investments? Surprise, surprise, with operating cash flow. Lately, our operating cash flow has been around EUR 500 million per year. Let's do a simple calculation. This is a six year program, EUR 500 million a year. Six times EUR 500 million is EUR 3 billion.
On top of EUR 3 billion, we have EUR 500 million excess cash in the balance sheet. Naturally, our aim is to grow our operating cash flows going forward with the help of Ole's and Piia's modern premium airline. Jaakko's operational excellence, and so on and so forth. We will maintain our dividend policy intact. That is over the cycle, one-third of EPS will be delivered as dividends. We have currently a strong balance sheet. Also in the future, we are going to maintain a strong balance sheet. However, there is room for being more efficient. We had EUR 1 billion in cash, that is 34% cash to sales. Our guidance for minimum cash to sales ratio during the strategy period is 15%, and the gap there is half a billion EUR. Okay. In terms of gearing is at the very healthy level at 74% currently.
Our guidance for the strategy period is to maintain the gearing below 175% mark. In the balance sheet, we have a hybrid bond of EUR 200 million. Our plan is to renew and downsize that hybrid, and that would take place next year since the step-up is taking place H2 next year. Renew and downsize. By doing this, we would maintain strong credit metrics, but our EPS would increase quite a lot. As I said, I've been with the company for 20 years. During the years, we have had an internal guideline for owned aircraft and leased aircraft, 50/50. In the future, our plan is to increase the number of owned aircraft. Especially, sale and leasebacks are less likely going forward. Of the current five Airbus A350s in the order book, at least three will be cash or debt-financed.
This is a balanced strategy. We have set balanced long-term targets. We have two profitability targets, comparable EBIT margin and ROCE, return on capital employed, for both over the cycle and 12 - 18 months ramp-up period applies. When we set this ambition level, we assumed constant fuel and constant currency market forward rates. We have two customer satisfaction targets, Net Promoter Score and On-Time Performance. NPS is at the very healthy level at 38 at the moment. The other target, On-Time Performance, I don't know which one is favorite of the CFO, maybe this one, because this brings customer satisfaction up and cost down. That's why Jaakko is my best friend, and that's why we have the same hairstyle. The On-Time Performance is the definition of its arrival punctuality within 15 minutes. Our target is a linear one.
At the end of the period, it's 85. We are gradually going up from current to 85. The fifth target is employee satisfaction. The KPI for that is eNPS, and that one currently stands at 19. Our aim is to increase from there. As stated earlier, the sustainability targets will be set in Q1. As a longtime Finnair employee, I'm truly excited about this strategy. This is a truly balanced strategy. What we have currently is a truly integrated business. Roughly 80% of the revenues come from passenger revenues, passenger side. The rest, 20, is evenly split between cargo, travel services, and ancillaries. Ancillary and PAX, they are like siblings. They are kind of closely linked together. Sometimes it's even a bit difficult to say which one is which. Cargo, the belly cargo is our business, especially long hauls.
That's where the cargo is really truly important. It can represent a major portion of the revenues there in certain routes. That is supported by our latest technology cargo terminal just nearby here. Travel services, that complements our scheduled business very well. There's a good reason for that. The seasonalities of these two businesses, they are different. These differ month by month of the year, day of the week, and hour of the day. We can mix and match nicely. Flying for travel services, Aurinkomatkat, and for the schedule. Network and fleet of our strategy. There's a good balance. It will be way better going forward. We'll focus on Asian megacities. We will grow at market rate, and there will be improved balance between the waves, the time channels during the day. Operational excellence, CASK.
CASK will be lower going forward. Operational excellence will improve our customer satisfaction. Modern premium airline. As a former revenue manager, I'm especially excited in that area about Premium Economy and dynamic pricing. Those to me, are the major drivers there. Please don't start talking with me about dynamic pricing. I would be talking too long about it. There is a true potential there. That's really cool stuff. Sustainability, that's a must in the future. As a CFO, I need to say that it will be good for us in business terms as well. Culture and ways of working. Jaakko talked about OTP, On-Time Performance. Team A develops a plan, team B executes it. Then the feedback loop goes back. We need to work within the teams and between the teams and improve our culture and ways of working.
With this strategy, we are aiming to deliver positive economic profit and hence shareholder value. We are addressing all aspects of equation, growth, profitability, and balance sheet. Going forward, we will grow, but not excessively. We will grow at market rate. We will address profitability in various ways. We will be pushing above 7.5% comparable EBIT after the ramp-up period. Modern premium airline will stabilize RASK, and CASK will be tackled with the help of operational excellence initiatives, with a long list of initiatives. The CFO's agenda, the balance sheet, we will have less CAS in the balance sheet going forward, less hybrid capital. We will have strong solvency, and we will have less sale and leasebacks going forward. I truly think this is a balanced strategy. Thank you.
Thank you, Mika. I think with that, I think we open up for questions, I think given the interest in this topic before, I would expect that there would be some. Let's see. Anyone wants to start? Seems like you were crystal clear, Mika.
Yeah. There are a lot of bankers in the room.
Is it working?
Yeah. Okay.
Yeah. With your strong cash position that you mentioned, and the strategy to increase ownership on aircraft versus leased is there a specific strategy on how those aircraft will be acquired? Is it using your own cash or leveraging your healthy financial position to acquire good credit with the low interest rates on the market right now?
I set a couple of boundary conditions, minimum cash to sales. Yep. Our target is to be above. After that, everything is free.
Okay.
Naturally, cost of capital plays a role.
Yeah. Jaakko.
Jaakko Tyrväinen, SEB. Could you give us a bit more flavor regarding your cost of capital in the lease portfolio? How do you expect that to develop going forward? I assume that you might have a bit costly lease deals from the history, apparently, the current level should be on a lower base.
Well, you know the drill. When the market rates, interest rates are high, when you lock in to a fixed rate that stays. The same logic applies to leases as well. Going forward, if we were to enter into a lease contract, the rates would be lower and the monthly lease rentals would be lower. It's rather simple. What I won't comment on is what's the exact current implied rate on leases. Generally speaking, we are of course, very observant about the changes in the yield curve on the market and changes in the interest rates. Therefore, we see an opportunity in balance sheet efficiency. Mika went through that very clearly. That's one thing. Coming back to operational efficiency of course, the yield curve impacts many other things as well. A small example would be real estate cost.
Of course, we want to capture the benefits of the yield curve in our business so that it would be also reflected in our cost base and in our efficiency going forward. Total cost of ownership is certainly one area, as Mika was pointing out.
Good. We have one question here from the viewers online, Mika, in terms of what's your one-liner pitch line to any investor to convince them that Finnair is a good investment? Buy.
I'm not sure whether the fact applies that I own Finnair shares, and will own more in a short while.
Is that a disclaimer?
Well, we have a strong position here. We have a strong franchise, we will grow even stronger. What Ole talked earlier about the network and fleet is that there's really hidden value there during the strategy period, what will happen to the balance of the network. When we balance those time channels or waves, when you start thinking about the usage of whatever resource which underneath, there's a lot of value by the end of the strategy period. That's my take, among other things, naturally. You only got one line. Okay, sorry.
Good. Any final questions to Mika from the audience? No, I think you're covered, Mika. Thank you for that. Thank you. I think we then move directly to you, Topi, in terms of your closing remarks.
Yes. Thank you. Thank you, Niklas. Thank you for paying attention for a couple of hours. We are, of course, excited and thrilled that we can tell our story. We think that it is a good story to tell. Just to recap the key messages from the day, especially from shareholder value creation perspective.
We are moving from accelerated growth to sustainable, profitable growth. I hope that that is clear by now. We will have continuous, determined focus on efficiency going forward to capture the benefits of scale to enable consistent gradual decrease in unit costs. We have the plan in place. We have been turning every stone. We are mobilizing the implementation. We will be driving revenue growth via retailing as Ole and Piia explained. Scaling back on growth, operating more mature markets will be part of this Asia megacity focus. The changed supply-demand picture in European and especially Northern European landscape will be all supported together with the retailing ancillary focus.
We want to be a front runner in terms of sustainability. Sustainability is the first word in our tagline. We are going toward long-term carbon neutrality in our business. We will be releasing a separate sustainability plan during Q1. We have deeply embedded in our DNA, the focus on customer experience and people experience, understanding the causality relationship between these two. We will be nurturing that culture going forward. The fleet investments are important to boost efficiency and bring down the carbon footprint. We have a strong balance sheet with opportunity to capture balance sheet efficiency, strong cash flow. Our dividend policy stays intact even though we will be financing the majority of the investments with cash flow and existing cash. It all comes back to the culture and ways of working.
As stated, we are a big-small airline focused strategy, integrated business model, one company, shared values, commitment to care, simplicity, and courage. In addition to this, we will be applying a couple of well-tested leadership principles, the good old-fashioned leadership principles, if you will. We will organize for success. We will put right people into right places, as we have been doing with the new leadership team. We work together. We are small enough to really work together as one team across organizational functions, across organizational silos. We will put in place clear targets for implementation. We empower people. We expect accountability and ownership. Transparency and follow-up, feedback mechanisms, intense follow-up, intense feedback will be key part of the implementation.
When it comes to ways of working together means especially lean methodologies, especially in operations part of the business in the run the business parts. Agile methodologies in development parts of the business where we have been taking significant steps forward already during the past couple of years. These leadership principles will be important in triggering the right kind of behaviors for implementation. People do respond to incentives as well, therefore we are aligning our compensation model with our aligned new strategic targets. When you look at our compensation model, we have the base salaries, of course. We have the short-term incentives for people. We have the long-term incentives for top 60 managers in the group. We have a personal fund for all of our employees, for everybody.
We have the Flyshare program that is promoting share ownership in Finnair for all of our employees, voluntarily available for all of our employees. We will align the targets in the compensation model in every bit and piece with our new financial targets. With the leadership principles, with the shared values with the compensation model alignment, we will mobilize the troops. We will create buy-in, we will create commitment, we will energize and build momentum for the implementation of the strategy. What we will deliver is these targets as we have communicated. Thank you. Thank you for following up during the day. I think, Niklas, now we will have one final Q&A sessio
to make sure that we are addressing all of your questions for the totality. Thank you.
Yeah, we already have a question on here, I think.
Nina Ebeling from LocalTapiola. I have a question regarding the incentive programs, because you mentioned that you will come up with a sustainability plan early next year. Do you plan also to integrate the sustainability targets to your incentive programs?
Yes. If we look at the sustainability targets, some of them are one to one correlated with our operational targets. Let's take weight and fuel as an example. The more we reduce weight, the more efficient we are with fuel, the less there will be CO2 emissions. Weight and fuel is a good example of a target that will be reflected in our short-term incentives for people and across these sort of compensation elements. Sustainability is not only about environmental sustainability, it is also about social and economic sustainability. An example of social sustainability is employee satisfaction, Employee Net Promoter Score, and that is reflected in our strategic long-term targets. That will be also sweeping across the compensation elements. With these examples, the answer is yes, sustainability will be part of the compensation model.
What we are currently considering in connection to the long-term sustainability plan that we will be releasing in Q1, is that how we potentially take sustainability into equation in putting the long-term incentive program in place.
Other questions to Topi or even to any of the other presenters, of course? No.
No, I guess not.
I think we've done, probably covered.
Exactly. It's really time to wrap up. Closing remarks after closing remarks. Thank you for putting this time aside, and thank you for coming. Thank you for presenting a lot of good questions. That goes for you in the room, also for all of you who have been joining via webcast. We have had more than 200 participants via the webcast, which is actually quite a bit more than we anticipated. We like to be popular, and we like the interest that this capital markets day has created. With that, I can only say that probably we don't need to wait for three years when we will be having the next capital markets day. When we will be having the next one, I'm sure that we can report on progress in achieving these targets. Thank you once again for participation, and see you soon.
Thank you