Deutsche Lufthansa AG

Yes. Thank you very much, and good morning, ladies and gentlemen.

Welcome to the presentation of our results for the third quarter of 2021 today out of our Munich headquarters. With me on the call are our CEO, Carsten Spohr; and our CFO, Remco Steenbergen.

Unlike in prior quarters, we will offer a separate call for the press at 11:30 CET, so there will be only one Q&A session following the management presentation today. Carsten, over to you.

Yes. Thank you, Dennis, and warm welcome to all of you from Bavaria today.

As always, thanks for joining the call and for your interest in recent developments within our airline group. If I was forced to summarize our Q3 results in just one sentence, it will be something like the crisis is obviously not over yet.

However, we're making tremendous progress on our way to emerge from this crisis as a stronger company. And what's my confidence built on?

Let me mention three developments. First, we are another step closer to recovery.

In the third quarter of '21, the Lufthansa Group has made an operating profit with an adjusted EBIT of €272 million before our restructuring costs. And we returned to positive cash flows of €13 million.

And when excluding the payment of the deferred taxes, we even generated €456 million in the third quarter, so €0.5 billion, more or less. And those positive numbers were not only driven by market developments, but by good share driven by our own successful transformation and the ongoing cost discipline.

Second pillar, booking numbers are increasing and increasing. Desire to travel, very obviously, remains high.

I think we all know that from talking to friends and families as well, not just for Lufthansa statistics. The new bookings are now back to 80% of precrisis levels.

As a result, we almost doubled our capacity in Q3 compared to Q2, and we will ramp it up further in the coming months. And the third pillar, I think we are living up to our aspiration to emerge from this crisis as a structural winner in our industry and therefore, confirm further our leading position in the industry.

I always mentioned that we want to stay among the top five airline groups in the world. But due to our successful transformation and the strong contribution of Lufthansa Cargo, who were actually the world's largest airline group by revenue in 2020.

We have come a long way with regards to our operational and financial restructuring. We've successfully completed a €2.2 billion capital raise and paid back the largest part of the stabilization measures way ahead of schedule.

Until year-end, at the latest, we intend to repay the remaining last €1 billion, so-called Silent Participation II, to the German government. And we will cancel the undrawn part of the so-called Silent Participation I.

At least I'm not aware of any other airline of significant size in the world which has paid back its stabilization packages as fast as we are doing. Another element is Lufthansa Cargo, which continues to go from strength to strength and achieved yet another record result in Q3 with an adjusted EBIT of €301 million.

And also, our ReNew team has shown a top performance again, who've implemented by now more than 70%, 7-0 percent, of our restructuring program, and that translates into annual cost savings of about €2.5 billion. The most important part of our recovery is obviously the continuous demand of our customers.

And as I mentioned before, bookings are now back at 80% of precrisis levels. And we see this year's summer travel season lasting into the fall and even into the winter.

I sometimes refer to it as the endless summer. And another upside results from the opening of the U.S., which is set for coming Monday, since the White House proclaimed the resumption of global entry, our U.S.

bookings rose by more than 50%. On some routes, we saw bookings triple and even quadruple after a long-awaited reopening announcement.

And new bookings on transatlantic routes are now also at around 80% of '19 levels. On some destinations, they're even above 2019.

The freedom to enter the U.S. again, marks another milestone for us.

As you all know, the Northern Atlantic is by far our most important long-haul market. Starting this month, we now offer our customers no less than 200 weekly flights to 17 destinations in the U.S.

And in addition to leisure travel, we are also now seeing encouraging trends in corporate travel. National meeting, conferences, even fairs were resumed over the last weeks.

And therefore, corporate demand came back faster and more strongly than we initially expected. Corporate sales are still increasing.

In our home market in Germany, it more than doubled compared to the second quarter. And as the corporate travel segment is obviously less seasonal, we expect that positive development in bookings to continue well into the remainder of this year and into the beginning of next year.

Another important contributor to our recovery remains is -- and will continue to remain, Lufthansa Cargo. Even over the seasonally less busy summer month, demand for freight capacities remained at record levels this year.

And the best quarter which is the traditional peak season for Cargo is yet to come. The demand in cargo is high as never before.

And on top of that, Lufthansa Cargo, as Europe's largest air freight operator, benefits from supply shortages caused by bottlenecks in ocean freight and the disruption of the global supply chain. Just 14 days ago, Lufthansa Cargo completed its fundamental fleet rollover.

It now operates the most efficient fleet in its history, one of the most efficient fleets in the world with only, in that case, 42% of freighters, 14, the number of. And to even enhance efficiency and to lower our CO2 emissions further, the whole fleet will be equipped with AeroSHARK from the beginning of next year and even bring down CO2 further.

And we keep on obviously exploring new market opportunities also in Cargo to also benefit from the growth of the e-commerce business because the Cargo will add additionally two Airbus 321s to its fleet. These 321s are currently being converted to freighters and will join Lufthansa Cargo in the beginning of next year.

With these short-haul and new short-haul freighters, we will be able to offer our customers important additional capacity for cargo operations within Europe. We are convinced that the entire logistics sector will be affected by fundamental changes for years to come.

And we expect, and at least for our Cargo business, favorable supply-demand gap to persist into '22 and beyond. But now, Remco, over to you for progress report on our return to profitability.

Thank you, Carsten. Let me give you more detail on how the group returns to profits in the third quarter.

Exceeding initial expectation, adjusted EBIT was €272 million, excluding €17 million, including restructuring expenses. This compares to a second quarter loss of almost €1 billion, highlighting the extent of the improvement in the past three months.

Adjusted free cash flow was positive too, reaching €13 million in the third quarter, a very good achievement, especially when considering the significant one-off tax payments of €443 million made in Q3, which we have deferred earlier in the crisis. On a year-to-date basis, the adjusted EBIT loss still amounts to €2.1 billion, but this includes restructuring costs of €520 million.

In comparison, free cash flow was down far less in the first nine months. It was €594 million negative in the period.

Analyzing our performance in the past three months in more detail. The Network Airlines ramped up to 49% of precrisis capacity levels in Q3 compared to just 29% in the second quarter.

European short-haul led the recovery with capacity reaching 65% of 2019 levels. Strong intra-European leisure amount also drove an increase of load factors, which reached 68% overall and 74% in European short-haul in the third quarter.

Importantly, the recovery over summer was, not just volume driven, yields improved, too. In our intercontinental business, they were even slightly above the level of 2019.

Also in Continental, the gap to 2019 narrowed to earlier in the year. The remaining difference of around 10% mainly related to the slower recovery of corporate travel.

The adjusted EBIT loss of the Network Airlines amounted to €304 million in the third quarter when excluding restructuring costs of €450 million as reported. This compares to a negative adjusted EBIT of €1.2 billion in Q3 last year.

At Eurowings, the recovery was even more pronounced. Including the strong performance of SunExpress, our joint venture with Turkish Airlines, adjusted EBIT reached a positive €108 million.

Capacity more than doubled compared to the second quarter. The load recovered to 78%.

And yields improved too, although they were still 14% below 2019 levels in the third quarter. This mainly reflects the shift in Eurowings' network to leisure-focused routes at the expense of corporate-travel-heavy routes in Germany.

The performance of Eurowings clearly shows that the turnaround, which we initiated already ahead of the crisis is bearing fruit. Today, Eurowings is a clear-cut European short-haul, point-to-point operation positioned in the value segment.

Its focus on expanding the tour operating business has made German's largest touristic carrier. In parallel, the share of private leisure travelers has increased by around 20% points since 2019.

On the cost side, the closure of Germanwings and the termination of year-round external wet leases had limited the number of AOCs operating in Germany to just one. This greatly reduces operational complexity compared to the setup after the takeover of large parts of Air Berlin.

The streamlining of the fleet to currently around 85 A320 family planes also made an important contribution in this regard. It will enable higher aircraft and crew productivity even when excluding the hugely positive impact from the closure of Germanwings.

Coupled with a sustainable reduction of overhead costs by more than 25% CASK are forecast to decline to around €0.05 early as 2023, close to 20% reduction compared to pre-turnaround levels in 2019. Taking into account during Eurowings' yield advantage over low-cost competitors and its success in growing ancillaries revenues, we're confident that Eurowings will be able to achieve margins in line with the group midterm adjusted EBIT margin target of 8%.

Turning to our other businesses. Lufthansa Cargo recorded yet another record results in the third quarter for the reasons Carsten explained earlier.

Adjusted EBIT amounted to €301 million in Q3 despite seasonally lower sales volumes in summer and operational restrictions in China, which led to some flight cancellations. Cargos yields premium over the wider market, however, remained at similar high levels as in the second quarter.

At Lufthansa Technik, the recovery continued as flight hours are increasing across the industry. This supports our components business.

In addition, demand for engine maintenance is also gaining momentum. As a result, activity of Lufthansa Technik has returned to around 70% of its precrisis level.

In the third quarter, adjusted EBIT was €155 million, excluding €61 million, including restructuring cost. The restructuring cost of €94 million were related to the closure of six line maintenance bases in Germany and a volunteer program to incentivize the departure of employees in Germany.

Profits in the catering segment reached €35 million in Q3, driven by strength in the Americas, partly offset by the effects of a still depressed market environment in Asia. Finally, the adjusted EBIT in other businesses and group functions amounted to a negative €47 million in the third quarter, mainly due to restructuring costs in these financial functions.

Thanks to our positive operating results, we not only stopped the operating constrain but also recorded a positive adjusted free cash flow of €30 million in the third quarter, despite the payment of €443 million of import sales taxes at Lufthansa Technik, which we had deferred early in the crisis. Excluding these repayments, the adjusted free cash flow amounted to €456 million.

Good working capital management contributed positively. And while we usually record substantial outflows in summer related to the decrease in customer prepayments ahead of the lower volume winter season, this was not the case this year due to the improvement in the number of new bookings which Carsten highlighted earlier.

Additionally, the fact that only a part of the restructuring expense booked in 2020 was cash effective supported cash flows. Investing cash flows amounted to €342 million in Q3.

The generation of positive free cash flow in the quarter and the successful issuance of a €1 billion bond in July meant that available liquidity was €11.9 billion at the end of September, around €800 million higher than in June. With the successful completion of our capital increase in October, we paid back the €1.5 billion drawn from the Silent Participation I.

we intend to cancel the remaining €3 billion of Silent Participation I and to repay the full Silent Participation II in an amount of €1 billion all before year-end. Assuming the repayment termination of all stabilization methods in Germany, as just described, liquidity amounts to €8.5 billion.

This is above our medium- and long-term target corridor of €6 billion to €8 billion. It underscores the progress made in the group's financial management and our ability to refinance on the public debt and equity margins.

Net debt remained virtually unchanged compared to the end of June, including the proceeds of the capital increase and the subsequent repayment of Silent Participation I in October. Pro forma net debt declined by around €1.5 billion compared to year-end '22 to €8.4 billion.

A further debt reduction of €1.7 billion is required to reach precrisis financial debt levels. This shows the progress that we have been making.

Pension provisions declined by around €2.3 billion since the end of 2020 because of a 50 basis point increase in the IFRS discount rate and the positive performance of plan assets. As a result, financial leverage amounts to 3.3 on a pro forma basis at the end of September, calculated as the sum of net financial debt and pension provisions divided by the 2019 EBITDA.

This is in line with our target of achieving a financial leverage below 3.5 and returning to an investment-grade rating in the medium term. The achievement of our savings target is key to realizing our medium term adjusted EBIT margin target of at least 8% and our ROCE target of at least 10% by 2024.

That's why I'm extremely happy with the fact that more than 70% or €2.5 billion of the cost reductions have already been implemented by now. Let me emphasize once more that we only include sustainable structural cost reductions here.

Short-time work subsidies, for example, whose importance has anyway diminished in the ramp-up are excluded. These subsidies decreased to €253 million in the third quarter.

In the past three months, we made particular progress in optimizing processes and operations, including the renegotiation of key supplier contracts. We also drove forward the transformation of our distribution activities coming with an expansion in the share of lower-cost direct distribution.

Finally, we are optimizing the cooperation between Lufthansa German Airlines and Lufthansa Technik. In the area of personnel costs, we had already hinted at the success of the volunteer programs offered in Germany when we met last time.

In the meanwhile, a total of around 1,800 ground staff and around 400 corporate staff opted to leave Deutsche Lufthansa AG voluntarily. Including also a voluntary leave program at Lufthansa Technik, a total of more than 3,000 employees have signed termination and early retirement agreements, bringing the number of departures secured in Germany to around 7,000 in the first nine months of 2021 alone.

Given the success of the preceding programs, we just launched a similar volunteer program also for our cabin personnel at Deutsche Lufthansa again. We are confident that the program will reduce a significant part of the remaining personnel surplus in Germany, which amounts to up to 3,000 positions or the equivalent in cost.

Let me highlight that the focus is not just on rightsizing our workforce, but also about generating structural productivity improvements. We do so by implementing changes to our network and operating processes, including growing lower cost and higher productivity flight operations such as Eurowings Discover.

We're reducing overhead costs, and we focus on productivity improvements in the current negotiations with our social partners, with a goal to reach union agreements for pilots and ground staff before year-end. Ladies and gentlemen, before discussing the overall financial outlook in more detail, let me take a closer look at our fuel hedging position given the recent sharp increase in the oil price.

Remember that we were among the first airlines to start hedging again at the beginning of 2021. This gives us a clear advantage of having a higher hedge ratio for 2022 compared to most peers.

At this point, we have hedged almost 60% of our 2022 exposure at an average price of around USD 73, well below the current average forward price of $78 for 2022. Taking the forward curve as an estimate for the average market price in 2022 and doing the same for the euro-U.S.

dollar exchange rate, we forecast fuel costs at around €4.85 billion, including the effects of hedging in 2022. While this means that unit fuel costs will exceed precrisis levels in 2022, we're confident that our hedging positions will provide us with an advantage over others in the market.

We should hence be able to benefit disproportionately from a market-wide capacity and pricing discipline instilled by higher fuel prices in the further ramp up. Talking about ramp-up, we plan to expand capacity to around 60% of 2019 levels in the fourth quarter so that the full year average will be around 40%.

We expect this expansion to support earnings in the fourth quarter, especially when it comes to positive effects from the transatlantic reopening. Equally, we expect strong cargo trends and improving momentum in our MRO business to continue.

As a result, we forecast EBITDA to be positive also in the seasonally challenging fourth quarter even though we expect around €80 million of additional restructuring costs in the fourth quarter. Gross investments will be around €1.5 billion in the full year 2021, unchanged to prior guidance.

Net capital expenditures will be slightly lower than that because of the facts of our aircraft divestitures. I will now hand over to Carsten, who will provide you with an update on the demand recovery and all the great services which we're implementing for our customers so they can keep choosing our premium airlines.

Carsten, over to you.

Yes. Remco, thanks.

The positive momentum which Remco just outlined is set to continue in our view. And for the first quarter of '22, we therefore plan to expand capacity to initially around 65% of precrisis levels, and we expect this to increase in the second half of the year to around 80%.

And obviously, we have flexibility in the system in both directions. The high demand will mainly be driven by touristic and leisure demand as well as VFR travel, visiting friends and relatives.

In those customer segments, we actually expect passenger numbers to reach at least 85% of precrisis levels next year. And therefore, we are confident to widen the average annual capacity to more than 70% for the total of 2022.

And ladies and gentlemen, we obviously have a clear goal, not only more passengers, but at the same time, more satisfied customers. And particularly during the crisis, we have been -- not always been able to live up to our own claim of being a 5-star airline.

Several restrictions made a premium service on the ground and partly onboard impossible. And as of now, we are providing our customers with all the premium services, again, they are rightfully expecting from us.

We, for example, work hard on expanding our call center capacities. In addition, we offer more and more digital customer self-service options.

And travel documents such as vaccination certificates can be verified fully automated and digitally. We cooperate closely with our airport partners around the world to ensure terminal procedures are as seamless as somehow possible for our customers.

And for the Christmas season around the corner, we are prepared for a further increase of demand by offering 400 additional flights per week from our hubs alone. That's an equivalent of almost 80,000 additional seats over the Christmas season.

And we do have the flexibility to operate more aircraft and deploy more personnel in case demand comes back even stronger than what we currently expect. Another important aspect of customer satisfaction is at the heart of our transformation, sustainability.

Making aviation more climate-friendly is probably the most pressing challenge of our industry currently. And we are fully aware of our responsibility.

Aviation does contribute 2.8% of global CO2 emissions. We don't deny that.

But at the same time, we offer a much larger contribution to the solution. Just take the COP26 in Glasgow.

Without the aviation industry, it just wouldn't be possible together the leaders of the world, scientists, policymakers and NGO for such an important conference. I'm convinced climate protection will not work without the global wealth, which again is impossible without aviation connecting countries, cultures and economies.

As of next year, the Lufthansa Group commits to the science-based target initiative. The initiative defines how much and how quickly business needs to reduce their emissions to prevent the worst impacts of climate change.

Lufthansa Group will publish the breakdown of how we cut net emissions by half until 2030 and fully avoid net emissions as of 2050. Key drivers to reach our targets are the accelerated fleet modernization, operational efficiency and the increased usage of sustainable aviation fuels.

However, we also have to achieve a part of the CO2 reductions through ongoing compensation measures. In this context, the permission to utilize carbon storage as a tool has to be taken into consideration within our home markets as well.

It's overdue. And the immediate effects in CO2 reduction are still coming from the fleet renewal.

As the latest progress of our fleet modernization, we just concluded a leading agreement for four additional Airbus 350 aircraft in October. And these aircraft will join the Lufthansa fleet in the first half of '22.

And as you could imagine, the favorable leasing rates were another good argument for the deal besides the CO2 effect. And with this leasing deal and the purchase of each five 787-9 and five 350s, which we already announced in May, we significantly used the crisis to accelerate the renewal of our wide-body fleet.

Besides these new aircraft, sustainable aviation fuels are and will be the most impact level -- impactful lever for a green aviation industry. We have been focusing on research, development and the usage of sustainable aviation fuels for aviation for many years, and we've built up an extensive network of partnerships.

With our experience, our knowledge and our competencies, we contribute to establishing a so-called power-to-liquid production in Germany. So far, the airlines of the Lufthansa Group produced sustainable aviation fuels based on biogenic origin, but the kerosene of the future is produced from renewable energies.

We are a partner and we are a pilot customer of the world's first production plant for power-to-liquid aviation fuels in Emsland in North Western Germany. However, a mass production of power-to-liquid fuels on larger scales will need enormous amount of green energies.

And we, therefore, will also work with several partners on international projects, for instance, in Chile and the UAE or Australia. Already today, we are the largest user and the largest customer of green kerosene in Europe and actually #2 around the globe, and we even enhance our commitment now.

Currently, we are in the process of securing the long-term supply with sustainable aviation fuels for our airlines. As a first step, we decided to commit sustainable aviation fuels in an amount of around USD 0.25 billion until '24, which is the largest pure sustainability investment in our history.

The fight against global warming is undoubtedly the most important task for our time. It's a global challenge we can only master together.

And this fight will not be won if we fail to connect people, cultures and economies around the world. And that's exactly what we do day by day, and therefore, help to create the global wealth, which we need to overcome this global charge.

A reinvigorated Lufthansa Group is ready to contribute and to lead the way in our industry to a more sustainable aviation industry. In summary, we are just a bigger part of the solution than we are part of the problem.

And with that, Remco and I are now happy to take your questions. Thanks for listening.

Great job, guys. The three I have are as follows.

Number one, Network Airlines. On my maths, Lufthansa yields are up 4 -- yields are up 4% in Q3 against Q3 '19; swiss is up 24%.

Just wondering if you can give us a bit of color on the pricing environment into Q4. Clearly, you're ramping up capacity, but not much.

And particularly on transatlantic, there's been quite a bit of mixed news on pricing on transatlantic as that market opens. The second one is on your passengers into full year '22.

If my maths is right, you're kind of guiding to close to 80% passenger recovery for the year. You're talking of capacity more than 70%.

Is that policy pretty much aimed at driving loads and yields up through full year '22? It's quite cautious on capacity given your expectations.

And then linked to that, my final question, without hoping to sound like an idiot, your fleet was about 76 3 full year '19. It was 73 4 so only down 4% at H1 '21.

I can't see any data for Q3. You've just taken on four new A350s.

Just wondering what the target is on fleet. I think you had talked about getting down to 6 50.

I may be missing something very obvious, but any comments on that would be lovely.

James, Remco here. Thank you for the three very good question.

Let me start with the first one, and we can take one partly off-line to run you through. But as -- whereas we see that in Q3, our yields are up 0.2% versus 2019, intercontinental, we see slightly up with a mix of continental still down with less business travel.

But overall, I have to say, I'm very proud on our commercial teams because during this crisis, they have done a really excellent, excellent job. But we also shouldn't forget in the yields, it's correct that a lot of the leisure travel, we see upgrading, correct?

We see them traveling much more than only economy class, which you see in the past, and that is really, really helping and a trend which we see continuing. So that's very, very positive.

Equally, our commercial teams are very carefully managing pricing, the network routing and the increasing of our network and making sure that we get a good return on that. And the trends, we will continue in the Q4 and next year.

So we expect those good yields to continue.

Yes. James, if you, specifically at questions on the North Atlantic, maybe let me share with you, which I think, interesting numbers.

As I said, overall of the booking for the North Atlantic, even though the opening was just announced, is already at 80% levels of precrisis. And if I give you the breakdown in the various booking classes, it shows you that it's higher in the premium classes than in economy.

In economy, we are 24% below precrisis; premium economy, only 23%; and business, only 12%. And if you look at first, it's even only 8% -- so it's 8% above.

So it's not low at all, it's 8% above precrisis. So it is a nice shift to premium traffic.

Maybe that's a good time to also remind all of us, let's not mix up corporate travel and premium classes. It's not completely overlapping anymore.

We see a lot of corporate travel happening in economy class. And fortunately for us, a lot of leisure travel happening in the premium classes, in places like Switzerland, Russia, where a lot of private wealth is, of course -- we see that more than you see it in some other parts of Europe or our global network.

But it's a significant trend, which, of course, we love. On aircraft, the exact number last week was 498 active aircraft, which we were operating, which results, obviously enough, for what we're doing right now.

But we need more aircraft, of course, ramping it up. So we'll be looking at the 650 to reach that probably faster than we initially thought.

The 650 is enough long term. Or if we need to bring that up, we'll be mainly attaining some flexibility.

We still have some aircraft parked, which we can easily reactivate. There's currently actually 60 aircraft being worked on by our Lufthansa Technik team to have them in shape for the summer.

So that brings us along to something like 560, and we take it up from there.

Congratulations on the performance. Four questions, please.

First, Q3 adjusted EBIT, excluding restructurings in the MRO division was above 2019 level. What is driving the strong profitability improvement?

And what shall we expect for the next quarters in this division? Second, last year, you mentioned the potential partial divestment of MRO.

By that time, this was an option to pay back some money to the German government at certain point in the future. In the meantime, you have done surprising progress with paying back the rescue package to the German government.

So where are we in terms of potential divestment of MRO at this stage? Third, you mentioned a 40% corporate CapEx recovery in Q4.

Could you please give some details on the regional breakdown of this recovery, the bookings window in the corporate segment at this stage? And what was the corporate traffic recovery in October?

And finally, if I understand correctly, once you terminate SP1 and SP2, you are allowed to participate again in M&A. And this brings back an old topic.

Do you think that 2022 and 2023 will be a decisive year in terms of consolidation, if not in Europe, in general, at least in your home market?

Remco here. I think your observation of Lufthansa Technik is correct.

Indeed, Lufthansa Technik had a very good third quarter with €165 million in adjusted EBIT, excluding the restructuring costs. And this is something which is partly caused by the very good cost management as well some specific very good business we had in the third quarter.

In that sense, it's slightly better than on a sustainable trend. Although we believe Lufthansa Technik in general is on a very, very good course.

And clearly also, we are targeting adjusted EBIT percentage going forward, which are above the average of the group. So we're very happy with that.

You are right that in terms of all the repayment and the refinancing, we are growing fast and we plan the remaining part to repay before year-end. With regard to divestitures, there is no change because this is mainly driven from a strategic perspective.

So AirPlus and LSG, we have said, we will go in the divest approaches once we can realize the right value, and that is something more in the second half of last year. With regard to the discussion of Technik, last time we said we are -- that we started evaluation to do a really good thinking before going and deciding whether we would want to go in the process.

And if we would go, that we go in that well thought through. We're in the middle of the process.

We haven't concluded on that yet, so I cannot comment. I would expect that during our next call in the beginning of next year, we can give you some more information.

Let me then take the last question as well before giving it over to Carsten. It's indeed correct that once SP1 and SP2 have been repaid, that overall, from the EU perspective, the constraints will stop with regard to M&A.

Would you expect a further consolidation in Europe? I think it's a bit of a speculation.

The logic would say, if you compare it to America, that no consolidation is needed. But of course, it depends on so many elements.

So if you ask me that something will happen in '22, '23, I cannot say. That is pure speculation.

But certainly, we are ready to be the -- to remain the largest airline and to further strengthen it whenever opportunities will occur. Over to you, Carsten.

Yes. I'll maybe add a few information on the corporate travel segment you too asked about.

Coming back assets in our home markets, Germany, Austria and Switzerland, but also our strong neighboring markets, Northern Italy, Scandinavia, that's where we see the strongest recovery. We're approaching about 40% of precrisis levels on the large corporates.

On the lower end of that 40%, if you look at the small, medium enterprises, which are very strong, as you probably know, in our home markets, Germany and also Northern Italy, they're even above that. Very much short-term bookings.

And to give you another number, in Germany alone, they doubled the corporate demand between Q3 compared to Q2. So that gives us confidence for the next weeks and month.

And again, the U.S., of course, will create a significant role here as well. Actually, at dinner yesterday with my counterpart in United who probably are leading the way a little bit, not only in the U.S.

but also the U.S. towards Europe, and they even see stronger bookings return on the corporate side already.

So that makes us optimistic. Industries, very much the machinery industry, automotive, pharmaceuticals, that's where we currently see the strongest demand growth.

Besides issues like public administration, consultancies, accounting, very important customers for us. And I think everybody has understood by now that without corporate travel, that global wealth will not continue.

There's existing studies from there. You probably already bought the Harvard study on corporate travel.

So there's confidence not only built on our data alone, which I just referred to, but also on things we have from other sources.

Three questions for me, please. First, on your cost progress.

There's been a lot done on nonpeople costs in the last quarter, but personnel measures look to be moving a little bit more gradually. Could you please update us on where you are on the measures not yet implemented and particularly the tone of discussions with the German pilot unions, where that stands to your previously discussed aspirations?

Second, on the business travel recovery. So you mentioned in 2022, you're looking for about 60% of 2019 passengers.

Wondering what implications does this have for your network, please? Would you have to sacrifice frequency or load factor, how you're thinking about that in the way that some of your long-haul competitors are restoring capacity a bit more quickly?

And then third, on European short haul, clearly, the bright spot in the business right now. Can you please talk about how you're thinking about capacity planning going into next year.

Are you looking to continue with sort of extra capacity on leisure routes like we saw this year? Will your network look closer to the way it is before kind of in shape and scale across both Eurowings and Network Airlines?

Alex, it's Carsten. Maybe I'll start on the issue of personnel costs.

Basically, we have concluded deals with all unions and all labor groups. There is, as you know, some issues still going on with ground staff in Germany where we have to convince a few more to leave the company.

And the issue you're referring to is the German pilots is actually only the pilots of the mainline where we don't have an agreement, which is a minority of our pilots, looking at the total of 11,000 pilots we have in the group. There, we had an agreement which was taken off the table by the union itself there.

We now only have an intermediate agreement until the end of March '22. And after that, we still believe layoffs could be avoided if we come to a part-time deal for the surplus pilots.

Also that surplus number has been reduced by almost 400 because 388, to be exact, pilots left on a volunteer basis. So for those remaining surplus pilots in our view, easily a short-time agreement could be reached.

The financial consequences for us will be the same. Either the surplus people work all jointly less or people will leave and the cost will be saved that way.

My preference is a part-time agreement, but the pressure, to be honest, is more on the union side than in our side. Network steering frequency load factors, well, it's obvious that there is a certain shift of capacity to lower-cost platforms to smaller airplanes.

Look at the widebodies, the 380s on the ground. So there's eventually the opportunity to bring similar frequencies into the air with less capacity.

Load factors compared to others, if I might be honest, as you know, developed much better than most of our competitors, which shows that our capacity discipline has paid off. And of course, we'll continue to do that.

And we believe it's part of our recovery success that we were quite disciplined on capacity and had the flexibility to do so. I think that's key now also for the next month.

Nobody knows exactly what the demand curve will be. So the network, which we basically looked at every day now, not like in the old days, twice a year, is an evolution of customer demand.

And again, modestly, I think we have done a pretty good job on that by our commercial team in the last months. We're quite proud of how that has worked out.

European short haul, obviously, some of the routes we are now operating with the main line, in leisure, will in the future be operated by Eurowings Discover. They started short-haul operations just a few days ago.

So we'll be building up that fleet in Frankfurt and Munich to take over some of those leisure routes, which we -- have been flowing with the mainline because of surplus capacity. And of course, the mainline leads to focus on the high-yield premium routes, which is what it's there for.

And these are recovering now with corporates coming back. Is that it?

Okay. We had some issues about Eurowings.

As you probably know, Eurowings has now opened bases in Stockholm. They have opened bases in Prague, in the Czech Republic.

We see them as not only useful tool to send a signal to our competitors that it's no fun to fight with German Lufthansa in our home markets. I think the low-cost competitors have learned that in the meantime.

But also, as you heard from Remco, they have turned around this summer and they're making money. And we look at them making money also full year next year.

So they are both. They are our tool to defend our markets, and at the same time, they are creating profitability and value.

And that's what we always intended them to do. Took some time, I can be honest on that.

You all know that. But now we're there.

Actually, COVID accelerated that success story.

Three for me, please. One is on the €2.5 billion sustainable cost reduction.

I guess just to be very clear, with flat fuel prices, if you were compared to 2019, would we see cost in 2022, €2.5 billion lower than 2019, and if that includes Catering, M&A.? I'm just trying to understand if this is a net benefit of their costs or ramp-up in third-party services that will offset this business -- this reduction.

My second question is on staff. As capacity ramps up, are there going to be any payment compensation?

So how should we think about the ramp-up of employee expenses? And a little bit more color on bookings because we have some other competitors have been seeing that bookings are very strong on holiday periods and weaker on low season.

Just curious if you're seeing the same trend or it's somewhat different.

Maybe I'll start with the last one. Remco will answer the other ones.

With more and more corporate travel coming back, that seasonality within the week, which indeed we also see, will be reduced. Currently, indeed, Saturday is the strongest day of the week.

But of course, that was based on the leisure focus. Now with more and more corporate coming back, I told you were approaching 40% of precrisis levels, we see less of that trend.

But we do see that trend as well coming out of COVID like our competitors, yes.

With regard to sustainable cost savings, it's very clear that the €2.5 billion is something which is related to the fixed costs and therefore, also recurring. The majority of that should also come into next year.

There are parts of the volunteer programs actually where people are leaving in the course of next year and a very few also in the course of '23. But the majority of the €2.5 billion should be in.

Of course, variable costs like fuel will go up. And if there are price increases on fuel, that, of course, is not netted against the €2.5 billion.

But we believe that our pricing discipline and that being a cost increase, which is throughout the industry, and by the way, as I said as well through the -- which we think with our hedging, we are in a slight advantage as well during next year, but that we compensate that. So our midterm targets will not be impacted by change.

Because of the higher fuel prices, we see that now. Nor if I add -- because we've got some questions as well of airport fees or ATC costs, which are here and there, going up, right?

We think we can manage that within our midterm targets very clearly. But they are independent of the €2.5 billion and -- or actually the €3.5 billion of cost reductions.

If we need to do more on costs, we will do. But then most of these costs, we think we can recoup through pricing.

With regard to the staff and the ramp-up of the staff. In Germany, you have a disadvantage and an advantage with all the Kurzarbeit.

Of course, you don't have those costs when you go into a crisis and not the restructuring cost. But once you come then out of the crisis, correct, for the parts where we need that back, then also our colleagues come back and they work upon.

So that is very helpful. So in that sense also, we do not expect also next year to be in a shortage.

Actually, as what Carsten said before, we still need to do some changes and some reallocation between our different AOCs. But all in all, yes, there will be staff increases, but purely in line with volume growth and the related profit growth coming in.

I hope, Carolina, that answers your question.

Just coming a little bit on the balance sheet. I mean how quickly now, that it's kind of in a recovery mode, do you think you could get back to investment-grade status?

Is it that important to you as it was in the past? Then just thinking about cash themselves flows going into 2022, you obviously had this MRO tax payment.

Are there any other one-offs or payment that we should be aware of in 2022? And then just trying to also kind of gauge some commentary around long haul.

Obviously, IR that came out at the 2022 forecast seems to be quite cautious on international markets, especially Middle East and Asia Pac. How do you see things developing on long haul next year?

Is 60% in your view cautious or realistic, et cetera?

Yes. Let me also take the last one first.

Remco will answer the other ones, to the more balance sheet and cash implications. Long haul, I think we clearly have to differentiate as a European airline between east and westbound.

So in westbound, obviously, optimism is great, and I'll give you a few more details in a second. In eastbound, there's much more question marks.

Even though there's also now first signs of openings in the East, Singapore has created a bubble with Germany. Thailand has opened for travel.

We see now India giving us additional frequencies also finally to Switzerland and Swiss. So on a small scale, also, we see opening trends in Asia.

But of course, the big focus, and for us, the big business is U.S. Don't forget, before COVID, we flew to the U.S.

as much per day as we flew to China per week, so factor 7. Or to give you a little bit more trivia the U.S., any seats on November 8 is filled next week.

More than 10,000 people every day next week will fly with Lufthansa alone on the North Atlantic. And that, as I said before, on some months in the summer, we have more bookings than we have on precrisis.

So we might even see more airplanes, more capacity on the north depending some weeks of the year than we have seen before. We have more destinations in the Lufthansa network because Eurowings Discover will open up places like Salt Lake City and Anchorage on North Atlantic.

So there, there's a clear positive trend also. By the way, Canada, we always talk about the U.S.

only, but let's not forget Canada, where we see similar trends since they opened up a little earlier. Asia, again, will be a question, of course, also Mainland China opening up.

Whereas various, let's say, pieces of information, when that will happen, we're planning rather with this middle of the year than with the beginning of the year at this point. And once again, the numbers I already quoted towards the U.S., we see stronger returns the higher the booking classes.

First class, even above precrisis. And then the other numbers as I gave you are better looking the higher the fare -- the seat, the higher the booking classes.

So that's causing our -- fueling our optimism for long range.

Okay. Jarrod, let me take the other two questions.

Let me start with the logic of investment-grade rating. We clearly believe that investment-grade rating is truly helpful.

Once it starts storming in the capital markets, then the distinction between investment-grade and noninvestment-grade becomes bigger. It's really important to have it in terms of cost, but also inherently having a strong balance sheet helps you when in storms, that you can get through the storm combined with a good liquidity level.

So we are sticking to that. In the beginning of the year, we clearly came out that we had a-3 based strategy in this regard, one was the capital raise, which we have ticked the box.

Number two, of course, coming back into profitability. And yes, you have seen what we've done in Q3.

You have seen the outlook for Q4 for next year as well. We have the ambition to stay cash flow positive.

And as of '23, we should come back in the cash contribution areas, which should help further restore the balance sheet. And lastly, we have also mentioned the divestitures, correct?

And I've said before that in the second half of next year, we would consider LSG, AirPlus. As we see it now, market will tell, but that would also give you then an idea of the timing.

With regards to the cash flows, there's clearly a big one-off. We deal with that this year.

Those are the taxes of Lufthansa Technik, around €450 million Q3, another €450 million in Q4. That should be over.

The only other one-off from a much lower impact is, of course, the restructuring costs we have taken this year. Part of that runs into cash outflows into next year.

Other than that, we don't see any one-offs at this point in time for next year. I hope that answers your question, Jarrod.

My first question is around capacity plans for next year, which you're seeing over 70% of 2019 levels with bookings at 80% now. So how are you thinking about that capacity plan, which is kind of the bookings recovery?

And then secondly, I just wanted to follow up on Remco's comments around the market discipline. What is your expectation for kind of industry capacity in European short-haul next year and also on the transatlantic?

And then thirdly, just on Cargo. So you've seen a very strong cargo market.

What's the impact of the transatlantic passenger flights coming back impacting the cargo market?

Maybe on the capacity plans for bookings, there's a mix up. So we expect for the year, the total year '22 capacity to be above 70%.

And we see 80% of total demand towards the end of the year. And we do indeed see 80% already for the North Atlantic, for the full year and the summer, even beyond.

But let's not forget where we talk 70% capacity, that's for example, missing most of Mainland China and some parts of the world where we cannot fly to. So you need to see the regional differences and the seasonal differences to come -- to get those two numbers together.

But again, the 70% -- or above 70% capacity planning for the full year has flexibility in both directions. If we see China opening up faster than expected, indeed, we'll ramp up that capacity.

The market discipline, we at least try to do our share. That's what you see in our load factors.

That's what you see in our yields. And let's hope that others listen in and do the same.

And we are in a more rational industry than we were mainly in the past. We all have taken financial shock in this crisis.

Balance sheets are burdened. So I would think that leaving short-time effects aside, which, of course, you see now in the market, overall, the industry has a high interest to create value after the losses we all have taken through COVID.

Cargo, there is, of course, a built-in element of values returning. But don't forget some of the passenger seats we are now starting to sell towards U.S.

have already been flying empty the last month. We have had many, many flights to the U.S.

with hardly any passengers because the cargo paid the flight. So there's not that many actually metal going onto the North Atlantic in our case.

It's just now finally filling up on the upper end of the aircraft and -- or the upper level of the aircraft, with the cargo loads already being full. So why did I say also in my opening, we expect this trend to go on?

Let's not forget, it seems like every old trader aircraft has somewhat we brought into service through COVID. These aircraft will not fly forever.

They will have to go back probably to the scrapyard. At the same time, only Boeing really is building pretty accurate at the time, and you know how low the production rate is.

So there is just no way that additional freighter aircraft can come to the market that quickly if some old aircraft will need to be retired after COVID. And on top of that, the demand side, which I just talked to the CEO of a German car manufacturer yesterday, they -- as they also said in public, expect this at least to last all the way through '22.

And then put e-commerce on top where customer behavior has changed even more dramatic in COVID than the years before. So all that makes us very bullish on cargo.

And now honestly, calling you here now from Bavaria Germany, the German export economy is going strong and hot. And of course, being the home carrier of that strong expectation is an additional advantage for Lufthansa and Lufthansa Cargo.

I think I have a question for each of you. Carsten, so first, in business class demand on the transatlantic is actually recovering quicker than premium economy and economy.

Is there a chance that, that trend could be sustained for a period, do you think? And if so, could there come a point where your plans to reposition for the new normal have to change a bit?

Or is that unlikely, do you think? And secondly, Remco, could you expand a bit on what you've described as the good working capital management in the quarter, which helped to facilitate the positive free cash flow?

Can the gains there be retained or improved upon as we move into the fourth quarter and then into 2022?

Sorry. Thanks for the question.

Allow me to repeat the numbers because you rightly called them. The higher the booking class, the better the product; the higher the return, the faster the return on automatic.

I think you see on top of that, the recovery of corporate travel, which I just pointed out. And again talking to my counterpart in United last night, coming from the U.S., I think, will increase.

That will probably even increase that trend towards the higher booking classes. So I don't only think this will maintain for some time, I think could even be increased.

And of course, Lufthansa with the premium seats we offer and the premium positioning we have in the market believes that we can be taking advantage of that situation. And again, we see more and more leisure travel, BFR travel, not happening in economy class, but in the forward part of the cabin.

Of course, inherited money, the growth wealth in some of our home markets, people also through COVID, I think, like the idea of having more room around them. They don't want to be squeezed in the middle seat anymore in economy class, not only during COVID, but maybe not at all anymore.

So I would -- short answer, I guess, to your question is, yes. I hand over to Remco on his strongly really improved working capital management.

Thank you, Carsten. I think Lufthansa clearly coming into a crisis, correct.

When cash is the most important element, has learned very much to very, very looking after the cash position. And that's something, of course, when we grow again we want to continue that learning we have gotten there.

Where does it relate to? If you think about Lufthansa Technik and the inventory of the spare parts, even stricter looking at it when you put it in, when you buy new parts and when not.

When you think about receivable management, right, stricter on customers paying on time and being really, really tight on sort this of strictness that include -- on the payable side and all the negotiations we have with our suppliers, not only for the cost savings as part of the €3.5 billion, which is a really important element. All our partners need to contribute to cost savings.

But equally, they need to have competitive payment terms. And in some cases, we believe those payment terms can be extended, and that's also something we are working on.

So in that sense, it's a continuation of the good learning, which came out of the crisis, coming out of the crisis. And yes, we do expect to continue the very strong working capital management.

It's extremely, extremely important. Also when we think about realizing ROCE in 2024, it's part and parcel of -- we have to make that a strong part and parcel of the DNA of Lufthansa as it has been in the past.

I'll take you back to Eurowings. I noticed strong contribution from SunExpress.

Could you give us a flavor of the contribution from SunExpress and confirm whether Eurowings, excluding that, would also be in the positive territory? Secondly, about any update, if you could provide about Eurowings Discover, of whether you are looking at its profit contributions separately.

And if you could give us an indication of whether it is indeed now profitable. Or what is the progress there?

And thirdly, are you in a position to share the CapEx forecast that you have for next year? Could imagine it could be higher than this year's, but to what extent is we would like to hear.

Let me start with Eurowings Discover. Let's not forget, we're just hitting 100 days of operation, I think tomorrow -- day after tomorrow, so it's really too early to answer your question.

But one answer I can give you, the load factors have been above 80%, right, from the beginning. They're only operating long haul initially.

So I think -- and then also a few days of rate short haul. Then leisure travel also, the gentleman asking the question before, all that money people have saved up by not traveling now also for years.

I think there's not only this pent-up demand. I learned when I just was in the U.S.

last week, the word of revenge travel. So there is a strong indication that people want to spend money.

And of course, Eurowings Discover has launched right on time, went into that demand from the market. On the Eurowings profit allocation, Remco, you probably answer...

Yes. We don't disclose exactly what that is, but the SunExpress profit is slightly more than half of the €108 million.

So Eurowings by itself, which made a strong profit as well, and we expect that to continue in line, with Carsten said before. I hope that answers your question, Sumit.

Yes. About CapEx, a few comments for next year?

On the CapEx for next year, we expect around €2 billion into next year. It's in line with the prior kind -- might be slightly more, might be slightly less.

We are currently looking at that. On the overall long term, we have said we want to sell the €2.5 billion, and nothing has changed there.

Actually, I just have one left, and that one is on cargo again. I mean you touched on it already a bit, but the expectation that supply demand will continue to be positive for a while.

What about the risk that capacity expansion comes from more passenger to freighter conversions? I'm just thinking about all those long-haul passenger aircraft that have been retired during the crisis and that at one point might come up for conversions.

So just curious to hear your thoughts on that.

Yes. I think it's worth to say that these conversions, which the industry looks at, will take a lot of time.

They need to be certified. They actually have to happen in only a few maintenance MRO facilities around the world who are certified to do that.

So even if there is a stronger trend towards that, answering also my previous comment that basically, Boeing cannot put out enough freighters for both shift of demand and capacity. We discussed now a couple of times, I don't think this is a huge change to the industry.

We actually, Lufthansa, we just have converted the last freighter aircraft faster back to passenger. I would think others do that as well because everybody now needs the aircraft again for passengers.

So I think initially, we see that in the opposite trend. And as I said before, the Boeings are not coming quite back that strongly because most Boeings have been flying, just with empty passenger seats on top.

Long and midterm, it's a more complex story. Of course, not that much on the supply side, the demand side.

I've been in the business myself for four years. It's very difficult to forecast cargo demand.

And I think we have to be honest, what we are seeing right now will not stay forever. I mean we are seeing sometimes yields of more than €10 per kilo.

You make a lot more money with kilo per carrier than kilo per passenger right now. So is that the long-term trend of the industry?

I don't know, but probably not to that degree as we see it now. But the overall, as I mentioned, shift of supply and demand towards our favor as the large cargo operator, we believe is there and e-commerce territory stays.

So the answer in general is positive as I indicated before.

Can I come back and ask on the pilot negotiations again? Carsten, I know you were clear that it is only the Lufthansa Passage mainline who are in question, but they've got a track record of creating some problems.

And while what you're saying about shifting production to lower-cost platforms makes every piece of sense to most people listening to this call, it does tend to enrage pilot unions. So are you not -- I mean how confident can we be that this negotiation with pilots is going to go through?

And then can I ask just one on Lufthansa Technik repositioning. I know Remco told us to be patient and wait until full year results.

But there was stuff in the press that you had appointed a bank to investigate the options of IPOs or partial sale of stakes. What I wanted to be clear is, I don't know if you'll answer it, are they investigating the IPO against the stake?

Or are they investigating IPO against, again, keeping it? So are you still committed to doing something and you're deciding what it is?

Or are you deciding whether to do anything?

Andrew, yes, on the, again, mainline pilots, which to be honest, include not only the mainline, the CLA also includes the former Germany pilots, which are out of work and include, to a certain degree, the cargo pilots in a complicated mix. So this is the pilot group we are talking about, which again, historically, was the biggest, a majority of our pilots, and now it's less than 50%.

So we have to differentiate between two elements. So one is keeping them all in the job when the crisis agreement runs out end of March.

400 have left voluntarily. The remaining surplus pilots can be easily absorbed in our view when we have a part-time agreement, which I believe we will get to.

If for whatever reason, we don't come to that, then indeed, the surplus pilots have to leave. The cost effect for us will be the same because all we ask for in the part-time deal is to compensate the surplus.

We don't want any structural cost advantages here. This is only about keeping them all employed and their families fed.

And for that, we need for some time, a part-time deal. That's module, whatever, one.

Then your second question and also our so-called module two is the future mix between our various platforms. And there, don't forget, after the brutal labor conflict we had, we don't really have a real scope clause anymore.

We gave them a number of aircraft to be accrued, which we have now, of course, in the crisis lifted. And that agreement can be canceled from our side if we don't come to an agreement on reducing that number.

And the negotiations have just started. And again, here, also the outcome.

We come to an agreement with a reduced number of aircraft crewed by those more expensive pilots. For that, we will ask for some concessions on the cost side.

If we don't come to such concessions, if we don't come to an agreement, we can just leave the agreement by next summer and just allocate aircraft according to our own wishes because there will be no more restrictions on that with the exception of brand usage. We couldn't just put Lufthansa brand on all aircraft.

That is limited to city line and Lufthansa mainline. But the number of aircraft then would not be limited.

So I think there's a high interest from both sides to come to agreement on both elements. If for whatever reason we don't come to an agreement, I think the negative output for the employer, for us would be very limited.

The negative outflow for the individual pilots in that contract would be significant, especially for the younger ones, having no career anymore because we would stop hiring. So I think there is a strong interest to come to agreement.

For us, the cost reductions more or less will be similar if we find an agreement or if we don't find an agreement.

Carsten, just to add. Andrew, correct?

In the earlier part of this year when we came out with the cost savings, I just want to emphasize that many of you at that time saw doubt, can we realize it, right? At this point in time, we're at 70%.

Many of the feedback we got, hey, can we do something in Germany? I think we have proven that we can do something in Germany.

That is the case, €2.5 billion is behind. €1 billion is to go.

Yes, the larger part of the €1 billion has to do still with personnel costs. But just to make sure you understand, we are 100% committed to reach that €3.5 billion.

And that larger part of the personnel cost comes from further reductions. Also on the cabin, you have seen that voluntary program, which we just announced.

The other programs have been very, very successful. We expect that here as well.

As Carsten laid out, the productivity improvements because of the different platforms and also certain things in Eurowings we still want to do, absolutely on track in the last part with the pilots and to a smaller extent, with the ground is also on track. And left or right, we will get to the €3.5 billion, and there's no discussion about that.

I just want to emphasize that we're absolutely committed to get that done, and we think we can also do that. On the Lufthansa Technik repositioning, I said before, we are in the process to investigate whether to do a sale or not and if to do a sale, what will be the construction.

Of course, it's extremely important to think it's true very carefully. So no formal decision has been made.

But of course, doing such an investigation is because we would be interested to do a minority in case there is value to be created, and it works overall. So sorry, Andrew, not much more to be said.

But we are, of course, very serious. And we need to think this very carefully through to do the right thing.

And that's why it takes a little bit of time, and that's why teams are working through this. But as soon as we have more news, Andrew, we will certainly let you know.

If I could also ask three quick ones, please. Maybe following up from the -- from your answer there, Remco, on the €3.5 billion savings.

Just away from the personnel side, on the other measures, there is still 23%, which I think is about €400 million yet to be implemented. Can you describe what exactly they are and the timing in terms of implementation of those measures?

Then second question on the pilot negotiations. At least per your annual report in 2020, most of the pension deficit was still defined benefit.

Are pension discussions likely to be a part of the mainline pilot negotiations? Or is that likely to be left for another year?

And then the third question, maybe one for Carsten, on the transatlantic JV, Atlantic++. You mentioned your dinner with United.

Given their growth into Europe, given the potential for changes to cabin configurations, perhaps as you plan over the next two or three years, is there any structural change to that agreement necessary per the revenue-sharing terms? Or does the current structure accommodate all of the changes that are likely to be seen over the course of the next couple of years?

You go first? Or...

I'll go first. Neil, good to hear your voice again.

You've seen that since the last time we spoke, most progress we actually made on the nonpersonnel targets. And I have to say, I'm very proud particularly on all the operational teams of all the work we're doing.

Of course, part of all the savings which have come through are related to real estate, IT, certain marketing costs to just spend less, which are the easier parts. But there are -- a lot of work has been going on in the distribution, on the sales cost by modernizing that and to do things there smarter and better also with the whole online move.

But also in terms of the operations, a lot of things can be improved in terms of the airlines working better together as well the airlines together with Technik to streamline processes. And a lot of focus has been made.

You've seen that we mentioned also the MRO side on our slide. There are not specific initial things to be done on the comments which are made -- some more has to be underpinned, so we can call it really implemented.

And that track record is fully there. You have to understand that by business, there are measures being defined, which have owners and due dates.

And some of them will run through next year. But of course, we want to have most of it completed by the end year, but there might be some things coming also already in -- still in '23.

But as you see, we are growing a bit faster than originally planned, and we want to continue that speed.

Yes, Neil. I'm not quite sure if I understood your question on the pilot issue correctly.

Please correct me if I didn't. In the last negotiations, we settled to move from defined benefit to defined contribution.

And there's just a legacy remaining, obviously, but that's a slow negotiation topic. So we had that big breakthrough.

It was one of the reasons why it took so long to come to the agreement last time. So there's no open issues to be settled there.

On United, as you know, we are the largest joint venture on the North Atlantic. Then we were joking last night that I had to pay the dinner because we were the largest airline in the world in 2020.

And United is aiming to be the largest airline in the world by revenue in '21. So next time, they will pay.

And It's probably not a bad position to be in with the two largest airlines have a joint venture, which works so well also in terms of the people involved, the management teams. They indeed have the largest growth ever towards Europe.

At the same time, don't forget, we have Eurowings Discover growth in secondary destinations in the U.S. That is, of course, all agreed in that joint venture.

As you know, we have antitrust. We can talk about all that.

And that will strengthen our position. So the answer to your question, are there changes needed, is no.

Yes. Everybody, unfortunately, we're running out of time because we also have another call with the press scheduled.

I kindly ask for your understanding. Everybody who hasn't had the chance to ask your question, please approach us separately.

We'll be happy to answer all remaining questions. And otherwise, we look forward to speaking with you and also meeting you in person again over the next couple of weeks and months.

Thank you very much for your participation, and all the best.