Deutsche Lufthansa AG

Andreas Hagenbring – Head-Investor Relations Ulrik Svensson – Chief Financial Officer

Neil Glynn – Credit Suisse Damian Brewer – RBC Stephen Furlong – Davy Ruxandra Haradau-Doser – Kepler Michael Kuhn – Société Générale Daniel Röska – Sanford Bernstein Andrew Lobbenberg – HSBC Johannes Braun – MainFirst James Hollins – Exane Anand Date – Deutsche Bank Victoria Bryan – Reuters Stefan Bauer – dpa-AFX Michael Gubisch – Flightglobal Panagiotis Koutoumanos – Frankfurter Neue Presse

Thank you, Emma, and good morning, everybody. Welcome to the analyst call for the release of the Q2 numbers today.

I've got Ulrik Svensson, our Group CFO, with me, and he will, of course, give you an overview on the numbers. Afterwards, as Emma said, you will, of course, have the opportunity to ask questions.

And as Emma also said, we welcome journalists and media on this call as well. I'm happy to go through everything today.

And Ulrik, the floor is yours.

Thank you, Andreas, and good morning, ladies and gentlemen. The Lufthansa Group has seen a very good development in the second quarter.

The adjusted EBIT, our leading financial indicator for the financial success, has improved by 75% compared to the previous year's period to more than EUR1 billion. And contrary to the first quarter, this time, the strong result development is largely driven by the group's airlines.

All Passenger Airlines together contributed EUR412 million to the result improvement. Lufthansa German Airlines and Eurowings were particularly successful with a profit increase of EUR265 million and EUR44 million, respectively.

But also, Lufthansa Cargo contributed significantly with its adjusted EBIT up EUR71 million on last year, thus continuing their earning recovery for the second quarter in a row. The total improvement year-on-year for the group was EUR435 million in the second quarter.

The Passenger Airlines saw a positive revenue development, with constant currency unit revenue up 1.8%. And this includes a dilutive effect of 1.4 percentage points on the first-time consolidation of Brussels Airlines.

While we are obviously satisfied with the revenue development, we are focusing more on the fact that constant currency unit cost, excluding fuel, came down 3.4%; and this in a quarter in which we increased the load factor by 3.8 percentage points, which in itself has a negative effect on unit cost due to the higher passenger-related costs. We are pleased to see that this development has compensated for the not-so-good cost performance in the first quarter, and unit costs are now down 1.2% in the first half year.

Of course and as always, we must and will continue to focus on further cost reductions as this remains the most important way to make higher margins level sustainable in the future. Looking ahead, we now have better visibility into the third quarter bookings.

On the basis of the actual results in the first half year and our expectation for the second half, we increased our adjusted EBIT forecast for 2017 to above previous year. I will come back to the details of our guidance at the end of this presentation.

Looking back at the second quarter, the trading environment developed well against the very weak last year comparison. The terrorist events and the political uncertainty last year had a very negative impact, in particular on inbound long-haul leisure demand at the time.

And you can see that, indeed, Asian and North American demand has recovered now. But also beyond this, structurally and most importantly, sustainable improvement supported trading.

Our new joint ventures with Air China and Singapore Airlines in Asia, the agreement with Lufthansa mainline pilots and improved commercial steering of our group airlines and, of course, also the change in market behavior of the Middle Eastern carriers. Demand in our home markets developed well.

Drivers here are the good economic development and the wet-lease agreement with Air Berlin. Load factors improved at each Passenger Airlines in almost all traffic regions and every month, summing up to 3.8 percentage points for the quarter.

Capacity increased by 13.5%, of which approximately 3.9 points were from organic growth and 9.6 points from the consolidation of Brussels Airlines and the Air Berlin wet lease. Despite the yield dilution from this, cumulative constant currency unit revenue for all Passenger Airlines were up 1.8%.

The Network Airlines alone would have seen a constant currency unit revenue improvement of 3.7%. Looking ahead, we have seen trading in July broadly in line with the second quarter development.

From now onwards, however, the comparable base for the third quarter is getting more demanding. August would be the first month in which a relative improvement would no longer be visible to the same extent as before.

From September onwards, forward bookings look good, but the business has become more dependent on short-term bookings from premium passengers. As the trading of the Passenger Airlines continues to improve throughout the second half of 2016, we currently expect unit revenues in the next six months to become negative on average.

But to be clear, the third quarter indications do look better than that, but visibility in the fourth quarter is very limited. And on this basis, we believe it's only right to highlight the risks of tougher comparables and dependency on short-term bookings and not be too optimistic with our own expectations at this stage.

On the cost side, we expect to make further progress. We expect unit cost to come down slightly.

A growth of the lower-cost Point-to-Point Airlines will certainly support this development in the mix, but we also expect to achieve cost reductions in the Network Airlines. Ex-fuel unit cost came down by 3.4% in the second quarter on the back of unit cost reductions at all three Network Airlines and the organic growth of Eurowings.

The first-time consolidation of Brussels Airlines and the wet lease of Air Berlin further supported this development by a mix impact of 0.8 percentage points. Fuel was a headwind of EUR223 million in the first half year.

On the back of the RASK and CASK development, we have looked at before and the total improvement in contribution of the Aviation Services, the Lufthansa Group has seen a strong profit improvement year-to-date. The adjusted EBIT has almost doubled from the last year's level and achieved the highest absolute number in the history of the Lufthansa Group.

EBIT is going to be slightly different from adjusted EBIT. This will change once the agreement with the pilot union Vereinigung Cockpit has been formalized and will be reflected in the accounts.

The net result for the first half year came in EUR243 million above last year. The good result and very solid trading environment helped us to generate a strong operating cash flow, up EUR1 billion to EUR3.2 billion in the first half year.

Both the first quarter and the second quarter contributed equally to this positive development. With gross CapEx on target last year, free cash flow came in at EUR2.1 billion, nearly twice as much as last year.

This has also driven the reduction in net debt by EUR1.6 billion compared to the end of last year. Pension deficit now stands at EUR8.1 billion.

This is EUR200 million less compared with the end of last year at equal interest rate and mainly on the back of the development of planned assets. The special contribution of EUR1.6 billion into the new-defined contribution scheme for the flight attendants of Lufthansa German Airlines will now start in the third quarter and will continue in various installments until the end of the year.

The equity ratio currently stands at 19.4%. This is an improvement versus the end of the first quarter despite the dividend payment in June on the back of increased profits and the higher pension discount rate.

The airlines, both passenger and cargo, are the main contributors to the strong result development in the second quarter. All of them have been also able to increase their margin considerably.

The Network Airlines strongly increased their adjusted EBIT, which was up EUR346 million in the quarter to EUR797 million. Constant currency unit revenues increased by 3.7% in this segment.

Constant currency in nonfuel unit costs were down 2%, and fuel costs were down EUR28 million. The Network Airlines increased their margin by 5 percentage points to 12.9%.

The Point-to-Point Airlines also showed a good development. Revenue was up strongly due to the first half consolidation of Brussels Airlines and the wet-lease agreement with Air Berlin, which showed its impact on the beginning of the second quarter.

Constant currency unit revenues came down 7.8%, almost exclusively due to the mix effects. Constant currency nonfuel unit costs were down 15.3%, and fuel cost increased EUR98 million.

All this resulted in a margin increase by 7.1 percentage points to 5.1% in the quarter. Lufthansa Cargo has seen a recovery of demand across all regions.

Constant currency yields were up 11.5% in the quarter. The initiated cost saving program has started to contribute as well.

Adjusted EBIT went up by EUR71 million to EUR45 million in the quarter. This is a margin increase of 12.8 percentage points to 7.6%.

Lufthansa Technik saw adjusted EBIT decrease by EUR32 million to EUR85 million in the second quarter. The margin came down by 2.9 percentage points to 6.5%.

Year-to-date, this company is now showing a more normal profit development. LSG Group showed an adjusted EBIT below previous year, entirely on the back of additional restructuring costs.

The underlying profit development is well in line with our expectations for the year. On the back of the good profit development in the first half year and the increased visibility on the important bookings for the Passenger Airlines in the third quarter, we have decided to increase our guidance for the full year.

We are now expecting an adjusted EBIT above previous year. The planned capacity growth for the full year remains unchanged at 12.5%.

This means that we expect available seat-kilometers in the second half year to grow organically by 4.7%. Including the wet-lease aircraft from Air Berlin and the first-time consolidation of Brussels Airlines, capacity growth for the group would be at 13.5% in the second half of the year.

As stated before, we expect constant currency unit revenues to turn negative, in particular due to the uncertainty in trading in the fourth quarter and the dependency on short-term bookings. We continue to expect the reduction of non-fuel constant currency unit costs and expect them to be slightly negative in the second half of the year despite higher passenger volumes, and therefore, additional passenger-related costs.

As is visible in the first half year, however, cost per passenger are coming down and profit goes up. Fuel cost will be EUR100 million lower than last year in the second half.

This excludes the first-time consolidation of Brussels Airlines. The Air Berlin wet-lease and Brussels Airlines, which are not part of the guided elements so far, are expected to deliver a small profit contribution.

And our non-Passenger Airline business are expected to have a cumulative result on par with the second half of 2016. With this, I come to the end of my speech.

Thank you for your attention. I'm looking forward to your questions.

Well good morning everybody. If I could ask two questions, please.

The first one, obviously, RASK performance was very strong in the second quarter. But I noticed yields were actually down at constant currency slightly in every geography.

And the gains clearly were driven by the load factor. Just interested in terms of the load factor, is still very low relative to Air France-KLM in particular.

So are you focused on improving utilizations further and driving that load factor into the second half? And then the second question, Ulrik, you mentioned the Air China and Singapore JVs kicking in.

Is it possible to give us some color as to how meaningful their contributions have been to unit revenue? As I would assume that those cooperations have had a structural benefit to unit revenue from APAC in the first half of the year.

Yes. Good morning.

Well, clearly, we have seen a very helpful RASK number. As you clearly indicated there, it is a function of load factor as well, how this yield is performing.

When you are comparing with Air France-KLM, we have to remember that they structurally have more passengers in this part of the world, which, of course, lead to a high seat load factor. So that is nothing which is concerning us at all.

I think, indeed, the RASK development we have seen over the last quarter has been very positive and is a very strong indication that our premium strategy is working indeed. In terms of the Singapore and the joint ventures, structurally, this is helping us, there is no doubt.

But in total, our joint ventures is giving us total revenue of 7% of our long-haul traffic. So the joint ventures are very important for us, and the Singapore Airlines joint venture is indeed very helpful.

So just to come back on the first question. Can you give us some guidance at this point?

Should load factor be flat or up in the second half of the year?

As we see today, Q3 is up. And when it comes to visibility towards the later part of the half year, I think it's very difficult to say.

Understood, many thanks.

Two questions from me, please. First, I'd like to turn to costs.

In the prepared presentation, you noted that ex-fuel unit costs were down 2% in the Network Airlines and 15% in the Point-to-Point Airlines. Given your guidance for the second half year, can you explain what's gone wrong in the cost base on the 1st of July?

Because clearly, what we've done in Q2 seems out of sync with that guidance. If you could elaborate a little bit more on what the issue in the second half year is, that will be good.

And then, secondly, with all the press commentary about it, could you say a little bit more about the company's thinking about the extremely heavy and amortized 777X and what your thinking on that is currently? Thank you.

Well, starting on the cost side, we indeed have seen a very good cost reduction here in the second quarter. We have to remember, however, that seat load factors are, as we heard, going to be very helpful as well in Q3.

And as we all know, seat load factors are driving costs. We have a cost per passenger, of course, in catering, we have it in security fees, we have fees to the airports.

So therefore, we are cautious that higher seat load factors also are driving costs. And of course, that will have a negative impact on the CASK, and that's why we are slightly cautious here in terms of the CASK guidance going into Q3 and Q4.

Your question on the 777, I did not quite get.

There seems to be press commentary about maybe reassessing the 777 order in favor of lighter-weight A350s, and I'm wondering if you can shed any light on that. And just as a follow-up, given the load factor increased by 3.6 percentage points in Q2 year-on-year, but you brought unit costs down.

I still don't really understand why with maybe even the similar load factor growth, you wouldn't get the same cost progression in Q3?

Well, I think also we have to remember that we had talked quite dramatic cost reductions towards the end of last year, so it's just tougher comparables as well. And as you know, we are cautious by nature here, so you also have to bear that in mind.

In terms of the aircraft, I mean, we are constantly looking at how we should see our fleet going forward, so I cannot really shed any further light on your question there.

Okay, thank you very much.

Good morning and congrats on the results. I'm just wondering whether you make some comment on what you think of the enhanced JVs that were announced by Air France?

Do you think that's a positive for consolidation in the industry, and their comment about being able to acquire a minority stake in the U.K. airline?

And then, secondly, maybe you can just give us an update where we are in terms of the pilots, that will be great, in terms of the deal.

Okay. Well, starting with the Air France-KLM deal.

I think, in general, all consolidation is good. The European market is very fragmented.

The airline industry, in general, is very fragmented. And looking at what has happened in U.S., I think that helped the industry quite dramatically.

So I think this is a positive sign. We at Lufthansa are, of course, contributing as well later this year with the Air Berlin wet-lease and our acquisition of SN Brussels.

So consolidation is indeed good for the industry. In terms of the pilots, we are working very constructively with Vereinigung Cockpit.

The deal will be finalized in the later part of this year. that it's going wrong.

It's just that it is taking a long time, as we all know, with very complex structures with the pilots.

Okay, that’s fine. Thank you.

Yes good morning. First, to follow up on Neil's question to better understand current price trends.

With the monthly traffic figures, you indicated a positive pricing environment at constant currency in May and June and a negative pricing environment in April. How negative was April such that you end up with a huge decline at constant currency of 1.8% in the quarter?

And looking into Q3, you guide H2 RASK negative, but Q3 should be better than this. So what underlying price development do you see during the current quarter?

And then what was the rationale to shift five A380s from Frankfurt to Munich? I was a little bit surprised by the decision, particularly because Condor announced shortly after that they will move all long-haul capacities from Munich to Frankfurt in order to reduce complexity in the airline.

And to better understand the dynamics at Munich Airport, will the A380 operate under this – on the same route operated today by the A340s which will be shifted to Frankfurt? Or will the average turnaround time of the A380s be different, lower than the average turnaround time of the A340s at the airport?

Okay. So starting with the A380 in Munich, we have a strong demand in the Munich market.

We are, of course, as well all the time looking at how are we optimizing where we are basing our aircraft, not only of course, depending on demand, but also depending on where we have the most beneficial costs in terms of airport costs and other costs. So it's a constant puzzle on where we are basing our aircraft.

And now it made sense to replace A380s over to Munich. In terms of the guidance and actuals in RASK, in the third quarter, there is, of course, always different effects in different months, which I don't think one should get overly excited over.

There are eastern effects, there are a lot of different effects. I think you have to look at this on a more longer term and not look at every single month specifically.

Anything else, Ruxandra, that was left open?

No. Thank you.

Thank you very much.

Good morning. And firstly, one follow-up again on the unit revenue trends that you indicate some, let's say, cautiousness looking at the fourth quarter.

We heard from other airlines that they also see capacities increasing a little more in the winter season. Do you also see that and is that part of your cautiousness?

And maybe a few words on what you expect in terms of competitor behavior on your most important routes. Secondly, it has become rather silent as of late around Berlin.

There was a lot of news out early in the year. Maybe some words on how you assess the situation at the moment and what scenarios you could imagine going forward.

And then, lastly, you said catering development underlying was in line with your expectation, but it continues to be burdened by restructuring. What's the outlook for the business here?

When will the restructuring be mostly finished? And when can we expect positive profit momentum again?

Thank you.

Thank you for your questions. Well, starting in terms of capacity, we do not really see large changes there.

Of course, we have Ryanair coming in to Frankfurt, but that is nothing which has impacted our guidance in this respect. So there is little news on that side.

On the Air Berlin, clearly, I'm not really commenting on Air Berlin itself. But I would like to, of course, reiterate what we had said earlier, we are very interested in Air Berlin.

And if the right conditions are there, we will be very interesting in taking part of their business, of course. Air Berlin, there are three challenges, and they are the costs which are too high in terms of flying personnel; there is too high debt in the company; and thirdly, there could potentially be cartel issues.

So it's rather tricky. In terms of the catering, there will be further restructuring costs in the Catering business.

This is, I would say, a several-year project before that is finalized.

Great thank you.

Good morning Ulrik. Good morning Andreas.

[Indiscernible] And I'm sorry to dwell on the yield, as the first question again. But just one comment around, if you could.

Is there a mix effect we're actually seeing in the underlying yield as you're growing stronger in the Point-to-Point, which is arguably more Economy? You're reducing First Class and Business Class and a little bit growing less fast in Economy, so is there a mix effect in the underlying yield?

Or is what you're seeing the yield decline actually more driven by the market? And you commented briefly on the Vereinigung [ph] talks.

I just want to ask, which major labor union agreements remain open and to be negotiated after you close that towards the end of the year? I'm thinking of Verdi possibly in Hamburg.

And lastly, if you could comment a little bit on Fraport, maybe not so much on the deal you made right now, but more on your long-term aspirations for that partnership. Kind of what would be your best case or wish scenario, your preferred goal in ten years, how you and Fraport kind of strike a new balance in the partnership?

Okay. Well, starting on the mix effect.

Clearly, there is a small mix effect, around one percentage points. But that is not the main driver here, and that's basically the same on both Q1 and Q2.

In terms of labor union, these, of course, we have them, majority of them done when we are finalizing with Vereinigung Cockpit here. The main driver of our cost as we know is the flying personnel.

With Verdi, there will be further discussions with them towards the end of the year. But this, in terms of modeling of our cost side, is not as essential as it is with the flying personnel.

Fraport, you have to see that the first short-term agreement we did now with Fraport is just the initial steps of a long journey. We are having still a 20% on average higher cost at Fraport compared with the other hubs we are based in.

So it's going to be a long journey, and we have the competitive costs in our home base here in Frankfurt. So the last question, I did miss.

No, that was the last question, Ulrik. But maybe just following-up on the open union contracts then.

If you closed the deal with Southsea towards the end of the year, is there any open labor agreements there with the pilots? Or does that kind of close everything for the next five years?

In terms of the pilots, that indeed is closing everything.

Okay, thanks for the clarification.

Hi everyone. Could I ask for a little bit of a discussion on Brussels Airlines and where we're going on the decision-making as to how or whether it's going to be integrated into Eurowings, and how you're going to get your arms around that?

Can I ask about the non-passenger businesses? I think you guided that the non-passenger businesses will be flat in the second half.

You spoke about catering facing restructuring and, yet, cargo looks to be flying. So are we expecting maintenance to struggle so what happens at maintenance and on the flip side, how can you best take advantage of the remarkable turnaround in cargo, and do you think it's sustainable?

Starting with Brussel Airlines, there is good progress on the implementation teams between Brussels Airlines and Eurowings. As you recall, we have taken a full year to come out with the conclusions of all that good work.

So we will have to wait another couple of months until we will shed further light on how it will be integrated in the most efficient way. In terms of the cargo, the cargo market, as we all know, has short visibility and is a structurally difficult market.

But for the time being, there is a very good demand. And as we all know, we have seen a consolidation as well in the sea freight market, and that is probably helping also in the airline market.

So there are structural things which looks better. But I think one is better to not be too – looking too much into the future when it comes to cargo.

It is structurally a very fluctuating business in itself. In terms of the non-aviation business, there are nothing in MRO which makes it different from what you have seen in previous years.

It's a steady growing business, and there's nothing there which indicates anything else.

Okay, thanks very much.

Yes, hi, good morning. Thanks for taking my questions.

Firstly, again on the pricing side and specifically on Asia and LatAm, your key competitors had much more favorable development in these regions with high single-digit, even double-digit RASK increases. While especially in Asia, you seem to have only flattish development.

Maybe you can help me to understand that. And secondly, you have been repeatedly mentioned as being one of the bidders for Alitalia.

At the same time, I think in the Q1 conference call, you were saying that you are not interested in Alitalia. So maybe some clarifications here.

And then, thirdly, on Air Berlin again. What keeps you from doing more wet leases to circumvent the problem with Air Berlin's stats and its cost base?

Okay. We'll start with the Asian thing.

Indeed, we see good return of leisure passengers coming back into Europe. But we have to remember that we didn't see as large hit as some of our competitors did, for example, flying into France due to the terrorist attacks there.

So they just had a more negative comparison. I think that's the reason why you don't see the same development for us.

In terms of Alitalia, yes, indeed, we have repeatedly said that Alitalia, as it looks today, that is something we are not interested in. However, the Italian market is very interesting.

We are already today an important player in the Italian market. And we do want to play an active role there to shape the future of the development of that market.

Now how that would look like exactly, that is too early to say.

We've got a few analysts still haven't registered for questions, and we would like to close their questionnaires now. Everybody just registered now will be taken, those who are asking a follow-up, please limit to one that would be great.

Thank you very much.

Three from me, please. I was wondering if you could just confirm whether CapEx guidance is still EUR 2.7 billion gross for the year?

I think it was that before. The second one, just on the pension contribution, EUR 1.6 billion.

It looks like that's been delayed. I was wondering if there was a reason for that and whether it will all be done by the year-end 2017.

And then the final one, just a point of clarification, it's from Daniel's question. I'm maybe being stupid, but I didn't quite get the 1 percentage point mix effect.

Perhaps I can ask – the way I would ask it is Q2 2017 Network Airlines unit revenue was up 3.7%, as you helpfully said. I was wondering if you can give us a bit of what premium was, what non-premium was.

So starting on the CapEx side, yes, indeed, EUR 2.7 billion is still our guidance in terms of CapEx. When we speak about the pensions, the EUR 1.6 billion, which is still sitting in our balance sheet, which are going to be transferred over to the cabin crew pension fund, that is indeed happening at the end of this year.

And the reason is because there is a lot of different choices for the flying personnel on which pension scheme they actually choose and, therefore, takes some time for them all to have made their individual choices. When it comes to the mix change, I'm not quite sure I can give you anything more on the feedback on that more than I already said.

You had further question as well, you can. Was that all?

No, no, there was that question. I just didn't quite get the 1 percentage point mix.

Are you saying that premium was 1 percentage point ahead of non-premium in terms of that unit revenue?

I think maybe just from me, James, what you can assume here is, of course, a very important story is that non-premium passengers, leisure demand has come back more strongly than premium growth. So of course, the share of non-premium has grown compared to last year.

Okay, okay. Thank you very much.

Good morning everyone. I had two on cash, please, and then another one.

Firstly, on the working capital, could you outline whether there is anything slightly strange going on in there? Or actually, should we just read that as forward bookings for Q3 are just very, very strong?

Secondly and just to follow on actually from a couple of earlier questions. If we try and extrapolate forward both for H2 and maybe for next year, given your CapEx guidance as well, could you outline what you think the best use of your spare cash will be, where you want to prioritize putting that?

And then, finally, given Air France-KLM's new deals, it would seem their lobbying position around Brexit and just more generally has changed. Could you update us on what you see as the most important outcome that you'd like to see from that?

Starting on the working capital side, yes, you're absolutely right, you can assume that this is bookings, so there is nothing else really happening on the working capital side. In terms of the CapEx and in terms of our balance sheet and how you will model that, we will primarily use the extra funds we are getting from higher profits to strengthen our balance sheet.

That's our priority in the next couple of periods. Brexit, that is indeed too difficult to say.

There are so many different loose elements and how that could possibly affect the airline industry in total and how it could affect Lufthansa specifically. Of course, you could say that with Brexit, as such, Frankfurt is probably a winner of the cities, and that helps us being based in Frankfurt.

I think that's as much as I can shed light on that question for the moment.

Okay. Thank you.

Yes. Hello.

One more question, please. Air France-KLM mentioned that they target to adopt IFRS 16 in 2018.

Do you plan to do this as well? And how do you think about dividend and remuneration of management policies after adoption of IFRS 16?

Thank you.

You were very difficult to understand. Could you please repeat that, Ruxandra?

Yes. Air France-KLM mentioned that they target to adopt IFRS 16 in 2018.

So do you plan to do this as well? And how do you think about your dividend policy and remuneration of management policy after the adoption of IFRS 16?

IFRS 16, in other words, how our leases are impacting our balance sheet, it’s all too early to say. It’s quite an extensive project to find out how that will impact us.

As we all know, we do not really have a lot of the – or nearly any leased aircraft within Lufthansa. There will be a number of premises spread all over the world.

And how large that amount will be, it’s too early to say, but I expect that to have no impact on neither dividend or management remuneration.

Yes. But taking the non-operating leases on your balance sheet will have implications for your P&L and will probably increase your EBIT.

And your dividend policy is based on the EBIT. So will it not have any implication for the dividend policy?

It’s all too early to speculate over that before we have seen what the numbers are.

Thank you very much, Ruxandra. And that closes the questions from the analysts so far.

We are now moving on. Thanks, everybody, for attending.

Happy for you to stay on, of course, if you want to. Otherwise, we are now moving on to media and journalists.

Yes. Hi.

Thanks for taking my question. I just wanted to go back, first of all, Ulrik, to what you said about the Italian market.

Can you say whether you have put in a non-binding bid or not for Alitalia? And secondly, I just wondered if you could maybe break down the outlook for unit revenues?

How are you – what are you seeing on the long-haul versus the short-haul?

On the Italian market, as I indicated, I think this is indeed a very interesting market. And we will, in the future, see how we can play an active role there.

I’m not willing here to indicate in what way we will play that role. So I think that’s as much as I can give today.

Outlook on unit revenue, we are seeing a positive development due to the strong demand in the Asian market and North America as well in Europe, so they are both moving in the right direction.

Okay. And any sort of commentary just on short-haul unit revenues, particularly with some of the low-cost carriers indicating that they’re maybe a bit more pessimistic on European short-haul in terms of pricing?

Well, we are helped, of course, by our strong home market here in Germany, consolidation happening, I mean, in other words, the weaker competitors like an Alitalia, like an Air Berlin, so that is also how we see a stronger revenue landscape in Germany.

Okay. Thank you.

Good morning. Just a follow-up question on Air Berlin and Etihad.

There are rumors and some indications that they are talking with Etihad on further cooperation, and this might be about leasing more Air Berlin jets. Perhaps I think it might be on NIKI jets or just on NIKI as an entity.

Can you confirm something? And can you say if it’s possible for Eurowings to take more Air Berlin jets?

Thank you for your question. Well, we are looking at quite a number of different scenarios when it comes to Air Berlin.

And we will be indeed interested to take on more wet leases if that opportunity would show itself.

Is there something – what you can say on amount, how many jets it might be? Other parts or is this just an idea of Lufthansa?

No, there is no specific number. We are just generally interested, and there are no specific number which are on the table today.

Okay. Thank you.

Yes. Good morning.

Thank you very much for taking my questions. Regarding Air Berlin again, do you foresee much interest from other airlines for an investment in Air Berlin or do you see yourself pretty much on your own there?

This is nothing we can comment on. I mean, I have no visibility of that, so you have to ask them that.

Thank you.

Thank you. I have several questions.

Could you, in general, tell us how half year revenues, half year adjusted EBIT and half year fuel costs were adjusted by the impact of Brussels Airlines and Air Berlin? That’s my first question.

Then my second question, will the labor agreement with the pilots contribute to the adjusted EBIT this year? And what I would like to know, could you tell us what RASK and CASK were like in July?

And my last question, what was the average ticket sale at Eurowings in the first half year? Thank you.

So starting with the labor agreements. The majority of the labor agreement benefit will come in 2018.

And depending on when we are actually closing the deal with [indiscernible] in 2017, there is a small effect this year as well. In terms of RASK, the RASK development we see into July is similar as we have seen in the second quarter, so that’s strong.

When it comes to Eurowings, that number, we will have to come back to you. I don’t actually have that.

Yes.

And in terms of revenue, excluding SN Brussels, for the first half year, that is plus 9%.

And adjusted EBIT and fuel costs?

No, on adjusted EBIT, the impact is very, very little.

Very little, okay.

On fuel, it’s plus 5.7%.

Okay. Thank you very much.

Thank you.

Well, thank you very much, everybody, for joining us today. And I look forward to see you and speak to you in a quarter from today.

Thank you.