Wizz Air Holdings Plc

Good morning, everyone. Thank you for coming to this meeting.

Let me just start with saying that I head to Bloomberg this morning and you need to do that, there is a huge screen blown into your paste, and you see your numbers in that and for including the integration. And I can tell you in the market is wrong, and we are just trying to prove that the market is wrong and we are right.

So we are reporting fiscal '19 today. We delivered 34 -- almost 35 million passengers, somewhat higher unit revenues year-on-year and somewhat lower exterior unit growth.

And I think this is quite a distinction compared to the rest of the market. And I think we are in a different place.

We're standing on the balancing in here. We are the highest margin business today, and we are the lowest cost airline in Europe as we speak.

Passenger growth, 17%. Revenue grew 20%.

The load sectors up 1.5%. I think we are paying on target with regard to our net profit with the latest guidance, EUR 292 million.

If we exclude, this we anticipate solution is EUR 295 million. We have been controlling our costs on our competitors.

Some of it, I think is still optical that we always chase the cost opportunity, and some of it is coming from the engaging of the fees for A320 and A321. And now the industrial rollout of the A321neo aircraft.

And we believe that our 3 is far superior to our -- to other competitors operating in terms of gauge as well as efficiency and unit cost production. We continue to invest into our people in many ways, into our customers, into our operations to make sure that we are a more resilient business, we have more resilient operating model, especially putting that in context of the industry, how this [indiscernible] and I don't think you can expect much better this time around either, but we would stand better to give the most effective [indiscernible].

Finally, we are back on track with regard to ancillary revenue production. We changed our having [indiscernible], asking because it right now, it started producing ancillary revenue appropriately.

And I think it has also give some of the operating processes of the airlines. And with that, we are guiding the market for EUR 320 million to EUR 350 million of profit, so that would obviously be a profit.

Do we think the year is challenging in terms of [indiscernible] challenging, but we think that we are standing firm and confident with regards to delivering the numbers. That's definitely a thing we are in a good way to deliver these numbers.

And the early signs of the [indiscernible] into the year is that we are [indiscernible] to our immediate expectations. So back to fiscal '19, almost 35 million passengers [indiscernible] into 412 aircraft.

The growth mainly came from A321. We expanded the franchise, we expanded the network.

I mean the [indiscernible] 5 million passengers will be through the franchise. I mean this is the size of an airline.

And a bigger airline [indiscernible] and obviously, that grew the organization as far as [indiscernible] 4,500 people. We had a difficult year with regard to operational.

Some of it was the result of the external operating margin, and some of it was in terms of with regards to external factors. I mean, you all know that last time was really related to the core industry given the ATC disruptions, airport issues.

And as a result, the whole industry suffers from a much greater level of cancellations and longer wait. And if you are looking at the first 2 months, or maybe last 3 months in the -- in the current period, activity [indiscernible] shape.

We are showing much improved performance. It is because we have more or less been business for response because the [indiscernible] environment has changed.

The actual has version, we are seeing more ATC coming in today than what we saw the same time last year. But we have made changes to the business and we operate in order, to make sure that we have more, that we have more ability to recover from operational disruptions, to be more resilient as a business order.

And let's not forget that last year, we were much affected by some internal letters between [indiscernible] U.K., [indiscernible] UK was an investment not only from a financial standpoint, but also from an operational standpoint. And we had a delivery team of 7 aircraft in 17 weeks, which created quite a pressure on the organization.

And as a result, we also [indiscernible]. Even you can see that in utilization, you were not able to utilize to extent the use [indiscernible] but this year we are starting to get back on track with that regard.

We continue to build market positions in our markets, in 62% of our capacity. We are the recent carrier.

Yes, the normal aline in many cases, not only the #1 SEC, but the number on airline, I mean, like Hungary, Romania or Macedonia, we have seen the airline of the old industry. And around a third of our capacity is in countries that we are #2 or #3.

Very notably, we are becoming the largest airline [indiscernible] which we think is quite very significant achieve that is [indiscernible] always. We are still to deploy 2 more aircrafts [indiscernible] capacity to the largest carrier at the airport.

And with that, I will turn it over to Iain Wetherall, [indiscernible].

Good morning, everybody. So first let's focus on the 12 months to the 31st of March, 2019 for the year that's just gone.

I think what these numbers show is that our objective of profitable growth is shining through. With group seats by 15%, we saw strong demand on all on factors.

I think at a fairly impressive, 1.5%. The 93%, and we see no rating in that as we head into fiscal '20.

Passenger growth was 17%, well ahead of any competition. So even though we had a higher load factor, we were able to achieve a higher RASK, plus 2.3%, which saw overall revenue up 20%.

So EUR 2.3 billion of revenue in fiscal year 2019. On the cost side of the equation, I think it's been clear that cash above 19%, actually actual liquid itself was up 22%.

So that was a huge headwind. And I really set the tail too long.

So the first half we grew fairly aggressively, but obviously, the higher fuel cost that really impacted on the second half, that's where you saw us. I would say, scaling our growth ambition back up.

So we probably grew about 5% less than we have anticipated in the second half. That actually had a negative impact on our ex fuel cost.

So you're taking ASK out of the system. But we're still able to deliver a minus 1% on the equity fuel count.

So cash up 5% in an overall basis. So going to the next slide, as our [indiscernible] in terms of people to understand what happened last year.

So there was no Easter. So when you're looking at Easter, we always sort of say, we lost about 1.5 in Easter last year.

So that's around about EUR 20 million. In terms of the bank revenues, this is what Joe referred to [indiscernible].

We underestimated 2 things: one, a financial impact of the change in that policy. This because with high load factors on large aircraft, we can't get those back on the aircraft.

So customers coming to the gate. So there are a significant indication on the operation performance that really impacted on the disruption.

It won't have this in 2019. So financial impact was around about EUR 90 million, EUR 95 million.

However, we feel very hard on the value add. So essentially, when you look at the value-add business slide further, in this presentation, we saw over EUR 100 million improvement on the value add.

So net-net, we were still able to achieve a positive incremental performance on [indiscernible] 48 [indiscernible] Now on the ticket side, 2.3% up in RASK, that's to the tune of around about EUR 50 million. So that, all-in together gives you a RASK improvement of 2.3% year-on-year.

A little bit more color on the ancillary side of the equation. It was positive, below our plans.

Ancillary still represents 41% of our total revenue. We did have a mixed performance.

So on the bank side, what you can see on the chart to the left, we saw EUR 3 down on the banks, but also offset that by essentially 3 years on the value add, which I think is a very good performance. I think when you push towards the right side of the chart, that figures show you the impact on ancillary setbacks.

We introduced a new policy on November, so essentially Q3. So that's why you see that washing-through effect in a very strong reaction on that.

If you want to think about fiscal '20, how that's going to manifest, we'll have a very strong performance. So the averse, which is November, the 7, which is where we introduced the new policy.

So I think just fair to say H1 is probably looking around about [ 15% ] increase on ancillary per pax and H2 probably more than 5%. So on an average basis, 10% on ancillary, so on 27.6 years post the year improvement.

Moving on to next important slide. We are on to cost business.

So this really takes a prominence. I think it's really, if you look at the [indiscernible] , the fuel CASK was up [ EUR 0.218 ] and total CASK was up 41 6.

So essentially the way we manage our business, the way we manage our costs, essentially through capacity. And I think it's a very strong performance on pretty much at all levels.

The one item I will say is staff costs. We don't expect peseta going into this year.

Essentially, this time last year, we were guiding accrued cash of around about 10%, minus 10%. Essentially, we increased the target salaries, on average by around about 16%.

So that was given you around about 9% to 10%. The -- we actually did it post 20%, which were disappointing.

And I think this plays on to Joe's point, the fact that we took on an awful lot of operational challenges getting out the new airline, getting those products showing up accordingly on the new regulations on the ACAA. But equally, how we source that aircraft, we close foresee aircraft patients.

So in an inefficient basis that we did believe we're ever going to get up to scale, for the [indiscernible], we closed those. So a lot of disruptions in the operations, there's a lot of out of this lying, that coupled with disruptions over the summer period.

There was quite a lot of disruptions, challenges, airport, underground, crude running out of dues, that created a next inflation pressure [indiscernible]. Where we look today, I think when you're seeing airline sale, especially the Airbus operators, whether it's [indiscernible], small planet [indiscernible].

There is, I would say, less stress on the pilots. So I think that's positive as we go into fiscal '20 certainly probably the best time we've seen [indiscernible].

So back to maybe ancillary piece. If you model obviously where we achieve that value.

So basically, we achieved plus 3.1 pax on the value add. So I highlighted that we were disappointed on bags that probably had on the value add.

I would say the 3 areas, the Wizz bundles is probably about 30 pax. The Wizz priority products has passengers wanting to be able to bring their bag on board.

So changing our priority, Wizz priority and check in to priority boarding, that was probably about 1/3 priority implement. And then we let the allocated seating continues, the penetration continue, plus we have the other revenue stream.

So 1/3 of it paying for the other revenue streams. Looking ahead, we took our first 2 A321neo in Q4.

It's a fantastic aircraft. It's delivering exactly what it should do, is very, very [indiscernible] fine aircraft.

if you think about 5 pillars of how we're going to drive our costs even lower and widen the gap with competitors is there are 5 pillars to that. Number one, we have a committed order.

So essentially, we have a very steady stream with A321 A320 here coming on board. These are the most fuel-efficient single aircraft on the planet.

If you look at the -- in terms of the gauge, so the A321 near the A320, that's 33% extra seat count. That's 59 extra seats.

So again, structurally, you're seeing cost savings coming to us simply because of the math. If you want to look at the next, next 3 years, that's close to around about 5% unit cost reduction structurally that's just coming through.

you're getting about fuel efficiency just purely based on seat count. Then you have the engine efficiency.

These engines are delivering around our 16% fuel turns. So the engines are delivering EUR 0.50.

So we've taken the delivery. The first 2 aircraft tier impact was [indiscernible] We're very excited about fuel efficiency of these engines.

Then you've got a price when you put an order of that magnitude, you know you get a significant price that's going to be start to manifest in lower costs. And in the final piece, the fifth reach is our investment-grade balance sheet.

So one of the business advantages we've had certainly on our earlier aircraft is that we've had limited access to capital, which resulted in fair leaseback market. And then the leverage on getting the best financing has never always been there.

Today, we have an investment grade credit rating. And the pricing we're seeing is that solely pronominal.

So what's important for us to make sure we maintain that investment-grade current rating make sure we have the for balance sheet, and that will continue to drive our cost base even low. So when you look at this aircraft, it is a true game changer.

Next slide, I think it's also very important to flag, and we can talk about how this is going to manifest or the cost savings or the cost efficiency is going to manifest the aircraft order. I think what's very important when you look at this, is just scale.

If you look at the next 3 years, we're taking [indiscernible] between now and 2022 and '23 we're taking incremental 71 aircraft. We're going to be redelivering 21.

So we are uniquely positioned where we are completely repeating our fleet with brand new, the latest technology for those fuel efficient technology in the industry. So this is really going to be driving.

And I think what's important is, this is where you start to see the step changes on pretty much or cost line, whether it's the fuel and whether it's the engine and the financing. By the end of this financial year, you will have 50% margin on the A321.

So we focus on the near because of the engine efficiency. Well, let's not forget that the gauge is the large aircraft in this industry sector.

This is a very powerful slide, generating EUR 407 million of cash flow from operations, I think this is a very strong businesses at cash and profitability. So cash is business of EUR 407 million.

Financing activities around about EUR 6 million. And in investing activities around about EUR 64 million, probably slightly less than what we expect.

That's a function of a couple of things. We readjusted our -- the order to get more certainty of those aircraft to be delivered on time.

So if you look at the cash flow statement, there was no outlook on these. Actually there was those other aircraft in [indiscernible].

But I think what's very important, we have a very strong cash generation. And the question will be, what's the next step that is cash?

I think today, when you have to finance that magnitude of aircraft and want to have important balance sheet. Interest rates today are [indiscernible] historical lows.

So we've been in lock in [ 11-year ] interest rates. At around about 1.5% or even lower, then that is a very, very competitive proposition.

That certainly compared to some of our older aircraft at the declines in [ China ], north of 6%. So again, refleeting at that pace, we're going to be seeing significant costs that come through.

It's important to note, we no longer run [indiscernible] assets, having once what we thought were very key and important to the neo technology, but we don't want [indiscernible] assets. So they're the engine.

So in the fourth quarter, and that comes through some of the numbers. So we don't hold any individual balance technology [indiscernible].

So then when we look to the -- in terms of the cash generation and the leverage. Again, very strong cash generation.

We have our aggressive grade balance sheet. I think where does that want to go, where do we want to go with that?

We certainly want to maintain all that leverage, and we want to make sure that we have all access and [indiscernible]. IFRS 15 is a hot topic, especially those with their spreadsheets, and I'm sure I'm going to have some conversations later on how this all flows through.

One thing I would say when -- if you're trying to measure us on a leverage basis, the traditional mechanism of assessing leverage is 7x our rental costs. So that gets you to EUR 2.3 billion.

Under IFRS 16, it's a lot more technical. On a lease by lease, you do a net rebates cash flow for that lease, and that derived at least debt of around about [ 1.80 ].

So when you look at our leverage of 1.4 -- 1.4 of EBITDA, net debt to EBITDA, actually, under IFRS 16, that's around a half. So the leverage under the IFRS 16, that number is around about [ 7 ] [indiscernible].

So a very strong position from both a capital perspective. So we feel good about fiscal '20.

I think if you look at the tailwinds that we have on the revenue side, we have a strong recovery on the bank policies. So we're seeing a very strong case on that.

If you want to model it, I would say in the first half, you're seeing around about 15% increase on the [indiscernible] in the second half, more like 5% on average, 10%. So add that to the Easter, that's why we're seeing up low single-digit on the rest.

So the revenue environment are looking very strong. What we haven't talked about actually is the capacity environment.

When you look at the capacity inventory, so you have to say all the capacity growth, the market in the summer is growing around about [ 15% ] in terms of additional fees. This part last year, it was about 13%.

So when the market was growing, so demand is growing between 6% to 8%. And the supply is growing at around about 6%, there is a very constructive toll to the revenue part, and that gives a lot so going into them.

Actually, when you look into the winter, we're there represented over 40% of the [indiscernible] going into the [indiscernible] so on the cost side of the equation, IFRS 16, I'll have a slide on that later on the next slide. What IFRS 16 does?

So this guidance still based on our IFRS 16. So these are the numbers that we will be reporting Q1 and beyond.

The presentation of IFRS 16 remains the least cost here. So essentially, what's happening is you're taking lease cost out of the EBIT, and essentially putting some interest expense below the year.

So on a like-for-like basis, fiscal '19, we deliver the next year cap at 2 24 Euro cents. By stripping out that interest its around about 2 19.

So one of the things I like at our IFRS 16 is when you compare our ex-fuel CASK with any other airlines, we are below that. So today, we probably say on an ex-fuel CASK basis, we are delivering the lowest cost in the industry.

It's a bit artificial by not taking the interest. So if you don't take the interest, that gets us to essentially partly flat.

So what we're saying today is that on an ex-fuel CASK basis, we're going to be delivering the minus 2%, so that's [indiscernible] a real basis, we're going to be driving around about 2% -- sorry, a broadly flat on the CASK side. The headwind is fuel.

So when you add all those together, essentially, that's how we get to these numbers. I mean the margin performance [indiscernible] package.

And that delivers a range of profit -- net profit of around about EUR 320 million, EUR 350 million. I have one slide on IFRS 16.

I can probably spend an hour on this based on some of those conversation. What this slide is designed to do is to help you build your models [indiscernible] it.

So essentially, if you take our fiscal '20 numbers, and you do you do credit on account [indiscernible]. Then this will adjust your opening balance sheet, and this will adjust your P&L.

So that's what this is designed to in intend to help you model [indiscernible] And again, I'd be very happy at [indiscernible]. One of the things I would say will, what is the P&L impact of this opening?

And if you add it all together, there's net impact on [ 14 ]. When you restate fiscal '19, there's a minus [ 26 ] so I think it's in page [indiscernible] is that reconciliation in fiscal '19.

So when you look at the year-to-year movement between fiscal '19 and fiscal '20, actually you're seeing the negative impact of IFRS 16 of around about EUR 12 million. So if we look at ex fuel CASK conceptually, the [indiscernible] should be delivering around about minus 0.9% lower unit costs, structure of business [indiscernible].

We are guiding flattish. Of that, you'll see depreciation is up around about 3% year-on-year, and that's driven by IFRS, the profile of depreciation.

So that's coming from there. And the other headwind that we're seeing going into this year, every year, have like [indiscernible].

We have a lot of aircraft going out to their [indiscernible]. We have a lot of [indiscernible] one-offs [indiscernible] cost base around about 10%.

All other line items very much in control. I will be seeing very strong performance [indiscernible] through I'd expect to see that turning negative this year on the back of [indiscernible] performance last year [indiscernible] on.

So with that, I will pass over to Jozsef to talk about the opportunity.

Thank you, Iain. I hope you understood [indiscernible] Okay, so back to the market, why we are confident in [indiscernible] already 15% of the European aviation market.

But I think it is about 15% in terms of gross potential, and its prospects going forward. If you look at 2020 estimates for GDP growth central Eastern is far ahead of vast projection.

Estimate of [indiscernible] reported '19 first quarter: GDP, 5.3%; Poland, 4.5%. So the markets remain very intact.

And obviously, GDP growth stimulate disposable income. And with that, we are seeing more discretionary spending coming through the particular market.

And that's clearly a distinctive factor in our table compared to the most of industry, because we are the leading airline in [indiscernible]. You see that [indiscernible] propensity to have [indiscernible] is catching up, but it's still a long way to go.

I mean, when we started in 2004, this number was 0.1 now it's 0.5. So we have been increasing capacity [indiscernible], but it is still this support of the [indiscernible].

And with that [indiscernible], we're seeing that in a lot more opportunity will be created by the market itself. And also we had the lowest producer in the marketplace, we are in the best aviation position to make sure that we continue to effectively in the franchise applying estimate idea in the marketplace.

At the same time, this is almost like on the sideline, we are seeing a number of airlines faring in the industry representing some opportunities for [indiscernible]. We have no interest still in acquiring businesses, but we have interest in factoring market opportunities should go [indiscernible] favor of airlines.

Today we have been growing our network. It's fairly consistent with what we have to do over the years, over the last few years, at least, that over 80%, 84% of our growth capacity has been placed very safely, either by increasing [indiscernible] or joining existing airports.

But at the same time, we finally [indiscernible] continue to carry the flag of USEC, and we continue to 5 new markets and new destinations. So we got 16% of our growth capacity into new countries, new airports, most relatively Austria was a significant market as [indiscernible].

[indiscernible] , the footprint that we have in Central and Eastern Europe and beyond, we believe that we are very well positioned to continue to own Central and Eastern Europe for the purposes of the airline business. We have operating bases in 14 countries, 35, 36 operating bases across the market.

And we are very well diversified to make sure that we continue to strive on market opportunities. But at the same time, we are not putting all eggs in one basket.

Let me just make a comment on Austria, asking how Austria has been very topical, especially the [indiscernible] market. For decades, nothing was going on in that place.

And so revenue was showed up -- an IHC, [indiscernible], whoever. I think that started settling down.

You are seeing airlines contacting capacity and pulling back from route. We remain very positive.

We are the lowest cost producer in Vienna. We have an A321 dominating the fleet in Vienna.

And in our first full year of operations, [indiscernible] dealing as a financial performance. Now put it in context of all the other airlines that reported the [indiscernible] zero debt, I think we are very [indiscernible] and making[indiscernible] to make sure that we continue to be our business in Vienna.

So as far as [indiscernible] is concerned, we are very pleased with the development there. We have deployed on backlog in fiscal '20, 2 in the U.K.: BCK operation and [indiscernible] because it was all -- Romania was not [indiscernible].

So this is not yet a complete picture, further act of our around that will be to deploy and fairly shortly we [indiscernible] further along. But I think this picture gives you a view that we continue to develop our markets in a diversified way, in a balanced way to make sure that the growth is [indiscernible] before it's [indiscernible] behind.

So talking about the U.K. I think the U.K.

has been a real success for this. I mean, that airline has been profitable since day 1.

It's a very rare space in the world. By now, we have built a record of 41 [indiscernible].

And at the moment, the airline operates 9 aircraft and 2 more to come in the coming weeks. And [indiscernible] of 450 employees.

If you look at [indiscernible] since Brexit, we have been growing capacity at the U.K. by 34%.

And we are pricing for business with regard to capacity management. If we are doing fairly in terms of profitability, we are adding capacity.

If we are doing not so, we are taking capacity out. So if we are having as a sign of market prosperity and good market performance.

So unlike many of the others, I think we are very happy with the U.K., and we remain very happy in the U.K. And it is because we are also produced in the United Kingdom.

And this is a competitive business. And we have a fairly balanced customer mix.

It's -- we are not betting on outbound U.K. We have a feasible outbound U.K., I think, but we have a lot of inbound in U.K.

as well. And depending on how the outbound grows in terms of strength, we can balance each other.

Maybe to spend a little; time on some of the operational challenges and the address environment and how we have been reacting to those challenges. I mean, certainly, last year was kind of shocking.

How much the [indiscernible] operating environment deteriorated and both the sense on the industry, on ATC, ground transportation over airports and ground handlers. I don't think the demand which is going to be much better, [indiscernible] than last year.

And the early signs are great. As I said, actually, we are seeing more ATC [indiscernible] in the first few months of the financial year than the same time last year.

But I think we have a more resident operating [indiscernible] as well to address the challenges coming that. We optimize low terms, we created higher breaks in our schedule to make sure that if there are distractions, we can easily recover from those.

And we try to do that in a way that we are not losing out of the [indiscernible] of the business, but to be more refined with regard to these operational disruptions for the purposes of better recovery. Clearly, we are seeing significant infrastructure for sales.

[indiscernible] the way we had to address those. We are very focused on improving boarding times.

And the new baggage policy in both commercial airlines [indiscernible] is not only having as revenue production, but it's also improving operational [indiscernible]. And then we have a big issue of how [indiscernible] supply to the industry, and we all know the Boeing issue.

But I can tell you that [indiscernible] that much the issue as well, and they are unable to deliver the aircraft as contracted. So we had to renegotiate the revise for fiscal '19 and also we are looking at fiscal -- sorry for fiscal '20.

So we are looking at the next financial year. So what we tried to do is we try to secure more spread and more room to maneuver capacity in the business, and also make sure that we get about 15 in the game when it comes to financial [indiscernible], it should fare to deliver the aircraft [indiscernible].

So I think we know better with Etihad, but there are uncertainties around supplier capacity in the industry. So overall, I think the operating environment will remain challenging going into summer, but we are significantly better set for those challenges to be more effective during the [indiscernible].

If you look at the business from a commercial standpoint, I think we've been very [indiscernible] additional airlines in the world, and indeed we are within the top 10 airline website in the world. I think we are #6.

At the moment, that is quite amazing. I mean, it doesn't reflect on the size of the franchise of Wizz Air.

But we had the best start in 2004 and even delivered digital. And I think we are, I think, in the benefit of [indiscernible].

We have [indiscernible] airline on Facebook in Europe, again, despite the size disadvantage. And you can see that a lot of these [indiscernible] have been covered well.

We are getting [ 2.2 billion ] views on the air, compared to their [ 1.6 billion ]. So we are highly digitalized, and we continue to focus on digitalizing our interactions with customers as well as digitizing the operating model of the airline.

A lot has been happening with regard to operational quality and investing into our [indiscernible]. We created a [indiscernible] We are a non unionized airline, a lot more spending [indiscernible] that way.

But we are very keen on booking the [indiscernible] employees. We have invested a lot into our people, and we try to institutionalize that relationships through these people so as to make sure that we can better address some of the issues and opportunities on a subtle basis.

We created this foundation, which is pretty much an emergency fund. So should something happen to our employees or their families, they're financial source for [indiscernible].

I think this is a devastating how much we had our [indiscernible] people. It is not only internally recognizing our people, but asking people recognized externally as well.

[indiscernible] for best selling [indiscernible]. And we are very keen on that.

We want to be the [indiscernible] airline in the sense we want to make sure that people associated with the culture of our company. And the best impression of that is how we have improved the [indiscernible] and they interact with our customers.

We made a major investment in pilot and [indiscernible] training, which is both on our page, EUR 30 million investment in the quarter of the tailings in Budapest. This is state-of-the-art to invest in Europe.

I don't simplify any better facilities for the purpose of good training that must be had in Budapest. And for the first time, we also awarded with the higher status of safety ratings, by airline ratings, on the base of safety, flight safety and 7-star rating is how far you can go on in a very complete, basically unbeatable [indiscernible].

We kind of call our way going forward with this 300. I mean, this is the vision to be at the fleet of this 300 aircraft.

And if you see the aircraft we have on hand, that corresponds with that vision very strongly. So we've seen on 2026, 2027 this has to be flying a fleet of 300 aircraft.

At that time, we should be carrying around 400 million passengers. This year, we're going to be adding 40 million passengers.

Obviously, the net revenue will grow and increase the organization [indiscernible] will go through. But this 300 core is so important, not only from an inspiration perspective, but also from the perspective of decision we're making internally in the company.

Every decision we are making nowadays, the organization, the system, the processes, the measure, the reputational gains that basically on the vision that good reputation stands, should stand on how we operate, 300 aircraft operates. And this is kind of our way of making sure that we are investing in the future, and we are making the right decisions from the standpoint of [indiscernible] in a few years from now.

So let me just close it up. I think fiscal '19 was a challenging year, but getting that context to deliver good result, really good, very good results for many of the KPIs, operational KPIs or financial KPIs.

And probably most importantly, or more importantly from your perspective, we are very positive with regard to this percentage. We think we had a good start into the year.

Every year we had good start, we have a good page. Every year, we have a best start and we have a best page.

And there we had a good start this year. And looking at the levers on hand and looking at the airline strategic position, we don't think we have been better positioned strategically than today at our report.

With the cost advantage of [indiscernible], the revenue environment our business is in and the A3 order tha we have on hand has us drive advantage going forward. [indiscernible] remains a very intact market.

It is the right market for Wizz Air. It is the best quality market for the prospect of growth, and we believe that [indiscernible] continues to have a significant organic growth opportunities for Wizz Air.

I think A321 order is underestimated by the market, and I would like to draw your attention to it. I mean, just put that in context, this order was placed as the single largest aircraft order in the world.

And as such, it gets the very best price, you can imagine, aircraft order are fairly simple or can think of the size of the order and pricing, the figures below the price we have come. So we are benefiting from the pricing of the quarter.

Iain was talking about the financing of the aircraft, even our credit standing. So we are getting financing, which has never been available to us.

I mean we are getting financing on 0.5%, even below 1%. I mean that makes a huge difference in terms of creating ownership value, and thus shareholder value in the end.

And we have 253 of those aircrafts on hand, going forward. If you go to an OEM today and decide to order an aircraft, you will be showing that the first half will be delivered in 2023, 2024.

So same way you, can't order aircraft today. And we have the best aircraft, we have the best right order and we have a secured supply chain of capacity going forward.

As said, with regards to the operating market, we think [indiscernible]. But we think we are much better to be able to post capacity today than before.

So I'm expecting a significantly better operating performance as far as financial performance in summer of '19 last year. And with that, we are very confident in our guidance of delivering net profit that recover between EUR 320 million and EUR 350 million.

There is upside to this number, but also the results, I think, I'd because we don't have full visibility on the fuel price environment. We don't have visibility on the operating environment, and we don't yet see [indiscernible] capacity going into the second half of the year.

But what we have seen today and what we are expecting today and what we have delivered today, we are very [indiscernible].

And with that, we [indiscernible]

It's Jarrod Castle from UBS. If I may ask 3.

You said the [indiscernible] is there anything about May and June, if you see that [indiscernible] the underlying capacity is doing? Secondly, if you have an indication on what the [indiscernible] summer has been booked already?

I think Iain just talked about 34% [indiscernible]. And then just one on the financial side, your tax rate guidance is 4%, fairly relative 8%, so [indiscernible] a lot low than what's going on there and anybody there [indiscernible]

Let me take the revenue, the revenue questions. [indiscernible], I think they are [indiscernible] driving those and increasing as the revenue and make the difference.

So the way you think about it is that lower fares are that [indiscernible] marketplace. And part of that is the revenue [indiscernible] there to give you a profitability lever for the business.

So it is actually a favorable trend that we are seeing at the moment. So we are lowering our path, but we are seeing around per 4% reduction.

But at the same time, we have said, we are getting around 10% positive investor revenue reduction. And I think this is the right place to be from our perspective because we are a low-cost producer, so we can sustain lower [indiscernible] in the industry.

And we are doing the best with regard to the revenue production relative to the industry. And then the [indiscernible].

We also see that actually as the revenue was are more resilient to market volatility. [indiscernible] are much more volume depending on competitive capacity.

And certainly, we know that the lower the PAS, the better we can simulate the marketplace. With regard to [ one ] bookings we have already, we are around 2% ahead compared to last year the same time when it comes to Q2 bookings.

And we hope we'd be able that we're going to be up to 4% in Q1.

Maybe on the map, if you want a little bit of color, certainly H1 will have a strong performance on the [indiscernible]. So maybe some rough numbers, and we get you to be up low single digits.

So the ancillary our 15% H1. H2, probably more 5%, so 10% on a full year basis on that ancillary.

That suggests giving back on ticket. So you're probably seeing around about 3% to 4% giving back on the ticket in the first half, down 5%.

So net-net, that will give you up 5-ish in the first half, flattish in the second half that gives you on a full year basis [indiscernible]. On the tax rate, a couple of moving parts.

One is there was a reduction in the Swiss income tax. That was a benefit for us.

That also had the impact of reducing a deferred tax liability. So that's why in fiscal '19, we had an investor number.

The run rate is around about 4%. What I would say is [indiscernible] pay, the business [indiscernible] than you can [indiscernible].

And as our business gets bigger, more profitable, it's still in the early days. There are some moves that will be maturing.

I would say that given it's around our 10% fleet, you can assume 1% to 2% increase on the tax rate going forward for this year. There's a bit of an upside on the impact that [indiscernible]

[indiscernible] report [indiscernible], sell-side reports a few months ago on IMS. And I'd be interested in your -- how are you preparing for the impact of IMS, and do you like that sell-side report anticipated [indiscernible] following 15% of [indiscernible].

I mean 2 pieces, one, you're referring [indiscernible] side of the equation. And we have a hedging program that points around about 18 months without suggesting the fact to start peaking.

We have hedge program. We're constantly looking at that.

I mean the industry is saying that there will be some inflection going through that. I think slightly European airlines is slightly different because we can hedge jet or capturing that other airlines are hedging Brent, they then have to start looking at maybe hedging the track.

The tenure of the track is not less liquid. So as long as there are jet products, then we can hedge 2, 3 years out.

So the question that really is hedging the world, any follow-up today? Fuel prices go up, they go down.

But when we were giving guidance is last year, jet was at 7 30 and was making it comfortable today at 6 30. So the price of fuel is fuel.

But it's something that we've taken seriously. Several comments on carbon.

The carbon, when the European [indiscernible] scheme came in, in 2013, we spent EUR 1.5 million on carbon. Next year, fiscal '20 we're going spend [ EUR 55 ].

So again, having that added to the fuel bill. So I think it's sort of not sort of distracting, but the A321neo, the fuel efficiency that's coming through that aircraft, we have the ability to absorb these inflationary impacts.

Other airlines don't have that. I think to Joe's point, in the next few years, you'll really see that gap between competitors on the fuel side and on ex-fuel side if you really want to.

Maybe just one comment, if I may. On the ex-fuel prices, yes, [indiscernible], we would like to see fuel being lower, but it is a higher price.

I think we allocate with that too, because as a matter of fact, we did most professional orders. And I think if we course market confidential on the one hand, and most certainly, some capacity rationalization of airlines that we would certainly benefit from that.

This is a common agenda. I think in a common [indiscernible], the lowest cost prevail.

And for some obviously we [indiscernible], now we have an opportunity for [indiscernible]. We know [indiscernible] this is geopolitics.

This is macroeconomics or what we should be spending that situation much better than anyone else. But it must be, much more painful to the other airline than to us.

So do we really care about fuel, to your point? Not really.

Well notwithstanding that you reduce capacity before.

We are not immune. Of course, we are not immune and the reaction to that.

But if you look at the impact of increasing fuel cost, it is much less than us, compared to the [indiscernible] relative to [indiscernible] so all the company's position is actually improving at results.

Sorry, just one follow-up, if I may. You gave the step change in [indiscernible] on account of the transition to the neo, A320neo, A321neo [indiscernible] Could you -- that's for overall CASK fuel, everything, right?

That's my understanding.

All in, yes.

All in. So what is it just for the fuel.

And then the other? So there's a seat impact and then the fuel impact, and I was curious to know how it's [indiscernible].

So the A320 this year has 190 seats, and A321 this year has 230 -- 20 or 50 extra seats. That's generating around about [ 9.7 ] improvement on cost of [ 9.7 ] [indiscernible] model.

Then when you take into account the A321neo, to effect, actually 9 seats, an extra 3%, that gives you around about 3%. And then you got the fuel, which is [ 16% ] fuel [indiscernible].

Break out e 10 3 -- 10 3 7 in terms of [indiscernible] seat count [indiscernible]

it's Alex Paterson from Investec. 3 for me, please.

Firstly, in your prepared remarks, you mentioned that ancillary was less cyclical or sensitive than fab. I'm just wondering if you could say why you call that was?

Is it that perhaps ancillary is less mature or less visible when something [indiscernible] more or less sensitive. Secondly, again, you commented about not the use [indiscernible] should be the last airline standing in that perspective, should we infer from that [indiscernible] you are tied that is really measures to do that in the near term.

And then lastly, [indiscernible], just on the hedging strategy, again, your hedging percentages have increased over time. Would you expect that will continue to indicate you get financially stronger and your energy cost [indiscernible] would come down?

[indiscernible] I don't have a financial partner answer to the question to that. So this is more than [indiscernible].

So if you look at the [indiscernible] ancillary revenue production compared to the [indiscernible], we have not [indiscernible] on net revenues. I guess it's because estimate revenues reflect on kind of the habitual behaviors of people.

So once they are [indiscernible], they are into the franchise. They kind of have to stick to that heading.

But the filing is supporting the game. So they can go many ways, they can go through different airlines, different modes of transportation, et cetera.

Once they are in, they can stick to their habits and they spend [indiscernible]. I mean this is totally and [indiscernible] maybe that is a better scientific explanation, that's what I can give you.

But with regard to unions, now these are [indiscernible] things, philosophically again, that utilization is the best way of handling labor relationships in the company. We have been making the [indiscernible] effort with regard to management and start to be inseparable in terms of the very distinct hub of the business and organization.

It has never been you or me, and we would always be as a team, what we can do. And I'm personally spending a lot of time on visiting our bases.

And we have to recognize the nature of our organization, 80%, 85% of our people never see the office, never see the headquarters. So they are remote compared to the other decisions that are made.

And I think it is very important that management goes to work with the people and see the people and give them the opportunity to [indiscernible] the infrastructure and the institution to speak up and say whatever they have to say, whether that's their issues or [indiscernible] opportunities for the company. And we have been promoting that behavior forever since the very beginning.

And I think as you layering on the institutional elements, the people caused to be more effective with [indiscernible] us. So I don't see a pressing need for unionization.

I recognize the context. I recognize how the industry operates.

I recognize that we are [indiscernible] in that. But I think we have a different organization [indiscernible] and I hope you can see to it.

On the hedging, I mean, we're a very data-driven organization. And I think the most important thing about hedging is what's the impact on the business.

There is a natural hedge in the airline business because of capacity. So as fuel prices rise, you can see airlines taking out capacity.

We're certainly seeing that in the summer, and we're certainly seeing that coming into the winter. So fuel prices rising, the revenue environment will follow.

So the convo happens when fuel price fall. Because the last thing you want to be doing is hedging everything and then suddenly the price is collapsing because you end up [indiscernible].

We just probably make a little bit more money as the fuel price goes down rather than the fuel price goes up. If you look across the curve, it's probably breakeven.

But I think what's important is that we are able to react, and that's why I think [indiscernible] slightly apart from other airlines is that we react quickly. So we were adjusting capacity already in Q4.

Other airlines are now starting to do that, which is maybe why they're less betting and more bearish on the outlet. It's got nothing to do with [indiscernible].

We got nothing to hedge. Yes, it costs money, but the reality is, I think we run on guy simulations on a regular basis, which is [indiscernible].

And essentially, it's prudent behavior [indiscernible] model.

[indiscernible] just firstly on the ancillary penetration. I was looking more out to the comments when you talked about the contribution incremental growth between the bundle and port, and so clearly, those [indiscernible] but in part due to change the baggage policy.

And thinking about the sustainability of that longer-term in one beyond how you're thinking about that maybe contribution from other products perhaps that might accelerate that further. And then just a second question, just in terms of the impact on fourth quarter and the net expenses, how we should think about out FY '21 and then [indiscernible] to that just significantly helpful.

And then thirdly, just on the ASK deliveries on the [indiscernible] renegotiate your FY '20 and FY '21 [indiscernible]. I mean do you anticipate [indiscernible] to grow?

Should we -- how should we think about FY '20 and what that is [indiscernible] case scenario?

Okay. So maybe starting with [indiscernible].

I think the result is that it -- is that it makes us think, in that [indiscernible] so it's also delivering growth capacity to the business. We would love to have the new aircraft, we would love to have the new, more efficient capacity in a better capacity [indiscernible].

But at the same time, we have a fewer adoption [indiscernible]. So even increased utilization on the existing fleet that function, and on [indiscernible] existing leases, or we can go to market a capacity from the other line.

So we are assessing each of those options in context of a delivery rescheduling. I think we are pretty confident that with regards to fiscal '20, we are able to deliver around 17% growth.

And we shall see how the industrial situation is evolving over the next period and what issues the deal has to deal with going into [indiscernible]. So we don't have a full understanding on that period yet, but we are seeing some further need to re-contract and renegotiate, especially calendar 2020 deliveries.

But again, given that we have a few other levers on hand, I think you should be in a position to be able to deliver your growth. But I don't think we got to be able to -- to go how we will be bullish on this, because this is simply not our interest.

For example, we expand our leases or [indiscernible] aircraft less [indiscernible] for a long time. I think we might be better of dropping some growth opportunities.

And because the capacity [indiscernible]. So that's on [indiscernible].

With regards to ancillaries. [indiscernible] So, sorry [indiscernible] conversion.

I think the we use to have kind of an unbroken line of estimate [indiscernible] and we used to communicate to the market that we can -- we continue [indiscernible] per year in terms of -- not necessarily delivering [indiscernible] per year but certainly delivering [indiscernible]. And then they made a [indiscernible] on that, and that affected us on production lead times.

I think we corrected the decision. And I think the way I can see is that now we are back on that [indiscernible].

But I don't think it is the volatility of the ancillary revenue production, I think it was now one single wrong decision that we made. And we hope [indiscernible] learn from that.

So I think going forward, I would still expect ancillary revenues to rise somewhere between half a year the passenger per year. And that will come on increasing penetration on everything spins.

And also, we continue to get new products to grow to the market. I personally think that the [indiscernible] grow over 50% of the revenue production of the [indiscernible] We are already at 43%, and it [indiscernible].

So we -- I suggest the answer. The tax would be up around about 10%, so that gets around about 3 years.

And maybe [indiscernible] this year was 2-year, is sort of a [indiscernible] recovery on 1 year is evaluated. So I think what's important is that we are on track to get that.

Certainly as we look into fourth quarter, it's not going into that line. We're going to start seeing the decreased penetration [indiscernible] On to net expenses, I think this is a really good example of what Joe highlighted in some value in neo contracts.

So essentially, revenue came out in Q3, the [indiscernible] out there said, how are you going to deliver minus 11% ex-fuel CASK in the fourth quarter. It's a function of a number of things.

#1 is the start of this year, which we've been waiting for 2015 [indiscernible] since the first order. The value embedded within this contracts we'll be repairing over the next 7 to 8 years.

The question is where would that number be, whether it's the lower depreciation because you're buying aircraft at a relatively low price, where it's an interest because it at a cheaper price, or whether there'll be one-off gains through lease backs. So in -- we had 2 aircraft in the fourth quarter.

We also got some COs off our books, that eventually is coming through that aircraft order. If you look at our cash flow statements, you can see going on assets, EUR 26 million.

So that gives you a flavor of what happened there. And so I think the question, is that going to be recurring?

The answer is yes, it is going to be recurring. The magnitude in fiscal '20, less so, I would say, probably around about a quarter, it will be.

We'll be seeing that going through into fiscal '20. The reason being is the majority of our aircraft is being financed with structures like [indiscernible], as opposed to a lease back [indiscernible], the accounting treatment is slightly differently recognized into a depreciation.

So yes, the gains are there, but they're coming through low depreciation margin [indiscernible]. And there's a couple offset and lease backs.

So the majority of our aircraft in fiscal '20 are through, essentially owned aircraft. So when we look at that number, is it going to be coming through?

Absolutely. And I think that's what we're very excited about going forward.

I take more color. I mean, we had to focus [indiscernible] around counting and probably reduce a one-off versus structural and IFS but is the meaning of the business.

I think cash must be the real indication of the [indiscernible] we at least produced over EUR 400 million of cash flow in operations. I mean, this is the underlying sense of the business.

I mean you can evade how you go for that, et cetera, but it reduce our EUR 400 million of cash flow.

Jamie Rowbotham from Deutsche bank. Just one from me.

Can you talk a bit about the opportunity in the Ukraine? Your press release reminds us that whilst you have 43% at low-cost, that actually only gives you 7% of the market, 7% or 8%.

How quickly can you capitalize on the opportunity in the U.K.?

I think [indiscernible] you kind of ask the same question [indiscernible]. And we used to be very upbeat in Ukraine, to the extent that we created an airline in the Ukraine.

And for years, we were only going to sell in Ukraine and we will be building the whole low-cost approach in the Ukranian airline market. Then the market became a significant fact [indiscernible] geographic and decided that the [indiscernible] was too high to something operational, so we move from that.

We never caught size for this, so we maintain [indiscernible] the Ukraine, but [indiscernible] operation was quality in terms of Hungary or based in Kiev. Over the last year or 2, I think we have gained some strength and we kind of reconfirmed Ukraine internally.

I mean clearly Ukraine has become a major source of labor to our [indiscernible] -- especially to some countries [indiscernible] one of the interesting things that we are seeing is that you see a lot of companies samples here against [indiscernible] into Western Europe, and you are seeing a lot of Ukrainians starting to [indiscernible] to replenish that workforce in there. And also at Ukraine, obviously, became a lot more open market than before.

We are looking at ways of increasing capacity and we [indiscernible] grow in Ukraine. To be totally honest, I think given the constraints of supply to this, we had to be much more selective and much more [indiscernible] where we are we are deploying capacity.

So with that regard, I think we will remain a little constrained on our growth in Ukraine in the coming years. [indiscernible] will grow, but maybe we could do more than what we actually [indiscernible] delivered.

But once that capacity [indiscernible] is lifted on the industry, I think you can see us growing much more in the U.K. We are very [indiscernible].

I mean the market performed well. I think it is more stable share for the environment today, has certainly given all those descriptions disappearing between the [indiscernible] and Ukraine, we think it is a good source of [indiscernible] going forward.

Sorry, a bit of a boring question, but could you give us an update on the whole situation has impacted your ETA requirement on shareholding as any negotiations [indiscernible] goes on, pre -- you saw [indiscernible] much about it recently, but it's obviously still a live project.

Maybe I give you an update, I'll give you an update on the [indiscernible]. So I mean, God knows what's going to happen to us [indiscernible] as that will happen and what is going to happen.

But I think what you, as an airline can do, given that you are [indiscernible] here, that you [indiscernible] contingencies on the key matters that would affect your business. I think 2 key matters that will affect our business: On the one hand, success to market; and the other hand, ownership and control being a European airline.

With regard to success to market, I think we plan contingency, timely enough because [indiscernible] in the U.K.. Now we have this [indiscernible] airlines that you have U.K.

airlines. So we are on both sides of the equation to make sure that we are in a position to [indiscernible] in whatever they [indiscernible].

And also, we received the full approvers from the British government to be able to fly between certain countries and the U.K. post-Brexit [indiscernible].

So I think there are reasons to go, because [indiscernible]. Then you have ownership and control.

And as you know, European ownership at the moment from the U.K. team, and post-Brexit in the U.K.

will be counted out. At that point, we would not be meeting ownership and corporate standards based on our current shareholding structure.

So we play the contingency of the [indiscernible] and we tested that contingency with the European Commission, and the European Commission agreed to that contingency plan. So I think they're also good to go, with that regard.

And it seems to me that disenfranchising lies -- disenfranchisement, the approach is a fairly European standard because [indiscernible]. I think the way it would happen is that this disenfranchisement with EDFA at a short medium-term and would allow you to adjust your structure time, over probably a couple of years, but that's the feedback that we received from the European Commission.

But we also expect that the investors will be structured. So the value that we are seeing today will not exactly be the same [indiscernible] because also [indiscernible] European or [indiscernible] become European at the point.

And again, we seem to do know what Brexit means. There are also some scenarios, but we try to make sure that we plan for the growth case scenario.

And I think, for the time being, and this is all approved by the relevant authorities, we are good to go on any [indiscernible]. So I don't think Brexit poses any risk product for us at this point in time.

So if there are any questions.

A couple of questions. First off, just a question on the quality of earnings being guided for this year.

On a reported base, rather than restating FY '19, IFRS 16 has given us a positive EUR 14 million. Your shift of treasury to a U.S.

dollar deposit base is going to add about EUR 36 million. So you've got a EUR 50 million kind of like-for-like benefit.

Then you've got the change in the non-repeat of the other operating expenses in terms of, maybe, a EUR 30 million shift negative. So EUR 20 million of your guidance looks to be coming from nonoperating.

I suppose the question is, do you make decisions around, say, pricing, knowing that you're getting these tailwinds derived from nonoperating items? That's question one.

Question two is, in terms of the fact that you'll get a, let's say, miss EUR 30 million of benefits, which you've taken through the other expense line, but you're guiding broadly flat CASK, ex-fuel. I'm just wondering if you can tell us where you're seeing the sense of the offset to recoup on that -- of that flat guidance?

Is it coming through such items as labor, should we be sort of expecting unit cost reductions in those lines? So I'm just trying to square the various, sort of, guidance you've given to some of those individual items.

Sure. Thanks, Mike.

I'm trying to get my head around what the first question was, but your math was right, keep on saying.

The first question was whether we have made an additional [indiscernible] are enjoying or we are of the accounting trade.

I would say, yes and no. I think we are keen on delivering the financial [indiscernible].

I think we've said that we are here for [indiscernible] and we are here for creating shareholder value. But at the same time, I think for the long-term shareholder value is also derived from the growth pattern of the business.

And we are also keen to continue to grow this business. I mean we are setting [indiscernible] 17% of growth.

And again, looking into perspective of the industry, the industry is much more down than that. So we would be premium with regard to our [indiscernible] to grow the business, but we also want to make sure that we are seeing it in terms of the margin performance and the profitability business.

So this is something you try to strike a balance of. So yes, I think we want to take advantage of the selling in [indiscernible].

But at the same time, we don't want to go [indiscernible] and forget about our profitability and financial performance.

Yes. Maybe say taking a step back and the way we manage the business.

In IFRS 16, we had the benefit of a couple of years of understanding what this does for the business, what financial impact in [indiscernible] the business and adjusting -- making certain decisions that will flow through, because we want to deliver sustainable profitability, sustainable growth. But when you are fundamentally changing your risk management structure, fundamentally changes bringing on EUR 1.8 billion worth of liability, that requires a lot of pain.

And so a lot of the decisions that we've been making that we're manifesting up until the end of the financial year and the first quarter, if you just take a step back, I mean it's almost an elegance that in fiscal '19 to fiscal '20, so having all the flat [indiscernible] when you're fundamentally changing the way you reporting the numbers essentially with the target. So it's not that we -- we just left in on a major divestment.

So we made a number of decisions, including the risk managing policy, which you've highlighted. So with IFRS 16, we're going to be facing EUR 1.8 billion of lease liabilities on the balance sheet.

That's a monetary asset. Whereas the asset that you bringing on balance sheet is not some monetary assets.

So you introduce a lot of FX translations. So for the first time, [indiscernible] are actually capitalized on our cash, So it has been very painful to sit on EUR 1.2 billion, EUR 1.3 billion of cash earning negative interest rate.

So like other airlines now we can actually earn dollar interest [indiscernible] from that. So the reality is that we have some of the [indiscernible] management policy, and that will be a pick up.

So that -- the timing of that event also works very well with the one-off in Q4. So again, I think the way we manage the business is so that we make [indiscernible].

But that sort of net EUR 20 million win, kind of half of your implied PAT growth this year, potentially, that allows you to maybe, be more aggressive on pricing just to drive that growth at a time when other people are actually having a tough time of it.

Yes, absolutely. I think one of the key questions really on the second half growth, I think we're very well set for the first half.

And again, today, [indiscernible] [ 630 ]. So that suggest, if fuel prices stay where they are today, it suggests a little bit of gunpowder [indiscernible] So let's see where we are.

It's still very early.

And then just as a sort of a derivation of that, with the view that you do have that changed in the cost base because you're not getting the net other expenses being sort of no reduced by those certain leaseback transactions, where are you delivering the big unit cost wins to then deliver that broadly flat guidance?

I mean, as I indicated you aren't seeing the value coming through the aircraft, because you are seeing lower depreciation cost and the value of coming through low depreciation on the lower interest expense line. So in terms of the ownership of that value manifest, the timing of that, all the bumps, so to speak, depends on the type of plan.

And they indicated is the majority of the aircraft is [indiscernible] 20, [indiscernible] that's how you should go then.

I mean, basically, you are seeing the benefits of out gauge aircraft going through. So we can do [indiscernible] 40% range for '21, and we will have more new flying, obviously.

And as we indicated before, I think we agree to -- on labor expenses last year because of the [indiscernible] we had to manage and [indiscernible] more on that, and you will see a fall of labor or [indiscernible].

Okay. That's great.

And if I could, as I'm online, just one last question. How do you read RyanAir's acceleration of the bus fleet.

Is it substituting RyanAir for bus? Or is it actually, sort of, suggesting growth competition?

I wish more love to RyanAir. I mean, as we speak, a [indiscernible] at RyanAir and we had a [indiscernible] business at RyanAir.

We had a high-margin business [indiscernible] finding that being more competitive and structure as positive going forward. And we're going to have to start maybe one more call.

Adrian Yanoshik from Berenberg [indiscernible]. One baked into your [indiscernible] product guidance.

If there's any utilization as far [indiscernible] as target cost about EUR 50 million in fiscal '20, [indiscernible] do you have any progress [indiscernible]

Yes. I think so [indiscernible].

So in terms of utilization, again, we managed capacity last year. When we topped down [indiscernible], lockout to date.

That's not the level we want to be at. And that's we want to be at ever again.

So yes, you will start to see utilization rising again. And in terms of the carbon price, there are hedging capabilities that we have had a little bit of that.

I think [indiscernible] number [indiscernible] Okay, with that, I think it is time to wrap up? Great.

All right. Well, maybe thank you everybody for joining us.

Thank you for listening to our story for last year and the guidance and many thanks.

Thank you.