There's a sound test. Great. Does everybody hear me okay? Very good. I'd just like to say a big, warm welcome to everybody. Thank you so much for joining us here today. I'll just do quick introductions as well. Andrew Findlay, our CFO, which we'll hear more about later in this presentation. I also have my esteemed colleagues from the airline management board who's sitting here in the front row. I have my Chairman, John, where are you? In the back row. We got you all covered into this event here today. Look, it's a tremendously exciting day for us at easyJet. You would have seen from the announcement that we made this morning that we got two news coming out to the market. One is that from today, we are offsetting all the carbon emissions from the flights across the whole of our network.
We're going to talk a little bit more about that later. In addition to all the other things we've been doing in this area, this is more than any other major airline is doing in the world today. We believe that that is absolutely in line with what our customers are expecting from us to do going forward. We also talk about the fact that we're going to launch easyJet holidays well ahead of the peak booking period here over Christmas. That's going to bring a proposition that consists of flexibility, consists of great hotels, featured also with some of the best-in-class technology that is out there, also delivering great value for our customers in this market. We're launching it, first of all, from the U.K. Then throughout the year, we will also roll it out in an additional European core market of ourselves.
Before I hand over also to Andrew, let me just go through some of the highlights that we've seen in the year that ended in 2019. I think it's fair to say that it's been a challenging 2019 that we ended off in quite a strong fashion, which meant that we ended up in the upper end of the guidance, coming in at GBP 427 million, which actually included a record performance in the summer, both in terms of its result PBT, but also in terms of the amount of customers that we have flying with ourselves. The PBT is actually up 18% on the half year versus 2018, and on profit per seat, it's actually up 10%. It is a strong finish that was primarily driven by self-help initiatives that we did. This comes really in two buckets.
One is what we've been doing in terms of reducing the cost when it comes to disruption. You know that we set out early on that this was a big thing that affected the whole of the industry, and we wanted to take action on that. We reduced our disruption cost with GBP 37 million in the year. Not only capped it, but reduced it with GBP 37 million in the year. Also earlier in the year, when we saw that there was a weakening in the yield environment for the summer, we launched a revenue enhancement program for the summer that focused on the late yield initiatives. The primarily uptick that we've seen in the yield has come from those initiatives that focus on that late market. Made strong progress, as you would know from what we've been doing in easyJet holidays.
Andrew's going to talk more about what we're doing on the fleet side. On the right-hand side here, I'm also showing you some of the awards that we've been getting. I know you can't take the awards and go to the bank and cash them in. We received more awards than ever before, both customer awards and industry-facing awards, and we think that that is a good testament of what we're doing in the market from a customer point of view is really working, and we can leverage that as we also go on in the future. I'll leave it at that, and I hand over to Andrew, and I come back and update and give you more details on some of these initiatives.
Thank you, Johan, and good morning, everyone. Just like our interims, these results reflect the adoption of IFRS 15, 16, and 9. Further details regarding the impacts of these are provided in the appendix to this presentation. Let's start off with some performance highlights. Our total capacity grew by 10.3% to 105 million seats, and passenger numbers reached 96.1 million, an increase of 8.6%. Overall loads decreased during the year, with total load factor down 1.4 percentage points to 91.5%, reflecting the softer trading in the first half and our focus on yields in the summer. Revenue per seat was down 1.8% on a total reported basis and down 2.7% at constant currency. This reflects the weakness in half one, but represents a meaningful outperformance against the guidance we gave at the half year.
Our total reported headline cost per seat was up 1.5%, up just 0.4% at constant currency, and down by 0.8% at constant currency excluding fuel, highlighting the self-help measures we implemented in the second half. I'll give you more detail on revenue and cost later in the presentation. Finally, our headline PBT per seat fell by 32.9%, GBP 4.07. This reflects a headline PBT of GBP 427 million, in line with latest guidance. Now, if we just take a look at some of the performance highlights from the second half, you know, you'll be able to see much more clearly the impact of our self-help initiatives that delivered during the summer. As you know, our capacity growth was slightly lower, growing by 7.2%.
The revenue per seat figures of 0.8% growth at constant currency in the second half compared to the 2.7% fall over the full year clearly show that we're starting to feel the benefits of our focus on late yields. It's a similar story on cost with half 2 cost per seat at constant currency ex fuel falling by 2.3% compared to 0.8% for the full year, as our operational resilience program brought additional benefits through the summer period. Moving on to the income statement. Total revenue increased by GBP 487 million over the year, reflecting the weakness in half 1, followed by the improvements in RPS in the second half. Total headline costs, excluding fuel, increased by GBP 406 million, which was mainly driven by our increased capacity, the annualization of previously agreed crew pay deals, and underlying price increases from airports.
These were offset by various cost initiatives, including the focus on operational resilience, the continued leverage of our scale at airports, and other benefits driven by our cost and efficiency program. Fuel costs increased by GBP 232 million, reflecting our capacity growth. While hedging rates have risen over the year, our advantaged hedge position continues to shield us from volatility in fuel prices. As a result of these factors, easyJet has delivered a headline profit before tax of GBP 427 million, which is a GBP 151 million reduction compared to last year. Non-headline items were GBP 3 million positive. This compares to the GBP 133 million cost last year, which related predominantly to the termination of the commercial IT platform upgrade and the integration of Tegel into our network. The total impact of the introduction of new accounting standards was a net negative impact of GBP 12 million on total profit before tax.
The breakdown of this is shown on slide 50. Moving on to the detail of our revenue per seat performance. Revenue per seat at constant currency was down 2.7% for the year, or GBP 1.66, and was driven by several key factors. Within the first red bar on the left-hand side, you'll see the annualization of strong performance in the prior year relating to Monarch bankruptcy, cancellations at Ryanair, and French industrial action. Moving further across the page, you can see that we've split out the underlying trading effects to reflect the weakness in the first half as we experienced economic and consumer uncertainty in our core markets as we approached the original Brexit date of 29th of March, and recovery throughout the summer period.
RPS in the second half was up 0.5% on an underlying basis, a strong performance and meaningfully outperforming the guidance of slightly down, which we gave at the interims in Q3 IMS. When including the impact of Forex, easyJet's reported revenue per seat decreased 1.8%. Moving on to cost. To help you understand our cost performance, the individual cost movements in this chart are presented before the application of IFRS 15, 16, and 9, the net impact of which is shown as a single bar on the right. Full details of cost movements with the new accounting standards applied, as reported in the accounts, are shown on slide 47 of the appendix. Total headline cost per seat at constant currency was up 0.4%, and excluding fuel was down 0.8%, reflecting the success of our ongoing cost program, which delivered GBP 139 million savings in the year.
In terms of the detail, I'll start with the negative impacts on the left-hand side of the chart. The first bar reflects the impact of doing business at large regulated primary airports, which underpin our network differentiation. The ownership cost bar reflects the new aircraft which we acquired during the year and the interest on the bond issued during the year. The increase in crew costs of GBP 0.23 reflects the annualization of previously agreed crew pay deals. Maintenance costs reflect the increased underlying cost of labor and parts, mainly denominated in US dollars. Offsetting these, we have positive factors such as the reduction of nav costs due to the lower Eurocontrol rates. We are particularly pleased with the reduction in disruption costs of GBP 0.52 per seat, the biggest single impact on our headline cost this year.
This was driven by our operational resilience program, which you will hear more about later. The reduction in overhead costs is a reflection of our ongoing cost control program, reduced incentive payments across the business, and includes liquidated damages received relating to delayed Airbus deliveries. These factors combine to bring costs GBP 0.32 per seat lower in the year or decrease of 0.8% ex fuel at constant currency, which is in line with the guidance given at the half year. Fuel cost per seat at constant currency increased by GBP 0.53, reflecting the increased effective price of fuel and a higher ETS cost. While hedging rates have risen over the year, our advanced hedge position continues to shield us from volatility in fuel prices. The impact of foreign exchange increased cost per seat by GBP 0.66. Moving on to fuel and Forex.
This slide summarizes the impact of fuel prices, currency, and hedging. The average market price of jet fuel for the year was $652 per tonne, a 2% decrease. After taking into account our commodity and currency hedging, the sterling cost of fuel per metric tonne was £458, which is £24 or 5.5% increase compared to 2018. The EUR rate fluctuated between EUR 1.07 and EUR 1.17 during the year. Net, there was a headline GBP 14 million negative impact from currency movements, which includes those within the revenue, fuel, and other cost lines. easyJet continues to generate strong, sustainable cash flows, with operating cash flow reaching £1.1 billion. This funded the return of £233 million to shareholders through the payment of the 2018 ordinary dividend.
Our investing and financing activities included the generation of GBP 121 million by the sale and leaseback of 10 A319 aircraft. In June, we issued a EUR 500 million investment-grade bond at a coupon of 0.875%. This continues our policy of diversifying our funding sources, managing our debt maturity profile, and optimizing the efficiency of our balance sheet. These funding sources contributed towards GBP 984 million of capital investment, primarily in new aircraft. You can see the split between this and other CapEx, which includes engineering and maintenance spend, plus investments in systems. This brings us on to where the balance sheet more generally, rated Baa1, BBB+. We continue to have one of the strongest balance sheets in aviation, which provides resilience and flexibility, plus access to low coupon unsecured debt. During the year, fixed assets increased by GBP 1.04 billion, principally representing the investment in 22 new aircraft.
Following the changes under IFRS 16, all of our aircraft are now on balance sheet. At the end of the period, 70% of them were unencumbered. Looking at our cash, easyJet ended the period with GBP 1.58 billion in cash and money market deposits. Our total borrowings of GBP 1.9 billion include GBP 578 million of lease liabilities, with the majority added as a result of IFRS 16. This resulted in a modest net debt position of GBP 326 million. Note that last year's positive net cash position does not include IFRS 16 liabilities now recognized on the balance sheet. Our liquidity is supported by $500 million revolving credit facility, which is undrawn and unsecured and has no covenants or draw stops.
We also have business interruption insurance of GBP 150 million to cover the impact of an extended fleet grounding from a range of short-term shock events, and this further supports our liquidity buffer. As at the 30th of September, our liquidity position was GBP 3.6 million per 100 seats, representing plenty of headroom compared to our minimum liquidity target of GBP 2.6 million per 100 seats. Moving on to our fleet plan. Our published schedules have been updated to take account of expected aircraft delivery dates. Airbus's continued transparency on deliveries has allowed us to reset our near term fleet and schedule planning. You'll see from the announcement today that we have reached an agreement with Airbus to defer the contracted delivery dates of 12 aircraft from 2021 to 2023 and beyond. We've also exercised 12 purchase options, guaranteeing our firm delivery positions in 2024.
This agreement is a key demonstration of easyJet's fleet flexibility, allowing us additional flex in the phasing of our aircraft deliveries and capital deployed in accordance with our disciplined growth strategy. Worth noting that A321 deliveries have been particularly susceptible to industrial assembly issues, and as such, we have worked with Airbus to concentrate on delivering more A320s, where certainty of delivery is greater. In 2020, we expect the delivery of 11 A321 aircraft and 13 A320s. Airbus and easyJet have pre-agreed compensation rates for delivery delays as part of our purchase agreement. The chart here illustrates the continued flexibility which we enjoy to maximize our PBT for seat and cash generation, whilst ensuring we continue to grow capacity in our key markets. Slide 14 summarizes our gross CapEx over the next four years. It reflects our revised fleet plan, as just outlined.
As a reminder, our policy is to hedge aircraft purchases once they become committed. Slide 15 shows the expected capacity growth across the European short-haul network through the winter. As you can see, total short-haul capacity is expected to increase slightly by around 0.7% in the first half of 2020, with easyJet increasing by around 1.7%. The expected contraction in the market is largely driven by the 1.2 million seats no longer being flown by Thomas Cook. Moving on to forward bookings for 2020. 51% of our seats for the first half have been booked, two percentage points ahead of the same time last year. Whilst recognizing that the second quarter is a weak comparative, this is a reassuring performance. This slide summarizes our forward jet and currency hedge positions. Our hedging policies continue to represent cushion against the risk of major volatility in fuel prices.
As at the 30th of September, we had hedged 68% of our FY 2020 jet fuel exposure and 45% of our FY 2021 exposure. Moving on to outlook. easyJet's 2020 capacity is expected to increase by circa 1.7% in half one, and by circa 3% over the full year. Revenue per seat for the first half is expected to be up by low to mid single digits, and this excludes the incremental revenues associated with easyJet holidays. Headline cost per seat, excluding fuel at constant currency and assuming normal levels of disruption, is expected to be up by low single digits for the full year. This guidance again excludes the incremental costs associated with easyJet holidays. It reflects the challenges of a lower capacity growth environment this year, offset by that continued flow through of benefits from our operational resilience program. Moving on to FX and fuel.
Based on the exchange rates highlighted, we expect a GBP 40 million year-on-year positive impact from FX on a full year headline PBT basis. GBP 10 million of this is part of the total fuel bill. Full year unit fuel costs are expected to be GBP 70 million-GBP 140 million adverse year-on-year, and total fuel cost is expected to be circa GBP 1.62 billion, and that includes circa GBP 25 million investment in carbon offsetting announced today. easyJet holidays is expected to reach at least breakeven in 2020. With that, I'll now hand you back to Johan.
Great. Thank you very much for that. 2019, clearly an eventful year. We had the ongoing discussions around Brexit, which continues to be ongoing, by the way. We also seen consolidation taking place. We've seen changes in the competitive landscape. We have seen the question and the concern from customers on the impact that aviation has on the environment has come up on the agenda. The ATC environment, the Air Control environment, is still unacceptable in every shape and form that you look at. I think it's fair to say that given all those challenges that has happened in the air, I feel extraordinary comfortable about the ability we have at easyJet to be in charge of our own destiny. There's no doubt when you're looking at the initiatives that we identify, that we launch, that they have had an impact.
We are not depending our success on others' difficulties going forward. I think that's an important message to come out, and certainly something that we think that we have proven through the performance, particularly in the later half of the year. I've been in the company now for two years, and I want to take this opportunity by dispelling some of the questions that I sometimes get, sometimes from people in this audience and elsewhere also, when it comes to easyJet and easyJet's story. The questions like, is there an ongoing cost opportunity within this company? How can you leverage more the network that you have? That we know is fantastic in every way, shape, and format. Holidays piece, will that drive complexity in what you're doing? Can that actually be something that is meaningful to this market?
Also one question that I sometimes get, just because you're not setting out medium-term targets, does it mean that you're not confident in the performance of the business going forward? I like to dispel those as I go through this presentation that I'm just about to do. If you're looking at the history of easyJet, I think it's fair to say that we've had a first-mover advantage on a number of things. I think easyJet has actually transformed a lot of the industry that we're in. These last two years, I don't think has been an exception. I think we were the first one to call out the fact that data will be an absolutely game changer in this industry.
We saw also the easyJet holidays being an alternative and a proposition that could be very meaningful for us because it was not about the fact that this market, the package holiday market in Europe, was reducing in size or even dying. We saw that there were players in here, some of them successful, but also other players who did not have what consumers were looking and asking for, and that sat within the capacity of us to bring out to the market. We talked also about the operational resilience.
I think it was at the H1 in last year where me and Andrew said that, "Look, the cost of disruption is about to really kill this industry unless we actually get a hold of it." We identified that earlier than others, and we set out the program that we're now seeing the result for in this year, where we focus to reduce the cost that sat within this. Actually, our target was, first of all, to make sure that it didn't continue to increase. As you will see later on, we managed to do more than that. That was in an environment that was not significantly better for us. En route delays were better, but the airport delays was also equivalent worse onto that.
Now, today, we are also addressing one of the concerns that we know the people have about aviation that I mentioned earlier, is that we are offsetting the carbon emissions from our flights. That is a cost that we're taking upon ourselves. We're taking upon ourselves to do that because we know that that is increasingly what the consumers are expecting to do, and we think that that will also lead us to be a more preferred airline when it comes to when they're choosing the airline to fly with. You've seen this before. This is our plan. The purpose, seamlessly connecting Europe with the warmest welcome in the sky. We got five priority areas here. One is clearly the opportunities we have to continue to grow by taking on the strong positions at the primary airport. Winning our customers' loyalty.
Within here sits the initiatives that we have identified within business, within loyalty, and also within holidays. It's fair to say that we have prioritized holidays, hence the reason why we're launching that now. That doesn't mean that we don't see value and benefits and opportunities in both the business and the loyalty program. As a matter of fact, when you're looking through the business, we grew our business passengers with 13% in 2019, more than the overall growth of the company. From the loyalty side, the easyJet Plus program gained some 17% more members in there, and our Flight Club program for the most frequent flyers gained some 24% increase in the members in here.
These are things that we're doing almost on a business-as-usual area, but we do think that we have more opportunities to do within this area, and we'll come back to you more as we're progressing through the near years on what that could bring. The focus has been about the Holidays. Value by efficiency, massively focused on reducing our cost. I'm going to show that later. We're pleased to say that we've taken out GBP 138 million of cost, which means that we now are guiding, as Andrew said, or we're saying for the year that we just ended, that we've been down now 0.8% on the cost per seat on constant currency. Innovating with data.
Everything we do is underpinned what we do in data, and none of this would happen unless we had the people to deliver it. I'm very pleased to say that we also have and are getting some great additions into already superbly strong team that will lead us and drive to the outcomes that we are focused on. That is to maximize the profit per seat, to maximize the return on capital employed, and also to generate sustainable cash flows as we go forward. Everything we do in this plan leads on to the focus on these three outcomes. If you're looking through the primary position, this is a chart that then shows you really where we stand in terms of the leading number 1 and number 2 positions.
We fly to and from 158 airports today, and we have leading positions in 56 of those. We increased the number of number 1 and number 2 positions by five in the year gone by. This model works. This model works because we can see when we are getting the scale, when we're getting the frequencies, we're also getting the increased customer demand in there, and everything we do becomes more efficient. A lot of these positions also sit at the slot constraints airport, and it's an amazing asset that the company have. The other side of this slide, I don't think we showed you that before, but this is actually an illustration to what is happening when we are normally and typically going into one of the major markets. This shows Schiphol, this shows Amsterdam, where we added on the base in 2014.
Now you see the black line there that represent the seat growth that we had and the staple that represent the revenue per seat and how that fluctuates with what's happening when we are initially launching on the capacity, it goes down. As that capacity matures and we're getting that presence in the market, it also then has a positive impact on the revenue per seat. This is very much also how each and every one of the big investments that we're doing into these types of airport is working. Berlin would actually follow the same trajectory. Berlin is now standing, as we speak, on the revenue per seat in the double-digit area space, which is also following pretty much the same plan and trajectory as we've seen in Schiphol as well.
This shows that the opportunities we still have to take on those positions to do the strategic investments at these bases is really working. We got 32 bases today. We have number one and number two positions in 27 out of those. Because of that 158 airports that I mentioned that we are flying to and from, where we're based is about a third now, we still have opportunity to grow within this network that we are already flying. I talked about the customers loyalty and the business and the holidays, the loyalty initiatives as well. This is also something that sits within how customers regards us. We have now an all-time high score in every single one of our core markets when it comes to people choosing us as the preferred choice of airline.
We have an all-time high score when it comes to how people feel about the brand in every single one of our markets. This gives us the opportunity to further leverage that when it comes to offering customers products and services, knowing that they are willing to pay for more than what it costs us to produce that. Our focus on profit per seat has a very much a bearing about that elasticity that we know that our customers have if they're getting something that they believe is worth paying for. The one thing that drives all of this is actually when people relate easyJet to being the one who provides more worth, more value than any other airline. That's where you can say, "Well, that means you're charging too little." Well, that is also the opportunity.
We will always make sure that we are competitive in our pricing. It's a great position to be in as we launch more products. In the U.K., as an example, we are now number 1 for the first time as we've been measuring this throughout the whole year, ahead of British Airways when it comes to customer satisfaction, as an example. Value by efficiency. This is what we're doing in terms of cost. We got three buckets in here. One is the bucket, what we call, is the strategic cost reduction program. In here sits negotiations and relationship with suppliers, our airports, as an example. We got a fuel and the FX program that sits within here. Throughout this whole thing, we believe that we are working also with a view in mind that we can continue to do more in all of these areas.
The fleet program, the upgauging of fleet, which gives us more efficiency in terms of what we're doing, the investment we're doing in a modern and more efficient fleet and aircraft as well, as Andrew talked about. We also then identified the Operation Resilience Program that is also a bucket for opportunity to reduce cost. The things we're doing within there, that started out by actually identifying what we could do within the schedule. The work we did when we launched the program last year was looking at 2019, and we did over 50,000 changes to our flight schedule to cancel the flights and avoid also the long and the costly three-hour delays that we had in the program. That was the focus.
We did those 50,000 changes by moving around the fire breaks to avoid those delays without losing out any significant productivity in the schedule. That was all driven by the data that was made available for us to work on. First wave efficiency, we went through every single component of that first wave, because we know that if we're getting the first wave right, we stand a much better chance also for completion of the program throughout the rest of the day. There was tremendous a lot of details into that, and we were chasing, and are chasing still, seconds in here because we know that every second and every minute counts as you go through the remainder of the day.
We also increased the number of standby aircraft and the cost of getting those standby aircraft coming in, the value was more than three times of doing that, and we used, once again, data to find out what is the optimal number of standby aircraft that we want and what it will give. They're all driven by all these data initiatives. All in all, cost reductions coming in of GBP 138 million in the year, 37 of that was linked to the operational resilience, and we believe that we have ongoing opportunities to reduce costs in this business. If you're looking at the operational resilience, and I want to show you this because I haven't shown you some of the absolute numbers before on this one.
Our focus was really then to reduce the cancellations, to increase the completion rate, and also then to reduce the three-hour EU261 cost delays. 46% less cancellations. We managed to reduce the delay by 24% in there. If you're looking on the graph on the right-hand side, you'll see that that shows then the overall disruption cost that we had as a company and how it really has exploded in the last four years. From GBP 43 million, GBP 76 million, up to GBP 178 million in 2018. The first initial thought we had was to cap that. We saw also that there was opportunity in here to actually reduce it.
Remember this is in an overall environment, air traffic control environment that has been pretty much the same in 2018 versus 2019, and that is the black line that you see in there that shows the ATC delay minutes in our network. We are very pleased on that. Now the focus is, of course, to continue to do more work on that as we go into the summer. One of the good things about this one is, of course, that everything that we set in place for the summer is continuing to have a good effect on where we stand today. We had October, and we got 10 days in October, which we had not a single cancellation on. We had 10 days in October where we had no non-extraordinary event.
I can't remember how many years you had to go back to find that type of performance. That was all driven by the things that we focused on to do for the summer, and that's something that will continue clearly into next summer as well. I said that data has been absolute key on this one. We're working with data really in three steps. One is the data management, the accessibility that the organization has of the data, and the quality that we have of the data. The second part is also the data analytics, the way we can take the data and define the opportunities and define the challenges that sits in there. The third part is the data scientist piece, where they are actually creating the algorithms and the product that we can use throughout the organization.
Here are four examples on this that we've been using when it comes to the operational resilience programs. The OTP simulator, which basically takes that performance of the first wave, and we can use that performance and then simulate what the effect will be throughout the remainder of the day. By doing that, we can then also more proactively do changes into the way we're planning the flight throughout the day to reach an optimal performance. The crewing analyzer, which basically looks at what are the crew pairings that is at risk of splitting. How do we make sure that we have crews available where it's needed to do? That is, once again, a simulation tool that we can use in order to avoid the EU261 as an example.
The crew standby forecaster, it basically looks to say, how do we make sure that given the standby capacity that we have on the aircraft and where those should be placed, that we also have crew available where we predict that we will have problems and where we predict that the aircraft will be used. The slot predictor, the ATC slot predictor tool, it's a great tool. What it does, it basically looks at the historical performance of the slots and also about the ATC controls throughout the whole of the network, and it takes that performance and looking at and predicting where we are most likely to run into bottlenecks going forward, both on a daily basis, but also going forward on a weekly basis. That slot predictor, that saved us about GBP 4 million, just that program. It was done and created within a two months period of time.
It gives you a little bit of a flavor on how actually one can create something in a short period of time, launch it, and it deliver fantastic value. That's one of the reasons why data is such a game changer in terms of what we're doing. We've been working with data also when it comes to what I said, the Revenue Enhancement Program and the Late Yield Initiatives. This program came about very much in end of January, February, when we saw there was a weakening in the yield for the summer performance. What we set out to do was trying to work out to better assess what the demand was going to be in the late period. Not only that, we also took into consideration trying to work out, okay, what is now the price sensitivity going to be in that period?
Depending on competitive capacity, depending on competitive pricing, and depending also to look at what other routes, how they were performing. We launched this, and I think this slide shows you. On the left-hand side, you've got an example of it. It's a U.K. outbound slide in September that looks at 2019's performer versus 2018. It's quite illustrative on actually what we saw in a number of other markets. That means that we were better to assess what the lates were going to be, so we can then do a better play between the load factor and the yield. On the right-hand side, you show the year-on-year change into the final seven days up until departure, looking at August and September versus last year. Here's the point with this slide. You can also see that this has given us improvement across the whole network.
This is not only because we have some competitors who had strikes on certain routes where we operated on. We did get benefits from that. The significant improvement was that it worked across the whole of the network. That gives you some of the power of what these initiatives can do. Another then of our priorities, the right people. Like I said, we have fantastic people in this organization. I'll mention three of them up here who are in a leading position. We should not forget that one of the biggest differentiating factors that this company has is the people who works aboard our aircraft. We know we keep coming back to that. We can see it constantly when we are looking at the customer satisfaction score.
The people rate our crew higher than any other airlines on the routes that we are operating on, and that's a fantastic asset to have. Garry's joined us from another big company to look after the holidays proposition we're doing. Sam Kini as well, who is our CDO, will be working with data for a long period of time, 25 years. We also got Peter Bellew, who's going to come in also later to us when he's sorted out his relationship or former relationship with his employer. We're very much looking forward to Peter to join us. Meanwhile, we have a fantastic team that David is leading also within that operational area. I just put this out here because it shows also that we have the ability also to attract a lot of fantastic people coming into this organization. Just staying on that as well.
You get some other information there. The engagement score in the company, the Glassdoor rating, the employee NPS that we have. All in all, you take all of this as well, and you can see that there's a big attraction to come and work for this company. That matters. That matters because we are now continuously to look also for slightly different skill set than what we've seen in the past. We're looking for people who have knowledge about data. We're looking for people who has working in those types of environment because we know that that is the future where this company is also going. We're getting a good mix of people. I think Garry, as an example in your team, you got people from traditional holiday operators, successful holiday operators. We get people from OTAs.
We get people who come from outside the industry as well. I think that that is a good mix on how you're looking to develop this to continue to be a leading company in a contemporary way. On to some of the announcement. The first announcement I will do is about the easyJet holidays. Let's just remind ourselves of the context that we have shown you before. In easyJet, we got 20 million customers who buys accommodation, but it was only half a million who bought that with ourself. That's where the opportunity kind of started, just within easyJet in itself. We also saw that we had a great trust from a customer when he looked upon the brand, which mean that we also recognize that it could go beyond just the flight in itself. That's not every low-cost airlines who can say that.
Leading network on beach and city. We fly to more leisure destinations than any other airlines. We fly more weekend flying than any other airlines in Europe. That's a fantastic proposition when you want to go in and take a space in this market. This market is not dying. This market, the package holidays market in Europe is growing about 6% per year. It's worth GBP 60 billion in Europe. It's worth GBP 13 billion just in the U.K. What we wanted to do and what I was very clear about was to say, as we set up this business, we wanted to make sure that it didn't cause a distraction within the core of the airline. I also wanted to have clear accountability within that. I wanted to have a separate P&L in here.
I wanted to have separate and different people in here because it is a separate skill set if you're going to do this successfully also going forward. Also making sure that as we progress in what we do, that we can build a business that was also scalable to roll out into other markets without adding on significant cost in what we were doing. If you're looking at what the key things are in here then, there are four things that stands out. One is the flexibility. We can offer flexibility that no other traditional tour operator can. A number of them, even the successful one, would fly three, four times a week to a destination. We fly three, four times a day.
We know that that is exactly what the customers are looking for, to have that flexibility to decide when they want to go on their holidays. That's a great asset to have. We also wanted to put this together with some of the best hotels in Europe, and we set out a target to sign contractually directly with 500 of some of the best hotels. We are now over and above that target, and I think we'll be looking at, for the next summer, to have about 700 directly contractual hotels. These are all hotels who have 4 and 5-star TripAdvisor rating. That's the standard we're looking for. This is the higher quality of products than you would see that you would find with the OTAs. We know these hotels. We know that these are the hotels that is in demand.
We know that these are the hotels are the one that really delivers. Because of the scale that we have, because they can see the volumes we bring in down to their destinations, because of the fact that we don't have 1 million hotels, they know that they're going to get greater exposure working with us, hence the reason why we also got very attractive rates on that. You're taking the flexibility of the network, you're taking the cost advantage we have on our network, you put it together with this, you're getting something that is a very good value for what we do. We're also going to have best-in-class technology when we are launching this. We're going to launch this well ahead of the peak booking period here in Christmas, you will see that the technology will be best in class.
It will be having features that are quite innovative. It will have also ongoing developments as you see through the year with the development of an app and so on. There's a good pipeline of what actually this will do, and all in all, deliver tremendous value, as I said. That is absolutely one of the key messages on this one, the combination of the flexibility, the combination of the great hotels, the way you can engage and you can book with this, and the value that this is delivering. That means that when we're looking around the market today, we don't think that anybody can actually do something that is as good as this proposition. The timeline is coming up before Christmas. We do a marketing campaign on that one.
Our first customer will depart on the 6th of January, and then we will then launch next winter, in the spring. We're going to launch next summer, also in the spring, and then we'll continue to do ongoing improvements when it comes to the digital, the data side, and then also how we are looking at yield improvements in this business. That's on easyJet holidays. Now, daringly enough, we are going to play a video. It's coming up here, and that is just to give you a little bit more flavor than just me speaking about it what this is. The website is built. We're just going through the final stages of the testing of what it's doing, and we're also then going to launch different features as the year progresses. Finally, sustainability and what we've been doing with carbon and what we've been announcing this morning.
You know the context. Aviation's carbon emissions sits around between 2.5% and 3%. 2.8% is the latest numbers we have around the global emissions around there. That's not, you might think, significant in itself, but one of the criticism that has come is that this industry doesn't have a roadmap, how it's going to get into net zero positions. It's fair to say that we have already been doing a lot in this area. We're already one of the more fuel-efficient airlines in Europe, and we've been taking down and reducing our carbon emission per passenger kilometer by 34%, and we got more aggressive targets also to go at. We know that there's more that the customers are expecting us to do. That is what we're showing on the next slide.
That from today, we are offsetting the carbon emission from our flights and from the fuel that that generates and that causes. We're doing it across the whole of the network, and we're doing it also knowing, and this is important, knowing that this is not a perfect final solution for aviation's footprint on the environment. We know that this is doing more than anybody else is doing. This will cost us GBP 25 million in the year. We're going to take that cost. We know that there also is an expectation from customers. Increasingly, we look for companies to do what is right, to do the right thing that sits in here. What we've been doing is here is locking in the cost of the carbon purchases, which is on actually historically low levels, and they are all linked into 17 projects.
They're all accredited to the highest standard, the gold standard, and the VCS standards. That is what we will monitor on. That's what we're going to focus on. We're working with Climate Focus, which is one of the most renowned companies who works with governments to shape climate policies, and we're working also with hugely reputable players to provide us these projects for ourselves. We're going to stay very close to them. This is an interim step before we see that new technology comes into play. That is one of the things that we now can see that there is a roadmap on actually what's going to happen going forward when it comes to the impact that we have on the environment. Everybody would agree, though, that for now, the best way of doing something about the carbon is actually to offset them.
That market has also moved along quite a lot through the standards that I talked about, but this is not the final solution. It's an interim step to take us to the next phase. We believe that there will be a time also where you're going to see sustainable aviation fuels comes up. We have looked at that, and we're following the development very closely in this area. The cost of the sustainable aviation fuels and the supply that is in there feels quite prohibitive to have a significant impact in this market. When it comes also to say, okay, what about hybrid and electric flying? I remember in a year and a half ago, when there were some discussion about, well, it wasn't so much about whether it will happen. It was all about when it will happen.
I think that a consensus that exists now is that you will see that hybrid electric aircraft with a 200-seater capacity, which would be interesting for us, would come into play at the 2035 and onwards, and then fully electric at that scale would be from 2050. That's a consensus if you're taking a look at all the projects that exist out there. Having said that, you would have seen an announcement just this week. Airbus came out here two days ago and said that they're looking to have 100-seater emission free by the beginning of 2030s. What we said all along, and what I said all along, is that you can't make a prediction on today's technology and what this will be in the future, because it's going to go like that. I think that we're going to see much more happening in this space.
easyJet has been leading this, as you know, with the partnership that we've had with Wright Electric. We also this morning announced also our partnership with Airbus. That is a program that would run for two years, where we are basically looking into what are the specific challenges that we need in order to have an aircraft and a fleet that is based on hybrid electric. That is an exciting development within this area. Basically, we're going to take some questions on this as well. I just wanted to finish off with this slide. That is actually the same slide as we kind of started this presentation with as well. Everything we do, everything we are talking about is here to really drive the benefits for the shareholders as you see at the bottom of this slide.
Maximizing the profit per seat that we had defined as a key core outcome of what we want to do, maximizing the return on capital employed on that, and also make sure that we are generating sustainable cash flows going forward in the future. That is what this plan is all there to deliver going forward. With that, I think we are finished with that, and we're going to do some Q&As, I think.
Yeah.
Yes.
If you just ask the question, please. Question, please. James? Microphone's here, Michael. Webcast.
Better? No, that's not There we are. Beautiful. James Hollins from Exane BNP Paribas. Two questions in for me. First, on holidays. I was wondering if you could maybe, in the broadest of terms, quantify what sort of revenue and cost we're looking at here. Clearly, you're saying they're going to match each other to deliver breakeven. Related to that, I was wondering if the scale and plans of the holidays project had changed since Thomas Cook obviously left the U.K. market. The second question is on your carbon offset program. The crowd in Dublin were quite explicit on quantifying what EU ETS was, plus APD, plus taxes all over the place. I was wondering if you could give us, again, even some broad figures on where you are on the EU ETS taxes, et cetera, and obviously what the GBP 25 million will be added to. Thank you.
Yeah. On the easyJet holidays piece, basically we said we're going to achieve at least break even in the year. That means that we're taking on really the setup costs of what we're doing, the setup cost is really there to put an organization in place that means that we can then roll it out also to additional markets without any significant cost in there. We will not have any revenues, as you would know, in the first part of the year. In terms of the volumes we're targeting, well, we're targeting in the year to double the volumes that we have. We're looking to have in excess of one million passengers within this, we think that there's plenty of opportunities to be a truly pan-European player on what we're going to do. We're not disclosing any other numbers and targets within there.
I don't want to think that this is going to provide a really meaningful profit contribution to the company as a whole. On the taxes, we are engaging and I'm engaging quite a lot with governments across Europe. We are paying over EUR 700 million in different taxes and the fees and the ETS part of that is about EUR 80 million that sits in there. What we're doing with the offsetting program is, of course, that we're going to go out there and then make the case to the arguments that this is what we are doing. First of all, there needs to be probably a revision of what the taxes are that they call eco-taxes and sustainability taxes.
Our aim would actually be to trying to reduce some of those or at least make sure that they are shaped in a better way than the taxes are today. There are sustainability taxes out there, as you know, in Holland that they are saying, well, everybody should pay EUR 7 regarding if that is a short-haul flight of one and a half hour or whether that is a 10-hour long-haul flight in a business class, which has 10 times more the emissions of carbon coming out. This gives us the opportunity to be at the front foot when we are having those discussions. We are absolutely adamant that the taxes are wrongly designed that is out there. Some of the taxes doesn't do what it says on the label that it should do.
Even when it comes to the ETS, you can see that the way that that is distributed, there's a number of those funds and revenue that doesn't go into anything that has to do with the environment. That's not right. That's not fair. The platform we're doing by our own carbon offsetting will allow us to carry those messages and those conversations in a way where we believe we have a strong case for what we're doing.
Thank you. Yeah. Damian Brewer from RBC. First of all, can I come back to Holidays? You mentioned it was scalable. When you reach beyond the break even of this year, how much of the incremental revenue growth would you expect then to drop to the bottom line in the second year? Bluntly, how much is fixed cost and how much therefore is a big PBT kicker in year two onwards? Secondly, coming back to slide 14, it looks like the core base fleet is after this year around about 350-360 aircraft for several years after that. Really two questions that flow from that. One is, why is there a big amount of CapEx coming this year if the fleet doesn't grow very much?
Secondly, given what looks like a low growth rate in those years, is there any revision to your ex-fuel cost per seat targets or do those stay in place given the lower seat growth rate that looks likely? Thank you.
I think on the first one, it's asset light proposition in here. The cost of setting up the easyJet holidays business is relatively low. There's about little bit less than 100 people who works on the project, and we think that if you compare it to where others are with their massive overhead costs on this one, this is a very efficient way of coming out with this to the market. Mind you, because the big part of what you would need to do if you set this up from scratch, which will be to sort out the airline part, and that is already sitting within there. This is a very low fixed cost business and hence the reason why it's so exciting when you're looking at how you can scale that up throughout the rest of the countries.
On the fleet, I think from a point of view of FY 2020, the fact that it's slightly higher than it was previously is because of timing of aircraft. There was one slippage from FY 2019 into 2020 and two from 2021 into 2020. From a point of view of FY 2020, we are growing still significantly from 331 to 352. 11 of those aircraft are A321s that we're bringing in. We've got a number of retirements going on in the next few years as a result of our exiting of A319s, which was fully planned. With respect to our costs, our cost guidance for 2020 is fully cognizant of this lower cost growth. Again, not only does the carbon initiative provide us with a platform from a point of view of the regulators, it also provides a very strong platform when it comes to our airports.
All airports like to be carbon neutral and having us as one of their key operators of the airports gives us leverage in that regard as well.
Thank you. Neil Glynn from Credit Suisse. I'll also ask two, please. The first one on the airline side. History seems to be repeating itself to an extent. Monarch went a couple of years ago, Thomas Cook now this time, and you're obviously benefiting from consolidation. We're just interested in, if you look towards the revenue per seat benefits two years ago, they didn't really seem to last very long. How is this time different? Does, for example, the purchase of Gatwick slots help you retain some of the consolidation benefits in the U.K. on a bit more of a sustainable basis? Then second question on the holiday side, just thinking about quality management, you mentioned the Tripadvisor scores. Thinking about those ratings, thinking about guest experiences, how do you manage that, given that there is a lot of reliance on guest experiences with hotels?
I guess it's a very sensitive time as you build out the platform, and your vulnerability to poor guest experiences will be quite high. That seems a bit labor-intensive to me.
First of all, what will be different from what we've seen in the past? First of all, I think that, the work we've been doing that I showed you around disruption. The fact we've managed not only to buck the trend of something that actually sit within our control, but managed to reduce that. I think that shows also that we got, regardless of what's going on in the competitive landscape, ability also to drive further benefits on our own in here. I think also the things we've been looking at, the initiatives on the yield improvement, is another way of saying that, look, regardless of the environment we are in, we are in charge of our own destiny that sits in there. I do think that the initiatives on holidays, as an example, which are there really to focus on that profit per seat target.
The ability we have to grow our profits and to evolve the company without necessarily having to rely on putting on 10%, 15% capacities in the market. That, in some cases, you could argue, will have a diluted effect in there. I think what we're doing is the ability to focus on that profit per seat and the easyJet holidays is a good initiative on how we can do that. I can continue. I think that the brand position we have, where we are seeing now that customers prefer ourselves better than British Airways in this market. It shows also the position that the company has in terms of moving in to that type of market, where we know the price elasticity is somewhat different.
We still got to be able to make sure that we're coming up with products and service that people are willing to pay for, but it's a good position to be in. We got a number of initiatives in here that we feel is not really dependent on others and what others are doing in order to get a success. I think also, you're looking at the growth going forward. We got 1.7% on the winter. The competitive capacity there is-
0.7.
Yeah, 0.7. I think that the whole industry is probably looking for right now to optimize some of the results after a difficult 2019. I think on the quality management on the hotels, Garry, fill in if you want to. These are hotels that we know. These are hotels that Garry and his team and I have been working with. We know that these are some of the top hotels that is out there. It's not that we have to check all the time that they are now daily basis on that four and the five star. We know that these are some of the most in-demand hotels. We got approached from them. We approached some of them as well. They have removed other companies in here, good, credible tour operators across Europe, to make us fit in because they believe in that business.
That comes back also to the fact that, we already were about this market. That's something that Garry's been working on for 25 years, and these are big families, strong companies that's been around, and we know that they deliver. Is there anything else you want to say on?
Sorry.
Just back to the point on-
Just give me the microphone.
I think it's back to Johan's point on data. The use of data and quality is going to really help us manage and monitor the quality within the hotels. We're not going to have teams of reps who are going to be in the hotels. Given the fact that we fly to Europe and that these are well-known hotels. The hotels have a real focus on quality themselves and a focus on delivering great experiences to the customers. We will religiously measure and manage the quality as that comes out from the customers through our data, and if they don't meet the thresholds, then they were taken out of the program.
We're very confident that the 500 and the 600 that we'll have for next year that we've handpicked, and the others that we've handpicked through the bed bank, that they've had to reach those thresholds to get in the program, and it's a case of maintaining those thresholds to continue in the program.
Rishika?
Hi. Rashida from Barclays. My first question is on Berlin. Only a very small mention from you on progress there, but it sounds like you've got some good revenue momentum coming through. Could I get you to maybe quantify what were the losses then in the year that has just ended? Do you still think breakeven or a small profit for the year ahead is the right target at Berlin? Within that as well, are we on track for the opening of Brandenburg in October next year? Then my second question, just on the carbon offsetting. Could you maybe just give us some color as to how you think your own initiatives will tie in with the global standard, CORSIA as that comes in from 2021 onwards? Thank you.
I think of Berlin, we don't disclose separate results performance by base. As I said earlier, we're in a stage now we've got double-digit revenue proceed growth in here. We've probably reached about 75% of the optimization of the program. We're seeing that it's following pretty much the same trajectory as I showed you on Amsterdam. We feel absolutely that this has been the right thing for us to do. We're getting increasing presence in the market. The brand stands out. There's no doubt in our mind that this will deliver as part of any of the big major bases that we have. Yes, we are focused on the opening of the new airport, and we've got a team who works dedicated with all the stakeholders in there. There are regular meetings taking place to make sure that launch will go okay.
It's still set for October. We're very much looking forward to that, which would also help us consolidate and strengthen our position in there. The offsetting piece, yes, it's a good question. I think there are still question marks on CORSIA. I think there are still question marks on actually what that will completely include in there. I think that there will be a growing pressure, though, in terms of the efficiency of that program and how much of the offsets that are taken into place that sits on top of the free allowances that is in there. We know that has been a criticism of the program. The participation is also up for debate. I think that there are various countries and airlines who said they will not participate in there.
I think that if that doesn't happen and solves itself, I think that program could run into difficulties because, as you would know, global carbon emissions is truly global. It doesn't stop by a country border, as an example. What this does for us and what we've been doing here gives us the opportunity also to shape and design some of these things. Clearly, as it becomes an offsetting program in here, we will not double offset. That's for sure. The thing what we've been doing here is actually going out and take a lead in this because we know that we can't wait for these things to come into play. Customer wants companies to act on this now, and that is what we're doing.
Thank you, Mark. Mark Irvine-Fortescue from Stifel. A couple of questions on holidays, please. One on holiday inventory and one on OTAs. On the inventory side, presumably direct contracting is better margin for you because you don't pay away to the bed bank. Is there a trade-off, I suppose, in having to take inventory risk for that capacity? The question is, how much inventory risk are you taking on the hotel rooms? Secondly, on OTAs, I suppose they've been a customer of your leisure product for a long time, but they're now becoming more of a competitor. Can you just talk about the changing dynamics with OTAs going forward? That looks like it's looking a bit different for you now.
There is no risk that we are taking from a no commitments from the hotel point of view. The reason why we managed them to still get very attractive rates is because we are providing huge volumes into these destinations. Actually, you can argue, well, that is the risk in itself. That already sits within the program of what we're doing. There hasn't been any big pressure from us to do that. Also, we're not looking for exclusivities in here. In some cases, we've been given exclusivities, but we're not looking for exclusivities. Why? Because we believe we're going to deliver better value and better flexibility than anyone else who actually are selling holidays on that hotel. On the OTAs, look, the OTAs are still going to need lift.
They're still going to need to find a way on how to transport their customers down to the destination. We fly more than any other airline to these destinations. It's not like they're going to find the alternatives out there very, very easily. These are customers of ours, and they've been customers of ours. Clearly, we still think that there's an ability and opportunity for us to do something on our own within this market space instead of just going through a middleman in order to get some of these hotels. Pardon?
How much?
Can disclose. I don't think we disclosed that, no.
Andrew?
Hi, it's Andrew Lobbenberg from HSBC. Can I ask about Italy? We're slightly at Groundhog Day with decision day for Alitalia looming. Up until now, consumers have merely continued booking Alitalia, and there's been clear signs that the government would continue supporting them anyway, so people may as well book them. With the current government in Italy, that's no longer so obvious and potentially something happening with Alitalia, be it shrinking or be it stopping flying or certainly looking less secure, is there. Have you got any plans in your bottom locker or Robert in your bottom locker for if something happens to Alitalia, particularly given your tight capacity growth here? Second question would be around France. Obviously, there's a live debate amongst the financial community as well as the general community as to whether Air France is getting its act together.
It's certainly not getting worse at the moment. How do you see the environment there with Air France being more focused? I would suggest with Ryanair coming and playing in the provinces. Did you get anything or do you hope to get any slots out of the Orly bonanza with the Élysée field?
Robert, you want to chip in also on Andrew's comments? Look, what I'll tell you, it's easy. We withdrew from the discussions. As far as we're concerned, we keep investing organically in Italy. It's a big market for ourselves. We have no plans on anything else than that at the moment. On Air France, yeah, I can see what Air France is doing. They clearly been struggling to compete with ourselves on the domestic basis. They are, from what I can tell, reading your notes and other notes, that they're trying to focus more on the premium side of the product and perhaps also the long-haul side. I think that they mentioned that they were going to withdraw some of the domestic capacity in there, 15%, from what I understand as well.
That, I think, gets us to the point that we are able also to compete with any one of the legacy players. That gives us those opportunities. I think that when you're looking at the scale that we have in France, we connect more French people in the regions than any other airline. Every company has to find the things where they believe that they compete successfully on a sustainable basis, building on the strength that they have. We know what our strengths are, and that is to have those leading positions and get great value and efficiency out of those at the primary airport, and we feel that we can compete with anyone in there. You want to comment anything, Robert, on?
I think just to add quickly, I think on the Italy point, Milan and Northern Italy continue to do very well for us. We're excited to be putting the A321s in there this winter, and continue to see strong performance there. As you said, I think that's the primary point there. On France, we continue to see quite strong performance. We are second to Air France in the market. We've, over this course of winter into summer, have reinforced a number of our domestic product offerings and continue, as Johan said, to lead really in the regional offering there and continue to see very strong performance.
Muneeba from Bank of America. Two questions. One on capacity, 3% for next year. Given you've just got the Gatwick slots as well, how are you thinking about the 3% and could there be upside on that? Secondly, just going back to Andrew's question on slots at Orly. The Air Europa slots, where are you currently in that process and what do you expect to get from that?
On the 3%, no, it incorporates the latest transaction with Thomas Cook, so we're very clear on that. With respect to Orly, do you want to just give an update, Robert? Sorry, there's a mic right here. Probably didn't grab the microphone.
Yeah. On the Orly process, we've applied through slots, as I'm sure a number of other carriers have. We've heard indications that more will come to the market mid-December as to how they're allocating slots. Yeah.
Malte Schulz from Commerzbank. Two questions. First of all, on the Air Europa, Iberia deal, would you be interested in taking remedies also in Madrid and constructing there a similar hub as you have done in Berlin or Milan and expanding your presence also in Spain where you haven't been that present yet? Second of all, to offsetting, you said it's GBP 25 million for this year, but you said you made a quite good deal. How should we think about going forward in cost of offsetting? Will it increase significantly in the next fiscal years?
I'll start with the last question. GBP 25 million is the cost that we're having for this year. We can see that now that the carbon offsets are actually in a quite a historically low position. What we've done is that we've locked in the prices on what we're doing in here to safeguard ourselves. The current projects that we're doing, they are there. We can also see where we could enter into our own project after the three years' time. That's something we're starting to look at quite immediately in order to protect ourselves from the cost on that. The GBP 25 million is a wholesale price. That is something that we're getting a good price on because we're buying so much and we're going straight into this project.
If a customer were to do this themselves through individual voluntary schemes that would be out there, they would pay a lot more. That's why it makes sense for us to do that. We have secured ourselves of that cost going forward, and that's locked into the program that we have. From that on, we can also see ourselves having our own project in there. The other one was?
Air Europa.
Yeah. That's not something that we usually comment on in that case, so yeah. In general.
Morning, Andrew Huntinghurst from Hunt Advisors. Just following on from the gentleman's question earlier on fleet and CapEx. You've got page 13 and page 14. I presume the CapEx on page 14 is laying out the capital cost of the fleet on page 13, i.e., your base plan?
Correct.
Okay. I think the reason the gentleman's got the question, and so have I, and I think this is because of IFRS, maybe you could explain this to us, is it looks like you've got a CapEx number of GBP 950 on a depreciation of sort of GBP 600, and you're not growing your fleet, and there's sort of not so much this year coming, but in coming years. Could you just explain, is that a total capital cost rather than what we'd normally have as a cash CapEx?
Correct. If you look at the gray box, the dark gray, that is your IFRS changes. Effectively, we disclosed that we included this last year, so that would have been included in the operational CapEx because it would have been an operational lease. Because of the changes, you bring it on balance sheet, and the cash flows associated with that are now within CapEx.
Understood. When we look at actual cash CapEx in the future, it's not going to be in 2022, GBP 1.2 billion. It's going to be GBP 1.2 billion, the actual cash outflow from the group, because the rest of it we finance on a lease.
Effectively, that gray box is the outflows associated with the leases. Effectively, we have operating leases.
Yeah.
We have 30% of operating leases.
Yeah.
They're taken on balance sheet. They're recognized as assets in use.
Yeah.
The leases associated with that, the cash outflow associated with that, is then deemed.
Okay, because.
The cash outflow associated with those assets.
Okay. Because you consolidated the cash costs as well as the depreciation. Okay, understood.
Yeah.
Okay.
Effectively, you look at our P&L in the appendix, you'll show the changing P&L as a result of depreciation-
Yeah
Your impacts of IFRS.
Okay. Yeah, that's fine. I appreciate. I'm sorry, you've been through it before. Thank you.
Yeah. We try to be as clear as we possibly can in our deck.
Morning, it's Alex Paterson from Peel Hunt. Just one question from me, please. When you talk about break even on the holiday side, just to clarify, is that purely the holiday room and ancillary, or does that include a profit from the airlift as well? Are you saying you do 1 million holidays, you break even because you make GBP X on the flight, and you maybe lose on the holiday side? Are the two combined, or is it purely just the rooms and the ancillary against the cost of the holiday organization?
I'll answer that. Effectively, from our perspective, it's the whole piece.
Yeah.
Frankly, so to kick the whole process off, we're treating Holidays as a kind of detached business. Where we'd have series seat sales to a third party, we're treating that series seat sales to Holidays. To be fair, to say the biggest cost associated with Holidays is the hotel cost. About 90%-95% of the Holidays business cost would be variable. As your revenue increases, because we haven't got those commitments that we talked about earlier, that cost will go up as well. That's where we expect to land.
Thank you.
We hope to have a breakfast at some stage in December with analysts just to take you through the dynamics around the holidays business to make sure you understand it fully.
Thanks.
Thank you. Hi, good morning. Carolina Dores from Morgan Stanley. I have two questions. On your unit cost guidance that it's up low single digit, does that include the holidays business? That's one of the reasons why it's going up. Second, on the KPIs, are we going to have a separate P&L from holidays so we can track the evolution of the business?
Yep. I'll answer quick first question, no. As I said, we'll have a breakfast analyst to explain how that works. The guidance we've given is purely for the airline, only, and we've been very clear on our guidance around that. We'd expect a holiday disclosure. When it becomes material, we'll consider disclosing it separately. Until that point in time, it'll be absorbed within the overall group disclosure. When it becomes material, we'll show our holidays, as we expected to do so to become material.
Yeah, Andrew. Thank you everyone for coming. Come chat, just outside.
Perfect. Thank you everyone for coming.
Thanks.
Thank you.