Thank you so much for joining us here today as well. Everybody's in the room. I think we have more people than usual. You're all very welcome and everybody who's joining in also on the stream here to discuss easyJet's results for the first half in 2023. We're gonna do as we usually do, we're gonna take you through the presentation, and then we're gonna leave plenty of time also for questions that you may have as well. I'm not doing this by myself.
I have the eminent assistance of the company's CFO, Kenton Jarvis, who's here as well. Also, I think we got full house also on my executive team, David Morgan, who is the COO, Sophie Dekkers, who's our Chief Commercial Officer, Jane Storm, who is our HRD, Thomas Haagensen, who is the Country and Markets Director, Garry Wilson, CEO of easyJet holidays as well, Rebecca Mills, who's the General Counsel, and Robert Birge, who is our Chief Customer and Marketing Officer, is here on the front row as well. Really take the opportunity also in the Q&A, and I think we will hand over to some questions also, so you can hear directly for them as well about, you know, specific areas.
Before we go in and dive into the presentation, I just wanna make a couple of introductory remarks that I think, you know, kind of summarizes some of the headlines that we're gonna discuss today. You know, one is the winter results. Whilst it is GBP 134 million improvement versus last year, we regard the winter as a big and huge opportunity to significantly reduce the losses and ultimately come into the profits in the winter seasons we have ahead of ourself. That is, you know, where we are spending quite a lot of time on to focus and plan right now. In this winter performance that we've just had right now, we've had a number of one-offs in there that has been partly related also into the increased investment we've been doing in terms of resilience.
It's really, really, you know, good to see, and it's evident in now that that investment is actually starting to pay off and has paid off over the winter. We're looking through, and you can see this on the Cirium data here, when you're looking through punctuality here in the UK as an example, you know, we are the most punctual airline in the UK among our top competitors at the airports that we operate from. We have a similar positions amongst the top competitors at the number one and number two positions on punctuality really across the network on the core markets we have. That is good because we were quite determined, as you would expect from last summer, with the challenges that the whole of the industry had, that we really wanted to deliver a great customer experience.
Even when we had challenges, external challenges, we've been able to mitigate that by the investment that we have made on that. That has also then led that I think we have increased confidence in customers to book with ourselves, and we're seeing also that people now prioritize holidays and travel in a different way than they did prior to the pandemic, which is coming through in the, what we're seeing for the summer. We're gonna talk more about that as well, but I think easyJet is uniquely positioned right now to also capture the demand that we are seeing since a lot of people also, because of the cost of living challenges, gravitate towards value more than ever before, which is really the trademark of where easyJet is at this moment. Let's go on to the first slide in here as well.
You know the strategic priorities for the company. We talked to you about this before as well, but I just wanna pull out some of the key things within these priorities just to give you a little bit of sense of what we have said to you earlier that we wanted to deliver, we are now delivering, and the rewards are coming through, and then we have more to go at. The changes we've done in the network, as an example, where we have now reallocated over 50 aircraft within the network, is probably the best demonstrated in terms of what it can give us is when you're looking at Berlin. We've seen that we've had a, you know, about 190% performance improvement when we're looking at the contribution per block hour.
It's gonna reach, we expect this year, about average about where the network stand. That is a massive change from something that was, you know, heavily loss-making for us before the pandemic. We're seeing also the step change we've been doing within the revenue and within Sophie's department. This is partly around the ancillaries, where we now have over 10 GBP per passenger in ancillary spend that we didn't have before the pandemic, and it hasn't diluted the ticket yields. We come on and talk about that, and we'll tell you what's ahead of us in the more opportunities to come within that area. easyJet holidays is, I mean, it's delivering exceptionally well.
We announced this morning as well that we now expect this part of the business to deliver over GBP 80 million of PBT to the company this year. There's lots more to go at. We're also announcing the first market now outside the UK this morning with Switzerland for departures in 2024. When you look at ease and reliability as well, and the investments we've been doing in there as well, we believe that this has been essentially, you know, a critical part when people are choosing what company to fly and what company to travel with. Not only does it give us also then a better customer experience with the investment we've been doing, but it also reduces costs by the disruption that we have seen in previous years.
We have a massive focus to do more in this area as well, and we'll talk about that in the presentation. We can now say with confidence that we are being able and have been able now to get ourselves in a position where we're doing 1,700 flights a day. I mean, that's 275,000 customers per day on a normal day, which is not far off where we would be in Q4, and we're delivering them with hardly any cancellations on the day. Like I said, in number 1 position when it comes to punctuality versus competitors from the airports we fly from. The cost, we've been doing a lot of actions on the cost to mitigate the inflation, inflationary pressures we're seeing.
We're looking for this H2 that we're in right now, this half, that we're going to deliver headline cost ex-fuel to be broadly flat, which we think is a good performance, and that gives you an idea how we're thinking about the cost going forward as well. If you take all that into consideration, the strong demand we're seeing, people's changed views on travel and how they prioritize that together with the actions that we have taken, what we talked to you about, that we're now starting to see delivery coming through as we're getting capacity back into the schedule, means that we expect to accelerate the delivery of the medium-term target that we set out to you at time of the rights issue in 2021.
We're going to do a little bit more deep dives on that later in the presentation, but I'll hand over now to Kenton to talk more the numbers through the half we've been through.
Thank you.
Thank you.
Welcome, everybody. We're gonna start on slide four. Thank you very much. Starting here with our key performance indicators for H1. Total capacity was up 25% versus last year to 37.9 million seats, and passengers increased 41% to 33.1 million. Our load factor improved by 10 percentage points, mainly driven by the low levels of demand last year as travel restrictions were in place to reduce the spread of the Omicron variant. Average sector length increased 5% year-on-year or 12% when compared to H1 2019. This is due to the network reallocations that we've made and an increase in the longer leisure flows where demand is proving to be very strong. Airline RPS increased 40% to GBP 66.46, reflecting strong ticket and ancillary yields coupled with increased load factors.
Airline headline cost per seat ex-fuel was up 7%, driven by the increased sector length and the load factor growth alongside inflationary pressures across the whole industry, offset by capacity restoration. The favorable movement in per seat revenue has improved our airline EBITDA per seat by 69%, reducing the loss to GBP 2.12. Airline headline loss before tax per seat reduced 38% to GBP 11.12. easyJet holidays has continued its rapid growth in H1, carrying 0.6 million customers. That's three times last year's level. This resulted in the delivery of a GBP 10 million profit in the first half. Wonderful. If we move to the income statement on slide 5.
Total revenue increased to just under GBP 2.7 billion during the first half, broken down into GBP 1.7 billion from passenger revenue, GBP 0.8 billion from ancillary revenue, and GBP 0.2 billion of revenue contribution from holidays. Our headline EBITDA airline costs, excluding fuel, increased 42% to just over GBP 1.8 billion. I'll provide more detail on our cost per seat drivers in a moment. Fuel costs increased 114% to GBP 773 million as capacity increased year-on-year and fuel prices rose. The effective US dollar price per metric ton of fuel increased 44% year-on-year. This has been compounded by the strengthening US dollar exchange rate, resulting in the sterling cost of fuel per metric ton increasing 59% year-on-year.
easyJet holidays EBITDA costs were GBP 161 million, and that's a lower increase compared to the revenue, which reflects a strong operational gearing of this business. I provide a further breakdown of easyJet holidays costs in the appendix. The group headline EBITDA loss of GBP 69 million is a 67% improvement on the prior year. Clearly, we've got an ambition to generate positive EBITDA even in the winter months. Airline depreciation, amortization, and dry leasing costs increased 16% year-on-year. This is a result of increased flying hours and a loss on the discounting of our maintenance provision due to a decrease in the U.S. five- and ten-year interest rates.
As a result, easyJet has delivered a headline loss before interest and tax of GBP 392 million, compared to the GBP 486 million loss in the prior year. Group net interest costs and other finance costs charges have decreased sorry, 25% during the first half. easyJet benefits from rising interest rates as the majority of our debt is fixed, and we maintain floating rate cash balances as part of our liquidity policy. easyJet also repaid a EUR 500 million bond in February. We recorded a GBP 27 million non-cash, non-operating foreign exchange gain in the first half that results from the retranslation of foreign currency-denominated monetary assets and liabilities that we hold on the balance sheet.
Non-headline items resulted in a small loss of GBP 4 million, primarily due to a non-cash disposal arising from the final return of Berlin slots following its right-sizing. This has resulted in a total group loss before tax of GBP 415 million for the half. Now moving on to our revenue per seat slide. Total revenue per seat increased by 37% at constant currency. The underlying passenger RPS increase of GBP 13.06 is largely driven by the impact of easyJet's continued network optimization and the increase in load factor during the current period.
Our ancillary revenue per seat increased GBP 4.77 as a result of our step change ancillary offering, combined with the increase in load factor compared to last year. If we take a moment to look at the left-hand side of this chart, and at the yields we achieved in the period, you can see that total yields have been strong with a 23% uplift year-on-year, which is 35% above H1 2019. This demonstrates the strength of the primary slot-constrained network and the step-changed ancillary offering. Let's have a look at costs and the cost per seat bridge on this slide 7. As you can see on the slide, the airline headline cost per seat at a constant currency, and obviously before fuel increased 5% compared to last year.
Taking into account the impact of average sector length also increasing 5%, our CASK ex-fuel development at a constant currency was flat year-over-year in H1. I expect the average sector length in H2 to be broadly flat year-over-year to be in line with last summer. The headline cost per seat ex-fuel should also be flat through H2 when compared to last year. Airport and ground handling charges per seat increased by 19% or GBP 3.04 as a result of improved load factors impacting airport and security charges because they're levered on a per passenger, not on a per seat flown. This accounted for about 55% of the increase or GBP 1.67. Alongside that load factor improvement, there's been inflationary cost pressure, especially when looking at the slot-constrained and regulated airports.
These airports account for around 80% of easyJet's flying, with contracts either linked to CPI or RPI inflation rates. As we move into the second half, the load factor income impact will become less material, as we'll not see the same 10 percentage point gains against last year's H2 load factor because that was already at 90%. Navigation costs increased by, sorry, 58 pence following an increase in the calendar year EUROCONTROL rates in both January 2022 and January 2023. The longer sector length has also driven an increase in navigation charges, which has clearly been more than offset with our RPS increase. EUROCONTROL rate increases in January 2023 will continue to impact on H2 year-on-year.
Crew cost per seat increased by GBP 0.41 or 4%, primarily due to labor deals being agreed and the early recruitment ahead of the summer's ramp-up to flying to ensure resilience was built into the system. This is partially offset by the fixed payroll costs being spread over higher flying capacity. I see resilience in the labor inflationary environment being partially offset by the capacity ramp up this summer as well in a similar extent. Selling and marketing costs have increased by GBP 0.25 as we return to more normalized levels of marketing spend. This spend has helped drive our strong summer forward booking position, but also results in an increase in the merchant fees charged in the period. Maintenance cost per seat decreased GBP 0.72 or 14%.
This was driven by the fixed elements of our maintenance costs being spread over increased capacity in the period, whilst also seeing a reduction in our repair costs, driven by the insourcing of line maintenance at Berlin. Going into the second half of the year, I expect maintenance cost per seat to increase year-on-year, driven by inflation and an increase in our operational fleet. There are no wet lease aircraft planned in H2, compared to the 15 which operated in the fleet last summer. This will result in a reduction within other costs, but maintenance costs will increase because capacity moves onto our own metal. Ownership costs decreased by GBP 1.52 year-on-year. This favorable variance has been driven by fixed costs being spread over a higher capacity. I provided more detail on our expectation for depreciation costs in the appendix in this slide deck.
Other cost per seat increased GBP 0.66 due to general wage inflation and a higher number of disruption events compared to last year when the volumes were very low. This was partially offset by a true-up in our disruption provision after adjusting for the current data on claim rates. I see other costs reducing year-on-year as we move into H2, as there are no wet lease aircraft in the fleet, and we also expect a reduction in disruption costs coming from our investment in resilience. Fuel increased by 55% or GBP 6.60 at constant currency. This movement is driven by the effective price of fuel being $860 per ton, compared to $599 in the prior year.
The bar on the right of the chart illustrates the net loss from foreign exchange and balance sheet valuation movements in the year of GBP 2.77. After taking all of these factors into account, the net headline cost per seat for the year was GBP 77. Sorry, for the half was GBP 77.58. Let's move on to slide 8 and our hedging position. easyJet continues to forward hedge our fuel and foreign exchange positions to help manage our exposure to market movements, which were particularly volatile through the period. We're currently 75% hedged for fuel for the second half of this financial year at a rate of $885 a metric ton.
For the first half of the next financial year, we have hedged 52% of fuel at a price of $868 per metric ton. Our fuel hedging is supported by US dollar hedging as set out on the table of that slide, which is helping to secure cost certainty for future periods that we currently have on sale. US dollar lease payments continue to be fully hedged for the next three years at a very favorable rate of $1.30. Our CapEx requirements are hedged for the next 12 months at the relevant underlying currency. We also manage our exposure to market prices on carbon. We're currently 96% covered for the calendar year 2023, with an effective price of EUR 41 per metric ton. We move on to the cash flow.
During the first half, our cash position, including money market deposits, reduced by GBP 154 million, taking our cash and money market deposit balance to just under GBP 3.5 billion as at the 31st of March. The movements resulted from a GBP 372 million outflow from financing activities, with the repayment of a EUR 500 million bond in February. This was partially offset by GBP 61 million of proceeds from six A319 aircraft we completed the sale and leaseback transactions on. In October 2023, we have a EUR 500 million bond maturity. We retain flexibility to be able to pay this down through cash if we choose to, and I'll continue to monitor the bond market as we move closer to this maturity date.
Our net outflow from financing activities was offset by our positive cash generation from operations in the first half of the year of GBP 375 million. As you can see on the chart, this positive cash movement is mainly as a result of forward bookings generating GBP 1.3 billion as we saw a more normal turn of year sales period. The positive cash generation benefited from the continued increase in capacity compared to last year, alongside pricing strength and the growth of easyJet holidays. This inflow offsets the other working capital movements as we obviously pay for the flying completed in Q4 of the previous financial year and the first quarter of this year. Alongside this, we took delivery of five new A320neo family aircraft, which were all taken into ownership through cash purchases.
After other movements in FX, we held cash and money market deposits of just under GBP 3.5 billion at the end of March, which underpins easyJet's excellent liquidity position and cash position. This contributed to an overall liquidity position of GBP 4.5 billion, which has headroom of GBP 1.6 billion to our stated liquidity policy, which is to cover unearned revenue plus GBP 500 million. This cash and liquidity position gives us flexibility as we move forward and provides easyJet with a number of options. We'll look to deleverage further, something I'll be reviewing as we move closer to the October bond maturity. If we do redeem that second euro bond, that will be EUR 1 billion of debt retired in the calendar year. We'll further strengthen the balance sheet with new aircraft being taken straight into ownership.
We'll also look to build liquidity reserves ahead of our ramp-up in aircraft deliveries coming in the next few years as we renew the fleet. An improved financial strength will also allow easyJet to take advantage of the commercial opportunities as they present themselves. We, of course, remain mindful of the importance of capital returns to our shareholders, so we'll review our position as we progress through the summer. The timing and quantum of these returns is something for the board to consider at the year-end. We'll want to make sure, and although when we reintroduce dividends, we'll want to make sure that the policy is a sustainable one, and therefore it will be a measured but meaningful level. Today, we remain focused on operational delivery to ensure a strong summer performance on deleveraging and on taking aircraft into ownership.
On slide 10, we can see the balance sheet, which continues to be rated one of the strongest in the sector. We've seen a 597 million GBP decrease in our derivative financial instruments in the year as a result of the reduction in the market price of jet fuel and a softening US dollar compared to March 2022. Our unearned revenue and trade and other payables positions have both increased from the prior year as a result of increased flying in the year and forward bookings coming through with strong pricing. Other assets have gone up 564 million GBP, driven by a greater number of ETS assets held at the end of March and also the further build of our deferred tax asset position. The calendar year 2022 ETS assets were surrendered in April.
At the 31st of March, we had net debt of GBP 156 million, which comprised of cash and cash equivalents of GBP 3.5 billion, borrowings of GBP 2.7 billion, and GBP 1 billion of kind of IFRS 16 lease liabilities, but obviously those are more BAU. Now if we move to our fleet, and just to explain again how the fleet graph works. The top dotted line of this chart illustrates the current maximum contractual arrangements with Airbus, as with our current lessors. The lower gray line represents the contractual minimum fleet size. In addition to the current 64 neo aircraft we have in our fleet, we have an agreed order book consisting of 163 firm orders of A320neo family aircraft.
This order book is driving our upgauging opportunity as our mix of A319s will be phased out as the order book comes through. This is an opportunity that's ahead of us as we are set to benefit from the increase in seats alongside the significant sustainability benefits and fuel efficiency that the new neo aircraft bring. An example is obviously that the A320neo burns less fuel than an A319 when it flies but has 19% more seats. It means the fuel burn per seat is obviously vastly improved. Our current average seat gauge is 179 seats across the fleet. This will move to above 190 when our upgauging journey is complete. Going forward, we expect our gross CapEx over the next three years to increase in line with the delivery of aircraft we have scheduled.
All of the deliveries that we'll bring in during the 2023 financial year will be funded through cash and brought into ownership. We've taken 5 aircraft into ownership to date, with 3 aircraft still to be delivered. It's been widely publicized that both the aircraft OEMs have production difficulties and challenges. The Airbus delays formally notified to us have been reflected in this fleet slide, and we remain in constant, and I would say constructive dialogue with Airbus to help protect these easyJet positions. For clarity, the '23 and '24 positions are those already notified, including delays. I should make it clear that the CapEx in the chart is the gross CapEx position and does not take into account any future potential sale and leaseback proceeds.
We're looking to fund our gross CapEx spend through free cash flow generation, existing cash, debt, or sale and leasebacks. It's also worth noting that we'll continue to manage the residual value of our aircraft by completing sale and leaseback transactions over the older aircraft in the fleet as part of our risk management. Just as we completed the 6 sale and leaseback transactions in the first half, which generated GBP 61 million. Currently, 55% of the total fleet is owned. However, when we're looking at the neo-ownership, we're at 72%, and this is what I'm focused on, as this is where the value in the fleet sits. I'll now hand back to Johan.
Thank you very much for that. We're gonna do a deep dive into these four strategic priorities of the companies. I come back to this as well because I think what's so great about this, that it gives us absolute clarity about the strategic directions and where do we invest our focus in improving the overall results of this company. We have identified the opportunities, and we have more to come within these areas. If you go on to the next slide to talk about the network as well. Just to reiterate what you already know, but it might be worthwhile doing as well. easyJet is Europe's largest airline from the primary airport.
There's over 300 million people that live within 1 hour's drive from an easyJet airport. We think that we are uniquely positioned to capture now the tailwinds that we see among the demand in the European consumer. We've done a radical reallocation of aircraft since the start of the pandemic. Over 50 aircraft has been moved within the network. That is gonna deliver us some great significant improvements going forward. One of the things that we see that is working especially really well for us is that when we have presence on routes and the ability we have to make those routes more dense, to thicken those routes up, to add capacity on markets where we are already onto. We can do that in a number of ways, switching aircraft types and in some cases also add aircraft.
One example is what we're seeing into the Greek islands, where we've been growing since the pandemic with over 9 aircraft. That's a 65% increase in the capacity with no dilution to the returns. I think that's just a great evidence and a testament, you know, how this thing's working and why it is so attractive for us with the strategy we have to focus on Europe's primary airport that we know are getting more and more constrained, and we already have those positions. Those positions have been built up, as you know, over since, you know, this company's, you know, was really founded, because this has always been part of that model.
We have another example in Portugal, where we added in total, as you will see on the chart also, 11 aircraft since the start of the pandemic, where we're taking now the number 2 positions in Porto. You know that together with what we've already done in Lisbon. We now have, you know, two majorly heavily constrained airports where we've been able to grow our presence in there. Those type of things are almost like once in a lifetime opportunity when you come over these positions, like Lisbon as an example. We're launching Birmingham for summer 2024. We've been operating Birmingham in and out of that airport since really 2007. We've had a market share, you know, without the additional aircraft we're putting in there, around 9%.
With what we're now doing for next summer, we're gonna be up at about 16%-17% in market share as well. That market lends itself exceptionally well for the network that we have in there. It will be also very well supported by what we're doing within easyJet holidays. It's an example of, you know, where those 50 aircraft has been moved around. 11 gone into Portugal, 11 gone into the U.K. We've seen 11 aircraft also being then deployed into the seasonal basis, which gives us more flexibility and a lower cost base that we can operate to the primary airport from. We also are not as dependent on sending all of this into one place, so we can change that depending on where the demand sits as well.
With the big change of Berlin, we see that this has really transformed the company in the way the network looks like. I keep going on about the Berlin, the importance of that, I think it's important for you to just remember about Berlin and what Berlin was and what it is for us right now. This was an operation that cost company in operation losses over GBP 100 million in 2018. That number, over GBP 100 million, was repeated again in 2019. That was in our overall results in those years.
When we're now seeing, with the changes we've done, that this is coming back up to the average network contribution per block hour that we expect it to be, it's gonna have a significant, you know, change to our overall performance and results as well. We will look to continue to change the network according to where we see we have demand in order to also then reduce down the performance that we have. We have a lot of work going forward also where we are monitoring this on a very detailed level as well. If you're looking at the transformation of the revenue at the next slide as well. We talked about the step change in the ancillaries as well.
You know, that 10.65 GBP that we now have per passenger, the difference really from 2019 to where we are expecting to be this year, that's 1 billion GBP. That's 1 billion GBP that this company didn't have before with, you know, really no cost attached to it because it fits so much into the products that we've been offering from the bag point of view, from the merchandising that we also do as well. Some examples of that merchandising would be things like we've introduced bundles that is now available also on the app, improved seat maps as well, so we're making it easier for customer to purchase the on seaters that we have. We do much more now timely and accurate and more effective reminders to customers on how they can book this.
This is already something that we have within our systems, and there's more to go on that. It's now been at that 30% now, you know, 30% of 2021 and 29% of 2022, and 30%, you know, where we are right now for this year. We don't think that there's like a limit to this at all. You know, we think that there's more to come as we're introducing more products. One example is the in-flight retail. With the change in the model we've done there, where we see higher spend per passenger, we see greater margin because we are now working directly with the suppliers, and we get better deals than having a middle party in between, and we also see better conversion.
That means that we don't put this at a limit to say we always now think it's gonna be, you know, 30%. You know, that could well go up as well. Also you can say that there's one sort of thinking that this will now continue to grow in line with the ticket yield. I think uniquely, almost uniquely, because I haven't seen that with other airlines, that we managed to add this, and we managed to get this without diluting the ticket yield, which I think is pretty extraordinary. There's more things to come on this as well. We have the AirFi with the closed loop Wi-Fi that we introduced, and on board that's done. We said we're gonna do that. That's done across the fleet right now.
That means that we're gonna be able to then also to unlock the fact that you can pre-order to the seat here before the summer. Also for next summer, we're gonna be able to pre-order duty-free and high-value items as well, and that is yet things, opportunities to come for us within this area. If you move on to the next slide, talk about easyJet holidays as well. Look, this is a, you know, part of the company that is just performing so exceptionally well. It is a relatively simple idea executed phenomenally well with Garry and his team. You know, you're seeing a number of stats up there as well.
We're confirming today that we believe that this is gonna make, you know, in excess of GBP 80 million of profit PBT to this company that we didn't have before as well. It's uniquely positioned. I would say that, and I was asked about it, we talked about it here the other day, that look, you know, is this taking share from, you know, traditional tour operators or from OTAs? You know, it's really, first of all, it's building upon the natural flow that we have coming into easyJet overall. We are taking share from tour operators. We are taking share from OTAs. It's really a unique model in itself because it's built on us being Europe's largest airline into leisure and beach destinations. It's built on the fact that we are already one of the most visited travel website because of the airline.
Which means that if you're looking at some of these, you know, the stats that are in here, they're all quite impressive. You know, it's a 60% growth. As we stand right now, 80% of the program is sold. Customer satisfaction of 87% is pretty unheard of. Look at that one, the 88% of direct bookings that's coming through unpaid channels. There is no one, there is nobody out there who would see anything similar to that, which means that the cost effectiveness and the cost base that we have is simply unique. Simply unique. It's a low-risk model. There's really basically determination of us and what we want to do on the variable cost that we have to take into consideration.
When we're now launching Switzerland for departures in 2024, it's a multicurrency technology platform that allows us to do that, and the cost that will be attached to that will be the variable cost. It builds really upon the positions of the leisure flows that we have across our network. There's about 6 million, you know, flows that we have in Switzerland alone. That addressable market is just over 1 million customers. Which you say in the UK would be 30 million, so the big price is still here in the UK. In the UK, as an example, we have, you know, 5% of the market. The market leader would have 15% of the market. That only still represents those 5%, 4% of easyJet's, you know, capacity on a seat basis.
You can see that there's really no constraint in here on how this big this can become. There's no reason why this one day wouldn't be, you know, the biggest in the UK. There are also more areas, and there are more countries that will follow on this calendar year from what we're doing in Switzerland as well. It's a low-risk proposition with basically all variable costs in there, and it builds upon something that nobody else, I would argue, can replicate. If you go on to the next slide as well, delivering ease and reliability, and we talked about the importance about this as well. We know this is important not only for ourselves from a purely financial point of view, because it costs a lot of money to run a disrupted organization and disrupted programs.
If you're looking in terms of how people view us, and this is the latest we've done on the Kantar brand study, we are firmly number one in a number of our core markets when it comes to the brand awareness, when it comes to how they view us from a value point of view. I'd just say on the value as well, we did a survey here in the UK that said now that half of the people in the UK consumer now are 45% more likely to choose a low-cost airline than before the pandemic. Which proves exactly the point which we have said historically also been led into evidence that when times are tough, people will gravitate towards value and brands they can trust. That makes us pretty uniquely positioned to capture that demand that is out there.
We are now, in terms of punctuality, number one and number two according to the Cirium data against our main competitors across the core markets we operate on. Customer satisfaction levels are back up at pre-pandemic levels. We got 78% of our passengers are returning passengers within 24 months. There's still a whole range of other things that's going to come in order to make sure that we do 2 things: improve the customer experience and reducing our cost of delivering that operations experience going forward. I think, Mike, we're going to do a day in Gatwick, you know, here in the summer that I really encourage you to go to, where David and Rob is going to host you.
You know what we are doing really behind the scenes, what we've been doing so far, and demonstrate also some of the improvements we will embark upon and we will implement in order to make the customer experience even better as well. It sits around everything from how we communicate with the customers in a timely and accurate fashion, how we are also using AI as an example. This business, this type of company lends itself so AI and generative AI as well because the millions of data points that we have that will do 2 things: improve the customer experience, reduce the cost of delivering that experience. That's where we're very much focused on as well. Like I said, I really encourage you to participate in that day at Gatwick.
We will talk more about this. You know that we were the world's first low-cost airline to present the roadmap to net zero verified by the SBTi. We are, like I say, at this moment in time, we are tracking ahead of the plan. On the other hand, we are still over there. We got some way to go before we get to the net zero by 2050. There's a lot of things happening within this area. We have secured the SAF's requirement according to the mandate that exists currently in Europe with the Kuwait Aviation for the next 5 years. We're working together with Rolls-Royce, as you know, on zero emissions technology on the hydrogen.
You know, David Morgan can tell you more about this, but I mean, the development in this area is just phenomenal. There's no doubt that hydrogen will play a role for short-haul aviation here from 2035 and towards the end of the roadmap towards the net zero. No doubt about that. We unlocked tens of millions of fundings together with Rolls-Royce to do further R&D into the hydrogen as well. We also maintained our DCP score, and we improved on all the other ESG indices as well. We're really on track, and we'll continue to want to lead as an airline as we can grow more, but also decarbonize aviation as we go forward. Low-cost model, Kenton Jarvis has talked about this as well.
The headline CPS ex-fuel broadly flat for this summer we're in, this half we're in as well. That gives you an indication about the actions we've been doing in order to combat and mitigate some of the inflationary pressures that we're seeing. There's a whole range of things. We talked to you about some of these things as well. The introduction of the Descent Profile Optimisation tool that sits now really across the fleet as well. That's delivering, you know, that's we say 50 kilos per fuel flight. That's a GBP 20 million per year saving for us. The introduction with Donald, the Berlin hangar, where we do it now in-house, and the savings due per aircraft, that's about a GBP 10 million savings that we're getting. We have a number of opportunities to come.
On the right-hand side of the slide, when you're looking at what we have ahead of ourselves as well, and this is why this is really so exciting when we're looking at the focus we have to reduce the winter losses. The ability we have to restore capacity and volumes now coming back into the winter with the ancillaries that we have, that change has completed a threshold where we believe we can put on capacity and get the prices we need from the current yield environment that we're seeing gives us a very strong confidence that we can significantly do something about those winter losses, even when we're coming on to next winter as well. That leads to increased utilization, that leads to better productivity, a better efficiency in everything we're doing as well.
There's much more to come on this, as we then, you know, go through this high inflationary environment and fuel cost environment. Whilst the fuels has now gone down recently, it is something that we keep being quite relentless about. If you then come into the next slide and wrap this up with two slides before we take questions on this as well. The summer. You know, I think that there are two things that we should keep in mind. One is the sentiment on travel and holidays has changed. That's really benefiting everybody who works in this space right now. As I said, we've seen that the views of travel has changed since the pandemic.
People don't take this for granted in the way they did before the pandemic. You know, we have not only do we see it in the current trends as well, where people are saying that, you know, holiday is now firmly the number one thing people wants to do here in the UK when it comes to allocating how they allocate the discretionary spend they do. Also 45% would say they're more likely to book a low-cost airline. With the value we have by being the biggest we've ever been in the UK before, we're adding 1 million seats than we ever had, you know, than we had prior to the pandemic in the UK. We're actually the same size now as we were pre-pandemic in this quarter as well. We believe we are uniquely, you know, positioned in order to capitalize on that.
Also the question we also asked was that what about the spending next year? For all sense and purposes, you know, 9 out of 10 said that in 2024 they will keep their spending on travel and holiday as they've been doing this year. We know that those things can change, but it gives you an indication that the change in behavior and how, and how people are prioritizing this over house renovations, over eating out at restaurants, takeaway foods as well, is really a change. You take that tailwind on the demand side together with the actions that we have described, that makes us, you know, feel quite confident about where we stand. We have delivered on the volume that we said we were gonna do, 56 million for this half.
For capacity, we'll be back around the pre-pandemic level as well. With the reallocations and the changes we've done in Berlin, which is so significant, Well, we're up at 108% to 2019 capacity. UK Beach is up, sits at 128% of pre-pandemic capacity as well. We've seen a lot of growth, and we want to continue to grow. We want to have, make sure that we have the right to grow so we can deliver profitable growth. We're looking to grow for next year. We're looking about a 10% increase in capacity for next year. We still have to work on various ways on how we're reallocating that.
You know, with the European consumer sentiment on travel continues to be strong, we think that we have a really, really good position to build upon. That would lead us then to what the outlook looks like. The Q3 RPS expected to be 20% on a year-on-year positive. We have the 73% that we talked about, you know, bookings for Q3, which is 1% ahead of 2022. Q4 sits at 36%, which is 3 percentage points ahead of where we are. The cost per seat as ex-fuel headline, as Kenton will say, broadly expected to be flat year-on-year. We talked about the network changes. We talked about the ancillaries. We talked about holidays as well, and also then the balance sheet strength that we have.
You take all of this into, to say that, look, this is now a company that sits really where you should be sitting at this moment in time. Changes have been done through a difficult and challenging period. Tailwind now coming in from the demand that we're seeing means that we expect to accelerate the deliveries of these targets that we set out at the time of the rights issue in 2021 as well. I'm gonna stop there, and then we're gonna start taking some questions. Thank you very much.
Thanks, Johan.
I love the idea when the arms comes up even before I have stopped the presentation. That's good.
James, unmute.
Yes. Is that on? Yes, it is. Hello. It's James Hollins from Exane BNP Paribas. A few from me, please. Acceleration of midterm targets. Maybe just spend a 2 minutes on what that means in terms of timing. You know, where you were before, where you are now, and how soon you could deliver that or these targets. Secondly, Kenton, maybe I'll push you a bit on dividends. You're sort of teasing a bit of information there, but how should we think about when they come back? You say you're underway on deleveraging. I'd say you're well underway. Also on the payout, should we be thinking about something along the lines of 50% payout we saw pre-COVID? Then the final one on costs.
Johan, I think you talked there about capacity up in full year 2024, up 10% year-on-year. If we've got H2 2023 costs flat year-on-year, should we be thinking flat again on that capacity or a bit better, a bit worse? Just how you sort of see it for full year 2024. Thank you.
Thank you, James. Yeah, let's kick off with what does accelerate midterm targets mean. I think the best thing to say is that we're, number one, we're completely focused on delivering for this summer. The stats that we showed were that Q3 is 73% sold and up 1%. We talked about a 20% RPS improvement for Q3. Last year we finished with about 88% load factor in Q3. We're currently up 1%. I would imagine that 20% RPS delivery is done with either 19% yield improvement and that 1% load factor sticking or that 1% could come back to 0 with 20% yield. That, that's the kind of thing we're looking at for Q3.
If that happens against against the same period in 2019, that would be running at about 33% up for for total yield. You saw that H1 ran up about 35% versus 2019 for total yield. What we're seeing when we look at Q4 is we're only 36% booked, and we're 3% up against last year in terms of load factor build. That actually puts us more in line with 2019 for load factor build, is we're last year Our Q4 was strong. Q3 was difficult. We know there was disruption both for ourselves and right across the sector. In Q4, a lot of that cleared up, and the booking position was strong last year, and we actually had our record EBITDA performance.
Year on year, we won't see the same relative improvement, because last year we already saw some of that gain. Therefore, against 2019, if you look at the yields, what we're seeing so far in those Q4 yields is that kind of 33% that we're seeing in Q3. That's what's coming through. That, that's the kind of color I could give on the Q4. Obviously, a lot to play for. We also gave more information on holidays. You know, before we were talking about up 60%. So we're still up kind of circa 60%. What's really pleasing, 'cause the way the business is geared, is that that means the profits will be up over 100%.
That's why we're saying over 80%, because that's the kind of gearing that we're seeing in that business 'cause it has very little in the way of fixed costs. We're not guiding for Q4, but what we are saying is with that confidence in what we're seeing in the bookings, when we set out these medium-term targets, which we did at the time of the rights issue, we were referring to medium term being 2025, 2026. Accelerating the medium term means just that, so earlier.
It means before 2025, 2026.
It means before 2025, 2026. But the ingredients are really there and with a, with a flat CPS, but I'll talk about more cost, then cost, 'cause that was your third question. What does all that mean for capital returns and for shareholder dividends? Like I said, it's something. You know, we know how important it is as a board. It's something that Johan and I will reflect on as we go through the summer. Ultimately the timing and the amount will be something that the board come together to decide on as we hit the year end. What I would stress is our kind of priorities are, let's deliver this summer. Let's remain operationally resilient. Let's get this summer delivered where we're heading.
Let's deleverage. It's lovely to have a net debt down at GBP 156 million, but we've still got GBP 3.7 billion of gross debt, although GBP 1 billion of that is IFRS leases. Let's deleverage a little bit. Let's strengthen the balance sheet by taking the neos on, and let's build some resilience for the fact that we ramp up in terms of the delivery. You know, we've been talking about and we understand that we're gonna get the 8 this year. We're looking at 18 next year, and then we move into the 20s. We wanna make sure we've got the money in place for that and obviously to take any opportunities.
Regarding the kind of timing, if I look at where you guys are in terms of what you've got slated for dividends, it's hardly anyone's got it slated for 2023. The vast majority of you got it slated for 2024. I'm not uncomfortable with that. Where you are with. Well, that's just my opinion. Obviously, a board's got to come together and see if they agree. Where we are in quantum, what I wanna do, and what I'm sure the board will wanna do, is have a sustainable policy when we put a policy out there. For me, that needs to be measured and that needs to be but kind of meaningful. No, I wouldn't be thinking of where we perhaps were before. Didn't answer the cost one, did I?
I'm sure someone else will ask it.
Well, why don't you answer the cost one, and then-
I'll start with the cost. Is that what you'd like, Jerry?
Well.
I'll answer the cost one and obviously get a bonus question because you didn't really ask it. We are confident about where we are in terms of our cost position against the competitors in those kind of major airports that we operate from. When I talk about 80% of our airports having CPI-RPI type of agreements or 80% of our flying coming from those constrained regulated airports, it's the same for everyone. You know, where they're regulated, it's genuinely the same for everyone. Where they're heavily slot constrained, we will have better deals because of our scale, but those deals come with a certain characteristic. Yes, good to have effectively the CASK flat in H1, although the CPS was up 7%. The sector length means we should see CPS flat.
The most important thing is kind of the measures we're doing. Johan touched on some of them in the slide. Like, if you kind of think about the big cost buckets and start with something like crew, we have finished all the pilot union negotiations right across the network, bar one. That one is kind of coming hopefully to an end shortly. We've all bar one in terms of the pilots, and the vast majority of the cabin crew negotiations have been completed. Again, the majority of those are under inflation levels. That gives us a nice position, a nice platform, because we've been busy in the background on those things. We've still got a good proportion, we've spoken this before, of captains who want to retain on their part-time flying contracts.
It is much more the captains than the first officers because it's more of a lifestyle choice. We obviously have the seasonal bases, and we're looking to expand or open seasonal bases as we go forward because we have more aircraft idle in the winter than we have aircraft in seasonal bases. When they're in a seasonal base, you don't pay for the pilots and the crew year round because they're on kind of 8/9-month contracts.
Obviously, as we startDoing, with this RPS increase on yield and with this ancillary pickup that we've got, plus the added benefit of holidays, when we look at the capacity opportunities in the winter, far more of the flying that previously was underwater and not contributing and therefore cut for the right reasons becomes profitable or becomes contributing. Therefore, we'll be looking to restore capacity, and as we restore capacity, that's where we lose out a bit on our pilot productivity with their winter hours. That's where we lose out on our aircraft utilization. That will bring productivity up for the crew community. I think those are the things we've got coming on crew.
If you take maintenance, the Birmingham hangar, the insourcing of line maintenance, because we'd already done it for a lot of the UK stations. We had it in Glasgow. We had it in Gatwick. We had it in Edinburgh. We had it in Bristol. We had our European fleet landing with DSR techniques, the Lufthansa Technik of the world. Building that hangar and starting that hangar, which started in January of this year operating. We've seen a 41% decrease in cost per aircraft visit going through that hangar. We'll be thinking about how we do our other maintenance. That's line maintenance that's now largely insource for us as a group. There's potentially other opportunities there.
We talked, you know the fleet, you know the upgauging, you know the fuel efficiencies of the fleet. A reminder, the A319s are now just sub 15 years in terms of their average age, so they are aging, and they obviously will be leaving the fleet. We'll get better utilization as we restore some of the capacity. Things like, you know, with the Descent Profile Optimisation software, that means we're not just sat waiting for the neo fleet to come along, and they have that technology. That's a retrofit to the ceo fleet, and that gives us that kind of benefit right across the ceo fleet because it gives a much better fuel efficiency. You look at things like our self-service app.
You know, developing that app, it doesn't sound like a big deal, but now in times of disruption, over 70% of our customers are self-serving on the app. That means less calls into call centers, which means less bums in call centers, selling seats because you know, obviously it's what the customer wants to do, and it's a better service. We'll keep refining that app, keep putting the functionality into people being able to self-service. Finally, we're having a big push on supplier relationship management, so we can really maximize the kind of performance and the value we get out of our suppliers. That's another big push. When you have all those things kind of lined up, then what we're seeing in H2, I'd like to see again in 2024.
That's certainly our goal to start holding costs flat. The real question.
No, no problem. Thanks. I'm Jarrod Castle from UBS. 3, 2 on holidays, 1 on CapEx. You showed the slide with CapEx, you know, upside downside case. You know, in an environment where it's difficult to get a slot for delivery, I mean, why wouldn't you be at the upside case? I guess related to that, you know, you've seen some competitors order follow-on deals beyond 28. You know, your thinking around that, I guess. Then just the 2 on holidays. You're obviously starting to source from Switzerland. I mean, how many source markets would you look at? I mean, how many do you view as attractive, I guess, when you're thinking about packaged holidays?
Then you mentioned in the UK that you could potentially, I guess, get to ATOL license levels of Jet2 and TUI. I mean, what timeframe are you thinking about in terms of closing the gap between the number one and two? Thanks.
Thank you very much. The holiday question, I'm actually gonna let Gary speak to directly as well. To hear it from the horse's mouth.
Yeah. On the source market questions, Johan mentioned that the platform has been built and the currency and all of the back office processes have been built. We can go into whatever source markets we want whenever we want at very little cost. Really for me and the team, the big prize is the UK. I don't wanna be distracting the team by going into marginal source markets at this point. We can roll in, we can test them, we can see what the appetite's like. Really the focus for me at the moment is absolutely optimizing what we can do within the UK.
Then on when can we get to the size of TUI and Jet2, really the focus is on the business model we've got, ensuring that we can continue the real focus that we've got on that business model. Not veering off track by developing loads of new products or doing things that are more niche and more peripheral and really having sustainable margins. I think that, you know, when we see the demand, when we see it coming in, there's no reason to think that we can't get to those levels, you know, in the outside the medium term, I suppose. Not certainly the next 2 years, I don't think we'll be at TUI's level.
Also while we're on holidays as well, I mean, the big opportunity we have still lies within our pricing and ancillaries, which we are, you know, still got loads of headroom to go.
I mean, that's an interesting one because once you look at those margins, although they're really, really strong and they are very strong compared to any of the competitors, and it's because of that 88%. But really in terms of the hotels, we're only scratching the surface at this point in terms of things like supplemented room types and how we can actually get customers to trade up within the hotel that they're buying, and that should all start to flow through in 2023 bookings for 2024. We should start to see that picking up a bit in technology where we have got direct access into all of the hotel's inventory, so we can really start driving into those supplemented room types.
Also things like excursions and activities or other things that you can add on as an ancillary to your holidays. We don't do any of those at the moment. Again, they're on the roadmap that we can start rolling them out too.
CapEx. The OEMs are definitely both having their challenges with supply chain. That is definitely leading to delays. I mean, on the good news, we stay in very constant contact with Airbus. We're their biggest European customer, and therefore, you know, that relationship is strong. We originally, if you look back through the presentation, thought we're gonna get 7 aircraft this year. That got notified, it got reduced to 6. However, we with working with Airbus, we were able to step into 2 production deliveries, which we've actually had delivered now and are just in work in progress to or in whip to make some minor changes. We were able to step into deliveries that were on their production line where customers moved away from.
You know, that 7 became 8 effectively, which is good. The 18 factors in the delays being scheduled for Airbus in 2024. Where am I? In 2025, 2026, that's back at our contractual position, and we'll have to see how the supply chain challenges kind of work through, and obviously we'll work collaboratively with them. Next order book. You know, Ryan and I were talking about their triggering deliveries in this fresh order book from 27 to 34. We have our 27 requirements, and we have our 28 requirements in the current order book.
When we go again, and we're bound to go again, 'cause you can't just like not, then it'll be for the 29 possibly to 34 kind of window, and obviously we'll be fully engaged and talking when the timing is right for that. On the CapEx, what I would say, when you look at those gross CapEx numbers, one, they're gross. Two, they have about GBP 300 million of capital lease costs in there. That's not. In the old school world, that's not capital. That's what your monthly lease payments are to your thing, and you split them up between capital repayments and interest and scatter them around. Really, they're kind of just lessor payments, and they sit in 'cause of the capital element of those leases sit there.
There's nothing new in that CapEx build-up. That's exactly what we were modeling when we ordered the remaining 56 options that we had with Airbus. No new news. Fully built into the model.
Hey, it's Andrew Lobbenberg from Barclays. Can I ask about winter and your aspiration to reduce the losses there? I think you're talking about profit, but I'm curious to understand, is this EBIT, EBITDA or EBITDA on a Thursday? What's that? What are you hoping for? Through the labor renegotiations as we came out of the pandemic, I think you had to hand back some of the seasonal working and give people full-time pilot contracts. You know, how well-placed are you for that? The growth in holidays, I mean, there are opportunities, but holidays is a seasonal business. How are you gonna get winter to more profitable, and at what level do you think it will come?
Just can I ask about yield management in the context of having the holiday business? That books a lot earlier, doesn't it? You're telling us that your loads are up 3 points for Q4. Hooray. To what extent is that coming from Garry's hard work, not anyone else's? To the extent that you've got fewer seats left to sell, how cleverly can you optimize the revenue?
Right. Let me do a couple of them. I'm sure I'm gonna forget something and then you fill in as well. I mean, in terms of what I did say was that I think I used the word ultimately get to profits, Andrew. Look, we have. You know, historically, I think easyJet has made profit once, you know, since the launch of this airline in 1995. We see significant opportunities to dramatically reduce the losses we had this year. With the levers we have available, you know, we're aiming to get to profit at some point. You know, it's not to say that that is the guidance where we're gonna get to for this winter.
We're always trying to, you know, maximize the performance at every point in time. I think what has changed now is that, as we're referring to in the presentation, the threshold on what we need in order to put on capacity from a yield point of view have changed with the ancillaries. You take that into account alongside with the tailwinds we see in the overall yield environment driven by strong demand. That means that we have a great opportunity to do that. By the way, Holidays is making a profit in the winter, so it's actually contributing towards, you know, the PBT in the winter because of the setup. That was the case even in this winter, and, you know, that is one, you know, level also to use.
You know, overall, this is down to the fact that we're gonna be able to restore the capacity at different levels with different yield results in there as well. On the seasonality on the pilots, you know, as Kenton has said, you know, it is the more expensive part of that community that are staying on to the seasonal contracts that we had. You're absolutely right that we have, you know, come back up into much more of the full year, you know, contractual level agreements with cabin crew and partly first officer as well. We have, you know, quite still, and not an insignificant portion of the captain, which is the higher pay grade, of course, that gives us also that benefit.
On the yield, when you said, you know, hooray, you're 3 pumps ahead, how much is there, Garry? Look, I'll take the load factor for whoever gives it to me.
Quite frankly. You know, we are here, and we can regard almost, you know, the holidays as a, you know, Gary won't be offended by this as well, but, you know, it's a super ancillary. It is a super ancillary to the company that is built upon in a very low-risk way, where we're using this very cleverly executed, you know, well by Gary and his team to actually get ahead of the booking curve. Here's one of the things that is so great about this when you're looking at this business, is that, look, if the airline and the industry and the sector will struggle more in delays, holidays will do even better because of the flight prices that's gonna come through.
You know, in the end, if the, you know, the aviation sector does well on delays in terms of the pricing, we're gonna get a benefit from that. This is why this is so, such a good complement to the overall, you know, the overall business of what we are doing. What did I miss?
Well, I'll just.
Sorry. Yeah.
I'll just add one more thing on winter losses for you, Andrew, like, the way I look at it, anyway. I think Q1 winter losses, which is October to December, is a very tangible thing to say, "Can we make a profit there?" You've got Christmas, you've got the last summer month, you've got October half term. I think then the Q2 one is a longer journey. That would be the case for all airlines.
Why don't you talk about the yield in the airline for the summer and the outlook about that?
Yeah. Sure. I was just gonna add to that in terms of the other thing that's driving the earlier load factor booking is also the route mix. If you think about our route mix versus where we were in 2019. From a route mix perspective, if you combine beach and non-EU for this summer, we're at 39% of our capacity is flying on beach and non-EU versus 32% that was flying in 2019. Obviously, that will have an earlier booking profile. In terms of, you know, selling out too early to holidays, you've got all that additional capacity. We've got loads to sell. We're not gonna have an issue there.
That profile will drive in a slightly early load factor build because of the nature of it. If you think city by comparison is at 41% for this Q4 versus 49% that we had in 2019, which would have had a slightly later booking profile. Domestics is flat, it's at 21% this year versus 20% in 2019. Your route mix will play a part in terms of your load factor build, but also then it also means we've got plenty of seats for Garry to sell, and he can sell a lot more if he wants to.
Thanks very much. Hi, guys. Conor Dwyer from Morgan Stanley. Just had 2 quick questions. One was, you highlighted growth in non-European destinations, African beaches being one of them. The question on that is that growth at all influenced by increasing cost of EU ETS, and do you expect that to kind of continue and reduce that liability? And then on the holidays business, a few years ago when you outlined the kind of profit targets and the passenger numbers that you would need to achieve that, looks to be running ahead of where that implied profitability level was per pax. I'm just interested is what is driving that? Is it pricing? Is it better than expected cost performance? Are people just staying for longer holidays than you expected? Any help on that? Perfect. Thanks.
I think when it comes to the route mix and the demand, I think that there's an overall focus on value. We know that. I think that when you're looking through, you know, what's selling at the beach and the leisure destinations as well, you might want to complement that, Sophie, as well. We see that, you know, where it delivers, you know, great value, that is where people are gravitating towards. There's no doubt that, you know, you would have some non-EU destinations who is also benefiting from that because of the value that they are delivering as well. We're looking for that to continue also across the network. We still are underrepresented in a number of routes, France to North Africa being one example as well.
We see more opportunities in Turkey. We see more opportunities in Egypt. We see more opportunities in Morocco as an example, which we are also then, you know, looking to adapt and grow in as we go out in the further years. I think that the on the holidays piece as well, I think it's a combination of what we always knew was a very effective idea implemented well together with tailwinds. You know, together with the fact that people, you know, want to go on holiday, they want to travel. I think it's just, you know, it's come together at the right time, at the right place as we have set this up as well.
As I said, we discussed this as you would expect us to do, it's almost impossible to replicate this because, if you're comparing with the OJAs, the cost of the traffic that we have is so much smaller than anybody else would be having. The network that we have, the attraction to the brand that we have and we can capitalize on means that this is not a big thing for people to consider. What's interesting, and Garry, you want to elaborate perhaps on that, is that the spend on the hotels is quite high. This is four and five-star hotels. They're utilizing the network and the value of easyJet to get there. That's absolutely fine.
There is nothing that makes them not spend, you know, what is the average now value of the booking you have.
Firstly, thank you, Andrew, for recognizing my very hard work. It's much appreciated. On those two things, I think as Johan says, our marketing spend as a percentage of revenue is tiny in comparison to others when you look at their marketing spend. That's driven by the 88%, which can drive those superior margins. I think the second one is this four and five-star hotels. 79% of what was sold so far for summer is into four and five-star hotels, and that's typically GBP 7-750 per person is our average spend on beach, and obviously four and five-star is higher than that. I think the increase is 'cause we're seeing a lot more going into that premium market than we maybe initially anticipated.
Damian?
Damian Brewer, Canaccord. Can I just come back on the winter losses again, please? I just want to be clear what the message is you're trying to say here, 'cause clearly summer is still the highest margin contribution part of the year. Is it that you see ancillaries and holidays as a way of providing more profitable parts of the existing winter capacity, or that you would see it as actually higher levels of winter capacity being operated? I just want to be clear 'cause obviously it's a very big difference in approach. Thank you.
Yeah. I think we will be able to restore volumes and capacity into the winter, so we're gonna be able to put more capacity on because the threshold of where it makes sense and where it delivers a positive contribution has changed. That gives us the opportunity to do that. Just to repeat again, the ambition here is ultimately to get onto a winter who actually makes money. We are looking now at significantly reduces the losses, you know, as much as we can, as quickly as we can. I think we're in a good position to do so. When that profit comes, I can't tell you know. We're always like in everything we do, we want to maximize the returns of what we're doing. Let's see where we get to.
Thanks. Alex Irving from Bernstein. 2 from me, please. Can I start off with corporate travel? I think historically you had a bit more of a corporate travel mix compared with the other point to point airlines in Europe. We've seen kind of a move away from city and towards beach. Could you please give us a steer on, A, remind us what your mix was in terms of volumes and revenues pre-COVID, and B, where that recovery is up to now? Second question, please, around, we've seen some problems in the sector with the geared turbofan engines across some A320, A220 operators. Is that anything that's affecting you at the moment? If so, how are you dealing with any of those engine problems, please?
I'll do the first one.
Okay.
Our corporate travel is back up at 90% of the pre-pandemic levels right now. Actually that's another thing that we see it is recovering. It's recovering slower, but it is recovering, as Sophie was alluding to, for in the summer. That means that we're expecting to have more city to city and more business travel to come on also in the this coming winter season as well. Just to remind you that we're over-representing that SME segment, which doesn't have as onerous travel restrictions and policies that some of the big large corporations have as well.
we over-represented in the segments of people actually physically needs to go somewhere, to power plants, to factories, whatever they do, which is not as easily replaceable as making that a Zoom or a Teams call. it sits at 90% of pre-pandemic level, and it is growing as we speak.
On the engines, the main issue is with the Pratt & Whitney engines. We have no Pratt & Whitney engines, so we have none of that problem. The CFM LEAP engines are performing very well.
Thanks.
Quick follow-up. 90%, is that volumes or revenue specifically?
That is in the volumes.
I have two follow-up questions. One is just going back to the unit cost. Your unit cost ex fuel right now are I think 25% above pre-pandemic levels. If 10% is coming from stage length, 15%. I think from some of your other competitors, we're hearing targets to get back to pre-pandemic levels. Whereas I think you just said you're kind of going to stay flat at these. If you could help me understand why not go back to pre-pandemic levels is the first question. Secondly, like Ryanair put out a target of getting to 30% market share in 10 years. How do you feel about that, and what are your targets?
I'll do the first one. You can do yeah, you'll do.
I'll do that.
Ryanair one.
Yeah.
Yeah. We just have a completely different network. We've taken 50 aircraft and put them somewhere else in our network. We've taken them out of the kind of Brandenburg, Schönefeld, relatively cheap airport doing domestics that didn't really work, and we've put them back into densifying, as you said, making thicker the routes in our slot-constrained primary airports where we make better yield and we make better returns. I'm very much now looking at our year-on-year development, both in terms of RPS, I'd probably look at RASK, and in terms of ASK and CPS because that's what matters.
You know, you just lose yourself going back into 2019, which is a completely different world, and if you weren't in the airline sector, I don't know any other audience that would be saying, "How do you feel about 2019?" Four years on. yeah, not something we're looking at. What we are looking at is how we can completely fight inflation in today's world on the route network that we have, and move forward. That's what we're really focusing on, how we can bring that cost down. I think you'll, what you'll see with others as they kind of start restoring some of the capacity is that year-over-year becomes more of a challenge.
No, we deliberately choose to operate from those primary airports. A lot of them are regulated, and that means you're not gonna go in there and demand 20% reductions just to kind of reduce them back to where they were in '19 'cause no one's gonna get that. If you're operating from that, you have a very competitive profit product, and we have a significant cost advantage, which I know we do have, then I think we're in a strong place to compete.
What was the market share he said he was gonna have in 30 years?
30%.
Ten, 30% to 10 year. Okay, 31. I mean, 10 years. It's... I don't know. Look, we are, you know, we feel very confident of our ability to grow and continue to be the largest airline at the primary airports. That's what we are focusing on as well. The overlap versus competitors, it's not massively different. We've seen a slight increase in the overlaps on Ryanair. You know, there are also many airports where we compete with them successfully, and I'm sure they're having a good time. We're having a good time. We can compete with any airline that is out there. We're seeing that there's been a retrenchment of Wizz, head-to-head capacity. There's been a retrenchment on some of the legacy airlines that we're competing against as well.
There's no Sophie, there's no significant difference really when you're looking at the network now for this summer as an example.
No, exactly. I mean, if you, if you look at some of the capacity that both Ryanair and Wizz are adding this summer, Ryanair are adding 10.5 million seats this summer. Wizz are adding 5.8 million seats this summer. Of the Ryanair capacity, 1.1 million is head-to-head with us. Of the Wizz capacity, actually, it's a reduction of 400,000 seats with us. Net, if you combine the two, it's 700,000 extra seats on our 56 million seats for this summer. That's 1.25%. Actually, they are growing, but they're not growing on our network, and yeah, the capacity constraints benefit us in terms of the primary airports.
As Johan said, where we do have similar market share with Ryanair at certain airports, actually, we're both profitable. We can coexist, and we don't have an issue with that.
I think we'll make this the last question. Go on. Neil.
R Control Tower. I will ask two questions. Firstly, for Sophie, and then maybe one for Garry. Sophie, on the city break side, weekend breaks, and so forth, you are growing 13% there this summer. As people have more flexibility with work, are you seeing a change in booking behavior for particularly days of the week, Monday to Friday, relative to pre-pandemic? Does that help you manage yields these days relative to pre-pandemic? Then the second question for Garry
On the procurement side with respect to rooms, obviously inflation for hotels as well as for everybody else, as you're growing so strongly, can you give us a bit of color as to how you're managing that as either deals roll over or you do new deals, and how you feel that compares to some of the competitors in the market? Thank you.
Hi, Neil. Yeah, no, you're absolutely right. In terms of the proportion that we're flying that first wave Monday and back the last wave Thursday, Friday, that has reduced slightly, and actually what we're seeing is a more blended view across the week. You're seeing more capacity on demand on Tuesdays than we ever saw before. Tuesdays used to be historically the weakest day of the week. It's still weaker than other days, but we're seeing certainly a significant improvement. From a yield management perspective, that's great because you've got higher yields across it, more seats that you're able to achieve. We're definitely seeing that. We're also seeing more flexi working, so people doing the kind of work away.
It takes it away from the Saturday to Saturday peaks that you would normally see. People will go out midweek, they'll work for three days remotely, and then they'll be on their holiday. It is certainly helping to benefit, I would say, the midweek yields and midweek flows that we'd normally see.
Thanks.
On the hotel side, if you look at the Eastern Med, first of all, they don't have the Russian or the Ukraine market. That's really driving some very keen prices there. We're actually seeing way below inflation price increases coming from there. By this point in a, in a, in a normally robust year, you would start to see the beds going off sale. That's not happening at the moment. It suggests that there's quite big gaps left by the Russian and Ukraine market in places like Greece and Turkey that's driving those keen costs. Overall, the Thomas Cook capacity, this is the first kind of last year was the first full year that it was flowing through. They're still getting to fill that capacity.
With TUI's kind of stated ambition of filling their own hotels, a lot of the third-party hoteliers that we work with are very keen to distribute the beds through us, and they understand that they need to keep those prices competitive. If I look at what we would pay versus the competition, I'm absolutely confident that we don't pay any more, that the buyers we have, you know, have got years of experience working with these hotels. We know what the others, how the others work with them. It's in the hotelier's interest to have competitive prices with us. We're not seeing a slowdown of supply, and we're not seeing increases in the cost, even being at inflation level at this point. We're confident that that will continue into next year.
Back to you, Johan.
Okay. Listen, thank you all so much for coming. Everybody who's come and joined us in this room as well and everybody who's watching on this as well. I think we are in a really strong position. There's natural tailwinds from the demand that we're seeing. We think we are uniquely positioned as well. Our absolute focus is to deliver trading through this summer, operationally keep it, you know, really, really strong. you know, we're on to planning for a significant reduction in the losses here coming forward in the winter. Thank you all very much.