Wizz Air Holdings Plc

Thank you. Good morning everyone.

Thanks for coming and thanks for listening to this. So this is our H1 results for fiscal '25.

Would you please move the slides, one more. Thank you.

So I would like to spend a little time upfront regarding explaining you some of the drivers of the business all in. I believe that the ship is turning and clearly we are entering kind of a better era for the business.

I would just still like to remind you, the challenges we have been navigating this business through the war in Ukraine, the Middle Eastern conflict, continuously dragging the business, and probably most importantly the GTF engine groundings. So with regard to the revenue environment, first of all, we are reporting positive unit revenue development in the first half, and probably even more important, we are seeing that revenue strengths continue to unfold going into the second half.

Some of it is the base. Same time last year was a fairly weak base.

You remember early October, the Israeli conflict broke out, making a significant impact on our business, by removing profitable capacity and putting that up after reshuffling to immature capacity. So obviously denting our ability to generate revenue, and denting profitability as well.

So we're seeing that this positive momentum is actually even getting stronger going into the second half. And I will elaborate on this a little later.

With regard to cost, I guess this is the area where we feel the most disappointed by. But this is all explainable.

Most of it is corresponding with the GTF engine groundings. And I know that you may say Pratt & Whitney is compensating you for that, but that's not entirely true, certainly not in our context.

If you measure compensation on the basis of direct costs to the business, yes, Pratt & Whitney is compensating us for that. But if you look at - at our entire exposure to the GTF engine, we were forced to make soft-scale decisions, especially for the current year.

Overnight, we lost kind of 20% of our fleet. And we had to make sure that we essentially back up our capacity one way or another.

And we were opting for three things - opting for two initiatives and one was happening anyway. So we continue to receive new aircraft deliveries, but we decided to stand old aircraft leases and we decided to take market leases, market wet leases.

Both of these come with cost. We could have decided to do nothing, and then we would have been kind of in the money with Pratt & Whitney.

But we had to take the decision, because otherwise strategically we would have been turning over-invested markets, newly invested markets, into the hands of our competitors. So we had to protect capacity and we set the target to off to capacity that came with significant cost.

And also, as we evaluated on previously, now we are shifting focus towards more expensive airports, to less expensive regional airports, secondary airports, alternate capital airports. And let's not forget that airport costs came under pressure, because we were not growing.

And the airport business actually is fairly simple. Airports they value for growth, penalize you for no growth.

And I think this is what we have been affected by. I think the business has been actually achieving a lot in this period.

We have reshuffled our network further. So we removed capacity from underperforming markets and we deployed that capacity to actually performing markets.

If you just look at the Middle East, given that the Middle East conflict continued to drag, I mean, people kind of don't like flying over war zones. So we started experiencing weakening demand, in the Middle East we removed significant capacity, and we reallocated that capacity, but actually that capacity was demanded.

I think the very recent example was the Moldova base reopening. We used to have a very strong performing base in Moldova, due to geopolitical reasons, we suspended the operation of that base.

But now we've just reinstating that base operation, which makes a lot of sense. And we are basically tapping into already mature market capacity.

Again with regard to sustainability performance, we've got CAPA's recognition for the third time in a row of being the most sustainable airline in the whole of Europe. So we believe that we have become even more resilient to navigate ourselves through volatility, continuous volatility, I would say.

If you look at the way we are going forward now, we are entering the area of growth after a standstill period of a year over 18 months now, we are actually at a tipping point that we're going to be growing again. Certainly, that is the case in fiscal year '26.

We are growing organically. We are looking at margin expansion and we are looking at our kind of valuation multiples to come in line with our peers.

So we're seeing that we are enhancing our value proposition to the market. I mean, clearly, the grounded fleet is, is a hangover and it will be a hangover for some time.

But at the same time, the proportionality of the issue is getting reduced by the day, because we probably bottomed out on the number of aircraft on the ground, but given the free growth but we are having, actually the proportion of the grounded fleet is getting less and less. And as we have said, we are in negotiation with Pratt & Whitney with regard to the extension of compensation that's going to happen.

Just met the company yesterday. I think we have still some job to be done in terms of ironing out some of the issues, but that's going to happen.

So I would be relaxed about that. Although I cannot give you much insights at this point in time, given the confidentiality involved.

Could you please move the slide? So if you look at the numbers, I mean, as said, the GTF has been a significant overhang on the numbers, but maybe if you kind of break it down, you look at capacity, capacity is kind of flat, flattish.

ASK terms is down almost 1%, seat terms it's up 1%. So basically this is the function of reducing stage lengths, which is important because by reducing stage length we are actually increasing sector productivity.

So with the same volume of assets we are reaching more customers, we are engaging stronger with the market and likely you should be expecting that trend to continue to unfold going forward. Our passenger numbers basically corresponded with seat capacity, we are up almost a percent with flat flattish load factor performance.

So the total fleet actually grew substantially during the period. So we went from 189 aircraft up to 232 aircraft.

So that's a significantly larger number of fleet, although that number contains the eight wet-leased aircraft. Now those wet leased aircrafts are out.

They were removed from operations at the end of October. So we no longer rely on market wet-leased capacity.

You know that this is a very expensive capacity. We needed to do that for protecting overall capacity against competitive incursions.

But it is at a cost and now that cost is phased out from the business. We had around 44 GTF aircraft grounded, and that made a profound impact not only on the cost of running the business, but also with regard to the measures what we had to take for protecting our capacity.

Utilization was slightly improving in the period, so we were more effectively using the fleet on hand, which I think is important with regard to utilization and spreading costs on the basis of utilization. Some improvements on operational KPIs - completion rate was slightly up, 99.4% our target is 99.5%.

So we were nearly on target. We think we will be able to catch up on that in the second half, and on an all year round basis we will be able to deliver our target.

On-time performance was slightly improving. I mean let's not forget that ATC was again disastrous during the summer slaughtering the whole industry.

And we were not immune to that. So that created significant distress.

I think kind of where we are with regard to our operating model. We feel very confident in our ability to operate timely with integrity during the off-peak periods.

But when operations pick up in Europe, especially the summer peak period, the stakeholders breakdown, especially ATC and they continue to make significant impacts on our ability to operate. So we are looking at ways of further enhancing our resilience during these peak periods.

And this is the focus going forward. And you see that with regard to airports and roads, we have been consolidating ourselves.

So basically we have eliminated loss-making routes for the benefits of routes, actually where we are making good money. So all in all improved the performance of the company.

Thank you. And with that let me hand over to Ian.

Thank you, Jozsef. Can we go to the next slide, please?

Thank you, Seth. So I guess, the good news is that we're flying more people, and those that are flying with us are flying at higher fares that's the takeaway from H1.

We're seeing that trend continue dramatically into H2. So as Joe explained, even though ASK came down and that's due to a shorter stage length, which is by design, that's a deliberate choice to try and drive more sector productivity.

We're generating more seats, and we're keeping load factors roughly stable which means that the higher revenue comes from yield. So that's a positive yield environment in an industry that's challenged in that respect.

So that's a positive outcome. And we're seeing, as I said that coming through into Q3 and we'll talk about some of those dynamics in a little bit.

Fuel cost was the support for us even though we're flying an inefficient fleet versus what we could be flying due to older aircraft, and lease extensions that we had to take on due to the - inefficiencies around wet leases. Our fuel costs went down.

They could have been much lower had we been able to maximize the true potential of the GTF - of an all GTF-powered fleet. And that is something to keep in mind is that - as we continue to eliminate some of these older aircraft and bring more GTFs back online, our fuel efficiency will continue to benefit from that.

In terms of non-fuel costs, I'll save that for the next slide, because we have a slide dedicated to that. EBITDA slightly down on prior year and that's despite an average of 44 aircraft grounded during the period.

We're around 40 aircraft grounded, and we expect that to continue. Those aircraft are incurring cost, but not generating EBITDA and so that puts pressure on the business.

Likewise on depreciation cover on the next slide. So overall, you know, our positive RASK was driven by a strong performance in Q1, and a positive performance in Q2, to 1.4% up on the period versus last year.

We're starting to see some strength in ancillary RASK as well as obviously ticket RASK performing nicely. The factor basically, basically flat.

So in terms of the revenue environment and why - that's supportive. I think it's important to point out that while we're talking about flat capacity or slightly up on capacity for the year Q3 last year, so F '23 versus F '24, we were up 27% in capacity.

This year we're basically flat. Q4 last year, Q3, F '23 to F '24, you're up 17%.

So we were able to benefit from this, the lack of capacity pressure, and really be selective in terms of where we're putting that, deploying our aircraft and making choices around profitability and maximizing that. And so that's giving us the confidence for the full year numbers.

If I can go to the next slide, please. In terms of cost, while we see optimism on revenue, we do see pressure on cost now.

I think the fuel environment is favorable and we'll continue to see that through our hedging program that benefits from that. In terms of ex-fuel costs, a lot of pressure in the - happened in the quarter on that and we are.

I'd like to try and segment that into three categories our costs. One of the costs driven by Pratt - that are either something that we can control or have already controlled.

So as we mentioned, we had a plan to exit the wet leases. We talked about that in Q1.

We executed that plan in line with our target, which was to get out of them by October. Those wet lease contracts are terminated.

They were full-year contracts. And so that's no longer going to be something that you'll see coming through our P&L.

Yes, there'll be the ad hoc wet lease here and there for emergency situations, but not something structural like what we put in place this year. The takeaway from that is that the exit costs were higher than what ultimately we were expecting at the Q1.

And that's part of the reason why you're seeing such high numbers flow through into Q2 and some of that overhang will fall into Q3, because we had wet leases in place in Q3. So things like wet leases gone, there's other inefficiencies that come along with the Pratt grounding that we're in the process of addressing.

So, if you think about, if you look at our cost structure disruption costs were high in the period. And that's just simply down to the fact that if you don't have spare engines, or spare aircraft and you have a technical problem with an aircraft, you leave, you're faced with no choice, but to cancel and that drives the costs up.

We did pretty well in Q1 with disruption, and we're expecting to see very strong performance in Q3 and Q4, as we drive stability into the business. And as we start to see more capacity come online.

But in Q2, we had a rather high disruption cost line, driven by the lack of spares, driven by the Pratt situation. Likewise, on crude costs, we saw high costs in the period, and we always say that crude was going to be an area of pressure on the business, because we were deliberate - and are being deliberate when it comes to maintaining the employee base, so that we have them ready for the return of capacity growth.

And so that's a choice that we took at the expense of short-term profit, but - to the benefit of long-term stability, that's the first bucket. I don't think, Pratt that we can control or are controlling or have controlled.

The second one are the costs associated with groundings. There is going to be a cost, but as long as we are grounding aircraft, we're going to be seeing more maintenance events.

It's just a simple fact. As we move engines around and try and optimize the availability of assets, there is a cost associated with that and there's cost pressure in that across the industry, which we're dealing with.

Likewise, there's depreciation. We have all these extra assets that are not contributing to ASK, and they're not contributing to EBITDA.

And so it's, we're taking this fixed element and spreading it across an inefficient base in terms of ASKs. As we start to return to growth, and we're talking about growth somewhere between 15% and 20% for F '26, that'll help take some pressure off that.

But as long as we have aircraft grounded, and as long as we're running a high spare engine ratio, there is going to be inefficiency there. And so it's, it's very difficult to compare that number in its current condition against the peer group, considering that we're grounding and others aren't.

In terms of other costs and income, you can see we've given you a rather helpful breakdown of the constituent parts to that. We benefit from sale-leaseback for the half.

We did have lower sale-leaseback activity in Q2 versus Q1. We would expect there to be a tick-up in Q3 and Q4 versus Q2 on sale-leasebacks, and then a real ramp-up in F '26 as the number of transactions happen.

What will be different this year is that there will be no engine sale-leaseback activity because we don't have any other engines in the delivery pipeline in the near term that could change, subject to discussions clearly underway. But this is all aircraft activity.

We take our sale-leasebacks as the assets arrive. And so, we have a pretty good view as to when the aircraft are coming for the next 18 months.

And that will be something that we can plan for. In terms of compensation, I would expect that number there to flow through - pretty much consistently between Q3 and Q4, because we're still seeing a consistent number of aircraft grounded.

So that's a pretty reliable number there. The short-term wet-lease numbers are going to go away.

And then, and then, and then the other ones are, are, there's nothing unusual on that. So back to the buckets.

You have the ones that we can control due to Pratt. The ones we can't control due to Pratt, and they will just simply roll off either through unparking or through capacity growth.

And then the third bucket, in terms of costs, are the ones that I would say are to some extent self-induced. Joe talked about that.

So some decisions around the network that we made that we need to now change and that's migrating towards aircraft airports that, that are prepared to incentivize us or even pay us to fly there. And so really identifying those opportunities, and making sure that the incentive program is right.

With us being the only airline out there that's really going to be able to add any sort of meaningful capacity, and reward those airports. We're going to see benefits through the network in terms of cost and revenue by virtue of the quality of the network.

So rather than being speculative, or opportunistic and trying to identify new markets and try and rapidly mature them, we're going to focus on deploying our capacity consistently within our existing footprint. So harvesting the profit that's available from our footprint, there's a slide that shows, later on we'll talk about where we're putting that capacity, and how it's consistent with our core markets.

And so that's how I would summarize the cost. We have a very specific cost plan in place.

How we get through the end of the year, and how we deliver on our numbers. That's the baseline.

If we are helped by revenue, then that's upside and if we're helped by FX, that's upside as well. But our focus is on cost, and that's the plan they're here to deliver.

And with that, I'll move on to the next slide, please. I'm trying to give you a little bit of color when it comes to our free cash flow, and to show you our EBIT to free cash flow conversion ratio, which is roughly 100% at this point.

Obviously, it's the better-performing half, and so you would expect there to be a strong performance. But I want you to understand, how we're able to convert EBIT into free cash flow.

The net CapEx line, after the operating cash flow bar of €720 million, is basically the combination of PDP deposit payments to the manufacturers out the refunds from PDP payments when we take delivery of an aircraft, as well as the net benefit from sale-leaseback gains under sales operating lease or sale to JOLCO arrangements. So that's the cash benefit from that.

And then the lease repayments is the combination of all the types of rent that would be going out across all the structures, whether it be French tax lease, JOLCO, finance lease, or operating lease. That €447 million number there end up being the free cash flow.

If I move to the next slide, please? You can see that we generated €270 million in cash in the period from Q4 at the end of last fiscal year to where we are now at the half.

We ended up just under €1.9 billion in cash at the end of September, and that's after the bond repayment in January. So we, we basically would have been €500 million higher for the periods following Q4 had we not had to make that.

So it shows a rather generous, a rather robust cash position, and in terms of industry peers, our cash-to-revenue ratio is sort of in the mid-30% range, which is higher than most. In terms of how we bridge our free cash flow from the prior slide of €447 million to the €270 million in net cash position, the difference there to get to €270 million down from €447 million is a combination of repayments of PDP loans.

We had a facility where we borrowed against our PDP deposits, and that's something we put in place in the winter of 2023, sorry, winter 2022 when we were emerging out of COVID and we hadn't yet returned to profitability. We've since decided that we no longer need that facility.

And it's part of our overall cost drive. And we've repaid that early, we've prepaid that, so that facility is no longer there.

And as a result, we'll save on the interest costs. It's a structured facility.

It's one of the more expensive costs of financing. I wouldn't say it's punitively expensive.

It's just relatively more expensive than other sources that we have available to ourselves. So that's just one element of the overall drive to deliver on our numbers.

You would have seen that Fitch downgraded us from investment grade, to one notch below last month. While it's disappointing, it's not unexpected.

We've been spending a lot of time talking to them. It comes down to ultimately, the math.

At the end of the day, our net leverage ratio, is not where they want it to be, which is two times, our net leverage is under pressure for a number of reasons. One is that we have 40 to 44 aircraft grounded.

Those aircraft, they come with leverage, because when you sale-lease back, you have to add the leverage to the business and this is the lease leverage. But they're not generating EBITDA.

And so it's just simply hard to make that number work. On top of that, you have a very high spare engine ratio.

Those engines, while they're contributing to the business in terms of reducing the number of grounded aircraft, they're not generating dollar-per-dollar the same amount of EBITDA, if we were to invest those dollars elsewhere in the business. And so those two elements alone drive the leverage ratio out of the territory that Fitch was comfortable with, in terms of maintaining the investment grade rating.

I will point out that if you look at the commentary from Fitch, over the last couple of years, in particular in the ratings actions, the reason why we were on negative outlook in those periods was lease-related. So can we get back to profitability?

How are we going to deal with hedging? What's going to happen with regards to geopolitical issues within our territories, things like that?

And in this - in this, this time around, all the commentary has shifted. The reason - for the downgrade is specific due to the inefficiencies caused to us by Pratt.

And if you look at some of the commentary, we have some of the highest EBITDA margins, we have strong liquidity positions based upon their analysis, they see the aircraft order book backlog as a competitive advantage. And that's something that I think it's very important to emphasize.

Lastly, we do see a lot of volatility flowing through our P&L due to the unrealized FX gains and losses. That is something that is unfortunately unavoidable.

Being a euro-reporting currency company, with most of our leases being dollar-denominated, that problem is going to become more acute as our fleet growth starts to ramp up in the coming years. As we continue to take aircraft that are dollar-based, we do whatever we can to try and secure euro leases or euro-type funding structures.

But the market is driven by, dominated by dollar-type funding structures. And so just like we, we've successfully executed our hedging program when it comes to fuel, and the FX portion of fuel we're in the process, we have approval and we're about to start layering in cross-currency swaps to be able to swap our dollar obligations for euro obligations.

And we'll start with addressing the existing portfolio using a combination of those structures as well as converting our free cash into dollars to deal with the existing portfolio. And then as new aircraft are delivered, we will continue to swap those in and that'll smooth that out and giving everybody, certainly those of you with models an easier time to try and predict how the unrealized FX - gains and losses flow through the business.

In terms of hedging, there's a slide at the back, which I won't get to talk about. But we're very pleased with our position.

So we can -- we can confirm that we're continuing to execute our policy as it was designed. That policy is delivering the results that we're expecting.

And like I said, we've augmented our policy now to start these cross-currency swaps to deal with the balance sheet risk. And with that, I will pass back to Joe.

Thank you.

Thanks, Ian. So one more page, please.

Yes. So let me elaborate a bit on revenue.

I mean you clearly see that revenue performance has become a lot stronger than previous trends. And I would like you to understand kind of the underpinning reasons for that.

This is not sheer luck or anything like that, but you will see some very substantial movements behind the numbers, and especially when you take a forward-looking view. I mean, you see that our revenue outlook is based on empirical evidence.

What we are seeing right now, we are much up on bookings in November, December and we are expecting that trend to flow into - the last quarter of the financial year as well. But if you really kind of drill down, to understand what's behind that?

You see that on the network side of the equation, there are two fundamental shifts. One is that we actually have reshuffled capacity from underperforming markets to performing markets.

So the Middle East came under some pressure, due to the geopolitical situation and revenue outlook deteriorated. As a result, we removed significant capacity from the Middle East, and moved that capacity to markets with high demand.

That's a structural improvement of profitability and revenue for the business. Second, a very important issue, and we have not told about this, but this is maybe the most relevant matter, that in previous winters we used to have anything between 25% to 30% premature capacity to carry on, because we invested new capacity into diversified markets.

But this time around we opted for densifying markets as opposed to diversifying market. And we have not invested into our new market.

So effectively 100% of our capacity is mature. That makes a significant impact to the performance of revenue.

So these kind of background network shifts in strategy I think are profound to the improvement of revenue performance. But I would also highlight two other factors on the pricing revenue management side of the equation.

You recall about two years ago, we basically moved our commercial organization from Geneva to Budapest. We lost quite a lot of people in translation, but that organization is completely rebuilt, and actually we are now starting benefiting from the maturity of that organization.

I think people have a lot better understanding of what they are doing, of markets they are assigned to and as a result, we are making better quality decisions. Secondly, I think that was already commented that we started deploying AI tools, and machine learning to make revenue management more real-time as opposed to just being proxied, or making decisions based on historic performance.

And we are seeing very clear improvements, especially on managing the late booking markets. So we're seeing that what you are seeing on revenue performance is.

Yes, I mean you can argue that it's against a low base, but it is very structural in a way we are seeing the performance enhancement. And when you run the number, you will see our guidance on revenue being mid-single digit for the whole financial year, which basically implies that we are looking at somewhere around a very high single-digit order, or low teens on improvement in the second half.

And this is against a low base, but against fundamental shifts in the quality of revenue, and quality of profitability of the business. Could you please move the slide?

So with regard to cost, I think this is where most of the challenges lie. As said end of October, we returned all the wet leases so they no longer drag performance of the company.

We are much focused on continuously improving our operational efficiency. We made a decision to suspend Israel until mid-January to make sure that operationally, financially, customer care-wise, we are focused on the high-demand Christmas period and we are not running the risk of volatility in that period.

And we create certainty for operations, and we continue to affect the design of our operating model. We kind of learned, I said that we do pretty well in terms of fundamental operating KPIs during off-peak, but we are still stretched during the peak period.

So we are looking at ways of improving the design with that in mind. We are continuously improving completion and functionality.

I mean these metrics are profound to performance on customer compensation. We are very focused on EC261 and to make sure that, we lower that exposure in the company.

We titled the stream of initiatives customer first to make sure that we are further reducing our delays, and improving the overall experience of the -- of the customer, especially in the peak periods like summer. You will see shortly that more predictability will be created on maintenance cost, once we are reforming the discussions and arrangements with Pratt & Whitney.

It's coming and I think we are sort of inching to the end of that - that process. I mean I would still like you to understand that.

I mean these matters require negotiations and you want to make sure that you get the best out of - the situation. Why we appreciate that the market wants to have absolute certainty and confirmed plans, but sometimes this is just not corresponding with - the realities.

We have an agreement in place legally binding all parties by the end of this calendar year. But this agreement will be renewed and extended, because I think this is simply just the interest of all parties and that's going to happen.

You also appreciate that when the business is not growing, then pressure on airport costs builds up simply, because the way airports operate, you bring gross, you get rewarded with lower costs. You don't bring gross, you pay more.

We are just exiting this standstill phase of no growth and we believe that we're going to be able to attract a lot better deals, as a result of being able to grow. And especially when you put that in context of the market, that likely we will be the fastest-growing airline in Europe next year, and our competitors will fall under pressure with regard to their delivery streams from their respective OEM.

And I will just make one more comment that we were talking about like over-crewing, and crew inefficiency in the business. This is limited to captains.

Captains are the most critical human resources for ramping up the business. And we have been overgrowing captains, because we just wanted to make sure that we ease the ramp-up whenever we come to it.

And now we are approaching that, that period. But the fact of the matter is that actually first officer's cabin crew, are fairly intact in terms of numbers.

So we don't have much inefficiencies and on productivity over there. But indeed, we have captain productivity, but we felt that was important, because otherwise we would be distressing the business with a sudden need of trying to find 20% more captains, which is almost like a mission impossible.

So you have to groom for that and you have to set some reserves with that regard. So please move to the next slide.

Fleet, I think it is important that you understand what is going on the fleet side, because it is not as rock-solid as it used to be. It is more fluid and there are variable components to that.

Of course, we know the fleet as we speak. I think we pretty much know the fleet what's coming in the next year.

Although as said, we are only reconfirmed until end of 2025. So more confirmation to come from Airbus, and you see the number of contracted aircraft in the fleet and then you see another line, which is the expected fleet.

So there is a gap between the two and this is due to the OEM's delays. Let's not forget Airbus is not a manufacturing plant, it is an assembly plant.

So basically everything is manufactured somewhere else. So Airbus is big time subject to performance of their own supply chain.

I'm pretty sure you have come across with the news that Spirit is in trouble. Spirit is one of the key suppliers to the industry, to both Airbus and Boeing.

But the issue is not limited to Spirit. You also know that the engine manufacturers are struggling, to uphold their contractual commitments.

And this is not limited to Pratt & Whitney. So this is across the board.

There are issues with CFM, there are issues with Rolls Royce. So this is a different industry in terms of the integrity of the supply chain of that, of that industry.

So these delays, these supply chain - this supply chain performance will keep - creeps through the years. And we don't know when Airbus for that matter would be able to catch up, to their contractual commitment.

Unlikely they will be and most likely they will continue to drag, and we will have to kind of start building up the order book towards the back end and beyond the back end - of the current commitment period. And personally, I think that we're going to fall back into Canada 2030, maybe even 2031 by the time this order book may be actually delivered to the company.

We still have [389] aircraft on order, but I think this is going to be smooth out. Now the relevance of this is that you may feel like there is too much growth coming here and there, and this is going to be very dilutive to the business.

But we are in discussions to make sure that we are kind of forwarding of this 15% annual growth rate, and iron out the delivery stream accordingly. And the two issues that need to be addressed in that discussion are, on the one hand, the Pratt & Whitney grounding and kind of the recovery of those aircraft and entries And two, the Airbus delivery delay.

So we are taking those into account when we are resetting the delivery stream. So I think in the end we will do a lot better than what it looks based on current contract, because that contract is going to change probably not once.

I mean, it was between us. To-date since 2005, we have changed contracts with Airbus, I think 80 times eight zero.

So that's going to happen. In terms of groundings, we are expecting to kind of hold the current levels for groundings, 40, 45 aircraft also for fiscal '26.

And then from there on we would be gradually recovering. And current best estimate of ours is that the Pratt & Whitney engine situation may go into net positive sometime in 2027, but not before that.

Would you please move the slide? Okay, so with regard to growth, as said, we are looking at 20% growth in the next financial year.

And we just wanted to demonstrate to you how we are set geographically for that. You can see that bread and butter continues to be Central and Eastern Europe, roughly half of our business over there.

A second layer of gross will happen in Western Europe and some gross will happen in in the Middle East. But we are looking at kind of 85% of gross to be delivered through European markets.

So I don't want you to come across with the view that Wizz Air has gone far too far. You know one charter territories, I think that risk is contained.

We're seeing there is an upside in non-European areas. But that upside needs to be managed very carefully to make sure that the proportionality of that capacity is well contained.

And also by taking into account all the risks associated, with that with that capacity. Importantly, the year ahead is going to be a lot more about densification, as opposed to diversification.

So we are not really looking at chasing new market opportunities. We are looking at actually enhancing our existing market opportunities.

Most of the growth will actually happen through our very core markets like Poland, Hungary, Italy, Romania. And it will be a very safe delivery of growth, as opposed to taking risks with new markets.

Next slide, please. So with regard to guidance for the balance of the financial year, we are reporting net guidance.

I know that you are challenging it but I would like you to really try to understand the fundamentals behind our revenue stream is very different from previous revenue streams. There is no immature capacity in that and we have been really shifting capacity along the line of profitability with enhanced pricing, revenue management capacity and ability.

So we're seeing that revenue will be a strong driver of debt performance and we are upholding the revenue guidance of going up mid-single-digit. Capacity is roughly the same as we previously guided.

We are seeing one percentage point up on capacity, but that's not a drastic change. We are seeing some variables on the cost side.

We will end up with better fewer costs than previously guided, and somewhat worse ex-fuel costs as a result of the grounding impact, the wet lease impact although that's behind us, but it kind of drags the annual numbers. No change on tax rate, no change on net profit guidance.

And we have the program in place not only on the revenue side, but also on the cost side to make sure that this is not net profit is not an inspirational target. But this is based on plans, which we have been delivering and we continue to execute against.

So management has the confidence that this business will deliver this guidance. Thank you.

I think that kind of wraps up the presentation. So questions, please.

Hi good morning, it's Harry Gowers from JPMorgan. Just two questions if I can.

First one like you talk about the better yield or RASK momentum into H2. So maybe you could give us a bit of a flavor in terms of the monthly progression, maybe September, October expectation for November in terms of RASK.

And in the second one more looking actually for next year. So the ex-fuel CASK is obviously up mid-teens percentage now for this year.

Clearly, a large proportion of that will be due to the groundings, and some of the, some of the one-off costs that you've taken this year. So as the growth comes back, and some of those one-offs unwind, I mean how much of that cost pressure from this year do you think you can recover going into next year?

Thanks.

So with regard to RASK, actually the progression is quite linear. I would go back to last year.

So 7th of October is the date when the war in Israel broke out, and that forced us to remove 7% of our total capacity and reallocate that capacity across the board. So basically we went kind of empty on that capacity for some time, before we kind of really put it back into operations.

But when that capacity was operated it was a very premature capacity. So the base is distorted first of all.

So obviously one part of the revenue progression, is to catch up against that kind of a defection last year. But the other part of revenue progression is more structural, and this is what I was trying to explain that this is network shift, no immature capacity, and improved pricing revenue management capabilities.

And you are pretty much seeing a linearly building trend with that regard. So we are seeing double-digit RASK improvement in November.

We are seeing a double-digit RASK improvement in December. And mostly that level will flow into the last quarter of the - financial year too.

Now with regard to ex-fuel cost, as you said, ex-fuel cost is highly distorted by one-offs like wet lease. That's not going to happen next year.

I mean that's fairly significant, about 4% of the total cost increase this year to wet lease. So that's not going to happen.

The proportion of the grounding fleet given that we are now containing the numbers, so roughly the same number absolute terms around 40, 45 aircraft, but against a growing fleet. So the proportionality will change.

So the exposure to grounded fleet is going to be less. So that will obviously make a positive impact.

I think we're going to be sucking up some of the reserves, especially on the capital side, the unproductivity of the organization through the growth. So that's going to have to.

And last, but not least, we're going to be delivering better airport costs that is out of growth, because we're going to be leveraging that growth profile. And I think we will be in pretty good position especially relative to the market, because others will not be in a position to present that ability to grow.

And that said, all these design changes to the peak operating model are aiming at reducing compensation costs to the other consumer. So we may have saving opportunities there as well.

So I think fiscal '26 cost should look quite significantly different from fiscal '25. Ian, do you want to add?

Yes, you should factor a reduction in ex-fuel CASK year-on-year. I would say sort of, you know, low single-digits around there.

Hi, Tobias Fromme from Bernstein here. I have one more question on RASK.

When you look at Q2 specifically, RASK was obviously flat despite the lower denominator. Can you help us decipher what exactly is behind that?

Is this Ryanair or is it something else? And then I was wondering what is assumed in your guidance for the supplier compensation?

Thank you.

Yes, so Q2 RASK was from memory up 0.4% versus 3.1% in Q1. And I mean I would just simply say that there was a combination of the busy season with the disruption challenges, and all the other issues that we're facing as well as we just needed time for these changes to start to flow through, which we're starting to see now.

So we've made some commercial changes in the organization, and those are starting to produce fruits and that's what we're seeing in the Q3 and Q4. And when Joe talks about double-digit, RASK improvement for Q3, I would say that that's a very modest number.

Right now, we're seeing very strong evidence of that. What was the second question?

On the supplier compensation.

On supplier compensation number. So I would say that take, take the Q2 numbers and you can roll those forward.

Q3 and Q4. Let's say our lease back profile is - it's comes down to when the fleet deliveries are Q3 is a modest quarter and then we'll start to see some increase in deliveries in Q4.

Yes. Good morning, it's Ruairi Cullinane from RBC.

Firstly, I saw you cut back on distribution and marketing expenses in H1. Is that illustrative of a very strong focus on cost at the moment, and how do you think of the trade-off with the top line?

Secondly, on RASK into full-year '26 appreciate you're not going to have much visibility but Ryanair painting quite a bullish picture on Monday given continuing capacity constraints and soft prior comps in H1. Considering this and the improvements in revenue management you touched on, is that something you agree with your competitor on?

Thank you.

I mean I would just take the second one, RASK. I see they are very optimistic with regard to going into the next financial year when it comes to expected revenue performance.

I mean first of all we are not under pressure to diversify capacity to markets that, you know, there is a longer time to build maturity. I mean we are really focused on, on densifying our markets.

Two, I would say that likely the competitive pressure is going to ease on us. I mean you can imagine that over the last year or so we have been under immense pressure, with regard to protecting our positions against competition and you know, we got challenged here and there and that's why we had to take some suboptimal short-term decisions in order to defend the business for the long run.

But I don't think our competitors will be in a good position to really challenge us with capacity, because they will be constrained on capacity and now we will have capacity actually to play our game. And by now most of our core markets, especially in Central East Europe, have become underinvested capacity-wise.

So we are just kind of putting capacity back into these markets, which have been already demanded by, by the marketplace and the consumer base. So, we're seeing that the revenue environment for our business in the first half of next financial year, is going to be fairly benign.

And just on distribution marketing where you're talking about the €63 million to €65 million. Is that the number you're talking about?

Yes.

Okay, well, I mean, there's certainly an element of cost savings there that's coming through. And in particular, what we're doing is trying to embrace some of these new payment platforms that are out there.

So whether it be Apple Pay, Google Pay, things like that, or some of these pay now, buy now, pay later type arrangements, or even some of the other, sort of digital banks that are out there, we're plugging all those into the system and we're excited about some of the partnerships that come through that. So that's the sort of innovation that we're trying to take advantage of just to make it easier.

People are buying more and more of their products through the phone. And so making it all integrated and really looking at what we can do on an e-commerce side of things.

I mean, it's a €2 million increase for the savings and a half. But, but I think that there's more to come.

The other thing when it comes to distribution is, you know, credit card processing is a big, is becoming a big cost to the business. We're basically a €6 billion, or €5.5 billion business at the end of the day, all of that flows through the credit cards.

I talked to our peers in the industry. They may have one, maybe two credit card acquirers just because of our, of our footprint and, because of our business and the currencies that we work with.

We have six. We're constantly playing those against each other to drive the best deals.

We're also renegotiating those deals. Many of the deals that we have were renegotiated during COVID just, because there was an uncertainty around the viability of airlines in a COVID period.

And so, we have onerous terms and those terms are what we're in the process now of renegotiating based upon the strengths of the business that we have now. Profitability, liquidity, cash conversion, things like that.

And so that will drive ultimately savings through the distribution line. So I mean you have to assume that any contract that was signed in the last five years, is fair game for renegotiation at this point.

Good morning, it's Jaime Rowbotham from Deutsche Bank. I just wanted to follow-up on Harry's questions about the phasing of RASK, focusing on this December quarter just to make sure I kind of understand.

So maybe you'd be willing to share roughly what RASK did in October. And following on from that, we can see from Slide 11, there wasn't much of a tailwind to RASK in October from load factor because it was flattish year-on-year.

Hopefully, you got a bit of yield improvement and that gives you maybe a low single-digit RASK. But then in November and December, hopefully, you hold onto these 300 basis point improvements in book load and they are in themselves roughly a 4% tailwind to RASK.

So to get from 4% up to double-digit, the rest must be yield. So you're saying a lot of that yield improvement is the mix of the network mature this year, versus not mature last year.

Is it fair to say you weren't getting that benefit in October? Because technically that's the final month of winter and then suddenly.

So there weren't many route maturity differences, but then there are from November through to March because that's the winter season. Perhaps you could clarify?

Thanks.

I think it's fair to say yes.

I would say so.

And October RASK. Not double-digit?.

No.

Okay, thanks.

Hi, it's Jaina Mistry from Jefferies. Three questions if I may.

Your press release says that there's a sharp focus on costs, but when I look at guidance ex-fuel costs is still mid-teens, which implies mid-teens growth in H2 as well. Could you quantify the level of cost savings that you're expecting to see in the second half of the year?

And when should we expect this to flow through into the P&L? My second question is around grounding.

So your groundings commentary has improved slightly. So 40 to 45 planes versus 50 previously.

What's the implication for ASK growth in the next 18 months? Are we still talking about 15% to 20%, or is it the lower end?

Or maybe slightly higher than that. And then the third question, just on guidance for FY '25.

What should we expect in terms of FX costs, or indeed income in the second half of the year? And could you just clarify whether, and why disruption costs will improve in H2?

Let me start with the grounding and you can single the others. I would caution you with regard to breathing too much into improvements with Pratt & Whitney, because really what is happening at Pratt & Whitney is that they invented a process called quick turn.

And quick turn means that you take the engine off, you put it in a shop, you replace the contaminated parts and the engine goes back to the aircraft. This takes roughly around wing-to-wing 90 days.

A long-term process is 300 days. But difference between the two is that in long-term actually you are addressing other maintenance events on the engine.

So maintenance events that may occur in three months, in six months, or nine months. But given the long off-wing time, you are kind of compounding all those activities.

You fix the engine and the engine goes back for years to be operated. The problem with quick turn, is that yes there is a gain very short-term, but you pay the price for that after, because quite likely a year later you will have to put the engine back into the shop, and then you start the 300 days.

So this is really kind of easing capacity situations short-term, but it's not really giving you a structural fix in the big scheme of things. Now kind of the way it works is that this is a prioritization of Pratt & Whitney.

So Pratt & Whitney controls shop capacity, and they decided as a corporation that they want to prioritize operations over engine, structural engine fix. So that's why they created this quick turn.

And at the moment they almost like they only do quick turns. So they push every engine into the shops through the midterms in order to release those engines to the industry for operation, and they start the long-term process.

So again, I think that gives you some short-term benefit, but it doesn't give you structural benefits. So yes, we are gaining something, a few aircraft as a result of that next year, but this issue is still going to stay with us until 2027.

So yes, I mean I would say probably are gaining five, six aircraft as a result of this in fiscal '26.

Okay. In terms of cost, I don't have a specific number to give you, because it's a - rolling action, right.

So we have a plan that we design every month based upon our forecast as to what it takes to get to a number within our guidance. That number changes based upon delivered actions, undelivered actions, FX, revenue environment, things like that.

So we're constantly modifying it like we're confident that we're going to get there. We have identified measures that will get us there.

We don't have gaps that say we know what to do, we still have to do this. We have said these are the list of things, and we report within our team as to who's doing what to deliver against them.

But there are variables, right? If the revenue ends up being better and we deliver our costs, then that's going to be upside and that'll push us further into the guidance zone.

If the FX moves against us like it did yesterday, then it means that the gap widens and we got to find other measures, and we're going to monitor that and we're going to keep on pushing to that. Our objective is to get to this 350-plus number.

Obviously, if I can smooth out the FX impact through this hedging program that we've now put in place, then that eliminates the variable at the end of the day. But yesterday was an impact to FX and tomorrow something else will happen that will impact FX.

We don't have a FX expectation because it would be silly. That would be you know, making our strategy be based on hope.

At the end of the day, we can only measure what the variables that we have available to ourselves at the time and we can only execute against that. But against a cost base of €5 billion, we're confident that we can generate enough profitability to get from €315 million to north of €350 million.

These are cost savings targets?

There are, but I'm not prepared to say that, because it's not relevant at this point. It's a profit.

We are here to generate profit.

Just on disruption cost in H2?

On disruption costs in H2. So the question was, why do we think that they're going to improve?

Well, we had a very strong disruption in cost performance in Q1 versus the prior year. Like I said, we had a challenging Q2, due to the level of activity in that period.

We spent a lot of time talking about how we've improved the network and changed the network. That also applies to our spare aircraft capacity.

So where we would normally look at the network and say, okay, we have dedicated aircraft as fares, we've now looked at a combination of dedicated aircraft and what we call virtual spares. So rather than flying the aircraft 13 hours, every aircraft, 13 hours a day, we bring some aircraft down to a much more modest number, even half that number, and those aircraft then are available as well as to be able to slot in when there's an issue.

As opposed to having an aircraft be based in, say, Budapest and have to fly it somewhere else in order to get it to where the broken aircraft, is so they can resume the service. So having more balance around that way, and that's a - specific design that, that we've changed.

It actually allows us to deliver more spare capacity, believe it or not, with the same amount of aircraft than if we were dedicating those aircraft. So that's some of the changes that we're facing.

There is a tension in disruption cost, because what's happening is the consumers becoming more educated, and they're becoming more, savvy in terms of claiming. So it's driving claim ratios up.

And so we have to assume that that's just going to be the world that we live in. In fact, we're assuming that the world we're living in right now is just a volatile world.

Right, it's volatile. It is what it is.

We're, we're focusing more on Wizz Air's ability to be agile and to cope with that and Wizz Air's experience in doing that. I don't think anybody else has more experience in volatility right now than we do.

But in terms of our disruption plan, we've proven that we can do it in January. We are driving stability into the network.

We are changing the way that we fly in terms of patterns and frequencies, also flying more between bases, and that gives us much better ability to manage disruptions than we had before. Any other questions?

Maybe. Online, questions online?

Good morning, everybody. A couple of questions from me, please.

Firstly, could you just say if there's any implications from Fitch's downgrade on your lease pricing? This is both existing leases and future ones.

And secondly, just this is a sort of a question a little bit out of left field, but I see Trump has been elected President in the U.S., and he has said that he's going to implement tariffs of 10% to 20% on the world ex China. Now, currently, aerospace is exempt of these tariffs between the U.S.

and the EU, but that exemption is only to 2026. If the U.S.

imposes tariffs, and it includes aerospace, the EU is very likely to retaliate. What can you do to mitigate that?

And I'm thinking specifically for your Pratt & Whitney engines, is there any sort of way around this or would you just incur a higher cost because of the tariffs?

Okay, I'll start with the easier question, which is Fitch. So we hadn't had a rating in Wizz's -- in its history for maybe sort of 17, 18 years.

We had the rating when we issued bonds and that allowed us to get very competitive pricing on that. There was a concern that there would be an impact to the downgrade.

As I said, it was not unexpected. It is disappointing, but it's not unexpected.

On the day that the bonds downgraded, we saw a widening of spreads, roughly 10 to 15 basis points. But since then, where we sit, as of yesterday or two days ago, we saw 63 basis points tightening on the bonds.

And maybe part of that is just simply the bondholders expecting that we're close enough to maturity, and maybe there's a pull-to-par effect that's going on there. But there was no additional impact to there was actually a pricing improvement on the bonds.

And so we have no plans to issue. So we don't really know what that would mean if we were to go to market.

We will continue to maintain that program as a safety net to deal with the unexpected down the road. But at this point, we're happy with our liquidity and happy with our cash profile.

And so we don't see that cost ever coming to fruition, because we're not planning on issuing. When it comes to the leases or anywhere else in the business, the short answer is there is no impact to the existing portfolio, because those are mostly fixed.

There's some variables. But, but like I said, we're.

That hasn't, that hasn't had an impact. In fact, it's had a benefit.

And in terms of going forward, there's, there's been no impact, because at the end of the day, these leases are secured, these financings, it's not unsecured financing. It's less focused on the credit of the business and more on the underlying desirability of the asset.

Yes, there's an element of portfolio management that lessors go through to try and find less ease of a diverse credit base. But we haven't seen any impact and we don't expect there to be any impact.

There hasn't been any impact on suppliers either. There's been nobody who said as a result of this they want to seek for tighter payment terms.

In terms of our accounts payable, we maintain very high negotiating leverage when it comes to our supplier base, and we will maintain that through our rigorous RFP process, when it comes to working with anybody. So it's been very pleasing to say that we have not seen any negative impact from Fitch.

Okay. Well, I mean, I don't know what he's going to do.

So we have crossed the bridge when we come to it. But let's assume that there would be tariffs imposed on aviation between the UN and the U.S.

But first of all, we have a contract in place that shall be a protective shield. So of course we would need to examine the contract.

But I don't think that the content gives any excuse for Pratt & Whitney to charge us for tariffs. So they would need to absorb that themselves.

But of course, we would need to look at that and maybe we would need to negotiate on that. But there is also kind of a relative approach to this.

I mean, we are buying a more European aircraft than some of our competitors. I mean, we buy Airbus.

Airbus has a lot more European components of that aircraft than Boeing, for example. They are a lot more sourced from the United States.

So if that issue comes into play, I don't think this is going to be really individualized. I mean, this is going to be an industry issue.

And being a European operator operating Airbus aircraft, I think we would be scoring significantly better than our competitor.

Thank you.

Hi there. Can I ask please, about the new or the extension of the Pratt & Whitney deal?

You express confidence that you will secure something very similar to what you've got in place at the moment. But, what are the factors that are making the deal take time to negotiate?

And related to that, what's the status of the RFP on future engine orders, and to what extent are the two tied together? It seems to be your one point of leverage.

And then can I just come back to these wet leases, which you have terminated, but Ian spoke of quite a high cost to exit? So, how large was the exit cost relative to the actual cost of the wet lease?

Can you perhaps reassure us that you're not going to end up paying this high cost to not fly the planes, compared to what you've been doing now, which is paying a high cost to fly the planes? Thanks.

Well, let me start with Pratt & Whitney. I cannot elaborate on this extension.

I mean, this is all confidential and this is being negotiated. But if you want to model it, I think safely, you can extend the current terms.

And then I think it would be pretty close to the realities. Why it takes time, because negotiations take time.

With regard to the RFP, kind of the same thing. We are not under pressure to decide, but sometime next year, I would say it would be decision time.

Although the process is moving I mean, you may appreciate that given the delays of Airbus, given the kind of the GTF recovery process, actually that shifts the timeline for the unengined aircraft quite a bit. So I think that gives us more time.

We simply just want to negotiate the idea of what is best for the company. And we are negotiating with both parties, CFM and Pratt & Whitney, but we are not there to disclose any progression there or any outcomes.

We'll break the news when the news is breakable. And I would turn it over to Ian, on the wet lease issue.

Yes, thanks, Andrew. So on the wet leases, we started talking about this in Q1 when we realized we no longer needed the wet leases.

We had certain wet leases that were just for the summer. And then we had a number of aircraft that we had committed to, for the full year and that those contracts come with a minimum monthly flying commitment.

So there's a minimum cost, hours, times price that we would have to pay each month. And so if you look at that on a full-year basis, that delivered us a number.

We made some assumptions at the time thinking that, okay, if we connect to these aircraft in October and give the aircraft back to those wet lease providers, they would at least have an opportunity to find replacement customers. And that would help us, that would help them in terms of the, you know, mitigation of damages or the cover that they would need to do in order to relieve us of those obligations.

We made some assumptions and said, okay, we're going to be incurring some costs and there might be a break cost to convince them to let us off the hook from October onwards. And we spent the remaining months negotiating that.

And ultimately where we ended up is that we ended up having to pay more than we initially thought to. We had to pay in order to get out of them.

We're still paying less than if we had to basically have those aircraft for the full year and pay the minimums. We're - paying more than we had hoped.

And that's just a function of the fact that we had signed a contract and so, we had to work within the parameters of the contract and making sure that we uphold our obligations to give our supplier base across the Board confidence that Wizz is a trustworthy counterpart. But ultimately, the commercial deal was a different one than we had anticipated when we went into the negotiations.

But this is all factored into the numbers.

It's all factored in now - into the guidance.

That's great, that's helpful and makes sense. Can I just come back with one more since I've got the microphone still open?

Recently there have been cancellations of aircraft orders from U.S. Airlines, Frontier, Spirit, and JetBlue.

Does that change the dynamic at all? First, potentially slightly for the better with that with Airbus?

I think it's hard to say because, I mean, clearly, Airbus is out of line with regard to their ability to deliver against contracted delivery stream. So I mean, I don't know how this would be easing Airbus' position to deliver in line with the contract.

But this is just one component. I think one issue is how the kind of the demand pool is changing for the aircraft, and that's the contract signed and cancellation, et cetera.

But the other issue is how their supply chain is ramping up. And I know for the fact that actually Airbus has produced a significant number of gliders on engine aircraft, because they are not getting the engine supply for those aircraft.

So I think it's kind of a two-way issue. One is the evolution of demand and the other is the evolution of supply.

And the evolution of supply is certainly not going in the right direction at the moment. So I think Airbus is under pressure with that regard.

So this cancellation might just be offsetting that. But I don't know exactly, I think you need to have a question from Airbus.

But I don't think this is making a profound impact on the market.

Interesting, thank you.

Great. Hopefully, everyone could hear me.

Good morning. Great.

Yes, maybe also just three from me. You did keep the guidance and you're completely right.

I mean consensus is way off at the moment, even the bottom end of the range. And you've seen a bit of currency move with Trump already.

I was just wondering why you kept the top end and in terms of probability, I mean, I mean what are we, what are we really talking about in terms of your ability to hit the top end, Isn't it extremely low chance? So I guess the question is just guidance why you kept the top end.

And then I know you said like on investment grade, in terms of let's say issuing new corporate debt, it's not on your agenda. But when you look over the next few years, when do you think you'd effectively get to a financial situation where you would be rated investment grade?

And then just lastly, U.K. aviation taxes.

You know it was interesting in the slide you used to highlight 35% of your growth into Western kind of Europe and part of that's the U.K. So I just want to base on last week, how do you see things from a U.K.

perspective? Thanks.

Maybe I'll just start off with your last question. The U.K.

I think we have to be somewhat delicate in judging countries' profile on the basis of taxes, especially from a European perspective. I personally think that the whole of Europe has come under pressure in terms of economic performance, in terms of budgetary performance of governments.

And like Germany introduced new taxes, now the U.K. is imposing taxes and you know, Hungary has special taxes and one way or another almost every government is seeking some kind of a recourse - to that issue.

So I think - that this is an element of the new realities that governments are in trouble and they will look for ways to impose burden on the industry. By the way, the same is happening on the regulatory side.

I mean if you look at how this industry is regulated today versus how it was 10 years ago or 20 years ago, I mean we have been evolving quite a lot. Of course, you have some room to maneuver, but at one point you may just run out of options, because if all governments impose taxes, where do you go from one place to another?

So I think you have to be somewhat smart about this, what you do, and of course you have to weigh it in. But it is actually fairly simple.

I mean we will just see demand at the cost base, the new cost base including government taxes. And based on the evolution of demand we can decide on capacity.

So we don't have any kind of pre-commitment to the U.K. or any other countries that no matter what we're going to be increasing capacity.

We will see how demand reacts to the new cost realities. If demand absorbs that, that's fine.

If it doesn't then anyway we will have to adjust capacity to maintain profitability of - the business. Then with regard to corporate debts, I think it is fairly simple.

At the moment we are the victim of the - of the GTF groundings. Without GTF groundings we would have been meeting investment grade criteria.

So we would be this year as we speak effectively. So we would be comfortably investment grade rated.

I think we have to get out of the Pratt & Whitney cycle. So another good two years, at least two and a half years to go, before realistically we can put investment grade back on the table.

But the issue as Fitch stated is not how to company performs overall on the core business model. The issue is that the Pratt & Whitney grounding caused such a distortion to leverage that, they don't tolerate any longer.

And simply we just need to go through this cycle. So I would say its two and a half years from now.

Guidance, top end?

Yes. So Jared, if you remember what our original guidance was, €500 million to €600 million, right.

That was set because you can expect that our internal budget was set to deliver that sort of numbers. Now we've had some things happen that impacted that and we brought that down to €350 million to €450 million, due to the wet lease costs due to some other pressures due to say, some revenue evolution that we've, that we saw at the time.

That being said, we haven't abandoned our budget. We set that for a reason and we report against that.

We measure sales against that and that's, that doesn't, it's not a sliding scale. It is - what we're working towards.

And so, we have ambitions to drive as much profitability into the business, and we have ambitions to try and correct these wet lease costs, and any other unexpected costs that we've incurred a year-to-date in the remaining period of time. Like I said, we have a plan to get us to the low end, and there are elements of the business that could drive us into the higher end.

We shall see. I mean, we're one of the ones that actually do give guidance in this industry, and we're proud of that and we respect that.

And so, we're working towards making sure that we deliver, and a lot can happen between now and then. I don't think one day worth of FX volatility, is worth now speculating on the rest of the year, especially when we spend all this time eliminating speculation from our business, and focusing on results.

Great, thanks a lot.

We think about it the same way that we thought about the Jan '24s, which is that we're not planning on rolling over or refinancing it. We're planning on generating liquidity out of operations, using that to retire debt, reduce our leverage ratios, increase our balance sheet strength, reduce our borrowing costs, use surplus cash to bring down ex-fuel CASK in the business.

We talked about what could happen at the Capital Markets Day with regards, to surplus cash and how we think about our aircraft financing strategy. We need to look at those decisions with the inputs available to us at the time.

We're not there yet. Right now we're still working through the Pratt & Whitney issue.

We're maintaining as high liquidity balance as possible, and looking to bring down debt for the benefit of the security of the business, simple as that.

Yes, I would just add to that. I mean the business has become cash-generative again.

I mean significantly cash-generative. I mean, that creates sources for repaying that loan.

I mean that's our prevailing approach to the issue. But we need to get that and we will take a view when we are getting closer to the day.

But that's the way we are thinking about this.

[I'll try to speak up].

I'll try to speak up.

Thanks. The depreciation grew significantly faster than the fleet size.

The capacity is broadly flat. Is this a reflection of the more expensive leasing rates?

And if so, would you be at some point willing to trade the SLB gains for a lower monthly rate? And a second question just following on the cash flow discussion.

Would you say given the growth should be resuming into F '26, is it more likely that we would see a positive or a negative result on net operating cash flow in the second half of the year? Thank you.

So on the first point, with regards to depreciation, don't forget that in addition to aircraft fleet growth, we did approximately, we added approximately 41 engines. An engine has a market value of, I would say close to.

Well, it has, it has, it has. It's not, it's, it's, it's not a small asset, let's say in terms of price.

But, but, but, but those are, those engines are also then ultimately put onto the balance sheet, because we say a lease back them and, and add to the leverage. And then as a result that also adds to depreciation.

So there's an element of that. There's also an element of the way that our depreciation profile works.

As we hold on to aircraft longer, which we did, we extended aircraft leases to deal with the capacity shortage. There are more maintenance events that have to be capitalized.

Those maintenance events get pushed through depreciation at the end of the day, and that causes an increase there too. So it's predominantly due to the fact that we have an inefficient spare engine ratio right now, efficient for where we are right now.

But you wouldn't normally have this many engines if we were operating a normal aircraft fleet that wasn't subject to groundings and the fact that our mix has changed into an older age fleet that will come down, as we start to take new aircraft. Those aircraft will benefit from a better depreciation profile.

With the deliveries, and that'll offset the older aircraft at the end of the day. In terms of cash flow - for the period of growth starting next year, we would see positive cash flow.

If you think about our working capital cycle, and our working capital profile. We get paid within basically one or two days by our credit card acquirers, when someone books a ticket, irrespective of whether that ticket is for this week, or for six months from now.

And then, if you look at our overall payment terms with our suppliers, it can be on average around 60 days to 90 days, if not longer. And so, we benefit from the working capital that comes from - getting paid in advance, and having to pay after for our bills.

Thanks.

Yes, hi. Thanks for the presentation.

I just have two questions and just follow-up on you. So you suspended flights to Israel, but the probability of the de-escalation of geopolitics may have increased after U.S.

elections? I guess.

So I'm just wondering if it makes sense to reallocate capacity to Israel before January. And the next question on India.

So you earlier referred to this market as an opportunity to grow your business. But you started to focus on growth across your core CEE market.

So what's your view or what's your stance on India right now?

Okay. With regard to Israel, we are not going to allocate capacity before January no matter what happens, to escalation or de-escalation.

Simply we are out of time on that now. We have to protect Christmas capacity based on our existing commitment, and we will do so.

So Israel is not going to be back before mid-January. India, as we said before, we think it's a prospective market opportunity for Wizz Air, but it is a cumbersome regulatory process to actually get fully designated and get route licenses to the country.

We are in that process. It can be actually fairly quick, it can be fairly long.

I don't know. This is a new experience but personally, I think this is going to steer drag for some time before we're going to be able to confirm anything to be flown to India.

But yes, we are working on it.

Thank you.

Thank you very much, ladies and gentlemen. Thank you for your interest and attention.

Have a good day.