Aegean Airlines S.A. (AEGN) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Costantino, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines Conference Call to present and discuss the full year 2021 financial results. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Eftychios Vasilakis, Chairman. Mr. Vasilakis, you may now proceed.

Yes. Good afternoon, everybody. Welcome to our annual call. This year, it takes place 4 or 5 days -- business days after the publication of our results. So I think by now, you've had the chance to review them. So I will keep my initial comments relatively short and allow earlier for questions. So perhaps we'll see where you're more interested to learn more. So obviously, 2021 was also a very challenging year for all of aviation, including Aegean. It's a year that started with the company operating very, very low level of flights, less than 40% of its regular capacity and less than 20% of its usual passengers relative to 2019. It gradually improved, of course, particularly after quarter 2, reaching in the peak of the summer level of recovery of activity roundabout 75% to 76% relative to 2019 in terms of capacity and around 67% to 70% in terms of passengers and revenue and achieving in the second quarter, for the first time since the pandemic, a positive operating result and a positive overall result. Unfortunately, the last quarter of the year, while the season was modestly extended in terms of demand initially due to the resurgence of Omicron and the restrictions that came along, we had a disappointing result in the end of the year. A strong effect of Omicron basically reducing the load factors in our flights at the time where we had actually reinstated at 85% our capacity level relative to 2019, but only achieved in the last quarter, 65%. So a lower recovery with a higher -- a lower passenger recovery with a higher investment in flights, which could not be changed because, of course, we were very close to Christmas and people are already booked in many different flights. So we had to sustain relatively high operational environments with a very low demand that was restricted by Omicron. Of course, we were able to adjust that going into the year. And now we look forward to a better summer. But certainly, the closing of the year was weaker than we had all hoped during the summer and during the early months of autumn. So all in all, 2021 was a year where we were actually aggregating 4 very dissimilar quarters in terms of the quality and the level of the quality of the demand, the amount of restrictions and the level of the operation. Overall, aggregating all quarters, we achieved 7.1 million passengers relative to, of course, roundabout 15 million in 2019 and a revenue of EUR 675 million relative to EUR 1.3 billion in 2019. So levels of recovery of circa 50% in overall revenue and overall passenger count. This came along with an operating result of a loss for EUR 72 million, which was, of course, a significant reduction relative to the EUR 296 million pretax operating loss of 2020. But nevertheless, the result was, I would say, EUR 10 million or EUR 15 million worse than we would have expected in the beginning of September or October when the recovery was going quite well. So Omicron definitely had an impact to us and our revenues that was about EUR 20 million in last year and our bottom line, something around EUR 15 million, all in the last quarter. Still, the operating result as a percent, the EUR 72 million loss as a percent of the EUR 675 million of revenue is actually to the degree visible to us from the currently published results of airlines in Europe, the lowest percentage of operating losses with regards to actual revenues for the year than any other European airline we've seen -- obviously listed airlines, which publicizes its results. So a disappointing end of the year, but an overall performance which, within this heavily burdened environment of the pandemic in the beginning and the end of the year, still looks in our eyes, at least, to be on a relatively good level with regards to the aviation environment of Europe. The -- what we also have to highlight, of course, is what you already know, but it's important to restate. 2021 was a very important year not only because we achieved, finally after many quarters in the pandemic, a positive result at least for 1 quarter, but also because we were able to complete the recapitalization process of the company and drove our capital back to EUR 213 million at the end of the year, which, again, I believe gives the company a positive balance sheet structure by comparison to airlines in Europe when, in fact, we did not only increase our equity, but we also reduced our debt loan, our debt burden during the year, retaining basically EUR 350 million of financial debt, which is lower than the EUR 475 million of cash. And if we aggregate the actual capitalized leases according to IFRS 16, we still come down to a very, very low net debt level, which again puts us in a very good position vis-a-vis our competition in Europe or most of our competition in Europe especially after 2 very [ financial ] years in the pandemic, where airlines have depleted their equity and of course, to a certain degree, added significant debt burden. So we feel comfortable with both our operating results relative to the competition in Europe and at the same time, also our balance sheet position relative to our competition in Europe. Of course, that doesn't mean to say that the balance sheet or the profitability is at the level that it was prepandemic. I don't think that's feasible for anybody. Once again, in 2021, the problem that remained, and it's the problem which we need to address going into 2022 is that there was a significant delta between the reinvestment in recovery in terms of what we operated, in terms of capacity and what we achieved month-by-month in terms of passenger count as a percent of recovery relative to 2019. In other words, the load factors were lower by circa 18 to 20 points relative to 2019. And this is the main figure that's important for us to address, and important indeed for everybody in Europe to address if one wants to follow a path back to gradual profitability in our industry. So this is the number that we'll be looking to improve month by month very diligently during 2022. Another thing that I need to highlight with regards to 2021 was that the recovery of Greece itself was very positive on the direction of tourism. Greece recovered better than many other countries in the south -- all the countries of the South of Europe, I believe, in terms of percent of tourism arrivals, as well as the years before. Of course, remaining lower but less lower than some of the other countries or all of the other countries, which, of course, allowed us to also benefit from that, while at the same time, of course, proving to be an attractive territory for foreign competitors to operate and to redirect capacity as they were seeking to see which were the more demanded, the more important markets for them to cover. So that element also is an important element for the evaluation of what goes on in our country and in our airline. And at the same time, it was an important year for reaccelerating and reinvesting in our direction of re-fleeting. As you know, like most airlines in Europe during the first year of the pandemic in 2020, we had pushed back some of our Airbus deliveries into the fleet, doing that to avoid creating over -- excessive overcapacity for our system, but also protecting our PDP, predelivery payment, outflows. This was reversed as a direction in 2021. We agreed with Airbus and our lessors and financiers to reaccelerate our investment into new aircraft. And we also had a significant payout more than $100 million paid out additionally to Airbus for predelivery payments during 2021. Indeed, today, we have already reached -- in the first quarter of 2022, we have already reached the peak of the amount of predelivery payments that are standing in Airbus, waiting for aircraft to be delivered to us. So from the second quarter and going forward of 2022, the net predelivery payments between what we additionally pay in and what we "receive" when an aircraft gets delivered or when we do sale leasebacks is going to be net positive. So we've already reached as of the end of the first quarter of 2022 the peak in our, I would call, advance to Airbus cycle. So that's important in terms of being able to do that, being able to do that in the middle of, again, a very difficult winter, the second very difficult winter after the winter of '21,'22 -- sorry, 2021, '21, '22 was also very difficult because of Omicron. We were able, therefore, to execute our commitments to Airbus, reaccelerate it, hand out the $100 million plus additional investment, sustained the losses of winter and at the end of the year, still managed to have EUR 470 million of cash and EUR 100 million of loans less than the beginning of the year. So I think once again, Aegean has passed the test of survivability and endurance in adverse conditions quite well. I would prefer to stop my opening statement here, just saying one more time that, yes, it's the second year we have operating losses, but we are encouraged by the fact that our percent of losses in terms of revenue seems to be lower than anybody else's we've seen publishing in Europe in the last couple of months where airlines have disclosed their numbers. And at the same time that we feel strengthened in terms of balance sheet and also in terms of our refleeting process by the end of the year. I'll be happy to take any questions, and I have my colleagues from finance and treasury along in case you want to ask something much more specific than that. And I'll be happy after the questions to give you a brief impression about the outlook forward after we get by any questions you may have on 2021. Thank you very much.

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

I was -- I have a question regarding the -- on the cost side. And it was -- I was wondering if the extension of the government aid scheme you have, which is running, if I'm not wrong, until March -- which ends in March, if you see any potential for further extension? And if you could see any more cost mitigating actions you could take given the rise and all the other pricing and costs and fuel increases and if there, we could see something that could be done. And I was wondering also if you could give us -- if you could remind us, actually, the predelivery payments due this year.

Okay. So let me start by saying the following. I'll start with the last question you have because it's the one that's easiest to answer. I believe at the end of the year, we had, what, $ 170 million outstanding to Airbus?

Yes, $175 million.

So at the end of 2021, we have paid in $ 175 million -- dollars or euros?

Dollars.

To Airbus. This number as a whole in the end of 2022 is going to be lower by roundabout $40 million to $50 million. However, the way this is going to play out, it's going to go up by about $30 million in the first quarter, so you'll see that number getting close to $200 million or roundabout $200 million, $210 million paid into Airbus at the end of quarter 1. And then from quarter 1 until the end of the year, the number will go down to $120 million, $125 million at the end of the year. Why? Because basically, as I explained, it's a matter of when we get aircraft delivered. Every time we get an aircraft delivered, effectively, the PDP payments for these aircraft are returned one way or another, either by financing it or by doing a sale leaseback, they're no longer outstanding to Airbus. So it goes up another $30 million from what you've seen at the end of the year by end of quarter 1, and it goes down by $90 million for the rest of the year. So net-net, it should be down by around $50 million by the end of the year from where it is now, $45 million to $50 million. So that's with regard to predelivery payments. And it's never going to exceed the level that you see it in the end of '21 at the end of any one of the coming years, all right? So it will rebuild again somewhat, but it will never go higher than the total amount you've seen at the end of any year. So that's the answer on the last question. With regards to the question on -- I believe you referred to Syn-ergasia, which is the support for partial employment. The answer is I do not think it will get extended. Of course, we will try to get it extended. However, the materiality of it as we go into the summer months is less significant since our staff will indeed be effectively fully employed. So no, there is not going to be probably an extension to the program. But if you need your staff in the summer, the effect is less significant than it would be in the winter. So in terms of what else we can do in terms of increasing costs, well, you don't want my honest answer to that. Inflation is not something that a company -- any company can deal with on an individual basis. But what's clear is that we have roundabout 50% of our fuel needs hedged, we have a -- at a level that is significantly lower, it's about 50% lower than the current spot rates of fuel. So we will be able this year to, let's say, recover from the point of view of hedging a little bit of what we lost or a lot of what we lost in 2020, which you know that was a major cost for us because we didn't use the fuel and the fuel went to 0. And at the same time, we've taken some swap positions on forward interest rates to protect the amounts we'll be paying for financing the aircraft going forward. So I would say what we've basically done in order to mitigate our cost is either hedged on the side of fuel or hedged on the side of interest rates. Both of these, of course, being partial offsets for the effects of either rising fuel or rising interest rates. I think what is clear for this year is that we need to achieve a revenue per flight improvement that is significant between addressing our load factors by carefully managing our capacity and at the same time, of course, getting as the summer progresses, a modest fare improvement so that the revenue quality either coming from the load factor or coming from the fare contribute to get back closer to what we used to have in terms of revenue per flight. And of course, also through that, address some of the inflation-related or commodities-related cost that I think we all face.

Okay. That's pretty clear.

It cannot be too clear when you have pandemics and wars.

Yes, it is a tough period, so given the circumstances.

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

I have a few. So basically, first of all, if you could please discuss your fleet plan a bit more -- in a bit more detail. So previously, of course, you mentioned that while most of the leases are going to expire in the next couple of years, but then your decision to return the aircraft will depend on how the demand develops. But then now in the current situation, when the fuel price is so high, would you really prefer to fly the older planes? Would you really prefer to retain those planes? Or -- so what will be your strategy around that? So if you could please discuss your fleet plan a bit. And while we are on the fleet, I also wanted to understand what drove your decision to buy ATR 72 planes? I mean what is the strategy behind this decision to buy these planes? And linked to that, you discussed -- you disclosed that the fleet restructuring of EUR 29 million you booked in 2021, does that belong to 8-Q400 aircraft, which you're returning earlier than planned? And what is the kind of breakable for EUR 9 million? Is that like how much is the penalty and how much for the aircraft redelivery conditions? And do you expect more of these kind of restructuring charges going in 2021? So that is my first question, sorry for the long one, but that is my first question, if you could please help understand.

Okay. So I'll start from the end again. No, the EUR 30 million, EUR 29 million that you referred to covers the entire restructuring costs, so the return -- the early return of the aircraft and any anticipated maintenance-related expenses with regards to that, that were not -- so that provisioning amount removes any further possibility of cost from the Q400 aircraft, one. Two, why did we take the reason to return these aircraft early? Several reasons. One, of course, was that this was an inherited sale and leaseback structure from Olympic prior to us buying it, which was done at really difficult or I'd say negative conditions, expensive lease, bad maintenance reserve conditions, bad redelivery conditions in terms of the airline, meaning expensive redelivery conditions. And in the last couple of years, 2 or 3 years, we have seen Bombardier, the manufacturer of the aircraft, effectively divesting itself from the type, which means that the level of support and at the same time, the cost of the support for either parts or indeed maintenance-related work on the aircraft continues to increase -- have continued to increase at a very alarming rate. And indeed, most passenger airlines in Europe, have already taken decisions to remove the aircraft from the fleet for this reason. So in effect, what we did was, okay, we said to ourselves, we know we have to bite the bullet for the Q400. These are aircraft we already have. These are conditions we never secured for ourselves. We inherited them. The factory is effectively discontinuing production and passed on the ownership of the type to a very small company, Viking, which has no significant capacity to support people like us. The whole industry is exiting the type and they're being used primarily for cargo left and right. So we need to do that. And we saw an opportunity to find ATR 72-600s in the market either to buy or to lease at better conditions than, of course, a couple of years back before the pandemic. So we thought, well, we have 1 bad contract, let's make sure the next contracts we get are done at a good time. So what led to the decision is the fact that the pandemic has created a weakness on the side of the lease rates or the values of the only effective turboprop type that's being well supported in the market, the ATRs, and therefore, the decision to do that, to have the 8-Q400s exit and have the ATR 72s enter was part of that. Now it also happens that the 72 is significantly more fuel efficient than the Q400. The only advantage the Q400 it has is basically range and the marginal delta and speed, which are only relevant if you fly the aircraft more than 1.5 hours, which effectively we didn't. Why? Because anywhere with a longer duration than that, we need to fly jets anyhow, otherwise, we cannot compete in the environment we're in. Therefore, for all these reasons, and I think I've given you enough, we've accelerated the departure of the 8-Q400s. There is no more cost to be borne for these aircraft other than the restructuring cost you saw entering our results last year. And the number of ATRs that are being pulled in our fleet are 9, they're ATR 72-600s. We are buying 3 of them, and we are leasing 6 of them. So this, of course, is part of the effort to make our fleet both more fuel-efficient and also more efficient in terms of maintenance costs because that was the biggest problem we have with the Q400s. We think we have secured a very good support contract from ATR. As you know, ATR is also associated with Airbus. Airbus is one of the 2 shareholders of ATR. So we have not only leverage because of the timing, but also in terms of the relationship. And that will help in rationalizing the cost of our fleet and the efficiency of our fleet going forward, we believe, in a significant way. Now with regards to the overall fleet plan, I think I have already said that yes, we are reaccelerating our orders, which means what, that this year, will accept a total of 12 Airbus A320, 321neo, and next year is another 10. So basically, we're making up for the postponement of 2021 by roundabout 80%. So at the end of 2023, we will be very, very close to where we would have been absent the pandemic in terms of percentage of aircraft -- not percentage, absolute numbers of aircraft received that would be neos. And I think from the third quarter of this year, we will be able to produce roundabout 40% of our capacity with neos or ATR 72-600s which means with the restructured, let's say, part of the fleet. And by the end of the year and especially for the winter months, we'll be able to produce more than 75% of our capacity going into -- with the new part of the fleet or the new ATR part of the fleet. And as we accept more neos in early 2003 (sic) [ 2023 ], that number will carry us over also to the summer of '23. Now with regards to how many aircraft were letting go, I believe this year, we're letting go other than the 8-Q400s, also another 3 Airbuses that are expiring before the summer. And I believe 2 Airbuses that are expiring in the end of the year, so a total of 5. And at next year, we have another 10 or 11 expirations, which certainly roundabout 6 aircraft will go away. And then, as you said yourself, depending on demand, we will decide on what happens with the rest. We're already in negotiations with some of the lessors and we're looking at different opportunities of how to best manage that going forward. But in a nutshell, I think the numbers that you should keep in mind is basically 40% of our fleet will be significantly more efficient by the summer in terms of capacity produced. 70%, 75% of our fleet will be significantly more efficient in terms of winter operations. And by the end of -- by the summer of 2023, I believe 65% of our operations will be provided by new aircraft because by that time, we should have already 26, 27 neos in our fleet and of course, all the new ATRs. And as you understand, we prioritize the utilization of the new aircraft and assign them to much more heavy flight routes, try to fly them through the night. So it's not at all on the same level of expectation as the overall fleet. I hope I've answered as many of the questions that I got.

Yes. No, that's really helpful. My second question -- I'm so sorry. Could you please discuss a bit about how the summer 2022 trading looks like, including the forward bookings and the fare trend. Also, it looks like the passenger traveling towards Eastern Europe, I mean, I think the confidence levels are low, especially due to Russia and Ukraine situation. So how do you see the demand at the moment developing for the summer, how the fare trend looks like? Have you seen sort of some cancellations post this geopolitical tension in Russia? And finally, how do you see the competitive situation look like? Of course, you understand that a lot of airlines are trying to [ defer ] capacity, but how the competitive landscape looks like?

The competitive landscape. Sorry. Sorry, I missed the last one, yes. Okay. So again, I think, again, I will start from the end. Competitive landscape, it goes where capacity in Europe will still be lower than 2019 levels. That means there are excess aircraft around still, of course, less than they used to be last year, but that also means that people are investing aircraft where they see relatively demand being stronger, and it's very clear that once again, Greece is one of those places. So we see significant competition interest towards the country, and we expect capacity levels to Greece as far as international flying to be between 7% and 10% higher in the summer months than they were in 2019. That is channeled primarily to islands, one more time. There's a bigger delta there, perhaps plus 15% overall with Athens and Thessaloniki being roundabout minus 10% in the peak of the summer relative to 2019. Now our investment in capacity is going to be roundabout -- at the peak of the summer, it's going to be roundabout 5% or 6% less than it was in 2019. But we're also making a very big return to Athens relative to the operation level we had last year. We're starting again a lot of the routes we have discontinued. I believe there are 15 routes we'll fly out of Athens this year that we didn't fly last year and of course, gradually, we're rebuilding the capacity level as well. But the 5% number, of course, that I give you refers to what we achieved at peak. We go to that number gradually from where we are today. Now the other question was -- sorry, I got the competitive landscape -- outlook for the summer for bookings, right. So bookings to hotels in Greece today are significantly higher in their books than they were in 2019. Bookings to our company in terms of forward sales have reached a level of roundabout 80% to 82% of what a month in 2019 would be for the current level of trends we are receiving. And remember, we're still flying at a lower capacity than that. But okay, as we go forward, that increases. So bookings in -- if we look to February or March, we're talking about 3 to 5x higher each month from what they were in 2021 in value. And as I said, today, they're roundabout 80% to 83% of what they would have been in March 2019. In terms of whether this has been affected by the situation in the Ukraine, by the invasion of the Ukraine, the answer is yes, but not in a very significant amount. What we lost from the beginning of the war was a steady gradual increase. We have reached the level I'm describing to you relative to the performance of week by week relative to the equivalent week of 2019 in the last week of February. And then instead of having that performance increase further, we saw it solidified, stabilized at that level. Of course, we would like to hope that if things quiet down, we will go to higher levels than that. And at the same time, I believe what is clearly being created is a situation where people, due to the uncertainty, might delay their booking, but I don't think they're necessarily changing their travel plans. We feel there is a significant amount of pent-up demand. We hear from all sides that people are not canceling their hotel bookings, and they're looking forward to traveling in the summer. And so the overall demand as far as we can see it today remains strong. Of course, we live in a world where there is a live war going on and where the heads of states, of very important states, including the United States, including Russia, including the European countries, make statements and predictions and I would say, even threats to each other. So this is a volatile environment, and we do not know whether from here, we'll see an improvement, which is what we hope, or some kind of deterioration. But the way it feels today, other than losing roundabout [ EUR 30 million ] of expected revenue that we would have all year in terms of the Ukrainian and Russian destinations or source markets, and other than losing that and other, of course, than sustaining a significant cost from the increase of fuel related to this, I would say the remainder of the effect seems rather muted because people want to travel after the pandemic. We do, however, see as I told you, however, a sort of a delay in the bookings and a later booking behavior which we have become familiar with more in the time of the pandemic. So it doesn't look too bad. It actually looks pretty good for the summer but we should keep our fingers crossed because it's a very volatile environment. And I do not know how long the statement I make will remain valid. It could improve or it could deteriorate.

Yes. Sorry, you did not touch upon on the fare trend. I have a question, if you could please discuss a fare trend also. And basically, in the current high fuel environment, would you be able to pass on the fuel burden to the passenger? And if not, then how would you sort of protect your profitability? I know that you hedged 50% of the fuel requirement, but then the fuel prices is really rising sharply and has gone up. So how the fare trend looks like? I mean is...

I mean listen. First of all, what we always do, we try to -- we've become a little bit more risk-averse. So we manage our capacity a little bit more carefully for April and May. So our first reaction when the war started 30, 40 days ago now, was to mitigate the amount of flying we do for April, May to try to build into the season a little bit more gradually and try to make sure that, as I said before, the combination of load factor and margin builds up as well as we can. So -- and load factor is the first thing that we want to see improving and it's the first thing that we should see improving. At the same time, yes, of course, we will try to pass on a measure of the cost that we sustained due to the fuel. I think everybody will. But at the end of the day, the effectiveness of that always depends, as you know very well, on the demand versus supply equation in any given market and any given route. But certainly, we're trying to do that as well because there is no -- there is not one single element of cost that is external other than our own fleet restructuring efforts that is actually a positive effect towards any airline in Europe, to the degree that I can tell.

[Operator Instructions] The next question is from the line of Mantzourani, Mary with Axia Ventures.

So I have a question regarding the hedging position. You said it's 50%. I understand that this is for 2022. So I was wondering if you can give us some color for 2023? And also, what is your hedging position against the U.S. dollar for the 2 years?

Okay. For '23, it's very marginal. It's a very small amount. I believe it's 5% or 7% of what we expect to consume in 2023. And I believe it should not be increased at this stage because building the position right now would build it at a very expensive level, and we don't intend to do that. And I think most airlines would probably follow this kind of tendency for right now. In terms of the U.S. dollar, guys, can I have some of the numbers?

For 2023, we are covered for 28% -- around 28% of our total estimated needs.

And?

And for 2022, more or less the same levels.

But are you counting on the cash flow hedges or the open forward as well?

No, it's just cash flow hedges.

But the open forward, they're open positions as well?

Yes.

So if you add the non-hedged effective part, it goes up to around 40%, I think?

40-plus percent, yes.

Yes. So 40% in total for 2022. And the other number you mentioned, what, 20%?

28%.

28% for '23.

[Operator Instructions] The next question is a follow-up question from the line of Kumar, Achal with HSBC.

Sorry, last question. Just a small question on the employee cost. I think you responded, but I think I missed. So the staff costs in the last quarter has declined. So how should we assume going ahead? I mean do we expect the staff cost going up from FY '22 onwards? How do we see this?

You should presume -- you should assume that in terms of any special programs regarded from the government, it will not be from Q2 and on any further assistance. Therefore, the cost will depend effectively on headcount and the degree of flying because we have a variable -- we have people that we employ seasonally, and we have a certain part of the compensation of people that is related to how much they fly. So it's going to go a lot closer to 2019 numbers, minus more or less the delta in terms of employment. And the delta and employment, rule of thumb is about half of the delta and activity. I'm just making it simple, so you can follow a rule. Otherwise...

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

So thank you all for attending the conference. I think what I've partially said, what I intended to say in the end and the answers to some of your colleagues. But basically, our outlook for 2022 is positive within, of course, an environment of significant uncertainty due to the war and the price of the commodities that we are looking at right now. However, what is planned in terms of activity from our side is an activity level that, in terms of flights and ASKs, will be roundabout less 30% in 2019, first quarter; roundabout 18%, second quarter; roundabout at 2019 or up to minus 5% of 2019 in Q3, which is the most important quarter; and roundabout flat of 2019 for the last quarter. That means that we will put to the market a number of seats between 15 million and 15.2 million for the year, assuming, again, of course, nothing further changes from what we see today. At least, it doesn't become any worse from what we see today. That is a significant amount of return to market. Of course, what we need to achieve is to go from the high 60% load factor sectors -- sorry, levels that we achieved in 2021 to certainly over 75% load factor levels which is, in itself, circa 12% to 14% improvement on potential flight revenue. So that's the main objective. Today, we are running in terms of forward sales, as I said earlier on, at 80% to 83% of equivalent 2019 months in terms of revenue sold every month, which means, of course, that most of it refers to forward months. So we are encouraged by that number, which is, as I said, for February, for instance, was exactly 4.3x the number that we sold in February 2021. And March 2022 is going to be in forward sales, overall sales, a number which is going to be higher than any month of 2021, including the summer months. Also, what was achieved in terms of cash flow breakeven, I believe, in May for the first time last year, was achieved this year basically after 15th of February. So from the 15th of February and on, we are in a positive cash flow environment, which is good. Of course, we are looking at cost headwinds, which come primarily from fuel but also from other directions. So this is important. What's important for this year is to achieve an improvement in revenue quality, as I said. And in terms of policy, we are reinstating about 15 routes from Athens. We are going, as we have said in the past, in a significant, what we call, product offensive in terms of trying to go after the higher level clientele that's beginning to come to Greece in increasing numbers. We have seen an increase in our business class product, and we want to build on that. We have -- we're working to improve the depth of our loyalty program. We have been working to improve the quality of our lounges in Athens and Thessaloniki. We're inaugurating a new lounge over the next couple of days for non-Schengen customers in Athens, which is going to be, I think, a game-changer for the image of the company, especially to the image of the company to the international market. And we have proceeded already -- we will be completed with the replacement of the Q400 fleet by the end of May with ATR 72-600s, which we expect will also bring some additional savings beyond, of course, the neo acceleration, which have been going on for the last year and which we expect will bear fruit again from this year and into the next. So all in all, we are positive about the chances to have this year become the first non-loss-making year. I hesitate to say the word profitable because that would also imply a significant amount of profit. Of course, we need things to quieten down. It will be great news for anybody to hear about a ceasefire in the Ukraine that would certainly release people into booking more aggressively than they already are doing for the summer. And it's very important for us that this happens sooner rather than later. Of course, we cannot control this. So we will continue to be very flexible in managing our capacity going forward and adjusting to the levels we need to have to absolutely achieve significant improvements in load factor and revenue quality relative to what we had last year because this is a requirement in the current environment, and this is the direction to which we have to return. We are happy that our results compare well with other airlines in Europe for 2021, and we are encouraged that this will also be the case after a very difficult winter, after that very difficult Q4 and Q1 of 2022 due to the Omicron. Now that people seem to be in the phase of considering that the pandemic is something that they are more or less putting behind them, and as restrictions in all markets are gradually lifted, we should expect to see a further increase on the buying purchase -- on the buying and the traveling pattern of people. And we believe that we're well positioned due to our products and due to our network in Greece to benefit from that. So I thank you for attending this call, and I hope that this is the last year that you'll hear us talking about losses. But of course, a few things have to stabilize in order for us to be able to achieve our objectives as well as the other airlines in Europe. So thank you very much and talk to you soon.

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