Good morning, and welcome to the Second Quarter Presentation for Norwegian Air Shuttle. My name is Jesper Hatletveit, and I'm the VP of Investor Relations here at Norwegian. Today's presentation will be held by our CEO, Geir Karlsen, and our CFO, Hans-Jørgen Wibstad. It will be followed by a Q&A from the audience and the web. Please go ahead, Geir.
Thank you, Jesper. Good morning, everybody. Let's get going. Highlights for the second quarter, EBIT of NOK 651 million. We are seeing a continuous increase in yields and also a very good load factor as we see it. Norwegian is continuing to have a very strong cash position. The cash by the end of the quarter, NOK 9.3 billion. Cash position today, above NOK 10 billion. We are, as many others, a little bit hit by inflation, by a weak local currency, the Norwegian krone, and that is unfortunately impacting the cost level of the company to some extent, even if we are doing whatever we can to keep the cost level as low as possible.
On the fuel side, very happy to see that through the quarter, it came down from, you know, approximately $800 a ton, down to low $700. But during the third quarter, and as per today, we are seeing an increase again, and I guess the spot price for fuel today is in the area of $950-$970. But fortunately, we have a very good hedge position in Norwegian today, and we will come back to the details on that. We are continuing with the, you know, a massive number of routes in our network, more than 300 routes in the peak season.
I think we have been planning the summer season, I would say very well, meaning that we have been able to take on crew, we have been able to train them in time, and we have been able to get them into the operation, you know, into the peak season. We are also very happy to say that we have not been using any wet leases so far, and we are not planning to do any wet leases going forward either. That means that we are operating the whole network with Norwegian aircraft and with our fantastic crew in Norwegian.
We are continuing to work on the corporate side of the market, and it is no doubt about the fact that we are taking market share. If you look at the revenues from the corporate travelers throughout 2023, they are above 2019 levels, even if we know that the corporate market as such is not back at 2019 levels. It is a combination of obviously that the higher yield is helping us, but there's no doubt that we are also taking market share and the number of passengers on the corporate side, you know, then deciding to travel with Norwegian. We also have been starting a campaign on the you know small and mid-sized company.
We did that last year, and in combination with what we have done prior to that, we have had, you know, we had—I think we had 28,000 companies signing up, for this, for this program. And looking 12 months back, 16,000 of these has, you know, has been active, you know, travelers, and which is, which is fantastic, really. It just shows that, you know, more and more, corporate travelers is, is selecting Norwegian as their, as their, as their airline. Also very happy to, to been awarded, the contract with, on the Norwegian Defence. That is a contract that we have been fighting to get, and this is a contract that will last for four years from, first quarter of 2024.
This has a value, as we said when we released the news, of about NOK 1 billion, and approximately 250,000 passengers will travel under this contract as per today's estimates. We will try to kind of work the network around this contract and then try to create more value out of the fact that we have been awarded this contract. We are continuing to push on the operational side of the business. I think we are doing quite well. I think we're actually doing very well. We have a regularity of close to 100%. Looking at the four last months, including July, we have a regularity of 99.5%. That is all the way on top, even if you compare with whoever in the European market.
On the punctuality, we have also been top three in Europe over the last four months. And we in the Nordics we are the number one, and I think that is very important. It's first of all important for our passengers, our customers, but it's also important for the airline, because if you are on time, you're also reducing the costs. Because if you are not on time, you have a loss of follow-ons, which will then increase your costs and make you more, you know, less efficient, and again offering a less of a high quality product to the passengers.
Even if we have an 80% punctuality over the summer months, if you look at, you know, the arrivals within one hour, we are 95%. Even if we are late, you have a really good chance of coming to your destination within an hour. So we are top three in Europe, very happy to see, and this is a massive focus also going forward, and we are going to keep that kind of level going forward, and then establish, you know, that pattern also on towards our customers. We have bought another airline called Widerøe. We think that is, as we call it, a sound industry rationale. I think we can...
There is a lot of synergies there. I think we can make a better customer offering with offering the airlines in a much better way than what we are doing today. I will get back to more details. We have also, as you saw before the summer, launched a new partnership with Strawberry. That is a 50/50 partnership where we are kind of joining forces on the loyalty side. We are more than happy today to also release the news that we have also evaluated a lot of alternatives, and we have selected then Avida to be the new financial partner into the loyalty company. Avida is a Swedish bank.
It's led by Tine Wollebekk, which was the former CEO of Bank Norwegian, and we know her quite well, and we are very exciting to see to then develop this relationship over the next months, and where we are planning to launch then the whole loyalty company, hopefully by the end of 2023. We have been talking about the values in the membership base that we have in our own Norwegian Reward program, and we are saying that we have been struggling to kind of visualize the value- the underlying values in this membership base.
By doing this transaction, we are actually able to to show that value, and that's why we are then going to book again, let's say, because of the transaction with Strawberry and Avida, NOK 800 million into the PNL. And on the basis that we will close this transaction in Q4, this will come into the financials then in 2023. So this is also a way to show that there is a clear value into this, you know, the membership base that we have in where we have, you know, close to five million members. So what's going to happen here is that Avida will buy close to 2% of the LoyaltyCo. We will use the same proceeds to buy 11% of Avida.
Looking at the market value, as we see it on Avida, we are then buying 10% of that bank with approximately 80% discount towards the market value. It's a really good transaction for Avida and a really good transaction for LoyaltyCo, as we see it. We are also continuing to work on the capital structure, I mean, in Norwegian. I think we have a really good capital structure as per today, but we have some loose ends, I will call it, you know, coming out of the restructuring. That's why we used the option this morning to repay the so-called NAS13 bond, outstanding bond, approximately NOK 430 million. This is one step in us moving into a position where we are a...
where we could be able to, to start to pay dividends. I mean, we have a cash position, as I said, of NOK 10 billion. And, and we would like, also to, to, to come into a position to be able to pay dividends. Whether we will pay dividends when we have the chance, is another discussion, but that's, where we are, that's where we are heading. 5.6 million passengers in 2024 in the quarter, 84.4% load factor, and we are, as you can see, increasing capacity through the seasons, between the seasons massively, increasing down with 44% quarter-on-quarter, looking back to the first quarter. Record strong summer, as we are saying.
If you know, we can see on the load factor, you can see on the yield, it has a steady increase. The load is going from 83%-92%, let's say, including July. The yield is going from 0.81 NOK-1.04 NOK, which is a record for Norwegian on the yield side. And it shows that when we are more than doubling the capacity from 1.1 million passengers to 2.3 million passengers, we are doing that with a relatively steady load and an increasing load and with a very good yield. And this is something that you will see in Norwegian also going forward, where we put more capacity into the market, through the peak, and then we will reduce capacity into the low season.
That's something you will also see going in now to the low season in November, December, and then the first three months in 2024. But looking into the third quarter, it's going to be a fantastic quarter, there's no doubt about that. July turned out very well. The traffic figures is already out there. August and September is also looking good. I'll come back to the details on the next slide. So if you see on the bookings, on, say, on the right side here, that's the seven-day rolling sales.
What took us a little bit by surprise was the, you know, the little peak we see going into July, because we saw a kind of flattening out and a small reduction going into the end of June. Then we had a little bit of peak, and then you had the kind of development through July, which is kind of a seasonal thing, where you don't sell that much in July, because that's when you actually are on holiday. And then it has started to peak up, peak up again into the fall, and, you know, the fall campaigns is starting to have an effect, and that's why you see a relatively steep short little moving up at the end there.
So all in all, looking at August and even looking at September and October, it's actually looking very good, I have to say. If you look at the bottom right here, the booked revenue, you can see that we have surpassed 2019 on revenue. And if you look at, let's say, September and October, you can say on load, you are, let's say slightly above 2022 curve, but the revenue and yield, you are more than 20% higher than 2022. So, so the 2025, you know, spread against 2022 is continuing also into September and October. And I think to some of you, that might be a positive surprise.
So we are not really seeing any slowdown in bookings, at least not for the two next months. For November and December, we don't have, you know, the same visibility, as the booking curve is still relatively short, even if it has widened out a little bit. So all in all, it looks promising, I have to say. And that's why we can also say that the third quarter is going to be a historically strong quarter. No doubt about that. Hans -Jørgen?
Thank you, Geir, and good morning, everyone. My name is Hans-Jørgen Wibstad, and I am the CFO of Norwegian. I will go through the financial results for the second quarter of 2023, as usual. The quarter came out, as Geir said, in a very good way. We had a good quarter with good profitability overall, and a very, very massive improvement from both the first quarter of this year, as well as comparing with the second quarter of last year. Unit revenue came in at NOK 0.76 kroner, which is a massive improvement really from the level of last year, which was NOK 0.62. And it's which is 22% up.
Also happy to see that ancillary revenues came in at 178 NOK per pax, which is up from 158 NOK per pax, which is the same level for the first quarter. So happy to see that development. And we're also seeing that the RPK is developing very nicely, of course, with the ramp-up of the activity. I think on the profitability side, it is important to note this for this time around, the EBITDAR chart on the right-hand side. You can see that in the second quarter of 2022, we had close to NOK 100 million of EBITDAR, whereas in this quarter we have nearly NOK 1.6 billion, which is an underlying improvement of about NOK 1.5 billion.
That's really explained by you know, all the efforts we have made, also a market which has improved, and also, of course, the higher yield, higher loads, and everything else. So very happy to see that. Obviously, the bottom line result for the quarter is lower than the second quarter of 2022, but that has to do with the impairment, the reversal of the impairment that we made in the first quarter in the second quarter last year. So looking at the underlying, kind of comparing apples to apples to a very large extent, this really, really shows the quite massive improvement that we've had from last year to this year. Though it was expected, and we're happy to see that being realized.
Geir mentioned the CASK, obviously, coming in at NOK 0.48, a higher level than we initially had hoped for, driven largely by inflation, which is high, both generally but also in our industry. But also, about two to three øre, or NOK 0.02-0.03 out of that is driven by the foreign exchange rate and the weak Norwegian kroner, which is impacting our CASK. Obviously, it has any positive impact on our top line as well, but overall, the weakening of the Norwegian kroner has had a quite significant impact on our CASK.
As Geir said, we're working extremely hard, and we have a number of initiatives going on the cost side, which we will see over the next year, two years, and also into the quarters. But obviously we are, we're having some headwind on the cost side, like, I think, generally talking about the industry itself around the Nordics, as well as in Europe. Very happy to see that, sorry, our balance sheet is improving also this quarter. We're coming out of the quarter with a cash balance of NOK 9.3 billion, which is an increase of NOK 721 million from last quarter, and a significant further increase from same level last year.
Happy to see that happening, and as Geir said, we're now having more than NOK 10 billion on our bank account. So that is a good reflection of a strong operating result, as well as certain things that we have done on the balance sheet, improving some of our credit ratios, et cetera, et cetera. Taking a further deep dive into the P&L, we see that the total operating revenues, compared with the same quarter last year, is up by 41%. You know, driven by the loads and also the higher yields. Very happy to see that, and also the ancillary revenues coming in at a nice level.
The fuel, as everyone knows, most people know, has come down significantly in the second quarter compared with the second quarter last year, where we had a very, very high fuel level. And despite a significantly higher ASK, we are actually coming down on the total fuel cost, coming in at just about NOK 2 billion. But as mentioned earlier, the fuel price has come up in July, but we are well hedged for the rest of the year, with about 20% for the remaining part of the year at attractive levels. And also, 20% approximately, 50% for the rest of the year and 20% for 2024. There is the EBITA of about NOK 1.6 billion, compared with about NOK 100 million in the same quarter last year.
Obviously, the reversal of the impairment, which had a massive impact in the second quarter last year, which then ended up like we had last year. We had nearly NOK 1.2 billion of profitability, and this year we're reporting NOK 538 million of profitability. But again, the underlying profitability, you have to take out the NOK 2 billion of Boeing deal, a great deal, for the company. But looking at the underlying operational result, that is, of course, a factor to take into account. Talking a little bit more about the balance sheet, we talked about that quite a bit. The balance sheet is growing as the business is growing. We've taken in 2 more aircraft in the quarter.
We're seeing that, going back to my comment about the balance sheet improvement, we're seeing that the holdback from the credit card acquirers is down to 29% from 32% in this previous quarter. And as you may, some of you may well recall, it was above 100% a year and a half ago. So that is a massive improvement, and that is really comes down to our, you know, credit standing for the credit card acquirers. Otherwise, there is no kind of, you know, unusual items on the balance sheet. The balance sheet is obviously also impacted somewhat by the strengthening of the U.S. dollar, as some of our debt and assets are denominated in U.S. dollars.
Very happy to see that our net interest-bearing debt is coming down in the quarter, compared with this first quarter, down from NOK 4.1 billion-NOK 3.7 billion, driven by the improved cash balance. And if you also take out some of the significant portion of the debt is kind of IFRS 16 or leasing debt. If you take out the leasing debt, which is a significant portion of the NOK 9.9 billion of aircraft financing debt, we are actually in a net cash position. Which brings me to the next point, which is really what we have announced this morning. We are calling the last NAS13 bond of NOK 450 million of par value.
It's being called at 105% of par, according to the loan agreement. That's part of an exercise that we are doing to optimize and simplify the capital structure. Obviously, the company has a capital structure and debt instruments that were really, really suitable for coming out of the reconstruction. But now that the business has stabilized, we've proven our ability to generate good cash, it is time for the company to address some of these issues. We've done a few things already. We have repurchased the part of the retained claim bonds in the first quarter, NOK 480 million at 72% of par. That was kind of the first step.
Second step is what we did this morning to call the last 13, and we will do further things, and our plan is to do further things to optimize and kind of normalize the balance sheet, which will also hopefully enable us to pay dividend as we move forward. So that's kind of the ambition, as we're kind of normalizing the balance sheet and gradually moving out of kind of the very suitable financial instruments that the instruments we had after the reconstruction, but now that we're normalizing the business, it is the right time to start moving on that, and with a strong cash balance, it's a way to also think about things like dividend.
At the same time, as we will ensure that the company has a robust and strong balance sheet, we have an investment program, coming up with the renewal of the ordering of the 50 Boeing aircraft, which we, by the way, have secured a NOK 500 million loan facility for. So, you know, we are in good control of our, our balance sheet, and we have a very, very strong balance sheet coming out of the quarter as well, which will enables us to do this kind of, kind of optimization and simplification of the balance sheet issues. Finally, just, we talked a lot about our cash, cash balance.
We generated NOK 1.5 billion from operations, a combination of strong operating result, as well as reduced holdback from the acquirers coming down to 29%, 39% last year. We have, of course, the payment of the aircraft leases coming, which is NOK 760 million. And I would also like to note that we have already paid in, as we've said repeatedly, NOK 3.2 billion of prepayment of the aircraft order, and combined with the $500 million facility that we've put in place, we are very well positioned, and we have a very good position in terms of our stability of the balance sheet and our cash position in the future.
So coming out of the quarter, NOK 9.3 billion of cash, currently NOK 10 billion, but of course, that varies a little bit, but we are very happy with that situation. All right. Thank you, guys.
That's all. Okay. So let's discuss the fleet going forward. I think on the last couple of quarters, we have been talking about delays from Boeing. I think Boeing is coming-
... you know, closer to a more normal situation where the delays are getting, you know, shorter. We had the delays into the summer, as we know. We were, you know, four to five aircraft short of what was the original plan when we planned the summer season, last year. But we have taken quite a few MAXes over the last months, and the fleet today consists of 16 MAXes, actually. So we are starting to build the fleet of MAXes, and it's going to be increasing rapidly, actually, throughout the rest of this year and also through 2024. So as per today, we are, you know, the summer has been, you know, with 81 aircraft.
Into next summer, 2024, we are going to increase the fleet by 10 aircraft net. We are going to bring on 15-16 MAXes from now until next summer. We're going to redeliver seven of the currently, you know, NGs that we are flying today. And looking into to the end of 2024, we will have actually 34 MAXes when we celebrate New Year, 2024-2025. So by the end of next year, 1/3 of our fleet will be MAXes. The MAXes is burning, you know, 15%-16% lower on fuel. It is a 40% noise reduction for the passengers, as well as for the crew and in the cockpit.
So it's a much more comfortable aircraft to fly for everybody, and we are very, you know, very happy that we are seeing now Boeing delivering, let's say, more according to plan than what it has been for the last, let's say, year. We have been trying also to optimize the specifications on the aircraft that we are taking delivery of. That has been done by the fleet team, led by Tore Jenssen, together with Knut Olav, and they have been doing, on the procurement side, they've been doing a great job. So I think and we are doing renegotiations also with the subcontractors, delivering, you know, items into the aircraft.
As it looks today, we have actually reduced the price on each aircraft with between $4 million and $5 million, which is massively if you count in that we are actually planning to take delivery of 80 aircraft over the next very few years. We think that, you know, going into 2024 and into 2025, we believe that Boeing will be able to deliver aircraft in accordance to plan, so they will have a caught up kind of the, the delays as we are, you know, as we are seeing today. We have paid in already $3.2 billion into this fleet order, so there is not much CapEx as such into, let's say, 2023, the rest of 2023 and 2024.
And we have, as Jørgen said, financed already the first 10 aircraft at very attractive terms. In the fleet order that we have, we also have an option to have a look at the MAX 10. And we are actually doing that as we speak. You know, we were kind of negative towards the MAX 10 back six months ago, partly because of the range. These aircraft can fly in the network that we are flying. Based on new information that we have received, that has changed to some extent. So we are actually evaluating now seriously on whether we should bring in a MAX 10 into our fleet.
A MAX 10 in a Norwegian configuration will have approximately 225 seats, and on the basis of a good price, that we obviously need to negotiate, this is something that we are considering. So that we will then have a fleet consisting of aircraft, you know, comparable with the 321 and offering down to 25 seats. The seat cost will obviously go down, also, of course, depending on the price for the aircraft. So that is for information only. So if you look at the fleet plan here into 2025, we have said that we would like to get up to a fleet in the area of 100 aircraft, and by 2025, you can see that we are at 100, as it looks today.
The flexibility that we have here is actually that, you know, we have a quite high portion of leased aircraft today. There is obviously an option to extend these, should we want to increase the fleet even more than what you are seeing on the screen here. So that's the fleet. On to the loyalty program again, I think I have been covering it quite well, but what we are now trying to create there is a partnership between, you know, first of all, us and Strawberry, and now Avida. There is no doubt about the fact that since we launched this new loyalty program, we have been receiving calls, many calls, also from huge companies, you know, showing their interest on what we are doing here.
We are in dialogue as we speak with many companies and with many potential partners into this new venture, which we think is extremely exciting. So this is full speed ahead, and as I said, we are planning to launch it then prior to New Year. And then we're also, as I said, bringing in Avida as the financial partner. It's very important to understand that the value proposition as such for each partner's loyalty program will stay under the control of that partner. But for the members, we are offering a much more flexibility, where you can actually use miles, points, or what we are going to call it, between the loyalty programs.
We think that we would like to create an environment with a lot of activities. We would like to create engagement, you know, among the members and with many offerings, as such, and then just create a better product for the members of the different loyalty programs than you know merged together into one company. Very exciting! Widerøe, I have also covered that to some extent, at least. But Widerøe is a company with 45 turboprops. They have three Embraer E2 s. They are operating, I would say, the majority part is operating the so-called public service operation, FOT-ruten, as we call it here in Norway. And we think it's a perfect match for Norwegian.
Widerøe and Norwegian today are not really competitors. We have very small overlap on the network, so we will more complement each other as we see it. Widerøe has a great organization. Widerøe will be kept as the company it is today. It will be run by the management team in Widerøe today. The head office will stay in Bodø, but we will take out synergies. Obviously, there are synergies on the network side, where we are going to kind of connect the two networks in a much better way than what we are doing today, giving the kind of the customers, the passengers, a better offering. We have been just listing up a couple of alternatives here, where you are seeing how you can connect the Widerøe and Norwegian network.
For example, out of Oslo, where you can connect it from the Widerøe network into Oslo and out to more than 80 international destinations. The same with Trondheim. This is something you can do today, but we will make sure that for the passengers, we are going to create a much better product. It's going to be seamless, and it's going to be a shorter travel time because we are going to interconnect the networks in a much better way than what we are currently doing towards Widerøe today. We are also very happy to see that the Norwegian government is incentivizing, or you know, making it more attractive for passengers, first of all, in the north of Norway, to travel, by reducing the max price, the max ticket price, with 50%.
That means that the Norwegian government is coming in with more subsidies, more support into Widerøe. That, again, will create more passengers, because it's going to be cheaper to travel, and that will benefit Widerøe, it will benefit the passenger, and it will benefit the combined company, Norwegian-Widerøe. The tender is out. We will know the result of the tender by end of September. We think that Widerøe will do well in the tender, as they have been always been doing, and we are very much looking forward to the results, and then we can move on. We have filed the formal report to the Norwegian authority to the competition authorities. We did that on August 11.
And then we will just see how this develops and whether we can get this transaction approved. Very much looking forward to it, and I think it's going to create, you know, a more profitable Widerøe and a more profitable combined company going forward. We are listing here the synergy is NOK 200 million-NOK 300 million. Personally, I think that is conservative. I think we should be able to do better. But time, you know, time will show if we get this approved, and we can get going into this cooperation. Just to summarize, Q2 turned out well, in my opinion. We planned the summer season well. We have executed on the plan. We have been flying our own aircraft.
We are flying with our own fantastic crew. Q3 is looking fantastic. It's going to be a historic, a good quarter for Norwegian. We have headwind on the cost side. We realize that. We have a weak local currency. We have inflation. It's hitting everybody, including Norwegian. But I think towards the analysts in the room here, and I think it's important also to understand that going forward, and also in 2023, in Norwegian, because we have the seasonality, and where we are going to take down the capacity in low season, that's something you will see also in the coming winter. I think we will even take out more capacity in the coming winter than what we did last winter. That will increase the CASK.
So you will have a high CASK in low season, then you will have a low CASK in top season. If you look at the CASK in July, for example, we are way down on the 0.3 level, but in the low season, it will be much higher. But the bottom line, on the 12-month rolling basis, will be much better. So we have to accept a higher CASK in low season, but the bottom line will be much better than how it has been, you know, previously. And that, that's just something that we have to accept. Because we're not able to take out the, you know, the 100% of the CASK when you take out the capacity.
But when we are running Norwegian full speed, full capacity, as we were doing in July, we are way down on the 0.3 level. So just have that in mind. On hedge position, as Hans-Jørgen said, we are 50% hedged, for the rest of 2023, 20% next year. On 2023, we are hedged at, let's say low $800 level, 2024, between $750 and $780, which is a good position. So if you look at Norwegian compared to the peers, we are coming from a bad position, unhedged 2022, into a very good position, while the other guys are doing the opposite. They're coming from a very good position into a worse position.
So that's why if you look at the CASK, the fuel CASK between the peers now, we are much more leveled than what we were in 2022. I'm very happy to be able to kind of visualize the value, underlying value of the reward program and what we are doing on the loyalty core, and that's why you will see an NOK 800 million gain coming into the financials in Q4. Very good. And as Jørgen said, the capital structure, we are fine-tuning it. I call it fine-tuning because we have a very healthy capital structure in the company today, but we would like to come into a position where we could pay dividends going forward. I think that's it.
Okay.
Yep.
Okay, John-
Yes.
You can stand over here. We then open up for Q&A from the audience. You don't need a microphone, but please state your name and where you're from, please. Let's start with Hans -Erik.
Hans Erik Jacobsen, Nordea. In the report, you write that you plan to reduce capacity during the winter between 30%-40%. That seems to be way above the normal seasonal variation in demand. Can you explain the rationale behind that? And also on the CASK, you said that it's going to be higher than what you previously expected, mainly due to inflation and the weak Norwegian currency. But is the low capacity utilization from the aircraft in the fourth quarter that you just guided on, is that a part of the CASK guidance?
There was many questions, actually. I see the rationale behind it is very simple. That's because we expected demand to be lower. So if you looked at the winter 2022-2023, you reduced the capacity then as well with more than 30%. So it's not massively different, actually. But it is in line with what we expect to be the demand. And where do we cut the capacity? Well, we will cut it obviously to the typical, you know, summer destinations, obviously. And then we will do something on the frequent side as well. Which markets? Norway, Denmark, Finland, it's going to be all over the place, reduction. So it's just aligning the network, aligning the capacity with demand.
On the CASK, I mean, I don't want to make it too dramatic because if you look at the CASK in, let's say, for the same, let's say for from January to July in 2022 compared to now, and if you take out the inflation effect, they're actually delivering a CASK better than the inflation. So yes, we have an increase, but believe better than an inflation. And so, but I think as I said, we will have a higher CASK in low season, and then it's full speed in the high season, where you will have kind of the much lower CASK. So that is something that we will have to live with. But the bottom line is...
I mean, if you would like to have a high CASK as a low CASK in low season, you can just send all the aircraft up in the air and fly as many kilometers as we can. Then you will have a low CASK, but the bottom line will be really bad. I don't know if that answers your question, but yeah.
Yes, it does. But still, you know, when you gave the CASK level earlier this year, I guess you already had planned for the seasonal variations. So the question was really, you know, we are doing better than expected, apart from inflation and weak NOK, but is demand going to be reduced more in the fourth quarter?
Mm-hmm.
That is really what I meant when you made the original CASK estimate.
I think if you look at what we planned, let's say, earlier this year, into the kind of winter 2023-2024, I think we are probably at the point now where we're actually taking out slightly more capacity than what we planned, let's say, six months ago.
Thanks.
I think that's fair to say.
Okay, Hans-Jørgen Wibstad.
Hans-Jørgen Wibstad, Widerøe. You are guiding that you will have, you have a good inflow of bookings, into the next few months. But according to the, the current, data on, passengers traveling domestic in Norway and to and from Norway, we see a sharp decline, particularly in international traffic and also, fortunately, also some in on domestic. So what point of sales do you actually have this, this guiding for? Can you give me more details on that? The second question is, Ryanair is just yesterday or on Thursday, said they will open a base in Copenhagen with two aircraft from, December. Any thoughts about that? And finally, the MAX 10, very interesting, 225 seats. What kind of routes do you see that aircraft to be operated on?
That's many questions, Hans-Jørgen again. I think on Ryanair first, I mean, that is to say, we have been expecting that. So that's absolutely no surprise. I think on the bookings and what I said earlier today is that, you know, when we look at, you know, the short period, you know, going forward, let's say September, October, as I said, you know, the load factors are on the 2022 curve, slightly above the 2022 curve, which is good, but the yields is 20%-25% higher. So what you're describing, Hans-Jørgen again, is not something we're actually seeing. That's the figures. That's how it looks. Domestically, I mean, domestically, it's working well. I would just say, you know, well.
You know, looking into November and December, however, there, there's no visibility as per today. I mean, the load factor in November and December today is low, as expected. But September, October, good. It is MAX 10, you know, what we have been slightly concerned about is, for example, you know, to fly with 225 passengers from Oslo to Tenerife, for example, or to the Canaries, has been, you know, is that range gonna possible. We think it is today. We didn't think that six months ago, but with new information, we think that is probably possible. Can you fly from Helsinki to Canaries? Maybe, maybe not.
So that's a typical one, and then you have the big destinations down, you know, in, in, for example, Spain, Alicante, Málaga, which obviously could fit for an aircraft like that. And then we are opening up a base in Riga next year. That's the first step, kind of, out of the Nordics again. We did plan to do that in 2022, but because of the delays from Boeing, we didn't. So next year it's a plan, and then maybe we will come with some other interesting news for next summer as well. We have to see. We have to wait and see.
Thank you. Okay, another question here.
Yeah, Mike Lynch, private investor. Question was regarding the thing you just said about penalties, actually, or late deliveries from Boeing. Are there any penalties that are in place for Boeing for those late deliveries of aircraft? Reduction because it's gonna cause reduction of income, it's gonna cause reduction of EBITDA as planned. So are there any penalties there to cover that?
First of all, thank you for asking that question, because I should have been mentioning it myself, and it, I think it was actually in one of the slides here. Yes, there are penalties. We are in, I would say, final, kind of, discussions on agreeing on the penalties, but yes, there are penalties. And, if we get our, kind of, will, this will be cash penalties as well. So yes, we are taking MAXes, and they are delayed, and we will be compensated. Yes.
Those are in addition to the reductions from NOK 4 million to NOK 5 million?
Yes. Sorry. Yes.
Okay, I don't think there's any other questions from the audience. We can go for a couple of questions from the web. I'll start with one from Ole Martin Westgaard. CASK guidance. You're withdrawing your guidance. You're not giving any new guidance. How do you see CASK ex fuel developing into 2024?
That is guidance. So we are not giving any guidance now. As I said, we have been, you know, we are doing. I mean, two areas we are working hard on. One is the specifications of the aircraft, which will have a CapEx effect, you know, as I mentioned, but it will also have an OpEx effect going forward. So that's one big area with pretty massive savings. We have also been doing a study on the maintenance side, first of all, on the engines. Today, we're using Lufthansa, so I would say we have been in discussions with Lufthansa and others for a very long time. We are very close to finalizing a deal. We know that that will give us savings.
So, that's two areas we have, we have been focusing on. But we are not going to give any guidance now, at least not for now. Will we give it later in the third quarter presentation? Maybe, maybe not. But it's difficult as for today to give a guidance. We don't want to give a guidance for 2024 yet. If you're looking at our peers, for example, they're all guiding increased costs. I think Ryanair is guiding 67% increase. Lufthansa is guiding an increase in cost, and we will have a challenge on the cost side as well. So we have to come back to it.
Finish with a final question from Achal Kumar from HSBC . Final on capital structure. Which year should we expect a dividend payment? And do you have any specific criteria in mind, thinking minimum liquidity levels, net debt levels, or anything else?
I think we have just started that exercise in terms of how we are going to structure the balance sheet in the future. We cannot give a specific guidance on when we're able to achieve that. Obviously, we have a strong ambition to be able to pay dividend as soon as possible. We have now taken out the last 13, which had dividend restrictions. We have further financial instruments with dividend restrictions, so we'll need to talk about those. But our ambition is clearly to get into a dividend position as soon as possible. That is our ambition. On the criteria, obviously, as I mentioned earlier, we will for sure maintain a strong sustainable balance sheet regardless of what we're doing. So that will be one of the important criteria.
The other thing is that, you know, of course, with payment of dividend, there is no reason for us to pile up cash. So I think that is, you know, assuming that we will continue to generate positive cash flow, it would make sense for us to start paying a kind of normalized dividend level as we move into the future.
Okay, no further questions, so we conclude the session. Thank you.
Thank you. Thank you. Thank you.