Aegean Airlines Stock

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the first half 2026 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman of the Board of Directors. Mr. Vassilakis, you may now proceed.

Yes. Good afternoon, everybody. And just to say, I'm joined here by our Deputy CEO, Michael Kouveliotis; our Deputy CFO, Stella Dimaraki, and our Investor Relations Manager, Anthi. So welcome again to our 6 months presentation. Clearly, this year has shown for our industry and indeed the world many more challenges than anticipated, both in terms of geopolitical stability and particularly its translation to energy costs and jet fuel costs in our case. Within that context, Aegean had what we believe is a reasonably successful second quarter of the year, where despite these challenges, we have managed to retain for the quarter positive profitability despite the disruption of having to forgo part of our network in the Middle East and more importantly, of course, or even more importantly, the dramatic increase in the jet fuel cost.

I'll give you some of the basics, and then we can come back to questions. So in the second quarter, our activity was increased in terms of revenue by 3%, with ASKs basically remaining stable. This comes from the imbalance of the cancellations of a significant number of the routes in the Middle East that is well known to the market. And due to the flatness of the ASKs, the passenger number was only up by 1%. So EUR 496 million of revenue, 3% increase relative to last year, and EBITDA of EUR 99 million, down 12% for the year, an EBIT of EUR 44 million, down 29% for the year and a pretax level for the quarter of EUR 23 million, down almost 70% for the year. This latter part is also materially affected by the valuation effects, which were heavy this year on the negative side as opposed to quite positive on last year's side, so on the quarter that had a significant effect.

Nevertheless, the quarter was positive. And also what's significant for us is that the RASK managed to stay on positive territory relative to the year before, something which seems to be reasonably good in comparison to short-haul carriers that we have seen published results in the industry. So despite our relative, I would say, proximity to the Middle East where a significant part of our network was affected and a lot of our connectivity was affected as well as we lost part of the network that contributes to East to West for the period, still, we managed to pull out a retention essentially of the RASK level with a marginal improvement which seems to be better than market for short-haul carriers for the period.

Including the quarter itself for the whole 6 months, we carried 7.8 million passengers. This is a 3% higher number than the year before, which is just about the same increase that we had in ASKs as well for the 6 months. In the 6 months, due to the imbalance of the second quarter, domestic traffic growth was higher than international, but this is momentary. This has been restored after Q2 once these routes were reconnected. And of course, with the inclusion of the second quarter with a positive but significantly reduced profitability to the total of the 6 months, we arrived to -- sorry, EUR 817 million of revenue, 4% increase of revenue relative to last year, EUR 145 million of EBITDA, which is 7% lower than last year, but a 35% reduction in operating profitability or EBIT and a marginal loss after tax of EUR 3.3 million relative to the EUR 48 million of profit after tax of last year. Once again, part of that delta has to do with the financial valuation effect, which last year was quite positive during the period and this year negative.

During this first 6 months of the year, we have taken delivery of 5 new A321neos. We have gone through the peak of the disruption in terms of grounded aircraft, which was around about between February and April, where we reached actually 14 to 15 aircraft grounded at the time. I remind you, last year in the summer, we were at 10. But between the April -- March, April peak of 14, 15 aircraft and the peak of this summer, we again were back down to 10 aircraft, and now we're clearly on the 10 aircraft being grounded. And now we're clearly on the declining side of this whole disruption. We're still in negotiation with Pratt & Whitney for some items, but our conviction is that we will have a substantially lower level for next summer and by the end of the year of '27, we will be down to no further aircraft being grounded.

It's already the case that we have accepted 43 aircraft, including the 5 that were accepted in the summer. And indeed, in this summer, 33 aircraft were flying, which is a significant increase relative to last year, 33 neo aircraft were flying, a significant increase relative to the 26 that were flying the year before due to the number of groundings and a lower number of deliveries. So our schedule of accepting aircraft is moving forward with the planned pace. There's been no change with that. We're also quite gratified that the majority of the aircraft that we have accepted this year, 4 out of 5, we did sale-leasebacks for, we did a JOLCO for. Difference is that sale-leaseback is 100% fixed. JOLCO is part fixed, part floating. And so given the volatility and the upward trend in the interest environment, it's important to note that the vast majority of our fleet, we can give you precise numbers later, is on a fixed rate basis and not open to rate variation.

In terms of liquidity, it's very important to note that the group has stayed very much on a very strong position. We have, as we note in the press release, EUR 100 million more than last year at the same time or the same amount as we did on the end of 2025, which is circa EUR 950 million, EUR 956 million cash and cash equivalents, having repaid our bond, our first EUR 200 million issue -- 7-year issued EUR 200 million bond in March of 2026 and also having paid a little bit over EUR 80 million to our shareholders in dividends. So despite the EUR 200 million prepayment of the bond loan and the EUR 80 million of dividend payment to our shareholders in May, the cash position of the company remains at EUR 950 million as at the end of last year, which shows that, once again, Aegean is in a significantly robust, let's say, capacity of absorbing volatility and risks as they may come from our environment.

A couple of words for the summer, meaning Q3. In the summer, we've managed to increase again our ASKs after recovering, as I said earlier, our capacity from the Middle East. However, it should be noted that we have never recovered the full plan of 2026 as it was estimated. We had guided you before the year started and very much at the beginning of the year to a 7% to 9% ASK growth overall for the year and something like a 6% for the summer. Clearly, due to the circumstances, both in terms of the Middle East, but also in terms of jet fuel and fears about demand, we have reduced that significantly, not only in the first half, but also in the second half. So in Q3, we were flying at an average of 2%, 2.5% increase of ASKs. However, by the end of August, we have achieved a little bit shy of 5% in terms of passenger count, which means that we're able to take advantage of the larger capacity of our A321neos, which are now more numerous in our fleet.

And also, again, we have a pretty decent indication, which is not a certitude today, but at least an indication -- a strong indication that our revenue per ASK for the quarter will not be lower than last year. It will be somewhat a little bit marginally higher than last year, including September. And this is, I think, again, a positive indication of how successfully we have managed to balance our network in reaction to what's going on vis-a-vis what we're reading and hearing about around the market and also different, let's say, fare trackers that we have used also to see what's happening around us. So the summer quarter is -- has been reasonably resilient in terms of demand. Of course, we did not expect the jet fuel situation to rebuild in terms of a level of where it stands today at 100% higher where it was at the beginning of the year.

We had all hoped in June after that initial cease-fire agreement that there would be an abatement. This was only temporary. And now we're looking at a situation where it's clear to all of the markets that at least for the next, I would say, 2, 3 quarters, it's likely that we'll be faced with a significant delta in the price of fuel to what we're accustomed to, possibly even twice what we used to pay a year or 1.5 years before. Clearly, this means that our attitude towards capacity has to be completely different going forward, especially after Q3, where traditionally, especially in Greece, the revenue quality or the fare level begins to be significantly weaker than it is during Q3. So for sure, the maximum you should expect our capacity to range for Q4 is around about flat. It could be between minus 1% and plus 1% in ASK, but certainly no higher than that.

And this is something that's going to be checked and rechecked every week with a much faster adjustment pattern than in the past, treating this situation very much as very special cost situation-wise, in which depending on the particular demand and cost structure of every route, we might need to make adjustments, particularly during the winter where DOC, direct operating cost, or variable cost becomes a much higher percentage of overall revenue.

And we have to try to ensure that the great majority of what we fly continues to contribute towards our fixed expenses even in winter. So looking at what we aim to do in the next 4, 6, 8 months because I think by necessity, the planning horizon becomes shorter in situations similar to this one. As I said, we do plan to have much more frequent revisions of the network to ensure that we're balancing our commercial requirements with the financial situation and costs as well as possible.

We will continue to work with Pratt & Whitney and other entities in the market, lessors and whatnot to accelerate the -- to the degree possible, the employment of our already delivered and partially idled fleet in neos. We will refrain from extending any of the expiring jet aircraft. These are older aircraft. And in this particular situation with the costs that we have today, it is important to let them go because the delta between using neos and older generation becomes much higher. And we are glad that we have the opportunity to receive early -- starting first, second quarter of next year, the LRs in our fleet, not only because they are longer range, but more specifically because they will offer us an opportunity to upgrade the quality of service we offer to some of the routes we are already flying.

And if I were to say 2, 3 years ago, when we took the decision to get into the LRs that I would have expected that a more comfortable business class, a more true business class product would be as important as it seems to be today, I would not be telling the truth. It seems to me that around the world and in Europe, airlines are actually pretty much heading in the way of upgrading the product offering because what they see is that the demand of the more demanding, more frequently flying customer is more resilient to basically macroeconomic shortfalls. And therefore, travel is getting more expensive no matter what we do on the choices of airlines, unlike what was happening in the 10 years or 20 years that preceded COVID. And therefore, we're very happy that we have the opportunity to offer to our customers as of next year in some of the routes that we will select to fly this aircraft an upgraded product.

We're also moving in the direction of upgrading our services in other areas. We're building a couple of new lounges. We are deepening the product offering of our mileage program. And we think that these things will become more relevant for customers going forward, as I said 2 minutes ago. We do think that whether it is by necessity or by choice, the next year, 2027, is going to be a year where all of us will have to concentrate much more in consolidating efficiency, consolidating quality, removing elements from our activity that don't make sense, reevaluating where we should invest more and make sure that we are doing it right because -- and at the same time, give us a chance to catch our breath and improve the training level, the performance level, the cooperation level and the culture of our people.

Because in any situation where the market is challenged like the year we're having and possibly the year ahead, we know that what's very important is to be able to stay on track on your long-term direction and to ensure with your loyalty to your people and taking care of your customers that whenever the crisis abates, there'll be strength enough and momentum enough and capacity enough, whether it is financial, human or otherwise in the company to keep going forward once again in a more dynamic pace.

But there's no mistake, we are definitely -- whether because of the energy crisis, the disruption in the relationships and the geopolitics in our wider region towards the Middle East or because of the yield environment, not in fares, but rather in bonds and interest rates and government debt, we are definitely in an environment where consumer capacity to spend and confidence to spend could be challenged.

And that, together with a higher jet fuel cost is a very difficult mix, which an airline like us with a tradition of being prudent and being able to navigate through crises have to sail through very carefully. So that's what I want to say as an opening statement and glad to take questions by any of you, either me or my colleagues. I would ask only that things that are very granular be addressed, if possible, after the call directly to our Investor Relations or our treasury. So we don't sort of get away from the larger picture, which I think is more relevant in this particular time. Thank you.

[Operator Instructions] The first question comes from the line of Natalia Svyriadi with Eurobank Equities.

Well, I was thinking on how we should think on capacity growth, but you already answered this. I don't know if you could give us some color on how competition treated capacity in the summer period, obviously, not what is going ahead. And I also had a question on the fleet that you mentioned. How many JOLCOs have we got in the fleet at this point? And you also mentioned that you're going to let go some older ceos. Do you have maybe an indication on how many are expiring in the next like a couple -- 1 or 2 years so we can get how this could affect that?

Yes. Thank you. Let's start from the fleet because it was the last and that way, I can try to remember the first part as well. Ceos, we're always going to let go. Actually, we have delayed ceos from going away, if you would recall, because of the grounding of the Pratt & Whitney engines for checks. So we have been forced looking 3 years back to make extensions on aircraft that we would have wanted to have redelivered. So what is happening now is one problem is abating, basically gradually the problem with the increased checks of the GTF engines. So the requirement to extend ceos is gradually going away. But at the same time, of course, adopting a more cautious approach towards capacity means that other than getting more neos to fly, we don't want to get any further capacity by retaining some of the ceos.

Now having said that, I believe there are 7 ceos that expire in the next year and probably another 5 to 7 in the year after that. So that -- you have to put that against the fact that we intend to reactivate 10 aircraft that are now idled. We are accepting 2 more aircraft next year, and we have 7 aircraft to accept as new jets in 2027 and '28. So 2 more to go this year, 7 to come in the next 2 years that makes it 9 that are not today in our fleet. So that plus the 10 that are idled and will come back to work by the end of 2027 gradually makes up 20 aircraft, which means that actually, we will have a higher number of aircraft by the end of 2028, even if we allow all our ceos to expire.

So there is no challenge in our current capacity, neither in the qualitative nor in the total, let's say, availability sense. In order for us to actually get back to the number of aircraft we're flying today without increase, that would be the end of '28, beginning of '29 as per expirations, I think, so mid-'29 as per expirations, I think. So that's for the fleet.

In terms of how many JOLCOs we have altogether, we have 5 JOLCOs altogether. And so -- but I think what's more important is to note the following. In total, we have EUR 1.6 billion liabilities in euros either in leases for aircraft or in borrowings, loans, JOLCOs for aircraft or in our mark traded public bonds. So we have a total of EUR 1.6 billion of liabilities for aircraft, for the bonds -- for loans and for leases. Out of those, 87% are fixed interest rate and 13.5% are floating interest rate.

So basically, EUR 1,400 million or EUR 1.4 billion fixed rate and circa EUR 200 million floating rate. The fixed rate is fully in dollars and the floating rate is largely in euros. The only fixed euro rate liability that we have, main one is the EUR 250 million bond. I think that should answer the fleet-related financing and availability questions. And then I forgot your first question, I'm sorry, does you start -- capacity of competition, right?

Well, I think what we have discussed in previous meetings and previous calls was there were no -- I mean, maybe people took 1.5%, 2% away from their peak summer capacity this year relative to what they were planning at the beginning of the year or the end of the year. Why? Well, first of all, if we're looking at European carriers, we are among those closer to the Middle East, right? So we have a relatively larger part of our short-haul network that gets affected.

But the second reason is that for everybody, the summer is a time where the revenue per flight is significantly higher for all carriers than the variable cost per flight. In other words, the cost that you save from not flying the aircraft, but of course, keeping the aircraft and the crews, the staff. So in an environment of a summer operation, it's actually much more difficult to improve your results given you have a given level of fleet and staff costs by reducing flights. So the degree to what you can do that -- to what you can do that and improve your results is usually 1%, 2%, 3%. And that's what people did. They moved basically 1.5%, 2%, something like that out of their respective systems.

Now going into winter, it's an entirely different situation. We've already had 2 or 3 major carriers making statements that they intend to go to flat capacity relative to the year before in winter when they were looking at 4% or 5% or 6% growth on an annual basis and as an overall policy in the beginning of the year. So there's already been a movement. And I expect -- and it shows to be next to -- I mean, if we're looking at the capacity degrees, as it shows today for the last quarter of the year, it looks like a 2% increase, whereas last year was a 10% increase when we're looking at the same point in time.

And I don't think you will see that 2% plus materialize. I think even that will go away because people have a short horizon. And when we look at the beginning of next year, it's going to be even lower than that because the weakest part of the year is for every airline in the Northern Hemisphere and in Europe, in particular, is the first quarter.

Okay. Great. That was very, very clear.

But to be clear also and this is the main challenge for all of us, we have not seen evidence yet of short-haul carriers being able to collect more per flight or per available seat kilometer to recover the part or full of the fuel cost. So that has been more effective in the long-haul market, where, yes, fuel is even more important than in the short-haul market, but also where the competitors are fewer and in some cases, like over the Atlantic, aligned between themselves, between the 3 joint ventures. So this is what needs to be addressed in the short-haul market.

And this can only be addressed by a gradual reduction of capacity, which will allow the carriers to get the confidence and the evidence that the revenue per flight can be different because -- as we have also discussed in the past, you can change your rates, but then we know that in every flight, you've got 20 different prices and what you sell depends on the propensity of people to buy your tickets. So if the capacity doesn't get reduced so that people gradually get used to higher fares, it's not going to happen. And when fuel is 20% to 22% of an airline's cost and when it is staying double what it used to be, there is no other way to deal with it if we're talking about a level that's going to be retained for some time.

So we're off to a tough winter. Let's see.

Yes, I read in the paper that it's going to be tough this morning.

The next question comes from the line of [ Lynn Nguyen ] with Wood & Co.

I just wanted to ask, if fuel prices remain very high also in 2027 as the curve currently indicates, what behavior do you expect to see from competition as you already previously said? And what else do you judge could be like the best course for Aegean in such environment? That's my first question.

I'm sorry, could you repeat the first part, what would we expect from competition and in which direction? Sorry, I missed it. If fuel stays high for most of '27, then what was the question?

Yes. So what do you judge would be the best course for Aegean in the next year with the high jet fuel prices? You said that the winter will be tough and that you will -- probably the capacity will be up, but what else do you see there? Is there any?

No, I think -- I mean, I believe I sort of referred to all that. I believe it seems to me now that there is evidence indicating -- and again, I'm not a specialist in the energy market, right? But from what I read about what happens and the reasons that particularly jet fuel is higher, which is not only related to the supply of fuel -- of petrol -- I mean, sorry, of Brent, but has particularly to do with the refining capacity that has been affected by attacks in different areas of the world, whether it is in the Middle East or between Russia and Ukraine. This means that full recovery of capacity to produce the products that are needed for different areas is going to take a while. Therefore, that makes us all more cautious. If you ask me today, I would say I would not expect Aegean to grow in terms of ASK in 2027. And if we believe that we have -- we see evidence that we need to reduce frequencies here and there, whether it is in international, domestic to get where we need to be in terms of fare adjustment, we will look into that as well.

Of course, that I say without knowing what the competition will do. I am assuming that carriers all need to cover the same more or less cost base. Therefore, I expect them to be very cautious as well. And hopefully, this will support the market. If it does not, well, Aegean does have the capacity to defend whatever strategic priorities or commercial priorities, not to use big words, we need to do, whether it is in market share and slot retention and customer relevance. So Aegean has the capacity to defend its area in case our competitors do not show the cautiousness that we expect them to show. So all that would mean is that it will be more costly for us and for them. But you cannot take that possibility out of the question.

What really matters in those situations is that you retain enough resources, particularly financial resources and relatively efficiency level, which for us is important because assuming what we expect will be flying next year will be flying, we will be one of the highest airlines in Europe in terms of penetration of new generation aircraft. So between having a high number of new generation aircraft in proportion to others overall in Europe in our short haul and having, I think, really strong financial capacity for our size, I think that puts us in a good place to go past this crisis, being cautious, not wanting to expand capacity and even being -- considering even reducing capacity if we feel the market demand versus supply balance -- sorry, demand versus cost balance requires it, but also definitely being able to step up in particular cases and defend our routes, defend our share where we think our strategic position might get affected.

So we are going to do what we can to have as low cost as possible from these circumstances that we find ourselves. But if challenged, we will defend our ground because, of course, we do think we're strong enough to go past it and be around the corner on the next day. And in previous crises, we have shown that we end up coming out stronger than before because we are so prudent and because, as an example, we only need to finance 7 aircraft over the next 2 years, whereas we have financed basically 14 aircraft in the last 2 years.

So we're not overburdened by incoming liabilities. We're not overburdened by the absolute requirement to fly more to utilize aircraft that have been already committed to. And we've got a cost base which is competitive, a high penetration of new generation aircraft and significant cash relative to our size. Therefore, we will try to be cautious. But if attacked, we will defend ourselves because we know that the profit does not come during the crisis, it comes the day after the crisis.

Can I ask then, do you see any evidence of the ticket prices moving upwards for the winter now? Or is it from that fuel pressure or anything like that?

Yes, we do see some evidence of forward pricing being higher than the past. But unfortunately, the percent of tickets that have been sold typically in winter is lower, the presales period gets shorter. And therefore, I cannot use it as a really convincing argument. If the trend that we have seen in the last few months of how winter is sold continues as we get closer to winter, so second half of September, October and early November, then I would be more convinced. But today, the indication is there, but not the conviction.

Okay. And the last question only. Can you share some color or magnitude into the Pratt & Whitney compensation payment?

We're not supposed to, I think. Everybody around is waving their hands and heads and making noises. I don't say anything. But I think what I can tell you is that the discussion on Pratt & Whitney has got different sides. One is compensation about idle aircraft, other is availability of additional spare engines, prices that you buy additional spare engines at, shorter or long-term leases that they can provide either for free or special terms. So it's a whole variety of things. I don't think we can say we are any different than other carriers.

We are a, I would say, let's say, midsized Pratt & Whitney customer. I don't think we've got the best deal in the world. But what I do think that is very relevant is that we have a comprehensive usage agreement or cost agreement in terms of what we pay for the maintenance of the engines or the reconditioning of the engines, which supports us going forward. So I feel reasonably confident in that direction that, again, we will not be on the short end of the stick relative to market. But I can't say it has been fun for the last 3 years, and we have another year to go.

[Operator Instructions] There are no further questions at this time. Apologies, we do have one last question. The next question comes from the line of Rahul Singh with Barclays.

I have a quick question on jet fuel hedging levels for this year and into next year, the hedging levels and pricing. And also, if I may, please could you highlight how volatile the situation is in terms of current escalated fuel prices and if we are at risk of our investment or in case Volotea seems in trouble or something?

Right. So in terms of this year, we are around about 65% at the levels that we have indicated earlier during the year, which is basically more or less the level that fuel was at the beginning of this year. This is what our average hedging had been at, and it's still there for 65% of what we need until the end of the year. For the next year, we are around about 15% at a level about 20% -- sorry, 15% at a level about 20% higher than the level we had hedged this year. So materially, there is a significant need for additional buying, gradually doing for next year, of course, trying to take advantage of the backwardation so we're buying further out.

In terms of what you said about Volotea, I didn't exactly understand your question. We -- in our last call, we highlighted -- we repeated the amounts that have been invested to the company, which are basically EUR 32 million in terms of convertible debt and EUR 5 million in equity, in shares, in common equity. We are -- never been Board members or involved in managing the company. The company had improved its results the last 2 years, '24 and '25, materially for '24 and marginally for '25. And certainly, it is still a significantly undercapitalized company, which has been hurt a lot by the jet fuel costs of this year and the effects of demand of the war.

But I cannot say anything beyond that because we are not managing the company. It is a private company. So therefore, the -- whatever it publicizes in terms of its current performance, what I did was I only just repeated other than our investment side, what size, just what they have publicized, made public for the last 2 years' performance. In terms of what they're doing now and what it might do in the future that you have to ask Volotea for that. But certainly, one cannot say that the company has not been affected and is not being challenged by the situation of the jet, being that they already have a difficult starting point in terms of capitalization.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.

Thank you all for attending. Obviously, we'll all be a little bit happier when the world is a little bit calmer. But either way, Aegean will manage to find the way through this. And at the other side, and as always, during crises, there will be, I believe, some opportunities one way or another to find a way to improve your position before the crisis is over, whether it is in fleet, whether it is in route, whether it's by acquisitions, whether by any manner of different things. Sometimes it helps. In any case, we're used to this kind of thing in the aviation industry. Every 5 years, we'll get one of those. This one doesn't seem to be as bad as COVID. So we're a little bit more certain about navigating it.

Thank you very much. And as I said before, our Investor Relations people are available should you need anything more granular than what's been granted to you here. If you take one thing out of this meeting, make sure that we'll try to divert our creativity in improving our customers' experience as best we can because the more difficult things to come, the more important it is to be closer to your customers and take care of all of them and especially those that will retain the capacity to travel repeatedly within a difficult market and a difficult economy. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling. Good afternoon.

Ladies and gentlemen, thank you for standing by. I'm Costantino, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the full year 2025 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman of the Board of Directors. Mr. Vassilakis, you may now proceed.

Yes. Good afternoon, everybody, and welcome to our annual results call. It's been another very positive year for Aegean and normally would be in a great mood right now presenting these results and the proposed dividend to the market. Obviously, our mood is mitigated or adversely impacted by what's going on in the Middle East, which is now 2 weeks old and where all of us, of course, are dependent in terms of both activity and cost structure by what happens there. Nevertheless, I will go through some comments confirming issues we have discussed in the past with regards to '25, and we'll give you also some limited input on certain things that are going on for '26 that will affect us going forward in regard to what we're planning to do.

So starting again from '25, the company registered a EUR 1.86 billion revenue, a 5% increase relative to the year before, which actually goes pretty much in line with the increase of the number of passengers, which is just about 6% as well to EUR 17.3 million and a 5% increase also in ASKs, which means that our RASK for the year remained roughly constant and so did our load factor. Our results were improved by 5% in terms of -- sorry, 4% in terms of EBITDA, reaching EUR 421 million, 17% in terms of pretax profit, reaching EUR 192 million and 14% in terms of the net profit after taxes at EUR 147 million or EUR 148 million altogether. So as I said earlier on, another strong year for the company with very balanced growth in terms of the domestic and international, presenting an equal amount of increase in terms of passenger traffic, 6% on both of those areas.

So a successful year behind us despite 2 elements that were negative for the year and 2 elements that were positive for the year, balancing each other out. The 2 elements that were negative were basically the first year of implementation of the 2% SAF mandatory intake, which added costs, regulatory costs to our operation. And of course, the gradual abolition of the grandfathering of the EPS of the CO2 allowances, which dropped another 25% in 2025, going down to 1/4 of what we had in like 4 years ago, and therefore, bringing another EUR 20 million in terms of cost. So the regulatory costs between those 2 increased by EUR 43 million -- circa EUR 43 million for the year. So those were the 2 negative effects.

Another negative effect would have been the -- was the continuation of having significant air traffic-related issues in our country, which contributed to building out disruption costs, whether it is in compensation or whether it is in actually additional fuel burn or overnight stays in hotels for passengers. So those were the elements that weighed negatively on the cost structure. And on the positive, of course, we had a better fuel rate for last year by about 10%, which, however, translates to a benefit that is a little bit lower by about 20% than the regulatory cost increase that we have and also a lower dollar, an improvement in the euro, which actually provides some valuation effects which differentiates to a great degree between 2025 and '24, where we had the reverse effect.

So if we adjust, if you like, for these different results, I consider the results of 2025 equivalent in terms of operating quality to those of 2024, neither better nor worse, even though the after-tax result is better. However, both years were, of course, impacted by the GTF issue, the grounding of the aircraft that we have, the new aircraft that we have because of mandatory checks on the engines. And in that aspect, again, '25 was burdened by a higher amount of aircraft ground. There were on average 10 aircraft grounded on average in 2025 versus 8 aircraft grounded on the average for 2024.

And the end of 2025 is essentially the peak of the disruption and the cost coming from this area with around about 13 or 14 aircraft grounded at the end of the year and decreasing from now on with several actions being taken by the company and with some partial support from Pratt & Whitney. So the result, once again, quite positive. Of course, this is supported also by how Greece has continued to develop in its incoming traffic and the spending of Greece also for travel. In both areas, we have continued to see improving numbers, the strength of the Greek economy contributing to Greece being able to travel more frequently and the continued attractiveness of the country, bringing in some additional tourism every year, albeit at lower rates of increase relative to the year before.

And here, we're continuing to see something which we expect to continue in the future, again, a rather more pronounced increase in the visitation in winter in terms of percentages rather than in the summer. And there, part of the reason is seasonal extension and part of the reason is the capacity of Greek Airport and Greek ATC in the peak doesn't allow for very much more from different sources. So that's kind of a negative positive in the sense that it fears the growth to take place in the winter, which especially as our neo aircraft fleet increases and recovers is going to help us both with utilization and costs.

So in a nutshell, that's the outlook -- that's not just the outlook. That's the actual condition of the year. We ended the year with EUR 955 million of cash and cash equivalents. We had an additional of EUR 155 million, how do you call them, prepaid -- predelivery payments to Airbus for upcoming aircraft. That number was increased from the year before because some orders we did the year before that. Actually, today, as we also wrote on the release, we actually repaid the first bond that we issued back in 2019, pre-COVID of EUR 200 million. It was a 7-year bond issued at the time and the first publicly listed bond the company has issued. It has now been repaid as of today. And I would like to also thank the public for participating in that.

As you know, last summer, we issued another bond for EUR 250 million. And we, of course, intend to continue being part of the capital markets because we believe that's a very positive plus for the company. In terms of what we were expecting to see from Aegean in 2026, we had guided in previous discussions, and I believe our Investor Relations department must have been more granular on that to an expected growth for the company for 2026 that would range between 6% and 8%, centered both in Athens, out of Athens, but also out of our regional bases in Greece, Thessaloniki and Larnaca. This is how we started, and this is how our network has been published, and this is the direction that the network has moved for the first 2 months of the year.

Of course, within the last 12 days and looking forward, we do have now a significant level of uncertainty with regards to our network. That has to do with the Middle East. Middle Eastern destinations that we don't fly to today are actually 7 in different countries in the Middle East in Israel, Jordan, Lebanon, Saudi, Iraq and UAE. These destinations and these routes represent roughly at peak -- between 7 and 11, at peak, they reach 7 flights a day from Athens, 7 rotations a day from Athens plus another 3 to 4 from our other regional bases.

So all these together constitute around about 4.5% to 5% of our seats and about 6.2%, 6.5% of our ASKs. So as one can imagine, if one takes these away, then we are looking at a year that in terms of activity would be flat. This is how the activity is shaping these days when we don't fly them. How long these destinations will not be flown, of course, is not known because that depends on what happens in the Middle East and the war that has erupted down there. In terms of another -- a couple of other important elements that I think we should highlight looking forward. One is fleet. In terms of fleet, the overall number of aircraft that we have committed with, with Airbus directly or through lessors has stayed constant at 60 aircraft, 60 neos, out of which 38 have been delivered to date.

From -- in these aircraft, however, we had counted as we had announced last year, 2 XLRs, 321 XLRs that we were going to get from another airline that wish to cancel them. With those aircraft, there has been a problem in terms of some certification issues in the seats. The deadline to receive them was pushed back by around 7 to 8 months. That created a situation where the arrival of these aircraft basically by the end of the summer and later in autumn would have made them rather redundant for us because they were meant to accelerate our entry in longer distance markets like India mainly.

And therefore, because we have already aircraft LRs of our own order coming in early '27, we took the decision around 2.5 weeks ago to walk out of that contract where we had, of course, the right to do so due to the extreme delay that had been experienced where the other contracting party had the liability. Therefore, these 2 aircraft have been canceled. They are no longer going to be received. On the other hand, we have replaced the overall capacity with 2 regular 321neos coming from another opportunity available towards the end of the year to keep the number of aircraft on the neo fleet steady. And we're looking at converting 2 more of our regular order 321s into LRs so that the subfleet of LR is able to fly longer distances and also have a very different product specification for the company to remain at 6 as it would have been if we had indeed received the XLRs.

Again, I don't want to confuse you with too much information with that. The bottom line out of all this is we remain committed with 60 neos. Out of the 60 neos, 39 will be of the higher derivatives, the 321 -- the larger derivative 321. There will continue to be 6 aircraft in total within those that will be able to fly longer distances. There will be LRs, and those will be also configured in a different way in the cabin with 178 seats and 16 sleeper seats. And actually, the removal of the XLR from the mix has 1 plus and 1 minus. The plus is that we will have a homogeneous subfleet of 6 aircraft as opposed to 2 subfleets, which would have made things a little bit more confusing. On the other hand, we pushed back our launch to the Indian market effectively by 1 year between the delay and the arrival of the new aircraft. So that's the fleet issue.

This year, we will receive actually 7 321s. All the aircraft that we're receiving from now on are all 321s. There are no 320s coming into the fleet. Obviously, this is the more efficient level -- efficient -- sorry, size derivative of the 320 family. And also, the significant delta this year relative to last year is that while there will be, at the peak, the same number of aircraft grounded as last year, 10 expected in July, August to be grounded with 10 also last year due to the number of aircraft received and certain other actions with regards to leased engines, we will have 33 instead of 26 neos flying. But even more importantly, we will have 22 out of 12 321neos flying.

So the average size of our seat capacity per flight and our fuel efficiency will be significantly improved. And of course, especially within an environment like the one we're looking at now on a relative basis to performance to other airlines, this is very important. Now looking at our hedging because I'm sure you would all like to know something about that. The company is 60% hedged from now until the end of the year, assuming the budgeted network, which encompasses all the destinations, including the 7 that are now not flown. Without the activity at those destinations, so long as we don't have the activity to those destinations, however long that might last, that takes us to 65% or 66% of actual fuel needs hedged.

So basically, while this is going on, roughly 1/3 of our activity is not covered by attractive fuel hedges. In terms of what we have seen in terms of initial reaction in terms of our booking flow since the beginning of the war, I would like to say that it's been rather similar to what happened when -- 4 years ago when Russia invaded Ukraine. There has been a reduction of flow around about 8% to 10% relative to the weeks before. And we see it beginning to normalize. But of course, it really will depend with what will happen in the next few days. Now keep in mind that, of course, we have now also taken out of our network for the few forward weeks that part of the Middle East.

Therefore, it's natural to have some shortfall, but there is also a holdback from people concerned about travel in general during this time. This is not at a very high level, but 8% to 10% is not insignificant, and therefore, we have to report it. Obviously, quite some people will wait to see how this evolves or whether it will become either to be resolved or whether it will become part of the "People's routine" like the war in Russia and Ukraine has become. The cycle -- the initial cycle, I think, in terms of reactions by people typically last 2 to 3 weeks. So I think by the end of the month, we'll have a better feel about what the customer reaction is, especially as we get closer to Easter and the summer period.

One more note with regards to the fleet. We, as I said, have 7 aircraft to be received this year. 5 or 6 of those will be financed by sale leasebacks or leases. 1 or 2 will be financed by JOLCOs or finance leases. We are well progressed in covering the agreements for all that. The AGM continues to be very attractive in terms of lessors and financial capacity suppliers in general. And we are very happy with the evolution of the offers and the cost we are receiving from that side. Having said that, just one more comment to make with regards to something that's a little bit longer term and slower moving, but where there have been some developments.

As you know, we have been operating for the last 2.5 years, our MRO facility, our new MRO facility. We do see a gradual evolution of its activity. We know it's going to be slow because it depends on the numbers of people that we train and include within that, but it is performing reasonably well. And it's nice to report that already 2 subsidiaries of 2 of the 3 largest airline groups in Europe are already our customers in that MRO. And also in the effort to develop what we have referred to as the maintenance support ecosystem, we have made an investment in a small Greek company that has a significant history in providing services to airlines in our area. It's called APELLA. They have around about EUR 15 million of annual revenue. We bought a 45%, sorry, stake in the company early in the year.

The owner and manager of the company will stay in place. And the idea is to develop the synergies between the activity that they have, which is supporting basically wheels and brakes for commercial aircraft, and they do some also work for the foreign subcontractors of major suppliers to the Greek Air Force. So both those areas are quite interesting. The synergies and the depth of what we're trying to develop are gradually moving forward. And so we are hopeful that with the years that come, we will indeed develop a significant facility with significant capacity to serve in different areas that were actually underrepresented and underdeveloped in our country.

So in a nutshell, that's what I wanted to say. I will left the reference to the dividend for the end. It's obviously there. We will increase the dividend. We will propose to the AGM that will take place in April to increase the dividend to EUR 0.9 per share. This is a significant increase from last year, and it's consistent with our payout policy, the same amount of the net after tax than the previous number for last year. And it's another year where Aegean will be able to return a good number to its shareholders. I believe the overall payout is -- will be EUR 81 million, 82 million if this is approved by the AGM. So that's where we are. Obviously, many of you will need to contact our Investor Relations department over the next weeks to get updates of how the situation is evolving.

I, in many ways, of course, -- the situation is visible to everybody. So things as regards to the cost of fuel and what's happening in the Middle East, you don't need a brief for us -- from us. The way that it reflects back to us and how we will make adjustments, whether it will be adjustments in fuel surcharges, whether it will be further adjustments to the network, how we might redirect some of the capacity and what our overall outlook for the year will be are all things that will be shaped over the next 2, 3 months. I do not believe that we will have immediate answers in the weeks to come. I would like to say that I am hopeful that this will be resolved in a week or so, but I don't really believe that. I think Aegean will have to, as usual, be conservative and flexible.

We have built the capacity to adjust and make sure that whatever happens in the short term does not compromise our ability to serve our customers. It doesn't compromise our ability to develop in the future. And that while short-term results might be affected, what remains mostly relevant is how competitive we are and how the efforts that we are gradually unfolding to develop the capacity and the skills of our people and our company continue to evolve even within patches of instability that unfortunately, for all of us have become rather more frequent in the last few years.

So thank you for attending our call. I'm happy to ask -- to answer whatever questions you have so long as they're not really about outlook because I think all of us have about the same information on that to the degree that it is relevant to what is happening in the Middle East. Thank you.

[Operator Instructions] The first question comes from the line of Svyriadi, Natalia with Eurobank Equities.

Congratulations on the results, and I hope you keep up the good work. I have 2 questions. One is regarding your investment in Volotea. How has this been evolving? If you could give us some insights on this investment and if you went through on investing further there? And also, I wanted one clarification on the fleet deliveries, the 7 aircraft we're expecting this year. Are they all coming before summer? And how has the owned versus leased mix evolved, okay, before the new aircraft coming probably? These 2 questions for me.

Thank you. I'll start from the second part, which is the fleet because it's faster to answer it. There -- the 7 aircraft out of the 7, 5 come before the summer and 2 after the summer. So yes, it's March, April, May for the 5, and I believe effectively September, October or October, November for the last 2. The last 2 are the ones which again come from another airlines cancellation diversion, release, call it whatever you want to call it. As I said, out of the 7, 5 or 6 will be leases and 1 or 2 will be funded with JOLCOs or finance leases. Where does that take the mix, Stella, for owned and...

18%.

It's 18% according to Ms. Dimaraki, if she's wrong, you can blame her. So 18% and 82% sounds pretty specific to me. So yes, so that's that part. In terms of Volotea, we have invested EUR 31 million in 2024, EUR 6 million in 2025 in a small top-up. Basically, let me explain what's different from the initial plan. The initial plan was that there would be a total capital increase of around about EUR 90 million, EUR 95 million by the different shareholders, of which we would have taken roughly 55% in 2 tranches, one which occurred when we started in '24 and another one in '25. Basically, what happened is the first part happened as planned. We had a small -- we had an opportunity to buy some additional shares from a shareholder that wanted to sell. So we bought at a lower valuation.

So that's how the EUR 26 million became EUR 31 million in '24. And then the shareholders of the company last year decided the company did not require cash-wise, the initial injection that had been budgeted, the EUR 45 million. So only a EUR 10 million increase took place in the summer of '25, out of which we took EUR 6 million. But with this second participation, our total participation reached EUR 37 million in terms of investment and our holding of the company reached 20%. And there is an active discussion close to conclusion right now for another tranche of EUR 16 million, where we are likely to undertake EUR 10 million, and that's our expectation for investment to Volotea this year. The company continues to improve its EBITDA every year.

However, it also continues to have on a net basis, a negative result due to the high financial burden that it has from the past. So I would say it still has significant challenges going forward. But on the other hand, it is the case that it hasn't required the amounts that were initially budgeted as a whole, which means that they are managing their cash needs and their performance in a rather positive way with a difficult start, of course, which was the weakness of the company even before we entered it. The good thing, I think, for Volotea is that the part of their activity is centered in basically France, Italy and Spain. And of course, they don't have any activity towards the Middle East.

So there is no demand related or rather operational challenge related effect from what's happening in the Middle East. The challenge for any low-cost company like Volotea, of course, is whether by the necessary increases of fares, whether done through surcharges, fuel surcharges or just simple increase of fares that will be needed to cover the delta in fuel costs. What will be the elasticity, will it be high, will it be low. But at least what's good for them is that they operate in a part of the market that's probably going to benefit a little bit from the, I would say, reduction of options for Europeans in terms of going towards the Middle East, towards potentially Muslim countries and also the higher difficulty of crossing over to Asia.

So I think a mixed bag in terms of what this means for them. For us, a potential investment of up to an additional EUR 10 million this year. And overall, as I said, an improving EBITDA performance year-on-year '24 -- '23 to '24, '24 to '25, but still a bottom line that's negative in the company. And we have not yet as a whole, as shareholders, invested even including the EUR 10 million that we expect to invest this year, the amount that we had initially budgeted in that direction.

The next question comes from the line of Caithaml, Jakub with Wood & Co.

Three from my side, please. On hedges, could you share a little bit more color on how the coverage is spread throughout the year? And second question, are you already seeing any signs of your competitors redeploying the capacity that they were using in the Middle East elsewhere in their network? And if so, how are they going about it? And has there been any impact so far on the routes in the markets that you fly? And third and maybe partly related to this, could you share what is your current expectation on summer capacity growth on routes to and from Greece?

You mean overall capacity market growth?

Yes, that's correct.

Okay. All right. So I'll try to answer to the degree that I can. I think it's too early to say what are people redeploying capacity in because people have not -- airlines have not yet, let's say, what's the right word, fully digested or decided or estimated in a decent enough way how long this would last and therefore, whether they are just discontinuing operations to the Middle East for a couple of weeks or whether they're doing it for the whole summer period being the 2 extremes. So up till now, redeployments that we have seen have been relatively limited, although in the last couple of days, we have started to see, for instance, some airlines saying, well, we have taken out Israel from our summer program.

But it's still quite early. I think 2, 3 weeks down the line, the translation in changes from initial planning to -- from the market will have taken more shape. Now as far as what is affected in our markets, other than the parts that we don't fly, there is a higher effect with regards to traffic to and from Cyprus due to proximity and the -- some of the discussions about the U.K. base there and whatnot. And I would say that's probably higher than the 10% that I gave you overall. There will be a higher number than that, the apparent shortfall in bookings or traffic. And we are, of course, quite eager to see that go away. And I think I'm hopeful that, that will go away regardless of the duration of the war because I think people will soon realize that the -- whether it continues or not, the damage is going to be significant, but probably more localized around the Middle East area or the Gulf area, I would say, more precisely. What else did you ask for? Sorry, because I -- sorry?

Hedging.

Hedging. Hedging is pretty much flat around the year. We don't have 80% in the first month and in the first quarter and then 60% and then 40%. There is a little bit of a higher hedging percentage in the summer months where you might have in Q3, 3%, 4% higher than the rest. But otherwise, it's pretty much flat at 60% around the year. And the way it works, as I said, 60%, if you think about it in what was budgeted as activity, 65%, 66% if you think that we're not going to be flying -- there's the activity now not being flown -- will continue not be flown and not be replaced. That's pretty flat around the year. So no big deviations about that. Anything that was -- did I miss something else?

This is super helpful. I appreciate it. Maybe on the summer capacity growth [indiscernible] Greece, keeping in mind the uncertainty.

Yes. Sorry, on the market, we had seen something that looked like more or less on the Greek market, 6% in Q2 and I think 3% or 4% in Q3 was the overall market expectation. But I don't know that -- how that will change. I don't expect it to increase with -- I would not expect significant redirection to our country, but that's just a guess.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.

Thank you overall. Thank you all for attending. Happy that we have another successful year behind us. We know that the start of this one will be more adventurous. And I hope that soon, we'll be able to be more specific about things quieting down, even though as we all know, it's not certain at all. So I hope that this year will be -- I'm certain that this year we'll be able to adjust in a way that will be at least as efficient as our competitors and probably more. How that will translate forward will, of course, depend on the world around us as well. So thank you. What I want to say is that AGM will definitely not pull back on any of its plans or capacities under development because of this.

Our longer-term, medium-term direction remains the same. We will continue to try to be an airline that offers in short haul something a little bit more than the others. We will continue to develop our MRO capacity, and we will continue to seek to fly to somewhat longer destinations and to offer as of next year, a product with a part of our subfleet that will be addressing the gradual shift of the market back to premium, which we think is both relevant for our company and actually very close to our hearts in terms of what we want to present as an image to our customers. So thank you, and we'll catch up to you on the next call. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.

Ladies and gentlemen, thank you for standing by. I'm Costantino, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the first half 2025 financial results. [Operator Instructions] The conference is being recorded.

At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman of the Board of Directors. Mr. Vassilakis, you may now proceed.

Yes. Hello. Good afternoon, everybody, and welcome to our results presentation for the first 6 months of 2025. Just to remind that along with me, I have Mr. Kouveliotis, our Deputy CEO and CFO; Stella Dimaraki, our Treasurer and Investor Relations Director; and also Anthi Katelani, our Investor Relations Manager. So all 4 of us are here for you. Happy to answer any questions after my brief remarks.

2025, first half is, again, a quarter and 2 quarters where we had, I would say, modest growth driven by our particular restrictions in terms of how many of our neo aircraft are actually flying versus the ones grounded for GTF. And within the confines of those restrictions, the additional challenge of around 2 months in the second quarter where our important nearby markets, Israel, Lebanon, Israel, in particular, Lebanon and Jordan, we were not able to fly to due to the situation there, what's going on between Israel and Iran and the effect it had to the whole area and our inability to fly for around about 2, 2.5 months, which ended on the second week of July, if memory serves.

So within the restrictions that we had, I think we've achieved a very strong set of results. We've managed to provide a revenue increase of 5%, which is 1% higher than the ASK, the ASK growth we put into the market, which was 4%, which meant that within an increasingly competitive environment, we have managed to actually increase our RASK marginally by 1%. This was done in both quarters in terms of growth, as you have already seen that the first quarter was significantly stronger in terms of ASK development versus the second.

That is part of 2 things, one planned and one unplanned, first of all, we have indicated also in previous conversations and discussions with you that we see a gradual extension of the season. We also see an increasing pattern of Greeks traveling more. So within those 2 effects, we see ourselves operating growing more in what used to be referred to as the lowest months, so Q1 and Q4 relative to Q2 and Q3. That is also related to restrictions in ATC and airport capacities around our country. But that's the first part.

The second part is, of course, what I referred to earlier, the fact that not being able to fly to Israel where at the peak of the season, we have around about 6 flights to 7 flights even a day from different places plus Jordan and Lebanon, that basically make the total amount of flights lost to be 9 for a period of 2, 2.5 months. This cost us around about 100,000 passengers on these routes. And on top of that, we lost around about 35,000 passengers on connecting routes. And in a way, the [ ConneX ] losses are more costly in the sense that those seats are not typically with the cancellation of flights close to departure, you're not able to redirect those lost [ ConneX ] seats route to other sources.

So within the confines of that, achieving a revenue increase of 5% and achieving a significant increase in our bottom line and a modest increase in our EBITDA are, I think, significant positives as well as, of course, continuing to build -- to have extremely strong cash flows where despite a payout of dividends of circa EUR 70 million and an increase to our PDPs paid into Airbus by another EUR 40 million. So a total of EUR 110 million that have been spent this way. We still had an increase of circa EUR 60 million -- EUR 70 million, I'm sorry, in our available cash to EUR 840 million.

And as we highlighted also on the report on the -- sorry, on the release, this is before, of course, the issuance of our early July bond of EUR 250 million that has further added in the middle -- beginning of July to our cash availability. It's fair to say, of course, that the development of -- the development in the same way that we lost passengers and capacity, both capacity and passengers and profitability in the second quarter due to the geopolitical problem. At the same token, we did have an advantage from the development of the euro and the development also of the fuel price. So there are effects both ways, positive and negative, which we can discuss in detail, if you like. But overall, we're happy what was done within the context of the restrictions that I previously announced or described.

Within the difficulties that we're having with the fleet, the positive element is that gradually, we are flying more and more of the 321neo derivative. In particular, as you know, the big delta in seat capacity and in efficiency per seat comes from increasing the mix of those aircraft of the fleet due to the fact that they have a 220-seat capacity relative to 180 to the 320neo and 174 on the 320ceo. The important thing for the company is that going forward, all the remaining Airbus deliveries that we are to take are indeed of the 321neo type. So that is going to be building our efficiency going forward.

And it's also important to understand that we are now in September of 2025, entering, I would say, the period for the next 12 to 14 months of maximum number of aircraft that will be on the ground awaiting these checks. Why? Because the aircraft that we have received up until the first quarter of 2024 were the ones affected with the initial defective or potentially defective part. As a result, those 28 aircraft that were accepted until April 2024 when they reach between 20 and 2,500 hours cycles they need to go for their preventive checks. And that maturity level is coming at its peak from what was basically last year 8 and what became 10 at the peak of this summer. Right now, we're at 11 to 12, and we will reach 14 -- between 12 and 14 for the next 12 to 14 months. So we're at the maximum part of the restriction in terms of how many aircraft will be on the ground.

On the other hand, as we accept more aircraft gradually, we expect to have, of course, a higher number of flying neos and indeed a higher number of flying neo 321s, which will be contributing to our efficiency and to our competitiveness. I also need to say that I think there are adjustments that we've made in our network this year that have worked well and have allowed us to offset the effects of additional competition in several different markets and the consistent growth of the market to Greece in excess of the rate that Europe's overall shortfall is growing. So adjustments in the network have helped us retain profitability.

And at the same time, I think many -- it's encouraging to continue to see that our business class product continues to have increasing penetration, still not at the level that one would like, but certainly much higher than in previous years and much, much higher than pre-COVID. So we've now -- I think this is an important aspect, especially as we're going towards the direction of introducing longer distance routes with the XLRs and the LRs that are coming forward. So we believe that this will also further help in this dimension and will have a reflection on what we should refer to as a traditional network as well.

And another issue I would like to refer to is that certainly, there is no shortage of disruptions from air traffic control all over Europe, but also particularly in our country. We are significantly active in a hopefully constructive and consistent way over the last 4 or 5 years at least with our local authorities. And we hope that in the next months and years, the amounts that have been paid in by all airlines, including Aegean will finally be used in an effective way in our local market in order for the problem to be gradually mitigated because it is becoming significant for the quality of service that visitors to Greece overall experience.

So we consider that a very important issue, which needs to be addressed, and we have highlighted that perhaps not in an equally aggressive way as others, but we have highlighted that consistently over the last 4 or 5 years. And we have made, I believe, specific suggestions on how parts of these issues could be mitigated.

Finally, before we take questions, a word about our investment in Volotea. It's now been exactly a year since we started to invest in that company. I have reiterated that in the annual results, I said we got what we expected in terms of results from Volotea for 2024. I'm happy to report that it seems to be going positively and indeed in a more positive way for 2025. So we are significantly positive about the prospects of the company going forward. It is not yet beyond all possible risks and burdens because it was burdened during COVID by significant losses and significant debt.

However, things seem to be evolving in a positive way. And we think that in the next 6 to 8 months, we will be called to make some decisions together with other shareholders about some additional injections of capital in a more significant way. And depending on what exactly the outcome of these conversations and the performance in the company in the meantime, we will also take our decisions about how to further proceed there. But overall, I think we're happy with the results. And we also think that it's possible in the future regardless of the amount of equity that we will now in the company to develop a somewhat complementary service to the regions of Greece.

The reason it hasn't been done actually already is mostly because Volotea, much more than Aegean is restricted by the unavailability of aircraft in the market. We are restricted by our GTF Pratt & Whitney cycle. Therefore, we are both relatively conservative with our capacity development over the years. So we will need some more time to develop these particular commercial synergies. But overall, we're happy with the cooperation.

So in a nutshell, also one more thing to say, expect our ASK development in the market to be somewhat higher, around about 3% in ASKs in Q3 and significantly higher than that between 9% and 10% of ASKs in Q4. I think it's fair to say that there is, again, a mix of factors going forward affecting our expectations. Demand is strong. Competition is also strong. There are fare pressures in different markets, not everywhere. Some markets are developing positively.

I think in a great extent, what we have come to expect is an annual improvement year-on-year, particularly on the September to December period as opposed to the June to August period because, frankly, people are gradually changing their pattern of travel. And even though families will always need to travel for leisure at peak, the rest of customers seem to be modifying their behavior more. So we begin to see a spill of potentially positive results also in the latter part of the year.

So I'll stop here and listen to your questions and hopefully, we'll give you a better idea of where we're at. Thank you.

[Operator Instructions] The first question comes from the line of Lobbenberg Andrew with Barclays.

Thank you so much for the clarity on capacity for the rest of this year. What's the right way to think about what we get in '26 given the more grounding but more deliberate? And then another question, could you perhaps give us more color on which markets are seeing the tougher competition and which are less? And you also spoke of doing some network adjustments that were positive. Can you remind us what those adjustments were?

Well, thank you for the question. Let me first say that I'm not going to ask specific network -- I'm not going to respond to specific network questions because if I respond on where our RASK is improving and where it's deteriorating, it's like guiding other people to go after that. It's a mixed bag, and we are very dynamic about it. I think all airlines have become significantly more dynamic about network adjustments.

There are opportunities, and we tend to make, I would say, 2% to 3% -- 1% to 3% ASK differential shifts in our overall market within a 3-month cycle. And whether that's up or down and where exactly it goes is something that we look at diligently and on a continuous basis. And I think the process itself is what brings the improvement. It's not specific trends in specific markets. Again, if you are to look at most incoming markets, most international markets in Greece, you will find between a 4% and a 7% capacity growth in all of them. So you can just not look at capacity and competition and adjust in advance.

Now in terms of the aircraft there, I can be much more specific. Today, we have taken delivery of 36 neos, out of which this summer, 10 were idled. So we had 26 aircraft flying. Last summer, we had, if memory serves, 8 to 9 groundings with a total of 33 deliveries. So there were actually only 33 minus 820 books, no it's wrong. It's 30 -- no, 30 minus 8. There were 22 aircraft flying. So there were 4 more neos flying this year than last year. And next summer in peak, we expect to have 45 minus 12, that makes it 33 aircraft flying.

So basically, you see an evolution where 8 grounded becomes 10 grounded this year and 12 grounded next year at peak. But at the same time, you see 22 aircraft flying in '24 at peak, new aircraft, of course, 26 this year and 33 next year. And what is particularly relevant even more than the increase in this number is that this year, we had 12 A321neos flying. Next summer, we'll have between 18 and 90 A321neos flying. So 50% more of the larger derivatives at work, which is what we expect more than anything else to support our results. So I hope at least on that part, I have been specific enough for you.

That's helpful. Can I just come back on the network, and I appreciate the commercial sensitivities. But in that second quarter, we saw more growth on the domestic than on the international, which versus recent trends. So we meant -- I mean, what drove that? Was that really influenced by the Middle East? Or was that influenced by commercial decisions by...

I would say both. I mean, certainly, the reason that you didn't have growth on the international network was the Middle East. We were planning to have small growth in the second quarter and a little bit more on the third and more on the fourth. Actually, the peak -- the maximum growth quarters for international were Q1 and Q4 by design. The lowest was going to be Q2 and in the middle was going to be Q3. Why? Because last year in Q3, we were not flying to Israel again and Lebanon and Beirut on and off.

So one of the things that confuses the comparisons is that if you have markets that you're coming in and out, not by choice, but rather by what's going on in geopolitics, that makes things more confusing. But no, if we look at the year overall, we were not planning to have more of an increase in domestic than international. We were planning for an equivalent level of capacity increase of both. It turned out to be a little bit different on Q2 due to what happened.

Now what I can say about the network is that within the international network. Certainly, we have emphasized a little bit more shorter destinations. So we do have, even if you're looking at the pure international network, a little bit of a drop in the average distance that we cover when we fly internationally. So that's as specific as I can be in the view.

The next question comes from the line of Caithaml Jakub with Wood & Co.

Three questions also from my side. On pricing, I understand that you're pricing slightly more softly in the summer than last year. Any comments on the extent of the softness? And also, could you tell us how the pricing was evolving during the individual months of the third quarter? And maybe related to that, are you now and to what extent flying back to Israel?

Okay. Again, I'll start from the end because it's easier. Yes, we're flying back to Israel, and we're flying to Lebanon, and we're flying to Oman and Jordan. And we hope to increase our flying in the Middle East with some new destinations also in North Africa in the next 6 months. It is very important for us because we also sell connectivity through Athens to ensure that near destinations with a distance between 1.5 and 2.5 hours flying in particular, to our South and to our East are well connected and that Athens and the GN or GM and Athens are considered a valid route to the West, to the north, to the Balkans, at least even before we discuss flying further away like we plan to next year.

So we are back and we are eager to expand our presence in different markets around there. But of course, I recognize that the stability of the region is not exactly stellar. And as we try to develop our network, we will have some instability depending on how conditions between the nations evolve. By the same token, I'm sure you understand that these markets are largely underserved. And therefore, when things are normal, you can expect a decent return, especially if you are positioned somewhere like Athens, which is convenient for these people either to come and visit for Greece and spend the holiday or business here or indeed just transit through Athens to another destination in Europe.

So yes, these markets are important, and we'll continue to try to develop there, and we will accept that this might mean that sometimes we might have to stop for periods of time. And we, of course, are very careful to make sure we fly when other Western carriers fly and when our people are told that the situation is secure enough for us to fly. We don't take risks of that kind knowingly. And of course, #1 for everybody else is safe operation. For all of us, it's a safe operation.

In terms of month-by-month evolution of -- I will say that international fares are somewhat lower, not in an alarming way. We are, at the same time, somewhat better 1 or 2 or 3 passengers more on average on people per aircraft. So that on passengers per aircraft, either because we're growing the aircraft or because we're getting small increases of load factors. So there is some measure of offset. And overall, the effect is there, but not super significant.

So we'll have to wait a few more months to see how this evolves. At the rate that we are going now, we feel that it is likely to expect an improvement in our overall results for the year. But of course, one can never take this to the bank unless the whole year or most of the year is behind us. So that's the most I can give you in this direction.

A quick follow-up on the Middle East. In terms of scale of the return? I mean, by September, I mean, are you back to where you would have been in your original expectations fully?

Yes. In terms of capacity deployed, yes.

Understood. Then the second question also on growth and pricing in the fourth quarter, where you are guiding for brisk growth of 9%, 10%. What kind of yield or RASK implications do you think this will have? And can you comment on the competition schedules, how they are looking for the shoulder season in the winter?

The competition is also more or less applying higher increases in the winter than in the summer in terms of capacity. This is a pattern that we have seen for the last 3 years. So their capacity is higher also in winter, more so than in summer. And I don't have yet visibility on what the overall effect on RASK can be. But I would expect in terms of international fares, which is not necessarily RASK, the things to be a little bit softer again following the trend of the summer, I would consider that more likely than the reverse.

But I have to say by the same token that we have seen and I've seen other airlines refer to that, an increasing trend of last-minute bookings. So it is becoming somewhat more difficult to be able to forecast exact RASK or exact load factor.

Got it. This is very helpful. Last question from my side on engines. You mentioned that if I understood correctly, the powder metal engine issue can be resolved in 24, 28 months. Just to confirm, is this referring to today? Or is this referring to end of June? And the broader question on engines, could you share anything at this point on your expectations regarding the availability of the HS+ section upgrades in '26, '27, how many of the engines may be able to get this that you will be sending for shop visits? Or is there anything that you could share on the advantage engines availability and time line?

Okay. First of all, I'm not sure I'm qualified to answer all of these questions, but I would at least answer the questions referring to the date and the significance of the number or the level of the number of the grounded aircraft. So as I said earlier in the discussion, the highest number, a number between 12 and 14, it will go up and down between those 2 figures will exist between September '25 and September, October '26. From October '26, we start having a decline, which will gradually lead to something like 7 aircraft in, I would say, September '27. And then between September '27 to March '28, it will probably go down to 0.

Now this is -- takes into account what we have been promised in terms of slots for induction of engines for the next 12 months and then some expectation for -- in an equivalent fashion for '27. Unfortunately, these numbers are moving targets, but we believe that these numbers that we're giving are relatively conservative. We are continuously discussing and pushing Pratt & Whitney to give us priority in slots. And we, of course, have said many, many times that the compensation that we get does not fully cover the losses that we have from higher maintenance, a less efficient fuel consumption and of course, loss of seats per flight. The compensation barely covers the lease cost of the aircraft that is sitting down, but it is not covering the opportunity cost of not flying the improved aircraft, which is, of course, the reason why we made the investment.

And on top of everything else, it makes our balance sheet more bloated because there are a significant number of idle leases, but we are not -- which are booked as a liability, but what we will receive as a compensation is not booked as an asset, not forward only once we receive it. Therefore, you have a level of inefficiency in your balance sheet. You have a level of inefficiency in your cost and you have a level of inefficiency in your utilization, which is, of course, the same thing as cost.

And the 24 to 28 months is from the date of the announcement, meaning yesterday. So that's why I think the 28 months will expire around about early '28. I hope I have been thorough enough in the response.

This is helpful. So I understand that at this point, it doesn't make sense to discuss the potential engine upgrades from Pratt & Whitney where they may be replacing some of the parts in the hot section of the engine...

Mr. Kouveliotis would like to respond to that. Here he is.

The Advantage engine, yes, as the specs presented by Pratt & Whitney are promising. And we are expecting when the time comes to have more durability on time on wing. But actually, it's quite early to have a clear opinion and view because we are expecting to deliver some -- the first engines of the Advantage within '26. But again, it's not something very firm. So we hope and we believe that this is going to be an improvement, but too early to have.

I mean in a nutshell, all of us knew that the Pratt & Whitney GTF engine was a new technology and that it presented potential benefits of evolution with versions coming out that would further improve mostly the fuel efficiency. So that was always the case there. Unfortunately, as you know, for the last 2 years already and for the next 2 years, as we've just said, this whole situation has been clouded by the problem regarding the early inspections and the effective grounded aircraft.

So I think all of us need to get ourselves out of the first situation before we consider the second. But yes, we all think that there is potential for this engine to evolve in a positive way. But let's see the main problem we get out of the phase before we start counting what the benefit of that might be. And frankly, we are also all eager to make sure that we keep on the pressure to Pratt & Whitney to maximize either direct payouts for compensation, which are there, but they are inadequate or indeed to accelerate the availability of slots so that the program -- the problem can be dealt with more expediently.

The next question comes from the line of Kumar Achal with HSBC.

I have 3 actually. So first of all, in terms of competitive landscape, so you mentioned that the increasing competitive environment. So just wanted to understand how the competitive environment looks like at Athens Airport versus the regional airports, the big cities. And especially, if I look at the table, it looks like the traffic growth at the airports operated by Fraport was quite slow, 1% flight growth and 2% passenger growth in the first half. So do you think with these kind of demand growth slowdown, the competitive environment could remain strong? Or do you think there is a possibility people could sort of take out the capacity? How do you see the demand versus supply going forward?

Well, certainly, the demand growth -- sorry, the supply growth has been slower overall in Greece than in the past 2 years, where we were in '23, still in the, let's say, recovery path post-COVID and '24 had a strong follow-on both for Athens and all the regions. This year, we're seeing certainly a resurgence of growth of capacity to the north, to the Thessaloniki market, still some significant growth in Athens, but Athens is beginning to be significantly restricted both by ATC issues and also by terminal issues. The airport became facilitated, which is Level 2 this year for the first time. It will be even, I would say, more effectively facilitated because the ATC restrictions have been better translated into the coordinators planning next year.

So that should -- well, hopefully allow us to operate a little better and at the same time, make it a little bit more difficult for too many people to add capacity. I think Greece has had a very good run. in terms of capacity development and demand development. And I think we should all be a little bit more moderate on what we expect going forward.

Now this is still early to talk about what will happen next year. The only thing that I am certain about is that there will be some capacity growth. I would expect it to be, again, somewhat at least 1% or 1.5% higher than whatever the average capacity growth to Europe is going to be. We are now based effectively in a material way in 4 airports, Athens, which, of course, is the core of the network and the provider of all the connectivity and the network synergies.

Thessaloniki in the North, where we have significantly invested this year and where we expect to invest even more next year. Larnaca in Cyprus, where we also have invested this year, and we expect we will invest some more again next year. And Heraklion in Crete, which is a very important, the second airport in the country, but is -- has been restricted in terms of capacity for many years now due to the terminal basically the terminal, the airport and the terminal itself. Heraklion is going to be replaced by a new airport in Crete probably March '28, so 2.5 years from now. We have 2 more years of operation on Heraklion, and we certainly consider Heraklion and the new airport of Heraklion a potential area of growth for us in the future.

So these are the 4 places out of which we will be developing our capacity. I would say, if I were to say what's going to have the highest growth into next year, possibly that would be Thessaloniki because Thessaloniki is among the main Greek airport, the one which has lagged behind in terms of recovery from post-COVID. The average in Greece today is about 30% higher capacity and passengers relative to COVID, 30%, 32%. Thessaloniki is, I believe, right now at 15% and has shown better recovery trends during the last 12 months. So I don't know, I don't know how much I have answered and how much more you need.

No, perfect. And then you mentioned that Athens Airport remains constrained...

It's beginning to be partially constrained. It's not Heathrow, right? But certainly, there are now times in the day, and there are a lot of times in the day where there will be significant difficulties in increasing capacity for us and for others [indiscernible].

But does that mean there will be more opportunity or better opportunity for you to sort of get better pricing out of Athens if the capacity remains high, do you think?

I promise to let you know as soon as I do, but I really don't know. I mean one would like to hope that. But in effect, what I'm mostly hoping for is that we reduced the number of operational -- the amount of operational problems that we are facing. Greece at this moment is not ranking well across Europe in delays, in ATC problems, we're ranking quite low. And it's impossible to escape the problems of your home country and of your hub if you are a carrier, particularly a carrier that does significant transfers in the airport.

So what we're mostly concerned about is to improve -- that further improve the quality of our operation. The last 3 years have been very difficult in this direction for on-time performance due to these reasons. So we are more eager to see ATC problems and capacity problems expanded so that our operation regains both a certain amount of quality towards our customers, but also a lot of cost savings for us because delays in the air, delays on the ground, compensations for passengers, misconnections, all that stuff costs money and it costs to brand value. And those things are very important for us, and we hope this will be corrected.

This will not be corrected next year and probably not the year after that. Will this create the adverse effect of somehow being able to support RASK? Possibly, but I don't know. I don't know.

Right. My second question is around the cost. So I can see in the first half, many of your costs have increased significantly, like your handling cost was up 20%, catering cost was up 14%, employee cost, 13%, other operating costs, 17%, while the capacity was ASK is up only about 4%. What's going on there? And particularly handling charge has [indiscernible] gone up by almost 20%, as I said. So is that because the new airports are pretty more expensive? And if that is the case, do you think the low-cost carriers will find it hard to stay? How do you see that?

Let me say this. The -- well, certainly, the handling cost increase is the most important one, and that is related to basically increased labor costs in the country, new contract after 5 years, for the next 5 years, and that, in a great extent, has brought the increase in the handling cost. Catering is largely due to the higher amount of business class to some degree, but also to our effort to continue to provide a high-quality product. Perhaps we have overdone it a little bit there. The rest are not really significant.

The part of the employees, the second -- the running rate as we go towards the year is actually at a much lower level. I would expect it to close the year between 9% and 10%, so significantly lower than 13%. Obviously, we were overstaffed and we were [ over planed ] as well in the second quarter relative to the capacity we actually displaced because, as I said, we didn't fly to 3 important markets. So that at least cost us 3% of our capacity for that quarter.

Now also, you have to remember that we are continuing to beef up the staffing of our MRO. The MRO itself has added about 170 people in the last 18 months. And that is an effect on the payroll cost that is unrelated to the size of the operation. Therefore, I mean, to the size of the flight operation. So that is a factor there as well. I think that's what I have. I think the operating costs altogether did not have a very significant increase. The overall operating cost increase of the company was 5% in the first half. So this is the aggregate of everything -- that's excluding fuel. Including fuel.

All right. So that includes fuel, which, of course, had a benefit, somewhat benefit because, of course, we were also hedged at the same time. But the overall expense was 5% for the operating expenses relative to a 4% increase in ASKs, right?

Okay. My last question is around your long-haul network. So you've just started -- you've just decided to start the flight -- direct flights to India. And you mentioned you're going to increase the long-haul operation. So I just want to understand...

Longer haul, not long haul.

Yes, yes, exactly. So do you -- I mean, apart from India, do you have any other countries in plan or in mind what countries you are thinking about? And then if you find these longer-haul operations more profitable, do you think you can expand it? Or you're sticking yourselves to 4 XLRs which are planned currently?

No. First of all, we don't have -- we have 2 XLRs and 4 LRs. So there are going to be, in aggregate, 6 aircraft that are competent to fly beyond 6 hours. Now we have told you in the past that we expect to invest these aircraft to a combination of routes that require the ability to fly further away, longer distance, but also to routes outside the EU that require a different aircraft configuration than the one that we're flying intra-Europe, which means a higher level business class because when we fly today to Saudi, as an example, or to Dubai, and we are -- we call ourselves a full-service carrier. We are competing with carriers on the routes to Athens as an example, to Riyadh or to Dubai where we have effectively an empty seat between 3 seats in business class, but other people have dedicated significantly more comfortable business class product.

So the investment in the LRs and the XLRs is a combination of an effort to try to test longer distances, but also a recognition of the requirement to be able to serve customers outside the European Union in a product that looks more like the competitors that we have to face that don't call themselves low-cost carriers in these markets. So it's a combination of quality and ability to fly longer.

Now our experience needs to be created out of the hopeful success of these initial efforts, be it how the improved product will be received in Dubai or be it how well we will do in the routes to India. So that's priority #1 for the next 2 years. And that's -- given we're getting 2 aircraft in '26, 2 aircraft in '27 and 2 aircraft in '28 out of these 6, as you might imagine, it will take us at least until the end of '27 to understand the initial response to these efforts.

So beyond deploying these aircraft to India and beyond, which, by the way, India has got, as you know, many possible major destinations you can fly to. We're starting with Delhi and Mumbai. It doesn't mean that we'll be restricted to that if we seem to be doing well in that route. It's very important to note that just 2 days ago, we announced a signing of an MOU with IndiGo to develop code sharing to the Indian market. They will also be flying to Greece as of next year. But through their presence in India, we will have access and distribution to, of course, all the places within India that they fly to, and that's very important for us because Greece is small and India is big. So it's important to be known also in that country.

So no, I don't have a particular idea of where beyond India. What I can say for sure is when and if Russia comes back in line, Russia is going to be served by some of these aircraft, mostly due to the comfort level and less so to the distance. The Indian market has got a lot of potential for development in the Middle East, whether it is Saudi Arabia, Dubai or some other potential destinations are going to take up capacity of the aircraft. So until the end of '27, I doubt very much we will see some other routes.

Now if there appears to be some seasonal lags where we can try some long-haul leisure routes like Maldives or Seychelles in the winter for Greek people to fly out of Greece to go there, that will only happen if the seasonality pattern of usage of these longer distance aircraft seems to be such that it allows for idle capacity to go in those markets. We will not discontinue India to fly to -- for 3 months to the Maldives for a few Greeks to be able to go there directly, unless it doesn't make sense to fly to India in the winter. Our hope is that it will make sense to fly to these markets around the year. And our hope is that through flying to these parts of Asia that we can reach, we can further improve our seasonality because the pattern of travel of some of these nations is not exactly the same as Europeans.

They tend to be a little bit less seasonal or place more -- some more interest in winter. And of course, whether that is with final destination Greece or somewhere in Europe, in both cases, it's interesting for us because we need the [ ConneX ] as well more in winter. So no, we don't have yet too many other ideas about where these aircraft might fly.

[Operator Instructions] The next question comes from the line of [ Karanika Savagillos ] with NBG Securities.

Just a follow-up on unit costs for the second quarter. If my estimations are correct, there was around 7% increase in unit costs, excluding fuel at the operating level, EBIT so -- which seems a little bit high given the euro strength. Can you give us some more color behind this increase? And is it something that we could expect in the coming 2 quarters of the year? And also, if I may, perhaps some color on some big deviations in 2 expense lines, other operating expenses and leases?

Yes. Again, underutilization of aircraft will cause costs to go up. Q2, we had basically 3 aircraft that were supposed to be flying in those 8 to 9 daily 2.5 to be precise, of aircraft that were supposed to be flying to these routes that were discontinued due to the geopolitical part idled and also the people manning the aircraft, maintaining the aircraft, supporting the aircraft. So the loss of 2.5 or 3% of expected capacity does not bring you, excluding fuel, as you said, an equivalent amount of saving because a lot of the things there stay constant, the aircraft, the people, okay, and the infrastructure to support them. So that's the reason that you had this particular spike in the second quarter, which is not the case for the whole -- it is not the case for the full 6 months, and it will not be the case for Q3 or Q4.

I said earlier on also that both employee expenses and some other expense will be mitigated. The ones that will continue to have a higher than the activity, let's say, increase are handling for sure, and to a certain degree, maintenance costs and catering. The reason for the increase in the maintenance cost is like mainly the fact that we do not operate -- that we continue to operate the older aircraft which are getting older due to the grounding of the -- some of the younger aircraft. And that's a problem that will be retained to some degree while we still have the GTF problem in the next 24 to 28 months, as I said earlier on.

Now in terms of why there is a drop in the operating -- you call it in the leases, the leases refer to ACMI. They are not the long-term operating leases or finance leases, which are dealt in EBITDA or EBIT. Those leases were committed in 2024 used to cover charter operation, and we didn't use ACMI again this year. So that's why there is a big delta on that line, a positive big delta on that line.

Mr. Karas, have you finished with your questions?

Okay. Is there another question?

Ladies and gentlemen, no, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.

Thank you all for attending. I know you'll be eager to follow how we continue to do in the year. I think I have tried to pass on a cautious optimism for the overall year. Not saying that there are no challenges, but that we think between the advantages and the problems will come out ahead of where we were last year. And I think in an airline where you see the cash flows as positive as ours, you shouldn't be too worried.

So having said that, enjoy the rest of your day, and I hope to talk to you again in a few months. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.