Finnair Stock

Good afternoon, everybody, and welcome to Finnair's Q3 pre-silent call. My name is Sophie Jolly, and I'm new here at Finnair, started the 1st of September as IR Director and really looking forward now to continue Erkka's and Emilia's good work.

Today, Pia, our CFO, is here to talk about a little bit what has been happening, giving you a slide update. But without any further talks from me, Pia, I hand over to you.

Thank you, Sophie, and good afternoon or good morning, depending on where you are, ladies and gentlemen. Let me start with a few remarks. I'll talk briefly about market, obviously, about fuel situation and hedging, a couple of words about our fleet. And that probably rounds up my commentary that will be rather brief. And after that, we will open up for questions and answers.

So first, on the market situation. I mean, what we've seen in July and August, and you've also probably seen our traffic performance releases, really, it has continued to show positive momentum. Our passenger volumes increased by 9.3% in July, by 2.3% in August year-on-year. And let's remember, last year, there were still some extraordinary conditions, maybe most importantly that we still had industrial actions during parts of July in 2025.

Anyway, if you would ask me sort of what the market momentum is right now, when I use that word, I would really say that the market is still showing resilience despite this world that we are living in, despite everything that's going on, we still see the growth year-on-year. We still see a resilient situation.

Obviously, Middle East merits a few comments. As you recall, our direct exposure is very limited. It's a low single-digit share of our capacity and passenger traffic that we used to have there. And right now, obviously, we are not flying to Middle East area, but the situation still continues to impact the whole market. I mean, it impacts the industry through safety, through capacity, through passenger flows and obviously as well through fuel markets. So holistically, the impact is big. But the direct exposure in terms of flights is limited and that direct exposure as well, you will see now come through in that there's no flying to the Middle East.

A little bit about load factors. Our load factor was high, 85% in July. And it really -- in July, it improved in all traffic areas operated by us. In August, the passenger load factor remained high. It was 80.3%, and it improved in the European and North American traffic. And unit revenue development has remained clearly positive. And I'm going to quote to you just the improvements or sort of the delta. So in July, RASK increased by 8.9%. And in August, RASK increased by 12.3%. And what's supporting this? It's, of course, good load factors, but it's as well higher yields.

And in the background, we have continued the good work with optimizing our network, capacity allocation and pricing to capture demand. And obviously, there's a lot of sort of differences or market flows out of Middle East that we have seen some flow still to our Asian traffic here. So overall, a resilient market situation has continued.

I also want to give a bit of credit and a shout-out to cargo. I think their performance has been really strong, and it has supported Finnair's performance as well, also as well through the Q3.

Then let's talk a little bit about fuel. It remains a really important point, especially in terms of the cost escalation. But most importantly, from Finnair's perspective, we have not canceled flights because of fuel. So with this, I mean, fuel shortage. And I mean that when we first discussed the war in Iran and the situation early in the spring, of course, there were then some fears of fuel shortages across the industry.

And indeed, the jet fuel market has remained constrained, and this has impacted the prices that stay at a very elevated level. But the jet fuel supply across Finnair's network is expected to still remain stable in Q4. It's supported by the continued close cooperation with our fuel suppliers. And a few more detailed comments about sort of more sort of market view where we see it right now on fuel.

Supply in Southeast Asia and the United States remains relatively good. Europe is more constrained, but still stable. Europe is partly supplied by overseas products from the U.S., Africa and Southeast Asia. Holistically, winter typically reduces jet fuel demand, which should support overall availability. And as before, we really continue to monitor the market very, very closely, and we also work with our suppliers to secure reliable fuel availability for Finnair's operations.

Then, let's discuss hedging a bit. At the end of the second quarter, Finnair had hedged 81% of its fuel consumption for Q3, 71% of its fuel consumption for Q4. And then looking into next year, 58% for the fuel consumption in the first quarter of 2027. And I'll still quote the second quarter of 2027, that's 40%. So you can see that there was, let's say, a window during the summer when we actually saw lower prices, and that was a good moment to increase some of the hedging.

However, holistically, if we look at now the market throughout Q3, the fuel market has been -- prices have been rising and been very elevated, and the opportunities to do hedging have not been that many. So I think here, just as a reminder of Finnair's fuel hedging policy, we have a spread or a collar within which we can move with our hedging. And clearly, as you can see, those hedging ratios into next year are a bit lower now than what we have seen all through 2026. But we will keep you posted. And in the next report, we will again quote the most recent hedging levels.

And it's really when we are looking ahead, the market conditions are currently looking very volatile. There's no immediate easing in sight given the continued hostilities in the Middle East and the lack of visibility on clear diplomatic off-ramp to deescalate the current conflict. We are constantly following the developments in the Middle East, and then, we will plan -- we are planning to act accordingly. So obviously, staying extremely sort of on top of any opportunities for hedging also going forward.

I would like to round up my comments just very briefly relating to our fleet. The development of our fleet has been a significant part of our strategy, and you are well aware of the longer-term commitments that we have made. I just want to say things are moving according to plan. However, in the third quarter, there was no new capacity added really to our commercial fleet, but we have some additions coming in. The one I, of course, want to mention is the 350 -- Airbus A350 that we are still sort of getting towards the end of the year, even though commercial flying will start next year. So we continue on the said strategic path when it comes to our fleet.

And with that, Sophie, I would like to end my comments.

Thank you, Pia. I think we can jump to questions. And so please, operator, if you can help us with that.

[Operator Instructions] The next question comes from Jaakko Tyrvainen from SEB.

It's Jaakko from SEB. I would like to ask on the situation with airBaltic and their Chapter 11 process. Have you seen airBaltic cutting their Finnish routes yet? Or is there any of such activity visible?

Jaakko, thanks for the question. And indeed, I mean, from at least the headlines that we all can follow, of course, they are now entering into this Chapter 11. And -- I couldn't comment yet on sort of such competitor movement. But obviously, what we have been reading in their statements is that they are cutting down their fleet, et cetera. So definitely something to follow.

Okay. Good. And then on the kind of market activity, what becomes to hiking ticket prices? I noticed that some of your low-cost carrier peers and competitors have not been hiking their prices based on their monthly reports. Are you seeing the markets being rational when it comes to the need to pay higher fuel costs through the ticket prices?

I could only refer to some broader statistics, Jaakko. So I -- when it comes to individual companies, that would be a bit difficult to comment on. But I think if we sort of follow broader statistics, also on European level, I think there, it's still visible that the higher fuel prices have also resulted in higher ticket prices from where we can follow it, and where we can follow it is historic data. So I think this is sort of -- this is still up to where there's actual data, the situation.

Okay. Then, on a bit kind of a demand side of things, are you seeing the -- and perhaps looking towards '27, are you seeing the underlying kind of demand in the markets being enough? Is there enough demand or is the demand enough strong in order to hike the prices in the magnitude you need to offset the rising fuel bill?

Jaakko, you are asking sort of a complex question because, as you know, the market prices is set so often, I cannot even say daily. It's like minute by minute, it's supply and demand, and it continues to be set by the market. But I can comment on some of the kind of broader dynamics behind that. I think when I use the word resilient for the market, I still want to say I think that's a very positive word sort of given where the world is right now.

And the thing that I'm obviously -- that we are really following is as well with higher interest rates, with maybe more inflation, how will the consumer feel this in their wallet and what will this mean for demand. And I think if we talk about this demand side, we have still seen it robust. So people are still planning to travel, still booking flight tickets. And so the demand side of the equation still seems to hold up at this point in time.

And then we can, of course, debate kind of what the supply side is and is there anyone who would sort of not be feeling the consequences of these higher fuel costs. And I think at least from a hedging position, Finnair has -- we are very well positioned. I think we have a strong hedging position, as strong as you may kind of possibly imagine to have right now. This, of course, is something that can change day by day. But from where we stand today, I think we are -- it seems that the market is still resilient.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Well, if we don't have any more questions for this time, then I thank you and everybody online, and I hope to see you at the 27th of October when we publish our Q3 results. Thank you very much. And in due time, if there are anything or if you need to contact, please contact me at [email protected]. Thank you very much.

Good day, ladies and gentlemen. I'm Erkka Salonen from Finnair Investor Relations, and it's my pleasure to welcome you to this Q2 2026 Earnings Call. I'm joined by our CEO, Turkka Kuusisto; and our CFO, Pia Aaltonen-Forsell. After the presentation, you may ask questions either by dialing in by using the webcast chat function. You can already send the questions during the presentation.

But with these words, I hand it over to you, Turkka. Please go ahead.

Thank you, Erkka, and very good afternoon to all of you, and welcome to this result presentation event.

Earlier this morning, we have reported very strong performance during the second quarter of '26, which is kind of a continuation of the two earlier quarters, Q4 2025 being the all-time high Q4 and also strong performance continued during the first quarter. What is kind of especially important to address when it comes to the second quarter performance, in my opinion, is actually rather holistic success in multiple areas.

For instance, the revenue growth of 16.4% comes across the all service lines that we have. Passenger revenue grew by some 15%, ancillary sales more than 20% and cargo really did overperform our expectations by 40% growth and also Aurinkomatkat did deliver high single-digit growth. Then when we translate the 16% revenue growth into comparable operating result, which was EUR 78 million. It's very important to address the comparison versus last year.

Last year, we reported some EUR 10 million of comparable operating EBIT, but we need to then factor back or add back the cost of the industrial action that we faced last year. Based on our best estimate, the cost of -- or impact of industrial action last year during the second quarter were some EUR 28 million. So if we add that back, operationally, we delivered some EUR 40 million of comparable EBIT. So basically, what happened this year that we were almost capable of doubling the result.

Pia will cover the operating cash flow in more detail, but of course, very happy to see close to EUR 200 million operating cash flow, which is, of course, essential when it comes to -- or pivotal when it comes to funding the investment scheme that we have communicated to you as well earlier this year.

What is behind the revenue growth is a kind of a complex topic. Of course, the demand in the Asian traffic started very positively already in January, February time frame and was somewhat boosted by after the events that have taken place in Middle East after the escalation of the Iran-U.S. war. Pia will also discuss this in greater detail. But in addition to the Middle East situation, I want to emphasize that we did invest even adding frequencies to our Far East Asia traffic this summer season by flying 28 weekly frequencies between Helsinki and Japan, which again makes Finnair the largest European carrier between Japan and Europe.

At the same time, as we will shortly see in the traffic area split, also our demand increased quite a lot in our European traffic area and also kind of the minor decline that we faced in North Atlantic traffic actually turned into a positive development.

Again, in Pia's presentation, we will -- slides, we have more details when it comes to the fuel hedging position. But in hindsight, of course, it's easy to acknowledge that the hedging policy of Finnair and the actions Pia and her team have taken have been -- provided us with the stability, predictability and also some capabilities to control the cost position that is the largest in our P&L. We do have a -- we had 82% hedging ratio for the second quarter and for the remaining 6 months, the ratio is 76%.

Already in connection with the first slide, one kind of a key highlight when it comes to the implementation of the new strategy. During the second quarter, we have now signed letters of intent to source 6 secondhand Airbus A320 aircraft. And if and when these agreements will be turned into definite agreements, these aircraft will enter our fleet already in 2027.

Speaking of customers, I'm very happy to report these numbers. Throughout the last 8 months or so, we have continuously developed the NPS to the positive direction. And throughout Q2, we again scored, in my opinion, a very solid number, 42, which compares to 33 of the peer average. And that's, of course, a consequence of smaller actions, introduction of new digital components, digital elements. But above all, this is the resultant of excellent operational capability, operational excellence that our team has delivered throughout the Q2. For instance, our punctuality has been 99% during the Q2. But then again, of course, the kind of on-time performance is challenged during the summer season because of the congested air traffic control platform in Europe. But all in all, very happy to see these numbers. And when we take a bit of a deep dive into the core customer section of ours, we are capable of reporting actually with higher figures.

Then taking the geographical split, we decided to remove the Middle East box. For obvious reasons, we have suspended our flights to Dubai and Doha since late February. Our intention is to restore the flights from Helsinki to Dubai if the safety and security situation allows towards the winter schedule or winter season. Asia, super strong. Revenue grew by 20%. Load factor improved by 6%. We can be extremely satisfied with this development situation.

And as already mentioned, Europe also did perform very well in my opinion. We increased the capacity by 8%, whereas the revenue grew double-digit figure and load factors also somewhat developed to the positive direction.

As already mentioned, North America or North Atlantic also improved. We did decrease the capacity by some tactical kind of elimination of certain frequencies to improve the load factors and yields consequently. And therefore, again, the revenue grew by some 6%.

This is a bit crowded slide, but we also wanted to cover this one with you that, in my opinion, illustrates the very stable market share in Helsinki, at the Helsinki hub, Helsinki Europe traffic pretty much where it has been over the past 2 years. And then Europe to Asia traffic, minor increase in the market share starting from the first quarter of '26, with this both kind of market share graphs gives us a great position to continue the network design and network development when moving forward and also the implementation of the new strategy.

Now I would hand it over to Pia for a while to discuss the financials in more detail.

Thank you very much, Turkka, and good afternoon, everybody. It is, of course, a pleasure to present these strong results. So let me start by just an overview of some of the KPIs that Turkka has already mentioned, revenue growing by 16%, resulting in a comparable operating result of EUR 78 million. You can see that, that's really the highest figure that you can see on this chart here for the operating result and then also giving us a very healthy cash flow. And I will dig a little bit deeper now into the components, both of the revenues and the cost. So let me take you there to the next slide.

I think these are important metrics to follow. So RASK and CASK, so looking at the revenues per available seat kilometer and also the costs as we are by our strategy in a growth phase. So we want to keep on growing our capacity. And with that then, of course, also having a good look at these key figures.

Now this quarter, in particular, on the revenue side, obviously, there was one big external event, which was the war in Iran and the situation in the Middle East that obviously also pushed some of the demand towards other suppliers than the Middle East hubs. And when we are looking at the development of our RASK, obviously, we need to take that into account. We are also stating here that that's a significant contributor to the RASK improvement. And there's also an underlying strong continued demand that I think we saw earlier in the year. I'll give you sort of one fact point of that, that I find important from a Finnish perspective, actually, consumer confidence has for the first time for really many years, actually been growing to be more positive and sort of the willingness to travel also amongst sort of Finnish customers and Finnish consumers has certainly increased.

Maybe I can also refer back to the slide that Turkka already presented where we looked at the RASK development a bit also by the regions. And we know that the traffic between Europe and Asia is really important for us and continues to be so and was, of course, impacted by this crisis. And there, we saw RASK increase, let me check the figure, by 16%. So obviously, a big increase. But we also saw RASK increase on North Atlantic, with 14%, and we also saw a good increase in Europe and in domestic 4% to 5%. So we can see that all of our areas have contributed.

So I still want to reiterate what Turkka said about the good operational performance, the balanced decisions when it comes to our network, the utilization of the capacity, this sort of holistically contributed to this really strong top line development and good RASK development as well.

Now jet fuel and that cost side is certainly on our mind. And I actually have a couple of more slides on that. So I think it's enough to say here that, that certainly has increased from a sort of market cost perspective. Our hedges have certainly protected us a lot. And there are also typically a bit of delays until some of those sort of operational costs of the fuel increase really hit the P&L. So that all also contributed into a somewhat, let's say, delayed impact. And we will discuss the forward-looking hedges in just a little bit.

We have also seen some increases in other costs, as you can see here, and it's really personnel costs that have increased predominantly because the number of passengers really grew by more than 7% in this quarter. So sort of Finnair's own production certainly has increased. And I would say the other cost elements are pretty well under control, maintenance, for example, fairly stable, et cetera.

Okay. So those were some of the key highlights from the P&L perspective that I wanted to mention. Let me take you through a few topics when it comes to our overall financial position when it comes to our balance sheet. And first, there's a KPI that really also reflects sort of the market and the continued strong, what we might call sort of order intake, but ticket sales and the ticket liabilities that we have in our balance sheet at the moment are at EUR 757 million. That's a really high number. And you can see this sort of level increase that we already saw in Q1, it has been kind of keeping there. So I think it really shows this improved market momentum also compared with the previous year. So this summer season, for sure, we have seen a lot of very healthy sales.

Then we have continued our CapEx program, as Turkka has talked about. And I think this is important that we have launched the strategy. We are now working according to that. And you see that the CapEx in the quarter is about EUR 72 million. Probably for the full year, we will go over and beyond the EUR 400 million, which is well aligned with the -- around EUR 2 billion for the strategy period that we have talked about in our strategy.

And then finally, our balance sheet strength. I think our financial position is stronger than it has been for a long period of time. If you look at our leverage, it's down to 0.9x at this point in time. And when you look at the development of cash position versus our revenue, it is growing. It's growing steadily even when we are investing. So I think at the point of time where we are today with the uncertainty, that's certainly a very good situation to be.

And then talking about the uncertainty, my two last slides will be more focused on the fuel situation. First, we wanted to bring a more holistic view on the fuel situation. Obviously, I know many of you are also following the jet fuel situation in particular. But I still think it's worth noting that kind of through this crisis, obviously, a lot of focus on the Brent and the crude oil and the developments there. And from our perspective, unfortunately, of course, when it comes to jet fuel, the situation has been even more constrained.

As we speak today, we have seen 10 days again of continued conflict in the Middle East. And with that, increases in crude oil price, but also increases in the jet fuel price. So really, if we compare with last year, we are at a completely different level and the situation continues from a market perspective to be very constrained.

If we then look at Finnair's position, our hedging position kind of confirmed by Turkka really protected us in the second quarter. And I think we were also able to be active in the market of hedges again when the situation calm down a bit. So if we now look at our hedge position at the end of June, I think we have a good protection, 81% to Q3, 71% to Q4. And of course, also with hedges into next year, but of course, on a falling curve. And still also the price levels, the costs there are not exactly the same as they were pre-war, but still on a reasonable level compared with where the market stands today.

So this continues to protect us. Also our long-standing relationship with suppliers continues to protect us. We haven't seen any supply or availability issues that would have disturbed our production thus far. These are topics that we will need to continue to monitor. Obviously, it's a very volatile situation as we speak, and we will continue to work the way that we have also worked in Q2, a very tight collaboration here between the operations, of course, the network, the revenue and as well then the risk management and the treasury bit. So we will continue along those lines.

But with that said, Turkka, back to you.

Yes. Thank you, Pia. We also wanted to share a short strategy execution update with you. I'm very happy to report that basically all the strategic priorities and initiatives that we have along these 4 categories are progressing pretty much as planned. We've been very active when it comes to the convenience part, the fleet and network strategic priority of ours. As already mentioned, we have now signed letters of intent to source 6 321ceo (sic) [ 320ceo ] generation aircraft from the secondary market to support the growth. And then as already communicated in connection with the Embraer announcement late March, where we will aim at going up to 12 secondhand Airbus 320s towards the end of the strategy cycle.

During Q2, we also announced that we will resume flights to Tampere and Turku to support the connectivity for these growth regions of Finland. And as I already mentioned in connection with my opening slide, we have started flight to 12 new destinations in Europe and also reopened or resumed the evergreen Toronto-Helsinki route.

And here are some facts related to operational stability and excellence that we also referred to. Flight regularity 99% during the second quarter, and we are continuously introducing AI-powered components to improve the effectiveness and efficiency and customer experience of all the customer-facing processes and channels of ours.

Choice-based product offering, again, a few KPIs. The ancillary revenue per passenger grew by 15%, which is a continuation of the double-digit growth that we have delivered over the past 18 months or so. And all in all, when the number of passengers also grew, the total ancillary revenue grew by some 20%. And we continue to analyze the data, customers' preferences to further develop the menu and the variety of ancillaries in our offering.

At the same time, we are also investing heavily when it comes to making Finnair Plus loyalty scheme more attractive. I'm very happy to see and report that the number of active Finnair Plus members increased by some 30%. And we did sign some domestically and regionally important Finnair Plus partnerships with some well-known brands and companies.

Also something that I wanted to include into this slide is the kind of the cultural and organizational sentiment of Finnair. Last year was very difficult for obvious reasons and very complex CLA processes. But as we speak today, the organizational culture and the sentiment is developing very positively, very strong momentum when it comes to Finnair voice engagement index development. We scored 7.4 in the measurement round that ended mid-June, whereas the figure for end of '25 was 7.0.

And then just to recap because there is so much activity ongoing when it comes to our fleet plans. There are one new -- the final 350 coming in during the fourth quarter of this year. And then end of March, we communicated the E2, smaller narrow-body investment scheme consisting of 18 firm orders and then some options and purchase rights. And at the same time, we communicated the intent to acquire reasonably new secondhand Airbus 320s and also some regional aircraft to really support the regional traffic and also the operational stability given the fact that we are flying ATRs and Embraer E1s with such a high utilization rate that we need to have also some spare aircraft.

So basically, that was the strategy section. And then going to the outlook and guidance. Outlook is specified and the specification is the capacity growth measured by ASKs. And today, we say that it will grow approximately by 1%. Last time around, we said 3%. And then the guidance is revised. Earlier, we said that the revenue range is EUR 3.3 billion to EUR 3.4 billion. Today, it's EUR 100 million higher from EUR 3.4 billion to EUR 3.5 billion, whereas we will keep the guidance related to comparable operating result as it was last time, given the uncertainty and low visibility and the kind of a geopolitical situation emphasized.

So with these words, Erkka, I guess we are ready for the Q&A section.

Indeed. So now would be a convenient time for any questions you may have. So please follow the operator's instructions to present them or write those in the webcast chat.

[Operator Instructions] The next question comes from Joonas Hayha from OP.

I have a couple. Firstly, I'm looking at CASK ex fuel. That growth seems to have been clearly stronger in Q2 versus Q1. So could you please elaborate the key elements and maybe provide some color on the H2 outlook? I think you mentioned the number of the passengers growth in that figure increased costs. But I think if I have my numbers correct, your passenger growth was at a similar level in Q2 versus Q1, but still the CASK ex fuel increased quite a lot. So can you please elaborate this?

Joonas, thanks a lot. And it's a good deep dive question. Obviously, we go directly into some details here. I think, first of all, if I look at sort of the annual growth of the cost, now from memory, I don't have the fact sheet in front of me, but we are talking some annually maybe kind of EUR 20 million level. And if I look at that comparison with a year ago, I mean, clearly, we have increased in terms of our passenger volumes. And with that said, we are also in the peak season. So I mean, this is the season when the level of activity is really high, and we have a higher number of personnel right now.

So admittingly, yes, we have also seen some growth earlier in the year, but this is really sort of to cater for that peak season. And please keep in mind as well that this is more maybe marginal, but I'll still mention it as we are also preparing for the CapEx projects, et cetera, there's some costs that we are adding also there, some training, et cetera. I mean we do need to have the right persons then in place for the in-fleeting, et cetera.

So if I would look at it sort of from where I stand today, I think out of the increase that I saw sort of year-on-year in the quarter, maybe about half of that really comes just from the fact that we are in the peak season, still increasing our passenger amount. Then there is certainly inflation. If you look at sort of the CLAs and the agreements, et cetera, if I would translate that to millions, maybe it's EUR 4 million, EUR 5 million, something like that sort of inflation bound.

And then we had a couple of million extra, what I would call sort of training cost, a bit of catch-up there maybe as well from history. And then we do have a better year, and there is a bit bigger accruals when it comes to STI, et cetera. That's, again, a couple of million. So that's sort of the approximate breakdown I could give for you right now.

All right. And then secondly, cargo yields seem to have jumped significantly in the quarter. Is this mainly a reflection of the reduced market capacity or perhaps fuel surcharges? What's driving the development?

Basically, a combination of the both components you mentioned.

Okay. And then finally, I'm looking at the other income line that came down from Q1. Can you remind us on what kind of changes have you had in the wet lease-front? And is Q2 a good proxy for what should be expected for the second half of the year?

Yes, we need to keep in mind that the wet-lease agreement with Qantas two 330s, that agreement ended end of March this year.

The next question comes from Pasi Vaisanen from Nordea.

This is Pasi from Nordea. Well, firstly, a question related to unflown ticket liability. Here, we have seen a growth of 13%, but is this growth coming from the 13% higher ticket prices? So what could be the unit growth when excluding this price-related effect from the liability?

Thanks, Pasi. Excellent question. I think this must reflect sort of the broader picture of where we have seen both our volumes increasing as well as then increased load factors impacting the RASK. And then finally, as well, market data also shows us that there has been an increase of ticket prices, which is also available in our data. So I still think it's a combined mix of all of those, also in those sort of forward-looking tickets.

Yes. I would agree with Pia, a combination and maybe 1/3 coming from the yield and 2/3 from the number of passengers.

Yes, that's excellent. And then one question related to your investment program. So what could be the annual average capacity increase coming from this EUR 2 billion investment in the strategy period? I know that you have guided roughly about 4% growth in the amount of passengers. But by taking into account that the new planes are narrow planes and, of course, serving kind of shorter routes, I guess the capacity growth then could be below the 4% growth coming from the amount of passengers.

But you're right that the strategy is built on the assumption that 4% growth on annual basis. And of course, it depends to some extent that when do we get the new aircraft into our production and what is the kind of a business mix between or how much we will still utilize wet leases during the so-called transition period. But I guess the optimization exercise that we have ahead of us is to really source the aircraft and also utilize the wet lease capacity so that we can meet the 4% growth ambition.

So that capacity growth could be close to 4% also in this period?

Yes.

Okay. excellent. Maybe just one issue related to fuel costs. So can you give us any color regarding the fuel costs in the second half? So -- because this is probably the biggest black box here and that creating the uncertainty in the estimates and also on your guidance. So for example, when looking at the open position and the fuel costs on the spot market, is there any time lag you are kind of facing 1, 2 days, 1, 2 weeks or 1 month in the spot prices? Or how should we actually try to estimate the fuel cost in the second half?

Pasi, it is indeed an excellent question. And I think, first of all, we try to give a bit of color for that to really give specifically the sensitivity to the fuel price. So if sensitivity, 10% change in the jet fuel price for us would be an EUR 18 million change on result level. And that's taking into account the hedges that we have. And obviously, with sort of the 76% sort of hedge level, I think a critical point to look at is what are the sort of costs that we have locked in already.

And then you are right that there are delays from sort of the spot price that you see vis-a-vis when we actually use the fuel, what's actually on the invoice. But that is, to some extent, confidential contractual information. But I think you can observe a little bit the pattern from the early sort of part of the year as well that there's also always some delay in that. But typically, in the market, those delays are not significant. So we are not talking quarters or anything like that.

Yes. And one technical issue related to kind of first spot prices we can see from the markets, for example, from Reuters and Bloomberg. I guess those are wholesale prices in Rotterdam. So are your hedges or hedging prices made for the delivery prices from Porvoo to Helsinki-Vantaa, or are you hedging prices actually to the wholesale prices? Is there, kind of, a 11%, 12% or 14% difference for these prices?

Yes. Maybe I can try to answer this on a little bit more general level. I think there are certain indices that we are sort of typically locking the hedges into and those vary somewhat by market. So you could, for example, have a different index in Asia versus Europe. So indeed, there is some alteration depending on where we actually use the fuel. But it is still based on sort of indices that are available in the market.

Okay. I see. And maybe lastly, regarding the rerouting of those planes from Middle East to other destinations. So is there any flexibility? So is it even possible to kind of start up the Doha, Dubai routes immediately if the airspace is opened? Or have you then kind of 6 months, 3 months lag? How to kind of -- if you are using those planes already and sold those tickets, I guess it's impossible to kind of ramp up this capacity again.

Yes. So basically, what we have communicated very recently that we will not resume Helsinki-Doha anymore. Qatar Airways will start to operate Helsinki-Doha by themselves. We do intend to fly Helsinki-Dubai based on the winter schedule -- winter '26, but only if the safety and security situation allows us to do so.

And we do have some flexibility when it comes to then towards the winter season to optimize the frequencies and capacity, let's say, towards the North Atlantic traffic. So if the situation allows reopening Helsinki-Dubai, we are more than capable of doing so.

The next question comes from Jaakko Tyrvainen from SEB.

Could you update us on the -- on your analysis on the jet fuel availability towards the year-end? Is there -- what is the kind of a risk level for possible delivery constraints kind of for Finnair and on the other hand, elsewhere in the European markets?

Based on the current understanding and very thorough and frequent dialogue with our long-term partners, we don't foresee any fuel restrictions or fuel availability issues at Helsinki Airport. And if we face something, let's say, in the Europe, we can fly more than 80% of our short-haul destinations by tankering so that we take enough fuel from Helsinki to fly back and forth.

And then when it comes to our global footprint, we do not have any indication that we would face fuel shortages or fuel restrictions by the local, let's say, players and/or government. So from that point of view, as we speak today, we do have a very good visibility and a confident position.

Okay. Good. Then a bit more specific question on the growth in the number of passengers on the European routes. Could you elaborate a bit more in detail? Has this been driven by the international passengers, possibly those who are transferred passengers between Europe and Asia? Or was this predominantly driven by the so-called domestic, i.e., Finnish passengers?

No, I would say that it's a combination of both. We have seen very strong demand from the Finnish passengers to use their discretionary spending to traveling and going abroad. But of course, as the -- especially the Far East Asia or Asian long-haul development has been so positive. It, I guess, goes without saying that all the passengers will not stay in Finland. Actually, quite the opposite. They will continue to Europe, for instance, through our European network. So it's a combination of both.

And then, of course, by adding 12 new European destinations, that has also been a successful kind of a contributor to the growth of passenger volumes in Europe.

Okay. Good. And a follow-up, if I may. Could you update us on what is the kind of current status of the Middle Eastern hubs? Are they fully operational? What becomes to kind of European airlines traveling via -- sorry, the Middle Eastern, European local players traveling between Europe and Asia via the Middle East?

It's a bit of a mixed bag. And of course, when the war reescalated some 10 days ago, we've tried to understand that what's the current kind of a sentiment and how different carriers are operating. Based on the current information, it seems that the local carriers have not suspended their routes or schedules for a longer period of time. They've been basically canceling in a tactical or operational window, quite a few flights, more than 200 was the latest figure that I got. So basically, they are flying by wire day by day, evaluating the situation.

But then the European carriers have suspended their flights to Dubai and Doha, for instance, because of the recommendation of the European Aviation Safety Agency, that has again raised or escalated the kind of the security and safety situation of that particular region to the highest level. So European carriers are not flying there as we speak.

Okay. And finally, on the guidance communication on the planned, somewhat slower capacity growth. Did you say where you are going to cut that capacity? Geographically speaking.

Yes. It's based on the current situation in the Middle East. So if you recall sort of before everything happened, Middle East was some 3% of our top line there. So obviously, now we have canceled, Doha and Dubai may then reappear towards the winter season. But that's really a big contributor to this change. So it's difficult to pinpoint any other sort of individual reason. Of course, there could operatively be some reasons, but not sort of one other big impact.

Yes. And just to maybe also mention the one of the wide-bodies that was damaged, September last year, Whisky Hotel 350. We originally thought that, that aircraft could return to service end of February, but we actually got that aircraft back, was it late May? So we had one wide-body down versus the original plan.

[Operator Instructions] The next question comes from Andrew Lobbenberg from Barclays.

Congratulations on a really strong quarter and good execution. Can I ask what the revenue guidance and the capacity guidance implies for your unit revenue expectations in the second half, compared to that 14% unit revenue in the second quarter? Because obviously, doing the math is not very straightforward because you've got the changes in the wet lease. So what's your internal -- what's the implied RASK guidance for H2 from your capacity and revenue guidance?

Yes. Thanks, Andrew, and thanks for the congrats. That's really appreciated. And I think one of the things to isolate, obviously, is try to look really at what sort of goes into our top line is obviously where we are really sort of flying our own traffic. And now the comparison period, there was still this Qantas flying that only ended earlier this year. So now I take this a little bit out of memory, but I think it's like a 5% growth that we would see if we would not sort of need to take into account this change in the wet lease. And maybe that's sort of a better measure for sort of the volume and the development really of our own flying, which then has a connection to that top line as well.

So maybe that gives a little bit of the hint. This was now a bit from memory. So if my memory doesn't serve me well, I'm sure my IR will shoot me soon, but -- or at least he will give me a bad eye. But that's one way of looking at it, obviously, that our own flying is increasing during the year, and that is also then a part of the revenue growth that we are seeing.

Okay. If I can stay on the same topic, and I know previous speakers have asked on it as well. But as we had a brief moment of peace. And building up to that, the Gulf carriers were reintroducing full operations. What happened to the pace of your Asian bookings? Did it step down noticeably? Or was it a more subtle fade? And obviously, have you seen any change to your inflow in Asian bookings as hostilities have resumed in the most recent days?

I would say that we saw the most visible kind of upside towards the end of March. But when we had this very fragile memorandum of understanding between the parties, we didn't see or witness a slowdown of the bookings overall and also Asia performed well. And now based on the current information, the geopolitical situation is not that much anymore influencing the velocity of the bookings.

Okay. That makes sense. Move to a different subject matter, if I may. Your 320 deals for 6 used 320s. How old are they? How content were you with the price? Are you seeing that the market is getting a bit easier with the failure of Spirit and Frontier handing aircraft back? Or were you slightly wincing when you accepted the deal, but you need the blooming planes, so you had to take it. So how ugly was the pricing? How old are they? And what's the time line or prospects for getting the next 6?

So without going into the details, we are still in the letters of intent phase. But what can I disclose is that we have found, let's say, a subfleet of aircraft that are pretty close to the configuration that we are currently operating. So from the complexity point of view, pretty optimal and also the modification cost that is required in order to make them look and feel like Finnair and also, let's say, install the needed winter operation kits, et cetera, et cetera, is very reasonable. This is a very different situation that we faced, let's say, 12 or 6 months back. So if and when we will finalize these 6 letters of intent, I think that we've done a very good deal.

The possible time line to get in the next lot?

And going back to the age question, they are below 10 years on average, and the engines are overhauled and maintained. And then we would like to see the 6 -- first 6 aircraft arriving our fleet already 2027.

Okay. Ancillaries were really strong. There's a brief reference on the web towards -- on the presentation towards bundles. But yes, can you talk a little bit more about what is driving that super performance on ancils? And how sustainable is that rate of growth? Because it's really impressive.

Thank you for the question. And it's been pretty impressive. And kind of my position or perspective is that the double-digit growth has now continued over the past few quarters. And it's not a coincidence. We've developed the product offering. We're introducing new products. But above all, we are making the, let's say, the checkout flow easier and also we aim at identifying the most optimal kind of purchasing windows or windows of opportunity that when a consumer or passenger is willing to buy an ancillary or choose. So it's pretty much about introducing the modern retailing capabilities and personalization.

So to -- in addition to developing the right products, we need to sell them at the right time to the right person and that we have really invested in developing our retailing and marketing capabilities.

Perfect. And one last one, and then I'll shut up and let anyone else go. How are the different new routes that you brought to market this summer, how are they behaving?

They are behaving actually pretty well. Of course, when you open 12 new destinations, there is some variety and variance when it comes to booking velocity. But up until now, it seems that they've been right choices and very good business for us.

The next question comes from Mateo Salcedo Lopez from ODDO BHF.

I have three, if I may. The first one, you were mentioning Asia bookings are continuing, let's say, on a good pace. And what about yields to Asia?

I think -- Matias, good to have you on the line. I think as such, we are not really expanding our comments into sort of forward-looking yields, et cetera. But I think the sort of the holistic picture we were trying to give earlier is that we don't see here a slowdown.

Okay. And maybe on the same topic on cargo, are you seeing -- is the performance -- the strong performance continuing so far? Or -- yes, what's the color on that?

I think the comments we could almost repeat. I mean, obviously, cargo was really significantly stronger than normal during the second quarter, and it was both volumes and yields. And you know that in the cargo business, this is very sort of short cycle. So obviously, this kind of gets pressure tested every day again, but we do still see a sort of a good flow at this point in time.

Understood. Understood. And then maybe my last question is regarding your EBIT guidance. If I do the 12-month rolling, we're almost at the top end of the range you have given. I understand that there is some uncertainties with the fuel costs, but are there any other items that might impact your guidance or the fact that you didn't actually upgraded your EBITDA guidance where you upgraded your revenue guidance?

Yes. Thank you. I do think that the fuel cost is sort of the biggest individual item where the changes just happen really fast on the market. And that's why we also wanted to give this figure that the 10% change. And this you should, of course, look sort of throughout the period from July until the end of the year, would bring EUR 18 million of change in the result.

And obviously, if I look at the forward curve, only how it has behaved in the last 10 days, it is up with approximately that 10% or even maybe a little bit more. So I think we just need to acknowledge that there is this uncertainty, especially around the fuel. And obviously, then in the longer term, and now I'm not talking about sort of this week or next week, but this could also have an impact on the consumer sentiment if the war continues. We have not seen this at this point in time, as already discussed, but it's July now, and we are still talking about our guidance until the end of the year.

Seems there are no further questions in the telco, but one question online still. So how does demand look for Q3?

So basically, what we've discussed in connection with the questions and also the presentation, I think the best estimate is the unflown ticket liability that we also disclosed in our numbers, that grew by 13.3% and then the more qualitative remarks and comments related to very resilient and consistent consumer preference to use their discretionary spending to traveling and experiences, which is also supported by Aurinkomatkat's insight that this is the second highest consumer -- kind of a consumers' intention to travel abroad when they have the next vacation or holidays.

So based on the internal data that we have, we can also qualitatively also confirm the kind of ticket liability growth of ours.

So I guess we're pretty much out of questions and can conclude the call. So many thanks for the excellent questions and joining, and we wish you a nice day and great summer.

Thank you all, and have a happy summer.

Thank you.

Good day, ladies and gentlemen. I'm Erkka Salonen, I'm from Finnair, Investor Relations, and it's my pleasure to welcome you to this Q2 pre-silent call. I'm joined by our CFO, Pia Aaltonen-Forsell, who will first give you an update on the key points of our second quarter. And after that, we're happy to take your questions. But with these words, I hand it over to you, Pia. Please go ahead.

Thank you so much, Erkka. And ladies and gentlemen, good afternoon, good morning, and welcome to what I believe might be the first pre-silent call that Finnair is hosting, and we hope to make this more of a, sort of, regular activity and obviously on the back of our silent period starting and still in a fairly sort of -- in a period with a lot of activity right now, it's probably good to take a few minutes for a dialogue with you all. And as Erkka said, we will take questions, but please go ahead if you want to put the questions in the chat. Go ahead already now so that we can start preparing for that as well.

But let me first talk a bit on the second quarter. I will focus my comments today mainly on, sort of, the here and now, but also talk a little bit about what we see happening in the market and, sort of, what that tells us about the later part of the year. But if we first look at the early part of the second quarter, we have figures out for April and May.

Our traffic performance continued to show a very positive momentum. And if we look at passenger volumes, which is the growth metric that we also talked about in our strategy, our volumes increased by 6.3% in April and 7.4% in May year-on-year. And we all know the big picture that's, sort of, around us right now. I mean, demand has remained strong in an environment where supply has been constrained during this quarter due to the Middle East situation due to the war in Iran. And obviously, it's -- from Finnair's perspective, we had industrial actions in the comparison period. So that's also boosting the figures versus the comparison period a bit.

So if we look at the different areas, growth was particularly strong in Asia and Europe. North America maybe remained still a bit on the softer side and we have suspended traffic in the Middle East and then, sort of, taking all of that into account, we still saw good growth in the early parts of the second quarter. Revenue passenger kilometers increased in both of the months and load factors improved to around 78%. And that's really on the back of solid demand and from our perspective, a supportive market environment.

So let's talk a little bit about unit revenue development. I mean that's been clearly positive. Let's not forget, there's a significantly increased cost picture, obviously, with the higher fuel cost, and we'll still come back to that. So revenue per available seat kilometer increased by 14.7% in April, 17.7% in May. And if we then look at, sort of, the factors that contributed to that, let's not forget the load factors improved, as I just talked about, and that supported this development.

There were also higher yields, particularly in the Asian traffic. And we have actively optimized our network capacity allocation and pricing to capture the demand and take advantage of the reduced market capacity caused by the war in the Middle East. And maybe it's still, sort of, fair to say that also, if you look at industry development from, sort of, a total picture perspective, what we have seen is, of course, costs that have raised a lot due to the increased fuel cost. But at the same time, we have also seen improved yields and I think this is testimony to the fact that demand has remained stable, supply has been somewhat constrained during the second quarter and then holistically, this means that the higher fuel costs have been compensated in the prices.

Also, Finnair's biggest market, obviously, has always been Europe, Asia has been really important, and that has been an area where I think we have, sort of, on relative terms benefited during this interim period or during this period of change and war. Now obviously, the situation in Middle East as far as we can interpret today is normalizing and maybe a little bit more about that later on.

I still wanted also to comment on cargo because from Finnair's perspective, that's been also a very positive development during this quarter. It has been driven by yields and that's really benefited from these disruptive situations. And this is continuing also a positive cargo trend that we did see already in the first quarter. So overall, that's a strong part of our business.

Then let's talk a little bit about the fuel prices. I mean throughout the second quarter, obviously, they have remained elevated. We have hedging in place and as I already said, stronger unit revenue has certainly mitigated part of the impact. So as we told you at the end of the first quarter, when we, sort of, looked at the remaining part of the year, we had a hedging ratio of 69% for the remaining period of April, December. So that's been something, of course, that has really balanced the picture for us.

Then as it comes to fuel supply, it has remained stable at our home hub in Helsinki. And we have not seen during this period any, sort of, material availability issues either at any other stations. So obviously, there's been sort of the odd situation here and there. So there has been, let's say, some very temporary limitations, but those have all been sorted out.

Of course, having said that, this -- the situation is still somehow fragile. And the geopolitical development still continue to create uncertainty around fuel availability and pricing for the longer term, should the peace agreement not come into place. But if and when the Strait of Hormuz remains open, this would certainly alleviate the uncertainty around the fuel supplies. And I think as you all have noted, if you follow the news flow from the recent days, the Brent crude has really sort of been falling back to even pre-war levels really fast, after these negotiations between Iran and U.S. have fallen -- come to place.

And we don't see quite as fast or rapid decrease in the jet fuel. And I think that's on the back of sort of more constraints, whether it's in the refinery capacity or just in the transportation to the specific locations. And I think it's fair to say that sort of clearing that all out should there now be sort of a continued opening of the Strait will probably still take some months, but it's, of course, a positive sign that the Brent crude has fallen back to pre-war levels.

So when we look ahead, market conditions could gradually normalize during the second half of the year, we also understand, of course, that the capacity that was suspended in Middle East will come back and normalize when this sort of war situation is easing up. And we also know from history and sort of what earlier lessons have told us that it's the balance between demand and supply that will, in the end, then sort of define the price levels. So could also from that perspective, expect something about sort of the ticket prices to be impacted by increased supply as the peace talks continue.

Overall, when it comes to demand, we do continue to see good demand, encouraging demand momentum still. We are moving into a very busy summer season or we are probably already in the busy summer season as we speak. And we still see customers actively looking and traveling across our network and our operations are delivering a reliable and high-quality connections.

And so all in all, there are certainly still uncertainties remaining in the operating environment, but we are confident in our ability to serve our customers. And it still remains safe to plan and book travel also for the autumn season and at least I'm planning to go for a short holiday tomorrow and really looking forward to that as well.

But I think with that said, that's really sort of the short overview of the current situation. And I think Erkka, we could hand it now over to questions.

Indeed. Thank you, Pia. So now would be a convenient time to present any questions you may have. Please follow the operator's instructions or use the chat function to present them.

[Operator Instructions]. The next question comes from Kaisa Vanha-Perttula from Inderes.

This is Kaisa from Inderes. Nice to hear you, and I have a few questions. So I would like to start with the first one. So the Q2 traffic data looks strong from a unit revenue perspective, so I would like to still ask about the pricing. So how should we think about the pricing for the rest of the summer and also into autumn? Is it -- is the strength mainly driven and supported by the capacity constraints in the market? Or is there also like demand-driven growth?

Thank you. I think it's an excellent question, and I think the answer is there's elements of both in it because I do -- we have seen across -- also if we look at market data, sort of broader in the market, it seems that demand has remained on sort of a strong footing. And with that said, it's clear that people are willing to travel and people want to travel. And we see that sort of in the booking momentum as well as, of course, sort of in the traffic data, which has already been published.

So I think with that said, it's fair to say that there is an element of sort of good market momentum. But certainly, there have also been supply constraints that we can follow from the data that they will also now probably ease up or have probably already eased up to some extent. And so there's elements of both.

Yes, that makes sense. On to the next question, ancillary revenue is a very important part of your new updated strategy as well. I would like to ask, has the recent development been mostly volume driven? Or are you also seeing progress in this revenue part also per passenger?

Thanks, Kaisa. Yes, it's driven again by both. So I think based on our strategy, offering more choice to customer is -- that's really a key part of the strategy. And that's why we have developed a lot also the offering around the ancillaries, whether it's, kind of, new combo, which may be sort of what seat and WiFi has been a big one, whether it's that you want to have more baggage with you during the summer or whatever that could be.

So both metrics are improving, of course, as our volumes are growing, that helps. But we have certainly seen also a per tax improvement and I think already for Q1, we could see this per tax improvement as well, which I think was a double-digit figure. So it's a good development.

Yes, yes, definitely. Yes. So lastly, I have one question. So given the strong start of the year, how are you thinking about the current revenue guidance and the quite wide adjusted EBIT guidance range, what would be maybe the key factors behind any potential revision or any changes on those ranges? I totally understand you're maybe not possible to comment widely about it, but still keen to know any...

Kaisa, it's a very relevant question. And I can give a few sort of thoughts around why is the range so wide as it is right now. And we were laughing earlier this morning in a meeting that, hey, sorry, I made the slides a week ago and already now this and that thing has changed. And I think that's the environment that we are living in right now.

I think what I tried to describe in my earlier presentation is that some of the concerns have, of course, been alleviated a bit. So with the peace talks now ongoing with some traffic in the Strait of Hormuz, some of those concerns seem a little bit more distant, but I don't think anyone could feel sort of -- they have to say that they are certain about a development such as peace agreement, et cetera.

So there are things that we know and those we try to share and they relate to the fact that demand is still on a good footing. We have seen some of the additional cost burden also, kind of, the positive development in our RASK has been supported by load factors increased by some higher yields in the early part of Q2. So we try to, kind of, put the puzzle of all of these different pieces. What we can really foresee and where we still perceive an uncertainty.

And that's why in the end, we still, at the moment, have this guidance with the wide range. And I think that what will sort of -- what we will need to all the time follow is really this development of these, like both external and internal factors. And that should then always sort of give the answer to you what should the guidance be. But at the moment, that is our guidance, and the wide range still is there for a reason.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes. Then we can proceed with the questions sent by the chat function. So the first question is coming from Benjamin Leverence. Is there a plan to return to the number of Asian destinations from before COVID once the Russian airspace is opened again or has Finnair completely put that strategy aside?

Thank you, Benjamin. There's a strong assumption in your question, which obviously sort of underpins it, which is once there is an opening of the airspace. And I still like to comment that first. I'm happy to also give a few comments directly to your question. But I first want to remind that Finnair's strategy is built on sort of the current reality and the assumption that the Russian airspace remains closed.

Now we may all have hopes that peace talks would progress also with Ukraine situation. And we are, of course, as a company, really putting a lot of attention to follow-up and sort of planning for various sorts of situations. But nonetheless, our strategy is still built on the fact that the airspace remains closed. And we could talk more about sort of what it would then take if it opens kind of -- it probably isn't just a thing of a week or two to then just make everything come back to normal. Probably it would take longer to have a lot of agreements in place, et cetera.

But if we then jump to sort of a situation which is now that the Russian airspace would have opened, then I for sure think that it would follow the same logic as any route planning is following right now, which really is based on traffic flows, where is it possible to get slots, airport availability, a number of factors that would be also a normal business logic would, of course, then be applied to such a situation.

So I think with that being said, there would probably be quite a lot of things to consider. And many things have changed since pre-COVID. I mean some of those include maybe a different China, different competitive situation, et cetera. So I don't think there's a, kind of, a return and just copy-paste what was there before COVID, but I don't think you assume that either. So I think it's just fair to say that if that situation would occur, we would just need to apply sort of a normal business logic. And of course, we have a team that is every day investigating sort of the best network for us.

Yes. The following question comes from Tero. How does Finnair plan to strengthen its long-term shareholder value, considering expected changes in global travel demand, fleet modernization needs and competitive pressures in the European aviation market?

Thank you, Tero. A question straight to the heart of our strategy. And I think the core elements there obviously revolve around our unique position with the hub in Helsinki and the attractiveness of the hub that we have here today, with sort of Finnair's network offering and giving an ability for people to travel via Helsinki basically to anywhere in the world through our network, which is really something unique I mean just as a traveler, go and have a look at all of the destinations that you can reach only with Finnair from Helsinki, it's really amazing.

So I think that's still at the core an attractive hub and network based on our strategy, a focus on our core customers and obviously, a renewal of the fleet, that we have been talking about the first steps that we are taking right now. But it's also clear that a fleet renewal and the growth of around 4% CAGR that we are foreseeing in the market will support Finnair's value creation today and also in the future.

And the next question is coming from Lavinia, a higher -- can you details about scheduled aircraft deliveries or leasing?

Well, thanks for the question. And I think there's no major change to things we have described earlier. First, I still want to say that we still have, of course, flagship Airbus 350, sort of, the last and final one in the previous campaign coming in, I think, scheduled more towards the end of the year for the delivery.

Then we have the new Embraer campaign that we announced earlier this year, where the first deliveries are scheduled, three aircraft at the end of 2027. And then we have other additions through our programs such as the midterm capacity, et cetera, where, obviously, this is a bit more sort of a flexible arrangements because some of these aircraft, we are considering sort of the best and most flexible options for us, used aircraft leases and even with wet leases, if need be, so that we get sort of a total fleet that keeps supporting the network that we have announced and want to fly.

So there could be some additions also through these more flexible measures even throughout this year. And then last time when we gave a bigger announcement, we also talked about acquiring up to 12 used ceo Airbus 32 (sic) [ Airbus 320 ]. So here, we are also making progress working on those, but we do not -- we have not announced any, sort of, more details around those yet.

Thank you. Next question is coming from Pasi Vaisanen from Nordea. Could it be possible that strong RASK growth has more than compensated increased cost burden? What could be the implicit RASK growth in Q2 if RASK growth is in line with cost increases?

Pasi, thanks a lot. That's a, sort of, very to the point question. And I still need to answer you today in a little bit more broad strokes. So I think it's fair to say that with the combination of a good market demand, some constraints in supply and also in combination still with the good load factors, that gives us a position where, kind of, the RASK growth is at least, sort of, a strong counterbalance with the CASK growth that we have seen.

And more importantly so, I think that looking forward, at this point in time, we start to see the pressure easing off on the cost side, and we see a demand picture that continues to be on a strong level. So maybe possibly, we need to discuss this more in detail at our Q2 release.

Then I believe this is the final question coming from [indiscernible]. What is hedging level in 2027 and at what average price? Has hedging now resumed? And if so, at what prices?

Yes. Thank you. When I'm looking at the figures. So in our quarterly report, we publish a table that is fairly detailed, but it's on a quarterly level. So I know, sort of, looking at this where the hedging ratio still early 2027, it's 40% in the first quarter. It's 29% in the second quarter, and then it's just a tad above 10% in the third and fourth quarter. So there's still a fairly, sort of, good support in the early parts of 2027.

And hedging has resumed, but on a slower pace than what we would do, sort of, in a stable market environment. So I think the liquidity in the market has not been stellar. And I think what we would expect now if the markets are normalizing, then that sort of -- that will over time give back, kind of, the opportunity to hedge with the tempo and with the pace that we have seen historically.

Yes. Thank you. So as mentioned, there are no further questions and we can end the call. Many thanks for the excellent questions and joining the call. We wish you a very nice day.

Thank you.

Good day, ladies and gentlemen. I'm Erkka Salonen from Finnair Investor Relations, and it's my pleasure to welcome you to this Q1 2026 earnings call. I'm joined by our CEO, Turkka Kuusisto; and our CFO, Pia Aaltonen-Forsell. [Operator Instructions] But with these words, I hand it over to you, Turkka.

Thank you, Erkka, and a very good afternoon also on my behalf. Earlier this morning, we published in my opinion, a strong Q1 report, especially given the fact that Q1 is typically a low season for our sector and also for Finnair. While, of course, at the same time when reporting stronger results, we do see that the risk related to the operating environment have increased. And we aim at also describing that how do we see the current situation, especially when it comes to the war in Middle East area.

But if I very briefly summarize the Q1 results and Pia Aaltonen will get you through more of the details. But if I start with the operating results, we were almost at breakeven. And I think that this is a remarkable improvement from Q1 last year. Although we did face the industrial action already in Q1 2025, but the direct impact of the industrial action at the time was somewhat EUR 22 million. And the kind of the comparable operating result was minus EUR 40 million. So over the past 12 months' time, we've been capable of improving the operational platform, our commercial capabilities and executing the new strategy so that result actually improved by some EUR 40 million in Q1 to Q1 comparison.

Revenue increased by double-digit number, especially driven or fueled by the strong demand that we especially did see towards the end of the quarter in Asian traffic given the situation in Middle East, the closing of aerospaces of Doha and Dubai Airports, of course, consequently increased the load factors of our Asian flights. But at the same time, January and February already performed very strong in terms of healthy Asian traffic. So this was kind of a final boost towards the end of the quarter.

The number of passengers increased by some 7.3%, and that then resulted also in increased load factors basically in all of our traffic areas, except Middle East. Pia will discuss in greater detail when it comes to our hedging policy. But when we started this fiscal year or calendar year, our hedging profile was actually rather supportive for what we have now witnessed. 86% of the fuel purchases were hedged in the beginning of this fiscal year. And at the end of this quarter, 82% of the Q2 fuel price is already hedged and then 69% for the rest of the year.

And then when we take the customer perspective, something that we are really now focusing on investing in when it comes to the new strategy that we launched mid-November last year. The customer satisfaction is on the rise. Across the total population, we did see in international comparison, in my opinion, a good result, 36. That was a 2-point improvement from a year ago. And then when we double click into the core customers of ours, those who flies us with the most Gold cardholders, Platinum and Lumo-tiered members, we are already scoring well above 40. So that's something that we can be rather satisfied with. And in my opinion, the strategy implementation has only started.

And then I will revert back to this one, but the -- over the last running 12 months time frame, the number of Finnair Plus members -- active Finnair Plus members has increased significantly.

Speaking of these traffic areas, if I start with Middle East, which is, of course, the most drastically changed area, we need to keep in mind that in the compared quarter of '25, we still had until mid-January also operation from Stockholm to Doha and from Copenhagen to Doha. But then, of course, the rather drastic change in terms of ASK in revenue is mainly explained by the fact that we did stop our operation from Helsinki to Doha and Dubai when this geopolitical situation escalated, late February. But we need to continuously keep in mind or put this into perspective that the Middle East traffic area has been some 3% of our capacity or annual revenue.

And then taking the very positives starting from Asia. ASK grew by some 9%, but the revenue in RASK actually grew even more so. And also the load factors are up by some 7%. And which is a consequence of a strong investment capacity allocation to Asian traffic. And we have also -- we continue to see kind of the activation of Japanese travelers flying to Europe and also activation of the business travelers. But as I already mentioned, the last mile or the final push is pretty much because of the closed aerospaces or hubs in the Middle East, and we did get some spillover effect to our Asian flights.

Domestic is pretty much stable, part of it last year, but also Europe did perform a bit better than we expected. ASK grew by some 4%, but revenue 8%, and again, load factors developing rather positively. So we are in a good position when it comes to starting the summer season during which we have more than 90 destinations in the Europe.

North Atlantic traffic, something that we've discussed very frequently with you or even intensively, we did see an increase of capacity. But at the same time, now the revenue development follows the capacity and also, therefore, at least the decline has stopped and we start to see some positive signals when it comes to forward-looking bookings and also business travel when it comes to origination or the U.S.A.

And then very briefly, just again, reconfirming that the capacity is growing steadily according to our plans, except the Middle East traffic area and then the market shares are pretty much stable. So we don't see anything drastic when it comes to our position at the Helsinki Airport or Helsinki Europe traffic. And also, we continue to be a very relevant player in the Europe, Asia, especially in Europe, Japan routes.

And then maybe a few words related to the fuel supply chain issues. And of course, given what's taking place or happening in the Middle East and Strait of Hormuz that has influenced first and foremost, the price of jet fuel and crude oil. But if this situation prolongs, there might be also issues when it comes to fuel availability.

If I start with our home market being the Helsinki Airport and Helsinki Hub, we do have a rather solid situation and based on the discussions of our main supplier here in Finland. We do see that the availability of fuel is extended until the end of our summer season and also some extra capacity. So therefore, if we need to tanker when it comes to short-haul flights in Europe, we do have enough fuel capacity in Helsinki to do so.

Some 80% of our European destinations can be flown by utilizing the tankering option. In North America, we don't see a big risk when it comes to the supply. And then, of course, the Far East Asia is the question mark and something that we work very intensively with on a daily basis to understand what's the situation. But based on the information that we have today on the destinations and all these that are relevant for us, we don't see short-term issues or short-term shocks related to potential fuel availability.

But maybe with these words, I would hand it over to Pia to continue on the financial figures.

Thank you, Turkka. And good afternoon, ladies and gentlemen. And if we haven't met, my name is Pia Aaltonen-Forsell, I'm the CFO of Finnair. And of course, looking at the Q1 performance, I completely agree with you, Turkka. I really see a seasonally weak quarter where our results have still been greatly improving. And in the graphs that you can see here, we have brought a bit of a quarterly perspective on some of the key figures over a longer period of time.

And maybe if we look at the revenue just for a slight moment, I think, first of all, obviously, you do see that there's a big sort of uptick compared with the first quarter of last year. As Turkka said, there were some disruption impact there already at that point, the EUR 22 million on the result. So you could say, okay, what about the comparison period. But maybe you can, in this graph also have a look back at '24, which was a sort of more stable year. And also there, you can see that we do have a great improvement.

I want to talk a little bit about the result in the same context. In the same way, obviously, a big improvement compared with last year. And if we look at sort of the how the year has started. I think particularly March was impacted by the war in the Middle East through both the fuel costs, obviously, as well through like the shocks that kind of went through the world, including then the supply-demand balance. So clearly, we have seen a very strong demand, for example, in Asia. But not only in March, so I do say that our year has started in a good way. And I think particularly, our cost controls have really been in place, and I'll still come back to that in my next slide.

And finally, our cash flow was strong. I'll take the opportunity to come back to some of the details around that in one of my later slides. So first, I'll go next to look a bit at the unit revenue and the unit cost of the RASK and the CASK. And I think this is important because we have a strategy where we are foreseeing growth. We are foreseeing capacity growth, passenger growth and we are, of course, very keen to do that in a profitable way to ensure that we can reach our strategic target of a 6% to 8% EBIT margin in 2029.

So looking at some of the elements, obviously, here first, if we look at the unit revenues, we can see that in this quarter, they were supported. So we had good load factors, yields, if you look historically, we're somewhat improving. And of course, we have as well sort of been able to navigate and manage the capacity growth that we saw in the quarter. So this is a good development and particularly if you kind of compare quarter-to-quarter, quarter 1 of last year to quarter 1 now, it's a really strong development.

But please have a look at the cost as well. I guess the fuel costs have really been sort of top of mind for a good reason. I mean, the prices, the spot prices have, of course, really, really been spiking. But if you look at sort of the proportion of the fuel cost to the overall cost profile. Even normally, we would be sort of 25% to 30%. And so this is a very significant part. But you can see that thanks to our risk management, this sort of early part of this situation has been well managed. And actually, the cost development holistically has been under control, including the other costs. While we have been growing, of course, we have been adding some costs, but proportionately, we managed to keep this under control. So I think I'm happy with the development during the quarter there.

Next, I'll turn to a few of the topics around our balance sheet. So first, I'll highlight the unfunded liability. And why I'm doing that is that I think it's, of course, it's a big balance sheet item, of course. You can see it's EUR 762 million. But what it also talks about is that we have seen bookings coming in. And sometimes, when someone is like asking that are people booking kind of what's happening? I think this is sort of the euro or the balance sheet way for a CFO to answer that. Yes, it's up 10% compared with a year ago. And you can see that if you go further back in history, it's up even more. So we do see those summer bookings coming in right now. And this is, of course, one reason contributing to the strong cash flow that you could see earlier, the EUR 274 million operating cash flow in the quarter.

Another thing that, of course, has been greatly supporting our strategic journey is the strong cash flow. We have an investment program. You can see that the CapEx in this quarter was around EUR 100 million. That did include EUR 20 million of the new Embraers. So when positioning the order, we also have taken some early cost or early cash out relating to that. But I want to say that this is also a pretty good description of sort of the balance between the cash flow and the CapEx going forward. I mean, we had a particularly strong cash flow right now, but also in our CMD, we said we would expect at least sort of a EUR 500 million-ish operating cash flow per year. And obviously, with sort of the finalized plans for investment that we have made right now, it seems likely that we are somewhere north of EUR 400 million per year, but maybe only slightly north of that. So this EUR 100 million sort of per quarter is a fairly good proxy for that.

I just wanted to say that because when you then look at our capital structure, I mean, our equity was strong in the quarter. Our net debt keeps going down. Our leverage was 1.2x. And and our cash ratio to sales is like 30%. So I think we are well positioned to operate sort of in a thoughtful way in this rather complex environment right now. And I think we are also well positioned to continue to execute on our strategic journey.

And my final slide is really some details on the hedging. I wanted to bring this up. Turkka already did speak about the fact that we have a good hedging ratio for Q1, for Q2, 82% and we have 69% for the remaining part of the year. And you can also see here that we are still sort of having a cost level of less than $700 per ton on this, which sort of for our cost structure is sort of very close to, I would almost say normal. But obviously, we also know that the hedging ratio is going down over time. There are still some hedges in '27. Nonetheless, of course, the percentage is going down, but I think this is giving us sort of plenty of time to act and prepare for the situation.

So with that, Turkka, I would hand back to you.

Yes. Thank you, Pia. A few remarks related to the execution of the strategy that we launched in connection with the CMU mid-November last year. And I'm actually rather happy when it comes to how the execution has started. And in my opinion, proceeds pretty much as planned. And as a big kind of strategic element or component, we did launch the resolution when it comes to the partial renewal of our narrow-body fleet a month ago. when we communicated that in order to support the growth, efficiency, profitability and customer experience objectives of ours, we did confirm an order of 18 E2 next-generation Embraers with some options and purchase rights. But parallel with that announcement, we also communicated that up to 12 [indiscernible] Airbuses 320s or 321ceos will be acquired from the market and that those aircraft are expected to join our fleet between 2027 and 2029.

As I mentioned in connection with the analyst call around this subject I think that this is a perfect combination of new aircraft and then somewhat used second hand aircraft that provides us with the needed flexibility and optionality to develop our kind of big or total fleet plan towards the end of the decade.

In the meantime, as already communicated, in conjunction with the capital markets update when we discussed the so-called midterm capacity or bridge solutions. Since then, we have agreed to add to current generation E190s, E1 Embraers into our fleet and also additional 2 ATR 72-600, that will be already operative in 2026 to further strengthen our regional capabilities and capacity.

And thanks to this fleet plan, we have already communicated some new openings and also extended some of the summer season routes to be all year round. So, that we can meet the growth ambitions that we have communicated. In addition to network or the convenience part of our strategy flywheel, also the other elements or other areas in our updated strategy are proceeding according to the plans.

Reliability and efficient operations in Q1. The flight regularity was at 98.3%, and it's actually increasing further more during the second quarter, so I'm very happy with the operational reliability and functionality of the Finnair platform as we speak. Also, the choice-based product offering and commercial strategy is also progressing with double-digit growth the ancillary revenue per passenger during Q1 grew by some 12.5%. And the total volume of ancillary revenue grew by 20% because in addition to per passenger growth, we had more passengers, so more than EUR 50 million of revenue were collected from ancillaries.

And we continue to push for the growth of modern sales channels and even more efficient sales to enable this modern retailing and personalization. And then the fourth component being the engagement. Over the past 12 months' time frame, the number of active Finnair Plus members has increased by some 27%. Again, very concrete proof point to communicate that the strategy execution has started on front foot. And with these activities, as communicated by the end of 2029, we aim at improving our profitability by some EUR 100 million. And as today, when we are describing the situation, we have identified the initiatives and the euro values across some 110 projects so that we secure the, let's say, the delivery capability, and we will meet the number by the end of the strategy period.

And then as a final slide, the outlook and guidance. The outlook section has been specified and the specified section is the capacity growth measured by ASKs. Earlier, we said 5%, but because of the capacity and the operational kind of a halt when it comes to Middle East traffic, today it say approximately 3% for 2026. And then the guidance, it is unchanged. We estimate the revenue range to be from EUR 3.3 million to EUR 3.4 billion and the comparable operating result to be within the range of EUR 120 million up to EUR 190 million. And this guidance is based on the assumption that there will be no significant disruptions in fuel availability.

But maybe with these words, Erkka, I guess, we are ready for the Q&A section.

Yes. Thank you, Turkka. So indeed, I would be a convenient time for any questions you may have. Please follow the operator's instructions to present them or use the chat function.

[Operator Instructions] The next question comes from Jaakko Tyrvainen from SEB.

It's Jaakko, from SEB. I'll start on the ticket liability, which you highlighted that was up 10% year-over-year. Could you elaborate a bit more on this? And how much of this growth reflects the continued good demand on Asian flights in Q2. Are you seeing -- basically asking, are you seeing the bookings very strong for April, May and especially on Asian flights? Or does this tell more about the overall demand growth across the geographies?

It's Pia here. I think sort of broadly what I can comment on this. I don't think that this is just April and May. I mean clearly, we see the booking curve sort of also through the summer period. And furthermore, when you ask about the different regions, I still think there's as well. There's a good spread. I mean, obviously, even in Europe, we have 90 destinations. There's a lot of new destinations they are getting some interest, et cetera. So I would not sort of highlight any area. And I think picking a little bit on some of the comments that Turkka made on the regions, I think even on the North Atlantic, there was a little bit of positive signs from the Q1 numbers.

Good. Then follow-up on Turkka's comment on the jet fuel availability. Could you talk a bit kind of scenarios, which kind of scenaries you are seeing the see availability being limited first in Europe, then in Asia and lastly in Helsinki?

So basically, based on the information that we have today and the dialogue that we have on a weekly basis with our suppliers, I need to start from the Helsinki perspective because that is also very related to the European perspective. We do see and we've been confirmed that there is some solid availability at Helsinki Airport until the end of the summer season and some capability and capacity to actually acquire a bit more because that then opens up the opportunity for tankering so that we can fuel the aircraft at Helsinki with the needed amount of fuel to fly back and forth if we face partial fuel shortages or limitations in some of the European destinations.

Some 80% of our European destinations are feasible for tankering options so that we can fly back and forth with the fuel that we have loaded at Helsinki. Based on today's information or visibility, we don't recognize clear or significant issues at any of the destinations that we operate. And that same applies to our long-haul network. U.S. is maybe the most on the safe side, but also when it comes to the Far East Asian routes, plan -- our partners and suppliers haven't communicated that there would be severe challenges during the weeks or, let's say, 1 to 3 months to come.

Okay. And then the negative scenario that the jet fuel is being limited how would you react? And how would you assume the whole market being react? Is it just so that you and the other players would just cut the most unprofitable routes?

I guess that's how it goes, it's the game of optimization. And of course, this is speculation, but it would also dependent on that to which extent, let's say, destination x, y, z that do you get 80% of the fuel, if you previously get 100%? Or are there more drastic changes? So it's a rather complex environment. Should we face that, but I wouldn't like to speculate about it today. But that's something that I think Finnair is famous for that when it comes to contingency plans or running scenario planning and scenario management. So let's see if the day comes, I think that we are operational ready for it.

Okay. Then, are you already selling higher ticket prices for the second half of the year? And what about then the competition, especially the rivals who may have had a bit lower fuel hedges in place? Are you seeing them hiking prices faster than you are?

That's a complex question, Jaakko, as we've discussed earlier also. Prices are set by the market and then the pricing algorithms are pricing tickets as we speak here today. So, we need to have a bit more backward-looking statements once we have closed the next quarter and the third quarter. But what we can see from the Q1 results that the unit prices increased mainly in Asia, was at some 5% and a slight increase in the U.S. traffic. But if the situation or the supply chain issues when it comes to fuel availability, will prolong, of course, that will, at some stage, will be visible in the ticket prices as well.

What is beneficial for us, as Pia described very well in my opinion, that the hedging policy and the risk management framework that we apply gives us a lot of time and oxygen to add up to the changing situation. And of course, we are following pretty closely how the competition has approached the same topic risk management and hedging and then let's see what happens. But I think that in relative terms, Finnair is well positioned for the Q2 and early Q3.

Exactly. Then one more, if I may. On the Travel Services, we saw a decline of 4% year-over-year in top line, a bit surprising to me. What was driving this? And how do you see the summer looking this year for you in terms of Aurinkomatkat-Suntours and tours?

Nothing drastic, that is mainly explained by the Canary Island supply issues or constraints. At Canary Islands, the hotel supply has been constrained. So we were, to some extent, we needed to limit or cap our capacity and sales to Canary Islands. But in a big scheme of things, our Aurinkomatkat-Suntours are doing well and also the same booking pattern or customer behavior pattern that Pia described in conjunction with the parent company applies also to Aurinkomatkat-Suntours.

[Operator Instructions]

This is Kurt from Aviation Week from Austria. Realized the closure of some of the Middle East traffic to help your long-haul routes. Can we see Well, the additional traffic is coming from. You have now a lot of connected passengers, let's say, from India to the U.S. or something like this? Maybe you can give me an update on that? That's my first part.

So basically, there can be up to 2,000 different [indiscernible] combinations on our flights. So I would say that our population of our transfer passengers is very, very wide and rich in my opinion. But as we've discussed also previously, Indian travelers connect via Helsinki to U.S., a lot of Japanese travelers connect by Helsinki, the 90 destinations in Europe. And then, of course, the various kind of nationalities that have now utilized the opportunity of traveling via Helsinki to Far East Asia, while the major hubs at the Middle East area have been closed or capacity constraint.

Yes. As you find, very long routes now regarding the closed air space of Russia and now I have seen you very well hedged, that helps really a lot. Do you think that the fill issue will have an effect if you're looking ahead, the expensive fill on your very long-haul flights or so far so good as you had with the hedging terms, yes?

So basically, the hedging policy and the hedging position that we have, 82% for the second quarter and then 69% for the rest of the year gives us time to let's say, view or evaluate how the market and the demand will develop. So we don't have urgent need to adjust anything been announced to our traffic to -- for Helsinki to Japan, for instance, is 28 weekly frequencies. But of course, it's pure mathematics that the longer you fly the more fuel you burn. But at the same time, kind of same situation for the European carriers and the Japanese carriers as well.

But -- so in a way, a long answer to your good question, but too early to speculate. Currently, we are well hedged and the demand for -- from Europe to Asia is doing well.

Is doing well. Do you think that one day the hubs in the Middle East will return to kind of normal? Do you think they will -- Emirates and Doha and Qatar and so on, do you think it will start a kind of price dumping to regenerate their capacity to fill the aircraft up with life? Do you think there will be a kind of price dumping coming up?

I don't tend to like this competitors' activities and actions, but I would assume that if an airline company faces a situation that you need to ground the aircraft and and it's kind of a severe disruption. Today, the operation starts to ramp up. You need to fly the aircraft to keep them airworthy. You need to also get crew the opportunity to fly so that you avoid extensive simulator training and such so that the training pipeline doesn't become a bottleneck. So probably someone starts to price to the cash flow so that you can start to fly with the aircraft.

Yes. Just 2 sub-points, if I may. Regarding the narrowbody order you have with the [indiscernible] A320s and 321s. Do you know already the share how many is 321s you will take and how many is 320s?

Too early to tell. It's, of course, always to some extent, an opportunistic approach when you go to the secondary market and the when the demand as supplies and there is a good deal to be signed off. So time will tell.

I think there are a lot of good deals coming up now with many airlines probably to reduce the older fees, maybe -- what do you think?

Let's see. Let's see. So I don't see any big deal.

Yes. And Australia, so the plants going on as planned for Melbourne, I think. No changes on this?

Yes, it is based on the information that we have today. So I guess, the maiden flight is the 26th of October, anyhow late October, and really looking forward to this opening and connecting Helsinki to down under.

The next question comes from Joonas Ilvonen from Evli.

Joonas Ilvonen from Evil. If I may come back to this [indiscernible] ticket liability question, can you disclose to what extent this 10% year-on-year increase was driven by higher prices versus volumes?

It is a mix, Joonas. I mean, clearly, but if we just sort of look backward at the stats that we have shared from the third quarter, then you still see that, yes, indeed, on Asian routes the yields were improving a bit. But I mean we were not talking about sort of 2-digit numbers. So still assuming that, hey, we have increased capacity, you have seen the rather big increase in passenger volumes it is clear that volumes play a significant role here. And then there's a little bit of the yield as well. So I wouldn't say that this is driven by price. That would be an exaggeration.

Okay. And then another question. So you already kind of discussed this ticket pricing situation. I know it's a complex question, but if you can add just a little more for example, I just recently saw like an ad or also from in 2 ways to get to Boston starting from EUR 350, I guess you would have to add, I agree that's quite cheap. I'm not sure how representative studies of the like overall situation, but do you see like opportunities for more aggressive pricing in some places?

I mean, I think basically all airlines are raising their prices. But let's say, if you were to expect that jet fuel prices are going to decline soon, which would you be in essence, be kind of ready to bet against these relatively high jet fuel prices, if you were like expect the decline by aggressively pricing tickets?

As mentioned earlier, the pricing is very complex, and the pricing algorithms and dynamic pricing optimizes the ticket prices in real time. And then, of course, there's -- especially in the European traffic, it's a rather tight competition. So time will tell how the price development and yield development will turn out.

But then as I said earlier, if the situation prolongs and the fuel price stays at the elevated level, of course, that needs to be offset by let's say, profitable flying or sustainable flying. And then, of course, you shouldn't draw too much conclusions from a single campaign. What was it Helsinki has in Boston, that's only one example. And without knowing the data and the what we try to optimize. But it sounds like a nice deal. Maybe we should go to Boston.

It's a nice town, yes.

Then some questions online. So the first one comes from [indiscernible]. Will rising aviation fuel costs under low supply for Finnair to cancel flights in the next quarter, especially in the flights towards Asia and the European sector?

Short answer, no. We intend to cancel our flights. We have committed to the summer schedule that we have published. So you don't need to speculator be worried about our flight cancellations because there won't be such related to this situation in Middle East years.

And the next question is from Mateo Salcedo. You said that Finland and Europe have relatively good fuel supply for the time being. Could we translate this into months, since last weeks are some European destinations in which the risk of jet fuel supply disruption is more present than in others?

I cannot comment all of our European destinations. We have 9 of them. So based on the information that we update on a weekly basis or a daily basis, we haven't been flagged severe issues at any of the destinations as we speak. And the most confident I am -- when it comes to the situation at the Helsinki Airport, where we've been confirmed that the fuel availability won't become bottle-neck issue before the end of the summer season.

Yes. And the last question comes from [indiscernible]. So does Finland have better availability of Kerosene during 2026 than most of the European countries?

That's difficult to evaluate because we don't have transparency or visibility to the, let's say, reserves or national supply across the European countries. But what gives me a lot of confidence that in Finland at Helsinki, thanks to the Porvoo Refinery of Neste, we are well positioned also on this one.

So I guess we're out of questions, so we can conclude the call. Many thanks for joining and the call, and the excellent questions. We wish you a great day.

Thank you so much joining today, and see you again, Q2.

Thank you.

Good day, ladies and gentlemen. I'm Erkka Salonen from Finnair Investor Relations, and it's my pleasure to welcome you to this Q4 2025 Earnings Call. I'm joined by our CEO, Turkka Kuusisto; and our CFO, Pia Aaltonen-Forsell.

After the presentation, we have a Q&A session, and you may present your questions either by dialing in or using the chat function of the webcast.

But with these words, I hand it over to you, Turkka.

Thank you, Erkka, and very good afternoon to all of you joining us today. And today, we have shared, in my opinion, very good news earlier when we published our Q4 report that indicated a very strong profitability development, especially driven by the continued strong demand and solid execution.

Pia will discuss, in short, the result in detail, but I would characterize it as a sum of multiple factors. Of course, we benefited from the lower than -- lower fuel price. But at the same time, when we added into the equation the increased cost from the environmental compliance, other regulatory charges, I would say that the cost management and effectiveness was extremely well executed with -- among the Finnair team.

At the same time, we still saw and we will see a strong demand, especially in the Japanese and European market that performed, in my opinion, relatively well. That led into a close to a 1% revenue growth, but above all or more importantly, our comparable operating result increased almost by 29% versus the compared, that already was actually a significant improvement from 2023.

As you recall some months back, mid-November, we announced our long-term financial targets and also the updated strategy. And therefore, I'm also very happy that already now, we start to see pieces of evidence that the strategy execution or implementation has started with good velocity.

As a concrete example of regaining the trust after the, let's say, more difficult or disruption shadowed first half, we restored the confidence of our customers and also discuss about the employees, but also the external stakeholders that we have as a concrete example being that with Pia's lead, we did successfully issue a EUR 300 million bond just before the year closing.

If and when we will take the regional perspective, as mentioned, our investment in further strengthening the Japanese foothold after the double crisis is paying off. All in all, the Asian markets continued double-digit growth, both in terms of capacity and revenue. And then if I take a deep dive into our foothold or market presence in Japan in the summer season of 2025, we flew 25 weekly frequencies between Helsinki and multiple destinations in Japan. And we are going to actually further strengthen that for the next summer season when we are adding 3 additional weekly frequencies from Helsinki to Osaka.

Also, as already mentioned, Europe as a traffic region performed relatively well during Q4, whereas the domestic part was a bit more soft in terms of load factor development. And then Middle East, when we kind of characterize the profile of the business performance, we need to continue to keep in mind or bear in mind that we don't -- didn't fly anymore from Copenhagen or Stockholm to Doha under the Qatar Airways collaboration or umbrella. So therefore, the revenue development and the ASK development is extremely negative.

Big question, of course, still related to how will the North Atlantic traffic develop during the forthcoming quarters. Still in Q4, we saw some softness in terms of ASK development and also load factors. But here, we need to continuously also bear in mind that our ASKs, 9% is allocated to the North Atlantic traffic, and we, of course, continue to monitor the development extra carefully.

Then speaking of customers, obviously, when the first half of '25 was overshadowed by complex CLA negotiations that led into severe disruptions, we faced, of course, declining NPS. But I'm extremely happy when I started to see already in September that the NPS is recovering very rapidly after we were capable of stabilizing the operation and continue to fly with the kind of recognized Finnair quality and safety and functionality. So therefore, in Q4, which is the most demanding winter season, the NPS among the total customer population of ours graded 33, which is a good result in network carriers global benchmark.

And if and when I'll take the core customer perspective, that is the core of our new strategy among the top tiers of Finnair Plus frequent flyer program, we are actually currently trending above 40. And as you can see from the chart on the right-hand side, the number of passengers continue to grow by 2% year-over-year.

Then also maybe related to the disruptions that we faced during the first half of '25, it's important to address that we haven't witnessed significant changes in the capacity market share in our core markets. So these 2 charts, in my opinion, provides a lot of information that our stronghold in Helsinki and our stronghold in the Europe-Asia traffic is holding extremely well, and we will continue to develop our market presence accordingly.

And then with this slide, I try to capture the highlights of 2025. So basically, the year was split into 2, difficult first half because of the industrial action and associated disruptions that caused directly more approximately EUR 70 million of negative EBIT impact. And then of course, we were not capable of flying the ASK plan that we had planned for the first half, but ever since we got the CLA disruption behind us early July, we were capable of stabilizing the operation very quickly and actually then, started to implement our profitability improvement actions. And then towards -- through Q3 towards Q4, we improved the momentum and velocity and therefore, very happy with the result. Report a full year result of EUR 60 million in form of comparable EBIT.

Unflown ticket liability also grew by some 7%, which is a good forward-looking indicator that how the ticket sales did develop during the fourth quarter. Pia will discuss this in more detail. And then on the right-hand side, on the bottom right-hand side, you can see that the Board of Directors yesterday decided to propose a EUR 0.09 capital return to be decided in the AGM held later in this quarter.

But maybe with these words, I would leave it for Pia to discuss the financials in more detail.

Thank you, Turkka, and good afternoon, ladies and gentlemen. I just want to say a big thanks to our team, to our customers and to our partners. It's a great privilege to be able to present so strong quarterly figures, as Turkka said, on the back of a start of the year that was still very challenging on many fronts. I think we have ended the year on a very strong note. And therefore, I wanted to offer you a few sort of quarterly time series here with some comparisons on some of the key figures, just to sort of have that perspective. I'll start a bit with the top line and the revenue.

As Turkka explained, we are in a market momentum in our key markets that's already a bit more positive. So we have seen some growth in the demand have seen some growth in our top line of about sort of 1% on a full year basis, which is pretty much equal to also, if you count in the wet leases, is how much we added to the capacity sort of holistically during the year. Please still keep in mind that due to the earlier strike situation, we did have cancellations, we have paid compensations, et cetera. Those all, of course, impact the top line as well.

If I look at the quarter itself and especially, if I think about sort of the different parts of our business, maybe there's a few words still worth sort of mentioning. We have seen growth sort of through our different categories. So the ticket revenues, we've also seen this increase on the ancillary side. Ancillary is very important from our strategic perspective. The growth was not that fast during the quarter. The comparison period a year ago had a very strong campaign towards that end of the Q4 in '24. So that sort of impacts a little bit the comparison here, but we are still continuing on a good path. That is really important for us, I mean, already reaching over EUR 50 million impact per the quarter. And finally, cargo was sort of fairly stable in the period.

Maybe those words are enough on the revenue side. Then let's turn our attention to the middle of the page, which is the graph on the operating profit. So the comparable operating profit to be exact. And you see our result was a stellar EUR 62 million for the fourth quarter. This is the strongest fourth quarter on record that we could find using the current accounting methods. And when you compare it to a year ago where we made EUR 48 million, we actually had a bit of strike impact, although it was EUR 5 million a year ago in the figures and none in this period.

But from a cost perspective, there were a few external factors that are worth mentioning. I'll say first that we were supported year-on-year in the development by fuel prices and also a weaker dollar, that did bring us on a quarter-on-quarter comparison, maybe EUR 15 million of benefit. On the other hand, we also had higher sustainability regulation-related costs that's added more than EUR 10 million per quarter, as well as higher navigation and landing costs that also added about EUR 10 million per quarter. So the headwinds of these external factors were actually bigger than the tailwinds. Nonetheless, we still had a EUR 50 million uptick, and this came very much from somewhat higher sales, so we were growing, and we were able to do that in a good way also then sort of being able to use the scale benefits, have a good operational performance, and that helped us then to improve the result year-on-year.

Finally, Turkka talked about the unflown ticket liability. I think that's a good sign of the momentum that we have right now that keeps on a stronger side, 7% increase sort of year-on-year. Of course, our business has a lot of seasonality. So you do see the quarterly variance here, but we are on a very good path.

I have one more slide really from the profitability perspective. And I wanted to talk to you about revenue RASK and CASK, and just give still some perspectives into that development. I'll start on the revenue per available seat kilometer, the RASK key figure here. And many of the things that I mentioned before on the revenues obviously play in here. I think if you look at the sort of year-on-year development, we can say it's a bit of a sort of hanging in there, sort of making the best of the situation in a challenging year with the strikes, et cetera, during the first half. So clearly, there's been an impact out of that holistically.

If we look at yields, I think it's worth still picking up on what Turkka also said, showing the geographical areas before. Though we see a positive development holistically year-on-year throughout Asia, particularly Japan has been a very important market for us, as Turkka said, we also see a good development in Europe if we look at the full year. But the North Atlantic traffic, that has been also from a yield perspective under pressure, and that's due to the sort of holistic situation that we face in that market, and I think that put a little bit of a lead or a little bit of a pressure here on our yield development. So kind of keeping all of that in mind, I still think we have a decent development through the year.

On the cost side, the lower fuel costs are helping us, but those other higher regulatory costs as well as landing, navigation costs, et cetera, they all come through here. So you can still see that we've done a good job in mitigating some of the impact. And I think just looking from everything, there's also some seasonal variance. I take one example, maintenance cost. I think we managed really good in the fourth quarter. And obviously, sort of between the quarters, there could be a little bit of changes. I think we have also structurally made some changes as we are through '23, through '24, and a little bit in '25 also done some lease buyouts that are, to some extent, then shifting between the lines, the cost of maintenance.

That does give me a nice bridge now to my final page, which is more on cash flow and balance sheet. So let's have a look there. Our cash flow was robust. Obviously, cash flow very much built on the operative performance, the result as well in itself. I think there's only one thing that I wanted to pick up from the cash flow side page here that you can see on the slide that you see on the left-hand side, and that is to explain that if you are keen on details, look sort of from our reporting a year ago, we had a bit of a reclass there on the credit card holdback that sort of boosted from a reporting perspective the figure in the year-on-year comparison. But I think sort of operationally, a good performance in this quarter.

Let's talk a little bit about CapEx. Going forward, we do expect a CapEx amount, EUR 400 million to EUR 500 million per year. We are also guiding sort of about that midpoint for 2026. You can see that in 2025, we were coming towards a little bit lower figure. Actually, the gross CapEx was less than EUR 200 million. There was quite a lot of buyout still in this. It was a bit north of EUR 100 million, so lease buyouts, and there was also a EUR 64 million of sort of more maintenance-related CapEx and then some investments, for example, into digital, et cetera. So that was really what we were working with in '25. Looking into '26, this will increase a bit, aligned with the communication that we had on our CMD in November.

And finally, it's good to end the year with a robust cash position and still with a good leverage, 1.8, and a good cash to sales ratio, as you can see in the chart to the right. So I think we have a good setup for starting to work into 2026.

And on that note, Turkka, please, over to you.

Thank you, Pia. So to some extent, recapping what we said in connection with the Capital Markets update we held in the middle of November. The strategy is pretty much now centered around the customers and more specifically, core customers because the network setup that we have, have, of course, changed because of obvious reasons. But now after 3 fiscal years since the Russian airspace was closed, Finnair has now demonstrated that we can operate a profitable network carrier even though the Russian airspace is and most likely will remain closed for the time being.

So therefore, we have highlighted the focus on traveling to and from Finland while continuously keeping in mind that we are still extremely important transfer carrier for international passengers who connect from Helsinki to European destinations, for instance.

This Japanese example that I provided you with earlier is a concrete piece of evidence that we are very strong in Europe, Asia traffic even though the Russian airspace is closed. So the strategic priorities that we shared also with you a few months back pretty much now focus on further optimizing this rebalanced or repivoted network of ours and continuously searching for new route openings, for instance. At the same time, of course, taking good care of the safety, reliability and convenience and functionality of the operations that we run, which enables us to monetize on our commercials, providing more choice through modern retailing.

And as you can see from our numbers that the revenue received or collected from the ancillary sales was more than EUR 50 million again during the fourth quarter. There was a bit of a hold or pause in the growth rate, but there is an item affecting the comparability because last year around, we did have a very extensive Avios points sales campaign, but what we continue to forecast is a very solid growth on the ancillary side.

And then, of course, when we get a more intimate relationship with our customers, we can then extract the full benefit out of the Finnair Plus frequent flyer program. Then taking from the kind of this 30,000 feet to more grassroot level, concrete examples, we are opening 12 European destinations for the summer season 2026. And very exciting news, published a few weeks ago when we communicated that we will be opening a route from Helsinki via Bangkok to Melbourne. And while at the same time, adding this third daily flight from Helsinki to Bangkok, again to kind of strengthen our presence in the Far East Asia market.

Of course, we continue to invest in addition to aircraft and the new fleet scheme into other areas as well. AI and digitalization and other technologies will influence significantly that how an airline like Finnair will be run, operated and led in the future. And we do have a lot of initiatives ongoing, where we can utilize the next-generation technology, be it fuel efficiency, route optimization, back-end processes and such. And speaking of digitalization, we will also continue to invest in the, let's say, digital footprint or digital experience of Finnair in form of new mobile applications, for instance, that will be launched later this year.

And then as a maybe final remark from my side related to strategy and on the journey ahead. Of course, given the double crisis, maybe even the longer legacy when it comes to an organization undergoing a significant transformation. And then, of course, the CLA spring that we faced, we want to now invest with extra care when it comes to further developing the engagement, cultural development, leadership and also employee well-being at Finnair. And I was extremely positively maybe even surprised at how much our engagement score increased when we measured it last time in the midpoint of November and December. So it, again, gives us a lot of confidence that we have selected a right path. We are on the right journey with our colleagues that represent 5,800 kind of professionals across the entire organization.

To kind of finalize the presentation phase, outlook and guidance provided today. We expect that the global air traffic will continue to grow 2026. We estimate that our total capacity measured by ASKs will grow approximately by 5% during 2026. And then, of course, when giving outlook and forward-looking statements, we continuously need to keep in mind the macro volatility, geopolitical tensions and also the fuel price volatility. But given all this, we are today estimating that our revenue for full year 2026 will be within a range of EUR 3.3 billion to EUR 3.4 billion, and the comparable operating result to be within a range from EUR 120 million up to EUR 190 million.

So I guess that with these words, we will close to presentation and open for Q&A.

Yes, indeed. Thank you, Turkka. So now would be a convenient time for any questions you may have. Please follow the operator's instructions or use the chat function.

[Operator Instructions] The next question comes from Jaakko Tyrvainen from SEB.

Sorry, I didn't hear the early part of the presentation, so if I'm repeating here. But could you give some color where you are about to play the capacity increase in '26? The point that it will be mainly Europe and Asia routes?

Yes, Jaakko. And I think maybe some of that was mentioned, but I think it's very well worth repeating. So of course, looking into Asia, we are further strengthening Japan with 3 more weekly routes during -- or weekly during the summer season. And as well, we have launched the Melbourne route from winter season of '26, and that will then also mean that we fly to Bangkok 3 times per day. So that's sort of the Asia part of it.

And then when it comes to Europe, I think, for the summer season, we have launched quite a few sort of interesting destinations, if you are interested in Stavanger or Umea or Luxembourg, and there's plenty more there, all in all, 12 of them. So I think we have a plan that has already raised some attention and some interest, and that's what we are up to now.

Great. And then what about the competitive environment at the Helsinki Airport now that given that all the players should have kind of published their route plans for '26, how you're looking the upcoming competition for the start of the year?

Of course, competition is something that we will face on daily basis. This is a globally competitive business and sector.

When it comes to Helsinki Airport specifically, we kind of knew that there might be an opening from Middle East to Helsinki. And therefore, we already actually -- we are one step ahead by introducing this third daily connection from Helsinki to Bangkok to mitigate the impact. And then at the same time, it's extremely important to put this into a context -- into context. Our traffic area, Middle East represents some 3% of our ASKs and revenues, and this specific route from Helsinki to Dubai, we fly it only during the winter season.

So I wouldn't like to underestimate the impact, but I would kind of position it there for the time being rather insignificant, especially given the connectivity beyond Helsinki. So should one kind of arrive at Helsinki, 70% of the passengers will continue to somewhere else with our aircraft.

Excellent. Then if we think about the guidance and the EBIT version of it, if we exclude the industrial actions impact in '25, which factors are you seeing being the kind of the most important profit growth drivers for '26? Is it volume, pricing perhaps or costs?

Yes. Thanks, Jaakko. I think the volume part, the growth part here is an important driver. I mean we are seeing ASKs growing approximately 5% and you also see that in the top line guidance there, the EUR 3.3 billion to EUR 3.4 billion that we are expecting on the revenue side. So clearly, that's a big driver because that then also helps us to keep kind of spread the cost in many cases over sort of a bigger spectrum.

But of course, we will need to keep the cost control, and we will also need to deliver on other parts of the strategy. That includes, for example, the ancillary sales, and that as well includes certain efforts that we are making in digitalization and AI that will also help us on the cost side. But it's more the growth and the revenue sort of in that context.

Good. And then the final one from my side. Did I get it right in your presentation that there will be further material inflation when it comes to traffic charges in '26?

At least in my presentation, Jaakko, the point I tried to make was to really describe the impact in '25, which even in the quarter was EUR 10 million per quarter. And I think there was a big sort of pressure sort of following COVID and the losses, of course, of many of these, let's say, national very regulated agencies. So at least sort of as far as I can see right now, many of those really step changes that were needed to sort of cover for history probably occurred during '25, but that doesn't mean that this is without inflation, but probably the big step change has occurred.

The next question comes from Joonas Ilvonen from Evli.

It's Joonas from Evli. Congrats on very strong earnings. You already talked about the cost side of Q4. But could you elaborate a little bit? I mean when I look at your cost line items, is there anything to highlight there? I mean, lines like passenger and marketing as well as aircraft materials and overhaul? I think they were all like slightly lower than estimated. So would you say that this kind of so-called, as you said, solid operational execution, is it repeatable throughout 2026 as well? Because in my opinion, if you were able to be as successful in terms of cost over 2026, then you would have basically no trouble reaching the upper end of your EBIT guidance. So is there anything to like highlight? Or do you think how repeatable this kind of cost performance is?

Thank you, Joonas. I think 2025 saw many sort of particular challenges also when it comes to sort of maintaining the customer satisfaction when we had cancellations earlier and also kind of handling those situations. So I think we sort of came into a more normal environment then during Q4. So maybe there is room to say, yes, there is a bit of a sort of better situation that we have reached.

I would, however, point out that when it comes to maintenance, so I see there is a little bit of sort of just timing topics, whether they occur in one quarter or in another. So I don't see that we structurally would have achieved a situation where we have lower maintenance cost. We are, of course, at the moment, still having an aging fleet. So that is one that I just think there were maybe more a bit of sort of quarterly variations. There is a structural change, but it only goes kind of in between lines because when we have bought more of the leasebacks, it means that some of the costs that were previously shown separately under sort of maintenance cost could now go into the depreciation line because some of the bigger overhauls would be treated as CapEx when they are to our own equipment. So there is a slight change, but that, of course, is not impacting the EBIT line as such.

All right. That's clear. And then about your revenue guidance, you already talked about this a bit. And you say you expect your capacity to grow 5% this year. But overall, I think your revenue guidance is -- I mean you expect quite robust growth. So to what extent beyond higher capacity do you expect passenger load factors and ticket prices to contribute to growth?

There is definitely -- just looking at the market environment and then the capacity growth in combination with our guidance, I think we are seeing some improvements in the load factor throughout the yield. And I don't want to comment on the yields in particularly. I just -- I think it's just good to sort of look at the full network that we have and the ability that we still have to boost Asia to some extent. So this sort of a mix thing is a good one to consider.

So you're basically still following the development of North Atlantic demand closely, but you're quite confident on Asia and Europe going to develop well also in 2026?

I think we have seen North Atlantic sort of continue kind of on the same path that we have seen before. But long term, we are still having capacity on those lines. And let's see when's that time for the changes.

The next question comes from Pasi Vaisanen from Nordea.

This is Pasi from Nordea. If I may start with this new route openings. So these new connections you have announced, are they supporting or kind of declining your average yield? I would assume that there are no easy wins available anymore. So how you are making the calculations for these new routes in terms of your kind of economical reasoning of the opening?

I guess time will tell what the yields will be eventually. But there is, of course, very diligent analysis behind when we are opening a new route. But especially the new openings in the Nordic region, we feel that there is currently a bit of a vacuum when it comes to providing regional flying from many of the Nordic destination to a Helsinki hub that then provides connectivity beyond Helsinki.

Then when it comes to the Toronto route, that is a kind of a reopening for the summer season '26. And then this Bangkok-Melbourne route that we communicated, too early to tell. But of course, it's a combination of optimizing your yields and then also capturing new passengers or passenger flows to your entire network. So that's maybe something that we will revert to when we meet you for the next time.

Yes, I see. And secondly then kind of looking at your investment program. So if you're now kind of buying new or kind of used planes in this spring, are these planes already included on your 5% capacity growth guidance on this year or not?

So we have a plan for growing capacity, and we have a plan of the CapEx as well, which is somewhere like around EUR 450 million for the year. And this is like sort of including also then the capacity increases. Of course, these are all plans and estimates at this point in time, but this is sort of how they hook together.

Yes. And it's always a combination of then maybe switching your balance from wet lease operation to your, let's say, new, although secondary acquired or secondhand acquired fleet. So therefore, again, too early to tell.

Yes. But this investment guidance is in line with the 5% estimated capacity growth guidance for this year?

Yes. Yes, that's correct.

Yes. And were there any kind of one-offs in last year, let's say, coming from the strikes or the accidents, which actually would kind of somehow be on comparable for the 5% increase on capacity on this year? Or is it on comparable basis excluding those one-offs?

I think it is on comparable basis. I mean, of course, the strikes impacted holistically the year including the top line. But I mean, we have reported the full figures and we still continue to fly throughout the year.

Yes. And then when looking at your guidance for the full year in terms of operating profit, so kind of the fuel price is already up by 12% year-to-date on this year. So is this peak on the fuel costs also included on your full year guidance? Or have you made the kind of calculation regarding the end of December situation regarding the expected cost for fuel?

Yes. Pasi, we are updating a minimum once a week sort of the full view relating to kind of what's the current price, what's the forward curve, what's our hedging ratio. This is kind of the -- one of very important drivers for our profitability. So my answer is yes. I mean we are standing here now today with sort of very recent updates of how we view the year.

But obviously, we also recognize that this is a big reason for fluctuation. That is why we have a range in our EBIT guidance. And that is also why we wanted to sort of even specify that, hey, if we see a 10% change in the fuel price, that would be like approximately EUR 34 million delta in the result sort of from where we stand today.

The next question comes from Andrew Lobbenberg from Barclays.

Yes, congratulations on good results in this quarter. Sorry, just to repeat, just to make sure I understand correctly from your last question. The 5% growth, that is on what was actually flown in '25? Or is it on what was originally planned?

It is what was actually flown, on what was actually flown. Yes.

Yes. Good. And are you able to tell us what the percentage capacity changes by region, North Atlantic, Asia, domestic Europe, can you give us that for the year?

I don't have the percentages here for you, but based on the route openings and how we have described that, it's clear that there is more focus on Asia and then regionally within Europe.

Is there any reduction on the North Atlantic? Or does it go up because you're adding Toronto? Or are you pulling down some of those frequencies that came in this year?

I don't think that we have any sort of significant pull-downs. Obviously, we are sort of constantly monitoring the load factors, et cetera. But Toronto is added as we have informed. But really, if I sort of look at the kind of the balanced picture of the world and where we are, there is then much more emphasis on the growth in Asia and in Europe.

And that growth in Asia, that's 3 weekly frequencies to Japan, is that what you were saying? Or is it 3 routes?

Yes, from weekly frequencies.

The 3 additional weekly frequencies from Helsinki to Osaka. So after that addition, we have 28 weekly frequencies from Helsinki to Japan.

Yes. Cool. And nothing changes otherwise, China, Korea, India?

No. No big changes. No.

Yes. Okay. Then can I come back to the maintenance cost and the lease buybacks? Obviously, I should know this. But can you remind me how many aircraft in the year you bought back and how many were bought back in the fourth quarter?

I think there was 3 or 4, but none in the fourth quarter. So obviously, this is a cumulative approach from something that we also did already back in '24. Actually, we did most of the lease buybacks already back in '23. So that shouldn't like bring any more sort of a year-on-year change between '24 and '25, but it's all sort of building into the status that we have.

And so there's no onetime effect from lease buybacks in the fourth quarter?

No, no, no. I wouldn't say so. But it's a structural change. If you look over time, you would see those sort of shifts from the maintenance to the depreciation, those sort of particular sort of maintenance activities.

Yes, yes, yes. Makes sense. But when you did do them, did you have a onetime gain? Because other airlines recorded onetime gains releasing maintenance provisions. You have them, right?

So we have released maintenance provisions accordingly, but I don't think that had any significant impact during 2025.

Despite doing 4 airplanes?

So these were -- if you look sort of across our fleet and the ones that we were doing, then my answer is no. It didn't have a significant impact.

Okay. Because like Norwegian had a really big impact from it, but I guess there were newer, shinier planes.

Must have been shinier.

And then I guess what I'd love is an update, and apologies, I also missed the start of the call and also perhaps, I'm just forgetting from the Capital Markets Day. Can you just remind us of what the status is of the fleet renewal on the mid-haul or short haul?

So if you are referring to the partial renewal of the narrow-body fleet.

Exactly, yes.

Yes. Thank you. So we're still working with the project or program. And as I said, in connection with the CMU events that we want to run a very thorough and diligent process. And therefore, unfortunately, today, we are not yet in the position of disclosing news, but I would expect that during the weeks to come, we should be over the finish line. So I kindly ask for extra patience.

Right. And is anything associated with that in your CapEx guide for this year in terms of deposit payments?

I think within that sort of EUR 400 million to EUR 500 million or EUR 450 million range that we have, I don't also have any sort of significant items relating to that. There could be something, but it's really more on this sort of shorter-term buying used or arranging so that we can use, used aircraft, et cetera, that we also spoke about in the CMU. There are sort of more -- that is kind of closer in time. Therefore, it's also including in our plans for this year as well as then the capacity increase for this year.

[Operator Instructions] The next question comes from Kurt Hofmann from Air Transport World.

Regarding Australia, it's quite an interesting move you do and as such, the route is quite an -- I can imagine, quite an investment. What are your expectations on this Australia route? And on the North Atlantic, do you see -- many of your colleagues see some uncertainty on the North Atlantic market. Do you see some overcapacity this coming summer and you have to adjust maybe the North Atlantic network?

So if I start with the North Atlantic traffic, of course, we follow the booking curve very diligently. And then if we need to react, I think that we are well positioned to fine-tune or optimize the weekly schedule to North America. So let's see. But too early to draw conclusions because we are still in the, let's say, the hot season of selling tickets to the summer season '26.

When it comes to the Melbourne route, that is, of course, a new opening for Finnair, and it has received quite a lot of interest. Too early to tell that how the ticket sales or the booking curve will develop. I'm personally actually visiting Melbourne next week to strengthen the relationship. And it's also about the kind of tactics or activity that we wanted to do that we added this third daily connection from Helsinki to Bangkok. So it opens us an opportunity to -- with rather low risk level to test this avenue. And we are, of course, doing it with our oneworld partners to also attract kind of a shared interest. So let's see how it develops, but I find it as a fascinating opening.

Yes, I fully agree. And you're one of only a few carriers, which is doing Australia from Europe. Regarding fleet, as the Qantas A330s, I remember from our last call, they will return in the future. What's your plans on the A330? You need all of them or you maybe phase them out, some of them because on the route network, the range is not enough to do more nonstops with them?

No, I guess that's, again, kind of a multifactor optimization exercise how the booking curve development will kind of develop towards the summer season. Then of course, A330s, as you know, are very good workhorses and the spare part availability is rather limited for the time being. So we might consider a hot spare. But then if the kind of the passenger volumes are developing according to our plan, then we will utilize it in our own flying. So we have multiple avenues to get benefit from the assets that will be returned from Qantas.

Yes. Okay. And one topic as now you resized your last A350, do you think for a new order on wide-body aircraft for a future fleet, maybe, let's say, A330neos in the future or A350, you have to think about this as well? And when you need new narrow-bodies, how many new narrow-body aircraft you would need actually in the future?

Time will tell. We will now want to finalize this campaign that we are running when it comes to partial renewal of the narrow-body fleet. And as we've communicated, we have 15 aircraft, 5, A319s; and 10 A320s that are approaching the end of their life cycle. So that is the most urgent need. But then, of course, we need to take into consideration the projected market and passenger volume growth. So that will be kind of the equation through which -- by which we will then eventually decide that what's the size of the narrow-body fleet investment also quantity-wise.

Then when it comes to wide-bodies, too early because we still have one incoming A350, which is a fantastic aircraft, especially in the current geopolitical situation. And as you mentioned by yourself, those 2, A330s that will be returned from Qantas to us, I think that we are well off now when it comes to wide-body capacity.

Okay. Final question. If the airspace one day via Russia will open again, and we have for sure no signs at the moment, how fast you can react to restore flights again via Russia?

That's, of course, very complex question. So if I take the easiest part when it comes to day-to-day operations, that is, I guess, the most -- the quickest activity when you could get back to those 24-hour rotations. But then there are other big questions related to -- over flight rights, insurances and such. So quite a lot needs to happen on the, first, in the political field and then the system level before we can go into the operational level and then landing slots and what have you. But then from the operations standpoint, we are -- we can move very quickly, but quite a few steps must happen before running into the operational questions and the implementation plan.

Thank you very much. That's from my side. And I think I will meet you soon in Helsinki in about 2 weeks.

It seems that there are no further questions, so we can conclude the call. Many thanks for joining, and have a nice day.

Thank you. Have a nice afternoon.

Thank you.

Good day, everyone, and a warm welcome to this Finnair flight to future. Our captain, Turkka Kuusisto, will take you through the sky with his copilots who today are Pia Aaltonen-Forsell and Simon Large. The crew on this slide consists of our other Executive Board members. These people together are driving our journey forward today and tomorrow.

For those online, the webcast is live and you can submit questions via the chat. For those on site, restrooms are located outside the auditorium on the right. Please keep mobile phones on silent. In case of an emergency, we would like to guide you to the nearest exits, which are over there and over there. We want to wish you a pleasant journey, enjoy your flight.

Good day, and a warm welcome to Finnair's Capital Markets Update. I'm Erkka Salonen from Investor Relations, and it's my pleasure to be your host today. Whether you are here at Finnair headquarters or joining online, we're happy to have you with us. Before we start our journey, just a quick reminder that today's presentations will include forward-looking statements, which may change, of course, in the future. You'll find the full disclaimer on the screen. So let's start our exciting journey ahead of us. During our flight, we will go through our financial strategic direction, financial targets for 2026 to 2029 and how we're creating long-term value for our shareholders and customers alike.

First, we'll hear from our CEO, Turkka Kuusisto, who will outline the new strategy. After Turkka, our CFO, Pia Aaltonen-Forsell, will take us through the financials. Then we'll have a short break. And after the break, we'll hear from Simon Large, our Chief Customer Officer. Following Simon, we will have a panel discussion where Simon will be joined by our Chief Revenue Officer, Kristin Ravelli; and Chief Operating Officer, Jaakko Schildt. And finally, Turkka will wrap up the day.

There are several Q&A sessions throughout the program, so there is plenty of room for discussion. For those online, you can submit your questions via the webcast chat. And to end the day, we'll have some treats from Finnair kitchen experience.

Now to kick off our journey, please welcome our CEO, Turkka Kuusisto, please.

Very good afternoon, and warm welcome to Finnair's Capital Markets Update 2025. It's been already 6 years since the last event, and a lot has happened since then. I have had the privilege of leading Finnair now for the past 18 months. And I continue to be on a daily basis, deeply impressed by this company and exceptional people that make up the Finnair team. There hasn't been or haven't been major surprises, but I'm extremely proud of the professionalism, safety culture and the resilience or like can-do attitude that define this organization. These are the qualities that lay the foundation also for the future development of this company, work community and journey ahead of us.

I'm very delighted that today, I can share our strategic direction, our strategic priorities and also the ambition level when it comes to our financial performance. I'm joined by my entire leadership team. And as you saw, most of them will join the discussion today to share their thoughts on our priorities and plans, but above all, that how shall we deliver on these plans and commitments that we are giving today. But before leaning into the future, I want to actually reflect on the rich heritage and history of Finnair. A story of resilience, transformation and purpose that continue to shape who we are today and more importantly, tomorrow.

Finnair is the fifth oldest airline in the world. And I think that, that's a rather remarkable achievement. Actually, 2 weeks ago on Saturday, we turned 102 years. And on the right-hand side of this slide, you can see actually a picture of our maiden flight. It was operated from Helsinki Katayanokka to Tallinn in March 1924. It carried mail, no passengers at the time. But since then, we've been navigating through the changing world, different circumstances. And while doing so, we've been among the pioneers or innovators of this industry and aviation.

For instance, already in 1983, we were the first company to open a nonstop route from Europe to Japan when we started to operate Helsinki, Tokyo with a DC-10 at the time, flying 16 hours over the north pole. And there are multiple other examples of innovations that we have delivered, for instance, in the digital front. But since this very first maiden flight, it's safety always. And that's something that I've been very impressed by how the safety culture, safety procedures and the way of working basically lays the foundation for safely operated 300 flights on a daily basis. And that's something that we will value extremely high on our agenda.

Today, Finnair is a network carrier with some plus 100 destinations in our own network. That is operated by a fleet of 80 aircraft that carry close to 12 million passengers annually. And the day-to-day magic is delivered by my close to 6,000 colleagues. I'll discuss our people agenda later today. And then on the right-hand side, you can see the outcome of the so-called successful pivot of our long-haul network that we needed to do after the closure of Russian airspace. Today, we are much more balanced. Having said all this, we are still extremely strong and important carrier between Asia and Europe with over 11 destinations.

During the last summer season, we were the largest carrier between Japan and Europe with 25 weekly frequencies. We decided to go all in. And as you can see from our traffic data that we publish on a monthly basis, that has been a great success. Parallel, we have also strengthened our westbound long-haul traffic and now have 7 destinations in North America when we introduced -- after we introduced Toronto as a reopening more than -- after more than 10 years, we have continued our flights from Helsinki to Toronto during the summer season of '26.

In airline business, the day-to-day operation, the regularity, functionality and the quality of the service has an extremely strong correlation with your customer satisfaction. So therefore, I'm extremely happy to report these numbers. Right after we got those CLA originated disruptions behind us, early July, our regularity bounced back immediately back to 99%. And that has then consequently led into a very rapid bounce back of our NPS scores. I'll discuss NPS later in this presentation, but already now you can see that they are developing very positively. That's, of course, internal perspective based on our own data, but we also value external opinions and external rankings. So therefore, again, very happy to report that for the 15th year in a row, Skytrax selected Finnair as the best Northern European carrier. And actually, our cabin crew as the best cabin crew in the Northern Europe. You saw a live demo that how great they are.

And then secondly, Apex for the fourth year in a row, graded us with a 5-star rating. So therefore, based on internal data, external acknowledgments, I think that we are doing a good job, but there is plenty to improve. Then when we take the financial profile and perspective. Of course, the last 5 years that were colored by double crisis. First, global pandemic, COVID-19 basically stopped aviation industry for a very long period of time. And that, of course, influenced Finnair. Right after the COVID-19, when different regions started to emerge and started to travel again, Finnair and the companies in the vicinity of Northern Europe faced another crisis. Russian aggression in Ukraine led into the closure of Russian airspace. And all of a sudden, our previous strategy and the previous competitive advantage disappeared basically over night.

But again, these numbers are very strong pieces of evidence that we have restored the revenue levels with this repivoted network and also restore the profitability. Over the last 3 fiscal years, 2023, 2024 and '25, if and when we exclude the impact from industrial action, we can see that we are delivering solid profitability. The traffic and passenger mix has changed, obviously, because of obvious reasons, closed Russian airspace from 2019. But it's worth of mentioning that even though Asia is not the biggest area for us anymore, it still represents 36% of our capacity allocation in the totality of our network. And at the same time, the role of Europe and North Atlantic traffic has increased. In my opinion, the key message from this slide is that we are back. We have pivoted our network. We have reallocated our fleet, and we are back to generating strong cash flow of close to EUR 500 million annually. That's something that Pia will discuss in greater detail in her presentation.

But for me, this is the foundation on which we will build the future of Finnair. When I started as a CEO 18 months back, I felt that we really need to allocate enough time, resources and brain power to run a thorough and comprehensive strategy process after the double crisis and changed geopolitical situation. And in the very early days of the process, we agreed on 2 key assumptions. First and foremost, the strategy is built on the assumption that Russian airspace will remain closed for the time being. In a positive scenario, if it reopened, that would be an upside for the strategy plan and financial that you will see later today. The second key assumption, we continue to develop Finnair as a stand-alone company. We must be capable of creating value to our shareholders and our customers on a stand-alone basis.

In addition to these 2 more strategic choices or key assumptions, I also felt that it's time to crystallize or clarify that who we are and why do we exist and what value do we provide for the stakeholder ecosystem around us. With our heart in Finland, we make every journey better today and tomorrow. We worked intensively with this, with my leadership team, with the whole organization to really understand that what value do we bring? And heart in Finland is, of course, a reflection of the changed geopolitical situation, the change in the customer mix that we will discuss today, but also to recognize that our home heritage and Helsinki Airport, Helsinki Hub is in Finland. That gives us the connectivity for the international transfer passengers, but also enables us to develop our network in the from and to Finland access.

Every journey better is the manifesto for customer-first, customer-centric strategy. There is plenty to do in terms of understanding -- to understand better customers' needs today and tomorrow and develop our services accordingly. And speaking of today, today and tomorrow, I guess, is this positive dualism that while we are delivering results and high quality of service today, we are also here to build the next 100 years for Finnair. So also this thinking and clarification guided the strategy process, the choices we've made and also the priorities that we have set for ourselves.

So let me discuss our strategy for 2026 until 2029. It all starts from the customers and actually to be more specific from the core customers. Those customers who flies with us the most. It's a bit smaller group than the total population of our customer base, but they are extremely valuable for us from the revenue generation point of view and also from the profitability point of view. Having said all this, in addition to this strong base of core customers, the most loyal customers that we have, we, of course, need to serve the connecting or transfer passengers that connect through Helsinki Airport to other destinations. They still represent some 50% of the revenue pool that we have. But in order to develop our services and to be more sharp, more prioritized to enable faster transformation, we want to really put the development of core customers into the spotlight of our business development agenda.

And actually, core customers are already now rather satisfied with us. The total population of Finnair Plus members, the NPS is 42. The top tiers, platinum [indiscernible] and Platinums are actually trending very close to 50, and these are fresh numbers. Also, the total population of our customers currently considers that we are also moving to the right direction, 37%, whereas the industry peer benchmark is closer to 30. So again, this gives us a great foundation to develop our services for the future.

So what do the core customers and customers prefer? Based on the understanding, based on the data that we have analyzed, they prefer choice. further engagement, convenience and reliability. And off you go again. So it becomes a bit of a flywheel. From the investors' point of view, this fully integrated customer-first strategy also results in improving top line development and also the unit KPIs, be it RASK or RPK yield because we are capable of boosting the top line actually with rather little investments, especially in the choice and engagement part.

I'll discuss choice first. Our commercial strategy is built on modular product portfolio, that is sold through modern channels in form of modern retailing. On the left-hand side, modular product portfolio, [indiscernible], a right product. The channels, digital channels, already 72% is sold through so-called modern channels, so the right channel and right time. And finally, personalized offers, know your customer, AI-driven personalization to the right person, right product in right time through right channel to the right person. So we can develop our revenue streams and also top line development.

And this is not a plan on a paper. We are already in motion. In the Q3 2025, the revenue of ancillary sales bypass our cargo revenue. It's currently some 6% of our total revenue pool. And towards the end of the decade, it will be a double-digit number. And this share of passengers in modern channels is extremely important vehicle for us that enables us to have the interaction directly with our -- especially consumer customers. Benefits being for the customers that you have freedom of choice. If you value a good value product, we can offer you a rather cheap economy light tickets. But if you are up for all premium or luxury, our product offering is award-winning business class product in a wide-body aircraft. We can also cater for that for you.

Secondly, from the company's point of view, this is extremely important from the point of view of what's our response to competition. With this commercial strategy, we can compete both with the LCCs, but also those more traditional full-service carriers that also provides premium and business class products.

And then maybe the final perspective is the investor perspective. Top line development with CapEx-light approach. Developing this area doesn't require new fleet, digital development and innovation. The second part is engagement, loyalty beyond travel. Currently, we have some 2.4 million active members in our Finnair Plus frequent flyer program. Total population being north of 5 million. I see this as a tremendous opportunity to build further engagement, find and develop revenue sources that are not necessarily flight related that you can earn and burn Finnair Plus loyalty points being [indiscernible], even though your flight would be -- next flight would be 6 months out.

There are plenty of opportunities to widen the partner ecosystem, be it banks or financial institutions or retail companies and such that have a high volume of B2C transactions. And this will get us an access to recurring revenue streams and stronger customer loyalty and improve our profitability. And luckily, this is something that we don't need to reinvent the wheel. There are plenty of global examples where this has been taken much further. So stealing with [indiscernible], I think that we have plenty of opportunities while we also build on the strengths that we have in our own system.

Third component, a network to serve our core customers, convenience, the breadth and the width of the network. We anticipate that the market or markets where we operate, our core markets will grow by some 4% annually during the strategic cycle, and we will capture our fair share of that. How to do it? Helsinki Hub continues to be great connecting hub for international passenger flows, transfer passengers. At the same time, we will increase both frequencies and destinations from and to Helsinki. This morning, we communicated that we are adding 7 destinations to the summer schedule of 2026. For the winter season of 2026, we will reopen direct flights from Europe to Lapland, Paris, Brussels and Zurich. Concrete piece of evidence that this plan is already in motion. Partnerships and alliances, vitally important for us. One world, the alliance and the different joint businesses we are a member of. Simon will discuss these topics in his presentation. But already now, I want to highlight that being part of OneWorld and also those joint businesses is an immense boost for our demand.

Through with our partners, we get connectivity to global mega hubs, be it Dallas, London, Doha and Hong Kong in Greater China. And when I meet my Airline CEO colleagues, let's say, American Airlines, Robert Isom or Japan Airlines, [indiscernible] they really value Finnair as a partner, even though we are a bit smaller, but they do see that we have a lot to contribute in terms of digitalization, product development and also the connectivity that we can provide through Helsinki Hub.

Fleet renewal and near-term capacity additions. Unfortunately, today, we don't have yet news related to the partial narrow-body renewal. Pia will discuss the thinking and frame in her presentation, but we have prioritized self-discipline. We want to run that process extremely diligently, and we will tell more when the time is right.

In the meantime, we are also evaluating different options when it comes to near-term capacity additions. And the press release from this morning is a concrete example of that we are also doing while we are planning for the longer-term fleet renewal. The fourth component, reliability, consistent and efficient journeys. That's the foundation of an airline company. And at the end of the day, we are in the business of getting people where they need to be as planned. And I already mentioned the strong safety culture. And as a new CEO, that's something that surprises me positively on a daily basis. And I have learned a practice that I also joined the quarterly safety review Board meetings and in all transparency, happy to report that there's always something new that we find and improve our processes and a continuous improvement mindset in our mind.

Safety is also related very closely to high on-time performance and regularity and service delivery success. And as already mentioned, these are highly correlated with the NPS or broader concepts of customer satisfaction. And as we can see, regularity, 99.2%, on-time performance, 81.6%. These are world-class numbers. And why that is important from the investors' point of view. High on-time performance, regularity laid the foundation for cost competitiveness and managing our cost base. Again, in Pia's presentation, you will learn more about our CASK, cost per available seat kilometer development, and we are doing actually very good. But that continues to be on top of our priority list when it comes to securing our competitiveness for many reasons, but I would like to mention to you.

Of course, we need to be fit for the future from the competition point of view. So therefore, we will continuously develop our cost competitiveness and secure that our CASK is developing favorably in the market conditions. And then secondly, referring back to those fleet investments, we need to deliver strong cash flow and therefore, also cost competitiveness is something that we need to very closely monitor and further develop.

So that concludes the what part that what we want to do. But then the big question is how. We identified 6 enablers that are needed to successfully execute this strategy. And my colleagues, close to 6,000 Finnair colleagues is the most important enabler. Internally, we call it one crew because it's all about developing one crew culture that aims towards high-performance organizational culture, and that is done by continuous dialogue and engagement. My 6,000 colleagues, we come from more than 60 nationalities. This is a very diverse organization. We have more than 20,000 job applications on an annual basis. Why I want to mention that? From the perspective of getting access to the needed talent. Those of you who follow our industry globally might have learned that there is a short of pilots or shortage of cabin crew members. We don't. We get enough good applications so that we can also employ the people that we need in terms of delivering the growth that you just saw.

And then why I want to highlight this one crew perspective because in connection with the reliability part, the on-time performance, regularity and the quality of service are done and executed through our people. So this also lays foundation to the positive cost competitiveness development and also securing that our CASK and other cost-related KPIs are developing favorably.

The second important enabler is our Finnish brand that fuels our strategy execution. This is, again, in Simon's section, but already now, let me mention that we want to build better preference among our customers. We want to differentiate from competition and also take our employees on board to build unified employee experience, customer experience and brand experience holistically. And without going into the Simon's presentation, I guess that all of us who have been on board Finnair, you might have sensed a hint of Finnish happiness.

The rest for everyday AI, very topical team. Of course, we will invest into it. We will learn about it, way of working, be it office, operational processes and such. End-to-end processes, very important. We are a functional organization setup. So therefore, we need to secure that the information flows, operational flows are becoming more and more efficient on a daily basis horizontally in this company. Already mentioned a few strategic collaborations of partners, be it one world or joint businesses.

In addition to this array of partners, we, of course, need to work very closely with the airport network operator, Finavia in Finland and also those companies who are developing the next-generation aviation fuel, be it SAF or ESAF. Speaking of which, we also want to drive ESG in line with the industry. And today, I focus on environmental sustainability because decarbonization is the biggest challenge in our industry in aviation when it comes to environmental sustainability. It requires a very wide toolbox and a lot of activities, and we are doing a lot. We are considering the fleet renewal. The next-generation narrow-body engines and aircraft consumes some 20% less fuel, so CO2 footprint will decrease. But then at the same time, on a daily basis, we need to optimize the network and our operations. For instance, we are taxing with only one engine on while our aircraft are moving on ground, limiting waste, reducing the weight on aircraft. But at the end of the day, this all boils down to next-generation fuels being SAF. So therefore, we also want to work very intensively with the fuel producers when it comes to securing the affordability and availability of SAF. And we stay very committed to when it comes to reaching the net zero by 2050.

With this strategy, we aim at creating stakeholder value holistically, pushing our total NPS across the total customer base above 40 in order to drive better revenue development and better RASK development. From the employee side, organizational health side, we want to decisively improve the engagement, score index and continue to rank among the top employers so that we have access to the needed talent to fuel the growth. But at the same time, as I already mentioned, this is the foundation that delivers those safe, reliable plus 300 flights on a daily basis that has a direct link to shareholder value through cost control, cost management and CASK development.

And then finally, speaking of the shareholders. This is a profit improvement plan. By the end of 2029, we aim at delivering comparable EBIT of -- within the range of 6% to 8%, and that's more ambitious than earlier, while maintaining the current shareholder return policy. Pia will discuss the wider matrix of our financial objectives and targets in her presentation.

So to sum it up, key takeaways from my side. We focus on core customers and their freedom of choice. We will build loyalty beyond travel, 1 and 2 are the positive contributors to the organic growth in our core markets, improves our profitability ratios. We will start renewing our narrow-body fleet partially. We will drive the culture of one crew to stay cost competitive, develop our reliability, punctuality and secure that we operate safely every day, 360 days per annum. And then we will secure that all these activities are also positively contributing to cost competitiveness and continuous improvement. I'm 1.5 minutes over time that that's within the OTP interval. Thank you.

Thank you, Turkka, for those insights. So we now open the floor for any questions you may have. So please raise your hand or use the webcast chat.

Jaakko, please.

Jaakko Tyrvainen from Finland. Regarding the -- from SEB and Finland. Regarding the 4% passenger growth target that you have in place and thinking about this core customer group coming from Finland. In your own thinking, how large share of that 4% passenger growth is expected to come from Finland and how much is counted for international passengers?

That's actually a very relevant question and they rather balanced. So maybe it's a bit lower in Finland, whereas the international transfer flows are a bit higher. But all in all, the 4% growth is pretty balanced.

And the second one goes to plan, introduce a bit smaller aircraft going forward in the narrow-body and regional side. how do the dynamics of your key KPIs change? You need to perhaps fly more frequently? And what are the key KPIs and the key aircraft-specific kind of profitability components that you need to excel in order to deliver this strategy kind of well?

In general, in the current geopolitical situation, we prefer a bit smaller gauge because Russian airspace is closed. So we need a bit more frequencies to fulfill our wide-body operation. But as we are still in the process of evaluating the different options that which aircraft type will fit our needs the best, it's a bit still -- something is still out there. But all in all, it's an optimization game when it comes to optimizing the scale and frequencies. There is a positive side in our kind of a northern part of the Europe where we operate that we are not slot controlled or there is no slot constraints. So adding frequencies doesn't linearly increase -- it increases your cost most likely linearly versus in a step change manner. So therefore, that's something that we continue to optimize. But in the big scheme of things, this narrow-body fleet renewal also positively supports the improving profitability figures that you saw.

And perhaps still on the same topic, what are the key risks, i.e., you open up new destinations, there is always a risk that this comes with a bit of a lower load factor in the beginning of the route. How you are tackling this challenge that comes from new destinations?

I guess it's striking the right balance that to which extent you want to take commercial risk. But in my opinion, that's also something that we need to take so that we can also enable growth. And there is a bit of a learning curve always when you open a new route. But especially after this successful network pivot that we did after the closure of Russian airspace, we have a rather good mechanisms and ways to optimize and also learn that what works and what doesn't. So therefore, we have the needed agility also to react if and when needed.

There's at least one question in the room.

It's Joonas Ilvonen from Evli. If I can just return to this 4% passenger growth question. So you say it should be very balanced between Finnish and international passengers. But what about between route areas, like is it more tilted towards shorter haul routes? Or should it also be very balanced between short- and long-term routes?

Of course, there are some differences if you -- for instance, Japanese are still recovering from the pandemic. they were one of the slow movers after pandemic to get back to the wings. So there are some regional differences. But again, if I take the westbound to outbound [indiscernible] eastbound access and then Europe short-haul, long-haul access, the demand growth is rather balanced. Of course, this year, we have faced this softening of North Atlantic traffic because of the tariffs and trade war. But of course, in the medium to longer term, we also see the North Atlantic market very important for us because that's the largest source of demand in our business.

Okay. What about your Finnish market share of Helsinki Airport traffic? Can you put any precise figure on that? I think it's probably pretty high, but do you have any exact figures on it?

Our Finnish customers prefer Finner, and I guess that can be found from the FinavVia data, for instance, but it's north of 70%.

Alright -- maybe last question. So you mentioned these direct routes from Lapland to Europe. I think the competitive situation there might be a bit more difficult. I mean, at least many European airlines have opened their direct routes from, let's say, U.K. to Lapland to Roman and the other 2 Lapland airports recently. So how would you comment on that competitive situation like versus how it's in the Helsinki Airport?

First and foremost, I'm, of course, very happy that Lapland is an attractive tourist destination. And you need to see the big picture in my opinion. We are the only operator who is flying to Lapland year-round. Now when they introduced a tighter slot control when it comes to being on time. I think that that's also favoring us because we are committed to flying the schedule that we have put out. And we have increased our capacity for this winter season also to a large extent. But in order to also provide the thinner service from Europe to Lapland, we are reopening the business concept that you can also fly from Europe to Lapland with us and those 3 cities already mentioned. So we are investing into Lapland. Of course, we welcome competition, but we focus on year-round operation also doing tactically smart moves so that we can also grow.

Perhaps a question online. So this is coming from Nicolas [indiscernible] Bank. How important is domestic economic growth to your targets?

Of course, domestic economic growth is a great indicator of the demand growth. So therefore, something that we need to follow very closely. After the pandemic, there is some evidence that overall consumer confidence doesn't necessarily correlate with the travel intentions. So there's a bit of a behavioral pattern after pandemic that there is a preference to travel. So it's a demand in a way is rather resilient. But of course, the GDP development is closely correlates with the demand development in our business.

This is Pasi from Nordea. Regarding the fleet renewal project. So if you are going to order new Airbus planes, would it take 3 years or 6 years to get these planes up and running here in Helsinki? And meanwhile, if you are going to buy a bit smaller planes, can you actually operate these smaller planes with higher or lower profitability than the Airbus 3 2021 planes?

I don't want to speculate about the delivery times of any of the OMEs because no choices have been made. But of course, we need to recognize that the supply chain issues caused by the COVID-19 pandemic are rather persistent. So there are delivery time delays among basically all manufacturers, not only the airframe, but also engines as such, something that we need to take into consideration while we are making our analysis and decisions. When it comes to the so-called midterm capacity solution, that's a tactical tool to capture the growth that is available now. And of course, if and when you use used aircraft or wet leases or dry leases, they are not that capital intensive. And of course, we have a very thorough and detailed calculations behind each and every business case, but we also want to grow while we are executing this longer-term fleet renewal project.

There are quite many questions regarding the narrow-body fleet renewal, but perhaps one question regarding long-haul fleet. So -- this is coming from [indiscernible]. What is the outlook until financial year [indiscernible] on your long-haul fleet? Can we expect the fleet to be reduced, increased or at present level?

I guess, all in all, the current wide-body fleet is rightsized, especially after we have successfully executed these tactical collaborations with Qatar Airways and Qantas block space agreements, dry leases and wet leases and also the 350s that are now utilized when it comes to the longer Asian routes. It's a very capable plane still even though the Russian airspace is closed. So all in all, in the big scheme of things, I think that the fleet is rightsized. But of course, that's something that we do on a daily basis in a company like ours that we optimize the capacity.

Jaakko from SEB continuing. You mentioned the Alliances and your importance to U.S. and Japan partners. There are some Chinese carriers who can fly over Russia. Could you consider partnering with those in order to provide connectivity in Europe for such players?

Short answer, no, because the airspace is closed, there are sanctions. And of course, that's also against our values. So therefore, we will follow the Western policies, comply with the sanctions, and we will focus on the partnership with [indiscernible].

Perhaps one more question online. So this is coming from Markku [indiscernible] from Nordea. You mentioned that the company is considering adding used smaller aircraft into its capacity in the near term. Can you talk more about this timetable? How many planes are you talking about? Are you planning to buy or lease these planes? And what is the expected cost? So quite many questions.

Quite many questions, and I need to ask Kristin to assist me later today. But this is still on a drawing table, but that's our tactical intention. We want to increase our frequencies and also capture the growth that is available now. I don't want to go into the details of the CLA round with the pilots, but one resolution out of that CLA process was that we can increase the number of jets operated by Nora from 12 to 6. So that is at least some type of a ballpark figure that what could we do?

Any final question from the room? I guess then we're good to go. Thank you, Turkka.

And then next, we will hear from Pia Aaltonen-Forsell, our CFO, who will walk us through Finnair's financial targets and disciplined investment approach. Please, Pia.

Thank you, Erkka, and thank you, Turka, for an inspiring presentation, and thank you for welcoming me to this team. It's been a great pleasure to join.

And most of you know, I've been here since August of this year. First of all, I do want to say and share also some of the things that really impressed me when I joined. And actually, Turka, you stole one of them because this relentless focus on safety has really been, if not mind-blowing, then at least something very, very impressive. Another really impressive thing has been the passion for flying. I mean, it's wonderful to work in a company where people are passionated about what they do. But we should do business, of course, as well.

So Turka said it, we are back. And I think that's one of the first findings, obviously, that I will speak to it still today to prove the point that following some more difficult years, the competitiveness has been restored. But not only that, now we are looking forward. And I really look forward to Simon Large his presentation later today to explain more about the approaches that we are taking both in modern retailing, in loyalty. And as a CFO, this makes me especially happy because every euro that we can generate through this is done with very light capital expenditure. We did some calculations, and it's less than EUR 0.10 per every euro that we can earn. So there is a very quick payback out of these investments that we are making into this area.

And finally, we are now also able to look long term into the future to start the narrow-body fleet renewal. And the key here as well is responding to the societal needs of decarbonization and our internal needs of operational efficiency and offering to our customers what they really want at this point in time. So that's where we are. We will today look at our financial targets. And if we look at these targets and the targeted margins as well as the contemplated capital structure, I think that we are able to deliver return on capital employed in the mid-teens. And we are also able to deliver total shareholder returns if we include dividends of 10% to 12% annually.

So this is a good case to look at. So please join me on this ride. I really want to talk to you about how this strategy where we put the customer first also will be a strategy about better margins and, of course, capital efficiency. So a few words first to just sort of look at where we were and where we are now. A few points on restoring financial resilience as such. You can see cash flow in this picture. I think it's an important driver for restoring the financial resilience because we have generated stronger cash flows, and we have as well been supported by the recovery of travel following the pandemic and closure of Russian airspace, but also a good and diligent work by the team to reset the network and restore the cash and cost balances here. I looked at the history.

We have now delivered 5 consecutive quarters of improving cash flows, operating cash flows and the leverage is back to around 2x. One important point is achieving targets in history. And when I look at the targets that were set back in 2023, we have really put that, let's say, target frame in place with many of the KPIs and the margin targets were, as Torkka showed earlier, reached early in that period as well. Let me show you one more thing relating to our balance sheet. This is a comparison also to peers.

I'm showing you here something about our cash to sales ratio. And maybe that is a bit airline specific. And for those of you listening from Finland, I also want to reiterate that this is important for Finnair because we have unflown ticket liabilities. So we want to have cash to cover that. And of course, we want to have cash in terms also of future CapEx needs. So we have an undrawn revolving credit facility of EUR 200 million that would still add to liquidity here. I think our cash balances for the time being are very solid and also compared to peers. You see that our leverage is on a good level compared to peers.

And if you look at our equity ratio, you will see it's adequate. It's on an adequate level also compared to peers. I would remind, if you are one history bigger that historically, we had some items there in our equity that were fairly expensive. We have paid them off. And at this point of time, what we have in our equity, it's really hard equity. It's really the right kind of equity. And today, we have some news from Standard & Poor's as well. They have reiterated our credit rating with a stable outlook and then the BB+. So this is also a good statement, and it paves the way for having an opening for different types of funding solutions if we so wish.

Now let's have a look at some of the revenue drivers. So this, again, is a little bit of the history just to prove the point of where we are today. I do think Turkka explained this rather well in his presentation already, the development of the regional diversification or the regional development of our network. So Asia, as Turkka has shown, was more than 50% of our asks just before the pandemic.

Now we are to 36% -- our position in Japan remains very strong. There are, of course, some other destinations in Asia that are not as strong, for example, China at this point in time. But I would still remind you that flying to Japan, it carries a good profitability to us.

With this network and with these destinations also within Europe being reset, what you have seen, Europe remains very important for us. It's a very dense network, and it's also a network that stands on its own feet in a profitable way. So all of these are proof points of the strength and the agility of the team here and of the company for sure. And with this network, we are today having around 12 million passengers per year. And really a core assumption of our strategy is that this demand will continue to grow in our core markets. And our RASK, of course, has already been a bit boosted by the ancillary revenues, and this will continue in the years to come.

Our strategy has delivered and will deliver resilience first and growth second and in that order also going forward. Okay. Let's have a look at costs. When we are talking about the cost, my main message here is that we've done a complete reset of our cost base. So this is the CASK. And you can see here that we are almost excluding fuel back to levels pre-COVID. If someone thought about inflation and escalating costs, I think that we have shown very good discipline in restoring the pre-COVID levels.

When you look at fuel included, please note that the decarbonization costs have also been pushing that up. I still wanted to mention that the team has had a very disciplined approach to achieving cost savings. And it's this totality of the network efficiency, the good and diligent work by the team and also a lot of really, I would say, significant structural changes, both in SG&A or in many other parts of the company as well that have helped to achieve this level. I still want to take this one step deeper.

And without going into the fine details of ASK and CASK and how it's all calculated, I still think it's relevant to look at what are the distances that we are flying because obviously, when you have more asks, you have more where to, so to say, spread the cost. So we wanted to make some calculations and comparisons sort of evening out for that and comparing apples-to-apples.

So let's look at some work that our team has done here. So the idea here is to show our peers, show their CASK and also show the average distance traveled per flight. So to sort of show also the typical network -- structure of the network. And we wanted to show our competitors as they are reporting. So that's what you see here. And then we wanted to simulate Finnair for like if we were in their shoes, like if we were flying their distances. And that's this sort of purple or lilac little graph that you can see here. And what that shows is that when we look at the full service carriers, our main competitors, you can see that basically compared to all of them, we are very cost competitive.

So we have found a model to deliver with the size and the structure of airline that we are. So our work has paid off. And now with this position, we are ready to move forward.

And next, I will talk to you about our strategic financial targets. A key part of our future is also generating better cash flows and enabling the future fleet renewal through these better cash flows by having a margin improvement. That's why it's really essential here to start by discussing the EUR 100 million profitability improvement that we want to reach by 2029. And that's really the starting point of our work here.

And I don't want to steal all the thunder from Simon. I know he will discuss in more detail CapEx-light retailing and loyalty. You see that's about 2/3 of the improvement. But we are constantly continuing to push on what I call more traditional elements here. So these are, of course, topics where we have continuous cost control. We are continuously looking at the fleet efficiency. And I do want to add artificial intelligence because Turkka mentioned it, but I think we have much more than talk. We already have CSU. And CSO is serving our customers. And I still want to say this is more than just the first attempt at using artificial intelligence in our customer service. It's already reliable. It's already in the important languages, and it's already as well with personalized data. So there's a lot more to it than the first attempt.

And when I joined the team, my own team, everyone is already using for their personal efficiency, all of those modern tools that you are all talking about and have heard. So we are already there as well. This can take us now to the future.

Now I want to talk you briefly through the development from our current margin levels into the targeted margin levels. So we are starting here with the actuals from 2024, the reason being that the 2025 figures were so impacted by the strikes. So building from that, there's a bit of a margin improvement through the bigger scale, the growth in line with demand. And you can see, obviously, the importance of our strategic actions. There is, however, something that we need to offset that we already know is coming, and that's increased regulation costs for decarbonization.

So these are costs for, for example, EU ETS, so no more free emission rights in EU, and these are costs for sustainable aviation fuel, where the mandates are already in place as we speak. So this is a situation that we need to find a way to improve our margin despite these already known increased costs. And the profitability improvement is the way to do that. So our 6% to 8% margin target, when we look at the sort of lower end of the range, it's underpinned by our own strategic actions. If we are to expand to the higher level of 7% to 8%, then we would have to live in a world where there is no more unfavorable regulation in terms of costs other than what we would know about right now and as well that the market conditions broadly would develop in a positive way. But this is the way how we see the EBIT development and the targeted level of 6% to 8% in the next year.

I don't want to go too deep into RASK and CASK, but as they are important elements, I just wanted to show how we have been thinking about them in our own modeling. So the headline of the RASK development is a 2% CAGR over this period of time. It's supported by the near-term capacity additions to our regional network. It's supported by the growth in line with demand, and it's as well supported by the development of the retailing loyalty that Simon will describe.

And finally, if we then still look at the CASK from this perspective, we will also see some increases in costs. These costs are based on the increased sustainability regulation. I wanted to make this one step more tangible and just say what we are foreseeing next year, so 2026, given our current volumes and plans and the current regulation with SAF and EU ETS and CORSIA, et cetera, it's a cost of about EUR 140 million per year. And this year, we have already had a level of about EUR 100 million. So these are very significant cost elements as such. So we will have to continue working on our cost competitiveness. There we will use the same tools as before. And I'll pick on one thing that Turkka said to add to my previous talk, which is operationally first time right.

Our customers are happier, but we also generate better profits when things are done first time right, and we don't have sort of additional costs from hassle or otherwise. So with this plan, you will see tangible results of our costs working on our costs, staying disciplined on them as well as on the retailing program. You will see these results already over the next 8 quarters for sure. We will deliver higher RASK and maintain a very disciplined approach to costs as well as the fleet efficiency. This is a part of how we operate today.

Now I will turn to the final missing piece of the puzzle, which is around the fleet. We already had some questions to Turkka in his presentation about the current fleet. Maybe this is a bit of a reminder what that current fleet of 80 aircraft consists of. You see first our wide-bodies in total, 26 aircraft, of course, our flagship, the Airbus 350 fleet, it's a young fleet. As you can see here, it's also an award-winning fleet. Then we have the Airbus 330, which is somewhat older and also sort of the resetting of how to utilize these aircraft was an important part of the overall reset. And this has also related -- resulted in partnerships, as Turkka has described.

So currently, 4 out of these 8 fleet is already sort of flying and helping also profitability with flying for others. And our narrow-body fleet is aging, as you also see from the statistics and the description here. When we are renewing the narrow-body fleet, we will also look at things like fuel efficiency, emission efficiency, operational flexibility, and it will support growth in our core markets and maintain that competitive edge. So -- the thing is that the foreseen investment is significant. It is between EUR 2 billion and EUR 2.5 billion by 2029. And we can see that a very significant part of this is the fleet renewal.

Of course, there are also certain investments, whether it's to AI, digitalization and specifically also to maintenance of the existing fleet. So we will also cater for that. We also already discussed today about the fact that there are -- the supply chains are still somewhat stressed after the COVID. So there could be quite a duration until we really can renew a bigger part of the fleet. Therefore, the campaigns for the fleet are likely to occur towards the end of the strategy period.

And we think that by 2029, we should have achieved this step of already as well have grown our fleet. Maybe it's grown 10% to 20%. This is still subject to the actual negotiations that will be carried through. And how will we carry this through? What is the basis? How will this be treated in our balance sheet? So when we look at the targeted operating cash flows with this model, we are targeting cash flows of north of EUR 500 million per year. So that's really the most important ingredient here. We will be balancing these investment needs with our cash flows. We can and we will remain opportunistic.

I think Turkka as well explained this already today. We can capture growth through some more flexible arrangement, maybe some wet leases, maybe even acquiring individual sort of used aircraft. But with all of that, we will continue to generate cash flows, improve our cash flows in the next years and then enable these investments mainly through our own balance sheet. And when I say mainly, I think we have some good experiences from leasing from the history.

Of course, if there are really good deals to be held, we wouldn't exclude that. But mainly, the thinking is that we will be able to carry through this investment to our own balance sheet. And now that I talked about all of this, I finally have set the scene for summarizing our financial targets for the period up until 2029.

So here we go. We will grow in line with demand in our core markets of 4% CAGR. And this will deliver an ambitious EBIT margin target of 6% to 8% that is underpinned and anchored by our own profitability improvements of EUR 100 million. We will start our fleet renewal, and we do foresee a CapEx envelope of between EUR 2 billion and EUR 2.5 billion during this period, but we will do this within the guardrails of keeping a healthy cash to sales ratio as well as a healthy leverage of between 1 and 2x.

And finally, we reiterate our dividend policy, maintain this policy of 1/3 of the EPS. And I did do a little bit of sort of back-of-the-envelope calculations. And I think this dividend would be about 3% to 4% of our market cap if we look at the yield to our shareholders. So Finnair has shifted from survival to sustainable value creation. We are a smaller, stronger airline with visible cash flows, measured growth and clear capital returns. And that's really what you, all our investors own today. Dear shareholders, dear audience, I joined the company in August. It's been a true pleasure to work with the strategic plan and these financial targets. I think where we stand today, what we have gone through together and the detailed plans that we are set, I'm convinced that we are set up for the future, and I'm convinced that we can reach these financial targets. Thank you.

Thank you, Pia. So we now welcome your questions. Again, feel free to raise your hand or use the online chat.

Right. It's Joonas Häyhä from OP. So first of all, regarding the 10% to 20% increase in the fleet size, you're now at the high end of your leverage target range of 1 and 2. So is the increase in the fleet size in any way dependent on meeting your profitability target that you have now set for yourselves?

I think it's dependent on us taking measured steps as we build our cash flows. And that is why we are having several sort of tools in our portfolio. It's not one big bang. It's certain actions right now to already grow the capacity on a sort of a midterm basis as well as then starting the bigger campaigns where I'm sure you can ask Christine later, and she can tell more. So I -- my answer is that to maintain this leverage, we will need to generate the cash flows already in the next years. So achieving our RASK improvements, keeping the cost discipline and generating cash flows, that will be the tool to keep this whole thing to keep the measured leverage as well.

All right. And then the financing of the EUR 2 billion and EUR 2.5 billion investment program, I guess it's mostly based on operating cash flow generation, but would you also consider selling some of your planes? You've now had these leases out to other airlines. So what's the strategy in that?

I love your question because it's -- I think it's pointed to sort of a thinner culture of just finding the best way to do it. But I would more see this as clear cut like it's cash flow. And then to sort of think about this over time, I am absolutely sure with our reiterated credit rating, et cetera, I mean, we have multiple tools available for us. So we could also be active just to make sure we have the appropriate sort of funding streams available. And on top of that, why not consider certain cases of operational leases as well. That's really the mix we could see. So if we then can make some cash by selling some old equipment, that's great. But that's probably a spice.

Any other questions in the room? There's at least one.

Joonas Ilvonen from Evli. If I can come back to the financing question. So you say that this profitability improvement is an important part of this whole financing strategy. And do I also get it that you say your leverage target is 2x net debt to EBITDA, but you also basically -- you are also quite ready to maybe improve your absolute indebtedness by, let's say, a couple of hundred million euros.

Yes. I think that's a fair assessment.

All right. Then any comments on relative profitability levels between Europe and Asia now that I think especially Asia has developed quite well this year.

Asia has developed really well this year. And you said the comparison to Europe, of course, Europe is short haul. It has a different character. But I think it's important to say that Europe also stands on its own feet in terms of profitability. So obviously, long haul is attractive. And what makes this -- I think what's important to state is that when we think about profitability, we do need to consider the full network. So even though we would talk about Europe and Asia separately, actually, all connections in Europe remain really important for them as well reaching that profitability on the long-haul routes. So they always are interconnected.

Right. And maybe a final question related to that. Can you give us the percentage of your long-haul passengers, which are connecting versus point-to-point?

Sort of broadly, transfer passengers are maybe up to half of our passengers. But now when you are asking that how many would actually have the -- really start from Helsinki versus start somewhere else, maybe we need to reiterate on that question.

If I remember correctly, 6 years ago in this Capital Markets update or Capital Markets Day, revenue management system was like an actual topic. And since then, revenue management became a bit difficult due to this double crisis. So my question is, how does this system is functioning nowadays from a CFO perspective?

Yes. Antti, thanks for asking. And you know I wasn't here 6 years ago to hear that great speech. So I cannot comment on that. I can comment on what I see in real life, and I actually see some people in the room smiling right now because I think underneath, it is a really important part of how we operate and how we work. It is really sort of the constant reiteration. First, of course, sort of having the right network, but then as well always being out for that what is the best price we could get in the market and how do we work with that.

And then if you add on top of that, giving customers the choice, you can choose between different types of tickets and you can also sort of add on what you want to have. I think it has only developed more since what you have seen. And if you allude to that it's difficult to do certain things during crisis periods, you are absolutely right. But that's now history.

And secondly, about the profitability target, should we expect that the path to the 6% to 8% by the end of '29 is linear or bumpy or form of some other curve?

Yes. If you look at, of course, 2025 performance, the impact of the strikes on profitability were EUR 70 million-ish. So it means that there will be a step-up in 2026 in the absence of that. So in that sense, not linear from where we stand exactly for the year 2025. But then I think that many of these actions that we have in place are of the nature where you build and build and build and build. So once we get sort of that lift from the current low levels that were caused by the strikes, then I think you could expect something a bit smoother.

This is Pasi from Nordea. Two questions. First, regarding your top line and the split between the business and leisure customers. So what's roughly the ballpark when looking at the kind of business-based kind of revenue you are receiving against the kind of leisure or the ordinary travelers. And the second question is related to your financial targets. So -- in the case you are not able to reach, let's say, 7% to 8% EBIT margin. So what are priorities between the balance sheet and dividend payments and also the growth investments. So in the case you are not able to fund this program with the cash flow, what would be the priorities? Could you first give of dividend payments or growing the balance sheet ratio expectations? Or then do you still keep on keeping these growth investments intact?

Thanks, Pasi. And I do think a dividend policy and the dividend sort of -- the dividend policy is now set -- and that's, of course, to some extent, on an absolute level, then dependent on the profitability level that we will reach. So there is -- inherently, there's sort of built into that some flexibility, but that's obviously a serious question for the Board to consider.

So I wouldn't open it up to say this is then the way to sort of find the flexibility. I think we need to find the flexibility within our own choices, within our own operations. And that's also why we really need this like step-by-step by step-by-step approach here as a way of just always pacing the growth in accordance with our funding ability, which is mainly based on the cash flow. And then the leisure business, I would refer to my IR, but I'm not sure we have really published that ever. So at least -- not in any of the notes that I've read have I found it. So maybe that remains something we need to consider how to share that information.

Excellent. I hear you. So just to confirm, you don't publish priorities between the growth investments, balance sheet and the dividend currently.

And when looking at your cost savings program, I mean, if I remember right, that has been the case last, let's say, you have done it 15 times already turning all the stones around. And how come -- on the next time, you can actually find EUR 100 million easily without kind of having that before. So what are the key drivers you have now find that.

I think there are new things happening, such as artificial intelligence and the way that develops really strongly, and it's not only about sort of how we would do our work internally. It's actually really step changes -- and as you are here in the room, we will have some demos during the break. You will maybe be able to challenge some of the things that we are already doing. So the technological development is allowing for certain step changes also going forward.

Definitely, we are in a vast ecosystem of partnerships and the right balance between in-sourcing, outsourcing, we do have some contracts coming up for renewal, and we will need to be super tight when we take all those discussions. What's the best for Finnair going forward. So out of that EUR 100 million, we think about 1/3 is the more traditional elements that you now referred to. And I can already now see sort of the laundry list there being long enough to find something. And then Simon will talk more about the top line side there.

Jo from SEB. The -- in terms of your margin improvement targets, the strategic actions plays an important role. And there, the modern and CapEx-light retailing is important. Could you give us a bit more kind of concrete action plans on that? For example, you have now EUR 17 per pax your ancillary. Where could that go? Can you double it and how it kind of sits in the peer context?

Yes. I will leave this partly as a cliff hanger to after the break because Simon will talk more about this. But I do want to say that based on benchmark, there should be ability to double. So maybe I'll leave it there and leave the rest for Simon.

There are still questions in the room. So First, Jonas.

Jonas from OP. Just one on the margin target. I think you have in the slides, 6% to 7% base case assumption 2029 and 7% to 8% if the market conditions are favorable and regulation is favorable. So can you talk a little bit what are -- what is a suitable environment to reach the 8% target?

Yes. I think what we have seen right now is what I would call sort of a stable growth or a measured growth of about 4% in our core markets. So obviously, should we see a demand growth over and beyond that, that would definitely be such a favorable environment. And then we know that the policy decisions right now around decarbonization are very much being discussed and in flux. And without at all trying to sort of second guess what they will be or what they won't be, I just think that this has been a significant addition to costs in the last years. Should there be any change, of course, that could provide both some opportunity, but of course, as well some risk from a pure financial perspective.

Joonas from Evli. So I'm also referring to this EBIT target bridge. So these strategic actions play the most important part on this. But I was just wondering, can you comment on your passenger load factor target? What role does it play in these targets? Because your passenger load factors are still well below 80% outside Q3, whereas before the pandemic, you made clearly above 80% passenger load factors on an annual basis. So...

Yes. We are not foreseeing sort of significant changes to the current situation. We do see some improvements over time. If you consider, for example, the Atlantic route that has been under some pressure. There has been also lower passenger loads during this year. Maybe we have reached sort of the low point there, and it's starting to rebalance over time again. So some improvements could be through such changes that we have, let's say, recently experienced within our network. So some improvement, but this is not built on sort of a single factor like improving load factors. That is not what is driving this case for the next 3 to 4 years.

So are you basically saying that if we would assume that there would be like a very big gain in passenger load factors, then you would like easily reach the upper end of this.

Well, wouldn't that be somehow reflective of a stronger demand environment over and beyond this 4% CAGR that we are now having in our plans?

I guess there are no questions in the room, but I guess we could take some questions online. So the first one is coming from Mark Moilanen from Nordea. You mentioned that your rating was reiterated. But can you talk about how S&P viewed your upcoming investment program? Were there any concerns?

I think my short answer would be not specific concerns other than the pacing. And I do think that this is also ensuring the long-term sort of viability and the long-term future for Finnair. So I think my short answer is no concerns.

Then a question about the leverage. So this is coming from Brian Bursting from Danske. If the leverage of 1 to 2x target range, is that a target for every year during the strategy period?

Yes. I mean we have set this for the totality of the strategy period. So certain of the targets, of course, we need to reach sort of at the latest by 2029. But you know we have already reached the 2% leverage target or we are sort of -- we are there as we speak. So I think that's a level that we want to maintain.

And perhaps this is now the last question coming from Sam Wilson from Nordea. How soon would you expect to see the effects of the renewed fleet in terms of fuel savings, et cetera, in your margin and cash flow once the fleet renewal eventually gets ongoing?

I mean, obviously, for every individual aircraft then as we start flying them, but this is a long-term renewal program. So that is why in our financials in this period, they only have a minor impact. So maybe that's one way of answering it.

Okay. I guess we will now take a short break of roughly 20 minutes, so we can continue at 10 to 3, so in 22 minutes. But make sure to come back because after the break, we'll get a more detailed view on our -- on how our strategy will look like in practice. And of course, we'll have a panel discussion where we will cover most of the unanswered questions. Stay tuned.

Welcome back. Our next speaker is Simon Large, our Chief Customer Officer, who will share how Finnair is enhancing its customer experience, retail activities and loyalty. Please, Simon.

Good afternoon, everyone. It's a great pleasure to be here on the next leg of this Finair journey. My name is Simon Large. I am the Chief Customer Officer here at Finair for the past just over 1 year. I've just celebrated my first anniversary here. My background is in airlines. I spent 30 years in Asia with Cathay Pacific in a very similar role to the one I have in Finnair. So at Cathay Pacific and indeed here, I've been in charge of or responsible for sales, loyalty, retail, the customer experience, marketing and the brand. So those are my areas of responsibility. After 30-odd years with Cathay, I returned to the United Kingdom in 2021 during COVID.

And just after returning, I got a call from Finnair asking if I might be interested in joining the Finnair Board at the time because they were looking for someone with some Asian customer experience as well as airline experience. And that came as something of a surprise. I knew relatively little about Finnair other than its great reputation. But I was very happy to accept that challenge. And almost the day that I joined the Finnair Board, airspace closed literally on the very day I joined.

So that represented at the time quite a considerable challenge as well for the 2 years I did that. Turka then took over as CEO here. And he immediately expressed an interest very early, I remember in his time that he wanted to have somebody sitting at the senior table with customer in the title and someone representing customer because I think he foresaw quite understandably that this was going to be a key element of our strategy. So we had some conversations, and that resulted in me happily accepting the role here and moving to Helsinki, as I say, 1 year ago. I should just say at the outset, there were a couple of things about the airline whilst I was on the Board that seriously impressed me.

One is the brand itself. And I could see at the time the Finnair brand was an incredibly strong one. And globally, it was so well respected. And the second thing I could see when I was there was the culture and how strong the culture was and how good the culture is and was for running an airline. And that's how I felt then. And I have to say I still feel that very strongly today, and I can get into some of the reasons for that later. But that was a big part in my motivation for coming here and taking up this role.

And I would just like to say a couple of things about the title of my piece of this presentation. When you've got an airline background like mine, you know in your heart, it starts with the core operation, operational excellence. That has to be very strong for you to then think about doing anything else. And that has to be the building block on which we build this strategy. And we are, as a team, very clear on that. We know that operational excellence, whether it's the network we have, the aircraft we buy, the reliability or trustworthiness that we promise and deliver and the customer experience end-to-end have to work extremely well. And that will always be the case, I think, with Finnair. That has to be the priority. But coming off that, clearly, what we are saying today is we feel there are new muscles in a sense that we can grow and build in both retail and in loyalty.

And that is very much part of my brief, and that's very much part of why I'm here using my experience to help Finnair on that journey. It wouldn't be appropriate for me to start a presentation without at least thinking about the customer first. That is my job. That is what I do every day and what I think about, and this is no different from that.

Turkka talked a little bit about some of these qualities that we know about our core customers. It should be right also to say that our core customer group has changed. We've said that clearly from this group that transited or this very valuable customer that transited through Helsinki from Asia to Europe or Europe to Asia to now this frequent flyer based in this region. It doesn't mean that all customers don't matter to us. They absolutely do, but it is essential that you prioritize a little bit, and that's what we've done here.

This group, we have spent quite a bit of time with over the last 12 months. trying to really understand or at least the 12 months I've been involved, trying to really understand who they are and what they care about. And this is an ongoing exercise, whether it's through data or whether it's through interviews or just spending time with these people.

And what we learn or what we know, these things are of utmost importance to them from their airline, and that is us. So what our customers or our core customers want from us ultimately is convenience as in the schedule, the network. And we are able to do that, whether it's with our -- just with direct flights from ourselves or whether it's through our alliance partners with very easy connections. They've also -- they also make it very clear they expect us to be reliable, whether it's the on-time performance or indeed when things don't go to plan that we are very quick to inform them and look after them and care for them and ensure we can get their schedule back on track. I think the third thing that came out very clearly to me and is one that Pia has talked about and Turkka talked about is this request for good value. It is very clear here that people want competitive fares. They want a super light low fare to start with, and they want to be able to build or upgrade their journey as they should wish. So this concept of building up choice and enabling choice has become a really important one in terms of how we think about the proposition. They want an underlying quality of end-to-end experience and rightly so, FIs have high standards and so should they. And we must provide that.

There is a core element of quality throughout whatever ticket you buy, and we are committed to that as well, whether it's the aircraft that we have or the lounges or the digital experience that we provide. And people like in a very understated way here, recognition and rewards like they do everywhere. It isn't as I say, a particularly finish way, but it is -- nonetheless, it is there. If they're providing their loyalty, they want to be recognized for it and rightly so.

I guess the last component of this is people appreciate the Finnair brand, the Finnair touch. They often say, we like coming on your aircraft. It feels like we're coming home. And that says a lot, I think, about how we provide our service and the customer experience that we design. I wanted just to put this out there because this, in a sense, is our commandments. It's what we think about and how we prioritize to some degree, our investment and our time when we think -- when we go forward in terms of the customer experience that we are trying to develop. But I want to get into this topic of the day, which is how retail and loyalty will deliver on our profitability targets.

I will just say at the outset, this is CapEx light. Don't get me wrong, this is absolutely CapEx light. But there is a real investment here that we have already made in terms of the people we are starting to think about putting in place, the organization structures we put in place, and I'm a reflection of that, the skills that we need to develop and are developing, the technology that we have but are still continuing to develop and the partnerships. Those are all key components. They are CapEx light, but they are still hard to do. You cannot do it overnight. And as you get better and better with all of those things, I think the results improve accordingly.

But I would like -- I will go through these individual elements one by one and hopefully shed some light on how we believe we think we can do this. Turkka mentioned and rightly so the importance of the Finnair Plus program. This is a program that already captures, we think, a lot of people who fly frequently in this region, if not all people who fly relatively frequently in this region. But as Turkka rightly said, whilst we have 5 million people signed up, only about half of that are actually active. And even then of those that are active, that only requires you to do one piece of activity every 18 months and you qualify.

And I think based on my experience, we can really improve this activation. We can really make this more compelling, more interesting. And with that comes revenue opportunities and profit. So just the program itself before we get into beyond flying or the opportunities beyond flying, I think, have real opportunities for improvement.

But then we get into the idea of building loyalty and business beyond travel. And this, again, as has been said, is a well-understood model in the industry. It just so happens that Finnair are not as far ahead as many other airlines have been for various reasons. But we really see a lot of potential here to create possibly the best loyalty program in Finland, maybe the best loyalty program in the region. And there's no reason for us not to have that ambition if we develop the right partnerships and put the right focus on this.

We've now got our partner, Avios, with us who are a recognized European currency and global currency. I think that gives us real strength. It's still early days, and we're still working with them very hard in terms of building these partnerships. But there is a lot of potential underlying here in terms of building a better proposition for Finnish customers and this region.

We have a target of 3 million, which I think, again, is very realistic, is very achievable. And every time you build -- you can have a new partner, you build a new partner, that, in essence, is a CapEx-light investment as they -- you get more earning and burning opportunities for Avios. So this is an area where we're very confident that we can move quite quickly and make real improvements.

And then I want to get into the retail component. So retailing, as Turkka said, is completely reliant on the outset on having the right distribution channels. And that starts with your direct channels, your website and then, of course, your app and apps are beginning to be developed more and more quickly and people are showing a preference for the app in terms of buying on it. It's also how you distribute your content to online travel agencies to corporate customers. And the great foundation that we have here is 72% of our -- as Turkka said, of our business in this region and in Finland is done through these modern channels. That is the platform you have to have in order to think about retailing.

And retailing is all about how you dynamically price, how you can package products, personalize products for different customers. And within those opportunities, as I will show, there are huge opportunities for huge, huge potential for growth.

Outside of Finland, in Asia and North America, the picture is not as modern, but it should be said that the growth numbers are significant. So we're seeing year-on-year growth of 15% in Asia of modern channel share, and then we're seeing a 10% growth in U.S.A. So that says to me, within a few years, we're going to have global coverage with modern channels to enable us to sell in a modern way wherever we want to. And that is the platform you have to have to start even thinking about retailing.

Where we are pioneers is in this concept of bundling or combies as we call them. And we launched the first combi offer in September this year, where we put together the WiFi and the seat and added to the ticket. And with that packaging, what you're saying is to the customer, look, if you go at a small discount if you buy these things together. And we're already seeing a real uptick in terms of demand for those kind of products. And we know from other industries how -- if you do this well, how popular they can be. We also know that we can offer these different types of packages at different stages in a customer journey. So again, we are in the very early stages of this retailing journey, but we're very confident that there's a lot of opportunity here for us to build our business.

The confidence is based on some results. We have seen a 10% year-on-year growth in ancillaries, as Turkka said, from a very low start, it now matches our cargo business. We are starting to see major growth in our app. And again, that we plan to really focus on that and make that a real channel of choice because we know that's what our customers want. We've seen real pricing improvements with dynamic pricing. That's the pricing you can provide any time of day or night based upon availability, based upon even customer. We've seen this improvement in pricing on bundling and indeed on our individual ancillaries. So all of these indicators are positive. It gives us belief that this is an area we can continue to develop and build as a strength for the airline.

That confidence is also borne through in the fundamentals of the customer experience. As I said at the start, you couldn't do this without that confidence in your core product. And when we do things well, as Turkka said, the feedback is extremely positive. We have made some very good investments in the A350, in our new lounges at Helsinki. We have extremely good service on our aircraft. Our crew consistently get good scores from NPS. And all of that adds up, I think, to a very good reason to be positive about our ability to deliver.

And today, of course, we've announced some new destinations in our network. And this also is a key element to giving customers more choice and driving up ancillary opportunities. And our network team are constantly looking for these new opportunities, ways to be creative, ways to keep the customer interested, but also ways to be convenient in their lives and that these are places we know that people need to go to for business as well as for leisure. So just today, that announcement will have generated a huge amount of interest in our websites and in communication amongst -- and this is what people are asking for all the time. And for a small country like this to be able to offer this kind of network is really fantastic.

It wouldn't be right for me to talk about assets without, as Turkka said, talking about how we develop our partnerships. And this is another key area that we have to focus. We have some very strong partnerships. We punch above our weight for a small airline, whether it's oneworld, whether it's these joint business partnerships across Siberia, where we're the biggest airline into European airline into Japan, across the Atlantic, this enormous air route where we're also participating very strongly and even now into the Middle East with Qatar. So again, evidence that we participate well in partnerships. We can do partnerships well, and that's such an important component. And we also have very strong local partners. We're building partners in our loyalty business. And of course, I mentioned Avios.

It also wouldn't be right for me not to mention because they are producing happiness on a major scale every year with 230-odd thousand of our Finnish friends going on holiday with them and enjoying the experience enormously. And that's a bridge, perhaps the happiness story is a good bridge into talking about brand. I mentioned at the start that when I joined the airline, we lost -- it was almost simultaneous to losing the airspace advantage. And it felt at the time a little bit like a kind of existential crisis for Finnair to try and find out this was our competitive edge and we lost it. But I remember thinking whilst I was there, there's much more to this airline than just geographic advantage. There's much, much more.

And coming in from the outside, maybe it was something that I could see that maybe Fins couldn't see so strongly. I didn't have a language for it. I couldn't explain exactly what it was, but I could see evidence whether it was the way people got stuff done, whether it was the humility, whether it was the equality, whether it was the positivity as well that you could feel amongst my colleagues. Having come here and spent some time, we said we needed to rethink our brand. We needed to get our confidence back for this strategy for the future for the next chapter of the Finnair story.

And quite quickly, it became clear there was a term for this that you are -- we are all relatively familiar with, and that is this one, this Finnish happiness concept. And -- for me, this was a gift because I remember thinking as the team, this captures a lot of the spirit that we deliver as an airline. We have this, it's authentic, it's natural, and we can deliver this to the world and the world wants it. And for my role, trying to glue together these assets that we have that I've explained that we've talked about these proof points, you need to package it with a brand that gives people belief that gives people conviction that gives people competitive edge. And we will relaunch our brand in 2026.

It's not exactly under this terminology, but this is the spirit behind what we are going to do. The relaunch will not be, at first, hugely visual. It won't involve massive delivery change. There will be very gradual changes to the customer experience. But I think where we'll see it to begin with is in the motivation and the spirit of the people in Finnair because everyone is excited by this and motivated by it. And I honestly think the world wants more of it, and it is a great platform on which we can build the strategy and launch the -- and achieve the commercial targets that we've set ourselves, but also a great way of bringing our people together and delivering a great experience for our customers.

So that's where I will stop at this point. And I think we will now go to a panel discussion. So thank you.

Thank you, Simon. So indeed, now we move into our panel discussion on Finnair's strategic direction. The session will be moderated by my colleague, Aaron McGary, Head of Network Strategy and Development. He will guide the conversation and ensure we cover key topics from today's presentations. Please, Aaron McGary.

Thank you, Erkka. Good afternoon on a very typical Finnish November afternoon. Thank you for joining us. Happiness all around. And welcome to our Capital Markets Day update panel discussion. As introduced, my name is Aaron McGary. I lead the Network Strategy and Development team here at Finnair, responsible for our longer-term network development and also our fleet planning efforts. Today, I'm pleased to be joined by Christine Rovelli, our Chief Revenue Officer; Jaakko Schildt, our Chief Operating Officer; and Simon Large, our Chief Customer Officer.

On this multi-leg journey we're about to take, we will explore how Finnair is shaping its strategic direction, building operational resilience and navigating an increasingly complex regulatory landscape, all with the aim of delivering sustainable customer-centric growth. We look forward to sharing insights with you. Let's get started.

Our first destination is our strategic direction and execution. Christine, Finnair is entering a new strategy phase. How are you optimizing route profitability and network design considering the loss of Asia over flight advantage?

Well, thank you. That's a popular question I know from this morning or earlier today. It's important for us to remember that aerospace actually closes all the time. We have geopolitical events that will close aerospace, for example, over the Middle East. That happens quite often. We've seen some of that here in the region, in the Baltics with aerospace being closed because of drones and things like that. So actually, when we look at what has happened in Russia, the only distinct factors that set it apart from other normal aerospace closures that we would normally deal with on an operational level is that it has lasted for so long, first of all. And second, because it really did impact our biggest strategic advantage, which was the fact that we were the most efficient carrier, the shortest distance for most connecting traffic from Europe to Asia. So those are the two things that we had to work with. But on a network level, we deal with constraints all the time. So this was just another constraint, albeit a larger one, that the team had to take into account when they started looking at where people were going and how we could get them there.

So in a sense, we just looked as we always do, on where people are going, how do they get there now? Do we have a competitive advantage if we add service there? And how can we get there with the fleet that we have. And so you've seen we've managed to reorient our network. We did deploy some A330s with partners, as Turkka said earlier, we had some flying for Qatar, and we have some flying with Qantas now. And we also sent some of the A330s across the North Atlantic. Those were in conjunction again with our partners. We now feed American Airlines hub in Dallas, and we also feed Alaska Airlines hub in Seattle. And then we also added some service, as you will have seen this morning, to some European destinations. So we're growing a little bit also in this region. And we're doing that with a combination of the aircraft that we already have. You will see that two of those destinations are served via two cities that we serve today. And then we're also doing some tactical wet leasing, which is very short-term capacity addition in order to let us get those routes stand up and functioning.

And Jaakko, how would you add to that question from the operational side of the year?

I think the Finnair team, we really demonstrated during the tough times that how agile we can be. And now I feel that some of the things that the team pulled through, I mean, we are 102 years old and actually the most agile airline. In a couple of weeks, we were able to redistribute our aircraft, renew our network and really search and find the new solutions. What the company hasn't never done earlier, and we did it safely, and we did it within Finnair standards, what we are very proud of.

I was there for both and remember it distinctly. It was an interesting week, let's put it that way. Christine, a lot of questions today around fleet. Maybe you can give us some of the key milestones for the narrow-body fleet renewal and midterm capacity plan and how you think they support long-term efficiency?

Sure. Well, newer aircraft tend to be more efficient because they tend to be -- they require less maintenance initially than the older aircraft. At the same time, older aircraft do tend to have a lower capital cost. So it's all about us balancing these two things. Right now, I think as you saw on the initial pages, our narrow-body fleet is getting older. The oldest of those is knocking on the door of 24 at this point. And so that is the fleet we are focusing on now in the near term, which is the A319, A320 aircraft. At the same time, we've talked about the supply chain disruptions that everybody is seeing in this industry, not only with the OEMs, Boeing and Airbus, but also with the parts manufacturers. So we kind of have a double impact.

The older fleet requires a bit more maintenance, which requires more spare parts, which are less available or they take more time. And then the newer fleet requires parts to build them, which are a little bit in shorter supply as well. And so those slots are a bit further out than we would like them to be for replacement. So we have to look at the balance of what we can do now, which is, like I said, the tactical wet leasing, what we can do in the next few years, which is the midterm capacity solution. We're looking at smaller aircraft, let's say, like E190 size ATR size to fill in those gaps. And then at the end of that period, we're looking at newer aircraft. So we're trying to remain flexible. We've learned a lot of lessons about being agile that I think we will put to good use here. And between all of those things, we will be able to serve the growth in the network that we're planning on as well as the core customer needs that we're looking at here.

Definitely. And we've spoken a lot about growth and capital-light growth. And one way of doing that we've spoken is through a lot of the partnerships. So opening for a bit of a discussion between the 3 of you, and we'll start with you, Simon. So how does strategic partnerships and joint businesses contribute to the network strength and profitability?

They are huge contributors. So our ability to serve Asia as well as we do across to Japan, particularly post Space closure has been enormously helped by that partnership. I would say our ability to diversify destinations after, again, airspace closure across the Atlantic into the Middle East have been enormously helped by partnerships. So it's an essential part of our armory in a way that we are good at it and that we contribute to those.

Christine, anything to add?

Well, in addition to the airline partnerships that we have, we also have -- and I'll hand this over quickly to Jaakko, partnerships with our major airports that we serve. And of course, we do a lot of development work, improving the passenger experience, how can we make the connections easier. We've seen some of our competitors even, I think, this morning, having to extend their minimum connection time at their hub, which is not something you want to do from an aircraft efficiency standpoint nor from a passenger experience standpoint. We've actually been able to work very effectively together with Finavia and some of the other airports to ensure that our customers are able to make those connections in short enough time that we can make best use of the aircraft that we have. And then I guess we also have some retail and other partnerships, I know, Simon, that you've covered as well.

Yes. I mean it is big, big, large value chain. And often, I mean, we talk about airline operations and network planning and actually then our partners separately, but it is actually one big value chain. And there, like the partnership with Finavia, we have a great airport. We have a great connection airport, what is rated is really the best connection experience many, many times. And it's not only the Helsinki Airport. This week, I was working together with Finavia -- where our Lapland traffic is really booming. We have a much more flight up there. And it is part of the very important value chain that the airport works.

Also, I would like to mention our partnership together with Nora, who flies the Embraer aircraft and ATRs, mean Nora delivers excellent on-time performance, excellent cost and superior customer experience. And that is something that we are also very proud of that partnership that it delivers what is expected.

And that's a nice segue to our next destination, core destination, which is operational resilience and safety. So Jaakko, safety is a cornerstone of our Finnair operations. Could you share how this commitment shapes our day-to-day decision-making?

Okay. Thank you, Aaron. The safety conversation often makes me kind of emotional. And I think there are 2 sides of emotions. One thing is that I am extremely proud of the 102 years history of our safety record and reputation and brand. And second emotion, what comes into my mind is really that being humble in the front of the whack fact that this is done for every day, for every flight by every Finnair employee and also including all the partners' employees. We have a number of destinations where we don't do the ground handling ourselves, for example, part of the maintenance is outsourced. And this is something that it's really humbling that we cannot lose the focus. We cannot -- we cannot take the overconfidence approach. We cannot come complacent. It has to be done by everybody again and again.

One of the most visible operational resilience targets is on-time performance, one that all of our customers cherish. Finnair is doing very well on its on-time performance and regularity of flights. Could you please explain what kind of impact this has on Finnair customer satisfaction and more importantly, as well cost competitiveness?

I mean that is really a key. And today, we saw on the presentations, we saw actually our performance from this year. But I just want to share it, and sorry, it's outside of the script. But like yesterday, we had a 98.4% arrival punctuality and connection reliability was 100%. So half of our connection -- all passengers all made the connections on time. And this is something which is a key for our customer.

As Simon mentioned, I mean, there is no point to build any retail activity unless these hygiene things are in place. So it's extremely important. And it also contributes to the cost that Pia mentioned that the first time right, the lean principle, it's an enormous cost driver that when we execute the operation as planned, that's actually the best unit cost what it gives. And also, I would like to mention that often the operational reliability, I mean, it comes to COO. But unless -- if we are not having the end-to-end process and a continuous improvement approach towards our network planning colleagues, the system doesn't work. So it's once again a big, big team effort to make the operation to run.

Simon, is there anything you'd like to add from the customer side on this?

I think I could only repeat how close NPS runs against on-time performance. And that has to be, as I say, the core building block. If you're getting that right, it gives you the opportunity to do so many other things. But likewise, like I think I said, we spent a lot of time also investing in customer care when things don't go to plan. So we had a demonstration outside of AI and how that can begin to do an amazing job, I think, to assist. And that's exciting, I think, for us. So that means the levels of customer service, particularly with complex schedules, complex bookings can start to be addressed at scale. And that's something you can't do with humans today. So when you can get that kind of capability in place, I think it gives us huge confidence that we can deliver a consistently good experience all the time.

I think complex is a good way of explaining it. And it's another nice segue to our next destination and up-and-coming destination, sustainability and its effects on the aviation industry. So Christine, environmental regulation is increasing costs. How is Finnair managing this transition operationally, commercially and technologically?

So it's important to understand that it's increasing costs, but only in certain jurisdictions. So we see increased costs for sure in Europe. We don't see that so much in some of the regions where our competitors originate. I won't name names, but some of them are to the west.

What happens then is that it's an uneven playing field. And of course, the airline industry is extremely competitive. We compete on all kinds of different variables. But when you have the type of cost that Pia was alluding to earlier that will come to us and that are coming to us now in terms of using sustainable aviation fuels, in terms of noise reduction and emissions reductions and things like that. And they're not evenly enforced among the competitors, that automatically makes it much more difficult to take the steps as an industry that we need to take. And so we have a two-pronged approach. Finnair is doing what it can on its own. I think, Turkka, you mentioned we are reducing weight on the aircraft.

We're taxing on one engine. We're doing continuous descend approaches. We're looking at the sustainability and the recycling and things of products that we can have on board. We're going to be doing some things in Simon's area with respect to food waste and other elements of the onboard service to further that part of sustainability. But the second thing we're doing is we're working with some partners here in Finland on development of ESAF measures or ESAF technology, which is probably the next step forward that we will need to take, but as an industry. And so we are also working through industry bodies. We're working through the European Airline Association. We're working through IATA to try to get the conversation on a global level so that we can all, as an industry, make the changes that we need to make so that as an industry, we can deliver on the targets that we've set for ourselves.

Yes. It's a good approach. I'd ask the panelists to put on their inspirational shoes now. And if you could leave the investors with one message about Finnair's future, what would that be? And we'll start with Simon.

We'll deliver on our strategy. I'm confident of that. We have great capability, great determination. There's a super -- it's a super lean operation here, which I'm so impressed by coming in. People work together incredibly well. And if you give them clear goals and targets, sense I have with Finnish culture is people get stuff done. And that's one of the reasons why I was so keen to be part of this journey and one of the reasons why I'm so confident we'll get it done.

Christine?

Well, we're back. We're growing, and I can't wait to show you where we're going to take you next.

I'm very confident that we will bring and give the Finnair to the next generation in a much better shape. And if I think about the strategy and what kind of -- what it brings to Finnair, I mean, if I compare that to an effort, what we did from 2021, '22, it's simply keeping the company alive and floating. I mean, that effort and power of what do we have in Finnair people makes me very, very confident that we are in a good shape then to give the Finnair in even better shape to the next generation.

Thank you to the panelists. That's all my questions. Now it's over to you out in the audience. So if you have any questions in the room, please raise your hand. Otherwise, if you're online, use the webcast chat.

Okay. We will have one online first. SAS strategy on Copenhagen hub together with Stockholm, Irlander and Oslo airports already feel the pressure on reduced growth due to airlines focus more on flying in and out of Copenhagen. And both airports are working hard to attract airlines, especially on long haul. How can the scenario where Copenhagen is expected to outperform the other main airports in the Nordics impact on Finnair growth strategy at your hub in Helsinki? Do you foresee any changes in Finnair current ownership structure going forward? And this is going to Christine.

Well, the ownership structure, I can't comment on because it's an owner issue. But in so far as Copenhagen is a growing hub, I mean, that's something that we've been seeing already, something we expect. We monitor all of our competitors' hubs as they monitor ours quite closely. Sometimes hubs grow, sometimes they pull back. Sometimes we see different trade-offs between -- especially when we talk about SAS, they used to have 3 main hubs. They've largely retrenched into Copenhagen. We do what we do. We see what they do. We respond to it competitively. They do the same for us. And I would say that we focus on the core customers that we have here in this market, of which there are many with many diverse needs. And then we focus on our partners and the network that allows us to serve as well. So does it have an impact? Of course, I mean, it's a competitive landscape. We're always constantly tweaking to meet the demands of the market. But is it something that worries us, I would say no.

Okay. Anyone in the room?

Jaakko from SEB. You are now rebuilding and continue to build the network and adding new destinations. Could you, as a team, kind of a bit of elaborate the work and decision-making behind choosing a new destination and kind of addressing all the risks that are related there? What kind of survey you are doing, et cetera?

Well, I can start. The basic question in network, you always ask yourself is if you have one aircraft, where would you send it, right? So if we have one, where we send it, well, you send it where it makes the most money. Okay, now you have two. What would you do then? And then you say, well, if I have four aircraft and I have 1 hub, what combinations of destinations can I start serving that would make a lot of money. And from there, you start to build your network. So what we're constantly doing, we have a long list and a short list. We monitor, as I said before, where people are going, how they get there now. Do we have a competitive advantage in serving that route if we don't serve it today? And how can we best take advantage of that. And so that's how we decide. And then, of course, there are some airports that are slot constrained that we would love to serve more, but we actually can't. And that's why you have your B team, your B list of destinations. And you're always kind of optimizing between those two things.

Yes. I mean the only comment I would make, and Christine is a much bigger expert than I, but in my years, I've thought it's science, but there's a little bit of art. So I've seen some great studies done and some deadserts fail, and I've seen some trials be great successes. So I mean that isn't always the rule. So you can't -- it's an interesting world trying to work out what will be successful when it comes to building a network. But these days, there's an awful lot of data that you can utilize to give you more confidence. But I think the other point to make is I think there are sort of almost CapEx-light ways in which you can launch networks too, without putting heavy, heavy investment into the infrastructure on the ground at the other end so that if it doesn't work. So there are ways of trialing these things now that if it's not working, you can pull it out and try something else. So it can be more agile. Is that fair to say?

Us do that quite often. You'll see them launch a route and then pull it back. But for example, of some of the destinations we listed this morning, there are two that we're going to be serving via destinations we serve already. And what that allows us to do is it allows us to go after a market that's small enough that we wouldn't actually put an entire airplane on it, but still big enough to be attractive with some service. So we're trying things like that to try to make sure that we cover as much of the market as we possibly can with the assets that we have on a cost-effective basis.

And maybe to supplement, I mean, the new destination is a big, big team effort. I mean there are always a short list and then what operation contributes into it that, okay, what is the condition at the airport? How is the payload range? Can we take off? What's the market for the ground handling? Does the airport need specific permits? Does it need specific skills for pilots, special training and things and so on. And of course, all this information and then is collected together and in great detail, put into the model, what would be the cost operating that route. Very detailed work.

Continuing a bit on the same topic and perhaps a question earlier here regarding the competition in Scandinavia and the SAS Copenhagen hub. This morning, you announced this Stavanger route. Do you see kind of growth pockets in the Nordics or in Scandinavia where you could kind of position as Asian network carrier for the people in Scandinavia?

You mean carrying...

Competing on Scandinavian customers towards Asia.

Oh sure, yes. And we've been doing that since even before COVID, we had some really good connecting traffic from the Nordics to Asia. But now it's changed a little bit. Our network has changed and the SAS network has changed and the competitive landscape has changed a little bit. We've seen long-haul carriers from Asia start service into Stockholm. So that's changed a little bit. But yes, we're always sort of poking around and trying to find where the demand is and going after it.

This is Pasi from Nordea. What is your feeling regarding the end demand currently? I mean when looking at the kind of the situation in Finland, we have a raising unemployment, declining housing prices and then probably a bit weaker consumer confidence. And also on other markets, there have been kind of problems related to inflation and consumers down trading the consumer behavior. So what's your feeling? Are we now currently on a better position today as a year ago? And what's your feeling? Is that things going to be better on next year than currently on this day?

Okay. I can take. So again, it's not new that we see all kinds of impact on customer demand. Sometimes you see it coming and sometimes you don't. What we can do and what we are doing is we're constantly, like Pia said, kind of working on the cost structure, working on the agility, making sure that if something is not working, we pull it back immediately. We don't have cost sitting there that we don't want to continue to carry if demand falls. That having been said, in Q3, we've seen some impact on the North Atlantic. It's important to remember that the growth in that market slowed. The market itself is not shrinking. It's still a growing market. Finland, we haven't seen any impact, but we're always kind of preparing for those types of things. And of course, you remember, you don't buy a ticket for tomorrow. You buy a ticket for maybe a few months from now or not more than a year from now, I can explain why later. But anyway, you're always buying tickets further in advance. So we have a view now of what it's going to look like going forward. And as we've said, I mean, we're pretty comfortable with where we are right now.

And maybe to supplement, it was mentioned earlier today that especially after the pandemic, we can see that I think the trend isn't dissimilar. So the consumers, when there was a period that travel was simply not possible, we also see that it's prioritized. That is on the household spend that is prioritized. It's not 100% following as it was before the pandemic.

Maybe if I may continue regarding the issue coming from the end demand. So when looking at the current bookings and your outlook for next spring and next summer, so are you confident regarding the 2% growth on RASK for '26 next year?

Well, that's what we're planning for, for sure. The booking curve has come in quite significantly. So I wouldn't know right now what summer looks like anyway. But what we've been planning based on the models and the behavior that we can see today, I think we're going to stay with that view, yes.

We might then take one last question online. This one -- oh, sorry.

Joonas from OP. I think we touched upon this already a little, but business travel took quite a hit from the pandemic. But more recently, there's been -- there seem to be quite a broad-based call back to the office. So have you seen business travel coming back? And how is the level versus pre-pandemic levels?

I mean, work-based travel is a big part of our customer base for sure. And it remains robust, I would say. There's a lot of -- and you're right, post pandemic, there was a big bounce back, and there's no evidence that that's going to change anytime soon. I don't think. There was talk, of course, of people working more from home, but I think we're still seeing quite a lot of the requirements to meet face-to-face. So I think it remains a very strong segment for us to serve.

Yes. And when we talk about corporate traffic, we have to be careful what we mean because we don't always know. We can predict sometimes based on behavior. So if you don't have a Saturday night stay, you're probably a corporate customer. But when we look at corporate traffic, we look at corporate contract traffic, which is typically Finland based. So that's -- when you say corporate overall, it's harder for us to define. But what Simon is talking about is what we can visibly see from the corporate contracts that we have.

Okay. And then one last question online to Christine. As already mentioned, Finnair has recently increased flights to Japan, especially during the summer season. Are there any possible to have flights to Nagoya during the winter season and to make the Osaka route daily in the winter as well? Also, without A330s, is there any possibility of resuming services to Fokowakku and Sephora? So I can answer all those, but I'll let you.

Well, I was going to say, is this someone looking for a job in the network team or...

It's no one from our team. It's okay.

Okay. Fair enough. Okay. Just making sure. Well, in terms of increased service, we will always put more aircraft where we see the potential for profit. We will be taking one more A350 next year, but that's going to be very late in the year. So not -- it won't be deployed in 2026. So wait and see. It's all I can say. If there's demand and it's profitable, we will certainly put it on the list.

Excellent. That concludes our panel discussion and question time. I would like to thank the 3 panelists here for their time and their insights, and I hope everyone here found it insightful as well. And I'll hand back over to Erkka.

Thank you.

Thank you.

So to summarize today's messages, please welcome back Turkka Kuusisto for closing reflections. Thank you.

Thank you, Erkka, and thank you all for joining us today. And I really hope that you found this long afternoon, useful and time well spent. I try to reflect some of my own thoughts and feelings. I'm super happy and excited about that we have now the right strategy for the company after a difficult year of double crisis and of course, very rapid rebound when the markets opened since the COVID-19 was left behind us. But as you've seen today, the Finnair team has done a fantastic job when it comes to pivoting the network, reallocating the fleet. And then we had enough self-discipline to plan this strategy properly.

We took enough time. I'm not famous for my patience, but I think that it's better to discuss the strategy today with you when we feel very comfortable that we are also capable of delivering what's included, be it on the customer side, be it on the operations side and how that translates into the financial performance. And today, you saw half of my team. I'm extremely privileged that I have such a great team with vast experience either in the industry or a lot of experiences from other industries. So we are ready for the challenge, and it's not only about the Executive Board, but the full Finnair team will be working very hard when it comes to achieving the goals because at the end of the day, strategy is not valuable if we are not capable of delivering on it.

To summarize the key messages, we do have a very clear customer-centric strategy that is built on operational excellence, as Simon extremely well explained it. That opens up new avenues, new revenue sources and also enables us to boost our profit margins because the development in retail and loyalty sections of our commercial strategy are rather capital-light and not investment free, but they doesn't require additions into our -- into the fleet. So key KPIs related to RASK or revenue development should be moving favorably to the right direction over the next 8 quarters as we already communicated.

Yes, the plan is rather ambitious, but it must be from 6% to 8% EBIT margin by end of this decade or 2029. It requires, of course, a lot of hard work internally to execute on this strategy. But I'm more than convinced that with this team and with the wider Finnair colleague population, we are capable of doing it. We will continue to develop this One cue thinking. It's very important from multiple perspectives by improving the engagement, improving the leadership, securing that we stay among the top employers in Finland so that we can get also access to new talent. We are capable of building an organization culture that enables us to preserve those great qualities of this company and 102 years of legacy, cost competitiveness, punctuality, regularity, on-time performance and safety always.

And then finally, we are here for long-term value creation and delivery. It's been already 102 years. And I guess -- and as Jaakko said it extremely well, we want to hand this company to the next generation in better shape. So we will be here also for the next 100 years. So thanks again for joining us today and looking forward to see you on board Finnair. Thank you.

Thank you all for joining us today, both in person and online. We have covered Finnair's strategy, financial targets and our commitment to customer-centric growth. We hope you leave with a clear view of where Finnair will be heading and how we'll get there. All presentation material will be available on our IR website. We'd love to hear your feedback on the event. So please scan the QR code on the screen or click the link on the webcast to share your feedback. It helps us a lot.

For those here at the venue, we invite you to enjoy Finnair kitchen experience and some after the event. Our Head of Product Development, Juha Stenholm, has prepared us a menu that is served in our business class on our long-haul flights. Safe travels, everyone, and thank you again for joining the event.

Good day, ladies and gentlemen. I am Erkka Salonen from Finnair Investor Relations, and it's my pleasure to welcome you all to this Finnair's Third Quarter 2025 Earnings Call. I have here with me our CEO, Mr. Turkka Kuusisto; and our new CFO, Mrs. Pia Aaltonen-Forsell.

I will now turn this call over to you, Turkka. Please, go ahead.

Thank you, Erkka, and very good afternoon to all of you joining this earnings call. The busiest season is now behind us and we are happy to report that we did deliver a solid Q3 financial performance, especially considering the negative impact from the industrial action.

As you might recall, it took until the mid-July to get the final CLA concluded and behind us. And before that, the quarter was shadowed by 3 strike days that led into cancellation of more than 300 flights.

And today, we are reporting somewhat -- some EUR 18 million of direct impact from the industrial action. And of course, for us, it's been very difficult to evaluate the so-called indirect impact, but they are in millions of euros.

So if we take the comparable operating result of EUR 51 million and calculate back EUR 18 million plus something from the indirect side, I guess that we can all agree that we would have been on par with the last year performance or even above.

The revenue increase was 2% and that was also influenced by the cancellations and the indirect impact of the industrial action. And then unfortunately, we faced some unexpected maintenance/AOG issues during the quarter that continued to impact negatively to the ASK and revenue development.

But it's worth of mentioning that after we got the CLAs and disruptions behind us, our quality of our service and flight regularity returned to a very high level almost immediately because the weeks followed by the industrial actions actually scored to 99.3 in terms of regularity, but now the full quarter result is somewhat lower because of the AOGs.

Also from the traffic plan and summer season network planning side, it was a great success when it comes to our traffic in Far East Asia, especially in Japan. We decided to increase the frequencies and capacity so that we flew 25 weekly frequencies between Helsinki and Japan, which made us the biggest operator or carrier between the Europe and Japan.

And as we can see from our load factors and also yield development, that has been a very strong geographical region for us during the summer season.

It's not on my slide, but Pia will revert to it later in her presentation. But yesterday, the Board of Directors of Finnair has also decided on the second installment of the return of capital payment that is now due 7th of November, if I recall it right.

Still taking some remarks around the collective labor agreements. Now we have reached with all employee groups and unions agreements that are in line with the general labor market framework and policies, which is, of course, extremely important for us when it comes to protecting and developing our cost competitiveness, not only in the short term, but also when we take a longer-term value creation road map in front of us.

We've been working intensively when it comes to returning customer satisfaction. And as you know, the biggest contributor to the positive NPS development is the quality of the service and regularity and punctuality.

Very happy to report that the NPS of the total customer base did increase from the low point of 28-ish close to 40 from August to September. And then the development has continued.

I will come back very shortly in this seat cover issue that we faced. But anyhow -- and then we will -- when we take a more granular view related to the NPS development and explore the, let's say, the core customers of ours, we are actually trending even higher. So the most frequent flyers are even more satisfied with our services as we speak.

Even though it was an event after the reporting period, this seat cover issue that we faced, we wanted to take the topic also today with you because it has gained quite a lot of media attention because we needed to ground 8 aircraft of our 321 fleet 2 weeks back because of a question marks in the certification process of the seats and seat covers.

To be very transparent, we followed the instructions of the designer and the OEM of those covers and seats. But then in our own procedures -- internal procedures, we found question marks and therefore, we decided to ground the aircraft.

But also very happy to report that all planes are now flying. 6 of them are back in our scheduled routes. 2 of them are anyhow in the maintenance shop, one being painted and then one going through a heavy overhaul process. So from that point of view, the operation is stabilized back to normal.

When it comes to quantifying the financial impact, especially now when we face this CLA-related disruptions, this is a completely different size item. It's a minor item versus the CLA disruption and impact.

So we are at max discussing few million euros. So that's something that we wanted to very transparently discuss with you today. And of course, also within the guidance range that we will discuss later in this call.

Then moving to the geographical footprint of ours. As already mentioned, Asia performing very strong double digit growth, both in ASK and revenue development and also RASK developing positively and also the RPK yield and load factors also on a positive side.

Europe and domestic rather stable or flattish, but nothing extraordinary in these geographical regions. And the big negative numbers in the Middle East area are explained by the fact that we are not flying anymore from Copenhagen and Stockholm to Doha. So it's only Helsinki-Doha operations. So therefore, we are 2/3 down given that change in our scheduled traffic.

North Atlantic traffic and North America, especially USA has, of course, remained as a challenge, I guess, for all air companies because of various aspects. And we had a plan to increase the ASK and capacity for that area and we did so.

Of course, we already hedged some of the capacity down given the CLA issues and also the development that we witnessed early Q2, early Q3. But anyhow, the demand and yield development didn't meet our expectations.

So therefore, we are reporting a double-digit decline in RASK and also load factor came down by high single digit numbers.

But maybe with these words, I would hand it over to Pia to discuss the financials in greater detail.

Thank you, Turkka, and good morning, good afternoon, everybody. And I can maybe start by saying I joined as CFO on 1st of August and I've been happy to join in a period when we have resumed normal operations, as Turkka just described.

So someone said to me earlier today that, hey, Pia, you had sort of the right smile when you presented the results. We are not on camera right now, so you cannot see that. And I think it's based on the fact that, hey, we have been able to operate.

Q3 is an important season. And you can also see that in the results that despite the really difficult periods that we had before this quarter and the long strikes and the fact that the strike impact was still EUR 18 million into the operating result of this quarter, we did land at a comparable operating result of EUR 51 million. And really, if you take into account the strike impacts, we were more or less sort of at last year's level.

And given some of the sort of structural changes on the cost side that I will come back to, I still think this was a good expression of the team's also ability to bounce back. So thank you to the team and also, of course, customer trust rebounding. Thank you to customers, as you, Turkka, pointed out.

There's maybe a few other sort of smaller changes that are visible on this page, but I think I'll answer your questions later on if you have detailed questions on the specific lines. And I would really go to the next page, which is more about giving the holistic view of the results in the third quarter.

So we already discussed the strike impact. And I think that's maybe just a technical note, if you look at the more detailed bridge that we have in some of the appendixes, of course, there, you see sort of a breakdown of all of the elements. But I really think it's important to summarize the strike impacts into one bucket.

And then there are considerations relating to the closure of the Russian airspace that had led to higher navigation and landing costs in this very corner of Europe where we are operating. Obviously, we are one of the few that really remains with sort of big traffic amounts here.

So we have taken some additional costs due to that. And obviously, that's a topic, the Russian airspace closure that is a fact that we have to accept and that's where we are right now. Obviously, then is there a question, could these costs be lower? That's for the authorities to look into if that could be possible or not.

Then there's another big societal change right now, which is particularly in Europe, the strive towards decarbonization. And that's visible for companies like us in many ways.

But in this chart, what you see is, of course, the addition to costs. So you see it's like EUR 10 million more per quarter. And I think that gives a good representation of what we are experiencing right now. So we are experiencing the emission rights costs now sort of being there to the full because there are no more free allowances for us.

So that change has happened during this year and that we still had maybe something I don't want to say in our back pocket, but some reserves from previously. But that is definitely something that going forward we know the European legislation is there.

There are no more free allowances. And that's really one of the big points of additions to costs during this year for decarbonization. And obviously, the other one is sustainable aviation fuel, where there's now the mandate to buy 2% blend and that's obviously as well increasing our costs.

So it's a fair representation, a quarterly addition of EUR 10 million during this year. And I still see into next year, there will still be a little bit of a hike up because of the ETS and the emission rights sort of being full-blown impact during next year.

So those were those structural changes. And then you can see that we have volume growth and that's really -- if I would like to simplify things, I would say that the green change here, the improvement of EUR 70 million, really the gross actually improvement on volume side is even a bit bigger than that. But obviously, if you look into the details, you can see a few other minor changes there as well.

Someone asked me about the changes in yield. I think one sort of noteworthy thing is that the compensations that we have paid also for the strike, they tend to go impacting that key figure. So maybe that's just one thing to keep in mind.

I also already got today a lot of questions about the impact, which, Turkka, you already commented, about the seat covers and whether that's a big thing or not. It's not a big thing. But obviously, for our customers, it came during a period of school holidays.

So of course, that's a thing that we really needed to fix as soon as we could and it has also been debated quite a lot. But if I look only from a financial perspective, it's a few millions. The impact will be in Q4 and that negative impact is within -- when we have given the guidance for Q4, obviously, that's within the limits of that. Okay.

I will speed up. I only have a few more things to say. The second installment of the return of the capital. So this was something that was already decided in the AGM.

Now it's kind of the formal decision about also paying the second installment because we are in a strong enough financial position to be able to pay. That will be happening on the 7th of November. When you look at the ratios from our balance sheet, we are kind of continuously showing some improvements.

And I think I will go to the next page to finally comment on a few of the things that we've done through this year. Obviously, if you look at first the operating cash flow, that's sort of the big -- that's the positive here.

When you then look at where have we spent and allocated some of the cash, obviously, we've done a lease buyback. We have also been paying back our loans and leases according to the schedules.

So I think that the same diligent work that was already started earlier to make the balance sheet healthier has continued step-by-step and it continues to show as gradually also improving ratios.

I think with that, Turkka, I would hand it back to you.

Yes. Thank you, Pia. So a few remarks related to the way forward. You might already be aware of that in 2 weeks' time, we have a more in-depth discussion with you in form of a CMU.

So already now to all of you, a warm welcome to our event. But in the meantime, what we've communicated externally that for the summer season 2026, we will be adding new destinations and more frequencies to the summer season in the Europe, Catania, Florence, Valencia and island of Kos being a concrete examples.

And then also, I guess we already discussed that in connection with the Q2 report that we are reopening the Helsinki-Toronto route after 10 years of not flying to Toronto. So that will be an interesting avenue also for us to explore the demand and connectivity between Helsinki and Canada.

Of course, a big step for us and I guess, also for the whole industry is the development of new distribution capabilities, but also a more modern digitalized interaction with the customers. And as a first airline, we did introduce ancillary combos where our passengers before the flight can select and collect various ancillaries and buy them as one bundle and get some monetary benefits out of it.

And I guess this is a very important milestone and step for us as a company because you can see from our figures that during the third quarter of '25, the revenue from ancillaries actually bypassed the cargo revenue. So that's a concrete example of that the selected commercial strategy is paying off and we are further improving our capabilities and competencies to continue that double digit growth.

As Pia mentioned, our company and of course, the whole industry is facing this environmental compliance and also the CO2 reduction challenge and dilemma. And we are, of course, very proactive when it comes to contributing to the different collaboration platforms to build the availability and affordability of next-generation fuels, i.e., SAF and eSAF maybe later down the road.

And in the meantime, of course, we are engaging intensively with our customers also on the corporate side to provide them with opportunities to contribute to the CO2 reduction challenge. And that's, of course, for the corporate customers important topic because if and when they have committed to their own SBTi targets, they need also that Scope 3 reductions in their whole value chain.

And then maybe as a final remark on this slide, for the fourth year in a row, we did receive a 5-star rating from APEX that is a Global Airline Passenger Experience Association. And for us, these are, of course, important acknowledgments, especially given the time when we have faced for various reasons more than needed kind of reputational issues.

So that in the big scheme of things, we need to be very humble and fix the disruption situations that we have faced. But just wanted to push the point that nothing is broken in the platform and the underlying business and operations. So therefore, we have a great platform to build on.

With these words, we will take you to the outlook and guidance slide. We are today providing you with a specified outlook and guidance based on the Q3 development.

And today we are saying that the capacity by ASK will increase by some 2% during 2025 and revenue will be approximately EUR 3.1 billion. And the comparable operating result range has been narrowed from the upper limit side.

So if we said -- when we said in July that the range is EUR 30 million to EUR 130 million, today we are saying it's EUR 30 million to EUR 60 million. And what led into kind of lowering the upper end of the comparable result range is explained by a few factors.

First and foremost, the North Atlantic demand and yield development has continued to soften. And then when we will take already discussed indirect impact from the industrial action, the unexpected AOGs. And then in July, when we envisioned the potential upside scenario and to reach that, it would have required a continuation of oil price decrease.

So therefore, in connection with this report, we see that it's unlikely to reach the earlier upper end. So therefore, we are taking it down. But I want to highlight that this guidance is now in line with the previous one because already then we discussed that we are closer to the lower end of the provided range.

And then as a final remark, already something that I mentioned, warm welcome to all of you and please register if you haven't done so yet, November 13 at 13 hours Helsinki time, where we will provide you with a Finnair Capital Markets Update. In addition to me and Pia, you have the opportunity of meeting the full leadership team of Finnair. So it's a great engagement and opportunity to discuss with the full team.

But with these words, welcome to the event, and let's open for the Q&A.

Thank you, Turkka. Now would be a convenient time for any questions you may have. So please follow the operator's instructions to present them.

[Operator instructions] The next question comes from Kurt Hofmann from Aviation Week.

Okay. My questions are a bit fleet-related and then the North Atlantic. I wanted to ask you what's about the campaign regarding the future narrow-body fleet, which you plan to decide by the end of the year, if you maybe have an update for us?

And then I would like to ask you also regarding the wet leases to the Qantas, the A330 Qantas aircraft, how this continues or you maybe have too many A330s in the fleet already? And then I'd like to ask you a bit about the North Atlantic.

So if I start with the 330s, the wet lease arrangement or collaboration continues until the winter season of '26. So I guess it's end of March when the wet leased aircraft and our pilots then, of course, will return to our own operation.

And then we have now already deployed the 2 330s on dry lease basis to Qantas. And I guess it was last week when the second aircraft was received by Qantas. So currently, 4 out of 8 330s are tied to Qantas collaboration.

The 2 wet leased aircraft will return to our own network for the summer of 2026. But we need to keep in mind that one of the 330s will -- the lease agreement will not be continued. So the fleet size will decrease. The total fleet size will decrease from 8 to 7 in months to come.

When it comes to the narrow-body campaign, we want to run a thorough and a diligent process when it comes to the campaign and we will communicate more when we have some tangible news. We are having discussions with the OEMs. And of course, the process has progressed since we last talked. But today, we don't have any news to be disclosed.

Okay. And second part from my side, the North Atlantic. As many airlines are suffering already kind of overcapacity and you also mentioned that the North Atlantic business was not doing that perfectly, do you have some measures for this? Do you plan to reduce the North Atlantic network maybe then for next year or especially over the winter when the demand is lower?

For the winter season, we are flying less because some of the U.S. destinations are summer destinations for us. So the winter schedule is different. And of course, when it comes to the summer schedule '26, we have still some time to evaluate that how the demand will develop and we might tweak the intended summer season plan accordingly.

So we are following the market development, demand development and yield development extremely carefully.

Okay. Just a clarification, how many Airbus 330s will be then flying for Qantas or will be with Qantas?

4 now.

[Operator instructions]. The next question comes from Joonas Ilvonen from Evli.

It's Joonas from Evli. If I can just return to this North Atlantic capacity question. So I already saw from your September traffic figures that your North Atlantic capacity already decreased a bit.

So was this a reflection of this transition to winter schedule? Or did you like already make some -- did you already kind of react to this rather weak situation in North Atlantic traffic?

It's both and intentional reaction. But at the same time, we have one of our 350s grounded because of this towing accident when the wing tip actually hit the hangar door. So we are down 1 350 that has also led into the capacity decrease in our totality. And then we decided to hedge the North Atlantic traffic.

All right. So when will this aircraft return to traffic exactly?

The current prognosis is early 2026 because, again, we want to, of course, secure the airworthiness and safety of the aircraft. It has taken a bit longer than expected.

Okay. So regarding your EBIT guidance for Q4 basically. So this North Atlantic situation still continues to weigh on your result. And what about the -- I mean, you mentioned these landing costs and environmental and SAF costs, EUR 10 million impact quarterly.

I think you kind of -- you already implied that this environmental costs will increase towards next year. But what about Q4? Are they still like around EUR 10 million during Q4? Or you only see increase in Q4?

Pia here. Yes, to confirm that, I think we are now on the 2% SAF mandate, it's been there since start of the year. The end of the free emission allowances has been there since the start of the year.

So it's a pretty even development during this year, about EUR 10 million per quarter. And then going into next year, what impact is then simply that we still had some benefits this year from, let's say, previous years relating to the EU EPS.

You could say that we had hedged or you know how this works. We benefited somewhat and that's why I said that there could still be some increase towards next year, but it's not as big as the increase year-on-year from '24 to '25.

That's clear. And a final question. So given this rather weak North Atlantic situation and thinking about next year, maybe you can -- you will come back to this later, but can you already like -- because the Asian traffic seems to be doing rather well at the moment. So do you have already any plans to probably allocate more capacity there versus North Atlantic?

No, I guess that's something that we do on a daily basis that we want to optimize the utilization of the fleet. Of course, within the given constraints, I guess we will fly more to Tokyo if we had more landing slots.

So it's kind of a complex topic, but something that we monitor on a continuous basis. And I guess that towards the end of the year, early 2026, we can also provide you with a more detailed view that how shall we utilize the wide-body capacity.

As it seems that there are no further questions, we can conclude. Oh, one more.

The next question comes from Kurt Hofmann from Aviation Week.

It's me again, but I found it quite interesting, your Asian network and it's still doing quite well despite you have to fly such a long route. I think is it the Americans now not allow any more the Chinese carriers to fly over China to the U.S. Do you think you can see some improvement that one day you are able to fly again over Russia in the near future?

And what do you think regarding the in a way unfair competition with the Chinese carriers which flying directly via Russia to Europe and you fly -- you have to fly around?

So 2, of course, very important and complex questions, Kurt. So when it comes to the closed Russian airspace, that's something that I already -- I can say already today because I've discussed that with you and media also earlier.

Our strategic thinking and our strategy process is built on the kind of assumption that the Russian airspace remains closed for the time being because we don't see any development that would change the situation quickly in a very short-term future.

When it comes to kind of a level playing field, I guess that's something that the European carriers are jointly acknowledging that that's something that should be dealt with if the situation continues. But I guess that there is kind of a bigger theme than only a national topic here in Finland or topic related to Finnair. So I would mark that as a EU level discussion.

So now there are no further questions and we may conclude the call. Many thanks for the excellent questions and joining the event. We wish you a nice day.

Thank you all and hope to see you in 2 weeks' time.

See you soon.