Air New Zealand Limited (AIR) Earnings Call Transcript & Summary

Welcome to the Air New Zealand 2022 Annual Results Call. [Operator Instructions] And with that, I will now turn the call over to Air New Zealand's General Manager and Corporate Finance, Leila Peters.

Thank you, and good morning, everyone. Today's call is being recorded and will be accessible for future playback on our Investor Center website, which you can find at www.airnewzealand.co.nz/investorcenter. Also on the website, you can find our annual results presentation, shareholder review, full financial results and media release. Speaking on the call today will be Chief Executive Officer, Greg Foran; and Chief Financial Officer, Richard Thomson. I would like to take a moment to remind you our comments today will include certain forward-looking statements regarding our future expectations, which may differ from actual results. We ask you read through the disclaimer and in particular, the forward-looking cautionary statement provided on Slide 2 of the presentation. I will now hand the call over to Greg.

Thank you, Leila, Kiara, and good morning, everyone, and thanks for joining us on today's call. I think I say this every August, but it's been another big year for Air New Zealand, hiring and training staff, scaling our international operations back up, announcing our new cabin experience and the hundreds of little things in between. When I reflect on the last financial year, it's incredible to think about what we have achieved and the steps taken to set Air New Zealander for future success despite operating in such a volatile and uncertain environment. Whenever I can, I take this time to recognize the resiliency and determination of Air New Zealanders. Attitude is a small thing that makes a big difference. And I see this play out for our customers every time I'm out on the network. Our teams show up every day with the smile, go out our way for our customers and move the business towards a brighter future. So for that, I want to say thank you again to our team. I also want to thank our shareholders for their ongoing support by refueling us for our recovery through the recapitalization earlier this year, you've set us up for future success. Your patience and support over recent years is appreciated and in turn, we're doing everything possible to leverage the recovery of aviation and set the airline up for a strong future profitability. As you will have seen, we released Air New Zealand's 2022 financial results earlier this morning. Despite a strong performance from our cargo business and an improving demand and revenue environment in the last quarter, we have reported a loss before other significant items and taxation of $725 million. The statutory loss before taxation was $810 million, and the statutory loss after taxation was $591 million. Richard will talk about the results in more detail later, but the loss reflects an environment in which international passenger flying was virtually nonexistent and domestic flying was significantly impacted by lockdowns and the arrival of Omicron. Pleasingly, the current landscape is quite different since the relaxation of travel restrictions and border reopenings in the fourth quarter, customer demand for travel has been stronger than it has been for over 2 years. This is fantastic, but it does bring about a different set of challenges. Fortunately, we made the call early to start rebuilding our business in anticipation of borders opening. Before we had any certainty around the removal of travel restrictions or how demand would look after 2 years of limited travel, our teams began the huge task of reanimating our 777-300s and hiring back and training operational staff. However, it has been very difficult to anticipate demand. While we were confident the desire for travel remains strong, we didn't foresee how strongly demand would return nor scale up for that level of growth quickly enough. Adding to this, we've had a winter of significant sickness, not only for our staff, but across the entire aviation system as well as the very challenging weather. Through all the chaos, we have focused on ensuring that we do the right thing for our people, our customers and our shareholders. That includes hiring additional support at our contact center, training and retraining crew as fast as possible, reinstating our COVID flexibility policy and providing special pandemic leave options for staff. So to say it's been a busy year is a bit of an understatement, but I'm confident that the work done in 2022 has set a strong foundation to take our performance to the next level. With the $2.2 billion recapitalization complete, Air New Zealand Board is open, the airline is firmly in the revive phase of our recovery. And as you can see, this has involved some hard mahi from teams across our whole business. It's an incredibly important stage. We've not been sitting around waiting for demand to recover. Instead, we've taken the opportunity to reimagine what our business could be and reinvent ourselves. In this new world, we believe differentiation will be hugely important, and we've worked hard to deliver new services and product offerings that will excite our customers. A lie-flat Skynest in the economy cabin was just a concept in 2020, but we've worked hard to make this a reality and we know it will be a game changer. Likewise, we know we must find a more sustainable way to fly if we want to thrive over the long term and maintain our social license to operate. That doesn't go away just because there is a pandemic. So we've further advanced our exploration of electric, hybrid and green hydrogen aircraft and set ourselves a clear pathway to our 2050 decarbonization goals. These are just a few examples of how our Kia Mau strategy is coming to life. To help drive that momentum, we've also taken the bold step of changing how we work by going agile. We call it full potential because that is exactly what it's designed to do, get us to our full potential in terms of how we deliver for our customers, our people, our shareholders and our country. With Kia Mau at the heart, we are committed to rebuilding a stronger, more nimble world-leading airline. Now moving to Slide 6. And we have observed in terms of customer demand across the past few months. Since the phased reopening of New Zealand's borders, bookings have been impressive and frankly, have far exceeded our expectations. The charts on the slide give you a sense of the momentum we've experienced in the last quarter of the year, both for domestic and international bookings. But as you can see, the dynamics in each of those markets are different. The domestic network has been impacted on and off with various lockdowns over the course of the year, but some quite significant highs when New Zealanders could travel freely around the country. This has continued. And in recent months, demand is tracked fairly closely to pre-COVID levels. The mix of that demand is slightly different with corporate travel in July just shy of 2019 levels and leisure demand even stronger than what it was before the pandemic. From a forward sales perspective, the trend is much the same. Demand remains high. Average fares are also reflecting increased costs. With the macro headwinds of higher interest rates, higher inflation and higher fuel, we're watching domestic demand very closely for signs of softening, but have not observed this to date. As always, we'll continue to monitor the environment and be ready to respond if needed. Looking now at international bookings. When the borders began reopening in March, we saw an immediate spike in demand we're unsure if that level of demand will continue. But as you can see from the chart on the lower right, it has held relatively steady. The level of recovery has been about 2/3 of the 2019 bookings as we continue to build capacity back into offshore markets. Demand for travel to Australia and the Pacific Islands has been strong beginning with the April school holidays where we were proud to be connecting family, friends and colleagues with each other again. The reanimation of our 777-300s has helped us service high demand on these routes. From a long-haul perspective, the North American market has been the standard with good bookings from both New Zealand and abroad. All ports have seen strong demand, notably our New York direct service with our first direct flight to JFK on the 17th of September. Asia bookings are lower, which is to be expected given continued restrictions in some markets, particularly China. However, even these markets have seen increased bookings in recent weeks as restrictions have shown signs of easing. All in all, we are very pleased to see this level of demand return so quickly demonstrating our fundamental belief that people still have a strong desire to travel and connect with each other. Turning now to Slide 7 and our plans for capacity as we continue to rebuild the network in FY '23. We've been fortunate that most of our fleet, with the exception of the 777-300s have been in operation throughout the pandemic, thanks to strong cargo demand and flights on the government airfreight schemes. This gave us a head start in relaunching international operations in April. We are expecting FY '23 capacity levels that are about 75% to 80% of 2019 levels. That's a bit more growth than we had anticipated back in March when we launched our recapitalization and reflects the stronger demand I touched on. It also reflects our expectation that we will have the remaining 777-300s flying by the end of FY '23. The mix of that growth by route group is provided on the slide along with some commentary that is fairly self-explanatory. I will just touch on the mix, which is compared against 2019 levels. The growth will be more skewed to short-haul markets and long haul, which is in line with our medium-term network strategy to grow the domestic market and optimize our international network. While our business is emerging from the pandemic at pace, that does not mean we're immune to other challenges that the industry has faced in previous economic cycles. These are all things that are beyond our control. But I would say that our team's experience in dealing with COVID while taking great care of our customers and planning for the future is a powerful skill set. Tight labor markets, unprecedented levels of staff sickness and the inclement weather conditions we saw across the country in July and August were tough on our customers with cancellations and delays across the network. You will have seen us proactively manage this, announcing that we're taking 1.5% of our planned capacity out of the system for the coming spring and summer months to give our customers increased surety over their travel plans. What gets measured gets managed. And our entire leadership team now has real-time access to queues at the airport, contact center wait times and various other operational measures throughout our network. I personally joined the daily operational calls to hear about the challenges around the various ports, what our teams are struggling with and how we consider it right quickly. You can see from our on-time performance that we continue to have blips, but I am confident we now have the tools to manage this more proactively. With that, I will pass you over to Richard.

Thank you, Greg, and Kiara to everyone on the call. Turning now to Slide 10. I'd like to touch on just a few items. Operating revenue was $2.7 billion, an increase of almost 9% on the prior year, reflecting a strong cargo performance of just over $1 billion with passenger revenue remaining fairly flat year-on-year as a consequence of the pandemic. To some context, domestic capacity as a proportion of pre-COVID levels was around 60%, and international, which includes short-haul international flying to the Pacific Islands and Australia was around 15%. Greg has already touched on the loss for the year, and we reported a statutory net loss after taxation of $591 million. Gearing and cash levels have improved substantially as a result of the capital raise and favorable working capital movements. However, we continue to be focused on improving other credit metrics as we navigate the current macroeconomic environment and our recovery. As a result, we have not declared a final dividend for the 2022 financial year. Looking now at our profitability waterfall chart on Slide 11. You can see the decline in profitability this year is driven by an increase in the cost base as we held on to certain reintroduced costs during both the Tasman bubble suspension in the extended Auckland lockdown anticipating that we would need those resources later on. As a consequence, labor costs grew ahead of anticipated capacity growth as we hired and retrain staff and also reflected 2 one-off staff bonuses made during the year. I will touch on fuel in a later slide in the increases related to costs such as maintenance and passenger operations are explained in the commentary on the right-hand side, which largely have to do with the ramp-up in operations in the second half of the financial year as Board has reopened. Ownership costs decreased due to impairment in the prior year of some 777 aircraft, which drove lower depreciation expense in addition to some aircraft exits. Finally, the improvement in our share of associates refers to our joint venture with Pratt & Whitney, the Christchurch Engine Center. This growth reflects both increased volumes going through the shot this year as well as a mix of the work skewed more to heavy checks than in the prior year. Turning now to Slide 12. Cargo continued to be a significant contributor to revenue with just over $1 billion in financial year 2022. This growth was partly related to more cargo-only flights, which grew 19% versus the prior year and yield growth of 4%, reflecting high demand and fewer international carriers operating into the New Zealand market. In addition, a continuation of government aviation support programs contributed $403 million towards the cargo revenue figure. The MIAC scheme was extended several months ago, but reliance on the scheme has been reducing across routes where borders are more free open. It is expected the scheme will cease entirely no later than March 2023. While we believe strong underlying demand for air freight versus sea shipping will continue in the near term, we are expecting the level of cargo revenue in FY '23 to reduce from FY '22 as we see increased air passenger operations to, from and within New Zealand. The contribution of cargo to our overall network post pandemic remains fundamental and is a key part of our strategy to optimize our international network. We are excited about the future opportunities in this part of our business, which will be driven in part by investments in digital systems focused on optimizing the mix of passenger and cargo weight on a flight-by-flight basis as well as infrastructure investments that allow for more automation. Turning now to Slide 13. Reported CASK that's cost per available seat kilometer increased 9.1%, largely driven by fuel price. Excluding the impact of fuel prices, foreign exchange and reduced third-party maintenance, plus the discontinuation of the aviation support subsidy, CASK decreased slightly by 0.6%. This movement was partly a function of operating a greater proportion of long-haul cargo only flying than normal, which comes at a lower CASK. You may recall mention of this temporary effect during the interim results call this year. As we look forward to the current financial year, we expect this to correct as the proportion of cargo flying reduces with higher levels of international passenger services. Turning to Slide 14. Fuel costs were $560 million for the year, increasing 80%. The increase was largely driven by a 92% increase in the price of Singapore jet fuel partially offset by $96 million of hedging gains. Fuel consumption increased 14% in the year, due to a 15% increase in capacity flowing resulting in an additional $41 million of volume-related costs. The stronger U.S. dollar also contributed to $16 million of the fuel cost increase. On Slide 15, I thought I'd touch on fuel hedging as we usually get questions on our approach to this in times of elevated jet fuel prices. In short, our approach to fuel hedging is driven by our treasury policy which in turn is based on the core principles that we utilize hedging as a tool to give the business time to adjust and to continue to assess the best strategies to protect against fuel price risk. Our hedging policy remains unchanged and includes key principles such as the tenure of hedges going out no further than 12 months, typically in the 18 months under certain circumstances. We hedge according to a declining wedge structure, meaning that the greatest volume of hedges are within the next 3 months and then that declines as you move further out from the current period. This largely aligns with our customer booking curves but also takes into account the lead time needed to make meaningful adjustments to capacity and/or refers to reflect the fuel price environment. As a reminder, we usually only hedge Brent crude and therefore, fuel cost is exposed to volatility in the crack spread between the crude and jet fuel price. This has fluctuated significantly this year. In the past 6 months, we have utilized call options exclusively to allow immediate participation should fuel prices trend downward, although we may elect to use different instruments as prices change. Based on current expectations for the network, we are approximately 56% hedged for the first half of the 2023 financial year and 25% hedged in the second half. Now that we have greater clarity of the level of capacity we expect to operate this year, we have reinstated a fuel cost sensitivity chart to provide a better understanding of the potential impact of price and foreign exchange changes given our current hedge position. Moving on to Slide 16. This provides an overview of operating cash flows over the past 2 years. Adjusted to exclude some pandemic-related items such as government subsidies, grants and other forms of support as well as PAYE deferrals and repayment. What is encouraging to see in the chart is the strong cash flow performance in the fourth quarter. As Greg highlighted earlier, this is supported by the positive booking activity, which we are continuing to see now further elevated by yield strength. Turning now to Slide 17. Following the completion of the recapitalization in May, our balance sheet and liquidity position has been restored. You can see the impact of the various transactions on the chart, which include the repayment of the $850 million Crown loan. It's worth noting that we continue to retain $200 million of redeemable shares on issue to the Crown, which are treated as debt on the balance sheet. We will look to repay this at some point potentially in the next 12 to 18 months, but are happy to maintain this additional source of liquidity as we navigate our way through the recovery and the potentially uncertain macroeconomic environment. Turning now to Slide 18 and our future fleet investment. You can see the expected phasing of the aircraft capital expenditures through to 2028 with no commitment at this stage beyond that. As we have discussed previously, our fleet networks and sustainability teams have been engaging heavily with manufacturers in start-ups on a future hybrid and electric aircraft, focused particularly on our domestic network, which will result in some future commitments to replace the Q300 fleet, but nothing at this stage. As the chart and table reflect, we will be receiving the first 4 domestic A321 NEO aircraft this year out of a total of 7. After some delay due to COVID, we are very pleased to be getting these aircraft, which will replace older Airbus 320s and provide cost-efficient capacity growth. There are 46 additional seats on the A321 relative to the A320. And these provide cost-efficient growth core to the domestic network growth assumptions we've made. Looking at our wide bodies. As you know, we have an order for 8 Boeing 787 aircraft. The expected timing of the delivery of the first few aircraft has been adjusted to reflect our current view of likely delivery dates. Following discussions with Boeing as they work through production rates, the first 2 aircraft are now expected to be delivered in financial year '25 rather than '24. The associated CapEx has, therefore, been adjusted to reflect this timing. The total forecast spend to FY '28 that you see reflected in the purple bars on the chart is $3.1 billion based on an FX rate of $0.62. This compares to our projections as part of the capital raise of $2.7 billion. I would note that there isn't any additional projected spend in there. The movement is largely a function of the significant strengthening of the U.S. dollar since March. Turning now to Slide 19. There are several components to the other investment profile we regularly touch on, but are far more fluid from year-to-year as the mix can change depending on the cadence of different projects. One such area discussed when we launched the recapitalization is the expectation of an interior retrofit program for our current fleet of 14 787s. The oldest aircraft in mix fleet is around 8 years old, so getting close to the end of the life of the interior seat product. We're still working through the dates when these aircraft will undergo retrofit, but currently expect that program to begin no earlier than mid-calendar 2024, and it will be staggered over several years. The estimated CapEx associated with that program at current FX rates is approximately $450 million. Engine maintenance is lumpy and dependent on the utilization of aircraft with a niche fleet. Accordingly, engine maintenance spend will increase compared to the past 2 years. Note that the associated spend on an engine shop visit provides an enduring benefit over a number of years, typically around 5 years or so. Investments in digital infrastructure are a core feature of our Kia Mau strategy, as Greg has already mentioned. So we expect a portion of our CapEx over the medium term will go towards systems that improve operational resilience and generate cost efficiencies, including advancements in the way our people interact with the airline and our customers and remove friction points. Finally, I'll briefly comment on properties and infrastructure spend, which is expected to be elevated from historical averages over the next 4 to 5 years as we undertake some significant reinvestment and our '60s era engineering base in cargo facilities in Auckland as well as relocate the company's head office. These are once in a generation investments. So the CapEx associated with them is not expected to repeat once complete. I'll now pass you back over to Greg, who's going to discuss the outlook and leave you with some closing remarks.

Thanks, Richard. Looking now to the outlook. With Board is now open to the majority of the airlines market Air New Zealand expects the 2023 financial year to represent the first full year of uninterrupted passenger flying since the beginning of the pandemic. Total flying capacity for the 2023 financial year is expected to be in the range of 75% to 80% of pre-COVID levels. On this basis, the airline anticipates a significant improvement in financial performance relative to the financial year 2022. Given the degree of uncertainty regarding volatility in jet fuel prices, the risk of a global recession and other macroeconomic factors, including inflationary pressure on costs, no earnings guidance will be provided at this time. Finally, I'd like to end my remarks by simply saying that I have never been more encouraged about the future of Air New Zealand. We have a fantastic network that is focused on serving our customers and where they want to fly. We're in the latter stages of fleet renewal with a simplified and modern aircraft that are a great match for the missions we fly. We have a culture that is underpinned by incredible people who are empowered to be themselves, do the right thing and focus on how we can continuously improve on what we offer our customers. And with our Kia Mau strategy, we have a clear road map to help us deliver on our 3 key profit drivers and move from revive to an airline that is striving and reaching its full potential. Thank you for your time today and listening as we've shared our results. I know you will have questions. So operator, please open up the line.

[Operator Instructions] And our first question comes from the line of Andy Bowley with Forsyth Barr.

First question for me is just around the outlook commentary. And I recognize there's a lot of moving parts here and a fair bit of uncertainty. And I can understand and sympathize with the reluctance to provide any guidance. But maybe if you could give us maybe some context around the significant improvement in financial performance for the year ahead. Can you be profitable in light of where fuel prices are, if they are sustained for the remainder of the next 12 months? And in light of what the demand profile as you're seeing at the moment?

Richard speaking, and thanks very much for the question. It's a difficult question and one of the reasons why we haven't put a sort of definitive guidance in the market for the year. What I would say is that with 75% to 80% of the capacity back in the network and domestic running at roughly 100% of pre-COVID, we are expecting a significant improvement in profitability. The challenge, I guess, we've had over the last 8 weeks is that fuel prices fluctuated from anything between the mid USD 140 level down to as low as 120. And actually, as we speak this morning, the jet fuel price overnight is back up at $141 million. So it's a fluid environment on the fuel cost side. I think per Greg's earlier points on the revenue side, we are in a relatively favorable environment or certainly an environment where we're seeing some good yield improvement. I mean if I just go through sort of the 3 major segments there, domestic has probably been the slowest of the 3 to pick up in terms of yield strength just as we've worked through the Omicron outbreak that we experienced over April and into May, but we're starting to see now demand catching up with the capacity that we've got in the market. And then clearly, internationally, there are relatively sort of few operators -- other airline operators into the New Zealand market, certainly over Northern Summer '22, the current period and the upcoming our summer period, Northern winter '22. So we've seen a supportive yield environment, which certainly gives us some confidence in the short term, probably over the next trimester that yields are keeping pace with some of the cost pressures we're seeing. But I think it's as I say, very hard to give assurances that we can get back to profitability this early in the year with the fluctuations we've seen in input costs in particular fuel.

That's fair enough, Richard. Now second question around cargo. You talked previously about wanting to hold on to some of the cargo profit uplift as a result of COVID. And Richard, in your commentary, you alluded to several initiatives to assist cargo in the post-COVID world. Maybe if you could just talk to or about the -- how you anticipate the competitive position in cargo and a post-COVID will evolve, particularly as subsidies roll off?

Sure. As we highlighted in the commentary this morning of the $1 billion cargo revenue that we've achieved this year, over $400 million of that was related to the MIAC contracts and to a lesser extent, the [indiscernible] contracts out of Australia. As we mentioned, that will be significantly lower this year and by the end of the financial year runoff. So that's $400 million of the $1 billion currently. The sort of core cargo business post MIAC. We still expect to perform strongly going forward. We've got good strong market positions. As you would have read in the newspaper over recent months, there were a number of other international carriers who are taking some time to reestablish operations and get back into the New Zealand market. if I just summarize that briefly, the Tasman, we expect over the next 12 months total market capacity to be probably 3/4 of what it was pre-pandemic. In the Pacific Islands, a similar figure, North America, 80% to 90% of what it was pre-pandemic and in Asia are quite different by market. So there's very few mainland China carriers operating at the moment. In fact, the 3 main ones haven't published schedules for the November through March period in Singapore Airlines who we partner closely with are operating at 2/3 of the FY '19 capacity. So I think a combination of all those factors does continue to provide a supportive yield environment for the cargo business. So yes, the subsidies will roll off over the course of the year, but underlying demand for the next 12, 18 months, I think, still robust.

Great. And maybe just lastly in relation to those government subsidies, what level of support are you anticipating for FY '23?

I mean it is dependent upon the passenger demand, Andy, in certain markets, as you would imagine, largely some of the Asian ports, where there's still some border restrictions or where we're still having some of that subsidy support, I could say that it's relatively minor versus previous few years. So not a lot.

And our next question comes from the line of Andrew Steele with Jarden.

The first one for me is just on passenger mix. Since the reopening of borders, have, you seen any meaningful shift in the types of passengers that are booking and the length of curve -- booking curve?

I'll have a go at that one, Andrew, and Greg might have some additional comments. If we look at, again, the 3 different markets, domestic, we are still seeing 3 segments domestically, the leisure segment, international connecting passengers segment and corporate. At this relatively early stage, we're seeing the leisure segment continue to outperform pre-COVID levels. I think we mentioned last year that it was running sort of 115%, 120% ahead of pre-COVID, and we're still seeing that currently. The corporate segment is probably 2/3, 70% of what it was pre-COVID, albeit yields is higher than it was in FY '19 for that segment. And we are starting to see actually strong positive recovery in international connecting passengers on domestic. So more leisure than we would have probably expected in the recovery in the other 2 segments. Internationally, the mix is -- it's predominantly leisure travel, both in the short-haul international markets and long haul. And we're seeing a good recovery in that. I think booking curves probably on average are slightly shorter currently than they were pre pandemic, but nothing notable or no notable differences.

Yes, I think I agree with that, Richard, as I get around and talk to the team. So I think it's fair to say no specific change in mix. What we are seeing is that as borders open Kiwis definitely wanted to get out and book and travel and that was not just domestically, but internationally. But I think we can look with confidence towards a pretty reasonable tourist season this coming summer for New Zealand as people are booking to come to this country. So no disenable mix, and we're encouraged by how we've kicked the year off.

Great. This next one is on your capacity guidance for international long haul. A number of your sort of, I guess, key destinations still have either full border restrictions or some form of restriction. Within the international long-haul guidance, what are you assuming, I guess, for Asian capacity specifically? And what are the assumptions underlying that?

Yes, Andrew, I think Asian capacity is obviously significantly lower than it would otherwise be in 2023. The North American market, we're running at close to 85%, 90% of pre-COVID capacity. Into Japan we're by the end of the year, likely to get back to 50% or 60% of where we were. Into the North Asian market, Shanghai, in particular, to a lesser extent, Hong Kong, it's a little difficult to tell at the moment. But our planning assumption is that we are likely to be at 30%, 35% of where we were pre-COVID in those markets currently for passenger services. We still got a number of cargo-only operations which are continuing throughout the year into Shanghai and out of Christchurch into Southern China. But from a passenger perspective, sort of an element of educated guess work in that currently not really expecting anything out of China until post Chinese New Year. So we're not necessarily assuming anything sort of the side of Christmas.

Just 1 last one for me. Given the ramp-up in capacity, where do you expect your staff numbers to be on a full-time equivalent basis versus pre-COVID? And what is your assumption for underlying wage inflation for FY '23?

If I start with the first of those. So staff numbers, FTE data at the end the 2022 financial year was a bit over 9,000. We're at 9,200 or thereabouts. We've hired back over the course of the last financial year, just under 1,000 people. And of that, 700 or thereabouts were aircrew, sort of tech -- a combination of tech crew and cabin crew and airport staff, so sort of frontline operations, another 100 or so are in the global sales teams. And then the balance was sort of a smattering of staff increases across different areas in the business. They got us to 9,200 at the start of the year. By the end of FY '23, everything going to plan, we will be -- as a business, just under 90% of our pre-COVID staffing levels. I think we've mentioned in previous dispatches that there are 1,500 staff, just under 1,500 staff coming back into the business over the next 12 months, 1,400 of which are frontline operational staff and then a small proportion of back-office staff or resources. So that's numbers roughly.