AIR France-KLM Stock

Good morning, and welcome to the Air France-KLM Third Quarter 2026 Results Presentation.

Today's conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Benjamin Smith, CEO; and Steven Zaat, CFO. Please go ahead, sirs.

Okay. Thank you. Good morning, everyone, and thank you for joining us for Air France-KLM's Third Quarter 2026 Results Presentation.

As usual, I will begin with the strategic and operational highlights of the quarter before handing over to Steven, our CFO, who will walk you through our financial performance in detail.

So starting on Slide 3. So we delivered a solid third quarter despite an operating environment that remains highly volatile. Group revenues increased by 7.6% to EUR 9.9 billion with nearly 30 million passengers traveling across our global network during the quarter.

Unit revenue rose 7% at constant currency, driven by resilient travel demand, the strength of our upmarket strategy and strong commercial execution. This performance was broad-based with passenger unit revenues up 6.9% and cargo unit revenues surging nearly 22%.

At the same time, we maintained rigorous cost control. Unit costs remained essentially stable year-on-year despite ongoing strategic investments in our cabins and customer experience across our airlines. As a result, adjusted operating profit increased by EUR 126 million to EUR 1.35 billion, pushing our operating margin up to 13.6%.

We also continue to generate strong free cash flow and kept our leverage ratio disciplined at 1.6x even after the successful repayment of our EUR 500 million hybrid bond in July. Fleet modernization continues at a fast pace with generation -- with next-generation aircraft now representing 39% of our fleet at a 7-point increase year-on-year.

Crucially, the strength of our unit revenues in Q3 allowed us to fully absorb higher fuel costs during the peak summer period. That said, fuel remains a major headwind. Based on the current forward curve, we now project our full year fuel bill to reach approximately EUR 9.2 billion -- $9.2 billion, sorry, roughly $2.3 billion higher than last year and $300 million above the guidance shared last quarter.

While the environment remains demanding, this quarter once again demonstrates the fundamental resilience of our model, the relevance of our strategy as well as our ability to adapt through dynamic yield management, strict cost control and agile commercial execution.

So this operational discipline is particularly critical at KLM. While the back on track transformation plan has already yielded tangible results, KLM today announced additional structural measures to further elevate operational stability, strengthen profitability and secure the group-wide 8% operating margin target by 2028.

So moving on now to Slide 4. So at Air France, we continue to build on the core attributes that make our brand unique. This quarter, we brought together 7 renowned French chefs to curate our new long-haul menus while continuing to elevate our ground experience with refreshed lounge offerings.

We're also making the customer journey seamless beyond the airport terminal. Our partnership with SNCF Voyageurs reached a new milestone with the extension of the Train + Air program to all OUIGO high-speed services connecting to Paris Charles de Gaulle, providing our customers with even greater intermodal choice and regional connectivity.

At KLM, we celebrated the 60th anniversary of KLM Cityhopper, which continues to play a vital role in feeding our Amsterdam hub and connecting Europe to our global network. KLM also marked a major sustainability milestone with the groundbreaking of the Netherlands first dedicated sustainable aviation fuel, SAF production facility developed by Sky Energy. This directly supports KLM's offtake commitment of purchasing at least 75,000 tons of SAF annually starting in 2028.

On the operational front, I want to recognize both the Air France and Transavia teams for their flawless execution in supporting the logistics of an exceptional event, Pope Leo's visit to France this quarter, once again demonstrating our group's exceptional agility, operational precision and service expertise under high-profile conditions.

Finally, a testament to our customer-centric focus, Flying Blue was named the world's #1 airline loyalty program for the third consecutive year by Point.me. This award reflects our ongoing efforts to build deep rewarding customer relationships across Air France, KLM and now Transavia while continuously expanding the reach of our partner network.

So moving on to Slide 5. When we made a strategic decision in 2018 to move our offering further upmarket, our objective was never simply to add more premium capacity. It was to design products and experiences that would generally differentiate us at the very highest end of the global aviation.

In September, the long-term ambition received landmark recognition. Air France La Première was named the World's Best First Class by Skytrax. This award honors the meticulous work of our teams across the entire La Première ecosystem from ground service to the cabin and fully validates the disciplined investments we have made over the past several years.

More importantly, it reinforces our firm conviction that moving upmarket is the right strategy for Air France-KLM, combining operational and service excellence with strong customer preference and superior financial returns. I want to extend my heartfelt thanks to everyone who contributed to this journey. Our focus remains on the future, and we will continue to push the boundaries of luxury travel for our customers.

So on to Slide 6. So here, you see that this upmarket shift is clearly reflected in our revenue mix. Over the past 2 years, the share of passenger revenues generated by business and La Première expanded from 26% to 29%, while premium economy grew from 7% to 80%. In other words, our premium cabins now represent approximately 37% of our total passenger revenues, up 4 percentage points compared to 2024. Looking ahead, we expect our revenue mix to continue shifting upmarket through 2028.

The commercial momentum underpinning this shift is exceptionally strong. Over the past 2 years, business and La Première revenues grew by 21%, led by outstanding performance across India, Asia and the United States. Premium economy revenues grew by 38%, outpacing capacity growth of approximately 21% with the strong performance shown by high-yield leisure travelers. This continuous outperformance of premium revenues relative to capacity growth confirms the strong pricing power and market appeal of our upgraded cabins.

I want to take a second to highlight the fact that our upmarket strategy positively impacts the experience in all cabins. The new high-speed WiFi powered by Starlink currently being rolled out at Air France and soon to come to KLM is free for all customers, also in economy. And when we modify an aircraft cabin, we install new seats in all cabins, improving the comfort of all passengers. Our aim is clear to provide a great traveling experience to all our customers and to elevate our offering in all cabins.

Slide 7. We're very proud to highlight a major structural milestone in our MRO strategy, the formal finalization of Alpha Component Solutions, our 50-50 joint venture with Airbus dedicated to A350 component support. This venture brings together the best of both worlds, the advanced capabilities of Airbus' flight hour services and the deep frontline operational maintenance expertise of our MRO division, Air France Industries and KLM Engineering & Maintenance.

Launched with immediate global scale, this JV already contractually supports more than 500 aircraft worldwide. By combining world-class supply chain integration with our proven maintenance excellence, this partnership allows us to optimize component availability, drive life cycle efficiency and capture high-value growth in the rapidly expanding Airbus A350 aftermarket.

On to Slide 8. As you know, we were not selected in a TAP privatization process. While we would have welcomed a different outcome, our strategic ambition in South America and Portugal remains clear to protect and further solidify Air France-KLM's leader position on routes between Europe and South America while continuing to capture high-value opportunities in the Portuguese market.

We already hold a leading market position across the South Atlantic, anchored by the strength of our own network and our long-standing strategic partnership with GOL. Our priority is to continue deepening this alliance, driving greater commercial integration and expanding seamless connectivity across Brazil and the broader Latin American continent.

Looking ahead, we will continue to pursue targeted organic growth in Portugal, notably through Transavia while remaining opportunistic regarding potential remedies or slots that may become available in Lisbon following regulatory review. Throughout the privatization process of TAP, we maintain strict financial discipline, and we remain fully confident in the strength of our stand-alone strategy.

On to Slide 9. To build a stronger and more competitive future, KLM is further pushing boundaries and taking far-reaching structural measures across its operations. The plan laid out today by KLM rests on several key pillars. First, a strict focus on the core, a powerful network of 160 direct destinations from Amsterdam Schiphol, reliable operations, an excellent customer experience and the iconic KLM brand. Second, restoring our European network profitability, adjusting our European fleet composition and expanding the central role of KLM Cityhopper.

Third, a smaller, more agile and more simple organization, streamlining processes, simplifying the organizational structure and making much more targeted choices regarding resource allocation.

Together, these initiatives will further establish a stronger financial foundation for a sustainable KLM, ensuring it continues to connect the Netherlands with the world for decades to come.

Handing it over now to Steven Zaat, our CFO.

Thank you, Ben, and good morning, everybody.

If I could use one word for this presentation, I would use the word resilience. resilience in executing the strategy, growing our profitable premium segment, leading to resilience in charging to the customer more than the additional fuel cost, resilience in an effective hedge strategy, which is a strong fundament under our results and resilience in our focus on cost reductions.

And it all comes together, if you go to Page 11, which is a very simple way to look at the results where we are actually able to increase our unit revenues with 7%, while the fuel price is just bringing at EUR 400 million. If you look at the fuel price, it's around 6.2%, which you need to get back to the market. And actually, we are overperforming on that, and I will go later through all the segments.

Also, what is very keen and what is very important for us is we stress it again, and it is again also mentioned on the KLM measures, we need to get our unit cost under control and we get our unit cost under control. We have a flattish unit cost in this quarter, even beating our own guidance, which we give to the market, which is between 0% and 2%.

If we look at the results per business segment, you see that we have a 6.9% unit revenue at the passenger business. I will go back later over the world map as usual to show where we are gaining that high unit revenue, but especially strong also the cargo segment.

We had a 22% unit revenue per ATK growth, partly coming from the fact that we increased our pricing by fuel surcharges, partly coming, of course, by the situation in the Middle East, but also there is a fundamental demand coming also from the high tech.

So all that together, a strong demand for the product and also we are able actually to offset our fuel price. If you look at the EUR 134 million increase in the adjusted operating profit for the network, there's EUR 89 million coming from our cargo business.

Then on Transavia, we grew our capacity further, taking over the slot in Orly. You see that the unit revenue increased by 3%. That is not beating our 6.2%. But on top of it, they had 2.3% cost reductions. So including the cost reductions, they were able to improve their results year-over-year in the third quarter by, let's say, a more difficult operation also to taking over all the slots from Air France and in Orly.

The maintenance segment is more or less flattish. We had a better performance at KLM Components, but it deteriorated a bit on the Air France component side. So all in all, it's a flattish result on the maintenance at a stable margin around 6% for this segment.

If we then go to the difference between Air France, KLM and Flying Blue, you see that Air France has a, let's say, more or less stable results. They were able to offset with the unit revenues, the higher fuel price, but at the same time, there was a slight unit cost increase.

At KLM, we see that the unit costs are decreasing. That is good news. They were able also to offset the fuel price, but you see that there's still a gap of 2% between Air France and KLM. So we need to improve further KLM to make sure that they are able to reach our 8% margin for a full year in 2028.

And Flying Blue, as I already stated it, the gift that keeps on giving, again, a 25% growth in revenues, especially on the third-party revenues as we call, so to the outside world, and this brings another margin improvement for this segment. So we are now hitting a 28% margin on our Flying Blue segment, which is a very hard cushion under our result.

Let's then go over the world. Let's start at the top left. You see that we reached the 6.4% on the passenger. So they were able to cover the increase of fuel costs, which again, I come on the 6.2%, especially very strong on the first and business segment, almost 12% increase over there with a slight drop in load factor, the premium economy up 9%. And even our economy segment was very close actually to that 6.4%.

If you look at the world, a very strong demand, and we have also seen it, let's say, at other presentations still in North America, 9.3% increase of yields in this segment. Latin America, a little bit lower for us 4% that we increased the capacity with 9% over there. So that has a significant impact. And Africa is fulfilling its compliance with the 6.2% increase of unit revenues. So that is good to see.

And then Asia still holding strong despite the fact that we, of course, decreased capacity related to the Gulf, we see that we have an increase of 10% in terms of yields. And despite the fact that the Gulf carriers are coming back, we see still that especially on the corporate segment, there is a big preference to fly with European airlines towards Asia.

So long haul, 7.6%. Then on the short and medium haul in Europe, we were able to have almost 7% increase in yields. To our surprise, to be honest, because I think that we also saw the situation in Europe where it was extremely hot. So in this hot season, we would expect that less results, but it's good to see that we could pass through this higher fuel cost to our customers.

And then Transavia already explained with a 2.5% yield. So we are happy with our unit revenue performance, and we are happy of the success of our premiumization strategy.

Then the unit cost. So we were able actually to gain in productivity to offset the increase of our -- of the labor cost. So in total, there is almost no impact from the labor cost part on our unit cost. Then the fit renewal brings a 0.4% fuel efficiency. So this newer fleet is really bringing also lower cost in our operations.

And then you see that the other is more or less flattish at minus 0.1%. There are ups and downs there. So we still see high flight-related costs, high ATC cost, high cost, especially on the ground in the airports. But at the same time, we have less wet leases in place during the summer, which had an impact of 0.5% positive on our unit cost.

So excluding the premiumization, you see that we have actually reduced our unit cost by 0.4%. And then if you add that 0.5% of the premiumization, which is partly coming from having less seats in the plane. And at the same time, we are improving our product on the catering and on the whole ground operation and including the cabin. So it's quite good to see that we can offset those premiumization costs in our unit cost trajectory.

Then if you deliver a good result, you deliver for sure, good cash. So we had a EUR 1.4 billion in recurring adjusted operating free cash. The good news is that we see that there are still these exceptionals in for EUR 744 million. And the good news is that next year, actually, we only have to pay the wage taxes for KLM up to October, and then we are -- get rid of all the debt, which is we are still having from the COVID. So good also in relation to our guidance to significantly positive free cash flow delivery.

On the net debt, you see we reduced it by EUR 133 million if you take out the hybrid. So we are able to, let's say, slightly reduce our net debt, and we paid the hybrid of Apollo of around EUR 500 million, which increased the net debt, but it is a hybrid debt. So you could also -- and there are some analysts in this room who are actually taking it as debt when they value our shares.

So the leverage ratio stayed stable, 1.6, which is the same as we had at the beginning of the year despite the fact that we paid off this hybrid. The good news is that all the financing needs were secured before the summer with very attractive conditions, which you have seen on the bonds, which we put into the market.

And 80% of our debt is actually fixed rate interest. And that excludes even operational leases, which you could also see as a fixed rate interest rate. So we have an average cost of 3.7% for those financial -- for the financial debt, which is, I think, very healthy also for the coming years.

And then on the outlook. Now the big issue, let's say, in our industry is, of course, the fuel price. So we see that the fuel bill is going up with $2.3 billion this year. It's good to see that we had an impact of our hedge portfolio of $2 billion this year. So very good cushion under our results.

We hedged 62%. We stopped hedging actually for 2026 after the first quarter. So actually, we didn't add any hedges for Q4 this year. And if you look at the 2027 portfolio, you see that we have hedged 54% for the overall year, bringing at the end of the day, a cushion of EUR 1.4 billion, which is helpful because part of our hedge result of 2026 will fade away next year.

First, I have to admit, this is the forward of last Friday. So the oil and the fuel prices are much higher than it is today. So probably it will be slightly lower.

If you look at our strategy is that we continued hedging after there was a so-called peace agreement. We put a ceiling on the jet fuel, which I will not disclose, and we actually locked in hedges in that period for the year 2027.

Then we saw actually in the last couple of weeks that actually the jet fuel crack was so expensive that we said, "Okay, let's go for another strategy. Let's focus especially on oil," because oil is still in strong backwardation. So we put actually in a ceiling, another ceiling to execute our hedges on the oil price.

If you look at this portfolio, there is around 50% -- we always have a minimum of 50% of our portfolio, which we do in jet fuel or in gas oil, and we are still above that target. So it's good to see that we actually have also that crack already hedged, let's say, more in the previous months and also, of course, in the year 2025 and the beginning of 2026.

So I think we have a healthy hedge portfolio. We continue our hedge policy, of course, looking at all the market aspects, also looking carefully at our competitors and also looking very carefully what is the maximum upside risk and what is, let's say, the potential for any drop in this fuel market.

Let's then look at the bookings. So we see already for a long time that there is a small load factor gap last year compared to this year. So you see that we are, for the long haul, 1% below for the medium haul, 1% below and for Transavia, also 1% below. But it comes with a very strong yield.

If you look at the first 26 days of October, load factor gap. Actually, we have a higher load factor in October than we had last year. You see that -- the shorts are strengthening in the sense that the month of September was very strong, but also October is very strong.

And we have a yield ex currency of 12% for the first 26 days more than it is in Q3. So that where I referred for Q3 for 6.2% on the unit cost, it is around 11% in Q4, what the higher jet fuel price does. But still, again, that is related to the fuel price of a week -- some weeks ago.

And maybe also to add, sorry, on this page on the booking because you will ask it what is the impact of Paris. So before to save few other questions to us, the impact up to now, if we take October and also November and December is around EUR 10 million of cancellations on our bookings. But of course, it all depends what are the bookings doing in the weeks to come.

So then the guidance on our capacity. So actually, it is unchanged. So long haul 2%, short and medium 1%, Transavia 8%, Q4 we will be around a 1% increase of our capacity where our main network is more or less flattish, but we still grow Transavia in that quarter because we are taking over the slots. And you see that for the total group, we are at the lower end of our range, which we gave you between 2% to 3%.

If we then go to Page 21, you see the outlook of our guidance. Actually, we didn't change anything. The group capacity, I already discussed 2% unit cost still 1%, including the 0.5% increase coming from the cabin premiumization. Net CapEx below EUR 3 billion and our leverage between 1.5 and 2.

With that, I hand over to Ben for his concluding remarks.

So just as an ending here before we open up for questions. Another solid quarter for us, strong execution for Air France-KLM. However, we enter the final quarter of the year with prudent caution while maintaining strict operational and financial discipline across the group.

Before we open the floor to your questions, I want to express my sincere thanks to all our teams across Air France-KLM, all around the world for their continuous dedication, hard work and commitment throughout the quarter.

So thanks for your attention, and we're now very happy to take your questions.

[Operator Instructions] The next question comes from James Hollins from BNP Paribas.

Just wondering on the unit cost guide. I was wondering if there's any particular cost pressure in Q4. I think year-to-date, you're up 0.6% clearly suggests an acceleration in Q4? Are you just being very cautious just that low capacity increase in Q4? Any detail would be welcome.

And then secondly, on M&A, I just wanted to get an update, if you can, the SAS timing moving to 60%. And I guess I'd be remiss not to ask you, Ben, on a scale of 1 to 10, how annoyed were you really at loosing TAP? What went wrong? Could you offer the wrong price, et cetera? And I suppose less eloquently, how -- a bit more detail on how you'd expect to evolve your LatAm network in light of not getting it?

James, yes, let's say, if you look at our unit cost guidance for the full year, you could say that we are maybe a bit pessimistic for the end of the year. We don't have any specific items which are actually popping up in the fourth quarter. But we have to admit that in the third quarter, the maintenance costs were pretty, let's say, pretty flattish. So I think especially on the maintenance side, you see that the costs are going up a bit. But there's no any specificity. We just wanted to give a rounded number and then you come to the 1%.

Okay. James, it's Ben. On SAS, so the next major milestone we have to reach is a regulatory approval by the European Commission. So we're -- the teams are working diligently on that. And based on what I'm seeing and what the feedback we're getting from the case team in Brussels is that we should be well aligned to complete this transaction, hopefully, by the first quarter of next year.

And on TAP, 1 to 10, I would say maybe 5 or 6. So when we went into this, we knew it was going to be a tough battle with our competitor, knowing full well that the requirement to have a presence in Latin America was much more important for them because of their current situation. And there were limits to how far we wanted to go in terms of bidding for a strategic investment. We already have SAS in the works. The timing for TAP is not ideal for us, spreading our management team so thin to be able to look at integrating a second carrier was not ideal.

And also, the price sought by the Portuguese government was much higher than what we had in mind in the beginning, and we pushed really the company, our company to the absolute limit as to what was comfortable. And we were quite surprised to the extent of which our competitor went to buying or to bidding and being a successful bidder in this transaction.

But also, I don't know if you saw all the details that they accepted to -- what they put into their bid to -- which helped them win. I mean, I don't think it's a way to properly run a company. I think it's very, very difficult for them, and I don't think we have any regrets.

So we'll see. We have a great position. We have great partners in South America. There are lots of other partners who want to do business with us, and we actually do have growth plans. So look, disappointed, but based on the results of what the decisions -- how the decision was made, I don't think we ever would have imagined or would be comfortable going that far.

The next question comes from Axel Stasse from Morgan Stanley.

A couple of questions on my side. Just wanted to understand, you said at the first 28th of October, the yields were up 12%. Is this trend accelerating even further going to November and December driven by the business travelers? And how should we think about early 2027 as well?

And second question is related to the unit cost inflation excluding fuel going into next year. You just mentioned maintenance is probably slightly higher than expected in Q4. Is low single digit a reasonable number going into next year? Are there any moving parts we should be aware of going to 2027, just to have your views on this.

Yes. Thanks for the question. Let's first start on the yields. So indeed, we see also for November and December strong yields. It is a little bit less than October because October is actually -- but I said that there is an impact of, let's say, increasing the summertime towards October. And in November, as you see the weather today, it's not really, let's say, the best time to travel. So it's still strong. It's still double digit. And as I told you, we need double-digit numbers. But October is slightly stronger than what we see for November and December.

And for Q1, it is -- we are a very, very lazy booking market in France and in the Netherlands because they think about the next holiday after the Christmas. So if you look at, for instance, January, you see that we have just a booking load factor of 40% and the game is especially after that. But we don't see any drops in January, February and March in the ticket pricing. So you can -- for the moment, you can hold it, but it is a little bit too soon to tell.

And the same is for the unit cost. We are just entering in the discussions for the budget. You know that we have a strong cost discipline. You have seen the measures of KLM today, but I cannot give you any guidance for now. I will give it to you in February when we release our results of the full year.

The next question comes from Stephen Furlong from Davy.

I just want to ask, first of all, Steven, in terms of the -- you mentioned the social taxes are basically concluding in October. Also next year, if I remember, perpetual hybrid, there's one more to be repaid. And can you just confirm after that, in effect, the balance sheet is clean?

And then for Ben, just kind of related to that, maybe you'll talk about this when you do a Capital Markets Day. But I just -- since you joined, there's been great progress being made with all the stakeholders. I'm thinking of employee relations, I'm thinking of customers premium award. I'm thinking even with governments and on the environmental side, but I was just wondering about investors.

And is something in the Board down the line in terms of dividends or something like that? Because obviously, it's a long time, I think the global financial crisis before Air France-KLM paid a dividend to investors. So maybe just talk then about stakeholders and Steven about the balance sheet.

Stephen, thanks for this interesting questions. Let's start over there. If we go back to the -- indeed, the social charges, yes, it is only for KLM what is continuing. So we talk about, I think, and I look at 241, which is remaining next year. And then it's done. We have paid the social charges to the French state at the end of this year. And we have no cargo claim anymore to pay. So that is all done.

Then indeed, you're right, we have this EUR 1.5 billion hybrid. So that is at the end in December. I don't call it dirty as you do it. I think it's a clean instrument. We -- relatively, to be honest, if you look at the interest rates today, it's not that bad. And we have an option actually to postpone it for 1 year if we want, if the interest rates are interesting.

We are -- you know we are trying to reduce the hybrid stock. So that is actually really our ambition. Usually, we do 50% in a year, and we want to replace it by the net result. But we will come back on what we will do with this hybrid. But it is not a very expensive hybrid to be honest. And at the same time, we have enough cash in that entity to pay back this hybrid.

Then the question on dividends...

I will start.

You will start? Okay.

Okay, Stephen. So I mean, you laid out some of the key elements of reaching a more solid position. So in 2018, when I arrived, we had a very, very weak foundation, starting off with significantly improving the relationship with staff, in particular at Air France, where if you followed us in 2018, we had rolling strikes that were costing us above EUR 300 million in 2018 alone and about EUR 1 billion for the years before.

Also the [Aircalin] model did not work. So a lot of negotiations with the unions and some difficult decisions around fleet were made. The concept of expanding Transavia is one of the major ones. We're moving the Airbus A380s and then putting forward a clear brand, in particular, again at Air France that could meet customers' expectations to be very clear. So that took time, and we're very pleased with the results. There's still a lot more to come.

And so the stakeholders of employees and customers much improved to the position we were in 2018. So I think we now have a much stronger foundation. The margin is more stable. We are going to 8%. That's our commitment.

And then for shareholders and dividends by extension, yes, this is -- we are a listed company. It's our objective to be in a stable, sustainable position to be able to pay dividends. I'm a shareholder as well, so front of mind very often. So the timing, not -- we're not ready to make a commitment as of today. But yes, it's something we talk about a lot. And yes, it is something we do expect to put in place as soon as we have a better and more sustainable foundation that we know.

We don't want to put them -- start paying and then have to remove them again. Obviously, that's the position we take. It's the same approach we take with our union saying "We don't want to give you increases where in a couple of years, we're going to have to reverse and ask you for efforts." But to clearly answer your question, it is something that we'd like to move forward with in the short term.

The next question comes from Harry Gowers from JPMorgan.

First question, just an extension really on the balance sheet one because I can see that the cash on hand, I think, is EUR 10.5 billion now, which is a lot higher than your target kind of range. So is that cash just being saved up to continue to simplify the balance sheet? So just any kind of further color on why the cash level has to be so high above your target range? And then just an extension of that, an extension of the dividend question as well. I mean, would you consider share buybacks as well? Or do you think a dividend would always be the first port of call?

And secondly, I just wanted to ask on the Paris protest. Can you just confirm, I think the EUR 10 million impact you said is just for October and November so far? And has there been any other impact in terms of the bookings curve or kind of forward bookings beyond kind of December or into next year over the coming months?

Yes, yes, we have a very high cash level. First, we have -- we already have the cash in place to pay for the acquisition of SAS. So that is one where we have the cash in order. It's true also part of the cash will be used also to pay off this hybrid in -- towards Apollo.

So it is true that we keep it also for the uncertain times to come. So we saw, especially when, let's say, the uncertainty kick in, we used the right moment to put a bond into the market and also to have a kind of security buffer for this year. Now this year turns out to be better than what we expected during the -- when the war started. So of course, we have more room to use also to pay off certain debt.

If you talk about share buyback and dividend, we don't have those kind of discussions yet. But I think if you -- we didn't pay any dividends so far. So it would be for me more logic to do it in dividends, but we will have -- we didn't have that internal debate at all at this moment.

And then on the Paris impact, I hand over to Ben.

So yes, confirming that for October and the beginning of November, we're expecting about a EUR 10 million hit and probably maybe even all the way through the end of November. And what we're pleasantly surprised is today, November 5 is a countrywide strike and less than 1% of Air France employees are following the strike. So the impact on our operation is basically 0 and all of our flights are operating. So as an outside, I would have thought much more, the impact would have been much higher, but it's minimal.

The next question comes from Jarrod Castle from UBS.

A couple of questions. Firstly, I mean, you're able to offset fuel. It doesn't seem like any other airline I'm aware of can do that. What's different about Air France-KLM? Is it your premium mix, your network, your client base? Or is it some secret sauce that how you revenue manage?

Secondly, I think, Steven, you said you don't want to talk too much about next year, but is there any color on capacity for next year and fleet deliveries given all the moving parts and how you're thinking about getting planes?

And then one more, if I may. But I think you made some comments that you're still doing pretty well in Asia, given shoots in the Middle East. I mean, do you think this is going to be a bit longer lasting when all hostilities have ceased. Is there a change from your customer base in terms of how they're thinking about the product?

Secret sauce we have that. But we've got a very experienced team and our network is very diversified. Not many people know that CDG is the largest international hub on the continent by far. So the number of destinations, the number of flights that we have out of CDG is incredible.

Amsterdam for its size is actually the #2 hub on the continent. So the teams that manage the revenue and put in place the pricing and the distribution have extensive experience in all the different regions around the world. As you can imagine, each region has different characteristics of how we revenue manage.

But the upmarket strategy we put in place or started putting in place 6 years ago is I think we were one of the first in the Western world that really started to focus on this with the unique -- I mean, this maybe is the secret sauce, the unique Paris market, there's no market like it where you have such a luxury leisure component where price elasticity is very unique. And even with the situation we're seeing in Paris with the protest, it is very resilient.

If you follow any of the hospitality, hotel, restaurant industries in Paris, extremely resilient. So I think we have that as a big advantage versus our competitors. And also the aircraft size that we now are focusing on, so the mainstay of the Air France fleet being the new Airbus A350s, the efficiency of that airplane as well as the reconfigured 777-300s at Air France are proving to be winning aircraft.

We've got the right size, the right number of premium seats in terms of the balance of the configurations on board. And that is 1%, 2%, 3% improvement of what we had in the past. And you add all that up over almost 100 airplanes that makes the difference. At KLM, the introduction of the 787-10 and now more recently, the Airbus A350-900 is proving out to be the same result.

We're a little bit lagging at KLM. And obviously, the formula is not the same. Amsterdam is not Paris, but Amsterdam is really well set up to feed or up to feed to link a lot of secondary cities in the U.K. and in Scandinavia, which is going to be enhanced now with the SAS majority position. So it does have unique destination.

I'll give you an example. I mean if you look at the number of destinations we serve in the U.K., I think it's about 12, 3 core destinations have limited service to other hubs. So our ability to channel those passengers via Amsterdam, our ability to yield up is quite strong because the other choices are not great. So I don't think we have a secret sauce. I think we have a unique hub in Amsterdam, and we have a very unique destination and home market in Paris.

And maybe the second part of your question here on avoiding the Middle East or our improvements in results going to Asia and to in that area. We don't have that much exposure. So there is a significant increase in the flights that we have. But if you look at the overall number of flights that we operate in the whole system, it is not a big percentage, but we are seeing a significant increase on those few flights that we have because of the reluctance of consumers to fly over the Gulf, which I think eventually will revert back to normal habits, but I think it's going to take a little bit of time in the short term.

Right. Anything on capacity and fleet deliveries, Ben, Steven?

No, I think if you look at the capacity, there is, let's say, the fleet deliveries are still coming in. I think there's a little bit less pressure, I would say, on the aircraft manufacturing given the current circumstances, but we keep on re-fleeting our fleet there, but it's not actually to increase significant our capacity. So we will have a moderate capacity increase as we have seen more or less where we get the bandwidth this year.

And I don't know if you want to add.

Yes. Maybe -- so we had 67 long-haul aircraft at KLM in 2018, and we're moving towards 70, so not a big increase here. And at Air France, we had 108 and we're at 120. But in 2018, 10 of those airplanes were A380. So you doubled 2 airplanes for 1 when you switch those out. But the number, which we mentioned in the beginning of this call, the number of premium seats on each one of those airplanes has considerably gone up.

So the mix is very different. So the number of passengers has stabilized, but the footprint of the seats that are carrying the higher-yielding customers takes up obviously a lot more space. So the number of seats on the airplanes and the ASKs are tempered compared to the capacity that we have out there. We also have the -- something else I should mention, the utilization of the airplanes that we have, especially in Air France has gone up considerably.

The next question comes from Alex Irving from Bernstein.

Two from me, please. First, how are you thinking about needs for a Southern European hub now that TAP is not available? Do you need to take another look at Air Europa as the last asset? Or is your most southern hub going to have to be in Paris? If so, is that an issue given that it's further away from the South Atlantic geographically less direct Latin American traffic versus either the [indiscernible] Lisbon?

Second question, you announced some KLM restructuring measures this morning, which sounds like it could include a meaningful downgauging in medium-haul flying. Sounds like a slot constraint, you, of course, can't really fly from that airport. So are you going to have enough feed for the long-haul KLM?

Alex, for TAP or the need for a Southern European hub, well, this was the strategic reason why we were -- why we moved forward with the bid, but not at any price. There are other ways for us to serve Latin America. And without a Southern European hub, we were #1 of the continent in terms of capacity.

And if you count one of the other competitor that we have, only if you combine their non-continent hub with the continental hub where they're slightly above us in terms of capacity. So we're in a very good position. We have a very strong partner. It would have been a lot of money to invest in TAP. So there are other ways for us to maintain or to improve our position in Latin America.

And also our other competitor on the continent, they're also developing a southern hub in Italy. So they'll have their resources stretched. They've committed to investing in Porto. So to have a concentration in Lisbon, which is a slot-constrained airport, we don't see a big amount of additional capacity, and that airline is already in the Star Alliance.

So impact on us is not as great as if they would be switching alliances. It would have been accretive for us. But I think we'll be focusing on additional capacity out of Europe and strengthen our relationships with our partner in Latin America and then also looking at new partnerships potentially in Latin America.

So I think at the price that the Portuguese government ended up selling the big stake in TAP for, as I said earlier to answer one of the other questions, I don't think it was -- it would have been worth it and would have been accretive for us in the short term.

As for Air Europa, this is -- we've looked at this company for a while, not an easy shareholding structure for us to imagine getting ourselves into. Would we look to do some kind of more extensive commercial partnership with them? Possibly. It's not #1 on our list. But for now, our ability to properly serve Latin America is not a concern for us in the -- for the next 2 to 3 years and that it gives us a lot of opportunity to solidify our already strong position in Latin America.

You also asked a question, sorry, on KLM. So previously, over many years, KLM had an extensive European connecting market. So customers traveling from one European city via Amsterdam to another European city. So that was a big portion of the KLM traffic. So this is what's under severe pressure with a lot of big increase in low-cost intra-Europe flying, some new nonstop links that have been put in place.

So a lot of this traffic we're saying it's too expensive to carry with the increase in charges at Amsterdam as well as the new aviation taxes that the Dutch state has put in place. So we are reducing our exposure to that part of the market while ensuring we have enough flights and enough capacity to maintain the same amount of feed to our long haul. So the offering of capacity to the European market or into the European market via Amsterdam from our long-haul network will remain unchanged.

The next question comes from Andrew Lobbenberg from Barclays.

I ask as you look ahead to bringing SAS into the group, what are your thoughts on governance structures or perhaps changing the structure of the group and how it works with the OpCos? And just on the same thing, just to clarify, did I understand that you're saying that SAS will happen -- will you expect SAS to happen in the first quarter of next year? Can we just be clear on that?

And then can I just come back on the question on the KLM fleet change and restructuring. That makes good sense that you're trying to get rid of the short-haul to short-haul connecting stuff. But how much of the decision to go to the Embraer is motivated by labor uptick? And also, do you see scope to increase the premiumization at KLM? Obviously, it's connecting hub in Amsterdam, not Paris, but how can you leverage the premium strategy as best you can for KLM?

Andrew, so you've been following the industry for a while. So the governance structure when you only have 2 airlines is obviously more challenging than if you have more. And I think with one of our competitors, it was similar until we added a third and then a fourth carrier. So we're -- within this is positive from a governance structure perspective and the ability for management to work more effectively.

So we -- the work we're doing to be best positioned to integrate the KLM -- sorry, the SAS management staff. So far, it is all -- I mean, we're all excited about how this will further simplify the way KLM and Air France work today. So that we view as straightforward, and this is not new. We have examples of other carriers on what some of the other practices are. And in most cases, they're better than how we operate today.

So there should be increased synergies that we have not put into any of our forecast. So I'm really excited about that the streamlined, simpler, more straightforward governance, which hopefully will have less interference by outside people who have views on how we operate.

So Q1 for SAS, assuming that the remedy package that we put in front of the European Commission is accepted, then I think we should be good to go in terms of closing in Q1. If the remedy package is not enough, then that will take some time to work out something that makes sense.

But I think what we're confident about is there are no barriers to entry into Copenhagen or Stockholm. And we've already allotted into the plan or take into account the loss of some slots at Orly airports or not Orly at Schiphol Airport to account for maintaining the same amount of competition. And of course, CBG is not slot constrained other than just a few hours in the morning.

So it's -- I think if we were in another jurisdiction, it would be much faster, but this is Europe. But the fact that Stockholm and Copenhagen are not slot constrained, that gives us a lot of comfort that this should be more simple than perhaps, let's say, TAP around an airport that is heavily slot constrained.

And on the KLM fleet side, -- so a little bit of everything. When we ordered the Airbus A321s, we also ordered A350-1000s and the Embraer 195 E2s. And this was an ungauged of the entire KLM fleet to reduce unit costs. So that was on the regional, on the European fleet and on the long-haul fleet.

Now since the cost of operating at Schiphol considerably gone up since these airplanes were ordered, we're now course correcting to our new reality. So we have now canceled all the A350-1000 orders, and we've moved those to 900s. So the A321s, even though the unit cost is so much better, we're saying when you do the trade-off, it's just too much capacity if we don't have the 1000s on the long haul.

So we're going to reduce the number of 321s and increase the number of Embraer 195s, even though the 195s is a step-up from the Embraer 190. This is the airplane that I think will best suit KLM's network for the future.

And in terms of labor arbitrage, of course, there are different CLAs with the cabin crew and the pilots at Cityhopper, and we'll work that through. But this -- Cityhopper is already created. This is not a new AOC. It already had 50 airplanes before we went down this path to 50 airplanes in 2018. And then we add a few more, maybe 10, 20, 25 more. It's not a complete shift in the way we work with our unions. And there's not a new long-haul AOC or a new AOC for a medium haul. It's just putting more capacity in one of the existing AOCs that we have.

Sorry, you had one last one, Andrew, which is around the premiumization and whether that would work in Amsterdam. But we don't have a La Première market in Amsterdam, a first-class market in Amsterdam. So that's not part of the plan. The business cabins because KLM was a real volume market because of the relatively low cost of transferring customers in the past in Amsterdam, that model is now changing.

We need to get a greater share of the local market, which we can do, won't be easy, but we can do. And what -- which is new, which we didn't have in 2018, it's only been introduced over the last few years is the premium economy, which we added premium comfort at KLM, which is doing extremely well, as you know, with most carriers that have this cabin. So we're increasing the size of that cabin.

Right now, we have only 2/3 of the KLM long-haul fleet equipped with a premium comfort, premium economy cabin that will go to 100% over the next 2 years. And the profit per square foot with this cabin is significantly higher than the rest of the plane. So we'll adjust the interior configurations of the long-haul aircraft to better meet the revenue opportunity. So we'll be moving to more premium seats, but it's not going to be to the same extent as we did in Air France.

The next question comes from Antonio Duarte from Goodbody.

Congratulations on the results. Two for me, if I may. One of them relates with the load factor gap. If I remember correctly, on your Q2 results, you reported between long and short medium haul about a 2 percentage point gap. This has now decreased apparently to 1%. Just wondering if there are any changes in terms of booking trends you have seen there or it just with your capacity management?

And the second one, you mentioned the strong performance in premium leisure. Just talking about on the corporate side in terms of corporate demand, what type of trends are you seeing there?

Antonio, yes, the load factor gap indeed decreased compared to what we have seen when we entered the third quarter. I think there is a couple of reasons. I think it was also part of the weather at that moment when we looked more or less at the third quarter. So I think that also had an impact on the bookings itself. And it is not a big difference. We talk about 1%.

But indeed -- and I think last but not least, then we were looking at July and August and especially August was, if you look at 3 months, relatively a more difficult month compared to September. So especially September and October. And again, October, we have a higher load factor in at the moment for the first 26 days than we had last year, you see that there's also more demand. So I think it has to do a little bit on the timing where we are looking at these results. There's no really difference in capacity management or anything else.

And on the corporate demand, so if we focus on Air France, the resilience of the market coming into France is welcomed by us and very positive. But we're seeing really no change in corporate demand going out of France by the corporations based here in France. I think it's quite resilient. And if not in some markets is actually increasing.

And thanks to the situation in the Gulf, there's a lot of our corporate clients that head over to the regions that normally would connect over the Gulf are now returning or are now flying with us. And that, of course, is all positive. But again, I just said that these are -- when you look at the 90 departures we have a day long haul at the CDG, we're talking 10, 12 flights that fly over the Gulf region. And those, of course, are getting -- the performance in those flights is much, much higher than what we had before. And out of the Netherlands, everything is pretty much stable.

The next question comes from Quirijn Mulder from ING Financial Markets.

This is Quirijn. I have a couple of questions. My first question is if you look at EBITDA last year, EUR 5 billion and probably you're going to exceed that in 2026, given the developments despite the fact that there was a real crime in February starting.

But still what are the lessons you have learned from this crisis? What are you picking up and what you're taking up in, let me say, in the case that everything is probably normalizing in a couple of years' time. So what are the takeaways from that, what happened here, especially with regard to the fuel and maybe also with regard to the increases of rates, et cetera.

And then about the competition, it looks like that -- okay, so some sort of benefits were there from the developments in the Middle East. Have you now reduced your capacity completely back to the level before the crisis and let me say, redirected all your fleet to North America, South America, from Southeast Asia. Is that what you're mentioning in the press release? That were my questions.

Quirijn, good to have you. It's the last time. So thanks for following us all this long time, and I appreciate our working together.

Yes, what are the lessons from the crisis? I think first, it shows that a resilient hedge strategy is really, really important because the fuel price has a strong, strong impact on our results. You cannot adjust capacity overnight. So I think you want to keep your network running. So I think having that is the first lesson.

The second one is to be very agile in your network. So where you see that there is no demand anymore in the Gulf, really look for the spots and really quickly act in terms of capacity management. That's what we did. And last but not least, I think you should not be nervous in pricing. So if you see increases in your cost structure coming from the fuel, you should be really pass that to the customers.

And for that, you need loyalty. And I think by, let's say, upgrading our product, we have more loyalty, also more loyalty customers in our Flying Blue. So these loyal customers, they are willing to pay a higher price for our product.

Actually, you see that the value perceived by the customer is still higher than what we charge them, and that's also that we can still able to charge them. So I think there has been discipline in the industry. We were not nervous in our pricing strategy, and we immediately put in place, let's say, what we call a fuel component in our tariff structure.

And for the second, I hand over to Ben.

And then in terms of redeploying our airplanes. So Dubai has been closed, reopen, closed, reopen, same Saudi Arabia, Israel and Lebanon. So the 8 to 10 airplanes, we've found new places to deploy these airplanes or we've taken the opportunity to early up some maintenance so that we have more availability to fly these during busier times in the third quarter of next year. So the airplanes are being well optimized during this unusual period.

The next question comes from Marc Zeck from Kepler Cheuvreux.

First one is on yields, and I recognize they were pretty strong. But I would assume that you still had a sizable percentage of tickets in there that were booked pre-crisis. Could you quantify what percentage that was and if possible, what the yield drag was from tickets sold pre-crisis?

The second question, just a follow-up on lessons learned. I guess the guys at United and Lufthansa would say that one of the lessons learned is that maybe ticket prices were structurally too low pre-crisis and that the crisis -- yes, the airline industry an opportunity to reset the structural underpricing to a higher level. Would you would agree? Or do you see things differently on that one?

Marc, now I think we don't have a lot of tickets. I don't know the number, to be honest, but we don't have a lot of tickets for Q4, which are pre-crisis. We have -- but I say in France and Netherlands, it's a very slow booking market. And people -- it's not like the U.K. where people are already booking for the next holiday in September for the next summer holiday. So not a lot is in related to the pre-crisis.

Then on the remarks of the U.S. carriers, I think that actually echoes my sentence that we say the perceived value is actually higher than the ticket prices. So indeed, the fact that we could increase the ticket prices, let's say, in this period with 7% and that we are now currently at 11% has to do also that there is still a strong demand and that we actually have a perceived value for it.

Then the question, Marc, is if the fuel price drops, what will happen? Let's see. It's also about the capacity discipline into the market, which is actually underpinning the strong results.

[Operator Instructions] The next question comes from Jack Rayburn from Bank of America.

Three from me. I was wondering if you could maybe give us some color on the 12% October yield, maybe split segment and geography, we're seeing some over and underperformance on that number?

Secondly, perhaps linked to that, North Atlantic yields were up 9.3% with 4.6% capacity growth. How sustainable do you think that yield dynamic is moving forward? And with fuel still elevated, how much do you expect U.S. carriers will continue to raise fares heading into next year?

And finally, just on hedging, you're currently 54% hedged at 2027. I'm just wondering, looking into next year, is there an intention to continue to top up programmatically or kind of opportunistically? And is there sort of a cap level that you wouldn't want to go over with jet fuel at the current price?

Jack, if we go first to your first question, if you want some color, I think it doesn't change so much as what we have seen in Q3. So we still see a very strong U.S. market. We still see a very strong long-haul market. And I would even say that the hub is doing not too bad at all. So I think it is more or less the same. And I don't have the details for that yet for Transavia. But let's say, you can more or less take the same geographical split.

But the U.S. carriers say, I don't know. It's nice that they say that they will increase the pricing. We are working very closely together with Delta. So of course, we will benefit from that. But I think we are quite, let's say, pleased by the pricing in the U.S., and we are very pleased on the results on North America. And if we can drive up further prices, that is the big question.

Although we will see that also, of course, other European carriers will also run out of their hedges. So there is also, as I showed you, the fuel price is still increasing. So we still need to pass through a part of the fuel costs, which we are actually absorbing at the current moment with our hedge strategy.

Then on the -- what we did for the strategy, we keep our strategy. So the strategy is still the same as was before. We adjusted for the moment let's say, the month that we didn't hedge. So that is we are not going to rush to lock that also in. And that is actually the basis.

But indeed, as you say, we have a ceiling for jet fuel and we have a ceiling for oil only. And that means that we -- up to now, we were more hedging in the, let's say, the third and the fourth quarter and not so much in the first quarter of 2027. But we already have 57% locked in. But the official target is that we should be at 70% at the end of the quarter.

So -- but what we need to do is actually we have a combination of pragmatism with following our hedge policy because we don't want to give up on the hedge policy because nobody knows in what kind of world we were entering in '27, and we always start hedging for 2028.

Let me hand the conference back to the speakers for closing remarks.

Well, thanks to all of you for taking the time to listen to our presentation today and for all your questions, and we look forward to speaking with you in February at our next session. Thank you.

Thank you all for your participation. The call is over now. You may now disconnect.

Good morning, and welcome to the Air France-KLM First Quarter 2026 Results Presentation. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Benjamin Smith, CEO; and Steven Zaat, CFO. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us for Air France-KLM's First Quarter 2026 Results Presentation. I'll start by highlighting our key achievements for the quarter before handing over to our CFO, Steven Zaat, who will provide a more detailed review of our financial performance. I'll return later for some closing remarks before we open the floor to your questions.

Before diving into the details, I want to highlight a critical point regarding the quarter. While fuel prices have surged since the start of the Middle East conflict, this impact is not yet visible in our first quarter results due to a lag in fuel pricing. This is a vital distinction as these costs will weigh on the upcoming quarters. Overall, the first quarter represents a solid start to the year, defined by strong commercial momentum and disciplined execution in a volatile environment. We carried over 22 million passengers, up 2.3% year-over-year, confirming that travel demand remains resilient.

Furthermore, we demonstrated our agility by swiftly reallocating capacity following the suspension of services to the Near and Middle East. Group revenues rose 4.4% to EUR 7.5 billion, fueled by higher yields in our network activity and a strong performance in maintenance. Unit revenue grew by 3.4% at constant currency, supported by our premiumization strategy and reduced industry capacity in March.

Simultaneously, we reinforced our strict cost discipline. Unit costs increased by only 0.5% as we balanced investments in our premium offering with productivity gains and the benefits of fleet renewal. As a result, our operating result improved significantly to negative EUR 27 million, a EUR 301 million step-up compared to last year. We also moved forward with our fleet modernization with next-generation aircraft now representing 36% of our total fleet, an 8-point increase year-over-year. As I noted, these solid results do not yet reflect the full financial impact of the current crisis. Stephen will come back to this in more detail, including the measures in place.

Moving to Slide 4. It's important to contextualize our performance within the current situation in the Middle East and the specific complexities it has introduced to our operations. The conflict has directly impacted Gulf carriers that up to conflict already covered more than 1/4 of the traffic volumes between Europe and Asia through their mega connector hubs. The disruption of these flows has created significant imbalances in global travel supply and demand. Furthermore, the conflict introduced even more airspace constraints and higher spot fuel prices, all of which contribute to a more demanding operating environment.

In this context, our group has once again demonstrated its resilience and agility across 3 pillars. First, our limited exposure to the Near and Middle East at approximately 2% of group capacity allowed us to swiftly withdraw capacity from the region, ensuring that no aircraft remain unutilized or grounded. Second, our hub-and-spoke model and diversified network of over 300 destinations enabled us to reallocate that extra capacity to markets where demand remains strong.

And third, by actively managing East-West traffic, we responded dynamically to supply-demand shifts rerouting international long-haul flows through our hubs in Paris and Amsterdam while capitalizing on rising yields. I want to emphasize that while our agility allowed us to mitigate the disruption and recapture demand, the situation remains uncertain. Looking ahead, as previously mentioned, we anticipate that we will not be able to fully offset the impact of higher fuel prices in the quarters to come.

Moving now on to Slide 5. I'm very pleased to announce the successful completion of a major step in our strategic road map, and that's the transfer of Air France's Orly-based routes to Transavia France. This move is central to our ambition to strengthen the group's efficiency and long-term competitiveness. Operationally, this transition planned over the last 3 years has been executed seamlessly. We have maintained comprehensive coverage on key domestic routes, including 2 daily flights to Marseille, 8 daily flights to Nice and Toulouse, respectively. Load factors are already exceeding expectations and continue to build.

Furthermore, operational reliability has been exceptionally strong with a 99.9% completion rate. Beyond operational success, we are seeing encouraging commercial traction, the strong uptake of our Plus and MAX fares reflects higher customer satisfaction with the Transavia product and a clear appetite for our premium ancillary offerings. Financially, this transition is a structural turning point for Air France, effectively addressing the historically loss-making domestic point-to-point segment.

By consolidating Air France operations at Paris CDG Airport, we are already seeing improved hub feeding, greater operational efficiency and increased booking volumes on connecting routes. Looking forward, we will continue to maximize demand, support customer migration and further leverage Flying Blue across the group to drive loyalty.

So I'll now hand it over to Steven, who will take you through the financial results in more detail. Steven?

Yes. Good morning, everybody, on this beautiful day in Paris, where it's much more peaceful than it is in the rest of the world. So let's go to Page 7. If we look at the result, it gives a bit of a realistic view. which doesn't show yet, as Ben mentioned, the current fuel price increase. And at the same time, we already benefited from all the measures we took in the unit revenue. So if you go to the picture at the right top, you see that we had a positive impact of the fuel price.

And that comes that the fuel price is actually having a delay before it gets into our system. So we have places where it takes almost 3 weeks before we pay the fuel price. We have places where it is 1 week. So let's say, on average, it's around 2 weeks.And then you see that the fuel price impact on itself of the spot is around EUR 107 million. And at the same time, we get the full impact of the hedge, which is EUR 164 million. So we have a EUR 60 million gain just out of the situation. But, of course, this fuel price will get into the system in the month to come.

If you then go to the unit revenue, you see the unit revenue is up 3.4%. But be aware that the March unit revenue is up 12%. So there is a big impact from March, and that resulted at the end of the day that we have an improvement of our result because the unit revenue increase is already kicking in. The fuel price is even positive due to our hedge strategy. And at the same time, you see that the unit costs are quite well under control. We are at 0.5% despite the weather impact, which we had in January, especially in Amsterdam.

If we then go to Page 8, you see the view of the business segments. So let's start on the network. Passenger business unit revenue up 5.1%. And also there, if you split it, you will see that it is more or less flattish up to February, and then it is spiking with 14% in March. On cargo, you see a slight decrease, but we should keep in mind that we had last year the front-loading because of the tariff announcements in the U.S. So last year, the unit revenues in the cargo were up 16%. And that is also reflected if you look at the cargo unit revenue in this quarter. Year-to-date, until February, we were at minus 6%. But in March, we had an increase of 7% of our unit revenues, which in total gets to the minus 0.7% if you take the mix difference between January and March.

Then on Transavia, Transavia, you see a steep increase in capacity, and that goes hand-in-hand with the unit revenue decrease. Ben explained the rationale for this. So we grew especially on Transavia France, but also Transavia in the Netherlands grew by the upgauging of our fleet. And last but not least, if we look at our Maintenance segment, you see a minus EUR 7 million. We have a negative impact from the dollar due to the fact that we have more maintenance revenues than maintenance cost. So the impact of the dollar is around EUR 17 million. We saw a stronger maintenance performance in our components business, especially in Amsterdam. So that's good to see that the Back on Track is working there. But at the same time, we see more complications in Paris on the GE-90. But overall, it's mainly impacted by the dollar. If we would not have this dollar impact, the maintenance business would grow further in profitability.

Then going to Page 9, where we see the results of Air France, KLM and Flying Blue. Let's start at the bottom. Flying Blue. You see a significant increase in our performance. We have now the full impact of the Amex contract because it gets, let's say, operational from the 1st of January, what we signed actually last year. And that resulted in an increase of our profitability by EUR 27 million -- sorry, EUR 32 million, bringing our margins up to 30%.

Then KLM, we know that KLM had a very difficult January. It was around EUR 80 million impact of the weather disruptions. But you see that the Back on Track is starting to work now. They had a unit cost decrease in the month in this quarter. So all in all, the KLM performance is quite going in the right direction with also seeing that the operational performance, if you keep out the snow was quite good in this quarter. So if you put back this EUR 80 million to the results, you see that they are also close to breakeven and they will improve, let's say, with around EUR 160 million compared to last year. And then Air France benefiting from the strong improvement of the unit revenues, which we just saw. And the same story, we didn't have the fuel price impact yet in place.

If we then go to Page 10, that's -- on the top, you see an increase in capacity, an increase in load factor and increase in yield. First, you see again that the premiumization is working. So in the first and business class, you see an uptick in the load factor and you see an increase again in our yield. So all in all together, it is, let's say, 8% in terms of unit revenues. Then our premium economy. We keep on premiumization of our economy sector. And you see that we increased the capacity and at the same time, we increased further our yields over there. And this is a very profitable segment. So we are very happy that we are growing in this segment further and is well appreciated by our customers.

Then on the economy, you see an increase of 2% of capacity, load factor more or less flattish. And then at the end, it was a plus 2% and mainly driven also by the month of March. If you look on the right bottom, you see that the March impact is significant, an increase of load factor close to 3% and an increase of yield close to 9%. So you can imagine that, that has a big impact on the unit revenue picture.

Over the world, the West is still holding strong. So increasing capacity in Latin America, we increased also the load factor, and you see yields going up between 6% to 7%. So strong demand over there, and we are also able to push up the prices over there since the crisis started. And then on the right, that's very interesting to see. We put them together Asia and the Middle East. We are not so exposed to the Middle East. That's only 2% to 3% of our revenues.

And you see if you put them together, and we know that there's only one month in after the situation, you see that the yields increased by 8% and the load factor increased by almost 2%. And we were able also to reallocate capacity to that segment. And especially, of course, in the month of March in Asia, we saw unit revenues in that segment over the 30%. So all in all, it's quite strong. Even in the short and medium-haul, you see that we are able to increase the prices year-over-year to cover our increase of fuel price, which didn't come yet into our system in the first quarter.

Then if we go to Page 11. I think you see further evidence of our strong unit cost control. First, we had the customer compensation mainly related to the January situation. So actually, if we would not have that, we would have a flattish unit cost. We gained almost 1% in productivity. We still had the impact of the Schiphol charges, and we are welcoming, let's say, the new announcements of Schiphol, but this still has a negative impact in the first quarter because the charges are not yet reduced, and so it was still increasing year-over-year.

Then the premiumization didn't have a big impact in this quarter. That is just a seasonality impact when we, let's say, take out planes to, let's say, to put them in modification and the planes are coming out. For the full year, we expect a 0.5%. But in this quarter, it was just 0.1%. So I think the unit costs are well under control, and we keep on keeping our guidance between 0% and 2%. As Ben mentioned, we are taking more measures to, let's say, to keep control and to keep control of our financial results.

First, we stopped hiring for the support staff. We have EUR 500 million on discretionary spend where we are cutting significantly by reducing significantly any costs related to consultants, any cost related to internal travel. So we are cutting all the costs there, which we can to the maximum. Of course, we keep on recruiting operational staff because we need them to keep our operations running. And we also will -- in this EUR 500 million, there's also a part related to training, which we will keep on continuing.

Then on the cash flow, which you see on Page 12. The main outlay is, of course, that after 17 years, I think we paid now the cargo claim. So that is an impact of almost EUR 370 million. If you take that out and you take into account the payments of the lease debt and the net interest, you see that we were improving our cash flow with around EUR 100 million. And on the right side, you see that we reduced our net debt. We are now at the lower end of the guidance at EUR 1.5 at the end of March 2026, which is a reduction of 0.2 versus the beginning of the year. But we are always helped in this quarter, as we all know, by the strong ticket sales, which we still have to fly in the second and the third quarter.

Let's then go to the outlook because that is actually maybe more interesting than what we did in the first quarter. If you look at the outlook and we look at the fuel bill, you see that we have an increase of the fuel bill of $2.4 billion. That includes our hedge results. So the hedge results brings a $1.5 billion reduction of our fuel bill, but the net impact is still $2.4 billion with a significant increase in the quarter 2, where there's $1.1 billion, and it slides away because the forward curve is still in backwardation for the coming quarters.

You know we have a hedge strategy, which we have opened and publicly, we kept on our hedge strategy until the end of the March. Then we took a pause. So -- because the Forward is really moving with all the news coming from the [ Truth ] platform. But our teams have the room to take action if they see that there are big decreases in the market, especially for the year 2027. So they have a room of 2% of our consumption. So they have room to act quickly because we -- before we sit together, then there's another message on the Truth platform, which can impact the price. So we have a tactical approach. We will see in the coming weeks what we will do and how we will continue our fuel hedge strategy. But for 2026, we are almost 70% hedged already for the full year because we continue that part.

If we then go to the bookings. So we still see that there is travel appetite. Actually, you see that the gap in booking load factor is reducing compared to what we saw in the previous quarter. So in the long haul, it's just 1% down where we were more in the range of 2%. You see that on the short and medium haul, it's even up. And in Transavia, despite the growth in capacity, you see it's going up with another 1%. Then the big question, of course, for everybody is how much of this EUR 2.4 billion are you able to compensate through your revenues.

Now let's go to the month of April. So based on the actuals of the first 24 days of April, we estimate that the yield in the month of April for our passenger business will be up 9% year-on-year ex currency, and that reflects approximately a recapturing of around 60% of the fuel price increase in April. So that is what we are currently seeing. So all the tariffs, which we -- let's say, the increases in price, which we put into the market are there to compensate also the fuel cost, but we are not able in the second quarter to fully compensate that through our revenues.

Then if we go to Page 16, we have slightly downgraded our capacity. We still see that for the quarters to come, especially for the summer, there is still with the current fuel price, it's still profitable to fly all these routes. We look at a flight contribution level. And as we all know, the prices in these months are at such a level that you can even compensate for the higher fuel price. Then the question more -- comes more what will happen in the winter. And I think nobody knows yet what will happen in the winter. So -- and there, we take a little bit more cautious approach because we need to act if this fuel price stays at the current level, we will, of course, be agile and will reduce our capacity.

So for the long haul, where we previously guided at 4%, we are now at 2% to 4%. For the short and medium haul, it's stable, but we went down actually a little bit in our own view, but it is more or less stable year-over-year. In Transavia, where we were previously at 10%, we are now at 8% to 10%. So we reduced our capacity guidance with 1%. Of course, we take tactical actions if you see that the flight contribution is negative on flight. But for the moment, we see quite good bookings coming in also for the summer.

Then on Page 17, now group capacity, I already explained. Unit cost, we keep our guidance, so 0% to 2%, including 0.5% related to the premiumization. On the net CapEx, we will also act on CapEx. So we will be very cautious on our investment committees. So actually, everything which is not necessary. But if it's still necessary for our strategy, we will continue on the capital expenditure. So we have discussions on the IT.

But for sure, we are continuing our innovation over there to make sure that we are getting even stronger out of this situation. But it will be below the EUR 3 billion compared to the previously EUR 3 billion, which we stated to the market last quarter. And then on leverage, the net debt to current EBITDA, we were in March at 1.5. We expect to end more at the higher end of this range. But that, of course, all depends on the circumstances which are happening in this world.

So with that, I hope that I gave you enough coloring so that there will be no questions, but probably that will not be the situation. So I hand over to Ben.

Okay. Thanks, Steven. So we're now ready to take your questions. And I think the operator will give the instructions on how to do so.

[Operator Instructions] The next question comes from Alex Irving from Bernstein.

A couple from me, please. First of all, how are you thinking about capacity planning, not just the short term, but the longer term? And what are the merits of bringing forward the retirement date of some older subfleets in the higher fuel price environment. Which ones of those would make the most sense? And second, why did you only cut 1% from capacity growth for this year? Why are you so confident that yields will continue to absorb the additional fuel cost into, let's say, Q3 and beyond? And if I can sneak a related question in here, how much of your strong performance do you think is due to temporarily attracting more than your natural share of transfer traffic given the strikes in Frankfurt?

Alex, Okay. Well, my initial reaction probably the same as yours is why don't we have the opportunity or why shouldn't we be canceling more flights or pulling airplanes out, especially older aircraft. But the teams here have done extensive studies on which flights would be still flight contribution positive despite the future forward curve of fuel prices. So almost 99% of what we have planned for the summer will be flight contribution positive. So we'll have some slight adjustments, but minor adjustments to capacity, and we plan on maintaining the entire fleet of the older airplanes, which would include the Airbus A330s at both Air France and KLM. And depending on how things play out for the latter part of the year, we could look to readjust that and early up the retirement of those airplanes. We had already scheduled to retire a fleet of A330-200s at Air France next year and shortly after the A330-200s at KLM. But as of today, we anticipate to fly pretty much the whole schedule of the 2 main airlines in the group through the end of the third quarter.

Yes. So I think that gives a light of the 1% capacity. So we don't expect that much capacity cuts coming from our network. The prices are really steady. and we will adjust if needed at the, let's say, in the winter season.

And with respect to the gains or the incremental revenue that we're seeing because of the ongoing strikes at Lufthansa, yes, well, it's now going on several times that we've seen this. And naturally, with the flights being relatively full with what is going on in the Middle East, we are seeing yields going up by default more so than would have been the case in Lufthansa were not on strike. And then, of course, on routes going westbound, we are seeing increases. So obviously, that's positive for us, and we'll continue to watch that. But yes, definitely positive for us.

The next question comes from Jarrod Castle from UBS.

I mean I think Steven you said at the moment passing about 6% of the increase in the fuel. . .

Jarrod, you need to do something on your connection because it's difficult to hear you.

Sorry, is that better?

Much better.

Okay. I mean you were saying that, Steven, that you're passing on about 60% of the increase in the fuel cost. And I guess for the full year, we're talking about over $2 billion increase. I mean, should we assume that the net headwind on your earnings is approaching $1 billion? Secondly, if I may, you also spoke about CapEx being below $3 billion. Can you maybe quantify kind of the magnitude in terms of how much below $3 billion and the areas that you might look to cut CapEx, please? And then just lastly, I mean, you obviously said you're going to progress with TAP. So just any initial thoughts based on the initial due diligence or views in terms of how you see that opportunity? Are you more excited, less excited? Do you think you can do a lot more with it than maybe you initially thought you would be able to?

Okay, Jarrod. First, the 60% is a proxy for April. But we have, of course, the actual yield for the first 24 days, and we know already what we have sold. So that is not so difficult to say. I think the 60% is more a proxy for the second quarter. I think for the third and the fourth quarter as the fuel price is still very volatile, it's very difficult to say. So I don't -- I'm not going to take any bet on this at this moment. But you will know that the fuel price is still in backwardation. But if there is happening something tomorrow positively because that can sometimes also happen, then it will also steeply drop. So let's take it more for a proxy for maybe the second quarter than for the full year. I would not take anything for that.

And then on the CapEx, yes, what I said, what is strategic, we will continue for sure. We look at the innovations, but we try to limit it and what we can further delay, we will further delay for the moment. But let's say, we are already in, as you know, for 4 months. And so don't expect that there will be a CapEx cut of 20% or something. It will be more limited. You can more talk about, let's say, a range between 5% to 10% or something. That is what we are going to do.

And I think on the CapEx mitigation, I mean we went through this exercise during COVID. So we have got a lot of experience in this. There's a chance that just naturally, we may take a few delays from Airbus, which will push CapEx into next year, not linked directly with this crisis. So as Steven just mentioned, we will see some reduction in CapEx, but we're not looking at a massive reduction at this point. With respect to TAP, so we've -- as you probably know, we put in a nonbinding offer. And the next phase is the binding offer, which will be in the next couple of weeks. And we do -- we have intended -- we have indicated our intent to follow through. There's only 2 bidders, ourselves and another party. And the strategic importance of TAP to us remains the same. The geographical location of Lisbon to build on top of our already strong position in Latin America is still very important. We have our historic relationships with an airline in South America, Brazil being our most important market. So the way we view Latin America has not changed whatsoever, and we'll put through the strongest bid that we can.

Yes. And on top of that, let's say, we will do a more in-depth due diligence. So we -- of course, the data [ room ] because it was open to, let's say, all the competitors for this bid. We will now do an intensive due diligence on, let's say, the financials and also on the legal. So that is what we are going to put in place in the coming period. And then we come most likely with a binding offer at the end of July, at the beginning of August.

The next question comes from Harry Gowers from JPMorgan.

A couple of questions from me. First one, I mean, you've given the Q2 kind of book load factor in the presentation, but any concerns on forward bookings when you look a little bit further into peak summer and Q3? And are the elevated ticket prices starting to put people off traveling at all into peak summer? And then second question would be just around Asia pricing. Very strong in Asia. . .

Harry, the second -- the first question was pretty clear. The second question, can you get closer to any GSM antenna because we lost you. No, it's not better. What -- why don't you send an e-mail to Michiel on the second -- on the other questions, and we will get back to you later. I can already come with an answer on what you say about the peak summer and what's Q2. So you see Q2. For Q3, we see more or less the same booking trend as what we saw last year. Of course, the pricing is different because we increase our prices related to the fuel price, but we see the same kind of trend. So it's not weakening. It's also not strongly increasing, but we see the same trend as what we have seen in the summer for 2025. And that also gives us confidence to keep the capacity, of course, in for the summer. Any other questions, please send it to Michiel, and we will answer them later.

The next question comes from James Hollins from BNP Paribas.

I thought it's worth, I think. I can hear all my analyst [ makes ] pretty well, not be your line, but I'll give it a go anyway. Just on -- wondering if you have any comment on jet fuel shortages, clearly a topic at the moment. So I was wondering if you just wanted to give an update on whether you are seeing any shortages, whether it's Asia, I assume you'll find in your hubs. And then secondly, clearly, you guys are closer to the regulators than we are. I was wondering if you are expecting any fairly immediate EU action on some regulation changes such as allowing tankering, that type of thing. I hope you could hear that.

Regarding the fuel shortages, we have not got any issues today. We don't see from the Dutch state or the French state. We've been working very closely because it's not only aviation where there's a concern of fuel availability. In the short term, we don't have any indication there'll be an issue. Out stations, we have 6 stations around Asia where there could be a concern, at least not in the next short while that we're looking at in terms of stock, what could be available in -- after the next 2, 3 months. But today, we're not in a position to give you a viewpoint. Our assumption today is that we don't have any issues with stock at least through the end of Q2.

And on the regulations, let's -- what is very important, and we have those discussions also with the government and with the EU is that we have not a difference, let's say, that it's allowed to use jet fuel with the specification of the U.S. because we are flying on those planes continuously with U.S. fuel. And second, it is more a difference, if I understand it well, related to freezing temperatures, which are not expected at all to happen during this summer. And by the way, we know that in the U.S., it's more -- usually more colder than it is in Europe. So we have to get an alignment over there so that we have access to jet fuel coming in from the U.S.

The next question comes from Stephen Furlong from Davy.

Would your expectation this year be that the transatlantic, there's certainly going to be a decent element of pricing power given, for example, all the U.S. airlines are unhedged and talking about recapturing an increasing proportion of fuel as they go through the year. And then can I just start with short haul? Maybe it's more of the low-cost sector, but some leisure companies, airlines have reported delays in bookings. And I think some of this is the media comments that there could be cancellations because of lack of fuel. So kind of it's related there to what Ben you said just in the previous question that I think the media commentary on supply is slightly distorted from what is reality. Would you agree with that or not?

Stephen, yes, on long-haul, pricing pressure, yes, we're somewhat hedged whereas U.S. carriers are not. So on the transatlantic, we are and we continue to expect some increased yield versus because of that situation. So that should be positive. However, we are in a JV across the Atlantic. So some of that will be shared with our partner. But yes, that's a positive. In terms of demand, as of yet, we're not seeing any impact from what we expect would be associated with any fear of a lack of fuel and a potential cancellation of flights long haul.

On the short haul, we have quite a bit of exposure with our low-cost carrier, Transavia, to Northern Africa, where the segment of customer is a little bit different. It's a lot of VFR traffic to Algeria, to Tunisia, to Morocco. So the booking patterns and the reasons for travel are quite different than someone doing a city type break. So we're not seeing as of yet any change to those patterns. We do expect depending on what kind of messaging goes out and how customers who take those types of trips might react to the current situation, and we'll probably be in the same position as other low-cost carriers. It is a bit early. We're not seeing anything material yet for the summer. But on a big portion of Transavia's capacity, it is assigned to markets, and we have segments of customers, which don't fall under a typical intra-Europe type segment.

The next question comes from Andrew Lobbenberg from Barclays.

Can I come back to the 2 acquisitions? I know you were asked already about TAP. But how are your thoughts about that transaction in the context that we're limited to a minority stake at the moment? How concerned are you about it being a minority? And then can you talk to us a little bit about SAS? I know the competition policy process evolves, but I think they're unhedged. So does that mean that you get them for a very advantageous price since I think the price was just straightforwardly linked to their EBITDA. So a little bit on that.

And then if I can hop in on, I think, the question that Harry asked, which is Asia and the unit revenue win for you had over 30% in March, you told us. How are those Asia unit revenues looking in April? And how quickly do you expect them to drop away? As Harry said, the Gulf carriers have got a lot of planes in the sky even if they're quite empty.

Let me start. So yes, on SAS, as you know, we have an EBITDA multiple -- and let's say, it's based on the net debt. So for sure, the current circumstances have an impact on the price, but we also agreed a minimum price with the private equity firms. So that is also in place. So we cannot get the company for 0 if that is your expectations. And then if we go to April, then on April, you will -- we have -- indeed, we see the same trend as what we have seen in March. So that is -- so there's no impact indeed yet from anything for booking away to the Middle East carriers. But of course, receipts are available and they will be put in the market. The question mark is how many people are taking that route at this moment. But up to April, we didn't see any impact of that from books.

Andrew, in terms of maintaining yields as we've seen on Asia, I think what's been -- what is turning out to be a great opportunity for us is customers that we did not have or customers that we used to have trying our service, flying nonstop on routes where they may have been making connections before is a good opportunity to acquire customers at a much lower price than if we were just going after them in a regular situation. And it gives a good opportunity for our sales team to leverage Status Match with Flying Blue, et cetera. So it's a great opportunity for our sales team despite this crisis situation to go after new customers that we hope we could keep in the future. So obviously, specifically corporate customers.

Coming back. No, we're not finished yet, Andrew. And then you can come back. So -- and then we had an sorry, there was -- because it was also the question before. So on the jet fuel, so we have hedged, let's say, if you take the 70%, for instance, in Q2, that is the oil package for sure. And then there is a part which is related to the liquids to make out of oil jet fuel, and there we are around 50%. And then you have another question, Andrew?

Yes. No, sorry, I asked first -- actually, I didn't ask about the fuel, but that's interesting. and how you feel about the minority stake rather than the majority.

Yes. So let's say, we cannot say anything about that at this moment. But we know what are the conditions from the Portuguese state, and that is the, let's say, the 45%, which is for sale. So we know what are the conditions from the Portuguese state, and we are in discussions with the Portuguese state how we get back to that.

The next question comes from Antonio Duarte from Goodbody.

The first one is related with the cargo yields. Of course, Q1 impacted the comparable impacted from the frontloading seen in Q1 '25 and also where -- of the unpredictability of cargo yields. But if you could give us some color going into Q2, that would be appreciated. And my second question relates to your unit costs ex fuel, et cetera. In your FY '25 results, you seemed confident that you could aim towards the lower half of your range. And now considering, of course, all the dynamics that have been on over the quarter as well as the Schiphol temporary discount on airport charges. If you could give us some more color in how confident you are regarding this, it would be appreciated.

Yes. Thank you, Antonio. Let's first start on the cargo yields. So the cargo is -- yes, it's always a very short booking window. So that's always -- so it's very difficult to predict exactly the future. We put in place a system that we will recover the fuel part of our revenue. So that is in place at the moment, and it's also what we're expecting. And if you look at where we are at April, we are even slightly better than what we see on the passenger business. But then again, we only have the April numbers in. We can look at the 2 weeks bookings ahead, and then it's still signed. We need to keep in mind that, of course, the Middle East carriers kept their freight are still flying and they're still having also their planes flying and the package is less worrying where to go. So that is true. But of course, people also avoiding the Middle East given the fact that they want speed for the products and they want to be sure that there's no interruption. So for now, we see quite good cargo yields, but the question mark is where it will go further because we don't have any bookings in, but we put in the pricing mechanism towards the market that we will get a part of the fuel increase in -- through our revenues.

Then on the unit cost, I didn't say that we are ending -- so we ended the first quarter at the low end of the range. We still think it will be between 0% and 2%. And of course, we're welcoming the Schiphol discount. So that's helpful for our unit cost. But we are confident with the range we give to 0% to 2%. Of course, if we cut capacity, that has an impact on the unit cost. But at this moment, we don't see that it will have an impact on this range.

Just add one more comment on the unit cost and how that relates to the recent announcement by Schiphol for the temporary reduction in the costs. This is the first positive news we've had in a long time out of the Netherlands when it comes to costs associated with operating at Schiphol the government with taxes and charges at Schiphol. So look at it very warmly. I mean it's very good news. And the discussions we've been having with the Dutch state regarding how we make Schiphol and the Netherlands much more competitive for connectivity is going in a much more positive way than it has in the past. As you know, as we all know, Schiphol and the Dutch state have a long, long history on overperforming from a connection perspective and the value of that and what it brings to the Dutch economy is now at least is being recognized by people who were not in positions of influence in the previous government. So we're really hoping that we can translate that into something that turns positive for us. And then one of the positives, of course, is a lower unit cost.

[Operator Instructions] The next question comes from Marc Zeck from Kepler Cheuvreux.

First, just a clarification. When you discussed the operating results from KLM and Air France separately, it felt like you only -- you said that only for Air France, there was a delay in the fuel cost booking. Is that correct? So for KLM, the operating result is already kind of reflecting March fuel costs? And then related to that, obviously, for the group, with higher revenues that you were already able to harvest, but nonfuel costs not yet reflected, one might say that the results are a bit skewed. So what would be the additional fuel costs in March if they were like booked on the spot without any delay due to contracts or anything? And then the second question, I guess you also heard that one of your U.S. competitors talked about pricing power in the industry in the latest earnings call and said that overall airlines have probably underpriced the services. Would you agree to that? And assuming that fuel prices come down later this year or next year, would you expect that ticket prices will not reflect the fuel price reduction rather stick at higher levels? Or would you expect that ultimately, ticket prices will come down to really reflect the entire potential drop in fuel prices once the crisis is over? That's my question.

Thank you, Marc. Let's first start on the delay in fuel price, sorry. That was not my intention. They both benefit from that delay. So they both have a delay in their systems. So -- and it's actually more or less working the same. So that is not at all my intention to say that KLM didn't benefit from, let's say, the fuel hedges versus the spot. Your question about the spot, the second one at the group level indeed. So just maybe to restate it, maybe I was not totally clear. So if you look at what we paid for the spot, it had an increase of EUR 107 million impact in March. That is the impact and it's in euros. So in dollars, you can increase that number. And then on the hedge, we got back EUR 164 million. So there's a total gain of EUR 57 million, which is reflected in the EUR 86 million, where there's also a part related to till February because we had a positive impact on the fuel price year-over-year up to the end of February. So to make it completely clear, I hope this answers your question.

Then on the pricing power, yes, of course, there is a big relation with the current situation. So it's part of it is the fuel price, and we are quite well hedged compared to, let's say, all the competitors in the world. So in certain areas that we gain, of course, pricing power to increase prices for that reason. But if oil prices and fuel prices are getting back to where they were, I think we get more to the normal pattern what we see, but we still expect that we can increase our unit revenues because we have the premiumization strategy. And we also have the strategy more to gain from our domestic market than from the connecting market. So it's really focused on the premium and to make sure that we, let's say, benefit from that in terms of unit revenues.

There are no more questions at this time. So I hand the conference back to the speakers for closing remarks.

. . . who joined us today. Thank you very much, and we'll see you in 3 months.