Thank you very much. Good morning, everyone, and welcome to IAG's first half 2026 results.

A particular welcome today to José Antonio Barrionuevo, who has now taken over as our group CFO. Also, as usual, I have the rest of the IAG Management Committee with me today.

This first slide captures the essence of where we are today as a group. Since its inception in 2011, we have built IAG into a world-class business.

We now have a diverse portfolio of globally recognized brands in large and attractive markets, delivering industry-leading margins and significant free cash flow, and creating long-term value for our shareholders. These fundamentals make us well-positioned to navigate the current headwinds that the industry faces.

As a result, we have delivered a robust first half performance. We have grown our revenue based on continued strong demand for travel.

This highlights the strength and diversity of our markets and propositions. Our disciplined cost control during the half has supported the resilience of our margins, partly mitigating the sharp increase in the price of jet fuel.

We continue to have a strong and efficient balance sheet, which gives us the ability to manage a crisis like this with confidence. For our shareholders, we are committed to paying a sustainable dividend and completing the excess cash returns.

With the actions that we are taking, we expect to deliver an operating margin within our target range of 12% to 15%, despite the headwinds the industry is facing. We delivered a good financial performance in the first half, with industry-leading margins that again highlight the quality of IAG's business.

We grew revenue by 1.0% overall in the first half, comprising strong first quarter revenue growth of 1.9% and resilient second quarter revenue growth of 0.2%. This is despite the effects of the Middle East crisis, which had an immediate impact on our capacity and fuel costs that gave us limited time to respond with mitigating actions.

However, we did manage to recover around 60% of the fuel cost increase through our own pricing and cost actions, in line with our expectations. This varied across our regions.

Broadly speaking, our long-haul operations were very positive, and in short-haul, it was more competitive. IAG Loyalty continues to perform well as a differentiated proposition to our airlines, increasing profit by 25% to £239 million at a margin of 19.3%.

Our profit for the first half was €1,757 million, a resilient performance overall. I will now pass you to José Antonio to take you through the numbers in more detail.

Thank you, Luis. Good morning, everyone.

I'm pleased to share our first half results with you. Now this slide shows the key drivers of our first half performance, both by revenue and cost drivers on the left, and by business on the right.

We delivered an operating profit of €1.757 billion in the first half of the year, down €121 million on last year, a robust performance despite headwinds from fuel. We delivered an operating margin of 10.9%, with the sector-leading first half performance, which is consistent with our confidence in delivering a full year margin within our 12% to 15% target range.

Passenger revenue increased by €828 million at constant currency, driven by continued strong demand for travel and our diverse portfolio of markets and brands. Cargo revenue was down €23 million as lower cargo volumes, mainly linked to the suspension of routes from the Middle East, were only partially offset by a 3.3% improvement in yields.

Other revenue was slightly lower than last year, mainly reflecting a change in how certain MRO components in Iberia are now charged directly by the manufacturer to our airline customers, which reduces both revenue and cost by an equal amount. I'm pleased with our disciplined non-fuel cost performance as our transformation programs continue to deliver savings.

However, our hedging program only partially offset rising commodity prices, leading to a 12.5% increase in fuel unit costs. FX was a net €52 million drag on operating profit in the half, with the translation impact of a weaker sterling against the euro more than offsetting a small favorable transaction impact.

On the right-hand side of the slide, you can see the performance by business. British Airways was one of the standout performers, growing operating profit by €44 million year-on-year.

IAG Loyalty also delivered a strong performance, increasing its profit by €48 million, reinforcing the qualities of this business that we set out at the recent Investor Day. Iberia, Vueling, and Aer Lingus all saw lower profits, mainly reflecting the impact of higher fuel costs and in the case of Aer Lingus and Vueling, some highly competitive markets in more price-sensitive segments.

I'll come back to each of these on the next slides. Turning to the second quarter, operating profit fell €274 million year-on-year to €1.406 billion, with a margin of 15.8%, a reduction from a 19% margin last year.

Passenger revenue increased €318 million, excluding FX impacts, driven by higher unit revenue, although this was not enough to offset the €489 million increase in fuel costs at constant currency, driven by higher commodity prices following the outbreak of the Middle East conflict. This quarter was also negatively affected by the partial shift of Easter in the first half.

Profits from all our airlines were affected by the immediate impact of higher fuel prices, but again, you can see in the slide the quality of the IAG Loyalty business, which increased its profits by €20 million year-on-year. Now we can take a look at our operating companies' performance in the first half of the year in more detail.

British Airways delivered an operating profit of £885 million, an increase in margin to 11.9%, with a strong first quarter improvement of £90 million more than offsetting the initial impact of Middle East cancellations and higher fuel costs. Iberia reported an operating profit of €526 million, down €38 million versus last year, but delivering a strong 13.5% operating profit margin.

Iberia continues to see strong demand, particularly to Latin America, but the reduction in profit reflected the impact of higher fuel costs and some cancellations linked to additional engine maintenance. Vueling's operating profit was down €49 million year-on-year to €46 million, reflecting, again, higher fuel costs and continued competitive pressure in some markets within the European low-cost segment, which is naturally more price-sensitive.

Aer Lingus delivered an operating loss of €34 million, compared to an €18 million profit last year. This was driven by the combination of higher fuel costs and competitor capacity growth, especially from US carriers.

IAG Loyalty continued to deliver high-quality, high-margin earnings, with operating profit up £48 million to £239 million, with a margin of 19.3%, up 3.4 points versus last year. Profit growth came mainly from the loyalty part of the business, driven by non-airline partnerships, with the holidays business affected by the suspension of routes to the Middle East.

Turning to our quarter two regional performance, group capacity was slightly down, below the original plan of around 1% growth that we guided to in May, reflecting additional cancellations linked to the Middle East conflict, as well as aircraft availability. In the North Atlantic, which represents around 30% of our capacity, unit revenue increased 7.3% at constant currency.

This was driven by British Airways, which delivered very strong unit revenue growth with strong premium demand and strong corporate demand in all points of sale. Latin America and Caribbean continues to be a strong performer, with unit revenue increasing 2.4% at constant currency on a 5.3% increase in capacity, driven by Iberia, which continues to grow its capacity to the region, including new A321XLR routes to Recife and Fortaleza in Brazil.

For Iberia, premium demand continued to outperform, with point-of-sale LATAM and Spain performing well. However, in point-of-sale Argentina and Mexico, Iberia saw a shift in demand due to the World Cup—congratulations to the winning team, by the way—with outbound tourism from these countries shifting from Europe to North America.

In Europe, unit revenue increased 1.2% at constant currency. This very strong outperformance compared to the wider European market was delivered through British Airways' Heathrow network and premium demand, highlighting its differentiated proposition.

The European short-haul market remains highly competitive, given significant capacity growth from other airlines, which limited our ability to recover the fuel cost increase through pricing. In the domestic market, unit revenue increased 1.7% on a capacity increase of 6.7%, helped by disruption to rail services in Spain.

In the rest of the world, performance was also very strong. In Africa, Middle East, and South Asia, capacity was down 17.4% as we suspended most routes to the Middle East, but unit revenue on the remaining routes increased 13.2%, helped by customers avoiding traveling via the Middle East, particularly corporate travelers on British Airways.

In Asia Pacific, capacity fell slightly as BA redeployed A380s from Singapore to Johannesburg, which was only partially offset by the launch of Gatwick to Bangkok route. Unit revenue performance in Asia was strong, increasing 6.2% at constant currency.

Turning to unit costs, non-fuel unit costs decreased by 1.3%, including a benefit of 3 points from FX. Employee unit costs increased 2.4%, reflecting pay deals, headcount growth driven by planned capacity growth, and the increase in employers' National Insurance in the United Kingdom.

Supplier unit costs improved 5.4% with our cost transformation initiatives more than offsetting inflationary pressures, although it's worth noting that FX especially impacts engineering and other aircraft costs, the majority of which are denominated in US dollars. There was also a tailwind from the change in Iberia's MRO contract basis that I mentioned earlier.

Ownership unit costs increased 8.8%, driven by new aircraft as well as customer-focused and digital investments. Fuel unit costs rose 12.5%, reflecting the significant increase in commodity prices from late February following the conflict in the Middle East.

This was only partially offset by our hedging program, which delivered hedging gains of €769 million in the first half of the year. Looking forward, we are around 70% hedged for the remainder of 2026 and around 40% hedged for 2027.

This next slide takes us down to profit after tax. In the first half, we recognized €149 million of exceptional costs, €114 million at Iberia and €35 million at British Airways, related to their transformation and workforce programs.

Before these exceptional items, profit after tax was €1.146 billion, down 11.9% year-on-year. Overall, adjusted EPS decreased by 10.9%, benefiting from our ongoing share buyback program.

We generated free cash flow of €2.905 billion in the first half of the year, €808 million higher than last year. Operating cash flow was up €409 million year-on-year, mainly reflecting the €447 million payment to HMRC, which we made last year to appeal the IAG Loyalty VAT ruling.

On the other hand, working capital was a smaller inflow compared to last year, mainly due to fuel prepayments we made to mitigate the impact of the Middle East conflict, together with lower capacity growth. CapEx was €1.291 billion, down from €1.690 billion last year, reflecting the delivery of just three new aircraft in the first half of this year, compared with 13 in the first half of last year.

We now expect 16 deliveries for the full year, with the majority being delivered in the fourth quarter and one delivery now slipping into 2027, compared to the update we gave you in May. Full-year CapEx is now expected to be around €3.4 billion, and we expect to continue to take the majority of the remaining deliveries unencumbered.

We continue to take action to maintain our balance sheet strength. Net debt reduced to €4.7 billion, down from €5.9 billion at the end of last year.

Net leverage also reduced to 0.6 times, and gross leverage reduced to 1.8 times. This was driven by the net impact of the repurchase of the convertible bonds, the issuance of new unsecured bonds, the repayment of aircraft financing, and a €0.5 billion in aircraft lease extensions.

Finally for me, a reminder of how we think about capital allocation. Our first priority is to maintain our balance sheet strength, targeting net leverage below 1.8 times and gross leverage of between 1.5 and 2.0 times.

Our second priority is disciplined investment in the business, targeting a return on invested capital of 13% to 16%. Third, we're committed to a sustainable ordinary dividend.

In 2025, the total dividend was €441 million, with a final dividend of the year of €0.05 per share paid this last June. We will update the market on the 2026 interim dividend at our quarter three results.

Also, we continue to return excess cash to shareholders, with around €800 million already completed of the €1.4 billion program that we announced in February 2026. Finally, I wanted to share some thoughts from my two months as IAG CFO.

Whilst I've been in the group for 13 years now, the experience over the past two months has strengthened my view that IAG has the right model, the right strategy, and the right execution capabilities. Even though the current situation is highly challenging, we're still generating high margins between 12% to 15%, high return on invested capital, and a strong free cash flow, allowing us to continue: a, investing in the business; b, creating long-term value for our shareholders; and c, rewarding them through dividends and returns of excess cash.

The conclusion is clear. The model works.

We're highly resilient, and I have huge confidence in the long-term future of IAG. On that note, I will hand back now to Luis.

Thank you, José Antonio. As usual, I will start with our strategy summary slide, which is how we are delivering our strong financial results.

Our first priority is to focus on our strong core, which means that we strengthen and grow our global leadership positions through developing our hubs and our networks. We are also investing in our brands, with value propositions across different customer segments.

Secondly, we are driving capital-light earnings growth, primarily through IAG Loyalty. As you have seen, this is going very well.

Thirdly, we are basing this on a robust financial and sustainability framework in which we focus on creating value for our shareholders in the long term. This is designed to drive sustainable profitability and accretive earnings growth.

Our strong core of diverse markets and brands is providing its value in the current environment. As you can see on this slide, our resilient performance is being delivered by our leading positions in a number of large and attractive markets, with powerful brands and customer propositions in those markets.

I would like to highlight that our different customer segments are making important contributions. We are seeing good revenue growth from business customers, whilst leisure and VFR traffic, particularly premium travelers, provide the sticky volumes that provide underlying resilience.

Our strong and resilient margin performance is driven by our ongoing transformation program, which focused on operational, customer, and cost improvement. This is a long-term continuous improvement culture that underpins our resilience.

BA is seeing the benefits of its commercial transformation through the new revenue management and payment platforms. This is delivering revenue upside, particularly in this dynamic trading environment.

BA also recently started to roll out the new app, with 93% of sessions now going through the new version, with better experiences for customers across all four aspects of its functionality. Iberia continues to implement its strategic medium-term Plan de Vuelo that was announced last year.

It is growing its long-haul fleet efficiently and profitably with the new XLRs, as well as reshaping its workforce to introduce new skills using the latest technology and AI to drive higher productivity. Aer Lingus has recently announced a major transformation plan in which it will make network changes, invest in new cabins, and reduce costs with a clear path to position the airline better for the long term.

Vueling announced its Plan Rumbo at the beginning of this year, setting out its longer-term transformation plan to carry 60 million passengers a year. A fundamental part of this will be the transition to a Boeing 737 fleet that will deliver a significant reduction in costs.

In the meantime, they continue to focus on digitalization in the business with respect to both customers and operations. Finally, IAG Loyalty is delivering on its plan to build to a billion, which I will cover in more detail in a minute.

We are continuing to invest in the business to drive a better customer experience, resilient operations, and long-term earnings growth. Our aircraft are our biggest investment, and we have 16 deliveries coming this year.

This includes the final XLRs, which is an aircraft type that is performing extremely well. We are also looking forward to the first of our 60 Boeing 737 deliveries to Vueling at the end of the year.

On board, we are retrofitting aircraft across our networked airlines. Most of BA's Heathrow long-haul fleet will have the new Club Suite by the end of the year, and the first A380 has just started its retrofit, which will also include the new First seat as well as Club Suite.

Both Iberia and Aer Lingus are retrofitting their A330s to deliver a more premium proposition with both business and premium economy cabins. As mentioned earlier this year, we have started the installation of Starlink across the group.

This is driving significant customer satisfaction increases on flights where it is available, and take-up is very high. We have 353 devices connected on one flight, which was more than one per passenger.

We expect 50% of our long-haul fleet to have Starlink by the end of the year, and Vueling will be the first low-cost carrier in Europe to have Starlink, which will be fitted to its new 737s when they are delivered later this year. We also continue to upgrade our lounges around the world, with the imminent opening of the new Emerald lounge at Madrid-Barajas for Iberia, and BA has announced the intention to upgrade their lounge at Newark Airport.

One of the benefits of our transformation program in the last few years has been that all of our airlines are now delivering sector-leading on-time performance on both a European and global basis. Aer Lingus has outperformed its largest competitor in Dublin for the last 37 months in a row.

British Airways had its best-ever quarter in the first quarter of this year, and Iberia and Vueling were both in the top five European airlines for the year to date. This has helped deliver strong customer NPS and an efficient operation, which underpins our profitability.

As I mentioned at the beginning, IAG Loyalty is continuing to deliver strong results in terms of its financial performance as well as strategic initiatives. Avios issued went up by 15%, and the number of active members increased by 9%.

New partnerships were signed with PizzaExpress and Uber Eats in the UK, and Cinesa in Spain. The holidays business was affected by the Middle East crisis, but has seen some additional demand in the Caribbean, Indian Ocean, and short-haul Europe.

Holidays has also seen significant benefits from the new BA Club Tier Point link, with a significant increase in revenue per booking from Gold and Silver cardholders. We continue to make good progress in our sustainability program.

Primarily, we are ensuring that we comply with our obligations, securing SAF volumes toward our 2026 requirement. We are working with partners to encourage the production of advanced SAF in the future.

We are also engaging with governments and regulators to ensure that carbon-related targets are achievable and do not unfairly penalize European airlines. In particular, we are evaluating the recent EU ETS proposal for its likely effects, but in principle would prefer that they support CORSIA, the global United Nations initiative.

As always, it is our people that are critical to our success. We hired 6,000 people in the first half of the year, increasing our total headcount to around 78,000.

This reflects the normal seasonal increases in pilot and cabin crew ahead of the busy summer season, as well as more manpower in our South ground handling business. We have a new agreement in place with ground teams at Iberia.

Moving on to the outlook. As seen in the first half, we are well-positioned to navigate the near-term headwinds facing the industry, showcasing the strength and resilience of our business.

We are booked at around 57% of expected revenue for the second half, in line with last year. We continue to expect to recover around 60% of the increase in the fuel price through revenue and cost initiatives, as supported by our transformation program.

Based on our revenue and cost actions and our decision to take out inefficient capacity, we expect to deliver an operating margin this year within the group's 12% to 15% target range. This, in turn, will generate significant free cash flow.

We are delivering for our shareholders through dividends and our excess cash return. We expect to continue to improve again next year.

We are confident in delivering long-term value creation for our shareholders. Now we are open the session to Q&A.

Thanks very much. Congratulations Luis and José Antonio on the World Cup.

I think we're all a bit Spanish that day. Two questions, please.

On this capacity reduction, and maybe just sort of unpack a little bit where it's being removed and maybe if it reflects sort of strategic reductions or just low aircraft availability. I think you talked about that impacting Q2, and whether you're still seeing ongoing engine issues in particular.

Then maybe we could hear from Lynne on Aer Lingus, just I saw some media on the transformation plans. It looks like quite a biggie there.

Maybe just a bit more on what's being done, cost-cutting, script strategy, et cetera. I think it's quite a big one to get that turn around.

Thanks very much.

Good morning. Talking about capacity, as we said, the full year capacity now is guided flat.

The main reason is that we canceled a big part of our operation in the Middle East. We are going to resume that operation, but slowly.

For example, BA resumed Doha on the 1st of September, Riyadh from the 1st of October, and also Dubai and Tel Aviv, but is taking time, and we are following the situation there. The other reductions is more because we want to have capacity disciplined, and we are evaluating all our flights, and at the end, what we want is to preserve the margins of the company.

It's true that we had some issues with the engines. I think in general, the situation is improving, but maybe, Sean, you want to comment about that in the case of BA?

I think we have an improvement in the Rolls-Royce Trent availability, we have less aircraft out this year than we did last year. I think that's enabled us to grow the North Atlantic, for instance, in the first half, where our capacity was up 5%.

We have taken reductions in the Middle East, as Luis said, but then we have redeployed some of that capacity into markets like India, where we've actually added an extra frequency to Bangalore and increased gauge in markets like Mumbai and Delhi. We've also added capacity into Nairobi, which is performing well.

I think it's fair to say that we still have some supply chain challenges that we're navigating through across our fleets in long-haul, but, generally speaking, we're seeing more of our aircraft operating this summer than we would have last summer due to an improvement in the Trent situation.

If I pick up on the Aer Lingus one there, James. This is our first half-one loss outside of COVID for some time.

At the €114 million swing in profitability, only 45 of that is fuel. What we're looking at is quite a changed structural environment to the one that we used to operate in where group margins were more easily in reach.

We've seen since those days 40% increase in short-haul capacity from competitors, 50% from long-haul, we just can't sustain that level of revenue pressure with the cost base that we have today. We are confident we can get there.

We do have a plan. It starts with head office, where we've been doing our zero-based budgeting on the cost base, but, importantly, taking over 25% out of senior management so far, but we're also consulting with our unions over a similar number out of head office in total.

We've taken the weakest flying out of the network, so that's a 6% reduction that we announced recently. We do have a lot of transformation on the revenue side, not in the tech side, but also in product.

We've mentioned premium economy and the business class refresh. We do need to see productivity improvements as part of that bridge to get to the group operating margin.

If we do all of those things, I think we're confident that we can get to being an investment case for IAG again. We do have a lot of aircraft requirements coming up, and we'd like to make that case.

Thanks a lot.

Good morning. Two for me, please.

Want to pick up on recent comments from Emirates refusing the first 777Xs because of rework requirements. United said they also don't want them.

Do you share that view, or do you think they could possibly work in BA if offered? More broadly, how confident are you in getting 777Xs?

I believe you're due your first ones next year. Second, with the recent news flow around easyJet possibly being taken private, if some parts of easyJet were to become available for sale—thinking about holidays, UK medium-haul, maybe some mainland European slots—would they be strategically interesting to you?

Thanks.

Thank you, Alex. Talking about the 777, we are going to receive our first 777, in principle, in 2028.

We choose not to have the first serial numbers of the aircraft, we are not concerned about that. In principle, we don't see the same problems.

About easyJet, we are as a group always analyzing opportunities of consolidation across the sector, because we think that further consolidation can help to make European aviation more efficient. The only thing we can say is that we regularly talk to airlines and assess consolidation opportunities, but we are not going to comment anything about easyJet.

Clear, thank you.

Good morning. Two questions, please.

Just on, first of all, CapEx, I see the CapEx now for the year is €3.4 billion. Just remind me what the CapEx is expected to be or what you've said for the rest of the decade or broad indication, and obviously it steps up.

I say that in the context that the net debt-to-EBITDA is 0.6, and you talk about excess returns of 1 to 1.5. Maybe just talk about, given that where your leverage is.

The second question, just on the market, you keep saying that the European market is competitive. I'm just wondering, what's the issue?

Is it too much capacity? Is it the competition, is it Ryanair, or is it inherent in the restructuring needed at the airlines, maybe in particularly Aer Lingus and Vueling, cuz it sounds like BA is okay there.

Thank you very much.

Thank you. On CapEx, we guided in the February results about our CapEx profile for the following years.

We're roughly in the same numbers that we shared with you at that time. CapEx for this year, 2026, it's going to be around €3.4 billion.

For the next two years, '27 and '28, we gave you an average of around €4.9 billion. Then for '29 to '31, a €5.6 billion average, returning to a run rate of around €4.5 billion after 2032 onwards.

We're roughly on the same place. There's obviously little changes that happen when the deliveries slipped to the right.

Roughly, we have now the same CapEx profile that we told you a few months ago.

About Europe, is the most competitive region. We have elevated capacity growth, in particular where there is ultra-low-cost carriers.

In some markets like, for example, Italy, there are other markets that they continue healthy. When there is a battle, is tough, to be honest.

In principle, our domestic market is performing well. We see stable trends, and it's a solid contributor.

I think that's the market where we see the biggest impact.

Okay. No, that's great.

Thank you very much.

Hey, good morning, guys. First question is just following up on the second question there, which was around European short-haul market.

As you say, obviously, it's quite competitive at the moment. I'm just kind of wondering what your views are and how that develops over the next few years.

Obviously, it was mentioned that easyJet may be taken over. Do you have any views on consolidation just for that market as a whole?

In terms of the order books within there, generally speaking, it looks like capacity growth could be mid to high single digits if retirement rates stay as low as they are. I'm just kind of thinking, what's your views on that run rate going forward?

Then the second question is, as we look into winter, obviously, you're cutting capacity growth, will have a higher weighting from the likes of corporate, generally, they'd be a bit less price-sensitive. Should that improve your ability to raise pricing into the winter?

Maybe perhaps an update within that of how is corporate overall kind of tracking at the moment? Thanks very much.

Thank you. Now, it's difficult to predict what is going to be the intra-European short-haul market, because if this situation continues, I am sure that some competitors they are going to suffer and they are going to reduce capacity.

It's true that we can have some consolidation, but maybe we are going to have also less capacity from people that they are not so strong in order to survive to this situation. We are following that very carefully, and if we have some opportunities, for sure we will take action.

The second question was about the business traffic and corporate traffic. Q2 was very strong in corporate revenue, high single digits year-on-year, and it was driven by volume and also by yield.

BA was very, very strong. Iberia corporate demand also worked very well in North Atlantic and domestic.

It's something similar to what we are seeing for the rest of the year. We continue to see strong business demand, in particular, as I said, in the North Atlantic and domestic regions.

It's true that also we have some traffic from the Middle East that is coming to our hubs, and it's something that is going to decrease on time. We hope that this conflict will solve at some point, but that's also helping us.

I don't know, Sean or Marco, you want to comment about that?

I think North Atlantic has been very robust, and we've had both volume and price increases. I think technology and financial services have been strong, but also small and medium enterprises, we've seen volume growth there.

Also a combination of personal and business trips has been a growing segment. I think, as Luis said, if you look at the rest of world, flows like North America to India, we're doing very well on business traffic, and a lot of that traffic at the minute is bypassing the Gulf hubs, and I think we are capitalizing on that, and we've added more capacity into those markets to kind of build on that momentum.

Look, I think we're seeing that trend continue as we look into the second half of the year. As you say, in the winter, that makes up a bigger mix of our business, but the trends are encouraging.

The same can be commented from an Iberia standpoint. We had an 8% increase in our corporate traffic in Q2.

In particular, the strongest one was North America, but in general throughout our network, long-haul network in particular, we did see that strength.

Wonderful. Thanks very much, guys.

Hola, Luis y José Antonio. Two questions from me, one on revenues, the other on costs.

Firstly, you've mentioned that 57% of expected revenues for H2 are booked, that percentage is similar to this time last year. Clearly, your expectation is for revenue growth year-on-year in H2.

Can you offer any thoughts on how you see the constant currency PRASK for the group progressing in Q3 and Q4 from the 4.6% level seen in Q2? In particular, do you see any price cuts from US legacy carriers that might affect how that progresses?

Then secondly, pleasing to see that the flat ex-fuel CASK guide is there despite the much lower ASKs. Could I get you to talk a bit more about the €149 million of restructuring costs?

What's been done exactly at BA and Iberia in H1? Is that just part of BA transformation and Iberia's Plan de Vuelo?

How much restructuring do you envisage in H2 for anything else at those two airlines, along with the announced restructuring at Aer Lingus? Thanks very much.

Thank you. Yes, as you said, the booked position is 57% of expected revenue booked for second half, it's similar to the percentage that we had last year, not in absolute terms, because what we see for the second half is a broadly similar behavior in PRASK of the behavior that we had in the Q2.

That's the performance that we see for the year. Maybe, José Antonio, you want to comment on the cost side?

On the cost side, two comments here. First one, obviously Q2 was a good reaction.

It was a disciplined approach to cost and in the new situation. We are going to continue putting focus on cost for the remainder of the year.

As you say, the guidance we're giving on non-fuel costs, given the lower capacity, shows that we're disciplined and we can react quickly to the situation when it's needed. In terms of the exceptional costs, you're right, they're part of the transformation programs of both Iberia and BA in terms of having a more efficient employee base, specifically in the case of BA, more on the headquarters; in the case of Iberia, also including some of the operational parts of the business.

It's a part of the ongoing transformation that we are having on both business. I don't know if Sean or Marco, you want to say something else.

Yeah. Out of the 149, there are €140 million that are corresponding to what we call the voluntary furlough scheme in Spain, the ERE, that touches almost 1,000 people in Iberia, that has been agreed with 100% of the support of the unions.

85% already of the people out of the 996 have been applying to that, we are in full implementation of that. That not only ensures that we have a change in our profiles to be prepared to face all the initiatives that we have in the Plan de Vuelo, but also allows to have a structural lower cost base in our labor cost.

It has a double effect both in efficiency and capability to execute our Plan de Vuelo.

In British Airways, it is, as José Antonio said, focused on our head office functions. What we found over the last four years as we've been rebuilding the airline, we felt it was the right time to have a look at how we're set up in terms of back-office functions, both in terms of efficiency and effectiveness.

We're going through a range of consultations across a number of functions with a view to streamlining and removing duplication. It also puts us in a good position to exploit new technologies to be more effective and efficient.

We're probably about 60% of the way through that program, and it will carry on for the remainder of this year and into the early phases of next year.

Thank you.

Hey, good morning. Two questions.

Just first on the comment about kind of the unit revenue and kind of the second half looking similar to 2Q, wondering if you could provide a little bit more color on maybe regional or other dynamics. I would have thought maybe improving because you've seen fuel move higher, and maybe a higher selling fares as you go through the year, and then maybe World Cup impact not as big in the second half.

Then just secondly, just on competitive trends, appreciate what Lynne called out at Aer Lingus. I was wondering if you could talk a little bit more about what you're seeing at Iberia.

Okay. Good morning.

Yes, the pass-through that we expect is around the 60% that we said. The reason is that the pass-through varies by region, by route, by customer segment.

For example, in the long-haul is easier that in the short-haul. We talk before about the intra-European market, how tough it is now.

Overall, what we see for the rest of the year is that the performance is strong across most key markets. North Atlantic, we see positive trends.

In LATAM and domestic, we see solid performance. Asia-Pacific, we continue with a good evolution.

The places where we see some softness is intra-European, that we talked before, and Middle East, because we are not flying, mainly. The trend continues, and that's the reason we said that the unit revenue that we expect for the rest of the year is similar to the unit revenue that we saw in the Q2.

We are still having the benefit of the strong business demand, mainly North Atlantic and domestic. We don't see anything today or nothing today that can change the confidence in the full-year outlook.

Maybe Lynne, you can comment.

The second question, I think, was about Aer Lingus.

Sorry, I thought the question was, and what does that mean for Iberia? Transatlantic, we've seen significant capacity over the first half of the year.

The accumulated impact of the capacity over the last few years is what's causing us the real problem, because the market hasn't been able to grow into that. What Aer Lingus is doing is tapping into the transfer market more, our load factors on long-haul, for example, have been flat in Q2, but that comes at a lower yield.

We have passenger cap likely to be lifting in Dublin. We want to make sure that we can take advantage of that, but we need the lower cost base to do that.

In terms of Iberia, indeed, we have seen, of course, the Spanish market is performing well, and that attracts also long-haul capacity, both from North America and South Atlantic. If you look at North America, for instance, both Delta and JetBlue increased capacity or introduced capacity from Boston to Madrid, as well as some services to Barcelona.

Of course, in our case, we've been growing capacity in that region 18%, and you see still a very, very solid performance that we are having, which is a combination of the fact that demand supports the capacity that we are having. At the same time, we have a very competitive proposition.

As we are doing this capacity increase primarily with the XLR that is performing very strongly. It allows us to open routes that previously were not served directly, like, for instance, now we are opening Toronto, or we've been opening Monterrey, Fortaleza, Recife in South America.

As you can see, our profitability, despite the significant growth, remains at the level where we were. That is also a factor of the fact that in parallel, we are continuing our Plan de Vuelo to improve our cost competitiveness, as you've seen in the first half, where we reduced our unit costs by more than 2%.

The combination of the two facts allows us to remain industry-leading in terms of our EBIT margin.

Very helpful, thank you.

Good morning, everyone. Two questions from me.

The first one, I just wondered if we could get some extra color on transatlantic demand into H2. Because when I think about the shape of your numbers, versus the 7% transatlantic RASK in Q2, can we actually see pricing accelerate on the transatlantic into Q3?

Because the comparatives from last year with the tariff impacts are weaker, and the US airlines have spoken about accelerating pricing and the strength of demand there into Q3. Just some extra color on transatlantic.

Then second question, one for José Antonio, obviously still new to the role, but any early thoughts on what you might want to do differently with the business, are you happy with the current capital allocation, where can you see any room for improvement on your side? Thanks a lot.

Thank you. Yes, talking about North Atlantic, the second quarter performance was very good.

The commercial RASK was +7.3%, up to 6.7% that we had in Q1. A big part of the increase came from British Airways.

When we look at the future, the third and fourth quarter, in the case of BA, business revenues, as I said before, continues to grow, and that's what underpins the high RASK that we are having, and in particular, North Atlantic point of sale is doing very well. Also what we see is that the leisure traffic is growing from the third quarter.

We think this is going to help. In the case of Iberia, we talked before that they are adding a lot of capacity in North Atlantic, and this is having an impact in the unit revenues.

If we talk about LATAM, the situation is different. I think that we are adding a lot of capacity in the region, the competitors also they are adding capacity.

We had an effect of the World Cup, and some traffic from Mexico and Argentina, they went to the north, but we see a strong performance for the rest of the year. I don't know, Sean and Marco, you want to comment?

Maybe on Latin America just quickly. What you see there is that capacity from Latin America to Spain in the second quarter, industry capacity increased 17%, and despite that, we can see that the unit revenues that we have been having are positive in constant currency versus last year.

What we see there is that demand remains solid, even though just in June, as Luis was mentioning, we did see some World Cup-related, most likely, in particular in Argentina effects. The overall underlying demand remains very stable, very strong in fact, and both on the business and on the leisure side, and therefore we remain confident to keep seeing that demand continuing in the future.

Just to add, I think if you look at Q2, business travel was up 16% in BA across the North Atlantic, but the US point of sale was much stronger, that was over 22%. We look into the winter, we do see capacity overall begin to moderate.

I think if I look here at H2, what's published London to US, we think will be down about 3%, and Europe to US will be flat. We have seen carriers pull back from published schedules, and I think that will support the fuel recovery ambitions that we have for H2.

Harry, in terms of the question to me, I think the priority, the focus of this year has to be to navigate through the current situation. We walked into the crisis in a very strong position.

I think we're proving so far, and we'll prove it at the end of the year, that we have the right strategy and the right model to produce the right levels of profitability, keep an investment program that is strong, and also give a return to our shareholders in good and in bad years, and that's what we are focusing on now. Obviously capital discipline and capital location is a important component of that.

We're hoping that when we talk with you again in February of next year, we could say that we're over the crisis and coming out of the crisis even stronger than we walked in, and that would obviously open new opportunities to us that we will be exploring and hopefully sharing with you in next year.

Great. Thank you, everyone.

Hello. On the Aer Lingus turnaround program, I was wondering if you could potentially quantify your financial expectations for the brand post-turnaround.

Did I hear earlier that it was supposed to be group margins with the goal, and how long do you think it will take to get there? Potentially an update on the demand environment for BA Holidays as well.

Do you have any color on booking trends year-on-year, pricing, accommodation inflation, any details would be great. Thank you.

As part of this group, if we want investment, we need to be at the 12% to 15% as well. Luis and Jay have got plenty of opportunities to allocate their assets, and Aer Lingus absolutely wants that too.

We do believe we can get to the 12% operating margin. There's some steps are quicker than others.

We believe we can take cost action quickly. We believe that the impact from things like premium economy and the business investment will take a little longer to come through.

We're starting that in Dublin towards the end of the year, but we don't get the full revenue benefits straight away. Then, yeah, if we can demonstrate that we're getting our own house in order and can get very close to that investable margin, then I'd hope that new-gen aircraft would lift us over the hurdle rate, because there's certainly efficiencies from having new-gen aircraft.

We do believe we can get there. We don't think it's an immediate solution, but there's certainly a pathway that we believe we can give confidence to group that Aer Lingus can be investable.

On the BA Holidays side, yeah, it's been a, I think along with a lot of the holiday providers, a tough H1. Dubai was our second biggest destination, we have seen an impact.

What I would say is that customers have booked elsewhere. The Caribbean has had a very strong H1.

The Maldives has been our biggest destination in H1. You've seen Indian Ocean and Caribbean perform very well.

As we come into the summer, short-haul beach has also been positively YoY, and I would say certainly Greece, again, for us has been very positive. We continue to see that.

We also continue to see average booking go up. You've seen that in the presentation.

Part of that is the BA Club members realizing the benefits of booking with BA Holidays, the tier points that come from it. We're certainly seeing that trend strengthen as more customers realize those benefits.

Great.

Thanks very much.

Morning, guys. Many congratulations on the football.

Can you talk to us a little bit about Level? I thought that was an IAG brand that appeared to have disappeared from the presentation.

I don't think it's in the optimum marketplace with a lack of premium exposure, but what are the plans for it? What are you going to do with Level, and where's it going?

Then can I ask just around fleet? You're really enthusiastic about the XLRs, but you're taking the last one.

Why wouldn't you want some more? A little bit surprised to see you grabbing Pratt & Whitney engines for BA.

Can you talk a little bit about that as well, please? Thanks.

Thank you, Andrew. Talking about Level, usually we put in the presentation the four big airlines that we have in the group, and that's the reason that we don't talk about Level.

Level, they are adjusting the network, and they have canceled some of the routes to San Francisco, Boston, and Los Angeles. What they are doing is to give priority to capacity on routes where they have more established demand.

It's true that they have less premium customers than others, and then for them is more difficult, for example, the pass-through that we were talking before. The opportunity in Barcelona long-haul is there.

We are also the only player in the market that we have Vueling as short-haul operation in Barcelona. We are sure that a long-haul operation from Barcelona, when we can have the feed from Vueling, is going to work.

We need to understand that in this situation, that is affecting more the leisure market, we need to do adjustment, but to be stronger later. Your second question was about the XLRs.

Yes, it's true that we are going to receive the last one soon, and we have options to have more. We need to take a decision soon, but we are still considering if we want to have more aircraft, and where do we want to have more aircraft.

We are very happy with the performance of the aircraft. Maybe, Marco, you want to comment?

Is an aircraft that is performing even better than originally planned in terms of the stage length. In fact, we are operating currently to the Caribbean, San Juan and Santo Domingo, where initially we were not thinking that the range could get over there.

In terms of unit costs, is significantly lower than the 330. It's counterintuitive normally, a smaller aircraft has a higher unit cost, but this is not the case with the XLR.

Of course, it allows us to open destinations where the demand is too thin to be served by larger wide-body aircraft. It is very effective for us allowing to explore new destinations to cover our network more profoundly, both in North America and South America.

We do expect that it is likely that we will expand that, but as Luis was saying, is a decision that has not been taken yet.

The last part of your question was about the Pratt & Whitney engine spot for BA. We had the issue with the GTF and we have 34 aircraft affected.

What we are taking is the engine that is going to fix these problems, and we are sure it's going to be reliable. I don't know, Sean, you want to comment?

Look, I think we've got a big enough short-haul fleet to have a split engine structure, and actually I think it does give us diversification away from some of the risks that we have seen in the last couple of years. The Pratt & Whitney engine deal is competitive, and very competitive.

Morning, everyone. A couple from me if I can.

Firstly, on capacity, as you talked about this year, but I know it's a little bit early potentially, but could you talk about what your thoughts are for capacity going into next year, maybe if you assume that fuel prices remain at around sort of current levels? Secondly, I think it was on the balance sheet slide, there was some talk about aircraft lease extensions.

I was just wondering sort of which aircraft leases you extended, which airlines they're at, and why you did that, please. Thanks.

Good

morning. The capacity for next years, we are not giving guidance, because first of all, we need to see how the situation in Iran is going to evolve.

We were talking before that we are going to be flat this year because we are reducing capacity, and part of the capacity we are reducing is in the winter season. We need to see how the situation continues, how the competitors are going to develop the capacity, because maybe some of them are going to cut capacity with this high fuel price.

Still is too early to say what we are going to do next year. José Antonio, maybe.

In the lease extensions, we're talking mainly about 787s in BA and 330s in Iberia. This was already guided in the results in February.

We look at the extensions are very favorable, very positive, we decided to continue what we said in February we'll be doing.

Thanks so much.

Thank you, everyone. I'll just limit it to one just given we're already over time.

We just wanted to get your views on TAP. Obviously, it's firmed up from Lufthansa and Air France.

Of the two, strategically for IAG, who would be the better one to win, to speak? Air France very strong already in South America.

Lufthansa, relative underperformer compared to you and Air France, but got large network, good balance sheet, potential to reinvigorate TAP. Just to get your views, who would you want to win strategically?

Who is the weaker player in terms of impact?

Thank you for the question. The first part of the question, I fully agree.

I think the best place for TAP is IAG. I think it's the model that can develop more the company in the same way we have developed all the airlines that they have joined our group.

We have a different model. It's true that we have the hurdles for investment that we were talking before.

We need a good performance in order to invest in the business, in some way it's a difficult club. Because of that, we need to choose carefully who can join the group.

In the case of TAP, it was interesting for us from the strategic point of view, but when we analyzed the conditions of the way they are privatizing the company, we thought was not interesting for our shareholders, and that's the reason we didn't continue. To be honest, I don't mind if finally they go with Air France or Lufthansa.

I wish them the best for the future of the company and the employees, but we are going to have the focus in our group. Okay.

Thanks very much.

Thank you. As there are no further questions, I will now

Thank you, everyone. Before I close, just summarize the key points from today.

We are proving that the model works. We are also proving that the strategy works.

This means that we are very confident in the future of this business. We are also confident that we will continue to deliver operating margins within our 12% to 15% target range, and significant free cash flow that we will allocate in a disciplined and friendly way.

On that note, I wish you a very good summer. Thank you very much.

Bye-bye.