First of all, let me just give you a highlight on the period of what we are reporting today. We delivered EUR 275 million of net profit, which is a 22% increase versus the underlying profit of last financial year, fiscal 2017. And delivered EBITDA margin of 34%, which is one of the highest in the industry. It was heavy growth in terms of capacity and passenger volume. Our passenger growth was 25%, and we delivered 30 million passengers in this financial year. Very importantly, we have been increasing our cost advantage versus the market. We delivered flat ex-fuel unit costs.
When you put that in context, you see that the airlines who have been reporting results actually have been creeping unit costs. We believe that we are having a better position from a cost perspective compared to the market. Our market share in Central and Eastern Europe increased quite a bit, 3 points to 42% when it's related to the ULCC sphere. I would note that our largest markets like Hungary, Poland, Romania and Bulgaria, you know, account more than 50% of their capacity on low-cost carriers. LCC expansion has been a significant phenomenon in the core Central Eastern European markets. We have been gaining ground on the A321.
Now the A321 is rolled over the network and delivering 35% of the total seats of the airline. You record the A321 is a 10% lower unit cost production than the A320. Actually we are very pleased with seeing that aircraft economics flowing through the system. Obviously that helps us offset the headwinds we are seeing in the market, such as fuel price increase, labor inflation, and some more disruption costs which we will elaborate on later. In the period, we received the investment grade rating from two credit rating agencies. Obviously we are very happy with that development.
I think this is just underpinning the structural strength of the business and the liquidity and financial strength of the company. We are guiding the market with regard to fiscal 19 net profit of EUR 310 million-EUR 340 million. We are pretty much seeing the trends, profit trends, continuing going into next financial year. It's a big year for us. You know, passengers are up 25% to 30 million. We inducted a significant number of aircraft, 14 aircraft, moving the fleet to a total of 93 A320s and A321s. We opened up a few new airports. Now we are covering 141 airports.
We operate from 27 bases in Europe in 16 countries, mostly in Central and Eastern Europe, partly also in Western Europe now. Obviously, the growth of the business requires the growth of the organization. Recruited quite a lot of people. Now we have 3,600 people working for the company. We keep expanding our footprint across the whole of Europe, and now we are operational in 44 countries. Actually, that's more than any other low-cost carriers in Europe. A significant volume of operations. I would just highlight utilization. 12.7 hours on average is one of the best in the entire industry.
We time to time look at Airbus's report when they track aircraft utilization airline by airline. We tend to score significantly ahead of the game compared to other airlines. Very importantly, actually, we operate the fleet. Technical, especially reliability and regularity, are one of the highest in the industry as well. We delivered close to 80% on time performance. This is slightly less than what we would have hoped. This is mainly resulting from the disruptive environment. We have been seeing many more ATC strikes, airport closures, weather-related issues as well, resulting in longer delays and more cancellations than in previous years.
Load factor moved up 1.3% from 90% - 91.3%. Obviously, we are pleased with that, with the development. A very neat and tight operation, but delivering a very strong metrics. If you look at our market positions in our core markets, you can see that we are mostly number one or number two in our markets when compared to other low-cost carriers. As said before, in most of these markets, actually the LCC capacity is now exceeding half of the total market capacity. Certainly, this is the case in the larger markets, Poland, Romania, Hungary and Bulgaria, but many other markets as well. We have been building our market position, moved market share from 39% - 42%.
We are the number one local carrier in Central and Eastern Europe, significantly ahead of the others. It is not only being the number one brand in Central and Eastern Europe. I think we have been gaining a lot of ground by growing our awareness in Western Europe as well. The United Kingdom is a good example. As you recall, we established a London Luton base, which was migrated into the operational platform of Wizz Air U.K. That airline is now operational, and as a result, I think Wizz Air has become more known. The British consumers are becoming more aware of our activities here in the country, and we continue to build on that strength.
This is also the case in the rest of Europe, Western Europe, that as we are gaining market positions and we are flying more and more, the market is becoming increasingly aware of the company. With those initial thoughts, I would like to turn it over to Iain, who's going to take you through the financial results of the company, and I will take it back for some more strategic matters. Thank you.
Thank you, József. Moving on to the financial review. While growth is very important to us, we don't grow for the sake of growth. Financial performance, strong financial performance, strong metrics is key to our business. We want to grow as fast as we possibly can, but we want to maintain margins in the region of 14%-15%. These are industry-leading profit margins and arguably growing at double the pace of our nearest competitor. If you look onto slide eight, revenues have increased 24% to EUR 1.95 billion. EBITDA has increased 22% to EUR 659 million. Net profits increased 22% to EUR 275 million. That all translates into a very strong cash flow generation, up 27% to EUR 980 million.
That's an increase of nearly over EUR 200 million on our free cash balance. These numbers flow into EBITDA margins. József highlighted some of the highest in the industry, of 34%, and a net profit margin fairly close to last year of 14%. Maybe give you a flavor of some of the drivers of the revenue performance. This time last year, we were guiding RASK slightly positive, we delivered a +0.4% on our RASK. I think it's important to look at some of the drivers of that. We added 6 million more seats to 32 million seats to the market. That's 24% capacity growth. We grew passenger numbers 25%. We pushed higher our load factors higher, stimulating more traffic.
That's up 1.3 percentage points. We're flying larger aircraft. Larger aircraft, A321s. At the end of the year, we had 26, 35% of the seat capacity. These have 50 extra seats. That's 28% more capacity. You're adding 28% more capacity to those markets. This has a diluting effect, but we managed to recover that. We fly further, our ticket prices are even lower. Our base fares are even lower. I'll come on to the ancillary per pax, which was flat year-on-year, which was a slight disappointment, but I can elaborate a little bit more further on that.
All of these factors together, the growth, the load factors, the larger aircraft flying further, lower ticket prices stimulating even more traffic, and we delivered on what we said at the beginning of the year, at a slightly positive RASK of 0.4%. There's a little table bottom right to give you a flavor. I mean, the hot topic at the moment is fuel. What I wanted to highlight is that fuel prices do translate into higher fares. We are seeing that. The guidance that we set this morning is seeing a constructive market in that. Brent year-on-year is up 16%. Our passenger growth is up 25%, so that's a 6 percentage point increase.
As you go into fiscal 2019, clearly we need to lever our capacity down a touch to manage that. We were able to drive our fares even lower and deliver industry-leading margins. I think from the revenue side of the equation, we had a very strong performance in fiscal 2018. Moving to the most important slide of the deck. Our focus on ultra-low cost is undiminished. The airline business is a commodity business. In order to be able to be the most competitive, you have to have the lowest possible cost. Lowest cost will always win. Whether there's currency fluctuations, whether there's high fuel prices, whether economic shocks, whether there's geopolitical issues in any of our markets, having the lowest cost means you have the competitive edge against any of your competitors.
Every year has a slightly different story, so maybe give you a flavor of what we saw last year. The two main items, staff costs. The industry is seeing inflation coming through, certainly from the pilot community. Staff costs on a unit cost basis were up 5.5%. Fuel prices, we saw the price of fuel increase 10.4%, so that saw some inflation coming through. As I highlighted a year ago, depreciation, we were seeing the back end of a high depreciation. That was up a very large 27%. As I also indicated, as we go into fiscal 2019, that will turn negative. You can expect something certainly of the magnitude of -5% on depreciation. Unit cost may be slightly better depending on the fleet structure.
I think the key message that József highlighted as well is that the relative performance of our cost discipline remains undiminished. While competitors are seeing costs creep across the board, not only do we have a very disciplined tight cost base, but when we look ahead to the A321s, the higher proportion of seats coming into our, into our fleet. When you look at the NEOs, when you look at the stronger balance sheet, when you look at the potential options we have on aircraft financing, certainly we see a lot of opportunities to further lower those costs. We're gonna be guiding -1 on ex-fuel CASK this year.
As we see the NEOs coming on board, which have nine extra seats and also the benefit of the on-balance sheet financing, to be decided, we'll expect to see that to continue, that further decrease going into fiscal 2020 and also fiscal 2021. I think the picture is very bright from a cost perspective. Onto the ancillary. This is a tale of two halves. We had a very strong performance in the first half. I was here six months ago saying that we delivered EUR 1.5 per pax in the first half. In terms of some numbers, we delivered 15.6 million passengers in the first half. That translates into EUR 23 million that we delivered incrementally on the first half. In October, I think you remember, we changed our cabin bag policy.
We used to charge for cabin bags. There were a number of pressures which suggested we had to change that. We changed that in October, we stopped charging for cabin bags. The one item that we underestimated was the impact it would have on checked-in bags. Simply, people were not taking their bag and checking them in. Rather, they were taking to the aircraft and then being put into the hold. We underestimated the impact of that going into the second half. disappointingly, we had a year-on-year performance of flat, 27.2. What I would highlight is that ancillary revenue remains a key pillar to our business model. Getting that trend back to positive, we will start seeing that back in fiscal 2019.
There'll be a little bit of headwind going into the first quarter, we have actions in place to reverse that trend, and you'll start seeing that in Q2. The year-on-year effect, you'll see the benefit going into the second half. The other positive looking into the numbers is the value add, those areas that people actually want to pay for rather than the perceived punitive cost of baggage. That was up EUR 2. We're seeing a continued traction on all of those, whether it's allocated seating, the mobile penetration, family bundles, and the like. Onto our balance sheet strength. Cash increased 23%, we have EUR 1.142 billion of cash, of which nearly EUR 1 billion of that is free cash.
The cash generation remains very strong. If you look at, our business model is fairly simple. Cash tends to follow profit. The net cash increase was EUR 212 million year-on-year. One thing that did change during the year is that we put in two significant orders for aircraft. The first one was 10 additional CEOs, essentially to ensure that we had the supply for the calendar year 2018 and 2019 wrapped up. That was five additional aircraft in 2018, five additional aircraft in 2019. Given the proximity of those deliveries, we had to increase our deposits to Airbus in the tune of EUR 125 million.
If you have EUR 125 million, add to the EUR 212 million, you can see that the cash generation remains very healthy. Other items, cash collateral and letters of credit facilities continue. One thing I would draw your attention to is the credit rating that József highlighted. In the case of Moody's and Fitch, the Baa3, BBB- was particularly pleasing to report over the past couple of months. This not only enables us to access capital markets, but it certainly has a huge impact on other contract negotiations, whether it's sale and leaseback contracts, whether it's with third parties.
Having that credit rating and the assignment by Moody's and Fitch certainly helps us with all other cost areas and will help us lower costs even further in all categories. In terms of leverage, what you're seeing today is a 1.5 x. That's improved from 1.7. Really that's a function of the FX rate. When you look at the calculation of leverage, essentially it's the dollar leases that are capitalized. Nothing significantly changed in terms of our business, just the FX rate. Where do we want to be? Questions asked in terms of what sort of leverage we want to maintain or have better metrics when we look with Moody's and Fitch. Maintaining that rating will remain a key objective for us.
IFRS 16 is a topic that's being talked about. If you look at the IFRS 16 number, it's around about EUR 1.5 billion that would be on our balance sheet today if we were to convert to IFRS 16. That number will be dropping to EUR 1.3 billion. I think a few surprise in terms of the magnitude. Certainly a lot lower than I think a number of analysts had been expecting in terms of that impact. To full-year guidance, I think maybe it's worth touching on a couple of the areas. In terms of capacity, we had been indicating something north of 20. Last year it was 24%, and we were suggesting it would be around about 22%-23%.
We'll be tempering that down to 20, which is still more than double than our nearest competitor. That will be skewed more towards the back end of the year. 21% over the summer. We're very happy with what we're seeing in the summer, so we'll be flying at full capacity. H2, though, that's the area where you tend to be investing more into routes. The high fuel price suggests that we might want to be slowing down a touch. On an annual basis, capacity growth, we should be looking around about 20%. Stage length will be relatively similar, slight increase load factors. We believe that you could be pushing load factors even higher.
Actually, if you're slowing down your growth a touch, load factors is a great vehicle to get more passengers onto your plane. Fuel prices, I think are well documented. Onto the ex-fuel side of the equation, I think there are two items. One I highlighted is depreciation will start to give us some tailwinds, but crew costs will be giving us more headwinds. Crew costs, you should put in your numbers around about 8%-9% on a unit cost basis. Depreciation, we should be seeing an improvement around about 5%, so -5% on a unit cost basis. All other areas broadly in line, some improvements pretty much across the board, in that one. Onto the RASK, a hot topic. We are pretty much closed Q1.
We have April, May pretty much in the bag. Good forward visibility on to June. We are seeing flat RASK in Q1, which I think is a very good performance, especially there is no Easter. Last year, we suggested Easter was to the tune of about EUR 17 million, depending on where the days of Easter sit, whether it is Orthodox or other. So to deliver a flat RASK certainly highlights that the revenue environment remains constructive. If you want to look at and break it into quarters, so it would be flattish RASK in the first quarter. Second quarter, you should be looking somewhere to the tune of about 3%.
The second half of the year, we should be looking more to the tune of 4%. In terms of the demand, what I would highlight is that I think Wizz Air is fairly uniquely positioned. The GDP growth in a number of our markets. Romania is forecast at 7.5%. Bulgaria is 6%, Serbia 5.9%, Ukraine 5.5%, Hungary 3.6%. Again, I think if you look at the relatively constructive capacity environment combined with, I would say, a fairly strong to robust to strong demand environment, puts us very well-placed.
We believe that the fuel pricing will be flowing straight through to the fares, and we'll be able to deliver net profits to the tune of between EUR 310 million-EUR 340 million.
We remain focused on growing Central Eastern Europe. That's our core territory, our niche. It is an important market, not only because of its size. We see the market to be around 200 million people, that market keeps growing much ahead of Western Europe. We are expecting GDP growth of around 4% in the next year or so, that compares to less than 2% in Western Europe. These markets are under-penetrated. We have a lot of ability to continue to stimulate this market, we think that we are very well-based for achieving that given the cost base what we have. As said, it is a commodity, and in commodities, lowest cost wins.
The markets, especially further east, continue to be deregulated. I mean, you will see a chart how we have been taking advantage of that and we believe that, you know, we'll have further opportunities with that regard. Very importantly, now the macro environment is changing. We are seeing fuel price rising, and we don't think it is a bad thing from our perspective. That will put pressure on the weak-performing airlines and almost all of Central Eastern Europe's incumbent national carriers perform very vulnerably, with no profitability, no liquidity. We shall see what happen to them, and we're seeing that it will fuel the consolidation game in Europe, and we could take advantage of that.
We have been building our leadership positions in our markets. We have 57% of our total flown capacity in markets where we are the market leader. We are the leading low-cost carrier, Hungary, Romania, Bulgaria, Macedonia, and Bosnia Herzegovina. Again, when you translate that into the environment that high fuel price will require capacity discipline and ability to feed the higher input cost into the fare environment. Where you are the leading airline in the market, you have much more ability and capacity to do so than just being one of the competitors there. As you can see, 57% of our capacity actually is in markets which we pretty much control.
40% is in markets where we are number two or number three, still very strongly affecting the market with that regard. We think that we are pretty well-positioned for managing our sales, managing profitability of the business, going into a higher input cost era. The way we are delivering growth remains fairly similar to our previous patterns. 2/3 of the growth will be deployed on increasing frequencies on existing routes. 24% of the capacity go to airports which we are familiar with, which we operate, and we are joining existing airports, joining the dots, and less than 10% goes into new territories, either new airports or new countries.
We think that this is a very de-risked growth platform of the company and makes the financial results very predictable as a result. Fiscal 19 is a fairly special year from our perspective. As we say, we remain focused on Central Eastern Europe, and I think this is what you should be expecting us to deliver in the years ahead of us. Nevertheless, given the consolidation opportunities we are reacting on in the U.K. as well as in Austria makes us somewhat biased for deploying more capacity in Western Europe as we speak. This is, I think, more of a one-off. And in terms of proportion, I would expect that at least two-thirds of our growth capacity will be deployed in Central Eastern Europe in the future.
Nevertheless, we are in the process of building up our U.K. operations here and having a head start in Austria with five aircraft. As you can see, we continue to fuel capacity into our core markets, Poland, Hungary, Romania. Also, we are quite excited about the opportunities in further east, we are deploying capacity in Ukraine and Georgia. Just talking about Western Europe again, we have said, I think we will continue to pursue that strategy should a market consolidation opportunity arise. We would certainly consider that, we would react on that. Don't think of M&As and those sort of things.
It is more reacting on vacuums to backfill capacity of airlines where they may leave behind if they go back onto or they backtrack significantly. London Luton is a good example. On the one hand, we took a measure for Brexit by setting up Wizz Air U.K, but on the other hand, we also create an operating platform that could be a platform for taking advantage of further consolidation in the U.K. should that happen. Given Brexit, given the changing oil price environment, you could actually imagine that in Vienna. We reacted to the failure of Air Berlin and Niki and said we are taking a head start with five aircraft of that. Just back to Wizz Air U.K.
As you know, a couple of weeks ago, actually, we got licensed and we started operating, Wizz Air U.K, so that airline is now operational. Actually, it is now operating three aircraft, and that goes up to eight aircraft fairly quickly towards the end of the year. We are not only looking west, we are also looking further east. Deregulation has been helping us increase capacity in that region. You can see that if you pick these countries like Georgia, Israel, Moldova and Ukraine, we have been launching quite a significant number of routes, 66 routes in total in those markets, delivering almost 2 million seats.
It is also very important and access to market remains a key issue, but we are certainly seeing deregulation to be a continuous process that a little less predictable, but once it happens, we certainly want to grab the opportunities. Israel is a good example. Five years ago, we didn't fly a single seat to Israel. Today, we are the largest international airline in that country. As you know, we have a significant aircraft order on hand. This is important, especially in the context of the market today. It is not easy to access the aircraft market right now. Aircraft, even the second-hand aircraft market is pricing up as a result of high demand. Now, that could change with the fuel environment.
As we speak, I think we are very well-placed strategically to be able to access aircraft, to be able to access the right aircraft at the right cost level going forward. I mean, given the magnitude of the aircraft orders that we have been placing, you can expect us that we are taking advantage on the pricing side of things. OEMs price aircraft and their assets on the base of the order size. As we were party to the ever-largest single-aisle aircraft order last year, you can expect us getting pretty good market pricing as a result. Iain mentioned the credit rating. We're seeing that will allow us to tap into much lower cost capital than before.
We will certainly improve the economics of aircraft ownership going forward as a result. We have 271 aircraft to be delivered between now and 2026. A few left of the CEO aircraft order and early next year in 2019, we will start taking deliveries of the A321neo order. A few years later in 2022, the latest aircraft order will kick in, again, A320, A321neo aircraft. The A321, as said, is a very important aircraft for us given that it's delivering 10% lower unit cost than the A320.
Once we start taking deliveries of the A321neo, that will add another 10% reduction on unit cost. An A321neo will deliver 20% lower unit cost than the A320 today, which is the core fleet for us. We think that we are well-positioned for continuing our journey to become the ultimate cost leader and the undisputed cost leader of any airlines in Europe. It is not only the cost side what we are focused on, but we are also focused on the franchise, the consumer franchise. wizzair.com has become one of the world's top airline websites. Actually, we are number 60 in the world. Only four U.S. airlines and one European airline are ahead of us.
This is significant given the size of the franchise and the number of consumers we carry. I think I can safely say that Wizz Air is probably the most digital airline of the world, given our exposure to the market. Let's not forget that this is in the context of our consumers with an average age of 28. The consumer is also pushing us. These are the millennials, so we have to be very technologically savvy to meet their requirements. We are the number one airline in Europe on Facebook. We have over 3 million Facebook fans. Quite a bit of growth in the last period. We also accelerated our presence on Instagram.
We are clearly digital and web and app-based. We have almost 2.5 billion page views registered in one- year, and that number keeps growing. Interestingly, we have 2/3 of our interactions with consumers on smart devices, smartphones and iPad type of devices. I think that makes us fairly unique compared to the rest of the industry. Let me just summarize the presentation today. Again, we delivered EUR 275 million. That's significantly ahead of the initial guidance what we provided. I know that the consensus was a bit more upbeat, but we were trying to give you the number, and you decided not to take it and ignore that.
I think we delivered against our commitment, and this is really what we can measure. We delivered 34% EBITDA margin, which is indeed the highest in the industry of any airlines. A very strong year in terms of growth, delivering 25% more capacity, 25% more passengers to 30 million. Very importantly, and strategically, I think this is the most important issue for us, that we are increasing our competitive edges versus our competitors by controlling our costs. All airlines reporting cost creep, ex-fuel cost. We are reporting flat performance. Going forward, we are seeing further opportunities with the rollout of the A321s, the induction of the A321neos, and the opportunities the credit standing of the company gives us.
We're seeing that we can offset the headwinds, and there are many of those. Actually, we can be in a better position vis-à-vis our competitors. We keep gaining ground in terms of our market positions, obviously, on the back of the growth what we are delivering and on the basis of the competitive edges what we have, this adding from the business model, the ULCC business model, delivering this business at the lowest possible cost. The A321 is a big deal to us. It is a more efficient aircraft, better economics, higher margin, and now we've got 35% of the seats flown on the A321. At the end of the financial year 2019, we're gonna have 44% of the seats flown on A321s.
Investment-grade rating gives us many opportunities for further lowering our costs. Actually we remain quite upbeat in our ability to observe the fuel headwind by reducing our unit cost and pass through higher input costs in the fares. As a result, we are guiding on net profit of EUR 310 million-EUR 340 million. Thank you.
We'll pass over to questions. Damian's got his hand up front.
Morning. Damian Brewer from RBC. Could I ask three questions, please? First of all, you mentioned about actions on the ancillaries. Could you elaborate a little bit more on what both the strategy and tactics are there to recover that? Secondly, on the credit rating, clearly that has implications for CapEx, but also could you talk a little bit more about how much scope there is to renegotiate payment terms with, for example, fuel providers, airports, banks providing credit card payments? You know, is there scope to sort of accelerate some of the cash flow gains there? Very finally on Vienna, clearly there's Vueling, there's Laudamotion, and Germanwings, whatever it wants to call itself.
in Vienna. Vueling failed in Brussels. If we discount Vueling, where do you think your position in Vienna will be relatively unique, or what do you think your USP in Vienna will be versus Lauda and Germanwings? Thank you.
Okay. Well, let me start with ancillaries. Actually, we have done very well on everything other than bags in the reporting period. If I look at the performance, actually we are up EUR 2 on non-bag revenues. We have been able to dynamize many of the existing revenue streams. For example, Wizz Discount Club was significantly enhanced and increased. I mean, we are taking 1.4 million members as we speak. I think we've successfully deployed the seat allocation model, gaining significant ancillary revenues there. Now we have a 30% uptake on seat selection. Where we have been failing is bag revenues.
Certainly this is something what we are reviewing at the moment, so you can expect action on that. Specific to your question, I think this is really the biggest ticket item which we will come forward with. The problem we have right now is that when you deliver 90%+ load factor, you have issues with bags. You need to sort those bags somehow. At the moment, the current bag policy is not only affecting ancillary revenue performance negatively, but also it's affecting operations negatively.
This is something what we are reviewing and that I don't want to speculate, but I think fairly quickly, certainly in a couple of months we are going to be out with a new approach and action on that. We are seeing that is going to reverse the current trends on bag revenues. On everything else, actually we are doing very well. With regard to Vienna, I will pass it over on the credit rating to Iain. I think we want to be the lowest cost producer in Vienna, and let's not forget that we are deploying our own operating platform.
With all due respect to Laudamotion, their cost is not going to be nowhere near to our unit cost. All the others, Eurowings, Vueling, others, will have significantly higher cost than what we are delivering. We will certainly make sure that we take advantage of the A321s we have on hand, and we will become a very formidable competitor at very low cost in Vienna. We're seeing that, based on the logic of the industry and consumer demand, this is a commodity, lowest cost will prevail and lowest cost will win. We're seeing that our cost base will position us very well to compete with anyone there. Short term, it's probably going to be pressure on yields. It's going to be pressure on financial performance.
Long term, once the dust settles down, I think we'll be fine. We have seen this in many markets. You know, we've seen this in Budapest, in Warsaw, in the Baltics, in Romania and Bulgaria. This is a fine game to play. It probably takes one- year or 18 months, and then everyone calms down. We'll take it from there. You know, for so long as you are the lowest cost producer, I think you're gonna win.
Maybe adding another comment on Vienna. I think we do have a slight edge. I mean, Vienna is on the doorstep of Central Eastern Europe. It's only a three-hour train journey. We've been looking at Vienna as a base for many years. A lot of Hungarians, a lot of Slovakians living in Vienna. In terms of the brand, we actually have pretty significant brand awareness already. It wouldn't be I wouldn't compare Vienna to, let's say, launching a base in another Western European country where we have limited local brand awareness. I think Vienna certainly pose a very good opportunity for us. Onto the credit rating. I think in terms of renegotiating, I mean, that's in our DNA. We renegotiate every day contracts on an annual basis, on a two-year basis.
Certainly we will be looking to use that credit rating as leverage. Specifics, credit cards, or card acquiring, we actually already have pretty good terms. That's an area we've already been driving lower. There aren't any cash collateral requirements. Your question on releasing cash, that would come in more in the form of letters of credit. We choose to actually collateralize our letter of credit facility. We have 175 million EUR of cash with a bank as a collateral on those letters of credit. We could convert that to unsecured financing, but it does a cost. When you see deposit rates at minus 50 basis points, actually it's a good use of cash. We could release that fairly quickly if we wanted to.
In terms of actually releasing the cash, I would say no. There's no immediate targets for that. Where I think it will really come into force will be, as you say, I think in terms of airports, in terms of, you know I mean, the fuel providers, it depends really on the market. If it's more of a monopoly, unlikely. It's really on the, you know, the big asset, which is the aircraft. Sale and lease back, you know, if you're a lessor and you're essentially lending to an investment grade company like ourselves, then you'll be getting better terms. You have the on-balance sheet financing. I mean, five-year EUR money, you're looking at 1.3% in terms of interest rates. seven-year EUR money, 1.7%.
If you compare that to the embedded financing charge of leases, you know, when we announced our investment grade credit rating, we had quite a few lessors knocking on the door saying, "What does this mean for us?" You can see the value that that credit rating will bring to us. It may be that we will still do sale and lease back because I think we can have that, you know, a little bit more leverage. It's only a good thing to have that investment grade. Certainly when you look at on-balance sheet financing, there are a lot of compelling arguments to bring them on-balance sheet, not only from a cost perspective, but also from a fleet flexibility perspective as well.
Hi there. Good morning. It's Rishika Savjani from Barclays. Can I just ask you to talk about how you think about balancing growth with your margin? You know, you clearly have a very kind of strong pipeline of new aircraft coming in. You've got the growth in the U.K. and Vienna in the short term, plus rising input costs. It might be fair to assume that the margin could come under a bit of pressure in the short term. I think you'll tell me that's the reason why you slowed your capacity growth. Maybe you can just talk about how, you know, are you committing to the flat margin, and is that how you're still running the business? Thank you.
I think we have a few levers on hand, but we also have a few issues to deal with, you need to put those next to each other. I think the levers that we have on hand are certainly A321, A321neo. The A321neo is not gonna be greatly affecting fiscal 2019. We're just gonna start taking deliveries next year. It's a marginal impact. The A321 keeps growing in proportion of the fleet, and that makes a significant impact. I said, you know, A321 seat capacity is gonna move from 35% today to 44% at the end of the financial year. This is a unit cost reduction of 10%.
I think we have told a lot about the credit rating and the opportunities that that gives us as a result. You know, we're gonna start affecting the business on that basis. We are a cost manager business, so when we have the option to decide between cost and, you know, reducing cost or chasing revenue, we always decide the cost line and not the revenue line. You can expect us to remain incredibly and very disciplined on managing cost in the business item by item, issue by issue. As a result, as you see, we are guiding -1% reduction of ex-fuel cost. You need to put that against the market.
I mean, you know, our competitor, I think, is guiding 5% or 6% unit cost increase going forward. We're seeing that we have an inherent cost advantage in the business, which is obviously turning into a structural advantage versus our competitors. We were talking about the positions of the airline in different markets. We have over 40% of our capacity non-competing with any airlines. We are the only game in town from an airline perspective. Actually, that proportion has been growing over the last period. It used to be 30% . We are the leading airline on 57% of our capacity.
I think our ability, you know, to manage fuel pass-through has become much greater than ever before. I mean, we need to play the capacity discipline ourselves. As said, you know, we are not an airline set up for growth. I mean, growth is a great thing, and obviously it excites us very much. We are an airline set up for delivering the financial metrics. Our number one objective is to deliver the margin of the business and the profitability of the business as a result. Growth is always just an output to that. We have been guiding the market on structural 15% growth, you know, with the flexibility of moving up or down, depending on market circumstances.
We took advantage of the last period, probably the best of the industry, over the last few decades, and we moved growth up to 20 %+. Now, we are still holding 20%, but you know, we are not religious about 20%. If the fuel price goes crazy and it's totally out of control, we will be reviewing our own capacity, and we would be adjusting capacity as a result to make sure that, you know, we maintain the performance on the financial metrics.
We have not been talking about, you know, the behavior of others, but you could expect, and this is empirical, I mean, we have seen that happening, fairly consistently, that especially when approaching, an off-peak period, the winter period, and, and input costs, are rising, then you see a lot more capacity discipline playing into the game. You can expect weaker airlines with no liquidity, with no profitability, to be pushed for, you know, contracting, capacity, or even going bust, if it becomes, that bad. We're seeing that the capacity environment will improve as a result, which will improve the fare environment, and that will improve the ability of the industry to pass through, fuel cost into the, into the fare environment.
Even without the others, I think we are much more capable today of controlling our own destiny. That's why we're seeing that we're gonna be able to hold our commitment on delivering the margin performance of the business.
Maybe two other comments. I mean, to József's point about the weak carriers, I mean, we'll certainly help them on their way out. You know, they're gonna be struggling going into the winter. The fuel prices are gonna be higher. They're gonna be hemorrhaging more cash. You can bet your bottom dollar we'll be the ones helping them on their exit. Just one thing to add, maybe the timing of fuel prices, which is actually fairly helpful. A fuel price spike in December doesn't give you much time to adjust your capacity. What we've been seeing now, a fuel price spike between, you know, before summer, all airlines tend to make money. Most of them make money in the summer. You don't really see the capacity adjustments coming through the summer.
The lead time that airlines have now is that they will have the ability to adjust their schedule. I think even if you look at our numbers, in the last fiscal year, in Q4, we grew capacity by 24%. This year, we're looking at around about 18% in Q4, or certainly the second half. I think you can see that we are demonstrating discipline, but there will be opportunities where we'll need to help our competitors leave the market in
Thank you, Mark Fortescue, from Panmure Gordon. Just on that point, really, if you, if you could just talk a little bit more about the consolidation theme, particularly looking east, where consolidation has been a bit more benign in Eastern Europe than Western Europe. I mean, maybe in two parts, if deregulation does increase, what's the sort of priority of opportunity there, organic versus buying something? If deregulation is slower to come through, do you really still think there will be opportunities as, you know, in a higher fuel price environment? It's quite hard for us to assess the financial condition of some of these legacy players. It's quite opaque. Can you give any sort of color on your thinking there?
Yes. I think my starting point would be to look at the overall economic context of Central and Eastern Europe. Central and Eastern Europe is growing at a rate of around 4% on GDP. The prediction is 4%-5% on most of the markets we operate from, and that compares to 1.5%-2% in Western Europe. Typically, what you see is that the airline growth, the industry growth is around twice of that of GDP. If you see 4% or 5%, you may expect kind of 9%-10% airline growth. That's actually quite consistent with what we are seeing today.
Today, the whole of Europe is growing at around 6% on airline capacity, and within that, Central and Eastern Europe is around 11%. It's just a better overall market, probably, and more low-cost carriers. Actually, you can stimulate more markets that by traditional carriers in Europe. I think that GDP growth, that overall economic context, creates a lot of stimulation opportunities in the marketplace. I mean, let's not forget that, you know, if you look at a country like Hungary or Poland, around 16%-18% of the population fly. More than 80% have, you know, never flown in their life. I mean, that would be, you know, 60% of the Brits flying with 40% non-flyers.
There is a long way to go on penetration and, you know, under-penetrated markets with high GDP growth, that's going to create a lot of stimulation opportunities. It has nothing to do yet with deregulation, whether deregulation happens or not. Deregulation, we believe from our perspective, is more of a sideline strategy. It is more opportunistic than strategic. We don't control that. I mean, this is all political. Countries may decide to, you know, to create access to markets, or may not. Our track record is showing that actually we can be very successful in grabbing those market opportunities.
If you look at it today, certainly when you look at base capacity, we are deploying around 80% of our capacity on markets in core Central and Eastern Europe and probably around 10% to Western Europe and 10% to further east. I would say that we are not really betting on that, but should further deregulation happen, we're certainly gonna be there to carry the flag of low cost into those markets.
Nelly from EMS Securities. Just two really quick ones. Just to follow up on Damian's question on the baggage issues. I just wondered if you could give us a feel on what's giving you confidence that those dilutive impacts on checked baggage have now all come through, given the surprises that you did face. I know that you'll obviously be lapping easier comps, but just a bit of a feel on your view on that. Then just in terms of labor costs, I mean, I know you've given guidance for 8%-9% for FY 2019, but should we think of that as going forward at that sort of rate for FY 2020 and beyond? Is that sort of just an underlying theme, or is that how much of that is pressurized by the tightness of the general market within pilots, et cetera? Thank you.
In terms of labor costs, I mean, we've been making adjustments to our pilot and cabin crew salaries every year. You tend to see once every couple of years that there's a bit of a bump. The last time we did it, we increased the sector pay of pilots, I think it was three- years ago. This year it was due for another rise. You would have seen at the back end of last year, we implemented some changes in the second half. That's why you're seeing a 5% increase in fiscal 2018. As you go into fiscal 2019, the full year effect will be 8%-9%. Are we gonna expect to see 8%-9%? I certainly hope not. You know, we're looking at something slightly lower than that. Onto the baggage.
It's, I suppose reinforcing what József said on all the things that we did very well. We saw a plus EUR 2 per pax on all the value add, and there are a number of areas certainly we can increase the penetration, increase the conversion. I think certainly we can do a better job on conversion on the mobile. We tended to focus a lot of our initiatives on the web, and then migrate on to the mobile. Mobile, you're seeing the penetration and usage increasing significantly. Certainly there's a bit to do on making sure that we get the same level of conversion on the mobile apps, which is all in the pipeline.
On the bags itself, I mean, it's been a little bit of a headache for the past five years. I think I've always had the same chart saying it's gonna bottom out, it's gonna bottom out, it's gonna bottom out. The change in the cabin bag policy was underestimated. The cabin bag we knew was EUR 2 per passenger per year, but I think we had underestimated the impact on the checked-in bag. The changes will be, I would say, more in line with what the industry is doing. Certainly encouraging people to check in your bags. That will certainly help the on time performance, less bags, less disruptions in terms of the operational side. I think there is more of a desire for passengers to take their bags through the entirety of the journey.
You should hopefully start to see improvements coming through on, let's say, the priority side of the equation, where if you, if you don't want your bag to be taken off you at the gate, you'll need to pay for it. These changes are coming through within the next few weeks, and hopefully we'll start to see some real improvement from June. And I'll report back in July at our Q1 numbers to see how that's doing.
Morning, it's Alex Paterson from Investec. Congratulations on the results. Can I just look slightly further ahead? What do you think your capacity growth will be beyond FY 2019? You've previously given a longer-term target. Does the slightly slower capacity growth next year mean that you get slightly more the year after to balance it out, or does that get pushed back? Do you have any visibility on any of your competitors in terms of their longer-term growth?
I think our growth will remain subject to market conditions and our ability to deliver financial results, profitability mostly. As said, you know, we are not planning on growth in the first case. We are planning on financial performance in the first case, you know, attaching growth to it subject to conditions of the market. Structurally, we're seeing this model is capable of growing 15%, this is how we have been lining up the aircraft order to deliver capacity to the business by creating significant flexibilities both for upping capacity and taking capacity down, again, depending on market conditions and our ability to deliver financial results. I think it's fair to say that we are still very upbeat about market conditions overall.
Yes, fuel is an issue, but we think we can deal with it. Overall demand is very strong, and we're seeing that our relevance to the market, given the business model and the improving awareness of consumers, actually help us achieve more than before. Whether that translates into 20% or 15% growth rate, I don't know. I think for modeling purposes, I would look at 15%, but if the market conditions are better than the baseline assumptions, we would certainly do more as we did over the last few years. What we are seeing at the moment, assuming there is no significant market deterioration or disruption, we think we likely to be more than 15% beyond fiscal 2019.
We could be, you know, 17%, 18%, or even more, again, depending on market conditions. Structurally, we're seeing this model is a 15% growth model.
I mean, maybe Alex, maybe to I think, one of the other constraints is probably the operations. I would say that this year, growing 25% was probably the maximum that we could do in terms of the operational. We could probably have grown at 30% and delivered the performance. I think operationally is gonna be one of the questions I think in the industry. The other things I think you're probably seeing as a market is I think, aircraft availability for our competitors, pilot availability for our competitors is going to be also a bit of a constraint on market capacity. József highlighted the, you know, the fantastic aircraft order that we secured. We have a very enviable pipeline of aircraft coming online.
I think the market is going to find difficulty getting their hands on aircraft. You know, that would suggest that we could grow, certainly continue to grow above market growth levels. In terms of the competition, I think what we're seeing is, Spain seems to be recovering, so you'll probably see the traditional Western European carriers going back to Spain. The Monarch departing will certainly give some opportunity to them. Germany seems to be a bit of a hot spot at the moment, so you're seeing a lot of capacity going to Germany. We are seeing some, you know, capacity being redeployed from our markets into places like Germany and the like. I think the competitive environment certainly looks very constructive and the capacity environment from competitors looks very constructive going into the next year.
Handing over to questions on the phone.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero and then one on your telephone keypad now. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There'll just be a brief pause while questions are being registered. The first question is from the line of Mark Simpson, Goodbody. Please go ahead. Your line is now open.
Thank you. Yeah, morning, guys. Two questions. Just want to go back to ancillary, the non-bag component. You talked about the value add obviously doing well, but if you look at the half year splits, on an ASK base RASK non-bag was up 17.4% in the first half, up only 7.9% in the second half. I'm wondering if you can just talk about that kind of seasonal split there or the kind of longer-term run rate you'd expect in terms of RASK, or maybe just give us a sense of guidance for FY 2019 on the non-bag side. Just want to check on the fuel front. In your full year guidance, you have the line, +15% fuel CASK. You've got fuel price of $685.
That $685 is that what you're saying is the blended or is that what you're saying is the market price that you're assuming ex your hedge position? I just want to clarify, you know, what makes up your 15% fuel CASK.
In terms of the math. What I would look at in terms of the +15%, the $685 is the spot rate going into that. You're seeing the liquid price up around about 22%. into-plane premium doesn't move with the price of fuel. When you look at the actual all-in price of fuel year on year, taking into account the hedging, we have around about 19%. You adjust for the favorable dollar. Last year it was 110. This year you're looking around about the 119 versus 115, you're seeing about a 4% improvement on that. We have more and more A321s, the Sharklets coming in, that's giving you some consumption.
You're seeing about a 20% increase on the fuel. You're seeing some tailwind from the FX around about 4%. You're seeing about a 1% coming through from the consumption. That gets you to your 15%. I think the question, your next question is gonna be the price today is $740, although the price is not actually down today. What is important is that you'll be looking to, you know, the RASK environment will be reflective of the fuel environment. The fuel environment of $685 is giving us a 3% RASK improvement. If we push the fuel environment higher, you know, it's our objective to make sure the RASK responds accordingly. In terms of ancillary, it's a bit of a mathematical question.
I think I lost my way a little bit on that.
Essentially, your RASK on non-bags was up 17.4% first half per pax. It was up, sorry, per ASK. It was up 7.9 only in the second half for the overall performance for the year of 12.7.
Only. yeah, only up. I think a couple of points maybe jumping to. I mean, our revenue still is 42% ancillary, and the aim will be for that to increase. I wouldn't guide specifically on RASK for bags per quarter or half year. I mean, ultimately, we've always stated Ancillary is incredibly important to us. We should be delivering EUR 1 per pax per year. You know, we haven't delivered that on the past few years, and last year was a disappointment. What I would say is that that should start to recover. You know, the checked-in bag portion of that will start to see a return to, you know, the positive territory. In terms of the value add, that should also be increasing.
You know, certainly I would just keep tracking what we've done in the past and be looking for positive improvement on ancillary per pax per year. Will we achieve EUR 1 per pax for the full year? That's our ambition, albeit a very stretched one.
Okay. Just going back to the kind of leverage between fuel price spot and your pricing. That suggests that you think that's coming through more quickly than the usual it happens 12 months out. I mean, it sounds as though given the lower level of hedges that the market has generically, that actually market pricing or fares will respond more rapidly than has been the case, you know, in the past, in terms of, in the face of where fuel prices are.
Well, I think the difference this time versus last time as far as we are concerned is that, you know, 40% of our capacity is non-competing with airlines. Essentially we are the market. By constraining capacity, disciplining our own capacity deployment, you know, we can affect the market pretty much immediately. In 57% of the overall capacity, you know, we are the leading airline in the marketplace. I mean, this is a much more significant position than ever before. Our ability, again, to affect the market is much stronger than before.
I think simply, we are seeing that we can play the capacity discipline game, thus the fuel cost feeds through into the fare environment much quicker and much more effectively than previously.
Okay, that's great. Thank you.
Next question is from the line of Jarrod Castle from UBS.
Thanks, Morning gents, t wo if I may. Firstly, just coming back to capacity. I mean, just call it $ 80 Brent. I mean, how much further would it have to go up before you'd reduce your 20% capacity guidance? Is it $ 5, $ 10, et cetera? Then just secondly, just given the investment grade rating and the strength of the balance sheet, are you thinking any differently in terms of consolidation and the opportunities that may or may not be out there at the moment?
Okay. Let me start with the second one. With regard to consolidation, I don't think we are planning on it. The numbers we are presenting to you excludes any assumptions on consolidation. I think it is rather an opportunistic matter. We are not going to buy airlines. You know, that just wouldn't fit the model what we have. You know, should we have an opportunity to access the infrastructure, what we are unable to do because our airlines are departing and those sort of things, yes, we would have an interest in. You know, simply this is unpredictable at this point in time.
You know, we just wanna make sure that we have contingency plans in place and, you know, we would have capacity in place to move around, you know, should that opportunity just arise. You don't see that assumption, any of these assumptions in the plan. That would come on top of what we are doing and what we are counting in. With regard to capacity versus the fuel price, I don't think we have gone that far mathematically.
You know, but certainly I can just repeat what I've said, that we are much more capable and able to own our own destiny in terms of delivering the financial metrics vis-à-vis a changing input cost environment. But I would certainly say that, you know, if fuel goes crazy and it really spikes up, you know, to levels what we were seeing years back, I mean, this is going to distress the industry. I mean, this is not an issue to us. This is going to be a much greater issue to the whole industry. Again, just putting that in context, we are operating and focused on Central and Eastern Europe. In Central and Eastern Europe, not a single national carrier is financially fit for dealing with a situation like that.
I mean, they have no liquidity, they have no profitability. Yes, on the one hand, it would be, you know, painful to us. On the other hand, I think that would create plenty of opportunities to offset that pain, certainly through a certain period of time.
Okay, thanks. One more if I may, but has there been any attempt by your staff to unionize? Obviously, you've seen a bit of wage inflation like the rest of the industry, but is labor relations good at the moment?
We think so. You know, we try to be very proactive in managing labor relations in the company. I personally don't think that union is the way to go. I mean, you know, it can actually stress the organization. It can stress the development or distress the development of the business. We have been very proactively engaging with our employees. We try to understand what's going on, what issues, opportunities they see, you know, to give them the opportunity to speak up in different channels, and management tends to act on that feedback. You know, we want to maintain that culture.
We think that culture has been a key contributing factor to the success of the company, and we certainly hope to be able to maintain it. Well, we don't see any emerging pressure as we speak that could change that game, but you never say never. I mean, we know the industry, and we know how the industry is working. So far so good.
Thanks very much.
Next question is from the line of Ross Harvey from Davy. Please go ahead, your line is open. Ross Harvey from Davy, your line is now open.
That was the easiest question.
Okay. As there is no answer, I will move to the next question, which is from Andrew Lobbenberg from HSBC. Please go ahead, Andrew.
Hi there. Could I ask for a bit of guidance if you're able to give on future CapEx beyond 2019 as we move to planning on taking aircraft onto balance sheet? I don't know whether you'll be able to give us anything. Let's ask. Secondly, if I can focus on you kindly gave some IFRS 16 net debt guidance. Can you explain why that drops quite significantly from fiscal 2018 to fiscal 2019, given that the obviously the size of the fleet is increasing. Are you taking aircraft on short terms or what's driving that? Third question, staying on the airplanes. How confident are you in the delivery schedules for the year? They still seem somewhat troublesome at the moment. Thanks.
Let me start with the last question with regard to aircraft deliveries. With regard to the current technology aircraft deliveries, it's been brought in line with contractual commitment. You know, we experience, you know, little delays here or there, but overall, I don't think it has really affected the business substantially. I think with regard to current engine option deliveries, we are fine. With regard to new deliveries, they come up in January 2019. Obviously we have been keeping an eye on the market, and we have been heavily engaging with the OEMs, both Airbus and the engine manufacturer, Pratt & Whitney. I think we understand the situation there.
We understand that the engine manufacturer is in catch-up mode at the moment. So far, we have been assured that we should not be expecting significant delays on those delivery. You know, we continue to monitor the situation and, you know, we will alter our plans, you know, should the situation change. So far we've actually been certain that by and large, those deliveries will happen as contracted.
The two questions. In terms of the future CapEx, I think there's two things. One, in terms of what the PDPs on the aircraft deliveries, as I highlighted, that we've actually had a step-up in fiscal 2018 by around EUR 125 million because of taking essentially 10 aircraft in the next 18 months. That will start to be returned as those aircraft. In terms of the PDP on the streams, you should start to see actually a net cash inflow coming through. I can't give you the magnitude. In terms of the future CapEx on the NEOs, the decision has not yet been made. You know, we're in the process. Obviously, we'll be looking at all options.
There are a number of options, JOLCO, whether it's sell and lease back, on-balancing financing, the capital markets. It's a bit too early, Andrew, to give you the guidance on that one. On IFRS 16, it's math. Essentially, the way IFRS 16 works on the leases, it's the time to the end of the lease. Obviously leases are going to be dropping off, and those that are dropping off are at, you know, very different interest rates. I think it's purely a mathematical calculation, in terms of why that number will be dropping down to fiscal 2019.
Okay, thanks.
Okay. We do have registered Ross Harvey again. Ross, please go ahead. Your line is open.
Hi there. Can you hear me?
Loud and clear, Ross.
Excellent. Excellent. I just have one question. I was just wondering, in light of the fact that you're moving 10 aircraft, I guess opportunistically into Luton, into Vienna, can you give a sense of what the ex-fuel CASK development would have been in FY 2019 were it not for these new, presumably, more costly airports? You know, what I'm trying to get at is the impact of the increasing overall size of the company and the gauge, and what the impact would have been on like for like costs. Thanks.
I don't think it will move the needle. I mean, certainly there'll be a little bit more inflation. The items where you are seeing certainly are, I mean, Luton is, you know, the airport costs are within line with the corporate average.
From an airport cost perspective, it's actually in line. Yes, the crew costs are slightly higher, you're seeing a little bit of cost creep coming through on the crew side. Essentially on the Luton side, no real major impact. It's also important to look at what's at the other end of the route. Those flights from Luton to, you know, Central Eastern Europe, there are some very low-cost airports. From an overall ex-fuel CASK, Luton doesn't really move the needle. There are a couple of million in terms of setting up that AOC and having people based there. You're looking at about EUR 2 million. To sort of run that through the numbers. Vienna, again, we had a very good airport deal.
It's not dissimilar to a Bucharest or a Budapest or a Warsaw. I don't think that's really gonna be moving the needle. What I would say is that we're committed to maintaining ex-fuel CASK. On the airport side is that the challenge that we pose ourself is for any primary airport that brings in a little bit of inflation on the airport cost needs to be more than offset by somewhere at the other end that gives you know, below average airport costs. From that perspective, I think the one area that we saw, and maybe we flagged in Q3, was the training. Taking 17 aircraft in 17 weeks does put a lot of stress on the organization. That delivers an awful lot of pilots and cabin crew in training.
There are slightly different training procedures for the U.K. AOC. Therefore, you see a training period, you know, growing from a few months to maybe six or seven- months. That's something that should start to flow through, and we should start seeing the benefit going into fiscal 2019. Certainly the training part of the organization. I mean, taking 17 aircraft in 17 weeks is pretty ambitious for any airline, and I think something we'll be doing less of in the future.
I mean, just one kind of mathematical perspective to the question. When you compare our operations in Western Europe versus Central Eastern Europe, essentially 75% of the cost would be the same because 75% of cost would depend on aircraft utilization, would depend on fuel cost and all charges which are common, irrespective of the origination of the aircraft. We have around 25% of cost that are subject to the market and typically labor and airport-related costs. If you just run the math, even if, you know, we see like a 10% increase of cost in Western Europe compared to Central Eastern Europe, this is affecting the overall cost 2.5%.
If it's 20%, it's affecting 5%. That's why Iain is saying that, you know, we are seeing a marginal difference in overall CASK, in Western Europe compared to Central Eastern Europe. Again, you know, whatever we are doing in a, in a more costly environment, you know, we make sure that we offset that in a less costly, capacity deployment on the destination end of the operation.
That's very interesting. Thanks.
That's our final question, so I will hand the call back to the speakers. Please go ahead.
With that, thank you very much, ladies and gentlemen, for joining us today. Any further questions, just follow up directly. Thank you.