Ladies and gentlemen, thank you very much for coming here today to easyJet's 2018 full year results. My name is Johan Lundgren. You would already know Andrew Findlay, who's the company's CFO here. I also have lots of prominent guests here from the company as well. Where's John, our chairman? I saw you earlier. Hasn't made it in here yet. Oh, John, I was just introducing you, so you made it. Yeah, very good. I also have my colleagues here from the executive team, the AMB. If you haven't had a chance to speak with them prior to this presentation and the coffee, I would suggest you do so because there's a huge wealth of experience within that team as well. I'm really pleased to have them also in place for the year to come.
Now, I'm really pleased to say that this has been a fantastic year for easyJet, particularly in the context of an industry in somewhat of a turmoil. I've been here almost a year now, and we have achieved a lot in that year. Our headline profit before tax increased by 41%, meaning our underlying profit excluding acquisitions was a record for the company. The structural advantage means we have increased revenue by 17%, with both passenger and auxiliary revenue performance being very strong. Cost control has been strong, delivering GBP 107 million in savings this year, and we've been recognized in years as the best value short-haul airline by Skyscanner, and our brand has continued to strengthen this year as the best airline across all our markets.
Across the whole of the network, we continue to build our strong positions with an additional seven airports added to the list of airports where we now have a Number 1 position in. We have successfully acquired and started up operations at Tegel, which was a fantastic effort by the team. Overall losses were slightly better than first expected, and we are now the Number 1 airline in Berlin. Despite the fact that it's been a difficult summer for disruption across the industry, we have seen a small increase also in customer satisfaction. Combined, if you take all of these things into consideration, I think it's very clear that easyJet has outperformed everyone in this sector for 2018. Therefore pleased that we can also say that we will be recommending a 43% increase in the dividend to our shareholders.
Earlier this year, we also identified three big areas where we can drive margins and returns, and we're now making good progress when it comes to holidays, business, and loyalty initiatives, and I will come back to those later on. All this will be underpinned by the investment we will do in data with the objective to become the most data-driven airline in the world. While disruption remains a major challenge for the whole of the industry, we believe we're leading the industry response with a comprehensive, integrated program investing in a more resilient operation to decrease the impact on our customers. It is currently our biggest priority along with the focus on Brexit, of course, as well as safety, and we see it actually as a major opportunity. We'll come back to talk more about that later on.
We're investing in people. easyJet has never been in such demand by cabin crew and pilot. We've had over 75,000 applications from pilots and cabin crew to join us, which is close to 8,000 more than we received the year before. All these talks and the discussions about the fact that, oh, there's a pilot shortage, that doesn't at all apply to ourselves. We'll come on to talk about that more in detail. We also have, as I mentioned earlier, we have a new leadership team who have the right expertise and the experience to deliver on the strategy. Finally, we also have positioned ourselves extremely well in a period of uncertainty. We have a strong investment-grade balance sheet with GBP 396 million of net cash. We are well prepared for Brexit, and I'll talk more about that later in this presentation.
Our fleet position is both flexible and advantageous. We have today confirmed an order of 17 aircraft with Airbus. Our fuel hedging position gives us a high degree of certainty also over the next 18 months. Really to summarize this, if you take in all of these things as a snapshot, we are a structural winner. We have great foundations that we can continue to build on, which we'll talk more about this in this presentation, with plenty of opportunities to go for. With that, I'm going to hand over to Andrew.
Thank you, Johan. Good morning, everyone. Before I start, I just wanted to highlight that this presentation will be the final time we split out the financial performance of our Tegel operation. As we run through the slides, I'll make sure to keep you updated on exactly what is being presented. Starting off with some performance highlights, which include the Tegel operation. Our total capacity grew by 9.8%, with passenger numbers reaching 88.5 million, an increase of 10.2%. Overall loads have increased for the year with a load factor up 0.3 percentage points, despite the lower average loads in Tegel, reflecting the rapid startup of operations. On a total reported basis, revenue per seat was up 6.4% and up 4.7% at constant currency, a result that has positioned us at the high end of guidance ranges provided through the year.
Our total reported headline cost per seat was up 4.4% and up 2.7% at constant currency, reflecting the wet lease operation at Tegel, as well as the difficult disruption environment experienced through the year. I will give you more detail of revenue and cost later in the presentation. Finally, easyJet delivered a headline PBT per seat increase of 28.7%, GBP 6.07, highlighting the continued strength in our underlying strategy. Moving on to the income statement. As with the previous slide, the Tegel operation is included in the numbers provided. Total revenue increased by GBP 851 million for the year, which reflects a combination of our capacity growth, a strengthening euro, as well as a strong trading performance.
Total headline costs, excluding fuel, increased by GBP 559 million, which was mainly driven by increased capacity, a strengthened euro, inflation linked through pay deals, which we have highlighted earlier in the year, plus high levels of disruption. This was partially offset by cost initiatives, including the continued leverage of our scale at airports and other benefits driven by a cost and efficiency program. Fuel costs increased by GBP 122 million, reflects an increase in fuel price through the year, which was partially offset by our advantaged hedge position. As a result, and despite the headline loss associated with our Tegel operation, easyJet has delivered a headline profit before tax of GBP 578 million, which is GBP 170 million improvement on last year. When excluding the Tegel acquisition, we delivered a headline PBT performance of GBP 690 million, a record for easyJet.
In terms of non-headline costs, there was GBP 133 million impact in the year, the largest elements being GBP 65 million for the commercial IT platform as we take a more flexible IT approach to securing future commercial revenues, GBP 40 million of Tegel integration costs, and GBP 19 million for the accounting entries associated with the sale and leaseback of 10 A319 aircraft in the period. Moving on to the detail of our revenue per seat performance, and this excludes Tegel. Revenue per seat at constant currency was up 6.7% for the year and was driven by three main factors. We estimate a combination of Monarch bankruptcy, the issues experienced at Ryanair, and the French industrial action delivered a GBP 1.98 impact for the year, being circa 3.4 percentage points.
Ancillary revenue delivered a sustainable GBP 1.34 increase through the ongoing benefit of last year's improvements, including our new hold bag proposition with differential pricing for 15 kg and 23 kg bags. Finally, underlying passenger revenue was strong, driven by a network brand, customer service, and attractive fares. When including the impact of Forex, easyJet's reported revenue per seat, excluding Tegel, increased by 8.3%. Moving on to cost, again, excluding Tegel, total headline cost per seat at constant currency was up 2%, and excluding fuel was up 3.8%. In terms of the detail, I'll start from the left-hand side of the chart. The first bar reflects the impact of doing business at large regulated primary airports, which underpins our network differentiation.
The increase in crew cost to GBP 0.56 reflects inflation in crew pay deals we highlighted earlier in the year, the negative productivity impact of canceled flights, and significantly better crew retention rate than expected. Higher depreciation charges plus interest on the two bonds drove ownership costs up by GBP 0.18. These factors, as well as underlying cost inflation pressures, combined to drive cost GBP 1.94 per seat higher in the year. To alleviate these cost increases, we doubled our efforts on delivering cost-saving measures. Increased mix of A320 and A321 aircraft in the fleet delivered a saving of GBP 0.29 as we added 45 A320s and two A321s to the mix in the year, meaning we still have a significant opportunity to deliver cost savings. Our year-end average gauge finished at 172 seats. 2018 saw continued focus on delivering sustainable savings through the easyJet cost and efficiency program.
The next column represents the cost reductions delivered in the year, which include enhanced long-term airport and ground handling deals, engineering and maintenance savings, overhead efficiencies through improved process and structure with a focus on increased automation, for example, auto bag drop facilities. We have a strong pipeline of cost saving measures in place, which will drive efficiency and maintain our position as one of the low-cost leaders in the industry, particularly through the primary network that we operate. Combining all the factors just mentioned would have led to a cost per seat ex fuel a constant currency increase of 1.1% for the year, which was in line with our original guidance. The next column highlights the higher bonus payments across the business as a result of our financial outperformance in the year.
We move on to disruption costs, which had the single biggest impact on cost per seat ex fuel in 2018. We do everything we can to ensure we look after our customers during these disruption events. As such, these costs also include welfare costs that we bear when having to cancel flights for ATC strikes and severe weather where a EUR 250 compensation is not payable. Johan will give you further details on disruption and the initiatives we have underway to address it later in the presentation. Finally, fuel cost per seat fell by GBP 0.52 at constant currency despite the market increase, reflects the impact of our hedging policy and increased aircraft gauge. The impact of foreign exchange increased cost per seat by GBP 0.88, primarily due to the weakness in pound against the dollar. Detail of our Tegel operations for the final time.
As I've said previously, we're extremely happy with the progress made through the year to deliver a very challenging plan of building a 23 aircraft base in around 11 months. The smooth launch of such a large base is testament to the outstanding operational capabilities we have within this business, this illustrates that easyJet is set up to deliver a smooth transition if another opportunity like this arises in the future. In 2018, we flew 3.9 million passengers from Tegel, delivering a load factor of 80.6%, which reflects the rapid ramp-up of their operations with tickets not going on sale until December 2017. Load factor levels are increasing as we expect, we hit around 85% during the summer months.
We made a headline loss before tax of GBP 112 million for the period, which is a solid performance given the factors already mentioned, with our total loss before tax of GBP 152 million coming in lower than our original guidance, reflecting a ramp-up of operations faster than we originally anticipated. In terms of operational measures, our performance is excellent. OTP of 82% for the period has been strong and would have been higher if it wasn't for the difficult year of disruption faced across Europe. Our recruitment and training was executed to plan, 30th September, 665 easyJet pilots and cabin crew were working at the base. We will continue to optimize the schedule and operations throughout 2019 and into 2020. This slide summarizes the impact of fuel prices, currency, and hedging.
The average market price for jet fuel for the year was $664 per ton, an uplift of 33%. After taking into account our commodity and currency hedging, the sterling cost of fuel per metric ton was GBP 434, which is a GBP 22 or 5% increase compared to 2017. Moving on to foreign exchange, the euro rate fluctuates between EUR 1.10 and EUR 1.16 during the year. Net-net, there was a headline GBP 8 million positive 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 GBP 1.2 billion, which funded the return of GBP 162 million to shareholders through the payment of the 2017 ordinary dividend. Our working capital benefited from a combination of our higher revenue per seat, changes to ticket sale timings, plus an improvement in supplier payment terms.
Our investing and financing activities include the generation of GBP 106 million by the sale and leaseback of 10 A319s. This contributed towards GBP 977 million of capital investment, primarily on new aircraft. You can see the split between growth and replacement aircraft as well as other CapEx, which includes engineering and maintenance spend, plus investments in systems, as well as the EUR 40 million invested in the Air Berlin Tegel assets. Rated at Baa1 and BBB+, we continue to have one of the strongest balance sheets in aviation, which provides resilience, flexibility, plus access to cheaper unsecured debt. During the year, fixed assets increased by GBP 615 million, principally representing the investment in new aircraft, offset by the sale and leaseback of 10 A319s. At the end of the period, 71% of our aircraft were on balance sheet, with 98% of those being unencumbered.
Looking at our cash position, easyJet ended the period with GBP 1.37 billion in cash and money market deposits and borrowings of GBP 977 million, resulting in GBP 396 million of net cash. Our liquidity is supported by the $500 million revolving credit facility as well as a further GBP 250 million RCF, which was taken out in the year. Both of these RCFs have no covenants or draw stops. We also have business interruption insurance of GBP 150 million to cover a range of large short-term shock events, which also supports our liquidity buffer. As at the 30th of September, our liquidity position was GBP 3.9 million per 100 seats versus our minimum liquidity target of GBP 2.6 million per 100 seats. This slide summarizes our forward jet and currency hedge positions.
Although recent increases in fuel price will impact us in the short term, based on the hedging disclosure of our competitors, we expect to be significantly advantaged over the next 12-18 months as a result of our current hedge position. Moving on to our fleet plan. Today, we announced an agreement with Airbus that converts 17 purchase rights into firm orders, securing valuable slots at a time when the Airbus order book has limited availability. The agreement includes the exercise of purchase rights to firm orders for 17 A320neo under the existing framework agreement signed in 2013, the deferral of delivery dates of 18 A320neo aircraft by up to 24 months, and the conversion of 25 purchase rights for A320neo into purchase options to ensure delivery slots in 2024.
As a result of this agreement with Airbus, we have increased our forward flexibility and have a range of outcomes over the coming years that are extra towards continuing our yearly capacity growth of somewhere between 3% and 8% per year over the medium term. The flexibility in our plan allows us to maximize our PBT per seat and cash generation whilst ensuring we continue to grow capacity in our key markets. This chart illustrates that flexibility. This chart summarizes our gross CapEx over the next four years. It reflects our current fleet plan, including the delivery of 30 A321, of which two were delivered in 2018, and a modest investment in parts to aid resilience and fleet recovery. Our policy is to hedge aircraft purchases once they become committed, and we have currently hedged for circa 88% of the A319 aircraft delivery payments.
In Q1 this year, we anticipate entering a further 10 A319 sale and leasebacks, in which we have anticipated raising between GBP 100 million and GBP 150 million, which is not reflected in this chart. Moving on to forward bookings for 2019. 50% of our half one seats have been booked, one percentage point behind the same time last year, which is a strong performance considering the inclusion of Tegel flying, the movement of Easter into half two, and the one-off increase in bookings experienced from Monarch and Ryanair issues in the first half of FY 2018. A first look at half two booking position shows we are slightly ahead versus the same time last year. This slide shows the expected capacity growth across the European short-haul network through the winter. Please note this information is sourced from OAG and includes the easyJet flying from Tegel Airport.
As you can see, the short-haul capacity is expected to grow by around 6% in the half, with easyJet reaching double-digit percentage growth, mainly due to the impact of Tegel flying, which represents the majority of our growth in the first half. In terms of competitors and our routes, we are expecting an increase in capacity of circa 4.3%, with last year's figures reflecting the demise of Monarch and Air Berlin and the reduction of U.K. domestic routes by Ryanair. In addition to the previous slide, I have added this chart, which gives a breakdown of easyJet growth for the half. Starting from the left, 4% of growth reflects the annualization of route capacity from FY 2018, the continued investment in building our Number 1 and Number 2 positions at primary airports, as well expanding our network to airports and routes that will deliver margin-accretive returns.
Prior year cancellations and upgauging represent a combined 3% uplift. Finally, the strategic investments in Manchester, where we are consolidating a strong position following the demise of Monarch, and in Tegel, where we will fly a full year schedule for the first time. Moving on to the more detailed line-by-line outlook slide, a reminder that this guidance includes our Tegel operation. 2019 capacity expected to increase by circa 10%. On a like-to-like accounting basis, revenue per seat for the first half is expected to be down by low to mid-single digits, in line with previous guidance. This includes the effective annualization of one-off revenue benefits from the 2018 financial year, dilution from Berlin, and the effects of Easter moving into the second half of the financial year.
Adjusting for the prospective impact of IFRS 15, revenue per seat in the first half is currently expected to be down by mid-single digits, mainly due to the treatment of booking fee revenue, which is now recognized at the time of flying and which will benefit the second half of the year, as well as the revised treatment of EU261 compensation costs, which are now partially offset against revenue. On a like-to-like accounting basis, total headline cost per seat, excluding fuel at constant currency and assuming normal levels of disruption, is expected to be flat for the 12 months to 30th September 2019. This includes expenditures on the strategic initiatives to drive margin and returns in the long term.
Adjusting for the prospective impact of IFRS 15 again, total headline cost per seat, excluding fuel at constant currency, expected to improve slightly as some disruption cost is offset against revenue, as noted above. Based on the exchange rates highlighted, we expect a headline GBP 10 million year-on-year adverse impact for the full year. Full-year unit fuel costs are expected to be GBP 50 million- GBP 100 million a year adverse. Finally, total CapEx for 2019 will be circa GBP 1 billion. IFRS 16, the new accounting standard relating to leases that we have chosen to adopt early in financial year 2019, is not expected to have a material impact on the income statement, as the annual operating lease expenses and maintenance charges are anticipated to be replaced by similar levels of depreciation and interest expense.
It should be noted the adjusted net debt at the 30th of September 2018 would be circa GBP 600 million lower than reported, as the capitalized leases we will recognize on our balance sheets going forward are significantly less than the 7 x estimate used in our current calculations. We anticipate for FY 2019 that this will have a positive impact on headline return on capital employed of circa 1.5 percentage points. I will now hand you back to Johan.
Andrew. What I'd like to start off with is to introduce you to our plan. This is something that we have recently introduced into the business. The purpose really of this is to refresh and simplify what we have said previously, to get everybody in the organization focused on the clear set of priorities and also promises that we're making to our stakeholders. We also came up with a purpose, I think this is really, really important for an organization where so many of the people in the organization are facing our customers on a daily basis. The purpose that also capture part of the business idea is to seamlessly connecting Europe with the warmest welcome in the sky. This is something that's gone down really, really well within the organization.
We get a clear framework of the five priorities that is shown on the page here. I'm going to talk you through those a little bit later as well. That gives us really the clarity and the focus on what we are going to do to be successful. The promises, the five promises that we also have in here about safe, responsible on our customer side, in it together, always efficient, and forward-thinking. It's really the things that describes how we do things in the easyJet way. If you're looking at the five priorities, they are building upon the structural advantages that easyJet currently has.
We will continue to build Number 1 and Number 2 positions to strengthen our unique network at primary airports, where we give our customers a travel experience that means that they want to travel again and again with us, and we are investing in new initiatives that offer them more reasons to do so within holidays, business, and loyalty. We will continue to focus on cost, but also in efficiency in every part of our organization. We want to attract and invest in the right people in the organization, and we want to accelerate also our investment in data to improve the customer offer, drive revenue, reduce costs, and improve operational excellence and efficiency. These priorities, this is important, these priorities doesn't work only in isolation.
I think it is when all these things come together that you'll see that they will bring and add up more to the sum of their parts to really maximize the customer experience and therefore also maximize the returns to our shareholders. We will consistently measure and report our progress against those priorities with six KPIs, which you can see on the bottom of the slide that are all aligned to the success and the sustainability of the business. We've done a big work within the organization to be absolutely clear what are the things we want to measure to make sure that the right people have the right things to look to see that we can evolve and measure the progress about what we do from a strategic point of view and also from a shorter term point of view. Let me talk you through these priorities.
The first of these priorities-- and by the way, there's no priority among the priorities, just to get that straight. They're all equally important as priorities for us. The first one is to be the Number 1 or Number 2 in primary airports. With this slot portfolio that we have, we have absolutely Europe's leading point-to-point network between the continent's primary airports. The range of destinations that we have, the frequencies which we fly on, gives our customers a fantastic offer, and as a whole, are also extraordinarily difficult to replicate. You got to think about this, that this is something that's been built up now since the airline started in 1995, and therefore, these slots are physical assets that actually somebody can't just take away from yourself.
We have a Number 1 or Number 2 positions at 24 out of the 29 bases and out of 51 out of the 156 airports that we serve. The percentage of our capacity that touches a Number 1 airport has increased from 79% to 88% in the year. As I mentioned before, we became Number 1 at seven additional airports this year, including Tegel, Bordeaux, and Lille, as an example. This investment in the network is delivering increasingly strong returns with contributions up 20% on average since 2014. We got plenty of things to go for as well. By gaining more and more share in the attractive primary airports and offering more frequencies and more destinations, we can increase the returns, and we believe that we can compete successfully with anyone in the market.
The track record we have of successful growth and increase in returns drives our future investment plans. Where we have a Number 1 and Number 2 positions, there are 60 million seats flown by legacy airlines in and on easyJet routes. That gives you a sense of the great opportunity that we still have to progress in this area. We're well established already in the airports that are largely slot constrained. With our average seat gauge growing from 172 seats currently and further increasing over the coming years, growing at slot-constrained airport is an advantage that we can benefit from, unlike many of our competitors. This is before you consider that we have also other opportunities elsewhere, including some of those airports that you will see on the slide there on the right. Our next priority is to win our customers' loyalty.
Today, easyJet, we know we have a great offer. We got a great brand that drives customer loyalty. Loyal customers are very valuable to us. We better understand what they want. They come back to us at a lower cost. They're attracted by the network, our award-winning value, continual innovation in our offer, and our great customer service that is delivered by an amazing group of people that we have on board our aircraft. You see in our brand scores that show that we are the best value airline in Europe with a number of awards this year that reflect this. Over 2/3 of consumers in key European markets state that they would seriously consider flying us over our competitors. I think that's an amazing stat and gives evidence of that opportunity we have.
Two-thirds of these consumers in these markets say they would seriously consider flying with us over any other airline. 2018 has seen the highest level of consideration to date in U.K., France, Germany, and in Berlin, perceptions around the easyJet brand have significantly improved with a 6 percentage point increase in serious consideration since last year. This is all reflected in our revenue performance, a 6.4% increase in total revenue proceed and an 11.7% increase in ancillary revenue proceed. Loyal customers fly twice as often and spend more than double with us. It also drives increasing loyalty. Last year, we had 58 million seats booked by customers who had also booked in the previous two years. That is an increase with 11 million.
We will continue to invest in evolving the customer experience and leveraging our brand in strong markets with the aim of retaining and growing our customer base and increasing spend per passenger. As I said in May, this gives us a huge opportunity to drive significant profits and returns over the next five years. We will build on the strong foundations of the core of the business, of the core of the airline, leveraging the customer base that we have. In addition to that, build on that brand with investments that we want to do now and we are doing within the holidays business and loyalty. Let me talk you through these initiatives, and I'll start with holidays. As you may recall, we had 500,000 customers out of 20 million who fly to our top 29 destinations that books a hotel through easyJet.
This is despite low current investment, a suboptimal technology experience, and a low level, if any level of personalization. This is a massive opportunity for us, and we will radically improve on how and what we currently offer to capture that opportunity. We'll base this on our unique and highly attractive fundamentals. A pan-European network of destinations and frequencies flying many times through the day, many times through the week to city, beach and ski destinations. An efficient, flexible, low-cost operation that we have within the airline and a great trusted brand and a loyal customer base. This is combinations that you take all of these things in consideration as a whole, you will not find in any airline that is out there. You might find parts of this that fits with some of our competitors.
When you put all of these things in together, there is nobody who can compete with these fundamentals, and that's what we want to continue to build on. We also have on top of that, now a team of industry-leading people and expertise. We have the ability to develop an offer that is tailored, that is personalized, and offer fantastic value, and therefore capture a significant share of this market. Let me talk you through a little bit more in detail what this will look like. Since May, we've had an interim team in the business who made good progress in three main areas, where the aim is to improve the experience and take direct control of specific parts of this value chain. What you can see from this slide is actually the description of the value chain that you see on top of the slide.
You have from where we basically are today, and at the bottom of the slide, to is where we aim to go as we progressing our efforts in this area. We're moving to a more targeted, better user experience offering, where we have a clear idea of what we want our hotel offer to be, and we've had also, I must say, a number of discussions with some of the most in-demand, some of the most loved hotel partners in Europe. With absolutely no exceptions have they said that they are absolutely thrilled to engage in a commercial relationship with ourselves, which is a fantastic start for what we want to do. This is exciting, and this is very positive. We also have a very clear idea of the technological experience that we will offer our customers.
We now have, as I mentioned earlier, also a team in place. Garry Wilson joined us here last Monday. He's already been in this company for more than a week. Time flies. We also have, in addition to that, we appointed a CFO, we have a head of marketing, we had a head of customer, head of PR, and we also had a great addition in from James Hardy, who comes from Jet2, who will head up our e-commerce and digital. Will work together both with the airline and also support also the activities we do within the holidays team. I'm really excited about how we are going to move this forward as well. What we plan to do is then in 2019, launch the new easyJet holidays prospect, and the big next season will be 2020.
We will continue to roll out and involve the improvements in the offer starting from now and over the next 18- 24 months. That is the timescale that we can prepare ourselves for when you're going to see more news coming in from easyJet holidays. Let me talk to you about business. Our customers tells us that when you meet people who travel with us for business today, and I've seen some of them in focus groups, and what they tell is very clearly say that, "Look, easyJet is the smart, contemporary way of travel of business in 2018." I think that is at the core of the offer of what we do.
It reflects also the customer experience that we give today, which is based on that point to point network at the primary airport with the frequencies that we have on all the major commercial routes, which of course now also includes Tegel. We built this business customer base from 10 million in 2012 to over 15 million in 2018, and an increase of 17% versus 2017. That is just on the year-on-year growth between 2018 and 2017. We can do more than that by developing also a great product, offering a seamless convenience at great value that is consistent with the easyJet way of doing things. We will target many more of the short-haul business customers who fly in Europe every year.
Our objective is to increase the business penetration on the business network, and we're already starting to make schedule improvements on a much more granular level and much more to larger extent than we have done before. From Berlin, we, for example, now serve from both airports in Berlin Schönefeld. We are launching Zurich to Tegel. We've added Berlin to Boston, as an example. We've added a first wave and last wave departure from Bordeaux to Nice. I could go on about the number of things we're doing here to really enhance the schedule for business passengers. We are also starting to fly Gatwick to Düsseldorf coming in January. All really something that will attract more business customers flying to ourselves.
We already done a number of the improvements that I mentioned at the half one that we need to do just to make ourselves to become a better alternative and partner to work with for companies. We are now able to separate the VAT invoicing, which was a big hurdle for us in Germany. We are also looking to do a number of other things, launching a corporate portal that will come out also in 2019 that will help establishing our presence within this market. I think one of the big drivers of this is clearly also to look how loyalty fits into this and the schemes and the recognition and reward we want to do for our most loyal customers. We do have a large and a loyal customer base today, and we do have existing loyalty programs that are very popular.
The invitation-only program that we have with Flight Club is for those who fly basically more than 20 times a year with us. Has increased by 45% in 2018. It is over 9% now of all easyJet bookings that is coming from people who have booked as Flight Club customers. easyJet Plus, which is our paid membership program that allows customers to access additional privilege for an annual fee, increased the membership by 52% also in the year. They are still quite limited in the scale and it is still quite limited in terms to the value that it provides. The opportunity is that if you take a look at 2018, that 66 of easyJet customers have flown with us in the past two years. Returning customers buy twice as many flights per year as first-timers, but just under half of easyJet customers today only travel with us once a year.
Our easyJet Plus and Flight Club members have consistently driven incremental year-on-year revenue, and we want to grow value by customer by recognizing and rewarding them, which will drive, and we will set up to make sure that that drives contribution to our bottom line. We have appointed now also our first ever head of loyalty. We are assembling also a team under that person to deliver a program that encourages customers to spend with easyJet and our partners to redeem points to get access to exclusive rewards, to be recognized and advance quickly through the loyalty levels we have in order to access further enhanced benefits. This is something that we intend to roll out also during 2019. We believe it will make a great also part of the offers we are doing within holidays and also within the business.
Third priority is value by efficiency, which is equally important to driving the profit per seat. As Andrew has showed you earlier, one of our biggest cost drivers this year has been the disruption cost, which has increased by almost GBP 70 million in 2018, that is clearly all included in our numbers. Our cost and efficiency program continues to drive both short-term efficiencies and longer term structural cost savings across all areas of the business, leveraging the increasing scale that we have. The program has been able to deliver large and sustainable savings, GBP 107 million in savings this year and over GBP half a billion savings has been achieved since 2011. We will continue to invest in efficiency and invest in systems and processes that drive operational excellence, support reliable decision-making, reduce complexity and use data to make better decisions faster.
Operational efficiency is key to any successful organization. We see a great opportunity for improvement in this area. Quite frankly, it is so that customers are not willing to pay for any inefficiencies in any organization, and we will do a lot of things to make sure that we continue to be even more efficient as we go forward. In addition to this, we are also investing in highly efficient next-generation aircraft that deliver up gauging benefits of around 1% cost per seat per year, 15% fuel savings compared to prior generation aircraft, and 50% less noise, which is attractive to many airports and customers in Europe. Let me talk to you about disruption. Disruption has been the single largest driver of non-fuel cost increases and customer dissatisfaction across the entire industry over the past four years.
As you can see, and as you would know, this is an industry issue that really affects everyone in the sector and all the airlines. It's driven by a lack of investment in systems, chronic understaffing in European ATC centers, regular strikes in both ATC and ground handling, and congested airspace with no spare capacity due to inefficient use. This is really about how the current airspace is being used. It's not like that there isn't enough of airspace. It's a fact that it's not being used as efficient as it could and as it also should be. That means that it's a big knock-on impact when disruption occurs. Network delay minutes have increased by 5.8% per year on flight on average across the last five years.
There were over 27,000 canceled flights for all airlines across Europe during a six-week period during the summer, 1st of July to the 12th of August, which gives you a bit of an idea of what difficult summer this has been. We do see this as an opportunity, and I'll describe why that is the case. We started talking about that, and I think we were one of the first airlines to really come out early to say that this is a big, huge issue, not only from the cost perspective, but also on the way that this impacts on our customers. I think that we have taken the lead in setting out also plans to tackle the issue. Two years ago, we actually started talking about taking the first steps to reducing the impact for the customers and reducing the cost involved in this.
Although this has helped, it hasn't been anywhere near enough where we need to be to really crack down on this topic. We have initiated the most comprehensive, the most integrated program we've done in this area to ensure that we can cut and reduce the cost that sits involved in this, and that we have basically a program that involves touchpoints across the whole of the organization. We call it the Operational Resilience Programme, and it's focused really on three key strategies: to build, to execute, and to recover. The build is really to invest intelligently in the schedule, in our aircraft, in our crew to deliver a more resilient operation. Execute focus on delivering a robust operation through a combination of data-driven predictive tools, including automation and optimization.
The recovery focusing on improving the customer experience during disruption, minimizing the impact, and preserving the customer satisfaction. There's this huge number of self-help initiatives that we will be investing in, which will include modifying schedules to improve overall resilience, increasing the standby aircraft availability, focusing on the first wave departure to minimize the delay minutes as the day progresses, implementation, automation, and data-driven decisions, making it available across the organization through the use of our on-time performance simulator. Developing strategic partnerships, such as in ground handling with DHL to deliver better processes and equipment levels into the contracts with our ground handlers. Improving operational and customer communications across the Operations Control Center, ground handlers, and the crew. The Operational Resilience Programme is really there to deliver reduced cost and minimize the impact on our customers. Let me talk to you about people, the right people.
We are investing significantly in people to make sure we have the right people to take this business forward. On our aircraft, I think it's fair to say, and I'm sure everybody who's traveled with us before now know, and I hope that you all done that as well, that we have a fantastic crew. Our crew stands out from any other of the airlines crew that is out there, and they are a big part of what customer thinks about when they are looking to what value we represent. We have an amazing customer engagement scores among our crew across the company.
In a trial that we have done on our new employee listening tool, Peakon, our cabin crew Net Promoter Score was 41, which is an exceptionally strong result, and which is also reflected what I said earlier in the customer satisfaction scores that we see on board. Looking at the A&D who sits there, we clearly have also invested in industry-leading experts into the core of the airline, in holidays, and the business, and the loyalty teams. We have great employee retention. At 6.5% turnover for the whole of the business and under 5% turnover for flight deck, that gives us a great opportunity and certainty that we can continue to grow with people who wants to come and work for this company. I said earlier, 75,000 applications from pilots and cabin crew to come and join this company.
This whole thing about there's a pilot shortage out in Europe aviation, that doesn't exist for ourself. We've had more applications than ever. It's an increase actually in applications of 8,000 versus 2017. Glassdoor features also easyJet now in the top 50 places to work in the U.K., as voted by our own people and our own employees. Within that, we are also the Number 1 airline. We have invested a lot, and we will continue to invest to make sure that we are the most attractive partner and company to work with within this space. The 4.2 star rating, that puts us ahead of Unilever, Waitrose, SAP, and PwC as an example. It's only with the right people that we're going to be able to obtain outstanding and successful and sustainable results for our business.
Fifth priority is innovating with data, this area encompasses all of the priorities I've already taken you through, it's important. It's highlighted in the ambition that I stated earlier to become the most data-driven airline in the world. The investments we're currently making will enhance the use of data to improve customer experience, drive revenue benefits, reduce costs, and also improve operational efficiency. I give you some of the examples now of what the data team is currently working on. With pricing and market forecasting, we are driving revenue opportunities by improving demand forecasting to deliver competitive pricing, not only on the ticket, but also on the ancillaries products such as seat allocation as an example. Our service optimization will enhance our customer experience through data-driven decisions for the onboard food and beverage.
The networks and the flight scheduling, we're also developing a lot of our ability to make the most out of the fleet that we have and the network that we have today to make sure that we can drive and make effective decisions around managing disruption as an example, by implementing the tool that's called Optym. Optym is really a planning solution that we are aiming to introduce in full here for 2019. What Optym does, that is really a software tool that takes commercial and operational data constraints and variables into consideration to make sure that it gives us an automated view on how we can look at the schedule in different way. It basically gives us a number of opportunity of what the schedule should be like so we know what the outcome could be with different types of schedule.
Really helps us to make that trade-off between the commercial value of what we do and also the operational performance, such as on-time performance as an example. Data will also help us to minimize the impact of disruption by using automation and machine learning predictions of delays to find the best solutions. During this year, we also developed our own OTP simulator, which is a fantastic tool. What it does is that basically after the first wave, we can take the performance of the first wave and then see what actually the changes we should do, given the constraints and the congestions that have been taking place in Europe, what this means for us throughout the rest of the day. We can earlier take decisions on the changes we want to make throughout the day to therefore minimize the disruption and therefore also decreasing costs.
Luca Zuccoli who also sits here with us today, our new CDO. He joined the company in August, he continues to add to an already strong team through the recruitment of a large number of data scientists, not just data analysts. This is important. We have a huge number of capabilities that we are waiting to bring into the company to already add on to the strong team we have within our data department. I know of no other commercial airline who's investing more on the relative scale on data scientists and data analysis into the company.
As a result of this, we are now currently, just to give an example of the scale of what we're doing, we're working now on 50 projects that is all relating into the things which I talked about earlier, about driving down costs, increasing revenue, improve the operation resiliency, and improve the customer satisfaction with ourselves. That 50 projects, that is more than double the projects of data that we had just in the last six months. This is something that we're really accelerating. Brexit. We started planning and this is important. We started planning for the Brexit two years ago. This is not something that we have started focusing on in the last couple of months. We have planned basically for every scenario that is out there, and we are confident that easyJet will continue to fly with no disruption post March 29, 11:00 PM.
The focus that we have done spans over a number of areas. I give you more detail on that now. First, our structure and our flying rights. Both the EU and the U.K. have said that their objective is to maintain the flying rights between EU and the U.K., even in the event of a no deal. That was something that came out from the European Commission as late as of last week on the 30th December with a proposed measure to protect those rights. That has also been reciprocated by earlier statements from the U.K. government. easyJet Europe has been established, which is headquartered in Vienna and will enable easyJet to continue to operate flights across the EU and domestically within EU countries after the U.K. has left the EU.
The new structure means that easyJet now is a pan-European airline group with three airline states in Austria, Switzerland, and also in the U.K. As you can see in the table here, only 35% of our capacity flies between U.K. and EU. Therefore, the majority of our network is in a solid position no matter what the outcome is. Second, let me talk you through the operation. The specific steps we are taking to ensure our ability to operate are ensuring that the Austrian operation has no reliance on our U.K. operation, in particular by obtaining Austrian safety certificates where it's required. Making sure that our third-party suppliers are Brexit ready and have the required certificates. Completing also our plan for spare parts to make sure that they are in the right place post-Brexit.
We don't face any risk of custom delays. We're not reliant on the U.K. certificate spare parts. We're also ensuring that our people are protected, and this is being addressed by transferring the 1,400 pilot licenses that we have today from U.K. to EU27. We're transferring over 3,000 cabin crew at the stations, both to be completed by the Brexit date. Of course, we're also keeping a close eye on the residency requirement that might be required and supporting our people in the process if this is appropriate. We have aircraft in the right place. Will continue to allocate those around the network to maximize the contribution and the return. That is already in the schedule for next year and the summer 2019. Next thing is the ownership.
Regardless of ownership, easyJet is well prepared with a more advantaged position than many other affected airlines and a number of options that are being considered to ensure that we remain EU-owned and controlled. We begin from a position of strength with approximately 47% of the shares already held by qualifying nationals. easyJet investor relation program has focused mainly on Europe since 2016, with the intention of increasing this to above 50% prior to the U.K.'s exit from the EU. In addition to easyJet's article of association, which will contain provisions to allow it to take action if necessary to ensure it continues to satisfy the EU ownership and control requirements. These provisions permit the easyJet to regulate the level of ownership by non-qualifying nationals, by suspending voting rights to attend the voted meetings of shareholders and/or forcing the sale of shares owned by non-qualifying nationals to qualifying nationals.
Similar powers exist also in the Articles of Association of other airlines, as well in the articles of companies that works in different industry but have similar national share ownership requirements. It's true to say, that it's important to say that we have no current intention of exercising these powers. The position will be kept under review pending the outcome of the Brexit negotiation between U.K. and EU. That is the powers that we have, and that has all been approved, and they're all well known. Like I said, with that 47% of the shareholder we have today, it's a very small percentage that we are talking about. Regarding our consumer demand, we are seeing U.K. demand remain strong. What you've seen from the slide that Andrew presented earlier, the H2 bookings are actually slightly ahead of the same time last year.
Finally, we also have the significant financial strength with an investment-grade credit rating and strong liquidity in the company. If you bring all of these things in together. You take the core of the airline, you take the foundations that I talked you through, the five priorities that we have, that we've gone through in detail, adding on then to also the initiatives that I talked about within holidays, within business passengers, and with loyalty. You're going to see that this is an airline who has the strength and foundations and opportunity to capture revenue and decrease cost, that I must say that I don't think you can find anyone else out there in Europe who has the same opportunities to do so. We have clear strategy now in terms of the priorities I talked about. We've got a team in place to deliver this.
Not only the people are here today, but a fantastic team of individuals and other people in the organization. This will be a year of investments, and we will make sure that we continue to invest in the things that really pays off, that really drives that profit proceeds. We're going to invest a lot in data, because data will be the key to continue to reduce significantly cost out of this business, to drive revenue performance, improve operational efficiency, and also increase customer satisfaction. We got a strong investment-grade balance sheet that we are ready to use if there are opportunities to come up that we will benefit from. What this all means for the shareholder, it's clear that we're going to maximize the return on capital employed. We're going to maintain the capital discipline we have within the company.
We're going to make sure that we are maximizing the profits per seat by investing in the core of the airlines and initiatives that I talked about, also generating sustainable positive cash flows into the business post payment of dividends on their payments of dividends. We'll do that and through the property we have, continue to invest also in the fleet to make sure we have not only great deal on the fleet of the aircraft we're getting, but also flexibility within the fleet plan. With that, I'm going to open up for questions. Thank you very much.
Just, these work? I appreciate it.
If you ask those, you've got to press the button and point it quite directly at my mouth, so I can remember.
Morning. Thanks for hosting. Three questions if I may. Number one on the strategy, maybe Johan, could you elaborate the big ideas and the big strategies you decided against in that strategy? What are the things you're not pursuing that sometimes be a harder thing to do when developing strategy?
Long haul.
Okay. Maybe next to that. Secondly, on the cost, kind of the way you phrase it as you provide the guidance, you had a lot of one-off issues with the wet leases and the higher disruption costs in your 2018 base. You're keeping that flat into 2019. Kind of seems to be fair to say there's around GBP 100 million in there you're spending on projects. If that's the run rate around that level, you're putting higher investment into the business to develop the business.
Should we think about that as a step change that's here to stay, and you'll continue investing more in the business? Or is that kind of a transitory period for 12, 24 months and kind of the project costs will subside after that? Lastly, on the different KPIs, how fast will you be able to implement that into management and team conversation? Is there any difference in the pyramid kind of between the top and the bottom in the terms of KPIs you'll be measuring people against?
I'll kick off and you can fill in, Andrew, that. On the cost, it's fair to say that the investments we're making, for instance, in the three initiatives as in holidays and business and loyalty, they're all very risk-free. We know that they are there to deliver sustainable, real return for the business. That's the same thing when you're looking at the data. Data is the key enabler for us to reduce the cost that sits within the areas today of disruption as an example. We could not continue to manually fix and try to mitigate some of these things without using data, as an example. I think that with very limited risk around this, it also has quite early paybacks on these things. The biggest cost thing we have to focus on is disruption. Bar none. That is really the key thing.
We talked here about what the increase has been in this year's numbers, and that gives you an example of the scale. I think also other airlines have talked about what the size sits in here. I don't think that there's anyone else who actually has come out with a way on tackling this. When I look through all the things we're doing, I think we're well on way to make a significant change on that. Having said that, look, this issue won't go away. It's not like we're thinking that the congestions in the airspace and the efficiencies on how this is being used in 2019 is just suddenly going to be much improved.
We are working, and I'm engaging a lot with the European Commission on this, with Eurocontrol on this matter to make sure that they actually get their act together, staff their ATC right, and then start using the systems in a better way. You want to add something on the cost? On the KPIs. That's something that we worked through, and that is being implemented right now into everyone's targets for 2019. I think it's fair to say on the KPI why this is so powerful. We've had a number of huge sets of KPIs before, but I think that what we found out, we wanted to get more clarity around the five strategic priorities that I talked about, so we can easily measure and people can feel that how they relate into what they do, so we can measure the progress amongst those KPIs.
Any difference in the top or bottom KPIs? Is there a cost KPI somewhere in there?
Well, there is, and it goes through everything what we do. What we're doing, and we talked about the six KPIs that we have in here. We're breaking those down as well, so it actually relates into how people go on and do the day-to-day job.
Don't worry, cost is still in there.
Yeah. Very focused on cost save.
Ruairi Cullinane from RBC. Three again, please. First of all, just coming to the sort of CSAT scores and the OTP, they seem to have dislocated. You still got good CSAT scores despite the OTP. I think I remember Chris saying in the past that basically the view was in easyJet, your frontline is your bottom line. Taking all that together, good CSAT scores, staff that seem happy. How quickly, given that you've also got a fuel cost to deal with, do you think you can improve the yield in the business, whether it's directly through fare or through ancillaries? Appreciate everything you've given us in the detail, but how quickly does that turn into improvements, and how fast can you move on that given the very good backdrop you've got? Secondly, on cash flow, I guess there's two parts to it.
First, you've given us the sort of minimum and maximum fleet, but a base case CapEx level. What would be the differential in the CapEx in 2021 and 2022 at the minimum-maximum levels of fleet? Secondly, on the cash flow. Clearly, the last two years, you've benefited from improvements in the fuel payment terms, improvements in credit card terms. In terms of moving the free cash flow forward in future years, what is it that drives the free cash flow better in future after those two, what look like one-offs?
I'll do the first two and the third one. You're right. I think it's the first time that we actually see that the customer satisfaction score has actually improved despite the period situation around the disruption. I think that comes back a lot with the focus we've had on looking after our customers, which is far more than you can say that some of our competing airlines are doing. That pays off because we know that this also drives loyalty, which is an important thing for ourselves. There's a number of things we can do to drive revenue, and I've showed some of them in here as well. The way our yield system works, we have a great yield system.
We get a great revenue system in there as well. We got more to do in terms of actually how we can yield and trade on, for instance, ancillaries as an example. We have more things we can do that we're implementing right now also to take a more strategical view about competitive capacity that exists out in the market to make sure that our systems and our algorithms take that into consideration. Also when it looks at competitive pricing as an example are things that we're now feeding into our system to be able to optimize the benefit from the revenue performance. I think that Robert is spending most of his time really looking at how we can drive these revenue benefits as well. The opportunities we have with an already good system is really there for us to take on to a next level.
We're looking for this to continue and have an effect also in 2019. I think it's important to say that as we drive forward and we do improve on the revenue perceived, that doesn't exclude anything of our attention and focus to reduce cost. It's not like we're ever being complacent about the fact that we think we can only get here by revenue enhancement opportunities to continue to build on the success. Cost will be absolutely key, and disruption is the key thing to take that cost out of the business.
Just talking about the fleet plan, I think it's fair to say that even at the minimum fleet plan, we'll see seat capacity growing, given the fact that we've got A321s and an up gauge in trajectory within this plan. And the range of this plan absolutely
This supports the range of 3%-8% annualized seat capacity growth that we've guided and delivered on in the past on an organic basis. From a point of view of cash CapEx, with the difference between the top and the bottom, I think it's fair to say in the arrangement that we've re-agreed with Airbus, we've effectively pressed the restart button on flexibility. If you remember back in 2013 when we did the original deal, we had significant flexibility. We've effectively re-pressed that restart button and gained significant flexibility. The difference between the top and bottom, within between 2020 and 2022, we can defer up to 30 aircraft if we so wish. The rest of the difference is fundamentally things like lease returns, early lease returns, or non-extension of existing leases, or exit of our A319 to 16 years.
That gives you an idea of the difference between the top and the bottom based on CapEx flexibility with respect to that deferral capability within that period of time. From a point of view of free cash, I'm not going to give you exact specifics around the impact on free cash. It's 30 aircraft worth is the difference in that top and the bottom. With respect to free cash, we absolutely are targeting to manage our capacity growth and our fleet investment to maximize PBT per seat, returns on capital employed, and deliver on free cash flow. Which are the three objectives we're absolutely focused on over the coming years. With respect to where we see the generation of that cash is through the margin-accretive initiatives that we talked about.
Holidays, business, and loyalty are all relatively low capital-intensive opportunities. We can see effectively driving the PBT per seat and the incremental margin will help deliver that free cash flow. Fundamentally, the things around the balance sheet, as you say, payment terms, and credit card deals, et cetera, have pretty much been solidified within the cash flow. It's now around operational performance and driving that PBT per seat up via those low capital-intensive opportunities.
Yeah. It's James Hollins from Exane. Three, please. The first one's on Tegel. I was wondering if you could let us know if you're still targeting break even in full-year 2019, whether there's going to be more exceptionals this year, or whether all sort of cost there will be in the bottom line. Secondly, I was wondering if you could update on your target for leased to be owned proportional fleet, whether that's changed, how you think that evolves through to 2024. Finally, you're probably about 80% sold on Q1. I was wondering if revenue per seat would be down year-on-year.
On the Tegel, as I mentioned, we are extraordinarily pleased with the way that we've managed now to integrate into the business as well. We don't expect anything more from an exceptional point of view in there. The prediction is we now have a Number 1 marketplace there. We are targeting, of course, to break even in Berlin as a whole. That hasn't changed. I think it's fair to say with the scale of this operation that it will take some time before we get up to the average of the net profitability. That remains our target to be profitable for the whole of Berlin.
With respect to James, with respect to lease versus own, we moved away from having a specific target. Historically, it used to be 2018. We moved away from that.
We did a capital structure review back in 2016. Fundamentally, it's a balance between managing resilience, managing cost, and managing flexibility. The outcome of that would be your fleet mix of owned versus leased. Currently, we're at 30% leased. That is a step up as a result of the inorganic activity within Tegel. Over the period of time, that will drift downwards. Fundamentally, it's all around managing. We don't see leases or selling leasebacks as a funding engine. It's more of a resilience management and a management process to exit the A319s, and it's worked well. The two SLB transactions we've done to date 2020, we understand where they're going. They've been secured outside of Europe, so they won't be competing against us. It's helped sustain the ongoing secondhand price of A319s. It's done its job. We'll see that track down.
With respect to Q1, I think it's fair to say we all know that it was tough comps in Q1, so half one reflects the tough comps in Q1 and into Q2. Plus the shift of Easter from half one into half two. So I think it's fair to say that we should see RPS down in line with the half one guidance we've given.
Just to mention on Tegel, because I think it's an important one as well. The way that the organization and the way we have integrated that and the team has been absolutely fantastic. You would have seen from one of our competitors, who actually stated very clearly that a big reason why they missed some of the numbers was because of the integration of their part of this transaction.
This has been really an airline the size of Monarch, that we've been seamlessly integrating into the operation, which gives us a great foundation to build on in the future.
Hi, Neil Glynn from Credit Suisse. If I could ask two questions on revenue. The first one with respect to 2019. The ancillary revenue per passenger, or sorry, per seat, was up 10% at constant currency in 2018. A lot of momentum. I guess you've got big plans in terms of driving that going forward. Just interested, should that 10% slow down into 2019, or how should we think about ancillaries this year? Then more medium term
I think, Johan, you mentioned near to half of your passengers basically fly easyJet once a year. Just makes me think, is there a way, including partners, for example, that you can make easyJet a more relevant part of potential passengers' day-to-day life? Thinking about things like branded credit cards or are there other initiatives you think could potentially make easyJet more meaningful for non-flying passengers?
Yes. On ancillaries, we continue to have a huge pipeline of products and services that we can offer. There's no end in terms of what we think we can do in this area. I think also with the things that we talked about, the ability we have also to now looking at how we price and how we revenue this from an optimization point of view, that gives us further additional benefits when it comes to the offers within the ancillary and what it will do to our bottom line. In terms of partnership, you're absolutely right. That is definitely one of the things we're looking at.
For those customers who are not the frequent travelers, to make sure that we can capture them early on and get them engaged into the loyalty program and with the established partnership with other companies, make sure that it plays a bigger relevance and a reminder of them, that when they do their booking, when they think about flying, that we are first in mind of that. That is something that we're looking to do within the loyalty program.
Hi there. Good morning. It's Rishika from Barclays. Just one question from me on disruption, actually. I think you quantified that the increase this year was GBP 70 million or so. The program around operational resilience. Is the intention there that operational resilience program stabilizes the situation such that disruption costs don't rise? Or do you think there's opportunity here to actually bring that disruption cost level back down again? Actually if you want, if I can get it in there, are you willing to quantify your total spend this year on disruption, not just the increment? Thank you.
The first part, our ambition is clearly to reduce this cost. On one hand, you will see from the increase in here that the first good step would be to stabilize that. I think it's fair to say that, we have now over, I think we're at 120, 130 different action points in there that you can contribute substantial value to. Of course, what doesn't remain in our control is what the overall situation will be. We have to assume that the situation won't get better. It might even get worse. If it gets worse, we're going to make sure that we not only recover the increase of the disruption that takes place for the things that sits outside our control, but we also that we can continue to mitigate some of that from that base level point of view.
I must say, we're making good progress. Chris Browne, our COO, and Robert here, our Chief Commercial Officer, is working through that whole thing about how we build it and how we execute it and how we recover it. I must say, I feel very confident about our own self-help measures and initiatives here that we will have an impact. I think we'll definitely perform better than others, then it just remains to see how much benefit will we get out of this in 2019.
Sorry. What's the absolute number?
Oh.
Quick question.
Okay. Yeah. We haven't disclosed the absolute number, but it's big.
Hi, guys. Gerald Khoo from Liberum. Three for me. You talked about your advantageous fuel hedge position. How do you go about using that? Do you take that to the bottom line? Do you use that to drive pricing to squeeze competitors? What's your thoughts there? Secondly, on the fleet change, I'm struggling to get my head around it. Is it fair to say that's, in net terms, a move to the right in terms of the delivery profile? Finally, I suppose in the context of the IT write-off, you talked a lot about the investment in data and systems. How do you strike the balance between developing in-house and/or waiting to see if an external solution emerges? Thanks.
I could do the first one. On the fuel hedging, it's very clear. What it allows us to do, it gives us certainty over the cost, this is one of the great things, that it decreases the volatility that exists in there. Of course, we want to maximize revenue as much as we can to make sure that we get as much as we can on the bottom line in there. It's also important to maintain a really competitive pricing policy to make sure that we can capture the growth in the market. I think we've seen in 2018 a number of airlines who've been exposed to this, who haven't had the ability to hedge, how that hits weaker models. It is brutal if you're running an inefficient operation with an unsustainable business model, that it doesn't take a lot.
That represents an opportunity for us to get more passengers in there. We will always be mindful to make sure that we have the right pricing, so we can continue to achieve growth, but at the same time, also drive revenues through initiatives that we talked about here today. It's a mix about where we want it to go. Definitely, we want to capture as much as possible on that.
Yeah. With the fleet, I think it's fair to say that the 2018 deferrals referred to is more of an adjustment around the fleet profile and that fits our PBT per seat ROCE and growth aspirations. I think it's fair to say, if you look at the graph, we've got significant growth coming through in 2019 and 2020. If you remember, we've got upgauging overlaid on top of those numbers as well. I think it's fair to say we've got plenty of scope to grow between the 3%-8% as we previously stated and in line with what we've done previously. I think all of this has been around triangulating those three things, to talk about data systems. I think it's fair to say on the IT platforms that we'll use for data, they'll predominantly be off the shelf.
It's well-developed off-the-shelf systems, for example, Hadoop, which we're currently using and leveraging. I think that the vast investment in data is around capability. As Johan said, that we've got Luca now in the team, we're building up that capability. We've got billions of points of data that we aren't using to the extent we could be. From an IT perspective, it's all about really integrating the existing systems into the off-the-shelf platform that these teams can then go in and analyze and use to monetize, which is exactly what we want to do. It's a very different proposition from an IT perspective to what we did from a point of view of the SVP platform.
Hello.
Yep.
I have answers from Goodbody. Three questions, one for Andrew. Just some capacity guidance. The implication is that this second half, we'll see 6% growth. Can you break that down as you did for the first half between organic, up gauging, Tegel? On the easyJet holidays, I don't know if there's any consideration about buying hotel inventory to package up the right product. If not, in a sense, how do you engage with hotels to be a partner, and to encourage or so you say, the right product for your customer? Thirdly, it's probably a timing issue, but if you look at your 23 aircraft at Tegel, 665 pilots and cabin crew, ratio of 29 per plane. Your last reference point at the end of last year was actually a ratio of 39 per plane.
I'm wondering if that's either are you doing something very clever in Tegel or is that just a mismatch of those two data points?
I'll take the first one. I think it's fair to say that there's an element of annualization from Tegel into the summer, because obviously we would have had a lower capacity growth as a result of using BAe 146s, which are obviously lower gauge, and we've now got A320s in place. There'll be a significant uplift there. You'll have some annualization from the activity that we're doing in Manchester, as we talked about. The rest really is around focusing on building our Number 1 and Number 2 positions. For example, in winter, we've got incremental aircraft in Belfast, Bristol, Gatwick, Manchester, Basel, Nice, Malpensa. We've got some in Venice. It's definitely dotted around our existing network and building those positions and building the routes off those positions. I think fundamentally it's leveraging our exposure in those places.
As Johan said, we've got seven incremental Number 1 positions, in FY 2018, clearly we want to solidify those and build from those.
On the holidays, there's no plans at the moment to buy any hotel inventory because we simply don't need to. If you think about it, this is really important and part of the attraction of the holidays piece is in here, that a number of the competitors that are buying hotel inventory, who owns actually their stock in there, they also own highly inefficient airlines. We have cost advantages here of 35% towards them. Actually with the cost base that we have and with the frequencies and how we can fly, I mean, we fly many times through the day, all days through the week to some of these destinations where others on a 35% higher cost base would fly three, four days a week.
We actually would like to go in to where other competitors are because that's where we can expose really the value of what we're going to be able to contribute throughout the whole chain. If we, down the road, would have exclusivities in something, that will be a natural involvement of where we stand today. Actually, the opportunity for us comes within the fact that we can be in the hotels that is in the most demand, that is most loved ones. We also see, we would have lots of hoteliers being actually already offering us so-called differentiated hotel product. Product that has specific, catered to specific needs when it comes to the food and beverage, when it comes to the entertainment, when it comes to the facilities.
That's because they can see the value that we will bring into them in terms of the brand, the unique 360 million web visits we have every year, also with the frequencies and the scale that we have into the operation. For us, it would be better actually to go in where everybody else is, because that's where we can demonstrate this value better than anything else. Sorry, what was the third question?
It was just related to the
I cannot answer that one. Robert?
Sorry. Timing difference problem. Yes, with the A320 aircraft, we operate them identically as we do our core fleet.
Hi, it's Andrew Lobbenberg from HSBC. You've given us your KPIs there. In particular, you ended the presentation with a focus on the shareholder-oriented KPIs. Are there going to be targets at any stage? I guess, very specifically, you speak of sustainable cash flows. Is there any commitment to positive free cash flows on any specific time horizon? Then can I ask about M&A? How do you see the industry developing broadly? Do we expect more consolidation, or do you think the recent pullback in the fuel price means that the Darwinism is over for now? I guess in that context, specifically where you're publicly involved in Alitalia, I get curious to see what happens there. Thanks.
I'll defer first to the country. We haven't set out targets. We do believe that there is quite a lot of uncertainty out there into the market. What we have done and what we will continue to do is to demonstrate the opportunities that we've had and clarify what is in the plans, talked about the initiatives and also the investments and how that can increase revenue and drive down cost and what impact that will have. At the moment, we don't feel that there's a need for us to go out with specific targets on that. I can just do the third question as well on the M&A. Consolidation will continue to happen, both organically and also through transactions. It's quite interesting when you're looking at the consolidation of the whole of the aviation.
There was about 25 airlines in 2005 that accounted for some 84% of European aviation. That number in 2015 was 11 airlines. This is something that has happened over a period of time, and I think it is partly because inefficient legacy models are basically year by year, growing out of fashion and can't compete with the companies such as ourselves and also others for that matter. We have the balance sheet, we got the financial strength to take and participate in opportunities if transactions are available, as we did with Air Berlin, as a good example. Like I said earlier, and I've said on previous occasions, there are three things that needs to happen for us to be interested. One, strategically it needs to make sense. Of course, we are focused on short-haul, we are focused on Europe.
It needs to be commercial terms here that we would find attractive to ourselves, and we also need to have the capability to handle any transaction. Once again, just to reiterate the enormous achievement that I think that we've seen with Air Berlin this year as an example. You're right, opportunities will come, and we have done a very thorough job to look at each and every one of the European airlines and working out what everyone's position is and also thinking where everybody's going. Based on that, we think we have tremendous strength, and we will continue to participate in strategic opportunities if they arise.
Just to add to that point, you mentioned Darwinism. If that means the strong get stronger, then yes, there is an element of that. We've always said that. With respect to cash flows, we haven't given a specific date, but obviously we've got some significant investment in the next couple of years with respect to the fleet. As I said to Damian's question, our cash flow is all driven by the delivery of a number of our focus areas, which includes the initiatives and the margin-accretive initiatives that will drive profit per seat. That will help get us to the position of a free cash flow after dividend. We've got a clear plan that we've all bought into as management and as a board to get to that place within the horizon of the plan we set out today.
Next couple of years we'll see some investment, and then as we deliver on some of the initiatives that we've talked about and we deliver that extra margin, we'll see that cash flow coming through.
Penelope Butcher from Morgan Stanley. I'm going to try and ask Andrew's question in a slightly different way on the management goals with regard to the ROCE and PBT. I appreciate you don't want to set timings or formal numbers, but could you at least say whether some of the goals you did have in the past on those metrics, sort of the 15%-20% ROCE, the GBP 10 per PBT per seat, are they kind of the numbers that would seem fair even if you don't want to set a time horizon for achieving them? Then just one question on the financial outline in, I think it's slide eight, Andrew, where you kind of walk through the headline cost per seat. That doesn't seem to quite correlate with the table you have in the appendix as to the drivers by the different line items.
Is it possible that you could just talk about what's in the other component of that slide eight factor? Because in the appendix, that seems to refer to increase in disruption costs, but you've called that out separately. What's actually in the other in the first table? That would be helpful. Thank you.
Sure. On the first one, to say that, look, the plan that we have introduced within the company that we set out and the focus, that is all there to improve the ROCE, it's all there to improve the PBT per seat. It is all there to make sure that we continue to do more when it comes to The cash flow and the positive net cash flow that we want to deliver on a sustainable basis. That's all there to do. It is an ambitious plan we have internally with a lot of self-help initiatives. We're not relying on the external factors to make that happen. We are keeping those targets and the process internally for the time being, because there are uncertainties into the market. We would like to improve every number you would've seen from the 2018 results.
Yeah. Okay. With respect to the reconciliation. In this table across here, you've got it by driver. In the table here, it's by effectively P&L line. You'll have effectively the impact of each cost program savings will have impacted across the lines in the accounting. Airports and ground handling, as you'll have seen, we've got a reduction on cost, whereas in this table on page eight, we've got an increase. It shows that the focus of a lot of our cost saving initiatives are about flexing our growth. In other inflation, we've got effectively other central cost inflation plus ground handling. We've invested some monies in DHL, which we've talked about before. Effectively, that's driving incremental returns for us. We will look to invest in improving our ground handling opportunities elsewhere, to improve our on time performance. It's had a marked change.
The day we put DHL in Gatwick, it's had a huge impact on our ATP performance. What it's done is also helped reduce our disruption costs, even though it's been a significant uplift in those costs. That's fundamentally the two key points.
Hi, Kathryn Leonard from Numis Securities. Just three from me, if that's okay, please. Just thinking about the forward bookings for the second half of this year, the fact that those are just slightly ahead. Wondered whether that's required any yield stimulation at all, whether you've seen any changes in the trajectory as through the course of the Brexit negotiations and the big headlines. Secondly, just on the holidays piece, just thinking about how you create that value for the customer more against, rather than the TUI and Thomas Cook of this world, but the OTA peers that you have, whether it be Booking.com, Expedia, or in the U.K. market, some smaller peers. How do you differentiate yourself and does that come into ultimately discounting, and does that impact how we think about the meaningful contribution to profit and how we should think about that?
Third question, just on the aircraft being in the right place for Brexit. You've given the various figures on which markets those are in. Looking at that suggests that 54% of your aircraft are currently in the U.K. market, which is somewhat ahead of the 35% of capacity. Just wondering whether there'll be any shifts around with that just as we get closer to any hard potential Brexit. Thanks.
I'll start a little randomly on these three questions, then Andrew can fill the gap on that as well. We haven't done anything to incentivize or stimulate the numbers for the H2. That's pretty much in line with what we would always do. It's quite encouraging to see that despite all the noise in the media about Brexit and perhaps other things as well, that there is a demand out that comes across in the bookings that we're seeing. On the holidays piece, it's important because I think it's a good question, because on one hand, you have the competitor set that is kind of the old legacy tour operator models. That's what I just explained about, where I believe we have some fantastic opportunity to provide additional value when it comes to what we can offer from the airline point of view as well.
The question is how do that is something that I feel very confident that we can compete very successfully on. When it then comes to the OTAs and Booking.com, we got to remember that those players, Expedia bookings as well, they are mostly technology platforms. Booking.com has something like 1.3, 1.4 million hotels out there. We don't need 1.3 million hotels here. We need to get a hold of which we establish relationship with some of the most loved in-demand hotels that exist on the network that we fly on to.
By giving them also the opportunity to our distribution, those 350 million unique visitors that we have per year, the 90 million customers that travel with us every year, we can make sure that we provide them with much more volume than if we were to spread this out across, like in their case, in Booking.com, 1.3 million. I think we are in extraordinary good position to compete with anyone in this space. Fleet mix?
That's about fleet.
Okay. Yeah.
I think in that all other, you've got to recognize that in there includes our flights between U.K. and Switzerland. That won't be impacted by, you've got all the U.K. domestic flying, and also you've got the EU 27-27. It's a combination of a number of things in there, but we've done all the work. With Europe, 117 aircraft, we've still got a little way to go to get to the target position before March. It's not much more than that. It's about 130 we need to get to get to the right balance based on the schedule that we've got and the mix of the flying between the jurisdictions that we've got. We're in good shape.
Copy. Listen, thank you all very much for coming as well. I hope you're excited as we are. We've had a fantastic year for 2018 as well, and the foundations we have to build upon is quite extraordinary. Thank you very much for that, and I hope to see you soon out there so we can have this chat as well.