Wizz Air Holdings Plc

Thank you. Good morning, everyone.

Thank you for coming. So this is reporting the results of the last financial year fiscal '24.

And I hope the way you come across with that is that we delivered what we told you to deliver. So this year was delivered in line with our expectations and our guidance to the market.

If -- could we move, please, the slide to the next one. Okay.

So net profit EUR366 million, this is a turn of EUR900 million year-over-year, and this is net profit. But if you look at operating profit, it is the same number.

So the business has turned EUR900 million over the year, and we are delivering it in line with guidance. Capacity continued to grow, despite the challenges arising from the supply chain.

On an ASK basis, we were up nearly 25%, and with that, we delivered a record traffic, of course, with 62 million passengers in the financial year. Previous record was the fiscal '23 with 51 million passengers.

We benefited from the revenue environment. RASK went up mid-single-digit, 4.6% year-on-year, much driven by improvement on ticket revenue.

CASK, we think it was a very strong performance. You recall that we were explaining that last two years or so, we were operating business at suboptimal levels in terms of utilization of some of the operational KPIs.

The financial year significantly improved on all accounts, we will deep dive into those. And as a result you see CASK improved significantly 15%.

And it is interesting to put it in perspective vis-a-vis the rest of the industry, you will see that some of our competitors actually have gone to the opposite direction with regard to cost creep but we've been able to put cost under control. And as a result, we are now the lowest cost producer in the industry, on par with the previous cost leader.

And we're seeing that we are well set for building cost advantage, unit cost advantage from here on a structural basis. Operational metrics, much improved.

Completion rate is back to standards 99.4%, and we've actually got a head start in the current financial year. Wizz Air is the best performing airline in the whole of Europe, with regard to flight completion.

On-time performance has improved a lot, still a way to go, but some of it is the function of the supply chain, some of it is our own internal improvements which we are working on. Utilization went back to our standards.

Now we have reached fiscal '20 levels, pre-COVID utilization levels, and certainly we much improved versus the previous financial year. Total cash EUR1.6 billion.

We maintained our investment grade rating with Fitch. We have talked a lot about Pratt & Whitney issues.

So I think you are fully aware of that. At the end of the financial year, we had 45 aircraft on the ground resulting from the GTF matters.

As you were also guided, the company received compensation for that. So that was kind of a push in terms of excess cost and compensation watching each other.

Now the good thing just to put it off the ground is that now we start seeing a turn, as we speak. We are now receiving clean engines on the one side and we are also seeing improvements at Pratt & Whitney with regard to shop visit time needed to push through the engine, the shop.

We received our second consecutive award from CAPA for leadership on global sustainability. And as you are aware, we just celebrated our 20th Anniversary with actually a record day for sales.

We managed to sell revenue of EUR37 million over one day, which is a new daily record. And during that 20 years of operating history, we carried nearly 400 million passengers.

And I remember when I was in London on the day of the first flight, that's 19th of May 2004, and I was interviewed by Richard Quest at CNN, and he put it out like, look, I mean, you are the 57th airline just recently created, who the hell do you think you are needed for? And well, 400 million people decided to need Wizz Air, which of course makes us very proud.

Could you please move the slide? So, just to give you a snapshot where the business is at the end of the financial year, as you can see, capacity was growing significantly on seat terms 18%, ASK terms that was 20%, 25% as you recall, we are up 21% on passenger traffic.

The fleet has been growing actually significantly. We haven't really seen kind of the full benefit of that due to the engine inspections, but at the end of the financial year, the fleet reached to 208 aircraft.

The age of the fleet continues to come down, that is important for operating unit cost purposes. The renewal rate is now over 60%, which is significant.

So I would say that probably of any airlines on the planet with scale, Wizz Air is the most renewed carrier. Every seat count is now up to 224 that gives us a significant competitive advantage.

Gauge comes with unit economics, so the higher the gauge, the lower the unit economics will become, and I think that gives us a structural advantage versus the rest of the industry. And upgauging continues to unfold going forward as we will essentially exclusively take deliveries of all A321neos in the future.

We are operating to nearly 200 airports over 50 countries across 33 operating bases. And of course, with the growth of the business, our employee base also grew.

We added 600 million jobs inside the company, of course, a lot more outside the company serving the Wizz Air business. We remain focused on sustainability over carbon footprint, and we further reduced that to 52 grams.

I mean, you will see that with a huge advantage, we are the leading airline when it comes to carbon footprint. Could we please move the slide?

We talked a lot about operations and the challenges we encountered over the years. I mean, you now see that significant turnaround has been happening across the operating metrics.

Probably the most important one is fleet utilization. Fleet utilization is back to standards, actually above fiscal '20 level when we operated the airline with 12 hours of utilization.

Now it's more like 12.5 hours, and it's a huge improvement versus fiscal '23. As you can imagine, given the logic of the business model we implemented, this is a very significant factor and cornerstone to the cost performance of the business, because we have a lot of fixed cost in terms of fleet, in terms of employees, pilots coming through, et cetera, and we have to be able to spread the fixed cost.

And the higher the utilization we achieve, the better we can spread the cost, so the lower the unit cost will become. Completion rate, I said back to standards, big improvement versus previous year, but also above fiscal '20 levels, 99.4%.

And I said, we just had a head start in the current financial year and completion rate is 99.8%. And with that, we are the best operating airline in Europe.

On-time performance keeps improving. I think we have to take note of the fact that we are in a more challenging supply chain environment still that hampers our ability to perform on-time.

Nevertheless, given all the investments we have put in place for enhancing the resilience of the business model and the operating model, you now start seeing improvements actually happening. So all-in-all, we're seeing that the fundamentals of the business are back in place.

Operations have been turned around. And now financially, business is benefiting from those investments and turnaround.

So with that, I would hand it over to Ian. Could you please move the slide?

Thank you, Jozsef. So in terms of financial performance, very strong revenue results, 32 -- 30.2% higher versus F '23, and that's based on 25% capacity growth.

So we're growing our revenue faster than that and that's because of higher unit revenue, 4.6% higher unit revenue. At the same time, our fuel costs has reduced year-on-year despite the higher capacity, and that's a combination of price.

So our fuel price on average was 18% lower year-on-year. The hedging program that we reinstated in fiscal year F '24, and fuel efficiency, driven by the market-leading aircraft in the A321neo.

Non-fuel costs increased by 15%, which of course, is lower than the 25% capacity growth, implying that there's a unit cost savings there, which we'll talk about in some subsequent slides. In terms of EBITDA, we swung at EUR1.2 billion year-on-year, so 1.2 is the total unit -- sorry EBITDA for the year, which is a very healthy number and helps towards our leverage.

In terms of operating profit, as Jozsef mentioned at the beginning, we see a EUR900 million swing. So similar results in terms of EBITDA, operating profit and reported profit.

It's a very proud moment to talk about having a EUR535 million loss last year and a EUR366 million profit this year. So it's -- that's something that we're all proud of, and we thank the team for delivering this.

In terms of cash, we ended up roughly the same as last year, slightly ahead. And that's despite a EUR500 million bond repayment that took place in January.

That payment was paid out of cash on hand, and so no additional debt was required to service that. If we could go to the next slide, please.

As mentioned, ASKs grew 25%, that's our capacity. Our revenue grew 4.6% in line with guidance.

Guidance was mid to high single-digits. In fact, all of our guidance metrics were met this year.

And -- but unfortunately it was on the lower end of guidance. And so there's certainly work to be done, and causes for that, we provided an indication as to where revenue was under pressure this year.

So ticket RASK was strong, double-digit growth there, but ancillary declined and most notably in H2 F '24, due to challenges that we saw in the Middle East and in Israel, due to the latest Israel-Hamas war, and then having to redeploy high ancillary revenue capacity into other markets that were impacted by the seasonality, November and then into Q4, as well as a shorter booking window for the holiday season. So there's a lot of opportunity there to bring that back in line.

And as you'll see from our guidance later on, we expect that to come back in F '25. Load factor, we talked about -- and so I think that -- I think we can go to the next slide on this one.

So in terms of unit cost, I think this is where we start to get really exciting and really punchy. And so, as you can see, basically most lines are either flat or have reduced.

Fuel, we talked about staff increased. 9.1% increase in staff, although I'd point out that that's a much lower growth number than our competitor who saw staff costs increase by 20%.

Depreciation went up slightly, and that's a line item that continues to be under pressure in the business due to the fact that we're taking on as many aircraft as we are. They're more expensive aircraft and we're grounding a lot of our aircraft currently, so there's an inefficiency that comes through that.

I would point out, however, that the cost impact on ex-fuel CASK is mitigated by total CASK, which we'll look at in a subsequent slide. Overall, the cost line was supported by -- the cost base was supported by the other cost line.

And in there, we've provided a hopeful breakdown, which gives you some color as to what's happening. So you can see that there was an increase year-on-year in unit cost benefit on the sale-leaseback line.

So there's two elements to that. There's an aircraft element, and so the aircraft sale-leaseback gains follow the fleet profile and the delivery profile.

But what happened in F '24, and will happen to some extent in F '25, is that we started ramping up on spare engines. And the rationale for that is strategic.

So we have the benefit of the Pratt & Whitney compensation arrangement, and that helps for parked aircraft. But we're, as I might remind everybody that this is a flying aircraft, and so what we wanted to do is make sure that we had support for the outer years so that we can continue the growth plan, which resumes after this fiscal year.

And so we made a strategic choice to invest into engines, engines that we would otherwise need as our fleet grows, but that could -- we could benefit from now. And so we've started securing as many engines as we could, either from sale-leasebacks or from third-party lessors, or, in fact, leasing engines from Pratt, as part of a strategic desire to build up our spare engine bank.

Those -- that investment will pay off in F '25, '26 and '27. And there is, in fact, a pay-off in F '24 because consistent with our aircraft financing strategy, we sale-leaseback our engines.

And if there's a benefit in F '24, so be it, because at the end of the day, having more engines available to us will allow us to put more aircraft back in the sky sooner, and make us less reliant on compensation, even though, of course, we continue to benefit from that and expect to in the future. There's also the supplier compensation line there, and I would caution you to assume that all of that is attributable purely to Pratt.

There are other suppliers in there that move the numbers around. So it's not going to be as easy to try and work out what our confidential arrangement is with Pratt.

As you can see, disruption increased, and that is solely due to the engine challenges and the disruptions we had in the Middle East over the fiscal year. And so you need to look at the combination of all these elements when it comes to our overall P&L and understand that we wouldn't have compensation without groundings.

I think it's also important to point out that everyone focuses on the cost increase or the cost impact from disruptions, whether it's engine-related or geopolitical-related, but there's also a revenue impact, as we mentioned in form of the challenge we face when having to redeploy capacity. And so there's a -- one perspective would be to say if there was no disruption, you wouldn't have the benefit from the engine sale-leasebacks or from the supplier compensation, but then at the same time you'd have higher revenue.

So what we're doing is basically trying to lock in our profit margin to a level where once we start flying again, we can take that margin and expand it. So that's the background behind this call out on the other.

And I'm sure that there'll be lots of questions as we move to that phase of the conversation. So with that, could I ask we go to the next slide?

This is a slide that we're very pleased to point out. What we've done is, we've taken our total CASK because at the end of the day, while we challenge our divisions to focus on unit -- ex-fuel CASK to make sure that we're bringing down the areas of the business that the line management can control, at the end of the day, we need to look at the overall difference between RASK and CASK when it comes to maintaining profitability, driving profitability and delivering shareholder value.

And you can see that in fiscal year '23-'24, either unadjusted or adjusted to 1,600 kilometer stage length, either way, Wizz saw a decline year-on-year in ex-fuel CASK, whereby Ryanair saw an increase, a dramatic increase, year-on-year. And then looking at the arrows on the top, you see that compared to fiscal year '20, so pre-pandemic, both of our cost bases are growing, which is expected in an inflationary environment, ours is growing slower.

And that comes down to superior aircraft capacities to the higher gauge, it comes down to the efficiency in terms of fuel and it comes down to the -- many of the cost lines where we are back to where we were pre-pandemic. So we're pretty pleased to be the lowest cost producer out there and to rebut any assertions otherwise.

Next slide. In terms of cash, as mentioned, we maintained strong cash levels, roughly 30% to 35% liquidity in terms of what the ratio is versus revenue.

Our net debt did increase this year, and that's driven by a combination of having more aircraft delivered, total aircraft in the fleet, including those that are grounded, as well, as there was a working capital swing this year and that is driven by the way that the Pratt & Whitney and other supplier credits are accounted for, when we agree on the credits but they haven't actually been applied yet. They end up in a working capital swing, so it ends up driving up the overall net debt number.

But as you can see, the leverage ratio has come down, as you wouldn't expect it would, and it will continue to come down. And at this point, we're thinking that we should be down below two by the second half of F '26.

So that deleveraging will continue. And that's what's supporting the investment grade rating from Fitch.

And we expect now, with these results out in the public that we will re-engage with Moody's to recover that rating as well. Ultimately, the cash balance was driven by operating cash, and to some extent, some of the smaller loan facilities.

The PDP facility will be fully repaid in the next 12 months, and we will be repaying our ETS facility in September at the same time that we surrender those emissions credits. So overall, pretty pleased with the cash position, and based upon our forecast we see that balance increasing, assuming, of course, that there are no further unexpected events, which would be nice for a change.

And with that, I'll hand it back over to you, Joe on the ESG.

Thanks. Could you please?

Yes, thank you. So, carbon footprint is the result of basically three factors, technology, the airline operates gauge, the efficiency of the aircraft, and some of the operating practices when it comes to fuel.

And as you can see, Wizz Air, anyway you look at it is the undisputed leader of carbon footprint or emission reduction in the industry. We are almost 30% lower rate than Ryanair, the next best, and significantly lower than any of the other guys, other airlines in Europe.

We have been recognized for this twice by CAPA based on objective measures and selection criteria. Of course, we are very proud of our credentials with that regard.

And we continue to build our track record on sustainability. So you should be expecting us to stay in the front row when it comes to reduction of carbon emission.

As a matter of fact, if I look at all the commitments of these airlines, what they have made for 2030, they would be steering over near to where we are today. And we would continue to reduce, of course, our own footprint.

So I think we are in a good spot with regard to ESG. Could we please move to the next slide?

So I think comes to [fun] (ph), GTF. So let's move the next slide, please.

So GTF. At the moment we have 47 aircraft on-the-ground.

We're seeing that we are at the peak as we speak. And we are expecting basically two significant changes affecting the recovery of the GTF engine situation first.

Now we started receiving spare engines clean of powdered metal, so those engines are no longer subject to inspections. And we are expecting the same to happen to new aircraft deliveries as of June.

So as we speak now, the engines we are getting will be clean of powdered metal. Of course, all the engines we have been receiving to date will remain subject to operating cycles.

And if you really think about this kind of the way the math works is that you operate the engine for 18 months, remove the engine, put it in a shop, and depending how quickly you can push the engines through the shop visit, you will regain the engine. So somewhere around two years, I would say, from now on, when we're going to be at the end of the recovery cycle.

But again, the good news is that new engines coming are unaffected and not subject to inspection. So the other, I think, positive development is that for the first time now we are seeing improvements at Pratt & Whitney.

We used to be taking the assumption of every shop time of 300 days, and now we are seeing some engines coming out of Pratt after 180 days. So that's good.

So clearly they have been able to improve their own procedures, and their own production and supply of parts, to speed up the shop visit process. So we're seeing that a lot of it is now becoming structural and quite likely that will create upsides for us with regard to regaining the engines after grounding.

We are still making fairly conservative assumptions. So we are assuming 50 aircraft on the ground in the first half of '25.

We may do a little better than that as a result of the improvements of Pratt & Whitney. I think we have talked a lot about this, that we are protecting capacity by taking more spare engines, Ian told about it, that actually this is a strategic investment for the company.

We continue to take new aircraft deliveries, extended existing A320ceo leases, and also took a few market leases, three dry lease aircraft, and a few wet lease aircraft on a seasonal basis to make sure that we protect capacity. So net-net, in financial year '25, we are expecting to deliver flat capacity as a result of all of that.

And we also talked about the way we are compensated for that by the OEM. So no real change with that regard.

So really, the news I'm trying to break today is that probably a bit more upside now we are seeing versus kind of the dark picture what we painted before. Of course, our final objective is to get out of this completely, and we are taking all measures and actions possible to make sure that we get the OEM to collaborate on that to make sure that we come out of this ditch as quickly as we can, and we can focus on flying the airline.

I mean, I think we have become very good at parking aircraft, but our business is flying aircraft. So we need to get back to that model.

So could you please move the slide? So, margin expansion.

We think we have a significant runway in front of us when it comes to margin expansion. Well, first of all, our operational performance is now solidified and we think there is more upside coming out of it.

So aircraft utilization continues to rise, and this year we are expecting 12:45 hours of operational -- of fleet utilization, of the flying fleet, of course, but that includes maintenance, normal maintenance aircraft, spare aircraft, everything. It's only the Pratt & Whitney related grounded aircraft that are externalized.

On-time performance continues to improve, and completion rate continues to improve. So we think that we're going to be less prone to operational disruptions.

It's unavoidable, but we think the level will get lowered and we will be less subject to EU261 compensation at the same time. So more to come on the operating metrics.

Capacity protection, as said, we have taken a number of measures to make sure that we are protecting capacity and that capacity remains intact, as opposed to being subject to volatility on a continuous basis. So we think that capacity becomes more predictable, more schedulable, and more restorable from a crew perspective that I think are significant factors for operational and commercial stability.

It's not only operational, but it's also commercial. I mean, you don't want to affect the customers with constant changes, rescheduling and rebooking, and those sort of issues.

So we think that the measures we put in place is not only protecting the numbers, but it -- but the measures also protect the stability of that capacity. And last but not least, everything is a double-edged sword.

So obviously the bad news is that we are unable to materialize the growth opportunities in front of us, but at least we are taking the yield upside of that as now we ended up with scarcity of capacity. The business yield is up against that.

So we think that that situation will continue to create upsides on pricing and load factors and as a result will contribute to profitability. We expect the next financial year to be a significant growth year.

So 20% plus growth we are expecting again. Still we are somewhat subject to Pratt & Whitney recovery.

So we need to see how the process gets completed and how exactly we're going to be regaining the grounded aircraft. But -- and also there are some volatilities with regard to Airbus' capacity to deliver a new aircraft.

I will talk about it. But fiscal '26, we think is going to be a big year when it comes to growth and our eyes are already on fiscal '26 because you can imagine you have to procure markets, pilots, and cabin crew ahead of time to make sure that you are able to execute against that growth plan.

Could we please move to the next slide? With regard to network, we are benefiting from a lot of maturity happening on the commercial side and also we make sure that we protect our competing markets, despite the scarcity of capacity.

We are very focused on competition to make sure that there is nothing to be given up despite the capacity challenges. We have been investing significant capacity into Hungary, Albania, Italy, Poland, Romania, the UK.

These are the most contested markets and we want to certainly protect our market positions. You can see on the next chart, the middle chart, how maturity has been rising.

We used to have a lot of volatilities on network and capacity coming through the adjustments for the geopolitical issues, the Ukraine adjustment, Russia adjustment, as well as, the Middle Eastern adjustments recently. But now you are seeing that actually that network is significantly more mature going into the fiscal '25 period, which obviously yields profitability through maturity.

And the third one to the right is really showing you the overall adjustments for profitability. So we looked at the performance of the business and you see that we essentially cut capacity in the underperforming quartile of the business and moved that capacity into the top-performing quartile.

So you're going to get profitability through that line as well. So I think it's a strong commercial plan and now hopefully you kind of put the puzzle together.

You see operations improving significantly and you are seeing the maturity and profitability coming through the plans on the commercial side as well. And of course, these are the major sources for profitability of the current financial year.

Could you please move the slide? Yeah, I mean, ancillary revenues.

I mean, that's one of the areas we think we needed to address to make sure that we get more robustness out of ancillary revenues. Although I wouldn't think of ancillary revenues like coming totally incremental on top of ticket revenues.

There is a significant cannibalization factor between the two. Nevertheless, we want to make sure that we are robust and we have been developing or enhancing a number of products to make sure that we increase our market appeal.

If you are interested, we can get into it later, but let's move to the next slide. So I think this is important, so this is showing you the fleet plan.

Fiscal '25 is firmed up in terms of new aircraft deliveries, in terms of extensions of existing aircraft, and market aircraft as well. Fiscal '26 is still somewhat in limbo because we know that Airbus will have delays affecting the contracted delivery positions.

What we are showing here to you is the positions contracted as per contract today. But fiscal '26 and onwards, we remain subject to a contract amendment.

So we are expecting 30, 30-plus aircraft to be less in fiscal '26 delivered to the business. So my expectation would be that during the course of fiscal '27, we're going to be hitting the 300 number.

So quite likely fiscal '26 is going to end up with around 265-ish aircraft and fiscal '27 is going to be around 300, 300-plus. So -- but time is approaching and basically we have less than three years now to go from 175 lines of flying essentially this summer to 300 aircraft in 2.5 years, 3 years down the line.

So this is significant. This is much in focus with regard to operational readiness, commercial readiness, to make sure that actually we are ramping our execution capacity up against the fleet program.

So this is significant coming. Could we please move to the next slide?

ETS. This is just a short update to you as you know that the current ETS allowance system is going to be phased out by 2026.

From our perspective, now the playing field is going to get leveled. We have been hugely disadvantaged from the current ETS system as the system favored incumbents and we were not an incumbent being an up and coming airline.

So we have been suffering significant competitive disadvantages from that. But now this is all getting leveled.

And as a matter of fact, now we start benefiting from some of the reallocation of free carbon units. So you can see that actually the whole ETS credit system is now turning into our benefit finally.

Next slide, please. So, outlook and guidance for the financial year.

First, we are guiding net profit, EUR500 million to EUR600 million. And this is on the basis of flat capacity.

This is flat across the year. So it's not like picking up in one period.

Pretty much we see flat on H1 as well as H2. Some improvement on load factors.

We're seeing an upside there. Current 90% is going to go to around 92%.

RASK, we are seeing high single-digit. And I know that you're going to be testifying us, okay, the other guys are saying this or that, but a few things.

First, we didn't overcharge the market last year, so our base is somewhat different. You remember last year for us was a big growth year.

So as a result, this is somewhat dilutive to the revenue generation of the business. So we have a different base.

Firstly -- secondly, you saw from your slide that we're heading a very different direction on cost. Our unit cost is falling, orders are creeping.

As a result, they talk more and more about revenue because that's what you do. When you don't control cost, then you bet on revenue.

We still control cost and we remain focused on cost. But because of scarcity of capacity, actually we're going to be yielding up the business.

But don't take the misperception that maybe summer is a benign environment that we just make so much money in summer to cover ourselves for winter. Actually, we think we're going to be yielding up more in winter given the situation in winter 2023-'24, we moved a lot of capacity and we shuffled capacity as a result of the war in Israel Gaza.

We also beefed capacity up against the GTF groundings to make sure that we maintain utilization. So we think actually second half of RASK improvement is going to be probably stronger than the first half.

But as far as we can charge at the moment, we see a robust environment for our capacity and our guidance is empirically evidenced, of course, on a time gone basis. Ex-fuel cost is going to go up, not necessarily because it's intended, but it's because of the groundings of engines.

I mean, let's not forget that around 20% of our capacity will be on the ground or 20% of the fleet will be on the ground during the financial year. That grounded part of the fleet comes with a lot of capital costs, but we are unable to spread.

Of course, we get some compensation for that, but we also have to carry some on productivity as a result of building up pilot capacity, cabin crew capacity for future growth, but unable to operate that capacity over the short-term. But I would say that that kind of a spike on ex-fuel cost is expected to be temporary.

And as we are regaining operational integrity over the GTF engines, this is going to be eliminated. Fuel costs, we expect it to be flattish.

So on that basis, we are expecting margin to expand and deliver EUR500 million to EUR600 million net profit. I think that concludes the presentation.

Thank you for -- so questions?

Good morning. It's Harry Gowers from JP Morgan.

I've got two questions if I can. And I ask first in -- asking on summer before someone else does.

So lots of noise recently, some of your peers reporting softening in price or at least maybe some more mixed messaging on the outlook. Is that something you would echo also over the next few months, and you are saying Ryanair dumping their fares into the marketplace and everyone else has to follow?

And then second one, maybe if you could just talk us through the large working capital swing in a bit more detail and the outflow there for the year just gone? How much is just a bit of a timing component on the supply credits?

And anything else there on the receivable side? And then into '25, should we expect another outflow given the flat growth?

Thanks a lot.

Maybe I start off with the summer question. I know that there is an -- there's a lot of anxiety and excitement around this matter in light of recent announcements by some people.

You have to see the differences between airlines. So as far as we are concerned, we actually have scarcity of capacity versus demand for our services.

So this is more pushing the yield up as opposed to going the other direction. And as I said, we didn't rip off the market last summer.

When you rip off the market and you overcharge the market in a way, I think at one point, if we start creating a plateau, you cannot do that every year unlimited. And I think this is what the issue is for many of the airlines.

They've just gone up so much on pricing. I mean, you can track it how much prices have gone up by airline.

So there is a limit to it. As far as we are concerned, we think the markets are robust.

We don't really see any significant weakening of markets anywhere. So I mean, we operate across a very wide geography now in Western Europe, in the UK, Continental Western Europe, Central and Eastern Europe, Middle East, et cetera, and we think the demand is very robust.

So we're not seeing a softening. But I think it is always down to airlines, how they see the pricing environment versus their own demand on their own capacity.

So we feel very confident with that regard. I would also say that, and I would come back to the chart.

I'm just asking the operator. Could we go back to the chart that shows the cost performance, the comparison between Wizz Air and Ryanair?

It's Slide 8.

Slide 8. Okay, perfect.

So I think this is probably your most stunning slide what is happening in the marketplace. When your cost is creeping, then you only talk about revenue, because you are no longer in control of your cost.

When you are down on cost and you're reducing your cost, you keep focusing your business on that and you don't really worry about revenue because this is commodity. And in commodities, lowest cost prevails and lowest cost wins.

So we are very focused on cost and we want to make sure that costs are under control. Despite this kind of temporary spike, what we are seeing, what we think, structurally, we are incredibly well positioned to be the undisputed cost leader in the industry, coming from growth, coming from further renewal of the fleet, and coming from the continuous sub-gauging of the aircraft.

And let's not forget that we have 300 aircraft, more than 300 aircraft on order that will be delivered. The other guys may have the same 300 aircraft on order, which you never know whether that will ever get delivered or when it's going to be delivered.

So we don't have an issue with the delivery stream of aircraft coming, even if there is a bit of a delay, but not the same issues, what the other guys are facing. So we're seeing that we are very well set for that.

So our business should remain focused on cost as opposed to wondering about summer and winter and fall and spring, what happens to the consumer. Because if you are the lowest cost producer in the industry, no matter what, you're going to be winning.

But in any event, even if I take the revenue side of the aviation, we feel very comfortable with what we are seeing. Ian?

Yeah. And just to echo that point on the environment for the summer or for the year, right, we're guiding single-digit RASK because we're seeing demand and we're not going to get into the sort of spiral that what happens if one person says something to the market and then everyone else piles in, because we don't see justification for that yet.

However, if you think about it, so we've got costs under control and we've got operations under control, which we do. Then you look at what's happening in the marketplace, there's a global supply chain shortage, both in terms of Boeing and on Airbus as we know from our engine situation.

Everybody is having -- is being forced to incur higher costs, older aircraft, they cost more to rent, they cost more to crew, they cost more to fuel, they cost more to operate, they cost more to maintain. So those costs are going to be hitting everybody else at the same time.

Those costs have to go somewhere. They're going to be going into the revenue side because you have to recoup those costs, so the consumer is going to have to pay for them.

We feel that we're going to be better positioned because we're still flying a newer, more efficient fleet, both in terms of maintenance, operation, fuel costs, and so we think we can control that and simply take the market pricing environment when it comes through. I think it's too early to say how this summer is going to play out.

We're seeing Q1 performed very nicely. We have April behind us.

April performed better than expectations, May is looking to be a very strong month. June and July are still coming together, and August is actually looking really strong because people know that they can block their holidays there.

So overall, we're optimistic, and that's why we feel that this guidance is appropriate. On the working capital, so -- yeah, so there was a swing of around EUR600 million from year-to-year on the working capital.

And so I'll break it down to two main constituents. One is the deferred income, which is the unflown revenue that we collect for future ticket sales.

We generated unflown revenue in the period, we just generated less than before. And that's because if you look at the capacity growth from F '23 to F '24 versus F '24 to F '25, you're seeing a dramatic difference, right, from plus almost 30% growth in the first period versus flat.

So we generated some working capital, but not as much as in prior year that contributed to roughly EUR400 million of the swing. The other part is that when it comes to trade receivables and other receivables, as I mentioned earlier, there's a reconciliation that needs to happen between the launch of groundings.

We didn't have groundings until the Q4, and then we had a massive grounding, as happened in January as the service bulletin became effective. And what happens is that you need to then calculate how many grounding days you have.

That then needs to be validated and reconciled so that we're not falsely claiming groundings for issues that aren't engine related. That then needs to go through a process and work its way through the mechanism in the contract.

The mechanism, as we discussed before, involves first a offset in credits and credit notes based upon other payables that we have to Pratt & Whitney. And then ultimately, if there's a shortfall, then there's an element of cash that gets paid.

And so that just has to work its way through. The contract is working as designed.

In fact, we're in the process of closing off our audit and last year, at the half year, when we disclosed that the contract had been signed with Pratt, the auditors were concerned that there was a risk that this wouldn't actually pan out as expected. That risk has been de-risked in the latest audit because they see that the evidence of this is coming together.

So this is simply a feature of a new effect, a new impact to the business that wasn't there before and that's causing that working capital swing.

Hi, if I may, James Hollins from BNP Paribas. Three, please.

Just on the sale and leaseback income, just trying to model that fiscal '25, if we take engine and aircraft deliveries, is it safe to assume that sale and leaseback income might be maybe a third less year-on-year or am I thinking about that too simplistically? Second one, again, if you're modeling like we are, when would you model compensation out to which quarter would you best guess it stops coming in?

And then finally, unit ancillaries, I think on a per passenger basis, we get rid of that ASK issue. You were about flat year-on-year in Q4.

I was wondering maybe, assuming that is correct, you can sort of run us through the trends you might expect on a either, if you wish, on a per ASK or per passenger basis, how ancillaries might play out this year? Thank you.

Okay. I'll take maybe the first one and the second one, and then maybe you or Robert can jump in on the ancillary.

But so in terms of sale-leaseback evolution, we have this conversation and there's a debate as to whether it's part of our business, it is part of our business. That is the strategy that we've chosen.

We buy well, we buy in bulk, and we buy because of our buying power, and we get a benefit in terms of the purchase price. And whether it's engines or aircraft, it's the same.

The engines might benefit from our scale, they also might benefit from the fact that we're in a compensation environment with Pratt. And the sale-leaseback transaction is our way to translate that benefit into the P&L.

So we've talked about that. The evolution of engine sale-leasebacks, there were a few -- there was a few in F '23, there was a lot in F '24, and there's going to be a few more in F '25, at which point, as we've said in the presentation, we sort of ended the year close to 40, we should be around 50 engines, and then that stream terminates.

So I would say that the aircraft sale-leaseback benefit will follow the delivery pipeline. So you can just sort of make an assumption around that.

There's nothing different that's happening on the aircraft side. And on the engines, I would expect that to taper down.

To your question as to whether it's a third of what it was in F '24, I would say it might be a bit more than a third less, so closer to 50% less.

But I will just add to it that I mean, that kind of goes reversely with compensation, because if you take a spare engine, that helps us keep the aircraft flying. If you don't fly the aircraft, then it would become subject to compensation.

So it's going to push in a way.

But I think the leverage effect of having an engine allows us to generate revenue, which, of course, is far more beneficial to a shareholder than compensation. So we think that the strategic direction on building up the engine bank was the right one.

Because we're going to have these aircraft and these engines for many years, and it gives us additional protection down the road for the challenges that we might face if the advantage engine doesn't come in on-time, if there's other issues that pop up, having additional spare engines is a valuable asset to have. In terms of the compensation progression, we talk about 50 aircraft, and seeing that run.

I think it's fair to say that that will continue for the next couple of years, and unless, of course, something dramatic changes with Pratt, and of course, we'll keep everybody abreast of that when it happens. But all of our expectations, all of our modeling, and we're getting a lot better at doing so.

I mean, I know the people in the past referenced F '26 as being a sort of 30%, 40% year, that was off the back of a comment that was made before we had time to sit down and actually go through with granularity and use the benefit of the technical department and the financial department to really model what happens with regards to powdered metal, forecasting, and the cycle counts based upon utilization, based upon unscheduled engine removals, so things like a bird strike or something that's unexpected and what that impact that has to be the balance of the spare engines, the balance of spare aircraft that we want to maintain. And at this point, we're seeing that 50 aircraft level extend certainly into F '26.

And we'll update you as soon as that comes through. But there's no improvement yet, although we're optimistic that there will be from Pratt, there's no improvement yet to report on.

Robert, you want to take the ancillary? There's a mic over here.

Yeah. On the ancillaries question, yes, you're correct.

Unit ancillaries were basically -- unit revenue from ancillary is basically flat in Q4. So the drop-off we saw in H2 was heavy in Q3 and then flattish in Q4, so a trend positive.

Looking forward to this year, I think we're back with our consistent EUR1 per PAX goal target for the year. We do have a number of improvements, which Jozsef went through a bit earlier, especially around we have a new bundle that introduced four weeks ago now, full scale across the network and we have big performance out of it.

We have seen great performance in testing. We also have some new products around subscription that we are expanding from the tests that we started about a year ago.

You'll see more coming on that later approaching the summer. And then as well, we have some new products coming online as well, and some other, let's say, targeted areas of improvement.

And then the last point I'd call out is, as we talked about, there was a geopolitical impact where we had cancellations that were very good ancillary revenue contributors, and those are coming back online into the network. Israel is now up to about 60% of what it was last summer and will continue into the fall and actually are positive about it.

All right. Good morning, everyone.

I'm Jarrod Castle from UBS. I might be able to do three on the GTF.

Just looking at the accounting, I mean, you received a compensation. It seems like you've put the full benefit through your P&L that fixed your CASK number you report.

When you do the fix, are you actually capitalizing the fix so the cost side is coming through as depreciation or somewhat are you actually replacing the fix? So I guess, is there a timing difference between recognition of the compensation and the associated costs?

Secondly, I mean, have you got any of these engines back, these GTFs? I'd be interested in your view on kind of additional performance you're getting all in terms of comparability between the new GTFs you're getting which obviously don't have this issue and old.

So what is the, I guess, efficiency up and forth, how well do you perform? And then I think you said I might have misheard, you said January '26, all should be done.

And you got 50, no…

No.

If you've got 50 -- Okay, I guess, the question, so when you got 50 anyway, and is that the peak on average it's going to be in? Because if it's 300 days, clearly sometime next year, early next year, you'll be done on those 50.

So I guess, is this the peak or is it going to be even higher than 50? Thanks.

Let me start with the second and the third one. So with regard to the GTF peaking, so we are at around the peak as we speak, So let's call it, 50.

So we're seeing that this is probably going to be it. Of course, there is always the home side risk to it, but we feel kind of comfortable with that.

The way to think about the cycle is that engines delivered to us to date, other than a few spare engines, remains subject to cycle limits. So after reaching the cycle limits, those engines will have to be removed and inspected.

Roughly around 18 months, after 18 months of operations, you reach the cycle limits. So kind of towards the end of '25, all those engines will have been removed.

Okay. Then you induct those engines and then you push them through the shop visits, which is to date up to 300 days, but now we are seeing some improvements of 180 days.

So God knows what it's going to be, to what extent this is going to be a structural improvement of Pratt & Whitney. But we have been modeling ourselves over a period of a year.

But maybe there is upside to that. So what it means is that by end of '26, we should be done and dusted basically with the cycle.

Again, this is an assumption, this is modeling, and that's how we kind of look at that. And gradually, the 50 will start reducing.

So next summer, we are expecting the 50 to become around 35 on the ground, and it will keep improving until a certain point when basically you are going to benefit from more spare engines having on hand than engines on the ground and you become net positive again. This is going to be sometime in '26.

So I think that's kind of the way to think about the cycle. With regard to GTF, new and old, there are two issues here.

So the GTF engine is affected by two lines of issues, if you want to put it that way. One issue, which is very predictable is the powdered metal.

That's a contaminated material that went into the production of parts that got put into the engine, and those parts must be removed after reaching a certain cycle limit and must be replaced. This is happening as we speak.

I think this is what we have been focused on in our communications. Now, the new engine is coming.

We've already received the first spare engine, and new aircraft deliveries will happen with clean engine as of next month. We'll be clean on that issue.

So that is done. I mean, of course, you have to do the cycle of the incumbent engines.

The second issue is kind of GTF 2.0. When -- basically, when an OEM develops a new technology and it is classified as a breakthrough technology, obviously, that technology goes through the maturity curve.

Then you get kind of the childhood diseases out on the engines in the early phase of operations, the OEM takes note of those issues and they make engineering improvements to the engine. We're expecting the GTF 2.0 to come to market sometime in 2026.

So that's going to be an improved engine. It is not just a properly manufactured engine.

So powdered method means a properly manufactured engine. That engine, I'm talking about 2026 engine is going to be an enhanced -- technologically enhanced, improved engine that's going to come in 2026.

And just on that first question, Jarrod, so just, can I clarify? I understand the question on compensation benefit and how that's treated.

But you said something about the fix and how that's capitalized. Just to understand, what fix are you referring to?

Obviously, there's a fix associated with repairing the engine. So does that get -- does that fix get capitalized into your balance sheet as part of the cost of the engine, and then you depreciate the…

No, because it's not our cost, right. It's a Pratt's cost.

Okay. But do you still -- so you don't do anything with the cost element?

So you just take the cost.

We take the benefit based upon the lack of use of the aircraft as part of the negotiated agreement that we -- the compensation agreement that we have, because it's a manufacturing defect, not a design defect. Pratt has an obligation under the separate maintenance contract to provide services to us.

We pay a rate based upon our flight hours and our flight cycles to some extent. So, yes, the fix is not on our-- it's not at our cost.

It's simply -- we get back actually an engine that, depending on the extent of the scope, could be a better quality engine, because while the engines open, they take the opportunity to address other issues. So it's actually a benefit for us once these things come back, if we can get them through the shop fast enough.

And if you were flying that engine, you're basically saying you would have got -- you would have made even more money than the compensation?

Absolutely, that's -- otherwise, we'd be focusing on being a parking business.

Okay, thanks.

Good morning. Jaime Rowbotham from Deutsche Bank.

Three from me. Firstly, Page 3, you mentioned the OEM support package with the release And then you said, we expect to secure future compensation on similar terms for Q4 '25 and onwards.

Any reason that package wouldn't be the same as the existing one? And when will you finalize it?

Secondly, I think it's Page 7, you talk about some new fleet ownership structures that you've introduced. Perhaps you could add a bit of color on those.

And third, I suspect this is hard to answer, but on 20% potential capacity growth in '26, what do you think the maturity would look like relative to the slide you've put up? And finally, perhaps I could just challenge you on the cost.

Are you not a little bit conscious to hold up unit costs in '24 that include EUR250 million of sale and leaseback gains when you've admitted you've done way more transactions than normal? Obviously, together with the EUR200 million of supply compensation where it is hard for us to judge whether you're being sort of overall under-compensated?

Thanks.

Well, maybe I would start with the last one. I mean, we are guiding on unit cost and you can assume that this is based on proper planning and modeling and I don't think that the unit cost is -- the unit cost performance is solely the result of kind of one-off items and special demands of the business.

And the unit cost is structurally moving to the right place as a result of utilization and improved operational metrics of the business. So I'm very confident that Wizz Air is at the right place now, despite all the issues we are dealing with.

Because you also have to be careful not to kind of discredit us always on issues, but you also need to credit us on some other achievements, what we are trying to deliver. So may you look at the benefit of compensation, you think that this is kind of coming on top.

But the business is observing the issues coming out of that. I mean, there is a reason why we are compensated and the reason is not that to make us feel good and happy, but the reason is -- and you can expect that RTX is a rational company and they are not totally idiots just to throw money out of the window.

It is because they cause damage to the business and they have to compensate us for the damage. I think we just have to look at both sides of the equation when we come to these numbers.

So with regard to fiscal '26, I mean, the way I would think about maturity is that most of the capacity growth is going to come through adding frequencies to existing routes. I mean, the way we have been managing kind of the downside capacity scenario was really through trimming frequencies, we would be adding those back up.

So I don't think that you would be seeing an explosion of immature capacity coming through fiscal 2026. That is going to be an element of that.

But I don't think it would go beyond the ordinary, what we would do, otherwise. You want to take the ownership?

Yeah. So I was going to do support, but in terms of new fleet ownership, we still predominantly pursue the traditional vanilla sale-leaseback transaction at the time of delivery.

We're seeing more appetite from lessors to denominate those leases into euro, which is helpful, but still that's the majority of our financing. However, we're looking at, I think, 27 deliveries this year, and then that number starts to increase and we see dramatic growth in F '26 and F '27.

On top of the 208 aircraft that we currently have flying, and we're running into challenges where we -- notwithstanding our credit rating and notwithstanding Wizz, that certain lessors just have too much exposure to one particular name or there's other parameters where lessors have a limitation that they can't have X percent of an airline's fleet irrespective of the exposure. And so we started doing JOLCOs back in the day to diversify away from the traditional operating lease model.

And there's been a recent trend in the lessor community across the board, both in Western Europe and Americas, also into Asia, to offer a finance lease product. And that's what we're specifically referring to where we've started to look at basically full payout, full amortization finance leases where unlike an operating lease, where you have to -- we have to comply with return conditions, even if they don't actually make technical sense because the contract says so, and that creates a cost, you transfer title at the end of the lease and then we have to then make an assumption on residual value and then what the future market looks like for us to dispose of that aircraft.

The benefit of that flows through in terms of a different depreciation profile. And of course, you don't have -- you may not have the same return condition in cost.

And actually, when you see the maintenance cost in our cost lines looking attractive, coming down year-on-year, that's because as we extended some of those leases, we were able to defer unnecessary maintenance to the point where it was necessary. So that helped reduce our cost base in F '24 as well.

And then in terms of ongoing support from Pratt, yes, so the deal that we announced back in November with regards to Pratt was always up through the end of this calendar year. We've made certain assumptions in terms of what that deal looked like, because the profile of the compensation ebbs and flows based upon where the compensation is being consumed, whether it's through the day rate, whether it's through engines, whether it's through the support contract that we have to maintain the aircraft or the engines.

And so what we've done is we've made an assumption going forward that if the solution is not fixed and the solution is basically getting the contract to perform the way that it was originally designed, the support contract, then there's going to be another conversation that's ongoing with Pratt. We have a daily conversation in terms of technical matters and then there's a weekly conversation on the commercial matters and those are ongoing and we expect to have an arrangement done well in advance of the half year.

Hi. Good morning.

Conor Dwyer from Morgan Stanley. Three questions, but the first one is on the Slide 8, comparison of unit costs.

So it obviously does show that the gap has closed between the two of you on a stage length adjusted basis. But if I think about the guidance just for this year, high single-digits and ex-fuel CASK growth, including flat fuel, maybe makes you get closer to mid-single-digits.

I think Ryanair all-in has gotten more close to up slightly, which with their load factor tracking down a little bit on a cost per seat basis, potentially just flat. That would imply the gap kind of widens again into this year.

So just wondering how do you kind of think about that, and if that's just simply hit by at the moment the groundings and if you think that you can regain that gain you're showing there in the more medium-term? The second question is you're not far off doubling your fleet between now and FY '28.

So I'm just wondering where are all these things going to go? I can't imagine they're all going to be just increasing frequency on current routes.

And actually more medium-term then in terms of ramping up into next year with 20% capacity growth, how do you really manage that? It's a balancing act, I guess, in terms of not wanting to hire people too early, but you don't want to leave it too late and experience issues with ramping up.

So, yeah, any color on that would be great. Thanks.

Thank you. I mean, I think fiscal '25 from our perspective is a transition year.

I mean, we are still operating under sub-optimal circumstances. 20% of the fleet will be on the ground, I mean, just look at it from the perspective of having a lot of capital tied into that part of the fleet, we're not able to spread it.

So -- and also look at it like, as next year is going to be a significant growth year, so we will have to build organizational capabilities, capacity for that operation, so we will carry unproductive labor in the system as a result. So I don't think I would read much into the current financial year in fiscal '25 because simply this is just a transition year.

But structurally speaking, I think we should be where our competitor is. So you go back to pre-COVID times, we were on par, even I would say that we were slightly ahead.

This is where we need to be, and logically, this is where we should be. If you take into account the fleet renewal, if you take into account the difference in aircraft utilization, the gauge difference, et cetera, this is where we should be.

Unless you assume that we're unable to execute. But I think the ops turnaround is demonstrating that actually we are able to execute.

And even I would say that the commercial planning demonstrates that we're able to execute even against extreme distress to the business, like war in Ukraine, war in the Middle East, or the supply chain related commercial hiccups. So I'm personally very confident that we are at the right place.

Yes, there is going to be maybe a bit of a widening, but I mean, we shall see what the other guys are actually going to do. I mean, look at their numbers.

I don't know what their guidance was, but actually they are up 16% on ASK based unit cost in fiscal '24. With regard to next year's planning, I don't think 20% gross is anything special to this airline.

This is the kind of growth what we used to deliver. But this is basically the business model what we have, high growth on the basis of trying to deliver the lowest possible unit cost in the industry and continue to stimulate the marketplace.

So I don't think fiscal '26 is anything special in a way, but we have to be planned on that. So this is not going to happen automatically to the business.

So we have to plan on markets. That's probably the easiest part because at the moment every single one of our markets are contained.

All the markets in Central and Eastern Europe are lacking capacity. We're lacking capacity in the newly opened markets.

So actually this is not going to be a market issue where demand is. We've seen the demand is already there.

We are under supplying the demand. The bigger challenge is going to be sourcing operational capacity, pilots and cabin crew.

And this is what we are planning on and we're going to be advancing execution. With that regard that will create short-term, again, unproductive labor.

But I still think that Wizz Air is a hugely attractive employer in the marketplace given our continuing growth. That creates career opportunities and perspectives for individuals.

So I think we'll be able to attract the resources we need, and let's not forget, the critical resources here at the pilot force. And we have been making lots of investments into creating our own pipeline as opposed to relying on the market.

We're just about to open a new training center in Rome, Italy. We have a number of programs in place to make sure that we capture people at the early stage of their career.

We train them up to commercial pilots and then we give them a long-term contract. So we think we are really good to go with that regard.

Well, with regard to deploying the fleet over the next kind of three years, medium term, the way we think about this is we have like three geographical pillars of the business, Central and Eastern Europe, Western Europe, and East, we call it Go East. So Central and Eastern Europe remains bread and butter.

Growth in Central and Eastern Europe remains subject to economic convergence, GDP growth. If you run around the numbers, whatever GDP growth the region delivers, you multiply it by two and this is going to give you the airline growth.

And if you look at last 20 years in Central and Eastern Europe, essentially legacy carriers didn't deliver any growth on an aggregate basis. The entire growth of the industry was delivered by local carriers mainly us, because we are the market leader.

So you can run the numbers, and we think Central and Eastern Europe will remain a highly attractive growth geography for the business over the next few years for sure given the economic convergence of the region. Western Europe is a lot more selective.

From our perspective, we made decisions to really expand in three markets in London, in the UK, in Italy as a country, and Austria. Every one of these operations is profitable, so we're seeing that they are expandable, they are investable in the future.

In London, we are seeing infrastructure constraints. So simply, slots are just not widely available.

But other markets, we don't really encounter those issues. So we think there are select growth opportunities in Western Europe.

We don't intend to become a full-fledged Western European airline, but we want to follow through these investments in these three markets. Going East, from a growth perspective, that's probably the most attractive market given the dynamics that economic convergence -- the economic convergence, their demographics, and basically the contained nature of the regulatory framework at the moment.

So as soon as those countries liberalize the marketplace, like what had happened in Central and Eastern Europe 20 years ago, we'll create significant further growth opportunities. So we are on those opportunities.

Obviously, we have to be measured, because we see that issues can happen, geopolitical or other issues. But we feel very comfortable that we are now having a good understanding of how the Gulf region works, even we have been able to mitigate the Israel issues quite effectively with some short-term damage.

But I think structurally we are fine. So we will continue to monitor how those opportunities come up and we will invest capacity against those.

But those are more discretionary in nature, us and the others, Central and Eastern Europe and Western Europe are more predictable, more plannable.

And I think if I could just add to that, I think Alex Irving has a study that shows that if we -- that Central and Eastern Europe could, in fact, absorb our entire order book, we don't even need to rely on those other markets. Based on the statistic that I think is that there's five times as many -- as much as airline capacity per GDP in Western Europe than in Central and Eastern Europe.

So that's one data point. Just on the F '25 being flat and what that does to unit costs and the gap between the two, I think, if memory serves me correct, Ryanair is expecting to be F '26 flat.

So we'll see how they deal with the year that we're dealing with now in a year's time. The one point I would -- I should emphasize is that we haven't changed our ultimate 2028, 2029, 2030 fleet plans, right?

Yeah, there might be a dip along the way to get to that goal because of what's happening, but the aircraft are still being delivered. There's no structural shift to the right in terms of deliveries.

And so in terms of our growth trajectory, it's still on track. I don't think that you can say that for -- when Boeing is producing a cap of 39 per month in April '24, right, I think that there's going to be some delays.

And so January '27 for the Dash 10 Max, I think considering that the Dash 7 isn't even certified yet, it seems like a bit of a stretch.

Thank you.

Yes, good morning. It's Ruairi Cullinane from RBC.

Firstly, show where you've added capacity within overall flat capacity. I was wondering if you could talk a little bit about which markets you had removed it from.

Secondly, I wanted to get a bit of attention to talk a little bit about pricing trends. Some airlines have pointed to slightly weaker trends in calendar Q2.

Ryanair talked about leaders in Western European leisure markets with strength in Central and Eastern Europe. Would you go along with that?

And then finally, just to clarify on the working capital outflow from supply credits, to what degree should we expect that to reverse in this financial year? Thank you.

I think we have commented enough on the pricing terms. I'm sorry, I'm not going to go into 9:00 a.m.

flights on Tuesday morning how they are tracking against previous years. So we're fine, no matter what other guys are saying.

I don't think we created over-optimism like others before, so we don't have to correct ourselves. We feel comfortable with our guidance, and this is all empirically based, so please just take it like that.

So with regard to -- you want to take the working capital one?

The other one was the pricing for Q2. So in terms of the working capital, we would expect that to turn around for two reasons.

One is that the reconciliation is now mechanical and happening according to plan. And on top of that we're going to see growth come back in the system and that will start to drive the unflown revenue back up.

So you would see a reversal of that swing from a working capital generation that happened in F '23 to working capital consumption in the following year. So it'll come back to a benefit to the company.

Hi, Muneeba.

Muneeba Kayani, Bank of America. A couple of questions, please.

Firstly, just on your loads outlook of 92% for fiscal '25, I think we're higher than the pre-pandemic in a flat capacity year. Why 92% are not higher?

Second question on fuel hedging. So your competitor is talking about a fuel tailwind this year, whereas yours is flattish.

How are you thinking about your hedging strategy? Are you happy with that?

Would you consider changing that? Then, thirdly just on your remaining fleet order, where are you on deciding the engines for that and when would you -- how are you thinking about that?

Thank you.

Yeah, maybe I would start with the last one with regard to the engines. So we have a number of aircraft un-engined yet.

I think we still have a good year to go with that regard. So we are not in a rush.

We are negotiating with the parties. There aren't too many.

There are two of them. But we are negotiating with those guys.

And when we feel appropriate from a commercial standpoint to confirm the selection, we will do that. But we have a good year to go, so we are not under pressure to make a quick move.

You want to comment on hedging?

On hedging, we're pretty happy with where we are. We typically tend to stay within 10 percentage points of our peer group.

We don't really think about it much other than in terms of execution. It's something that happens every month and it's routine and we calibrate based upon where the market is, and then adjust.

So for us, we're happy with its outcome, we're happy with the instrument. As we build more liquidity, we'll look to figure out ways to use that liquidity to reduce ex-fuel unit cost.

And one of the ways might be to change from zero cost collars into call options. But at this point we want to make sure that we -- in the absence of long-term structural debt, which we're trying to retire at this point we want to make sure that we build up more liquidity.

And so we have a few other objectives to get through, and hedging is working, hedging is delivering, but it is not the biggest opportunity for us right now. We see a lot more opportunity to continue to capture the revenue environment as we expect it to increase and continue to drive down our unit costs.

I think on the load factor issue, I mean, first of all, on a principle, we're load factor active, yield passive. But any other day, the ultimate objective is to maximize revenue.

And the revenue is the function of the equation between load factor and yield. I don't think that there is like a written book or a bible on what is the right level of load factor.

I don't know, to be honest. But we feel that given the current state of the business, 95 -- 92% load factor combined with the yield, what we are assuming gives us the maximum revenue.

But the objective is to maximize revenue, not only one side of the equation. Maybe other guys think that for their business, 94% is a better number.

I mean, of course, we buy into the principle that the most expensive seat is an empty seat, and as a low cost carrier, you have to be biased towards load factor. But any other day, we are trying to maximize revenue, and we think that based on where the business is at the moment, this is kind of the right number.

If there is more upside to come, of course, we would take it.

This is Sathish from Citigroup. I've got two questions here.

Firstly on the staff cost in FY '24, how much of the benefit you had? Because you're not ramping up into this summer, so you don't have the mobilization obviously coming in.

If you have to grow around, say, 20% this summer, there would have been an additional cost there. So any like color on what are the impacts of mobilization just to get an understanding what impacts you into the second half of this year.

And then the second one is on the Pratt & Whitney engines. Out of those 47 that are grounded, how many are like actually on the test bed right now?

Do you have any visibility to that level like to understand like where we are in terms of the engines coming out of the shops?

I wouldn't say that there's a dramatic benefit from a lack of staff cost mobilization. I think we did put a hiring freeze in place, particularly when it comes to cabin crew anticipating that we'd be in flat capacity.

Natural attrition is bringing that number down. But I wouldn't say that there's a dramatic mobilization benefit or lack of mobilization benefit.

On the engine side, Mike, was it?

30 is in the shop.

30 is in the shop. Yeah.

The performance at least is stable. We track them every single day, every single gauge, and we've even visited shops.

Yeah, we have people on site, right? Yeah.

I think this wraps up the time. Right?

Is there -- yeah, okay, I think that was it for questions, so.

Thank you. Are we good?

Okay. Well, ladies and gentlemen, thank you for coming.

Thank you for your interest. I mean, I'd like you to take out of this meeting like, we delivered a financial year.

I think we still have a transitional year in front of us with regard to fiscal '25. But we're seeing that operations are under control, commercial planning is under control, and we are expecting further enhancement of profitability coming through the financial year despite all the external challenges we are facing.

Thank you.

See you in another 20 years.