Wonderful. Well, welcome everybody to easyJet's half-year presentation of the results for the 31st of March 2026. I'm joined today by our Chair, Sir Stephen Hester, and the management board here on the front row. We've already released a full presentation to the website this morning. I don't know whether you've had a chance to have a look at it, but if you haven't, I will give a brief summary now before we go through to Q&A. Starting with our performance for the H1, the underlying H1 results were consistent with expectations and were in line with what we put out in the April trading statement. There was a very limited impact from the Middle East in terms of trading, but obviously there was a fuel impact with volatile fuel pricing in the month of March, which caused a GBP 25 million additional cost.
Now, we clearly recognize that these winter losses are not where we planned them to be when we set out the 2023 targets, and it remains a focus for us to structurally improve our seasonal losses and bring them down over the course of the coming years. What's important to recognize is that we've made some important investments. So over the last three consecutive winters, we've added 24% in terms of seat capacity, which is 33% in terms of ASK flown. And that has given us a productivity benefit when it comes to crew, but importantly, it's also given us better aircraft utilization. And our aircraft utilization is now 20% higher than it was in 2023, and what that means is it's back and restored in terms of where it was pre-COVID.
The good news there is that we can now moderate our growth as we look forward to the following winter and future winters because we've restored that capacity and we've restored the utilization, and that should allow our route investments to mature. We saw 6% extra passengers come and fly with us on the airline. That was from 4% extra seats, so the load factor improved 2 percentage points to 90. easyJet holidays continued to take share, and grew by 22% when it came to passengers. The performance in the half for the airline was impacted by a number of things. The first was market oversupply on some thick beach routes.
This happened in part because most airlines pulled out of their routes into Tel Aviv, therefore redeployed them on longer leisure beach flows, that led to some market overcapacity. It was particularly the case in the London-Spain market. We also had our first winter of operations, following our investments in Italy, in Rome, Fiumicino and in Milan Linate. We're expecting that to come at a cost because you don't pay for slots in Europe, you fly remedy routes, we have experience of doing this in the past, over time, those routes mature, we fully expect those two airports in Milan and Rome to be great catchment airports and to perform very well for us. We also saw cost inflation weighted towards the H1.
We had annualized inflation from resilience measures we put in, which did work really well through the summer 2025. We carried some of that cost into the winter. We had some above-inflation airport fee increases like Schiphol, where we saw the airport fees go up 35%. We've got ongoing investment in digitalization. There's a natural cost impact of 2% extra load factor when it comes to departing passengers. We expect that to normalize as we did when we entered the winter season. Looking forward to the summer, we're expecting our CASK ex-fuel to develop a low single-digit amount. As I said, easyJet holidays continue to grow with 22% extra passengers, generating 39% extra profitability in the H1, generating GBP 61 million PBT.
One of the most satisfying things was to see the on-time performance, which has already been substantially lifted, compared with the 2023, 2024 years. We got a further one point improvement on on-time performance and customer satisfaction coming, one, from that on-time performance, but also from better service features improved by a further 2 percentage points for the airline to 84%, and 1 percentage point for easyJet holidays to 85%. Good resilient operations. If we look at the impact from the Middle East, the first thing to talk about is demand. I've obviously been watching the announcements that have been coming out and it is the same picture for all that the booking window has shortened. We're seeing strong demand. We saw it strong in the month of April. We're seeing it strong as we run through May.
As you go further out, the consumer uncertainty is meaning that people are waiting before they make that booking. You can see that if you look at the development of bookings since the April trading statement, for instance. When we did that just back in April, our Q3 was 2 percentage points in terms of deficit on load factor, that's now one. Q4 is still behind where it was last year, so that will need a certain degree of price stimulation, but at the moment, we're holding prices above the level of last year. Conversion is good, so it shows that it's really the searches that are down for that further out period, and when people come, they are buying. For jet fuel, we're well hedged. We've got 72% covered at $726 a metric ton. That hedge actually goes forward.
We've got over half of next winter covered, and again, in the 700s, we've got almost 30% of the summer after that covered, again, in the 700s. A lot of the hedging's been locked in pre-crisis, we're actively managing the hedging as we move forward. That protects not only easyJet, but more importantly, protects our customers from that real volatility. We should note that every GBP 100 of fuel on the unhedged portion is the equivalent to GBP 35 million. We have one of the best investment-grade balance sheets in European aviation, that allows us to come in and manage this conflict and the impact on fuel prices from a position of strength, meaning we can take measured and disciplined response to the action. We have GBP 4.7 billion in liquidity, which sits over GBP 1 billion above our liquidity policy.
We have a net cash position with GBP 434 million of net cash. Importantly from the aircraft ownership side, 86% of the more valuable NEOs we have in ownership. When it comes to managing the near term uncertainty, we're being quite active in our hedging. We suspended the hedging in the near two because it's extremely volatile. I think it's dropped 5% this morning. It's been bouncing between 1,600 and 1,200, therefore, we're coming in when we see the opportunity. Further out, we're continuing to layer on hedges because the curve, as you all know, is in backwardation, therefore, if you're hedging 12-18 months out, the prices aren't materially different to where they were before. We continue to build the hedge position, which is why we're 30% hedged for the summer and advance.
In March, we looked at how demand was being impacted following the outbreak of the conflict, and we reallocated about 400,000 seats from countries adjacent to the Gulf region, being Turkey, being Cyprus, being Egypt, and moved them into the Western Med or city flows or domestic flows. We also trimmed some of the capacity in April and May on some of the thicker routes because of the elevated fuel prices. When that was all swept through, that led to a 0.3% reduction of capacity in the summer. We now plan no further changes to the schedule. As you know, airlines make more than their annual profit in the 12 weeks from July, August, and September, and therefore, almost everything we fly is contribution positive. I'd say everything we fly is contribution positive, and therefore, we're not making any further change to the schedule.
Customers can book with confidence. We're not intending to do any fuel surcharges. That's the message we'll be giving. On supply itself, we have seen no issues at any of the 165 airports we fly in and out of across the U.K., Europe, North Africa. We stay in constant contact with airports, governments, fuel suppliers. What they tell us is that fuel supply is being diversified. Yes, there was a lot coming through the Straits of Hormuz and coming out of the Gulf region. Now more production is coming out of the Americas, more production is coming out of places in West Africa, like Nigeria. Norway are ramping up their production. Refineries are increasing productivity when it comes to jet fuel refining, which is probably not surprising given how expensive it is.
It's a good thing for them to be doing, and that is rebalancing the supply of jet fuel, and that's why confidence is lifting that this summer will be uninterrupted when it comes to our flying program. Okay. Looking forward, we remain very focused on the delivery of our strategy and our margin improvement to generate over GBP 1 billion in PBT. We continually take a very disciplined approach on allocation of capital. When it comes to putting new aircraft, growth aircraft into bases, we're introducing a hurdle rate of GBP 2.5 million per aircraft, and that means that these bases will already be operating at or above that level, which is the level to be in the middle of the 7-10 GBP per seat range, to put it into context.
As I said, now we've restored utilization levels to where they were pre-COVID. We are able to moderate the growth in the future winters, which allows the routes to mature. Following all the delays we've seen from the OEMs, the good news is the upgauging now moves to the near term. We're saying next year, full year 2027, the year after that, full year 2028, we expect to see GBP 250 million of P&L efficiencies come through our P&L, and that's really important because that has been one of the things moving to the right. You'll see from the fleet slide, we still expect to receive the 17 aircraft this year. We still expect to receive 30 next year and 43 afterwards, the year after. Airbus are firming up on those deliveries. Yes, they're slipping a bit, but not structurally.
They're slipping one or two months, and we're working through that to manage that in our schedule and working with Airbus on what that means. The confidence has grown, and that's why we're now going to accelerate the retirement of our A319s and get them all out of the fleet by 2029 because we're taking this more disciplined approach on capital allocation. When it comes to easyJet holidays, we're still progressing well on our new target of GBP 450 million. We're growing in the U.K. and taking market share in the U.K., and that will continue. In Europe, Garry's looking to turbocharge the growth in Europe. It's growing very well, but from a low base.
In Germany, we're signing up 500 travel agents in the Berlin catchment area connecting to their digital way they distribute products, and that's important in Germany because still about 70% of the German travel market is booked offline. That's an important distribution channel, and that'll be open to us from later this year. We're also introducing a new flight plus hotel proposition, which we'll embed in the airline book flow. At the moment, if you come into the app, you have to choose upfront whether you're doing a flight search or you're going to do a holiday search that would include city breaks. Now you can enter the airline flow, well, not yet, but that will be the case.
You'll be able to enter the airline flow, secure the flight, secure the ancillaries you need with it, and then look at the accommodation offering, and it'll be served in a place that I think is more like the way the customer wishes to search. We're bolstering the inventory we have behind that. We're increasing our hotel inventory from 8 - 13,000, which means we'll have a richer offer for the consumer. We're also going to introduce a new loyalty program from the start of next year. There's been a lot of speculation, so we thought we'd put it on the slide, but that's all you're getting. There'll be a seminar at the start of next year. It will complement the easyJet Plus program, and we expect it fully to drive engagement, drive repeat bookings, and be accretive from a margin perspective.
The aim is to leverage the group more efficiently, to continue to build on the strength of the brand, which is improving the more we improve our operations and further improve the seamless customer experience. We're also looking to move to being a leaner digital organization and have investments running through our P&L around automation, around data, and around AI, which will help improve our cost position, but also help streamline our operations. In summary, we are navigating this near-term volatility coming from the macroeconomic uncertainty from a position of strength when it comes to the balance sheet, when it comes to the hedges that we have in place for fuel. Our longer-term focus remains on executing against our strategy, and that what we're doing is we're underpinning that by a real disciplined approach to capital allocation, only putting those aircraft in the bases where they perform the best.
Our aim is to drive a tangible improvement in our margin performance, as we move away from the current position into a more normalized environment. Our medium-term ambition remains unchanged. It remains to deliver GBP 1 billion in PBT and more. We're very focused on that. I'll now move to Q&A. If you have any questions for me, for Jan, or the management team, then Adrian will organize the questions.
Good morning. It's James Hollins from BNP Paribas. Thank you for that. Three, please. First one for Jan on costs. I think it's alluded to in your snazzy video earlier in the slides. There's a doubling down on cost focused. Is there an official sort of cost program underway, making the most of a crisis, and ideally, if you could quantify what you expect from that? Second one for Garry. Just on holidays, my feedback to you from this morning was there wasn't much discussion in the MD&A around the holiday side. Maybe if we can hear from Garry on holidays bookings, and I guess specifically whether that differs much to the chat around what you're seeing on the airline side. Finally, I come back to you, Kenton, on jet fuel. Clearly, you and others seem remarkably confident in no shortages, certainly through the summer.
Maybe if we look beyond that, maybe what scenario would drive some trimming of capacity beyond the summer? Nearer term, do you think the message is now getting through from all that media scaremongering around shortages, do you think the message is now getting through to consumers that they should be fine this summer? Thank you.
All right. I think that's the first time I'm getting the first question. James, thank you very much. Normally, it's always for Kenton. Well, in terms of cost focus, I think first of all, it will never be a cost-only focus. It will be a margin focus. There are a lot of domains where we can still improve. The first one, and Kenton already alluded to it, is capital allocation. We will be much more respective in terms of where we are putting capacity, with our hurdle of GBP 2.5 million per aircraft. Which means that we will grow only there or redeploying capacity where we're not making a GBP 2.5 million profitability. That also means because very often where we're not making profit, it's because the cost position is not the most optimal. Moving from higher cost basis towards lower cost basis will improve our overall cost position.
The second one is definitely the biggest opportunity in terms of upgauging. As Kenton said, the upgauging has been a little bit delayed versus what we had initially set out in our medium-term targets. Now it's moving from a medium-term to the near term. We still have 79 A319 aircraft in our fleet. As already repeatedly said, a A319 burns 10% more fuel than a A320, and has a unit cost position, which is 24% more expensive. Just moving from a A319 to A320 will provide an important profit. We've now for the first time also quantified that, we're expecting GBP 110 million cost improvement for that in 2027, GBP 140 million in 2028 additional. That means that by 2028, it will be a GBP 250 million improvement. We've used this crisis to accelerate also that upgauging strategy.
Decision taken now to get all the A319s out of the fleet by 2029. Which means that next year, 19 aircraft, which is six more than initially planned, then moving up to 35 and then 25. They will all be gone. That's an important one. We will continue to focus also on asset productivity. Although as Kenton said, especially in the winter, aircraft utilization already went up by 20%, and back to pre-pandemic level. I think there are still further opportunities in terms of further network optimization. Although we will not be increasing stage length as much as we've done over the past winter, we will continue to increase. Just only this summer, we're increasing stage length by 3%, so we're still optimizing where we can.
We're also investing in our scheduling process with implementation of SkyMax, we will have a more efficient schedule, which will drive productivity. We're also investing quite a lot in our crew planning processes, whether it's in teams, whether it's in process, whether in systems, we will be able to plan much more accurately and much more into the detail, which will reduce the buffers we currently are having in our systems. Also that is helping. Also focusing on turn improvement. I think last time we said that in 2025, we already reduced our turn by four minutes. We're targeting a next improvement of two minutes this year, and we're performing on that. That's happening through a better coordination between our ground crew people, our cabin crew people, our cockpit people, but also digitizing the turn.
We're getting rid of all the paperwork, which improves the turn. Even doing investments like the smart stands in Gatwick. These will be AI-powered cameras, which are monitoring the turn, which are providing more accurate information about how the turn is going on. That helps you to move faster. All those elements are helping asset productivity, which is great. Focusing on aircraft ownership. Last time we told you about the aircraft buybacks. We have not any planned this year to do, but as soon as we see opportunities, being able to switch the more expensive leasing towards cheaper finance aircraft, definitely. One specific one is on Leonardo-Fiumicino. We are having, of course, the GBP 20 million loss in summer and a GBP 30 million loss this year.
Part of that loss is induced by the fact that we have a less optimal wet lease set up. We will be getting rid of that wet lease set up as of next winter. That should support. We are also investing at the moment in additional spare aircraft, spare engines, and also LLPs. All of that helps to support disruption costs. We already reduced disruption cost by GBP 50 million last year, and that remains a focus. Also, we decide to have a more moderate growth than initially foreseen. Already next winter, we'll be growing less. Next summer, we're also planning to grow less, where last year we increased our peak line of flying by 10 aircraft, approximately. Next year, we're planning to only increase by five aircraft.
That does mean that the investment cost you're doing in the winter will be lower, so that will also support. Finally, we are reinforcing our investment into digitalization and all tech investments with an objective to reduce cost, to improve customer service, and improve operational resilience. There is a whole bunch of projects which are currently ongoing, both in operational domain or commercial domain and in the general company environment. I can continue speaking on all the projects if you want.
Let's let Garry go on how you're seeing holidays.
On holidays, I think we said earlier in the year, we were expecting about a 15% growth year-on-year. Given the crisis, that will be below that, but we're confident it will be only 2% below that. We'll be probably 10%, 11%, 12% growth at least. We're seeing very strong demand coming in the lates, particularly four weeks out, and we do think that's been driven by customers just having the confidence that there'll be enough fuel for four weeks, but thinking further out. Once they gain more confidence that the summer's going to be safe from a fuel perspective, then we're very hopeful that that can lift up. When we look at that four-week demand, it's very strong year-on-year. They're pulling a lot forward.
I think that's helped by the hoteliers have reacted very quickly with pricing. They pulled the prices down in Turkey, in Egypt, in Tunisia, Morocco, Cyprus, pretty much when the crisis started. We went from a negative position in Egypt to a very strong positive position year- on- year within a matter of a couple of weeks, just as those prices come down, and we're seeing that sticking. That's looking good. I think if we look at versus the competition and how we think will play out, I think we're in a bit of a sweet spot in some ways in that if you look at the big legacy tour operators who've got fixed capacity, fixed commitments in the hotels, they'll be really focusing on trying to fill those.
Where that gives us an opportunity is that the other third-party hotels who maybe aren't getting that focus from them are pulling their prices down, and we're able to pass that on to the customer. We'll probably see a difference in mix in terms of where the customers go this year versus last year, just based on that. Certainly, when the hoteliers are reacting from a price point of view, and we're then passing that on to the customers, then we're seeing really good demand in the lates.
If that could just, in the next few weeks, start to go out from the four weeks to the six weeks or the eight weeks, I think that that would give us quite a lot of reassurance. We're confident that our position at the end of this year will be a positive one and not too far from the guidance that we gave.
The last question was around fuel supply and what it might mean going further out into the winter. I think the rising confidence for this summer is the success that the fuel suppliers have had on diversifying their sources of both oil and refining capacity, which has really stepped up in the absence of it coming from the Gulf region. Governments have played a part in that to look to contingency planning to see how they could even bolster it further. That is increasing the confidence, and you'd have heard from most of the sector that that confidence is rising for the summer. When you go beyond winter and what it means for pricing, capacity, and supply, on the supply side, let's see. The world is rebalancing.
We saw the U.K. government green-lighting potentially, unclear really on the sanctions, but potentially Russian oil being refined outside of Russia to support. Assuming the fuel supply remains uninterrupted beyond the summer because the Straits of Hormuz don't open, what we're seeing in pricing is the curve in backwardation. People are expecting that fuel will come down. It's above where it was, because now you're hitting the summer, you're inside that 12-month window. It's above where it would have been pre-crisis. As I said, we've got 53% hedged at an amazing rate of $714 a metric ton. That puts us in a good starting position. Regarding capacity, as I said, we would anyway be looking to moderate our capacity next winter. We've added 24% in seats over the last three years. We don't need to grow at that level anymore. We will be moderating the capacity.
We've seen the utilization benefits come back in. As Jan says, we will obviously look for more, but that will come through network refinement, through use of technology like SkyMax. We're also looking at the best way to optimize the network. Now cities and VFR flows are coming back, and we'll be thinking about the capacity we put on some of those thicker London-Spanish flows and looking to manage that as the routes mature. For us, at any rate, I would expect a more moderated winter, but we've given ourselves a good, strong position from a hedge. I think it will be more moderated next winter, naturally.
Morning, everyone, Joel Spungin from Panmure Gordon. Can I start with bookings? You've obviously talked about some softness in bookings, but close-in being strong. Where's the crossover point in terms of weeks before departure, and why do you think Q4 bookings are further behind than they were in the April update? I think you talked about taking aircraft deliveries into ownership this year. What are your thoughts in what you would do to finance deliveries beyond this year, please?
Okay. Well, starting with bookings, the strength in month is a rolling strength. Now we'd be starting to see the front half of June strengthening, and May remain strong, but it is really anything six, eight weeks out, you see the customer's not booking. Our conversion is strong. When they come to the website, they're converting. It's not necessarily a price thing, which is why the price is slightly above actually where they were last year in terms of yield. However, it's a rolling caution. Now, whether that's been generated by unhelpful comments from energy ministers in Europe saying there won't be any fuel by the middle of May, it's past that now, so we should have run out. There have been a lot of unhelpful comments.
I think even as a sector, we should reflect on the way we communicate because we've never had more than four weeks visibility, and communications back in March at A4E saying, "It's the middle of March. We've got the usual visibility, which means we're fine to the end of April," created headlines of, "It all runs out in May," as opposed to what was actually said, which was, "We're fine to the end of April." That hasn't helped, and I think that is in the mindset. People are booking, they're booking with strength in the lates. Is it enough to make up for the loss for bookings? Let's see. If there's any color on what you're seeing destination-wise or shape within that.
Yeah. I think what's interesting is where we initially saw a move away from the Eastern Med into the Western Med destinations, actually, that's balanced out now because hoteliers in the Eastern Med are offering really great deals, whereas the Western Med has oversupply in terms of airline seats, so actually hotel prices aren't so great. We were already seeing, and we saw it last summer, we saw quite a lot of softness from U.K.-Spain, and we talked about that, I think, at our full-year results. In terms of what's happening in the lates and to give a bit more color onto that, if we were to look specifically at May trading, as of the 23rd of February, we were 2% ahead in May in terms of load factor.
That dropped to 0.7% behind when we were at the beginning of April, and then by the 11th of May, that was only 0.2% behind. As Kenton says, we might not necessarily make it all back, but you're definitely seeing that strength in the lates. If we were to look ahead to August, we are currently 7% behind where we were in terms of bookings for August. I think that is all around confidence. People are just waiting to understand, and it's all about the fuel narrative, so it's really important that we're re-emphasizing that. In terms of route mix, it's all down to capacity in the market, really, and what's driving where people are going. We have had questions about whether we're seeing any improvement from people not flying long haul. I think not yet. We're not really seeing that coming through.
Certainly in terms of destinations and routes that are popular, it's a lot of the long leisure as well as city breaks that are coming through particularly strongly. In terms of our network mix, that actually plays in our favor. We're seeing more of a strength within Europe than we are from the U.K. In terms of our network mix for H2, 17% of our network from Europe is onto leisure, and 29% is non-leisure, so that's your cities and domestics. For U.K., our leisure is 25% and non-leisure is 29% from the U.K. We actually have quite a broad mix of routes. We're not overexposed, but we are exposed to U.K.-Spain and U.K. leisure. That is, as Kenton said, that's coming in in the lates.
It's very tight, so it comes in the last four to six weeks, and really no one's booking yet for the summer holidays. I think we'll wait to see what happens after May half-term, because normally that's an inflection point when people then come back after the half-term and start thinking about summer holidays. I think the book with confidence message is the point we keep reinforcing to give people that confidence that we plan to operate the summer schedule we currently have on sale. We don't have any intentions to cut any capacity.
Jan on aircraft?
Yep, on the aircraft financing. One, the number of aircraft we're expecting now to get delivery out in the next years are 17 this year, 30 next year, and 43 the year thereafter. We're speaking about total CapEx of GBP 1.7 billion, moving to GBP 2.3 billion and then GBP 3.3 billion. That's assuming that we're taking 100% of those aircraft into ownership. I think the positive thing about easyJet is that we have a strong balance sheet, and that does allow us different options in terms of financing. The most important one will be to finance through own cash. We have GBP 3.3 billion of cash currently on our balance sheet. That means that the first option will be to finance through own cash. The second thing is a debt capital market. We have two bonds currently. There is none of them which is maturing before 2028.
Obviously, we can have access to the bond market. Thirdly, we have last year and also this year restarted with our JOLCO financing, our Japanese operating lease with a call option. That is something new, and it's a cheap way of financing, which we probably will continue to look for in the coming years. Of course, the market is limited, but at least what we can do, we will continue to do. Currently, we have eight aircraft which have been financed through JOLCOs. Obviously, we have any asset-backed finance option, which is still available to us. Currently, 86% of our NEO fleet is owned. Total fleet is 59% owned fleet. I think we have sufficient options to be able to finance ourselves. Next to the GBP 3.3 billion cash, we also still have an RCF to our availability of $1.7 billion. Yeah.
Morning. Jaime Rowbotham from Deutsche Bank. Two from me, potentially for Sophie. In terms of the thicker routes that you chose to trim in April and May, looking at some of the scheduling data, it looked like it was Geneva to some of the Spanish destinations that was one of the most affected corridors. Does that resonate? If so, any particular reason for trimming there? Secondly, you say you won't cut anything more now for peak summer. Doesn't look like Ryanair or Wizz are cutting either. It's growth full steam ahead. Are you seeing any competitor capacity actions from maybe some of the smaller players that might mean a bit of an opportunity for easyJet in terms of market share?
Yeah. Great. In terms of Geneva is part of the mix that we did adjust for April and May. I would say what you saw in Spain was probably what you saw from most of the airports in terms of the trimming that we made. Actually, what we have been doing for Geneva is adjusting slightly some of the shorter sectors and growing more the longer leisure. We did take some capacity out of Amsterdam, out of Geneva into Paris as well, and we've redeployed that into Tangier and some of the new routes that we've launched. We are about 1.5 percentage points down in seat capacity, but we're up 1.7% in ASKs. There is route optimization. Now you'll see that in pockets across the network. We've done it also in Amsterdam, predominantly in Amsterdam, because the airport costs are so high.
Actually, you can't cover the costs on a lot of the short sectors, so we've had to reprofile a bit in Amsterdam. Geneva is seeing something similar in terms of what we've done on reprofiling around the edges there. In terms of competitor capacity, the biggest noise came out with the Lufthansa announcement of the 20,000 seats, but that was their city link operation, as you know. Actually, that doesn't really overlap with our network. That's a lot of the short German sectors. There's not a massive amount coming out. We're not seeing, as you say, Wizz and Ryanair aren't really touching their capacity. We're seeing a little bit of moderation in Volotea, but only a very small amount within France, predominantly. It's just trimming around the edges. We've not seen anything from Jet2 or Leisure either at the moment.
I do think peak summer, as Kenton said, most airlines make money in peak summer, so I think most will be reluctant to take significant amount out. I think winter will be more interesting because it is much more marginal. I think one of the interesting points to add is the DfT announced slots alleviation, potentially to go through and be approved. The slots alleviation that they have announced is that you can give back 5% of your slots before the 9th of July and have full historical slot rights on those for the summer. Beyond the 9th of July, you can then release another 5% of slots and retain your historical rights. At the moment, easyJet does not have any plans to take advantage of that, as I say, summer is where we make the money.
Interestingly, that is also going to apply for the winter, and that is where we'll be looking and running some scenarios over the coming weeks in terms of what makes sense then with different scenarios of raised fuel prices, essentially. Winter is very much BAU because we always, in early July time, look at our winter schedule based on forward bookings and based on costs, and we always make moderations to our winter capacity. The slot alleviation is a new thing. Certainly, we, and I understand other carriers won't be taking advantage of it. Some may, but certainly, we don't plan to.
Hi, it's Andrew from Barclays. Sorry, back to Sophie, I think. How on earth? Maybe not. How do we do the revenue managing in this environment when it's a game of chicken, I think, with the consumer, isn't it? You don't want to see the loads for peak summer drop too low. Down 7% sounds scary already for August. Yeah. How are you thinking about managing the rev man? Second question for Garry. I think James alluded to it in his early question, you haven't given us very much detail or KPIs on selling prices and volumes for the summer. What can you tell us about that? If you don't want to play with those.
KPIs because perhaps they're not the best. What can you tell us about your ability to defend margin in the current environment, which is perhaps more important? Then if I dare, a third question, what can you tell us about the MRO developments? Because I think your planned acquisition in Slovenia has got a legal block. I know you've done Malta, but where are you going with the MRO development there? Thank you.
Great. I'll start then. On the revenue management, I think one of the great things is we're fortunate to have our own in-house system. We've got a great core data science team that are dedicated in the revenue management team. They're able to make sure that the system is optimizing for the current scenario. Now, if you left the system alone, what it would want to do is it would see low bookings coming in. Therefore, it would want to lower the fares because that's the way the system naturally works. What we're doing is we're putting in an overlay that's not letting the system overreact to a drop in bookings. We are adjusting what we call the rate of sale. Essentially, where you see lower bookings coming in, we're not letting the system drop below certain minimum levels.
If bookings suddenly start to pick up, then it reacts more rapidly to that increase. The way we're looking at something like August is because we know the traffic isn't coming in, we don't want the system to artificially pull down the fares, we're holding the system where it is. What we are seeing is good conversion when people are looking for August. Searches for August, we were looking at it the other day, searches for August were down 15%, people aren't searching at the moment. When they come in, the bookings are converting 13% up year-on-year.
That goes to illustrate that the demand isn't there at the moment because people aren't searching, people are cautious, but actually, when they're coming in, they are booking, and therefore, there's no reason to believe that we need to drop the fares anymore. It's more about how we give people confidence to get people into the book flow in the first place. That's how we're adjusting the system, and that's how we're approaching revenue management for our Q4, is making sure that we are not letting the system overreact, and we hold the fares where they are.
The maintenance capacity. As you know, we bought our own heavy maintenance facility in Malta. We've been operating just over four bays since we got it. We're actually a very attractive employer in the area, and therefore, we've been attracting engineers, and we're now able to open a fifth and a sixth bay. We will be increasing the capacity in our own maintenance facility there. Regards future plans, I'll let Jan talk to future plans, but Slovenia was an interesting one.
Well, I think the opportunity in Adria, or in Slovenia, is, of course, an interesting one. As you were saying, we're currently waiting to be able to close that deal, given that there is, at the moment, a litigation which is ongoing, but we can't really say anything additional to it. Hopefully, that will be resolved because that will increase the number of bays that we will be able to insource, moving from the 25% currently insourced heavy bay maintenance to around 50%.
On holidays, there's such a lot of mix in what's being sold at the moment for H2, given the initial shift away in demand from Turkey, Egypt, Cyprus, and even Greece into Spain. With that, when you look at that mix, that does have a shift and a change in the margin. As a kind of cost-plus business, we will effectively take those reductions that the hoteliers are giving us. We'll put the markup on, and we'll sell through. What I can tell you is that the average selling price has come down for H2. When we look at it versus some of the traditional players, clearly, where they've got the fixed costs within the accommodation, and on the flights, they are really pulling the prices down to places like Spain. We're choosing not to go there.
We will maintain a base at which we will just not go to the kind of prices that they're going to. We are confident by the end of the year that we will grow by low double digits. We won't go backwards in profitability. We will grow in profitability, and we will certainly take market share. We're very, very happy at those kind of big KPI levels that we are ticking green boxes in that and doing very well. That's what the model's there in order to be able to react to. It can move with the demand, it can move as a cost-plus business, where the customer wants to go and where the pricing is.
Great. Thanks. It's Jarrod Castle from UBS. Three as well. On slide 12, you show the base case fleet plan. I just want to get an idea, does that incorporate the current backdrop, or are you assuming that the current geopolitical backdrop improves? If it doesn't incorporate that, what would it mean for the base case fleet plan? Could we see deferrals or groundings, et cetera, over the next two, three years, I guess? Secondly, any change in views on how you view the Middle East? Let's say again, this is behind us, or rather Middle East exposed markets going forward, I guess, over the medium term, if current situations changed your medium-term plans?
Just lastly, on loyalty. Can you give a bit of color what's changed your mind about having a loyalty program? You know, m aybe looking a little bit more like a full-service airline, and would you do anything else? Maybe an airport lounge. I take it the answer's no, but just how you've evolved in terms of loyalty thinking. Thanks.
Jan, do you want to start with the fleet question?
Yeah. I hope I understood the question well. The base fleet plan gives you a view of what a fleet will be at the end of the year. Having those 370 aircraft, for example, 2026, is a number of aircraft we are having at the end of the year. However, what we call this, I think it's the first time we called it out, the peak lines of flying, is really the number of aircraft that we have available at the peak moment, which, of course, what is driving your results. The difference between the base fleet plan and the peak lines of flying is linked to the timing of deliveries of the aircraft.
We normally always hope to have those aircraft before the summer. Because of some of the delays we have experienced with Airbus, they are also coming after the peak summer into the winter. That's the main explanation. Within that base fleet plan, but even in the peak lines of flying, we do have some flexibility. Flexibility in terms of, one, timing of deliveries of the aircraft, firstly. Secondly, also into the decision as to whether or not prolong some of the leases that we have. We have both upward and downward flexibility if we would need to.
On the other two questions, I don't think of what's happening in the Middle East as a change for long-term structure in the aviation industry. I don't see this as we will never get oil out of that region. Clearly, this will be resolved at some point. It's just as important for Iran to be having oil passing through the Straits of Hormuz as any other country. Longer term, life will go back to there being sufficient oil supply coming from everywhere, and that will drive prices down over the longer term. Will it come back to where it was? I don't know. Was that the question on the Middle East?
No, I was talking more about your network than.
We don't really go to the Middle East. No, what we're seeing is the Egyptian in particular, and anywhere around North Africa are incredibly responsive when they see demand pattern shift. There are some fantastic offers, which means having dropped in the first few weeks of the conflict by 50%, 60%, 70%, they are now performing up year- on- year with amazing offers. Very attractive five-star properties in Egypt being the equivalent of three-star properties in Spain. When people really get out their maps and realize the Suez Canal isn't part of the Straits of Hormuz, they become more relaxed. It's certainly doing really well in terms of searches, in terms of conversion, in terms of people traveling there. No, will be the short answer. No, I don't see anything in our network that would change.
The only thing we have done is when it comes to flying back to Tel Aviv, we prolonged the decision not to reenter that market to give us clarity on planning next winter. We won't be going back to Israel next winter, just for clarity. On the loyalty program, change of mind, I never thought it was a bad idea. We just didn't have one. I don't think that counts as a change of mind. We have 100 million customers. We're a very attractive airline from this marketplace.
There's a white space in the market. We know that with British Airways, it's becoming more of an elite program. Points are harder to get. They're kind of really not rewarding the frequent flyers to and from Scotland anymore. There are just opportunities in this space, and we'll reveal more about the type of program that will be. We're seeing a growing membership, anyway, for easyJet Plus customers.
Yes, good morning. Ruairi Cullinane, RBC. First question on staff unit costs up 11%. Can you break that down at all, and how should we expect that to evolve? Secondly, fuel may not be passed through to fares this summer in short haul. How do you see that playing out? Does it just come back and depend on competitor capacity, or how do you think about that? Thank you.
Do you want to start with the cost evolution?
Yeah. I will take the CASK. Well, first of all, overall, CASK increased by 5%, to be honest, not, or in line with our expectations, if you exclude the additional fuel cost linked to the Middle East crisis of GBP 25 million, also the legal provisions that we have taken for some of the historic legal cases of GBP 32 million. If you look at a CASK ex fuel, that increased by 8%, obviously higher than what we have experienced in the previous quarters and previous years. It is not what we are expecting for the rest of the year. For summer, we are expecting to come back to normality, which means in the CASK ex fuel, which will increase with a low single digit. If you look at the CASK ex fuel increase of 8%, what is the reason for that?
Partially, it is linked to the one-offs, as I explained. In the H1 of 2026, we had those extra legal provision of GBP 32 million, but also we didn't have the benefit that we had last year from the aircraft buybacks, which had a positive effect. That's not returning. Secondly, we have been investing in additional resilience in summer, which has benefited our summer performance with disruptions cost going down by GBP 50 million. That additional resilience, which is coming through additional crew, is of course, a cost that is continuing during the winter. The third element is linked to the load factor growth. As Kenton mentioned earlier, load factor grew by two percentage points. That means that everything which is passenger-related cost is increasing. Fourthly, we also had an unfavorable foreign exchange movement with the euro evolving unfavorably versus the pound.
Finally, we had, of course, the above-inflation cost increase, especially in airports like Amsterdam, where costs increased by 34%, but also the general increase in terms of wages and salary. All of that was not compensated sufficiently by the productivity increases that we've seen in terms of aircraft utilization, but also crew productivity and all the operational initiatives that we have seen. I think it will be a one-time element, this H1. For the H2, we're expecting CASK ex-fuel to go down again, in the sense that it will only increase but in the low single-digit amount.
Back to the fares question and the ability to pass on the incremental fuel costs. Fares in this summer are going to be dynamically priced the way low-cost carriers always do. It'll depend on the route, it'll depend on the demand, it'll depend on the timing of the route. At the moment, fares are slightly above where they were last year for peak season. That will be dynamic, and if competitors are looking for fares to be flat or down, then there'll be some element of that driving the market. It'll depend route by route, what the situation is. When you look further out, we're in a more inelastic period for people booking in winter. That's why we have increased the minimum fares price to start reflecting our outlook for fuel costs.
At the moment, obviously that price is sticking. People are buying o ur load factor is marginally up from where it was this time last year for winter. It really is the concern of the rolling four weeks that has created the uncertainty, and people are just leaving that decision later. We don't yet know what the fare environment will be for the likes in July, August and September.
Hi, it's Conroy Gaynor here from Bloomberg Intelligence. Just to pick up on an earlier point, what does this sort of 2H move away from the longer leisure flows towards more cities and domestic, what does it mean for your utilization, and to what extent does that actually play into your ex-fuel CASK guidance? Second one on the demand side. While I can appreciate the geopolitical concerns and concerns around jet fuel and everything are contributing to the shorter booking window, what is your general sense on the underlying demand health of the consumer, given that things like higher energy bills will no doubt hit people in the pocket?
I'll start with the last question on demand health and then look to Jan to talk about the CASK impact of some of those shorter leisure routes, although this isn't a wholesale move. On the edges we're looking at here in terms of that. In terms of the demand health, I think you've got the world before the Middle East crisis and the world after. Before, the customer was there. We were growing. We saw a 6% increase in passengers for the airline. We saw a 22% increase in passengers for holidays. We know we've put a lot of investment in that capacity, and I'd expect those to mature over time. People were definitely traveling. They were buying. Demand was robust. As we look forward, it remains very strong in the month of departure. People are traveling, and they're traveling in their masses, and searches really ramp up.
I think what's hard to gauge is what's fully behind the uncertainty. With so many factors, is it the price of petrol at the pump? Is it the rumors that fuel's not going to be there, which hopefully will start abating as more of the conversation comes out that fuel supply looks good for the summer? Is it the impact of supermarket costs? Really hard to put your finger on it. All we know is when it comes to the in-month window, people are booking, and they're booking strong. Hopefully, as these fuel concerns and supply start alleviating, at least for this summer, we'll see people coming back earlier. There has been a watch and wait approach. We haven't yet got into high season. We've still got the majority of our seats to sell for Q4. Let's wait and see.
Okay.
On the CASK impact.
Yep.
Of what you've-
Sophie you can always... You want to answer, or I can try first? You're starting. Okay. Go ahead.
I'd like to hear your answer.
Yeah.
I'll start anyway, and you can always add on the CASK bit. I think what's interesting is although we are adding cities and domestics, we're also adding long leisure, so a lot more into non-EU. On the net balance is actually our ASKs are still growing. Our seat capacity for the H2 is up 2%, but our ASKs are going to be up 3%. Oh, sorry, the ASKs are actually up 5%, but the sector length is up 3%. What you'll see in that mix is a kind of rebalancing of what you'd have as your kind of core leisure beach.
You've got some more long leisure coming in. We've got Egypt, we've got a lot more into North Africa. You're balancing that with more cities and domestics. Net-net, you're still going to see capacity growth greater than your seat growth in the market. It's a bit of a mix effect, taking a bit of remixing that leisure, and that's also on the back of easyJet holidays. Some of the success we've had there with some of that long leisure as well.
I think adding to that, first of all, growing a little bit more on cities and domestic is not necessarily a one wrong thing, because if we look at a current RASK development, we do see that cities and domestics are more resilient than currently the more leisure destinations, first of all. Secondly, I think the growth in cities and domestic is probably more focused on U.K., and more specifically on London and in winter. If you would look today at the repetition in terms of seat capacity, cities versus leisure or non-European, especially out of U.K., the amount of seats on cities has gone down in proportion.
We see that there is an opportunity to rebuild the city proposition, especially on winter out of London. That does mean that it will also drive your aircraft utilization, because currently, productivity in winter out of London is probably not the highest. That should have also a positive cost benefit.
Harry.
Morning. It's Harry Gowers from JPMorgan. The first question, I wanted to ask about the kind of market oversupply on beach routes, which you mentioned during winter, and I think maybe a little bit into summer, especially U.K. beach. Are you starting to see that kind of change in any way, whether it's summer or looking early out to winter? Is that just completely reliant on Tel Aviv or Israel reopening? I guess you could argue structurally some capacity might never go back to that kind of adjacent region. Then, just going back on the Q4, kind of holding onto the higher yields at the moment and revenue management. Is the aim at the moment to be flat on load factor year-over-year when we get there, or would you take lower loads but higher prices?
Would you be happy with the current mix once we get properly into Q4? Just final one, you do have this new GBP 250 million cost benefits number from the phasing out of the A319s over 2027 and 2028. Just to confirm, that's basically a pull forward of upgauging. It's not completely incremental to the GBP 1 billion PBT number medium-term. I guess for us kind of simple analysts, should we just add GBP 250 million to our numbers for 2027 and 2028 or not?
I'll start with the last question because it's a pretty interesting one, isn't it? I mean, the GBP 250 million is saying, if in 2028 we flew the program that we flew in 2026, say, with those 28 aircraft, that would be the cost benefit. It burns less fuel when you have a NEO flying on an A319 route. Therefore, if you had the same capacity and you remixed it with those aircraft, then the fuel savings, the pilot savings, the cabin crew savings would land through at GBP 250 million . That's the cost benefit. Clearly, if you do it on 2028's capacity, you also get the scaling benefits of having more seats on the planes, that's when the fixed costs come through as well, which is why there's a delta between cash and fixed costs.
Just to make it very clear, they are part of our medium-term targets.
Yeah.
You can't add that up additionally.
I mean, always part of the medium-term targets was the profit improvement in holidays, which is coming through. The upgauging, which has unfortunately since 2023 moved to the right and been hard to get your fingers on, what we are saying now is it is coming in the next two years, a large chunk of that will come. That is what is coming. The upgauge is coming near term. It was always part of the medium-term targets. We always said it is about GBP 3 per seat. How much we then trade off with revenue dilution from filling the extra seats, we will learn more. We have not seen much from the going from 100 A319s down to 80, this is all 80 going effectively in the next three years. That will be on the thickest routes. It will be in slot-constrained airports.
You don't need to put a new route in play, so it's not proving out new routes. Whereas the 24% increase in CACs that we've done over the last three winters, our gauge has barely moved. That is new routes, aircraft flying new places that needs maturing. This doesn't need maturing to the same way. Oversupply on U.K. beach. Sophie, do you want to pick that up?
Yeah, I can pick that one up. Yeah, there is more capacity on U.K. beach even this summer. 8% up in Italy, Portugal, and Spain. All of those see more capacity. Interestingly is where that's coming from. From our own perspective, our growth has only been on the Newcastle base opening for this summer. That's where a lot of that beach growth has come from us. If you look at somewhere like Gatwick, 53.7% of our capacity in H2 in Gatwick is on cities and domestics. To my earlier point, that is where we are growing more. We're adding H2 capacity on cities and domestics at Gatwick this summer up by 3.1% versus last year, compared with removing 0.3% on beach routes. We are, as we said earlier, that's part of the network optimization.
For us, it's routes like adding in Newquay, which we see as a great opportunity for the summer, those sorts of things that just make sense. Building back more into places like Dusseldorf, Madrid, Porto, Berlin, and so on from Gatwick. Yes, we're still seeing pressure, I think, on U.K. leisure. More broadly, the benefit we've got is the fact we have easyJet holidays, so that gives us an advantage over many other airlines. The fact we've got flexibility with the easyJet holidays model, that means we're not fixed to certain destinations. If the Egyptian hoteliers put on great deals, we'll just sell more holidays to Egypt and less And if the Spanish hoteliers keep their prices up, we'll just see less conversion there, but we'll still see them on flight seat only. That's kind of what we're seeing.
I don't think Tel Aviv would make a significant difference longer term in terms of capacity from the U.K. versus the leisure markets. Then on your point around Q4 yields, load factor, and where that balance is and where we get that right, ultimately, we aim for the balance to get the best net profit. Whether that means that we don't take the full load factor in terms of load factor objectives, we want to continue to achieve the load factors that we have done historically, and we want to be realistic, but we're not going to go for that load factor at any cost. Now obviously, load factor for us, we benefit then from ancillary sales, and ancillary sales continue to be strong for us, and therefore, we take the balance of both ancillary plus ticket when we're making a decision on overall final load factor.
We will still aim to get the load factor, but we're not going to do it at any cost in terms of ticket yields. There will be certain routes where you're right, where actually if we don't see the demand coming in, it makes sense just to take the yields you can on the people that are coming in, and you'll keep the yields high. Generally, for Q4, most will be demand-led in terms of bookings and pricing.
Excellent. I'll hand back to Kenton to close the Q&A session.
Well, thank you very much for all the questions. Thank you for coming today, and we'll be around for a few minutes if anyone wants any kind of one-on-one questions afterwards. Please come forward. Myself, Jan, the team will be here. Thank you