Earnings Call: H2 2019

Nov 19, 2019

Getting ready? Now there's some thoughts. Okay, 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. And I have my Chairman, John, where are you in the back row? So we got you all covered into this event, here today. Look, it's a tremendously exciting day for us at Easy Jets. You would have seen from the announcement that we made this morning that we got 2 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 net work. We're going to talk a little bit more about that later, but in addition to all the other things we've been doing in this This is more than any other major airline 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. And that's going to bring a proposition that consists of flexibility, consists of great hotels, teacher also with some of the best in class technology that is out there also delivering great value for our customer in this market. And we're launching it first of all from the UK. And then throughout the year, we will also roll it out in an additional European core market of ourselves. But before I hand over also Chandra, 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 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 1,000,000, which actually included a record performance in the summer both in terms of its resolved PBT, but also in terms of the amount of customers that we have flying with ourselves. So the PBT is actually up 18% on the half year versus 2018. And on profit per seat, it's actually up 10%. So it is a strong finish that was primarily driven by self help initiatives that we did. And this comes really in 2 buckets: one what we've been doing in terms of reducing the cost when it comes to disruption. And 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. So we reduced our disruption costs with 7,000,000 in the year, not only capped it, but reduced it with 37,000,000 in the year. And then also earlier in the year, when we saw that there was a weak in the yield environment for the summer. We launched a revenue enhancement program for the summer that focused on the late yield initiatives And the primarily uptake that we've seen in the deal has come from those initiatives that focus on that late market. Made strong progress as you as we you would know from what we've been doing in holidays, Andrew's going to talk more about what we're doing on the fleet side. And on the right hand side here, I'm also showing you some of the water we've been getting. And I know you, I mean, you can't take the water and go to the bank and cash them in. But 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. So I'll leave it at that and I hand over to Andrew and I come back to him and update and give you more details on some of these initiatives. Thank you, Owen, and good morning, everyone. Just like our interims, these results reflect the adoption of IFRS 15, 169. Further details regarding the impacts of these are providing the appendix to this presentation. Let's start off with some performance highlights. Our total capacity grew by 10.3% to 105,000,000 seats and passenger numbers reached 96,100,000 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 receipt was down 1.8% on a total reported basis and down 2.7% at constant currency. This reflects the weakness in half 1, 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% £4.07. This reflects a headline PBT of 1,000,000, in line with latest guidance. Now we just take a look at some of the performance highlights from the second half, you'll be able to see much more clearly 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 in 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, our operational resilience program brought additional benefits through the summer period. Moving on to the income statement, Total revenue increased by 1,000,000 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 1,000,000,000, which is mainly driven by our increased capacity, The annualization of previously agreed group 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 1,000,000, reflecting our capacity growth whilst 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, EastJet has delivered a headline for tax of 1,000,000, which is 1,000,000 reduction compared to last year. Non headline items were 1,000,000 positive This compares to 1,000,000 costs last year, which related predominantly to the termination of the commercial IT platform upgrade and integration of the TIGAL into our network. The total impacts of the introduction of new accounting standards was a negative impact of GBP 12,000,000 on total profit before tax. The breakdown of this is shown on Slide 50. Now 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. Then 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 the economic and consumer uncertainty in our core markets as we approach the original Brexit data 29th 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 and Q3 IMS. But including the impact of Forex, EasyGX reported revenue per seat decreased 1.8%. Moving on to costs. To help you understand our cost performance, the individual cost movements in this chart are presented before the application of IFRS 15, 169, the net impact of which is shown as a single bar on the right. All 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% excluding fuel was down 0.8%, reflecting the success of our ongoing cost program, which delivered 139,000,000 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 barber affects the impact of doing business at large regulated primary airports, which underpinned our network differentiation. The ownership cost bar we've reflected a new aircraft, which we acquired during the year and the interest on the bond issued during the year. The increase in crew costs of reflects the annualization of previously agreed crude payer deals and maintenance costs reflect the increased underlying cost of labor and parts mainly denominated in U. S. Dollars. Offsetting these, we have positive factors such as the reduction of NAV costs, due to the lower euro control rates, we are particularly pleased with the reduction in disruption costs of 52 pence per seat, the biggest single impact on our headline cost this year This was driven by our operational resilience program, which you'll 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 Air Pass deliveries. These factors combined to bring cost to 2 percent pence 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. Finally, fuel costs per seat at constant currency increased by 50 three pence reflecting the increased effective fuel price, effective price of fuel and a higher ETS cost, whilst hedging rates have risen over the year, our Advances hedge position continues to shield us from volatility and fuel prices. The impact of foreign exchange increased cost per seat by 66p. Moving on to fuel and Forex, this slide summarizes the impact of fuel prices, currency and hedging, The average market price for jet fuel for the year was $6.52 per ton, a 2% decrease, after taking into account our commodity and currency hedging stirling cost of fuel per metric ton was GBP 4.58, which is GBP 24 or 5.5% increase compared to 2018. Moving on to foreign exchange, the euro rate fluctuated between and during the year. Net net, there was a headline CHF14 million negative impact from currency movements, which includes those within the revenue fuel and other cost in cash flow reaching GBP 1,100,000,000 is funding the return of GBP 233,000,000 to shareholders through the payment of the 2018 ordinary dividend. Our investing and financing activities included a generation of GBP 121,000,000 by the sale and leaseback of 10 HV-nineteen aircraft In June, we issued a 1,000,000 investment grade bond as a coupon of 0.875 percent, 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 984,000,000 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 a valid balance sheet more generally rated Baa1BBB plus 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 1,000,000,000, principally representing the investment in 22 new aircraft. Following the changes under IFRS 16, all of our aircraft are now on balance sheet. And at the end of the period, 70% of them were unencumbered. Looking at our cash each year ended the period with GBP 1,580,000,000 in cash and money market deposits, Our total borrowings of 1,000,000,000 include 1,000,000 of lease liabilities with the majority added as a result of IFRS 16. This resulted in a modest net debt position of 1,000,000 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 the by USD 500,000,000 revolving credit facility, which is undrawn and unsecured and has no covenants or draw stocks. We also have business interruption insurance of GBP 150,000,000 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 September, our liquidity position was 1,000,000 to 1,000,000, representing plenty of headroom compared to our minimum liquidity target of 1,000,000 for 1,000,000 So 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 contract delivery dates of 12 aircraft in 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 EasyX fleet flexibility, allowing us additional flex in the phasing of our aircraft deliveries and capital deployed in accordance with our disciplined road 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 needs to get a 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 4 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 twenty twenty, with Easter increasing by around 1.7%. The expected contraction in the market is largely driven by the 1,200,000 seats no longer being flown by Thomas Cook. Moving on to 4 bookings for 2020, 51% of our seats for the first half have been booked, two percentage points ahead at the same time last year, whilst recognizing that second quarter is a weak comparative This is a reassuring performance. This slide summarizes our forward in board, jet, and currency hedge positions, Our hedging policies continue to represent a cushion against the risk of major volatility in fuel prices as at the 30th September, We had hedged 68 percent of our FY20 jet fuel exposure and 45 percent of our FY21 exposure. So moving on to outlook. Please get to 20 20 capacity is expected to increase by circa 1.7% in half 1. 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 these Jet holidays. Headline costs proceeds 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 the Easyjet holidays It reflects the challenges of a lower capacity growth environment this year, offset by the 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 1,000,000 year on year positive impact from FX. On a full year headline PBT basis, 10,000,000 of this is part of the total fuel bill. Full year unit fuel costs are expected to be 1000000 to 1000000 adverse year on year, and total fuel cost is expected to be circa 1,620,000,000 and that includes circa 1,000,000 investment in carbon offsetting announced today. Leasejet Holidays is expected to reach a lease break even 2020. With that, I'll now hand you back to Johan. Great. Thank you very much for that. It's in 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 seeing changes in the competitor landscape. We have seen, the question and the concern from customers on the impacted aviation has on environment has come up on the agenda. The ATC environment, their control environment is still unacceptable in every shape and form that you look at. But I think it's fair to say that given all those challenges that has happened in the year, I feel, you know, 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 them that we launch that they have had an impact. So we are not depending our success on others' difficulties going forward. And 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 in the later half of the year. I've been in the company now for 2 years, and there are, I want to take this opportunity by by, dispelling some of the questions that I sometimes get, sometimes for people in this audience and elsewhere also, when it comes to easyJet and easyJet 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 tease? Will that drive complexity in what you're doing? Or can that actually be something that is meaningful onto this market. And also one question that 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. So I like to dispel those as I go through this presentation that I'm just about to do. Now if you're looking at the history of ECDs, I think it's fair to say that we've had a mover advantage on a number of things. I think easyJet has actually transformed a lot of the industry that we're in. And this last 2 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's set within the capacity of us to bring out to the market. We talked also about the operation 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. So 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's set within this. Actually, our target will, 1st of all, to make sure that it didn't continue to increase. But as you will see later on, we managed to do more than that. And that was in an environment that was not significantly better for us. On route delays were better, but the airport delays was also equivalent worse onto that. People have about aviation that I mentioned earlier is that we are offsetting the carbon emissions from our flights. And that is the cost that we have taken up on ourselves. We're taking up on 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've got 5 priorities areas here. 1 is clearly, the opportunities we have to continue to grow by taking on the strong positions at the primary airport. Winning our customer's loyalty within here sits initiatives that we have identified within business, within loyalty and also within holidays. And 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. And 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 fliers gained some 24% increase in the members in here. So these are things that we're doing almost on the business as usual area, but we do think that we have more opportunities to do within these areas. And we'll come back to you more as we progress through the to the near years on what that could bring. But the focus has been about the holidays. Value by efficiency massively focused on reducing our cost. And I'm going to show that later. We're pleased to say that we've taken outcome to SEK 38,000,000 of cost, which means that we're now are guiding, as Andrew said, to what we're saying for the year that we just ended, that we've been down now 0.8% on a cost per seat on constant currency. Innovative with data, everything we do is on the pin book we do in data. And none of this will happen unless we have the people to liberate. And I'm very pleased to say that we also we have some great 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. And that is to maximize the profit proceeds 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 3 outcomes. So 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. So we fly to and from 100 and 58 Airports today. And we have leading positions in 56 of those. We increased the number of number 1 and number 2 positions by 5 in the year gone by. And 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. And a lot of these positions also sit at the slots 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. So this shows, Skippel, this shows Amsterdam and 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. And as that capacity matures and we're getting that presence in the market, it also then has a positive impact on the revenue proceeds. 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. And 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 Skippall as well. But this shows that the opportunities we still have to take on those positions to do the strategic investments in these spaces is really working. We've got 32 basis today, and we have number 1 and number 2 positions in 27 out of those. And because of that 100 and 58 airports that I mentioned that we're flying to and from, where we basically raised about a third now, We still have talked about the customer's loyalty and the business and the holidays, the loyalty initiatives as well, but this is also something that sits within how customers regard us. We had now an all time high score in every single one of our core markets when it comes 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 reduce that. Our focus on profit per seat as a very much a bearing about that elasticity that we know that our customers 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 easy yet to being the one who provides more worth, more value than any other airline. And 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, but it's a great position to be in as we launch more products. And in the UK, I think, Sampin, we are now number 1 for the first time as we've been measuring this throughout the whole year ahead of it to share with when it comes to customer satisfaction, as an example. Value by efficiency. This is what we're doing in terms of cost. So we get 3 buckets in here One is the bucket, what we call, is the strategic cost reduction program. So in here, it's negotiations and relationship with suppliers our airports, as an example, we got a fuel and the FX program that sits within here. And throughout this whole thing, we believe continue to do more in all of these areas. The fleet program, the up gauging of fleet, which gives us more efficiency in terms of what we're doing, the investment we're doing in the modern and more efficient fleet and aircraft as well as Andrew talked about. And we also then identified operation resilience program that it's 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. So the work we did when we launched a program last year was looking at 2019 And we did over 50,000 changes to our flight schedule to avoid to cancel the flights and avoid also the long and the costly 3 hour delays that we had in the program. That was the focus. And we did those 50,000 changes by moving around the firebreaks to avoid those delays without losing out any significant productivity into schedule. And 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. And 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 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 stand by aircrafts that we want and what it will give. And they're all driven by all these data initiatives. So all in all, cost reductions coming in of 130 8,000,000 in the year. 37 of that was linked to the operation resilience, and we believe that we have ongoing upper tune it is to reduce costs in this business. If you're looking at the operation resilience, and I want to show you this because I haven't shown you some of the up 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 3 hour EU261 cost delays. So 46% less cancellations, we managed to reduce the delays by 24% in there. And if you're looking on the graph on the right hand side, you'll see that that shows then the overall disruption costs that we had as a company and how it really has exploded in the last 4 years from 1000000 up to 1000000 in 2018 And the first initial thought we had was to cap that, but we saw also that there was opportunity in here to actually reduce it And remember this, this is in an overall environment, air traffic control environment that it means pretty much the same in 2018 versus 2019. And that is the black line that you see in there that shows the ADC delay minutes in our network. So we are very pleased on that. And now the focus is, of course, to continue to do more work on that as we go into the suburb. But one of the good things about this one is, of course, that everything that we sat in place for the summer is continuing to have a good effect on where we stand today. Now 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. And I can't remember how many years you had to go back to find that type of performance. And that was all driven by the things that we're 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 with 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. And then 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. So here are 4 examples on this that we've been using when it comes to the operation 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. And by doing that, we can then also more proactively do changes into the way we plan in the flight throughout the day to reach an optimal performance. The crewing analyzer, which basically looks at what are the crew parents that is at risk of splitting? How do we make sure that we have crews available where it's needed to do. And 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 aircrafts will be used. The slot predicted, the ADC slot predicted 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 predicted, that saved us about SEK 4,000,000, just that program. It was done and created within a 2 months period of time, So 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 deliver fantastic value. And 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. And 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 And 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. And 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. So 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 UK outbound flight in September. That looks at 2019's performer versus 2018 and is quite illustrative on actually what we saw in a number of other markets. That means that we were better to assess what delays 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 showed the year on year change into the final 7 days up until departure looking at August September versus last year. And 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 operate in on. We did get benefit from that but the significant improvement was that it worked across the whole of the network. And that gives you some of the power of what these initiatives can do. And other than of our priorities, the right people, like I said, look, we have fantastic people in this organization. And mention 3 of them up here who are in a leading position, and we should not forget that one of the biggest differentiated factors that this company have 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. Gary has joined from, from another big company, to look after the holidays proposition we're doing, Sam Kinney as well, who is our CEO, will be working with data for a long period of time, 25 years. And we also got Peter Bellieu, who's going to come in also, later, to us when he sorted out his relationship or former relationship with his employer, but 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 and area. But 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 on staying on that as well. The you got some, other information there. The engagement score in the company the Glassdoor rating, the employee MPS 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. And that matters. That matters because we are now continuously to look also for slightly different skillsets than what we see in the past. We're looking for people who have knowledge about data. We're looking for people who have working in those types of environment because you know that that the future where this company is also going. So we're getting a good mix of people. And I think Gary, as an example, in your team, we got people from traditional holiday operators successfully holiday operators. We get people from OTAs. We get people who come from outside the industry as well. So 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. So on to some of the, announcement, the first announcements I will do is about this jet holiday. So let's just remind ourselves for the that we have shown you before in Easyjet, we got 20,000,000 customers who buy sec commendation, but it was only 500,000 who bought that with ourselves. That's where the opportunity kind of started just within easy depth in itself. We also saw that we had a great trust from a customer when he looked upon the brand, which means that we also recognize that it could go beyond just a flight in itself. And that's not every Locust Airlines, you can say that. Leading Network on Beach And City, we fly to more lesser destinations than any other airlines. We fly more weak and flying than any other airlines in Europe. And that's a fantastic proposition when you want to go in and take a space in this market. And this market is not dying. This market The packaged holidays market in Europe is growing about 6% per year. It's worth 1,000,000,000 in Europe. It's worth 1,000,000,000 just in the UK. So 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 a clear accountability within that. I wanted to have a separate P and 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. And then also making sure that at we progressed 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. So if you're looking at what the key things are in here then, there are 4 things that stands out. 1 is the flexibility. We can offer flexibility that no other traditional tour operator braked a can. A number of them, even a successful one would fly 3, 4 times a week to destination. We fly 3, 4 times a day. And 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. And that's a great asset to have. We all wanted to put this together with some of the best hotels in Europe, and we set out a target to signed contractually directly with 500 of some of the best hotels. And we are now over and above that target. And I think we've been looking at for the next summer, to have about 700 directionally contractual hotels. And these are all hotels who have 4 and 5 star trip advisor rating. That's the standard we're looking for. So this is the higher quality products than you would see that you would find with the OTS. And 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. And because of the scale that we have, because they can see the volumes we're bringing down to their destinations. And because of the fact that we don't have 1,000,000 hotels, They know that they're going to get greater exposure working with us. And hence, the reason why we also got very attractive rates on that So you take in the flexibility of the network, you take in the cost advantage we have on our network, you put it together with this, and you're getting something that is a very, 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. And you will see that the technology will be best in class. It will be having features that is quite innovative, it will having also ongoing developments as you see through the year with the development of an app and so once that there's a good pipeline of who 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 greater hotels, the way you can engage and you can book with this and the value that this is delivered. That means that when we're looking around the market today, we don't think that anybody can actually do something that as good as this proposition. So the timeline is coming up before Christmas, We do marketing campaign on that one. Our first customer will depart on the 6th 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. So that's on holiday. 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. Dole. The website is built. We're just going through the final stages of the testing on what it's doing, and we're also then going to launch different features as the year progresses. So 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% or 3%, 2.8% is the latest numbers we have around the global commissions 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 it's going to get into net 0 positions. It's fair to say that we have already been doing a lot of this year. We're already one of the more fuel efficient airlines 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. But we know that basically that from today, from today, we are offsetting the carbon emission from our flight and from the fuel that that generates and that causes. Now 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, but we know that this is due more than anybody else is doing. This will cost us million in the year. We're going to take that cost. We know that there also is an expectation from customers Increasingly, we'll look for companies to do what is right, to do the right thing that sits in here. So what we've been doing is here is locking in the cost of the carbon pressures, 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. And 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 future reputable place to provide us these projects for ourselves. But we're going to stay very close to them, but this is an interim step before we see that new technology comes into play. And 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 comes to the impact that we have on the environment. Everybody would agree though that for now the best way of doing something about 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 take us to the next phase. We believe that there will be a time also when you're going to see sustainable aviation fuels comes up. We have looked at that we're following the development very closely in this area, but the cost of the sustainable aviation fuels and that the supply that is in there feels quite prohibited to have a significant impact in this market. But when it comes also then to say okay, what about hybrid and electric flying? And I remember in a year and a half ago, when there were some discussion about, well, it wasn't so much about where it will happen. It was all about when it will happen. And I think that a consensus that exists now is that you will see that hybrid electric aircraft with a two hundred seater capacity, which would be interesting for us would come into play at the 2035 and onwards. And then fully electric in that scale would be from 2050. That's a consensus if you're taking look at all the projects that exist out there. But having said that, you would have seen an announcement just this week. Airbus came out here 2 days ago and said that they're looking to have a 100 seater emissions free by the beginning of 2030s. So 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. So I think that we're going to see much more happening in this space. And Easyjet has been leading this, as you know, with the partnerships that we've had with Right Electric. And we also, this morning, announced also our partnership with Airbus that is a program that would run for 2 years where we are basically looking into what are the specific challenges that we need in order development within this area. So basically, I'm going to now allow to we're going to take some questions on this as well. I just wanted to finish of this 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 key core outcome of what we want to do, maximizing the return of capital deployed on that and also make sure that we are generating sustainable cash flows going forward in the future, and that is what this plan is all there to deliver going forward. So with that, I think we are finished with that and we're going to do some Q And A's, I think. Yes. Please. Question, please. Thanks. Better. Well, that's not there we are. Beautiful James Hollins from Exane BNP Paribas. Two questions then for me. First, you're 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. And related to that, I was wondering if the scale and plans of the holidays project had changed since Thomas Cook obviously left the UK market. The second question is on, your carbon offset program the crowd in Dublin required explicit on quantifying what EU ETS was plus APD plus taxes all over the place. So I was wondering if you could give us Again, even some broad figures on where you are on the EU ETS taxes, etcetera, and obviously what the million will be added to. Yes. So on the holidays piece, basically, we said we're going to be achieve at least breakeven. In the year. That means that we're taking on the really the setup costs on what we're doing. And 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 costs in there. We also, we will not have any revenues, as you would know, in the 1st part of the year. In terms of the volumes we're targeting, while we're targeting in the year to double the volumes that we have, so we're looking to have an excess of 1,000,000 passengers within this, and we think that there's plenty of opportunities to be a truly pan European player. On what we're going to do. And 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 the company as a whole. On the taxes, yes, I mean, we are engaging and I'm engaging quite a lot with governments across Europe. We are paying over I know 1,000,000 in different taxes and the fees. And the e test part of that is about 1,000,000 that sits in there. Now 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. And first of all, there needs to be probably a revision on what the taxes are that they call eco taxes and stainability, taxes and RA would actually be to try and reduce some of those or at least they'll 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 1,000,000 regarding if that is a short haul flight to 1 a half hour or whether that is a 10 hour long haul flight in a business class, which has 10 times more the emissions on carbon coming out. So this gives us the opportunity to be at the prompt foot when we are having those discussions. So we are absolutely adamant that the taxes are wrongly designed that is out there. Some of the taxes does do what it says on the labor that it should do. And even when it comes to the ETS, you can see that the way that that is distributed that there's a number of those funds and revenue that doesn't go into anything that has to do with the environment. And that's not right. That's not fair. The platform we're doing by our own carpet offsetting will allow us to carry that messages in those conversations in a way where we believe we have a strong case for what we're doing. Thank you. Yes. Damian Brewer from RBC. First of all, can I come back to holidays? You mentioned it was scalable. When you reach beyond the breakeven of this year, how much of the incremental revenue growth would you expect then drop to the bottom line in the 2nd year, I'm bluntly how much is fixed cost and how much therefore is a big PBT kicker in year 2 onwards. And then secondly, coming back to Slide 14, it looks like the sort of the core base fleet is after this year around about 3 50 to 3 60 aircraft for several years after that. So really two questions that flow from that. One is why is there a big amount of growth CapEx coming this year if the fleet doesn't grow very much? And then secondly, given what looks like a low growth rate in those years, is there any revision to your ex fuel cost per seat targets will do those stay in place given the lower seat growth rate that looks likely? Thank you. I think of the first one the, it's relatively it's a asset light proposition in here. The of setting up the holidays business is relatively low. There's about a little bit less than 100 people who who works on the project. And we think that if you compare it to where others are with their massive overheads 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 sort out the airline part, and that is already tipping within there. So this is a very, very low fixed cost business. And hence, the reason why it's so, and exciting when you're looking at how you can scale that up throughout the rest of the countries. Want to do the Yes. So on the, sorry, on the, the fuel, sorry, the fleet I think from a point of view of FY 'twenty, the fact that it's slightly higher than it was previously because of timing of aircraft. There was one slippage from FY 'nineteen into 'twenty and one from 'twenty one, 2 from 'twenty one into 'twenty. But, from a point of view of FY 'twenty, we are growing still significantly from threethirty 1 to threethirty 2, 11 of those aircraft are threethirty 1s 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 3.19s, which was fully planned. With respect to our costs, our cost guidance for 20s, fully cognizant of this lower cost growth. So, again, not only does carbon provide the carbon initiative provide us with the platform from what point of view, the regulators are 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, operator to the airports gives us, leveraging that regard as well. Thank you. Neil Glen from Credit Suisse. I'll also ask 2 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 when you're obviously benefiting from consolidation. We're just interested in if you look towards the revenue per seat benefits 2 years ago, they didn't really seem to last very long. How is this time different? And does, for example, the purchase of Gatwick slots help you retain some of the consolidation benefits in the UK on a bit more of a sustainable basis? And 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 gets experience with hotels, because I guess it's a very, very sensitive time as you build out the platform and your vulnerability to poor gas 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 around that I showed you around disruption. In fact, we managed not only to bucket trend on something that actually sit with our own control, but we managed to reduce that. I think that that shows also that we got regardless of what's going on in the competitive landscape ability also to drive, you know, further benefits on our own in here, I think also the things we've been looking at the initiatives on the yield improvements is another way of seeing that, look, regardless of the 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, I think, sample, which are there really to focus on that profit per seat target, the ability we have to grow our profits and to build 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 dilutive impact in there. I think what we're doing is the ability to focus on that profit proceed and the holiday business is a good initiative on how we can do that. So, you know, I can continue. I think that the the the brand position we have, where we are seeing now that, you know, customers prefer ourselves better than the British Airways in this market. It shows also the position that company has in terms of moving in to that type of market where we know the price elasticity is somewhat different. We're still going to be able to to make sure that we're coming up with products and services that people are willing to pay for, but it's a good position to be in. So 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 But 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. Yes, 0.7. So I think that it the whole industry is probably looking for right now to optimize some of the results after difficult to 2019. I think on the quality management on the hotels, Gary fill in if you want to, These these are hotels that we know. These are hotels that Gary 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 a that we have to check all the time that they are now daily basis on that 4 and the 5 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 we believe in that business. But that comes back also to the fact that, you know, we already aware about this market. That's something that, you know, Gary has been working over 25 years and And these are big families, strong companies. It's been around and we know that they deliver. Is there anything else you want to say on? Just give me the microphone. 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. So 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 in 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 thresholds that were taken out of the program. But 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 had to pick through the bed bank that they've had to reach those thresholds to get in the program, and it's the case of maintaining those thresholds to continue in the program. Shaker? Hi, Rashidige 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, you know, what were the losses then in the year that's just ended? And do you still think breakeven or a small profit for the year ahead? Is the right target at Berlin? And within that as well, I'll be on track for the opening of Brandenburg in October next year. And then my second question, just on the, the carbon offset Could you maybe just give us some some color as to how you think, you know, your own initiatives will tie in, you know, with the global standards, you know, course here as comes in, you know, from 2021 onwards? Thank you. So I think of Bernie, we we don't disclose, you know, separate, you know, results performance by base, but as I said earlier, you know, it's, we're in the stage now. We got double digit revenue proceeds growth in here, We probably reached about 75% of the optimization of the program, and we're seeing that it's following pretty much the same trajectory as I showed you on on on Amsterdam. So, you know, we feel absolutely that this in the right thing for us to do. We're getting increasing presence in the market. The brand stands out. And so there's no doubt in our mind that this will deliver as part of a any of the big major basis that we have. Yes, we are focused on the opening of the new airport, and we got a team who works dedicated with all the stakeholders in there, their regular meetings taking place to make sure that that launch will go okay. It's still set for October. And, we're very much looking forward to that, which would also help us consolidate and strengthen our our our position in there. The, offsetting piece, yes, I mean, it's a good question. I think there are still question marks on Corsa. I think there's 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 taking into place that sits on top of free allowances that that is in there. We know that that has been a criticism of the program. The participation is also, up for debate. I think that there are various countries, and airlines just said they will not participate in there. And I think that if that doesn't happen and solve it solves itself, I think, you know, that program could run into difficulties because as you would know, you know, at the global carbon emissions, it's trivially global. It doesn't stop by a country border as an example. So 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. And clearly, as it becomes an offsetting program in here, we will not double offset that for sure, but the thing what we'll be 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. You know, customer wants a company to react on this now and that is what we're doing. Thank you, Mark from Fortescue from Stifel. Couple of questions on holidays, please. 1, 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. But is there a trade off, I suppose, in having to take inventory risk for that capacity. So the question is, how much inventory risk are you taking on the hotel rooms? And then 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, because that looks like it's looking a bit different for you now. Yeah. So there's no risk, that we are taking from a low commitments on the hotel point of view. And the reason why we managed them to still get very attractive rates is because we are providing huge volumes into these destinations. And that is actually, you can argue, well, that is the risk in itself. But that's already sits within the program of what we're doing. So 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, better flexibility than anyone else who actually are selling, holidays on that hotel. On the OTA's, look, the OTA is still gonna need lift. They're still gonna 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. So it's not like they're going to find the alternatives out there very, very easily. And these are customers of ours and they've been customers of ours, but 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? I don't think we disclosed now. Andrew? Hi, it's Andrew Lop from HSBC. Can I ask about Italy? We're slightly at Groundhog Day with decision day for Alitalia looming. Up until now, consumers of Merrill Lynch continued booking Alitalia and has been clear signs that the government would continue supporting them anyway so people may as well book them. But with the current government in Italy, that's no longer so obvious and and potentially something happening with Alitalia, be it be it shrinking or be it stopping flying or certainly looking less secure is there. So have you got any plans in your bottom locker or Rob air in your bottom locker, or if something happens to Alitalia, particularly given your your tight capacity growth. Yeah? Second question would be around France. Obviously, there's a live debate amongst the financial community as well as a general community as to whether Air France is getting it back together, but it's certainly not getting worse at the moment. How do you see the environment there with, with Air France being more focused? So I would suggest with Ryanair coming and playing in the provinces, And did you get anything or do you hope to get any slots out of the Orly Bonanza with the whether you want to chip in also on, on Andrew's comments? I mean, look, when I tell you it's easy, we withdrew from discussions, and as far as we're concerned, we keep investing organically in Italy. It's a big market for ourselves, and we got 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 compete with ourselves on the domestic basis, and they are from what I can tell, reading your notes and other notes that they're trying to focus more on the, the, the premium side of the product and perhaps also the long haul side. I think that they mentioned that they were gonna draw some of the domestic capacity in there, 15% from what I understand as well. So that I think it, gets us to the point that we are able also to compete with anyone of the legacy players. And that gives us those opportunities. I think that, you know, when you're looking at the scale that we have in France, we connect more French people in the regions than any other airline. But, every company has to find the things where they believe that they compete, except really 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. Do you want to comment anything we're 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, that's the primary point there. And 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 your handset to lead really in the regional offering there and continue to see very strong performance. Maniva from Bank of America, 2 1 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? And secondly, just going back to Andrew's question on on slots at orally. So, the egg is your slot. Where are you currently in that process and what do you expect to get from that? So on the 3% note incorporates the latest transaction with Thomas Cook, so we're very clear on that. And with respect to Ollie, do you want to just give an update, Robert? Sorry, there's a there's a lot of work here. I'll leave you on the ground there. Yeah. On the early 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 swaps. Malte Schulz from Commerzbank. Two questions. First of all, on the Agaroper Iberia deal, Would you be interested in taking remedies also in Madrid and constructing the similar apps as you have done in Berlin or Milan and, expanding your presence also in Spain where you haven't been present yet. And second of all, to offsetting. I mean, you said it's 25,000,000 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? Sorry for the last question. 25,000,000 is the cost that we're having for this year. And we can see that now that the carbon offsets are actually in a quite a, historically low position, So what we've done is that we locked in the prices and what we're doing in here to safeguard ourselves. And then the the current projects that we're doing they are there, but we can also see where we could enter into our own project after that 3 years' time. And that's something we're starting to look at quite immediately in order to protect ourselves from the cost of that. The 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, volunteer schemes that would be out there, they would pay a lot more. That's why it makes sense for us to do that. But we have secured ourselves of that cost going forward, and that's locked into the program that we have. Then from that on, we can also see ourselves having our own project in there. The other one was Yeah. So that's not something we that we usually comment on in that case. So, yeah, in general. Good morning, Andrew, Hollings from Public Advisors. I'm just following up on the gentleman's question earlier on on fleet and CapEx. So you've got page 13 and page 14. I presume the CapEx on page 14 is laying out the capital cost of the fleets on page 13, are you a base plan? Correct. Okay. So I think the reason the gentleman's got the question to have I, and I think this is because of IFRS, and maybe you could explain this to us, is it looks like you've got a CapEx number of 9.50 on a depreciation of sort of 600 and you're not growing your fleet and there's sort of not so much this year coming but in coming years. So could you just explain, is that a total capital cost rather than what we'd normally have as a cash CapEx? Correct. Correct. So if you look at the gray box, the dark gray, that's your IFRS, changes. So if it were to be disclosed that we include this last year, so that would have been included in operational CapEx because it would have been and operational lease because of the changes you're bringing on balance sheet and the cash flows associated with that now within CapEx. Understood. So when we look at actual cash CapEx in the future, it's not going to be in 2022, 1,200,000,000. It's going to be 1,200,000,000 natural cash outflow from the group because the rest of it we finance on our lease No, but that effect of those, those that gray box is the outflows associated with the leases. So effectively, We have operating leases. We have 3% of our fleet of operating leases. They're taking on balance sheet. It recognizes, assets in use. The leases associated with that, the cash outflow associated with that is then deemed to be, cash outflow associated with those assets. Okay. Because you've consolidated the cash costs as well as the depreciation. Okay. I understand. Yes. So effectively, you've got to you look at our P and L in the appendix, you'll show the the changing P and L as a result of depreciation and your, impacts of IFRS? Okay. Yes, that's fine. I appreciate it. I'm sorry you've been through it before. Thank you. Which ought to be as clear as we possibly can in our debt. Morning. It's Alex Pedersen from Peel Hunt. Just one question for me, please. When you talk about breakeven 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 a 1,000,000 holidays, you've got you breakeven because you make expounds on the fly to plus you and you maybe lose on the holiday side. Are the 2 combined, or is it purely just the rooms and the ancillary? Against the cost of the holiday organization. I'll ask that. So effectively from our perspective is the whole piece, but frankly, So to kick the whole process off, we're treating holidays as a kind of detached business. So where we'd have series seat sales to a third party. We're treating that series seat sales to holidays. But to be fair to say, the biggest cost associated with holidays is the, hotel costs and about 90% to 95% of the holidays business costs would be variable. So as your revenue increases, because we haven't got those commitments that we talked about earlier, that cost to go up as well. So that's where we, we expect to land. And the report, 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 understand it fully. Thanks. Thank you. Hi, good morning. Carolina Doris 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. And second, on the KPIs, are we gonna have a separate P and L from holidays so we can, track the evolution of the business? Yes. So I'll ask quick first question. No. As I said, we'll have a in both our analysts to explain how that works. So this is the guidance we've given is purely for the airline, only, and we've been very clear on our guidance around that. And with respect to holiday disclosure, when it becomes material, then we'll consider disclosing separately given to that point in time where we absorb within the the overall group, disclosure, but when it becomes material, we'll show holidays, as we expect to do so to become material. Yeah. Andrew, thank you everyone for coming. I'm just outside. Perfect. Thank you very much for coming.