Everybody is here. As I said, I'm really pleased to see that the load factors on the planes are better than it is in this forum today. I think we kick off with that and start by saying it's okay. Yeah, very good. Listen, first of all, very welcome and good morning to everybody, and thank you all for coming here today to discuss the easyJet full year results of 2022. We're gonna give plenty of chance also as we go through the presentation, where we're gonna talk through in more detail on how we believe that the transformation that we have, you know, embarked upon when it comes to a number of actions within the company is really starting to deliver for us as well.
Of course, talk about the year that we are in and how we can expect more of this to come. At the same time that we also, you know, clearly are faced with a number of industry-wide challenges, particularly on the, on the cost side as well. We're gonna talk you through that, leave plenty of time with questions to myself and also the team that I have here today as well. With me is of course, Kenton Jarvis, who's our CFO. I'm gonna introduce also the other members of my team here. I'm actually gonna start with David Morgan. David Morgan, who's been our interim COO in the company, is now announced from yesterday that he will be the permanent addition to the company as a COO as well.
David has an extensive experience from being in low-cost airline. He was at Wizz before he joined us here. David, together with a number of our colleagues, has been, you know, one who's been really driving the operation performance that we saw from the peak period, where we delivered, you know, customer satisfaction levels that was above 19. We had a better operation performance in terms of less cancellations on the day, leading to us becoming, you know, the most preferred airline here in the U.K. part of the summer as well. Congratulations to David and it's great to have you on board. We also have Sophie Dekkers, who's our Chief Commercial Officer.
We have Garry Wilson, who is our CEO easyJet Holidays. We have Thomas Haagensen, who's the Country Director here.
We have also then Robert Birge, who's our Chief Customer and Marketing Officer, and we have Stuart Birrell, who's our CDIO. Last but not least, we also have our Chairman, Stephen Hester, who's here. Do take the time also after the presentation, if he's around to grab and ask any questions to any one of my colleagues as well as we have everybody here today. Listen, I'm gonna start out with 1 slide that I think really summarizes in 3 different things on what has really helped us delivering the record EBITDA performance that we saw in Q4. Also helped us achieve the GBP 1 billion bounce back that we see.
Then I am going to talk a little bit about one thing we are going to come back to, which is really about the great opportunity we have going forward. In terms of the network, the network has really continued to deliver a lot for us, where we have also then, you know, been absolutely relentless in optimizing, moving aircraft, changing routes to the higher performing bases and routes that we have. We have moved around over 2 million seats in the full year 2022. We have also continued to add, you know, very valuable slot positions in the portfolio that has helped in driving also then an increased contribution per block hour over 10% in the quarter 4 versus where we're in 2019.
A big part of what we have been doing throughout the pandemic has really been about this network that I see quite frankly say is that it's almost impossible to replicate. To have these type of positions at the leading primary airport where we know they are higher yielding, it gives us a great opportunity to continue to do more in the next 12 to 18 months on optimizing that network. We said we're gonna deliver a step change when it comes to ancillaries, and we certainly have been doing that. Ancillaries is up 59% on the year versus 2019.
That has been primarily through the things that we enhanced the product offering that we've had there, primarily through the cabin bag, primarily also then how we've been yielding the ancillaries, where we've gone on to do more of a dynamic pricing on the ancillaries that is similar to what we are doing on the fares that is looking to deliver also great results for us to come in the future. We launched a different IFR, an Insight Retail proposition that was fully embedded here in September. We're gonna talk more about how that is delivering for us because there's also more to come on that as we're introducing new products and features from that as well.
easyJet Holidays is well on the way to hit its targets of GBP 100 million-plus PBT profit for us, delivering a GBP 38 million profit for us in this year, which is really the first year of the operation. It's the fastest-growing, highest margin, lowest cost travel company in the U.K. with a model that is really based on very, very little risk. We talk more about what we think we can achieve with that one as we go forward, opening up on new European markets within that model.
One thing I just want to highlight also, which I think is something that we don't, you know, have spoken to as much as we should, is really the upgauging that we have coming ahead, which allows us really to expand and grow the capacity from the primary markets. We're going to have basically a 40% of the A319s that we believe in the fleet here within the next 3 years. Just to put that in context, when we are replacing this with A320s and A321s, just to give you an example of some of the numbers in here, with basically 50% more capacity from an A321, we will use the same amount of fuel on an absolute numbers, which is quite extraordinary.
Because of a lot of the constraints that exist is then how do you then grow at the prime airport?
This is what this allows us to do. It's great for our cost, it's great for growth, and it reduces also the impact on the environment in terms of what this swap of moving out the A319s into the A320s and A321s we've delivered for us going forward. The number of things that we set out to do has resulted in that GBP 1 billion bounce back and the record earnings in Q4. Having said that, let's talk that through in more detail. Also let's talk of some of the challenges that we are now facing that are industry-wide as we go into the year that we are in right now. I'm gonna hand over to you, Kenton, to go through the numbers, and then I'll come back and talk to this in a little bit more detail.
Thank you, Johan. I should just say, I've got a bit of a cold. It's not COVID, I'm glad to say, but it is a good old-fashioned stinking cold, so I apologize if I reach for my water or I have a little cough. Right. If we kick off on slide 4. I'm in charge. Here you go. With the key performance indicators for full year 2022. We had a good start to the year, with momentum building from summer 2021. Trading remained positive in October and November before slowing down with the spread of the Omicron variant in December. Post this, we saw the removal of travel restrictions from the end of January in the U.K. and into February, for some European countries, with demand beginning to build from that point into the summer.
Total capacity was up 189% to 81.5 million seats, and passenger numbers increased by 242% to 69.7 million. This increase was due to the very low levels of flying in the prior year, when lockdowns were imposed, with travel restrictions in place throughout Europe. In addition to capacity increases, load factors improved to an average of 85.5%, up 13 percentage points year on year. Airline RPS increased 31% to GBP 66.23, reflecting the increased load factors as well as the strength across both ticket and ancillary yields. Airline operating cost per seat, shown as EBITDA cost ex fuel, reduced by 22%, driven by the increased flying volumes as fixed operating costs are spread across more seat capacity.
The favorable movement in both our per seat revenue and costs have led to airline EBITDA per seat improving by 134% to a profit of GBP 6.46, and the airline headline loss before tax per seat reducing by 93% to GBP 2.65. Airline EBIT per seat has improved by 99% year-on-year to a loss of GBP 0.43. When looking at the group level, including easyJet Holidays, we delivered a small profit at EBIT. easyJet Holidays has continued its rapid growth, carrying 1.1 million customers during the 2022 financial year. From these operations, the business has delivered an incremental profit of GBP 83 million to the group. Sorry, GBP 38 million to the group. On slide 5. There we go.
On slide 5, we've broken out the key performance indicators into quarters. As I mentioned, the performance during the period started strongly with October and November continuing the positive trends of the previous summer. The momentum then paused in December and January with the outbreak of Omicron and the subsequent travel restrictions. However, as you can see, there's been a step change from where we were last year, with the recovery of demand driving increased capacity and improved load factors.
The steep ramp up can be seen in Q3, where we flew almost 25 million seats, over 5 times the amount of the prior year. This ramp up resulted in increased levels of disruption across the industry. Capacity peaked in Q4 with 26.3 million seats, up from 17.3 million in the prior year.
Overall performance in Q4 was strong, with load factors up over 92% and our revenue per seat over GBP 88, helping us to deliver a record EBITDA performance in the last quarter. Our yields have been proactively managed throughout the year as we've capitalized on our flexible network to meet customer demand where it's the highest. We also saw our new ancillary proposition continuing to deliver in the post-COVID environment. If we move on to the financial performance on slide 6. Total revenue increased to just under GBP 5.8 billion during the year, broken down into GBP 3.8 billion from passenger revenue, GBP 1.6 billion from ancillary revenue, and GBP 0.4 billion of revenue contribution from holidays.
Our headline EBITDA costs, excluding fuel, increased 125% to just under GBP 3.6 billion. I'll provide more detail on the cost per seat drivers in a moment. Fuel costs increased 245% to GBP 1.3 billion as capacity increased year-over-year and fuel prices rose, in part driven by the Russian invasion of Ukraine. The market price for fuel has almost doubled year-over-year. However, easyJet's strong hedging position limited this increase to an effective price increase of 12%. easyJet Holidays' EBITDA costs were GBP 325 million, in line with the revenue growth of the business. We will continue our focus to keep our low fixed cost base below 5% of revenue.
The group headline EBITDA profit of GBP 569 million is a GBP 1.1 billion improvement on the prior year. Airline depreciation, amortization, and dry leasing costs increased 17% year-over-year. This is a result of increased flying hours, combined with an increase in the number of leased aircraft and the annualized impact from the change in useful economic life estimation in the prior year. This increase is partially offset by a gain on discounting of the maintenance provision due to an increase in the U.S. interest rates. easyJet has delivered a headline EBIT of GBP 3 million compared to a GBP 1 billion loss in the prior year.
Group interest and other finance charges have increased by 6% during the year, due primarily to the sale and leaseback transactions.
We recorded a GBP 64 million non-cash, non-operating foreign exchange loss in the year resulting from the re-translation of foreign currency denominated monetary assets and liabilities that we hold on the balance sheet. The non-headline items of GBP 30 million, primarily as a result of the loss on the sale and leaseback transactions of our 10 oldest A319 aircraft and the return of Berlin slots from its rightsizing. This results in a total group loss before tax of GBP 208 million. Moving on to revenue per seat bridge on slide 7.
The total revenue per seat increased by 33% at constant currency. The underlying passenger RPS increased by GBP 12.13. That's largely driven by an increase in load factor during the current period and the impact of easyJet's continued network optimization.
Our ancillary revenue per seat increased GBP 4.66 as a result of our step change in ancillary offering, combined with the increase in load factor compared with the prior year. If we take a look at the yields on the left-hand side, you can see that total yields have been strong with a 17% uplift over full year 19. This demonstrates the strength of our primary slot constrained network and ancillary offering, which has continued to deliver. Moving on to cost per seat on slide 8. Airport and ground handling charges per seat increased by 19% as a result of improved load factors, increasing the passenger airport and security charges during the year, alongside inflationary cost pressures.
When looking at the composition of our airports, we have about 80% of the cost is at regulated airports or airports with RPI or CPI-linked agreements. The remaining 20% is at non-regulated, non-slot constrained airports. This means that we will see a similar cost development to other airlines operating from our slot constrained airports. Disruption costs increased as a result of the unprecedented pressure across the industry, leading to the widespread disruption that we saw, particularly in Q3. This has resulted in a GBP 2.49 disruption cost per seat in the current year.
The prior year had very low disruption rates due to lower levels of flying. It's worth noting that the stability of our operations have improved in line with our expectations since the start of July, with our Q4 disruption costs being lower than the same period in 2019.
This is evidence of the proactive management actions taken on operational resilience. Navigation costs increased by 60 pence per seat, following an increase in EUROCONTROL rates that were effective from January this year. We are seeing continued increases being proposed across the network from EUROCONTROL, clearly impacting all airlines. Crew cost per seat reduced by GBP 8.11 or 46%, primarily due to fixed payroll costs being spread over higher flying capacity, partially offset by the reduction in furlough schemes, which has obviously now ended, as well as additional one-off crew payments such as retention bonuses.
Going forward, I see the inflationary labor environment being offset by the continued capacity ramp up, helping our productivity. Maintenance cost per seat decreased by 53% to GBP 3.69.
This was driven by the fixed element of our maintenance costs being spread over increased capacity in the period, while we also saw a reduction in repair costs. Going forward, I expect maintenance cost per seat to remain around this level. Ownership costs decreased GBP 12.67. This favorable variance has been driven by fixed costs, again, being spread over the higher capacity and a gain on maintenance discounting, which resulted in a credit in the income statement of GBP 71 million due to the increase in the US dollar interest rates over the year.
These favorable variances are partially offset by an increase in the number of leased aircraft and the annualized change in the useful economic life of our older CEO fleet during the 2021 financial year. I provided more information on our expectations for depreciation and interest costs in the appendix of this slide deck.
Other costs per seat decreased by GBP 6.09, primarily again due to the increase in flying, spreading these fixed costs. Partially offset by wet leases that were required to support the increase in slots at London GatwiDDDck and Oporto, alongside those already brought in as part of resilience measures in Q4. I should say all the wet leases have left the fleet at the end of October. I'll talk to fuel in more detail on the next slide. As you can see on the chart, the airline headline cost per seat at constant currency before balance sheet revaluations decreased 25% compared with last year, primarily as a result of the increase in capacity.
The bar on the right of the chart illustrates the net loss from the foreign exchange and balance sheet revaluation movements in the year of GBP 0.77.
After taking into account all these factors, the net headline cost per seat for the year was GBP 68.88. Moving on to slide 9. This slide provides more detail on the impact of fuel prices, currency, and hedging. During the year, the average market price payable for jet fuel almost doubled to $1,063 per metric ton. However, the post-hedge effective fuel price for the year reduced to $705 per metric ton, which is just 12% higher than the post-hedge fuel price of $631 per ton in the prior year.
If we hadn't got the hedging in place through the year, it would have cost us an additional GBP 662 million for fuel. After taking into account our commodity and currency hedging, the sterling cost of fuel per metric ton w GBP 532, a 13% increase compared to last year. The average market rate for the dollar was $1.24 to the pound, with easyJet's effective rate being $1.33. This was $0.02 adverse to the prior year. Net net, we have an GBP 88 million hit on our headline loss before tax as a result of currency movements, which include those within revenue, fuel, and cost lines.
This was in addition to the non-cash, non-operating GBP 64 million loss from balance sheet evaluations. This is our hedging position, slide 10.
We continue to forward hedge fuel and foreign currency positions to help manage the exposure to market movements, which have been particularly volatile this year. As we move into this winter, fuel is the largest cost headwind as we see the spot price of fuel currently over 50% higher than it was this time last year, magnified by a strengthened US dollar. We're currently 74% hedged for fuel for the first half of this year at a rate of $814 per metric ton. For the second half of the financial year, we've a hedge of 51% of fuel at a price of $903 per metric ton. Our fuel hedging is supported by US dollar hedging, as set out on the table on the slide, with rates considerably favorable to the current market spot rate.
A hedging position that we've not previously disclosed is on our US dollar aircraft lease payments, which are hedged, fully hedged for the next 3 years at a very favorable rate of $1.33. We also hedge our CapEx requirements for the next 12 months at the relevant underlying currency. We manage our exposure to market prices on carbon as well. We're currently 100% covered for the calendar year 2022, which will be surrendered in April 2023, with an effective price of EUR 17 per metric ton, and 77% covered for the calendar year 2023 at EUR 31 per metric ton. These hedges continue to put easyJet in a strong position relative to the wider market. Moving on to the cash flow bridge on slide 11.
During the year, our cash position, including money market deposits, increased by GBP 104 million, taking our cash and money market balances to just over GBP 3.6 billion as at the 30th of September. The movement resulted from a GBP 236 billion, million outflow from financing activities, with the repayment of GBP 377 million of debt financing made up of the remaining GBP 300 million CCFF in November and $100 million of the UKEF in April. This was partially offset by GBP 53 million in Q1 relating to the rights issue and proceeds from 10 A319 aircraft that we completed the sale and leaseback transactions on.
As we move into the 2023 financial year, we have a bond maturing in February 2023 for EUR 500 million, and we intend to settle that from cash as we continue to deleverage the business. Our net outflow from financing activities was partially offset by our positive cash generation from operations in the year of GBP 36 million. As you can see on the chart, this positive cash movement is mainly as a result of the operating cash generation in the year of GBP 537 million.
The positive cash generation also benefited from continued increasing capacity and operations compared to last year, and also resulted in an unearned revenue increase of GBP 197 million and a positive net working capital movement of GBP 101 million.
These offset the gross CapEx outflows of GBP 778 million in the year, which in part is driven by taking delivery of eight new NEO aircraft, which were all taken into ownership through cash purchases. After other movements in FX, we held cash and money market deposits of over GBP 3.6 billion at the end of the year, which underpins easyJet's excellent liquidity. On slide 12, we can see the balance sheet, which continues to be rated as one of the strongest in the sector. We've seen a GBP 239 million increase in our derivative financial instruments in the year as a result of the increase in market price of jet fuel and strength in U.S. dollar, making our hedges more valuable.
Our unearned revenue and trade and other payable positions have increased from the prior year as a result of increased flying and forward bookings coming through on a larger winter flying program than the previous year. Other assets have gone up by GBP 403 million, mainly driven by the increased number of ETS assets we hold as a result of our increased flying, and also an increase in the trade and other payables. At the 30th of September, we had net debt of GBP 670 million, which comprised of cash and cash equivalents of GBP 3.6 billion, borrowings of GBP 3.2 billion, and lease liabilities of GBP 1.1 billion.
The cash and net debt position clearly puts us at an advantage from the majority of our peers, and this provides the flexibility to take advantage of opportunities as they present, and also helps protect the business from downside risk. Moving on to the fleet slide on slide 13. Whilst we retain flexibility to downsize the fleet if required, we're not constrained by the fleet numbers in this graph, as we can look to externally source market aircraft to go beyond these jaws if we see the right opportunity.
Just to explain how the fleet graph works, the top dotted line on this chart illustrates the current maximum contractual arrangements with Airbus as well as with our lease lessors. The lower gray line represents the contractual minimum fleet size.
As I just mentioned, the chart does not include any future potential additions to the fleet or any wet leases in operation. In addition to the current 59 NEO aircraft in our fleet, we have an agreed order book consisting of 168 firm orders, 135 for A320NEOs and 33 for A321NEOs. This includes the aircraft purchase approved earlier in this year, securing 56 aircraft deliveries, with also the conversion of 18 A320NEOs into A321s. This order book is driving up our up-gauging opportunity as our mix of A319s will continue to fall with around 40% of our A319 fleet set to leave in the next three years.
This is a huge opportunity as we see the benefit from the increase in seats alongside significant sustainability benefits and the fuel efficiency that a NEO aircraft gives.
Johan explained earlier the benefit we get if we move an A319 to an A321 because they have similar fuel burn, but the A321 has 50% more seats. In total, we currently own 57% of our aircraft and 41% are unencumbered. On slide 14, we look at our gross CapEx. Going forward, we expect gross CapEx over the next three years to increase in line with the delivery of aircraft we have scheduled. We have seven deliveries expected this year in 2023, 21 deliveries in full year 2024, and 25 deliveries in full year 2025. All of the deliveries we'll bring in during the 2023 financial year are expected to be funded through cash and brought into ownership.
I should make it clear that the CapEx in the top chart is the growth CapEx position and does not take into account any future potential sale and leaseback proceeds. In addition to sale and leasebacks, we're able to fund gross CapEx through free cash flow generation or from debt. It's worth noting that we'll continue to manage the residual value of our older aircraft by completing sale and leaseback transactions as part of our risk management. I'll now hand back to Johan.
Thank you very much for that, Kenton. Let me click here. Very good. Now I just wanna start by saying, I'm gonna show you a slide that really demonstrates some of the underlying strengths that we think that we have at easyJet. That is really a good position to be in to deliver strong shareholder value. I mean, that is one of the things that myself, Kenton, everybody who's in this room and in the organization is doing. Every action we're taking is there to really put us in a position to deliver strong shareholder value and be Europe's winning airline, both for shareholders and our people and our customers.
This position that we have of the strength sits really within three buckets, the way we look at it. One is the network strength that we've had.
I know there's been quite a lot of talk about, you know, other low-cost airlines coming into some of our positions at the primary airport. The truth is that if you're looking compared to pre-pandemic, we haven't seen a big shift in the head-to-head competition from other low-cost carriers because the constrained airports are just what they are. They are constrained. In a number of cases, we are actually winning, as you will see in Lisbon as an example, in Porto, those positions that becomes available as the legacy airline is pulling out of there.
It's a great position to be in, and we have a significant cost advantage against the, all the main operators from these airports, whether that is legacy airlines or whether that is other low-cost airlines.
You know, a 5, you know, planes operation from Wizz can't compete with our 80 operation planes from Gatwick from a cost point of view. Whenever you're looking at a, you know, cost average from an airline, you have to look at what does this do in terms of the head-to-head competition. Because of the scale we have and because of the positions we have there, we have a significant cost advantage over our main competitors in this airport. I think that this is something that we look to widen as we are then also moving into what I said earlier and also Kenton mentioned about the upgauging.
We've been absolutely focused to make sure that coming into this pandemic, we ought to set ourselves the target to say the competitive advantages we have, we want to expand on, we want to increase on as we go forward. As far as we can tell right now, we have the opportunity also to expand the cost advantage because a number of actions, and in particular about the upgauging, that no other airlines can do from these airports that we can do. It's about growth, it's about lowering the unit cost, and it's also then reducing the impact on the environment. We also have not only the network strength, but we also have the financial strength.
And this is something that is, you know, quite remarkable when you're putting it up to chart like that, when you're looking at the net debt of some of our airlines, whether that is the legacy airlines or the, you know, Wizz as an example as well. Not even to mention the gross debt positions that a number of these companies has as well. We're one of the only two airlines in Europe who has an investment-grade balance sheet as well. This gives us good, you know, position from terms of, you know, dealing with, you know, further challenges that could come our way from a macroeconomic perspective, or then also capture opportunities that we believe is gonna also then come our way.
We have a brand strength. I know there was a lot of talk, there were certainly some challenges for easyJet, not only easyJet, but for the whole of the industry as we ramped up capacity into Q3, and the potential impact on the brand. Really from the end of the summer season, where we had introduced a number of actions, the stores deliver higher customer satisfaction numbers, better operational performance from July and onwards as well.
We were voted as the number 1 preferred airline in the UK, and we have strengthened that position also then in the number of other key core markets that we have. This matters. This matters even more now as we're going in a period of uncertainty, because we know people will gravitate historically to 2 things.
Value for money, which is really one of the key core propositions of easyJet, and also brands that they do trust. This gives us a really good foundation to deliver on strong shareholder value as we go forward in the time to come. If you're looking at the 2023, this financial year that we are in as well, and on the winter, we have continued to optimize the network. We have launched new routes. I should remind you also that easyJet is by far the largest airline into the ski markets. As of now, at least we're looking for this winter to be the first uninterrupted, you know, ski season.
We know that there's a huge pent-up demand because people haven't basically been able to go on ski on Christmas and New Year and over the February half term since pre-pandemic. That is clearly something that's gonna play into our favor as well. This Christmas day flying is +30% versus also the last year as an example. We see that there is strong demands in the peak periods. We had a strong half term in October. We see Christmas and New Year. We see the ski season, you know, being strong.
We see the early indications also that the Easter next year is good. easyJet Holidays, who has a earlier booking profile than the airline, is also seeing some strong encouragement signs also then for the peak periods into next summer.
It's also fair to say for this winter, for this winter outside the peak period, that there is a need to stimulate also the demand there through pricing actions and also then campaigns. That's the kind of trend and the pattern that we're seeing. Peaks are doing well with strong growth on the yield, but outside those periods as well, it is clearly the normal seasonality and the needs that we have then to do market stimulation. We're also in this quarter and into the next quarter, really investing into resilience to make sure we have the right level of resilience into the next summer to make sure we can deliver a strong performance operationally also as we're starting out to ramp up the volumes into Q3 and Q4.
All these actions that we are taking, they are really there to help offset some of the cost that we're seeing is coming our way. Not only has the dollar strengthened, as you know as well, we see, you know, the fuel price go up on a year-on-year comparison in this half with over 50%. That is a significant part, as you know, of the airline's cost base. Those actions are there to help offset some of these pressures that we do see going forward. In terms of the capacity, we will have approximately from a seat capacity point of view this quarter, about 20 million seats available on sale, 18 million into Q2, Q3 ramping up to 26 million.
Then in Q4, you will see us get back to the pre-pandemic level of the quarter, around 30 million seats. That's all in all, total seat capacity we estimate to be around 94 million in this financial year. We've been ramping up capacity quite a lot. Remind you that we did only 20 million customers in 2021. In the numbers you would've seen for last year, we did 70 million customers as well because we had much tougher travel restrictions and being the largest airline here in the UK, that had clearly had an impact on that capacity. RPS, the visibility we have for this quarter, we're looking to be over and about 20% of the RPS.
We see that load factors we predict to be about 10% where that was versus last year. Like I said, the booking pattern is that the peaks are doing well for us, but outside the peaks it continues to be a challenge to stimulate that demand. That's something that we recognize everybody is dealing with at this moment in time. If you then take a step back and you say, okay, you know, describe really what easyJet is on a page. This page really does it because it really puts together what is the purpose of the company, who we are, what do we want to achieve, and how are we gonna do that to be the winning European airlines for shareholders, for our people, and for our customers.
The purpose we have, and we have taken the opportunity to really refine this in the last couple of months as well, and we launch this into the organization, it's really about what the company started out as it promised to do, making low-cost travel easy. You know, that is really at the core of what we can do better than anybody else. We know that this can also deliver value for shareholders when we get this model right, as has been demonstrated also in the past and will do so again. We know the customers wants us to make their travel easy as well, and there are really four ways on how we're gonna do that.
One is to continue to build on easyJet's network. I mean, we are the largest airlines from the primary net airport in Europe if you exclude Stansted as well.
It is a great position to be in because they are constrained. We can still grow from that position as we are seeing legacy airlines and others, not only legacy airlines, but also local airlines are retrenching from some of those positions that we can build upon and continue to drive where we know we have higher returns on those airports as well. We've done a number of things in this that has really benefited ourselves. We have not lost a single number one and number two positions throughout this pandemic. We have gained number one and number two positions.
That's important because they deliver higher than the average about returns within our network. That's something we will continue to do within the next 12 to 18 months.
We said that we're gonna transform the revenue capabilities of this company. We have delivered that, and we got more to come within this area. 59% up, as you see on the ancillaries, but also the way that Sophie and her team are doing the pricing. We'll talk about that a little bit more detail where we think that we have more opportunities to go in that area. The In-flight Retail that we launched earlier this year, fully embedded from September as well. That is together with other actions we're doing within this area, something that is yet to be delivered on. Delivering ease and reliability. We know the customer wants to have a seamless experience as they travel, as they fly in Europe, and that's where the focus is.
We get some specific target points that we've been addressing to make sure that those things that matters the most to the customer are something that we deliver better at the primary airports than anybody else is doing. We do have a loyal customer base. Loyal customers isn't just there because we think it's nice to be nice to customer. It is because they actually tend to come back to you more often than they go to competitors. That's really the point of why the loyalty really matters for us.
We're at 76% of all the bookings are from returning customers within a two-year period, which is a strong number. The operation stability that we focused on and the actions we've taken has really delivered for us in the peak period.
That's what we're investing now in this winter to make sure we deliver a great experience also for summer 2023. Continue to focus on cost by really capitalizing on the low-cost model that we have, where we do have this advantage from a cost perspective from the main competitors at the primary airport with the various things that we'll go through in detail going forward. This is what's really gonna help us deliver that strong shareholder value, be the preferred airline for our customers, and also be the most attractive employer within this industry.
Looking then onto the network and just spend some time really to see what has then performed within the network and what is then lagging behind from where we stand today. We can see that beach has been really the star performer.
We've been up 10% on a, on a year basis, versus where we were to pre-pandemic levels in summer '22. The particularly outstanding one has been the UK beach. That's down to also that there's been a huge amount of pent-up demand that we're seeing for people not being able to travel since the restrictions has been put in place. We also see an increased customer choice. We launched new markets. We launched Tunisia as an example from the UK and also in Switzerland, and a number of other destinations in there as well to really capture that demand that was there. From the domestic, that has also fully recovered.
The domestic was the one who really held up the strongest throughout the pandemic because the restrictions wasn't really capturing the domestic part of the travel.
That was more on the international side as well. We launched 7 new domestic routes. We also seen that business travel is coming back. One interesting, I think, stats about easyJet versus other airlines when it comes to the business travel that consists about 18% of what we do, and as it's recovering now, it constitutes primarily of people from SMEs, so small, medium-sized enterprises that do not have the same type of travel restrictions that large corporations are putting in place. We can see that this represents an opportunity where we can come back quicker on this than other airlines who are focused on that big corporations. City has not yet recovered to the same extent as the 2 other parts in here.
It is not an insignificant part of the company that you know that represents our city business. It is coming back, and it's coming back quicker, but it's starting from a lower point than the two others has been in place. The city breaks are doing well for us, but it's really outside those breaks that we see that we have more recovery to come from this part of the business as well. We continue also then to adapt the network, so we can see that we're fulfilled where the demand really is at. This is what this slide really shows. Sometimes we talk about, you know, the ruthlessness is on how we can move aircraft from bases that we can see that they can perform better at other bases.
We showed you this graph before, where we basically have all the bases lined up, and we're looking at the contribution per block hour. In simplistic terms, we are taking capacity from the one that performs less good to the highest performing bases that we have above the averages. This is not only about how we're moving aircraft between bases. We also have a great opportunity that we demonstrated in Italy, that we demonstrated partly also in the Berlin operation, where we're actually moving the aircraft to the routes that performs better. Adapting ourselves to that beach demand, adapting ourselves to that leisure demands.
I can tell you that we are not very sentimental in terms of making those moves and really to capture the value to meet the demand to the higher return basis that we are seeing.
In Gatwick, we've since pre-pandemic, we increased the capacity with some 20 aircraft. Given the noise that some of our competitors has been making, adding 1 or 2 aircraft, it dwarfs in terms of the scale that we have at that airport. Porto, another 4 aircraft. That's 80% increase in equivalent of the seat capacity from those aircraft. The list and slot
, which makes us now overtaking Ryanair, is now the second largest airline in this place. On a slot-constrained airport that we won those slots as well, is about to deliver for us this year because the decision of that was only taken at the end of the last financial year. That's for us to come.
We are also the largest airline into the Greek Islands, which has demonstrated great demand in 2022, and the early signs for 2023 is also that everything in the Eastern Mediterranean looks really strong because people are focusing on value for money. The Greek Islands, Turkey, Egypt, as an example. These are the type of examples you will see on what we set out to do, we actually have delivered, and we're absolutely being focused to make sure that we're allocating the aircraft to the routes and to the bases where we're getting the best returns as we do going forward.
We have more things that's gonna come within this area in 12 to 18 months going forward. We also said that we were looking to really make a transformation of our revenue capability.
That's part of the plan that I showed earlier as well. You know, for those of you who have watched and monitored the company, you would have known that for many, many years, we had about 18%, 19%, 20% of the total revenue mix that was driven by ancillaries. With the changes we've done, both to the impact of the products that we offer, the cabin bag propositions, the bundles that we've been doing, the way we price that, we've reached some 30% of the total re-revenue mix that was ancillaries. Came down one percentage point last year, but that was more because of the strength of the ticket fare rather than anything else that we saw a drop in the absolute numbers that we got through to the ancillaries.
We've been also working a lot, Sophie is doing a huge amount of work when it comes to optimizing also the pricing on the fares. We're cooperating now with a leading-edge company, Datalex, which will help do primarily three things in here. One, having the opportunity also then to be quicker to the market. We've had system constraints in here that has just meant that it's taking too long for us to sometimes to get out to the market with bundles and with offers that we're having.
One, looking at personalization much more in the product offering that we do, which means that we can do a higher yield, we can ask for more money when it's more suited into certain target groups and individual customers. We continue then also to work on the algorithms.
We have some 600 different algorithms that we're working with, we know that when we can get these to work on a route-on-route basis, we see huge improvements within this area as well. This is something that is really for us to be enjoying the advantages as we continue to work within this area. I think it's fair to say that I don't think that there are any airline, as I have seen as we go through this, that does more investments into how we can grow the revenue capability, and that has certainly delivered into the results that we saw in Q4. The In-Flight Retail proposition that is now fully embedded is really gonna take on for the next year to come.
We've seen that the profit per seat impact that we've had here in September is about 70%, so that's GBP 0.42, GBP 0.42. That's actually profit per seat above all the capacities. It's not only the ones who's then, you know, clearly buying the products that we have. We're looking then to get further improvements in here when we're, from January, gonna introduce a closed-loop Wi-Fi system where we'll be able to merchandise the offering that we have in a much more effective way going forward. We will introduce also then, you know, the capability to pre-order this by the end of this financial year. easyJet Holidays.
Look, I know there were some skeptical comments about this when we launched this, and we said we're gonna, you know, refocus our efforts in a separate company, in a separate P&L that Gary's leading here. We've now had the first year. We set out the target to get to GBP 100 million, I think it's fair to say that if anything, we've seen that we're moving closer to that target than perhaps we thought at that point in time, delivering GBP 38 million of profits in there. Like I said at the early point of it as well, this is a company with almost no committed risk. It's a variable risk product. It is the fastest-growing, lowest cost, highest margin business in the U.K. within travel.
One thing that we set out to do, what's so great about this, that this model can easily be replicated also into other countries. That I don't think you can find any other company can do. This differs immensely from any traditional travel company that doesn't have the fixed risks that it has, which means that the winter operation, as an example, will not incur, you know, losses the way you see other, if anything, losses. We don't think we're gonna do any losses in the holidays company for this winter. It's all upsides that we're seeing in the profitable summer season.
We will then also then look to then add on source markets going forward. Just to mention that that GBP 100 million doesn't involve any other source markets. This is driven by the great opportunity that we see in the U.K.
We are really pleased with that performance and look forward for this to deliver that GBP 100 million, perhaps even closer and quicker than we anticipated. Focusing on our cost and really capitalizing on the low-cost model is hugely important for ourselves. We did set out some things that we wanted to structurally change within the company. There wasn't really a one-off nature as we headed into the pandemic.
One was to introduce the seasonality contract for our pilots, as an example, because that means that we don't have to have that cost in the unprofitable winter season, as an example. We can look to see that we can add growth where we then see the profitable summer season has, and we can utilize that part of that community. That's in place.
We launched and have now some 21 aircraft in seasonal basis, operate on an 8-month profitable basis, and we look to do more of that in the next coming years as well. That gives us an opportunity also then to introduce aircraft start-up base from lower cost environment that goes in and take advantage of the slots that we have at the primary airports also in Europe, which is a great position to be in. We insource the line maintenance.
We have, compared to a number of our competitor airline, concluded the majority of the crew deals now, both on the cabin crew side, with 60% of all the agreements are in place now across the union communities, and 80% of the pilot units are completed right now. We're working through the remainder of that as well.
That gives us certainty about the cost as we see going forward. We're in a, as Kenton mentioned, we're in the leading position when it comes to the hedging for the fuel effects and the ECF. All these actions are helping to offset some of the cost inflation or pressures that we are seeing. It will give us opportunity then also to deliver strong as we go forward in the future years. The main focuses that we have for, on 2023 on the cost side lies within fuel. Fuel is the single largest component of our cost base.
We introduced Descent Profile Optimization software tools, as an example, which looks to reduce the fuel burn that we have on a like-to-like basis with 1%. Completion now on the remainder of the crew deals that we have.
We will continue to add also features for customers to self-manage and self-service. That means that when there are changes to a booking that needs to be made, that the customers can do that themselves. Prior to the pandemic, we had some 70% of all our customers that had to contact us through a contact center to physically get somebody to help them to do the changes. That's now down to 30%, we look to make sure that that will be reduced even further. It gives better customer satisfaction, it reduces the cost for the company.
We also have the opportunity now for the upgauging of the fleet from the constrained airports, where you actually could not add any growth in terms of the number of aircraft, the seat capacity will do that for us.
Just to highlight this once again, we do have a significant cost advantage versus, you know, the main competitor. That is not only the legacy airlines, but also other low-cost airlines in there because they simply don't have that cost that is driven by the scale that we have. They cannot get it because these airports are constrained. Delivering ease and reliability, we talked about that as well. There've been really three points that I wanna highlight on that we put a lot of focus into for this year, and we'll roll that out also now going forward.
The Auto Bag Drop, where we are basically, you know, having people the opportunity to deliver the bags without any staff assistance when they check in. They can pay for their whole bags as well at the airports.
We're moving that out to another six airports within the network. The Twilight Bag Drop, which is really well received, where you can get customers that they can deliver the bag on the evening before an early flight, and therefore removing the step of that journey on the same day of the flight. We're also investing in presence in Gatwick, which is clearly, you know, the biggest part of our operation on a single from a single base point of view by adding a terminal fleet manager in there as well that will help us then support the operation performance at that base, which we're looking forward to benefit from as we go forward into summer 2023. The recruitment process started earlier than ever.
We have something like 2,100 positions to fill from a cabin crew point of view. We are recruited at this moment in time, 1,500 are recruited and signed up. We had about 19,000 applications in terms of filling out those 2,100. It's a record number of applications that we've had, which demonstrates that, you know, people are attracted to come and work for this brand. We're investing. We're doing fully training courses as we speak right now to make sure we have that resilience going forward.
There, it's also true to say that I think it differs also in certain regions, where we see that the labor markets are tighter in some region versus other. The Gatwick area Southeast continues to be demonstrating quite a tight labor market.
In general, we are on track on what we are looking to recruit, and we're in generally oversubscribed really across the rest of the network as well. This is something that we'll continue to focus a lot for when we go into Q3 and Q4. Also there, I know there's been some discussion about some competitors not paying out refunds as well. When consumers are eligible for a refund, that is an automated process right now that will be paid out to them within 3 to 5 days. Sustainable travel. I don't know how many of you there was watching David here at the BBC yesterday as well. Most of you would have seen what we did when we launched a roadmap to net zero in September.
Last week, we together with Rolls-Royce, you know, conducted the world's first test of a jet engine, 100% run on green hydrogen. David was there, you know, physically present. I'm very happy and pleased that you came back safe and sound from that experience. This is really a fantastic milestone because it demonstrates what we kind of said all along. The purpose of this test was really to run and control that jet engine on that 100%, you know, green hydrogen. It is a lot of things left to be done on that whole thing, but it's been one of the reasons why the acclaim that I think we got for the roadmap to net zero was what it was.
You know, this was the first time somebody demonstrated that zero emissions technology can actually be a part of that net zero know about 2050. Within this, we have also done a very, very granular plan on how we're gonna reduce our carbon intensity by 35% to 2035. This is something that we are continually investing in doing. I think that no airline, as far as I can tell, in the world, is doing more than we're doing. It's the right thing to do for the environment, but it also reduces our costs as we look to reduce the amount of fuel that we're using, moving on then to zero emission technology. At the end of the roadmap of 2050 then look to remove the residual emissions that is a result of our operations.
We've seen enhanced ratings really across all metrics, the CDP, the MSCI and the Sustainalytics. We also, it's the world's first low-cost airline to have been certified from the IATA IEnvA environmental management systems in place. We continue to do quite a lot of progress within this area. This is something that is, you know, sits as part of my objectives, is part of Kenton's objective. There's a strong governance, even from the board level to the management about all the areas we do within this, and that's something we will continue to want to lead on. If I just finishing off on this slide as well. We talked about what's been delivering. We talked about the position we have.
This is all really for us to demonstrate that we are absolutely focused to deliver strong shareholder value. That's really the core. That's really the key thing. That's what we wanna do. We recognize that has been a, you know, a rocky road for shareholders within this industry. Not easy to have been excluded from that. We want to demonstrate and are committed to deliver exceptional strong shareholder value versus other going forward. What we can see in the outlook we have today, we're looking at a over 20% year-on-year RPS revenue for the quarter that we are in.
We're looking for load factors to be about 10% higher than they were at this point last year. We are investing into the ramp-up of summer 2023 in terms of the resilience.
All these actions are helping us to cope with the, with the inflation or pressures that we, that we do see when they are there, particularly in terms of the fuel we're seeing for this half. In general, we can see that the peak bookings are doing well for us. It's outside those peak bookings that it remains to be, with the seasonality, we'd expect in the winter to be some challenge around that. We're looking then to fly some 38 million seats on offer here in H1, 56 million come back to pre-pandemic levels then in Q4. Holidays is targeting, can I say, at least 30% growth carry for the summer to come as well.
We look forward to come back to you to demonstrate that that success is also then continuing. With that, thank you very much, and I think we are ready to take some questions. To myself and Kenton and also to anybody in the team, feel free.
Hiya. Hello. Yeah, it's James Hollins from BNP Paribas Exane. A few from me, please. Very interesting long-term stuff there, but with apologies, I'm gonna focus a couple on the short term, and they're both for Kenton. I think there was some confusion this morning on your unit revenue outlook. Perhaps I could ask if you'd give us some pricing outlook for Q1 2023, so that's yield per passenger on tickets Q1 2023, and whether that's against Q1 2020 or Q1 2019. You can see how my morning's gone. Secondly, on the unit cost, perhaps you could give us some guidance on whether you wanna give H1 for year 2023, or maybe when unit costs get back to pre-COVID levels.
Thirdly, in the more longer term, I'd love to hear from David, as now he's got the keys to the top job as permanent COO. Maybe just to hear from him his thoughts, his focuses, areas of weakness, opportunity, et cetera. Thank you.
Thank you, James. In that order then. Q1 yields, what we said in the statement here was that we were seeing RPS over 20%. The key is over. We do see it being greater than 20%. The load factor we're saying will be 10% more than it was last year. We're seeing ticket yields and have an expectancy that ticket yields versus last year will be low double-digit higher. Ancillaries carries on even though now we're at the time where it was in place last year. We're still seeing a kind of low double-digit increase in ancillaries as well. That's on last year.
If you did that versus 2019, the ticket year would still be up around the kind of high single, low double digit because Q1 of the 2022 year was fairly flat on ticket yields. For ancillary yields, obviously we were last year we were running up 50%, 60%, because we're still growing then versus 2019 the ancillary yields are gonna be like up 80%. That load factor of +10%, we did a 77% load factor last year, that would give you around the kind of 87, 88 mark. I think pre-pandemic, the Q1 for 2019 was 89, a little bit softer, but not hugely softer. We're focusing on the RPS. Hopefully that's a bit more flavor on the Q1.
In terms of cost, the way we're looking at cost is two real focuses. Firstly, in our kind of primary slot-constrained airport, which is the vast majority of our airports, maintaining a good cost leadership position, and that's against kind of all carriers. Obviously, you know, we'll clearly keep that and want to keep that against the legacy or the legacy kind of low-cost carrier variants. Also, as Johan said, when a, you know, if a Wizz comes into Gatwick with five aircraft trying to operate long-haul slots into short-haul, it's a pretty ugly cost base. You know, it's a better cost base from those coming into the lower cost airline, the lower cost, our kind of network.
When we look at the kind of costs that have been kind of achieved, we've still got a good proportion of our pilots on part-time seasonal contracts. We've got the seasonal bases that are open for eight months of the year, the costs follow that. We're kind of having very constructive negotiations with our unions and having 80% of the pilot contracts done for the forward years now at levels below the running inflation is giving us certainty of where that cost is going, and it's about 60% for cabin crew. Obviously, we've still got the fact that we insourced our line maintenance, that'll give us ATP benefits, but also some cost certainty there.
One of the focuses is still to continue the automation on the self-service app because it's just a big plus for the customers to be able to manage their own, their own bookings and if there's disruption, manage that as well. Obviously it puts less pressure on the, on the back office, so we can have fewer people supporting the call center. Longer term, we've got the upgauging opportunity. We've got 94 of these A319s, and the average age of those is now pushing 14 years, and none of them will be in the fleet after their 18th birthday. That gives you an idea of how quickly they'll be leaving the, leaving the fleet. Even if they're replaced by an A320, it's still 19% more seats. An A321 is obviously 50% more seats.
There's a natural growth of 6% over the next five years merely from cycling those out before you think about putting any extra metal in, which all helps towards it. David, maybe one of the things he would say on cost would be, so I'll nick it, is on the optimizer. He's constantly looking at efficiency measures for the way we fly. We're looking to install new software on the fleet over the coming months to optimize the Descent Profile, which again, gives us about another 1% fuel burn benefit. If we're looking at the cost for winter, you know, we have to be mindful of the fact that the market price for fuel is 50% higher.
You know, it's a GBP 1,000. It's a $1,000 a metric ton. It was GBP 670 or something like that a year ago. Although we've got excellent hedges, you know, $800 a metric ton, and a really good kind of 1.29 for the dollar for that winter, we also had excellent hedges a year ago. Against the market price of GBP 670, we were hedging at GBP 500. We're seeing this kind of 50%+ increase in the unit cost of fuel compounded by the strengthened dollar even though we've got a good dollar. Competitively with other airlines, got a really good hedge, but year on year, we're exposed to that cost. The pricing looks good in the peaks. Ticket price off about 18% for Christmas.
Typically, in the winter, it's outside the peaks that you have more of a challenge recovering it. Like I said, Q1, at least 20% RPS increase. The focus goes on to Q2 now.
I think in terms of, you know, operational focus and challenges, you know, clearly we saw some challenges, particularly early on in the year, the summer this year, with labor shortages right across the industry. We started, as Johan mentioned, we're taking the opportunity during this winter to invest into that. We've started, particularly on the cabin crew, which is one of the most challenging areas last year. We already have, you know, several hundred cabin crew in the pipeline going through the process at the moment. We're well on our way to delivering that. For the pilots, we're in very good shape, actually. We've got a very good cadet program with our partners on that and the pipeline.
is delivering well, that we are completely on track to have full pilot numbers for next year. you know, other parts of operations, we're adding resilience into, like, the operations control center just to make sure we've got, you know, the right number of people to deliver and to manage any disruption on the day through weather and whatever it is. and this year particularly, we're paying a particular focus on our third-party suppliers. we saw last year they were also coming under a lot of stress, you know, ground handlers, PRM providers, coaching, ATC, you know, you name it. there was hardly a bit of business that wasn't impacted by that.
We're kind of all over them with their recruitment plans as well, making sure that they are keeping pace with early recruitment, getting the right numbers there so that we've got confidence about delivering a great operation for next summer. We're using a little bit of software as well.
The challenges we did have also was clearly with ATC environment, and we were very pleased to see also that since NATS took over the control tower in Gatwick is really performing much better. There's a bigger resilience and better resilience in Gatwick now from the ATC environment, which we, you know, think We're gonna benefit from going forward as well. It's a big part of that is also that, you know, that is actually initiatives that will, you know, not only improve the customer experience and operations stability, but also reduce the cost to make sure we run the operation in an efficient way going forward. That's where a lot of focus will be.
Thanks very much. Alex Irving from Bernstein. 3 for me, please. First one is on upgauging. Constantly you have a dense network between slot-constrained airports. Is there going to be enough demand when you put a higher gauge plane on those sorts of routes, or do you need to reduce schedule density to have enough demand for that route? Alternatively, if upgauging is quite as beneficial as we're talking about, would you look to convert more A320neo orders to A321neo orders? Second, if I can follow up on the revenue per seat guide, please.
For fiscal Q1, it looks to be up about 3% versus fiscal Q1 in your FY 2020. If I have this right, though, the stage length is up around 10%, so it implies RASK would be down -7 or better than -7. Is that right?
If so, what explains the swing from summer to winter? Finally, a question on Amsterdam. That's clearly been one of the jewels in your crown, but we've had the Dutch government proposing to cap flight movements 11% below the levels of 2019. How does that affect you, please?
I'll do one and three, and you can do two then. I mean, first, we don't really see that, you know, the, we have any cannibalization really when we're adding, you know, capacity onto the existing, you know, basis that we have. The upgauging has proven earlier that that was just the benefits coming in. We got the operation, we got the presence, we got the awareness in the market, a lot of that just falls straight down into the bottom line. It actually doesn't, you know, increase any frequencies either. It's just more, you know, capacity on the seats that is already well-established. We will also look to introduce it clearly in the same way, where we have, you know, the stronger and the better returns on that.
On the third part on Schiphol as well, look, you know, we are very disappointed with their performance. There's no question that this has, you know, proven to be an awful customer experience to some extent, and it's been also, you know, damaging ourselves. This now is looked to continue with the capacity caps, I think, into March and April, as far as we can tell. We are in discussions with them. We are, you know, supported by legal firms to see what we can do and what we can recover, because they have not delivered what they set out to do. In any case, in any airport that we are, you know, paying for, performance from the airport is part of that component.
Whether that is Amsterdam or whether that is somebody else, we will always look to have negotiations around the fees and the charges, what we've been paying, and also in comparisons to how they performed. That's what I can say about the Schiphol operation right now.
Okay. Just finishing on Schiphol, one of the good things about slot-constrained airports is where we saw this flow rate reduction, which of course is frustrating, et cetera, we also see now a ticket rise because there is natural demand for a popular airport like Schiphol. That's never going anywhere. Therefore, if the flow rate is reduced, we do see the benefit in ticket prices. The calculation on the versus 2019 in that Q1 and what it meant for prices, I think what we're expecting is a ticket yield versus 19 to be up around a high single digit, 10%. I'm not quite sure I'm seeing your 3% calculation.
If it is around that amount, with the increase in average sector length, you're right. It's at best flat, ticket price per average sector length. What we are seeing, though, is obviously an ancillary income versus back then in 19 of, you know, we said it was up 60% last year at this point. It's up at least another low double digit on top of that, so it's 70%+ ancillary increase. You're right. The ticket RASK is probably either flat or marginally down versus 19. The other one on where can we deploy the A321s and the A320s. In terms of deployment, I might defer to Sophie if that, if you're comfortable with that.
In terms of our intention, when we put in the aircraft purchase order of the 56 to complete our 2013 order, but we also took the opportunity of doing another 18 conversions. Inside 56 are another 18 A321s that we kind of asked Airbus to deliver, and they've obviously agreed, that were originally slated for A320s. We'll continue to review the network, look where that's a good opportunity. Clearly slot-constrained airports and thick, long leisure routes would be the kind of preferred network. Sophie, if you wanna give any more detail.
Yeah. I think, in terms of the slot-constrained airports and the growth of the A321s. Don't know if you can hear me on my mic, but no. I think the, the key thing is, you know, one of the interesting facts is with the Lisbon slots that we won, the two criteria the European Commission weighted most heavily were, capacity of gauge and, route mix and number of destinations that you put on. Our capacity of gauge is we went into that, competitive tender with A321s, the 235 seats. We understand that Ryanair went in with 189-seat MAXes, and Vueling went in with a 180-seat, A320.
That was one of the driving factors of us winning those slots. We added in the route mix of number of destinations that we can serve that also played a part in that. I think, you know, from a A321s perspective, they've got a really key role to play in those slot-constrained airports. Clearly, when capacity comes online from legacy carriers, the EU Commission will be looking at who can add the most seats in there. I think there's a real role for the A321s in opportunities like that.
In terms of your point around, you know, do you end up reducing frequencies? 'Cause that's what we've seen with Air France switching to Transavia with their larger gauges on French domestics, for example, is they've gone from multi-daily frequencies into much thinner frequencies because they've got the larger gauge.
I think with the majority of our capacity operating on constrained to constrained airports, actually the demand is there. All the external factors we're looking at in the kind of medium term is that demand for air traffic growth is just gonna continue. Actually, the fact we're in slot-constrained airports and that demand will continue to grow and it's primary to primary airports, means I think the demand will be there for the A321 s. In the near term, we will still have a mix. We will still look to deploy theA319s on those multi-daily domestics, for example, and things like that. We will still have that mix in the near term anyway, and we'll be able to play with that on those sorts of routes.
You know, as Kentin and Johan said, you know, you then deploy them on the long sector 321 kind of routes where they are slot-constrained, like the Greek Islands and so on. We've actually got 6,000 more slots for Greek Islands next summer in the summer application that we've put through this year. We're still able to grow, and then we can lay the 321s on there, and that's a great opportunity for us.
Thanks. Alex.
Morning, guys. Jaime Rowbotham from Deutsche Bank. Two from me, please. The fleet plan suggests 4%-5% growth in fiscal 2023. Ownership costs or depreciation anyway, seem to be increasing about 20% according to slide 31. Kenton, could you run us through some of the moving parts on that one, please? Secondly, a quick one on Gatwick. There was some speculation in the press recently about BA wanting to expand again at Gatwick. Just conscious that your some of your recent growth there has been via leasing slots from them. Can you remind us under what circumstances they could, and when they could take those slots back? Thanks.
Well, I'll start with the last question. Look, from what I understand, and I don't know to what extent that this is negotiations with Heathrow or what. Look, I mean, if they were to come back to the numbers that was being reported, that would mean that they would basically, you know, install primarily the capacity they had prior to the pandemic. It's not more than that because they've reduced quite a lot of the capacity they had in there. The agreement hwe have with them is that there will be an opportunity for them or for us, depending how you see that, some of the slots will be starting to come back to them in 2024.
You know, it happens gradually over X amount of years in there. We don't see that as any, you know, major, you know, difficulties for ourself as well. Like I said, if they were maximizing that opportunity, they would just be closed back into the pre-pandemic levels.
Okay. In terms of depreciation, what we've got in the depreciation line is you've not only got the depreciation from your owned aircraft, you also have the depreciation on the right of use aircraft for the leases, and you also have the maintenance costs. If you own an aircraft, when you do a big engine shop visit at kind of eight or nine years, which is typical for the CEO fleet, you capitalize it at that point, and therefore, thereafter, you do the depreciation. If you lease an aircraft, you start accruing up and providing for the next event, when it comes. When it comes, you pay for it and you release the accrual.
We got a benefit as all airlines would have done with a lease fleet in 2022 from the movement of US interest rates, because the way you do that calculation on your maintenance reserve is you accrue up to the next event, which can be multiple years out. You accrue a dollar amount for that liability, and our maintenance provision is $600 million-$700 million, and then you discount it back using a US dollar interest rate. As interest rates went up, the discounting back had a greater impact, and therefore it reduced the level of the maintenance provision. That's something that any airline with leased aircraft would have experienced. The benefit to us was GBP 71 million.
Clearly, forecasting in the kind of guidance we're giving on interest rates, that we see a similar development of increasing interest rates over this calendar year. As it happens, there has been a slight increase in the Q1 , so you'll get a bit of a maintenance discounting benefit in that . We just assumed no movement in interest rates. If they do keep going up, that will repeat. That's GBP 70 million, which is kind of half of it. The other half is we have more aircraft in the fleet. That's an impact. Then we also have, as our kind of older A320s hit that shop visit, that shop visit gets capitalized and the kind of depreciation element of that goes through.
The average age of our three-nineteens is 14 years. They're all past that. Depreciation is running. That's all happened. The A320s is more 7 and 8 years. They're starting to hit. The older ones are starting to hit that engine shop visit, and that depreciation comes through. That, that's why that and the combination of the fact that we've got a few more aircraft in the fleet that at least gives us the depreciation cost. The other thing in ownership costs is obviously the interest line, where we've taken on quite a bit of debt since since before the pandemic, and we're thinking about how we, how we de-leverage that now. That was. Is there another question?
No.
I think that was it. Okay. Thanks, Joe.
Good morning. Muneeba Kayani from Bank of America. Just following on the lease comment, what are you seeing in the lease market right now, and how does that impact your thinking of new sale and lease backs and the mix of the fleet going forward? Overall, kind of, what would be the cash impact on your lease payments for next year, is my first question. Secondly, Johan, how are you thinking about consolidation in the industry? Kind of we heard from some of the legacy airlines, you know, their focus on M&A has increased now. Do you see that kind of changing the landscape next year?
I think it was actually, there was a journalist who was more focusing, thinking that there was somebody who wanted to consolidate. If there's been any truth in that, I'm sure the panel would have forced him to come up with a statement by this point in time. Look, I always said that I don't believe M&A consolidations happen to the extent perhaps that, you know, some people think, partly because of the structure of the European airlines. You know, there's a number of, we can mention, we shouldn't mention it anyway, but, you know, a number of companies who should have gone bust by this time unless they've been supported by their respective governments.
It's not clear that the normal market rationale about, you know, unprofitable airlines means that they will go out of business.
I do think that it will trend that we have seen of regional airlines not making it through this year will continue. Consolidation also happens when you're seeing retrenchment. We're seeing, you know, in our airports, and this is so important that, you know, our focus is at the prime airport. When you're looking at overall market growth, you know, we are looking at what is the capacity movements at the prime airports. 300 million people lives within one hour's drive of an easyJet airport. There's enough of us to gain from that. We're seeing that the main competitor are removing capacity out of there.
We can expand on the capacity going in there, taking place. Doesn't mean that we're not ruling out M&A activities ourselves, but it's gotta do two things.
One, it's gotta deliver value for the shareholders, and it's gotta be doable. It's gotta be something we feel we can execute with the, a risk level that we feel confident about. In general, we are confident in our own plans to grow. Also the other thing, even if you were to speculate on these things, you know, who would take over who? You're looking at some of these debt positions, and it's not like you're thinking that some of them are in a great position to do big transactions as you're coming through this. We have a very strong position from that point of view. Share prices has been, you know, up and down for a number of airlines.
I think that depending on what time you're looking at our share price before, maybe we would be, you know, somewhere in the middle of the package. It compares to the European counterparts in there as well. I'm still of that view, and I'm so far I'm proven right to say that, you know, M&A transactions is not as likely. I think of one of our competitors speaking about it mostly in the self-interest way because it benefits them. I think this will continue in terms of the consolidation for retrenchment rather than M&A activities.
Then when it comes to aircraft, how we think about the fleet, leased aircraft, et cetera. At the moment, we've got 57% of the fleets in ownership. Pre-pandemic, that was typically around 70%, and that served us pretty well as we entered the pandemic and allowed some kind of liquidity to be unlocked from the order book. What we're doing is the 8 aircraft, the NEO that we had delivered this year, we took in into ownership and paid cash for them. The 7 next year we'll repeat the same thing. The way I'm thinking about the NEOs is I want to take those into ownership because they're a kind of a better class of asset with a higher residual value.
At the moment, the NEOs in the fleet are kind of 70% owned. If you look at the A319s, as they get older, what we do is for the you know, as they get just typically 13 years, 14 years, we put them on a short 3-year lease, which makes the lease levels look higher than they are really. You're just securing the residual value because you don't have to sell them, you just hand them back to the lessor and you negotiate a kinda a lease at the end of their life. Of those kind of A319s, we own, of the 94 A319s, we only got 37% in ownership. You can see the 57% in ownership is skewed to the better value aircraft, and that's the way I'm thinking about it going forward.
Airbus, really tight. They're pretty much sold out to 2027, 2028. They have, like everyone, some supply chain issues that you read about. We're pretty confident on the deliveries we have from them. It's, you know, in terms of NEO aircraft, it's a pretty tight supply. Mid-life aircraft are available in the market. We've taken some A320 CEO aircraft during this year, and also to deliver next year. We've been able to find 10 sister ships at good rates. In that kind of mid-life, 6, 7, 8-year-old, CEO A320 market, there is availability. The kind of NEO market is pretty tight on, in terms of the order book from the OEM.
We can have conversations with lessors as well if we choose to take an A320neo or an A321neo. There's a number of options about how to play the fleet. With, at the moment, we're just looking to see where the demand comes and where and the primary goal of our fleet next year. When you saw the fleet jaws, is we'll trend towards the upper end of those fleet jaws in 2023, because we'll look to backfill all the aircraft that we've had on wet leases. We have 6 aircraft in London Gatwick on wet leases and 1 in Oporto for the slots 1. Those 7 will come back into our fleet, and our own pilots will fly them and cabin crew will man them.
Morning. It's Harry Gowers from J.P. Morgan. I've got two. Maybe, just on costs, maybe a bit of extra color or reframing one of James' questions. I mean, how should we think about the trajectory of total ex-fuel unit costs over the course of the year, given the pressures that you've talked about? You know, if we get back to pre-pandemic levels of capacity in Q4, where should we expect the non-fuel unit costs to be relative to 2019? Should they be back to 2019, but maybe at, I don't know, 5% or 10% for inflation, for example? Then just on yields, early days, maybe if we could try and look out that far, but what kind of visibility do you have on ticket yields into Q2 at the moment?
What sort of averages are you seeing above 2019, not just in the, in the peak periods? Thanks.
All guidance questions. Thank you very much. On Q2, similar to Q1, the end of Q2, you start seeing the Easter pricing that's looking very firm. Ski, as you'd expect, is in demand. Feb half term, the week's in demand there. We're seeing a similar performance, should I say, that we're seeing in terms of Q1. In terms of demand for Q2. Beyond that, really early days, given it, I think for Q1, we're over 75% sold. For Q2, we're about 20% sold, a little behind where we were in 2019 for Q2. I think, you know, pricing is firm for what we see, the visibility is not huge at the moment.
In terms of how we're seeing costs going forward, we will get some productivity benefits. When it comes to crew, it wasn't the most optimal summer for our pilots in particular, this term, at this time in terms of productivity, so we'll look to get more productivity from the pilots. We'll also have some of the, kind of, inflationary pressures coming through in the wage deals we've secured. I would, I would imagine that the productivity would offset the inflation we're seeing in the wage deals for our kind of cabin and pilot community. In terms of maintenance, as we do more cycles, we'll have more maintenance, but also you'll get kind of more volume to spread the fixed cost elements of maintenance over.
I would imagine that that would be fairly static from where we are because parts are obviously you know, parts around engines are inflating LLPs and so on, in line with what you're seeing in the, in the wider inflation market. I think the challenge is always airports. Because we have 80% of our airports are either slot constrained or actually regulated. With a regulated one, it's not really a negotiation. It's, you, you may get some incentives if you're putting in the NEO aircraft, which is why they're also valuable because they're in demand from an airport perspective 'cause of the sustainability credentials of, of the aircraft.
What it does mean in those slot-constrained airports where you're more CPI indexed, you'll see that CPI inflation coming through, but everyone else kind of operating out of those airports will also see that inflation coming through. You don't lose any competitive edge out of those airports, but you do get that level of inflation. Navigation charges, they look like they might go up about 10% next year from this year's level. That's obviously gonna be the same for everyone who flies through each of the air corridors because it's just a regulated cost.
What the EUROCONTROL bodies are looking to do is recover some of their COVID losses. They'll naturally be lobbying through Airlines for Europe and Airlines UK, et cetera, against that.
You could expect to see that. I mean, in terms of returning to 2019, it's a long time ago. I'm not sure how many industries will be doing that. The inflation has been running 10% since then, and obviously fuel, carbon, topics like this are gonna be coming into the cost base. We put on slide 36 some guidance or some key drivers next to each of the cost lines. Probably if you, if you have a look through that and then, and then have conversations with Adrian and Michael, we can give you some flavor.
Morning, everyone. It's Alex Paterson from Peel Hunt. Actually, can I just ask a bit more about your recruitment and those labor costs, please? Then a bit on the dividend, or future capital allocation rather. It, you know, it seems the UK labor market is very tight at the moment, how are you able to secure staff at the moment? If you are taking staff on now, I'm assuming that really you need them for summer 2023 rather than winter 2022-2023, you're gonna be paying them and training them in the interim, what kind of incremental cost is that going to be? What are you doing on retention? Is there anything that you can do to improve that? Are there any areas you've been losing staff to and things you can change?
Then on the dividend, you mentioned in your statement that you would look to pay one when market conditions and company performance were right. Well, can you elaborate on what you would look for in order to make that? I'm guessing it's not just gonna be profitability, given the investment that you're making in fleet, so there may be cashflow considerations as well.
Yeah. On the recruitment, I mean, we would be normally at this point in time in any year, really look to, you know, gear up in terms of the summer 2023. I think it's fair to say that we have a, you know, bigger ramp up now because we're then replacing the wet leases with own crew as an example. That's why it is the right thing to do the investments into the training. The courses are full. We got all the trainers available to run the programs on that. It comes back from the fact that, you know, we've been at lower levels of flying than, you know, you know, some, you know, we could have done.
That's been part of the restrictions, and we adapted the program and the capacity of flying towards that. Remember also that, you know, in last, you know, turn of year, that Christmas, New Year peak period of bookings into the summer, nothing happened. We had the Omicron by that time as well. I think it's gonna be really interesting to see what that pans out. You know, we were, you know, adapting ourself to environment where we actually didn't know how much flying we were gonna do really coming out of the January.
Now we feel pretty confident that the fact is that we're gonna, you know, see these levels coming back to us in the next quarter, and that's what we need to do. It's good to see, you know, the numbers coming in.
We launched this campaign for over 45s, which is really about, you know, challenging the stereotype that exists about this job in terms of, you know, the age profile, and we've seen applications running, you know, since the launch of this campaign here last week with up 75% on a daily basis. You know, the traffic to the career site has gone up with 3 times, 4 times. We can see that there's, you know, plenty of people who are attracted to come and join us, and we want to continue to do that because in certain pockets, in certain regions, you don't know, even as David was saying, that we are now, you know, working closely with the suppliers to see, you know, what the labor market will do to them.
If you're coming into a situation that we saw last year, that actually it started off with one competitor, you know, missing people, and then money was thrown in various things and incentives, and then, of course, that created a lot of uncertainty with the pool that one had available. This is not only up to us, this is also to make sure, you know, what happens really across the rest of the network. I think that, you know, so we can say at the moment recruitment's doing well. We're an attractive, you know, airline to work for.
We had the highest Glassdoor rating out of any travel companies, as an example, in terms of attractiveness as an employer. Those type of things helps for us. I think we haven't seen, you know, a big loss of people leaving.
We did have ourselves also introduce a summer, a bonus, a performance bonus for our cabin crew, and when that payout was done, we saw hardly anybody leave the company in comparison to what, you know, Schiphol experienced, as an example. We know that people, you know, are attracted to that. But it's something that we are absolutely focused on to make sure we deliver, partly because it's great for the customer, but because, partly also because it's very costly unless you finish and you complete your program, as you will see from the disruption number that we had in Q3. It's been industry-wide issues, and we are focusing on delivery on what we set out to do in terms of capacity.
So far, and we're watching this on a daily basis, we feel that we're in a good position. We have also multiple plans that we can, how we can recover if we think that we see drop-offs coming through the pipeline, which we're not seeing at this moment in time.
On the dividend or cash return to shareholder question. Yeah, I mean, as an entire board, we're very mindful of the importance of dividends. When we put that statement there, what we're really thinking is around the kind of medium term targets. We're still very confident we can kind of meet and then exceed those medium-term targets. We've got the mid-teen EBITDA target and the kind of low to mid-teen ROIC target. The CapEx isn't new news. We always intended to exercise the 56 remaining purchase options and purchase rights, and that's part of the modeling when we put that guidance. That's not new news.
I think to answer your question about when we'll feel the market conditions and our own financial performance is ready, it's when we're kind of evidencing delivery of those medium-term targets and exceeding those medium-term targets. Clearly, this year was a loss, so there's no dividend to be declared.
Thanks. This is Sathish from Citigroup. I got 2 questions. Firstly, on the winter, you actually talked about market stimulation that needs to be done outside of the peak travel period. Any color on that, or does it look actually across three segments, domestic, beach, and then city? You mentioned that the booking is slightly behind in Q2, around 20%. How does it actually compare within those three segments? Where are you actually seeing a strong recovery versus lag? The second one is around the ancillary normalization. Historically, H1 and H2, it's about 25% lower in H1 versus H2 ancillaries. Would you see a similar trend this year, considering the run rate that we have seen in H2?
Would we take a 25% step down as we go into H1 and then see it coming back up? Any color on that would be helpful. Thank you.
Yeah. I think in terms of that market stimulation, it's not, you know, significantly different what you would see in a normal winter season. We should remind ourselves that this is, you know, all airlines makes, you know, usually a loss in the winter season as well. We can see that the demands is there for the peak. But outside that, it gets down to the price levels and the way you can attract the demand on from that basis. Also then, you know, the campaigns we've been doing. As you would have seen, we're taking, we believe, a right but a prudent approach in terms of the capacity going in for this quarter and for the next quarter. Partly because of the over...
the environment, you know, gives some uncertainty on what the demand is gonna be outside the peak, which, you know, proven to be right. Partly because it is a loss-making season. You shouldn't, you know, be too enthusiastic throwing on capacity for the capacity's sake. Then also partly because we wanna invest in the resilience this winter coming in then to the profitable summer that is there. It would be the normal type of, you know, things that we would do on campaigns and, and prices to see where we have elasticity and we can stimulate demand to come in. Where we can't do that, you know, we are clearly focusing on the yield in order to do that.
It's that whole mix about, you know, how much load factor driven are you with the benefits you're seeing on the ancillaries versus on how much you are looking then to focus on the yield on the ticket fare, as an example, and therefore might compromise some of the load factor. I mean, we're not driven primarily by load factor. We're driven by total RPS, total contribution into the company, and that's a lot of work that's going into that.
Yeah. Add on the route mix, if it's helpful. Yeah. If I just add, from a route mix perspective, based on your question, just to give you some numbers on how we compare in terms of our overall route mix for H1 versus where we were in 2019. Our beach capacity for H1 versus 2019 is at 9.2%. We're still seeing more demand for kind of that beach. Also non-EU, which includes kind of your Turkeys, your Egypts, those sorts of destinations, that's actually up 41.2% versus H1 2019. That's on lower volumes. That only makes up around 2 million of our seats. The beach capacity that I mentioned before is around 7 million of our seats.
City is still slightly down in terms of overall capacity versus H1 2019, is down 28.1%. We're still seeing that that is taking slightly longer to recover overall. That still makes up around 18 million seats. It's still a large proportion of our capacity is on cities. Domestic is still slightly down as well versus H1. 2019 is down around 6.7%... 16.7%. Apologies. It's still 9.1 million seats. In terms of route mix, you'll still you'll see an increase in terms of demand still for the beach and for the non-EU, and part of that is also driven by easyJet Holidays. ...
In terms of overall mix, it's slightly down on city and domestic, but overall, those still make up a larger proportion of our overall capacity. Shall I take a bit on ancillaries? Is that helpful?
Yeah.
Well.
You go. You go.
Pass that on or pass back. Pass the bat on. I think the point on ancillaries to make is one of the things that we have introduced since 2019 is the cabin bag charge. One of the things that we do see in the winter season is more people taking short breaks. Actually that cabin bag charge, will help to improve that kinda seasonality of ancillary mix. Normally, like you say, in the summer, you've got the hold bags and everyone's taking those big trips. There's a bigger demand for that. Actually, the cabin bags will flatten some of that ancillary mix into the winter because you see more people taking city breaks, more likely to take cabin bags. We didn't have that charge pre-pandemic.
I think that will flatten some of that seasonality on ancillaries overall, which will make a difference, I think, going forward.
Okay. I mean, what are you seeing in Q1 and how does that shape through, Q1's got the last of the annualization benefit because of the timings that we introduced some final phase two and threes in last year. To Sophie's point, there is then, you know, with the cabin bags, it's really boosting winter. Then obviously people take more hold bags as you move into the summer. We'll get that. I think we'll still have that natural shape, where summer average price for ancillaries per person will be greater than winter. Other things obviously you should think about in ancillaries is In-Flight Retail. Although we've put a new proposition in place towards the end of the summer.
Unfortunately, the supply chain restrictions and the labor shortage meant that we weren't really able to fire on all cylinders there, but it's starting to come in now. In September, we saw a really good performance that was highlighted in the slide, and I think the kind of, the profit per seat, which is the final ultimate one after spend per head and it's been converted, was up 70%. We saw a very promising, that was September. We saw it again, that repeated in October. The In-Flight Retail is around GBP 0.42 per seat. Imagine, think of 100 million seats, that's what you get. You know, the target there is obviously to get that 70% lift running right through the year, and then keep working with that product to improve it.
The other thing, he doesn't like it being called ancillary, holidays is a great ancillary. Clearly, we've made the GBP 38 million from 1.1 million seats. There's nothing to constrain the growth for Gary and the team. At the moment, we're looking to exceed a 30% growth next year. I don't really see a need to be diluting the margins. When you're modeling what 30% looks like, assume we don't dilute the margins. Now, there will be more city in the mix, which is a shorter duration, but the challenge will be to compensate that with a bit of margin accretion. You know, holidays coming through, in-flight resale opportunity, which is really a 2023 year rather than 2022 year.
I think the annualization of the, of the cabin bags that work's largely done, the work then moves into fine-tuning the algorithms and dynamic pricing and total basket optimization.
It's final question.
Final. Okay.
Because of the time.
Thanks. Gerald Khoo from Liberum. Three, if I can. Firstly, on holidays, you talked about how the GBP 100 million target is based on the UK as the sole source market. Could you size the other source markets opportunities? Should we be thinking of, shall we say, the profit per customer being any different in other source markets? Secondly, I think earlier in the year, you had an issue with elevated absence rates. What's happened to those? Have they returned to pre-pandemic levels at all? If not, you know, where are they? On staff turnover, I was wondering whether you would give us a number in terms of the run rate and how that compares with pre-pandemic, please. Thanks.
I'll do the two on absence and staff turnover, and Gary, you can fill in on the holidays part as well. Absence rate has normalized. We've come back to the levels of that what we usually are at, around 7% as well. You know, we should remind ourselves also that we did, you know, saw, you know, big surges of COVID taking place at certain points in time and which led to absence rates as we disclosed at that time, coming up to some 20%. What we've been doing in terms of looking at the resilience needed now, we are going back to look at the same level of kind of resilience that we had in 2019 and then adding on to that to some extent.
At the same time, wanting to be cost-efficient in the way we utilize, you know, the crew. I think that we are working a lot with the data available to ourselves in order to make sure we do that. On the staff turnover, we think we're in a good place. Like I said, we haven't seen any, you know, big attritions coming through, you know, on crew or for that matter, or also anything different that, you know, the whole of the industry and outside this industry is seeing in general from an M&A population. We don't struggle to recruit top talent and, you know, top talent also, you know, are quite keen to stay on to where we are. It's something you don't...
You're never you know, complacent about. You need to make sure that you continue to be attractive in what you do, and we monitor this on a daily basis. Holidays?
Yeah.
Yeah.
Yeah, on holidays, the GBP 100 million would say is based on really the UK, predominantly on the UK. I think how to think about the opportunity is at the moment, we've got the beach and the city offering is very similar when you go through the book flow. We've got a huge opportunity, I think, on city, where we're seeing kind of enormous demand growth. I mean, we're over 150% for this year versus last year in terms of holidays demand, so in the city. We're looking to change that book flow for customers and really develop a very specific holidays offering within cities. That should really drive some of that volume and margin growth.
There's also opportunities on different products, on ski, on villas, which we're looking at, and also in yield management, which we've not really done a great deal of work on. We've launched the yield management platform, and we're gathering a lot of the learnings now where we're going to automated pricing from next year. There's huge opportunities as we see it within the UK, and that's where the main focus will be. In terms of launching into other markets, we will launch next year into other markets. I think, yes, you can think of it on a per person profit basis, the same as the UK.
The only difference may be we might need to do some more marketing outside of the U.K. just to establish the holidays business there and get the brand known for holidays as well as airline outside the U.K.
It's fair to say that the big opportunity still lies to continue to grow in the UK, because of the network and strength of the brand.
Okay.
Yeah. Okay. Listen, I just wanted to say once again, thank you very much for coming here today as well, and everybody's listening in to this as well. Like I said, what I wanted to do here was, you know, talk about the year, you know, demonstrating also that the things that we've said we wanted to do are starting to deliver. It is a real transformation when you're looking at the changes we've done to the network, the revenue capabilities that we demonstrate as well, and also the upgauging on the cost and efficiency we will get out of that going forward. Clearly we have targets out there, mid-teen EBITDAR targets.
You know, let's just be clear about that. You know, myself and everyone in the, you know, my colleagues, we wanna meet them and exceed them. We wanna go beyond that.
That is not our ambition to stay at this level. We wanna get ourselves into a position where we can say, "Yeah, tick the box on that, now we're moving forward because we're gonna see that happen." We need some circuit in the market, clearly the actions we are taking is taking us along that line. Once again, thank you so much for taking the time, thank you also for the questions as well. Thank you.
Thank you.