Amadeus IT Group, S.A. (AMS) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Amadeus H1 2026 Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to Luis Maroto, President and CEO of Amadeus. Please go ahead.

Good afternoon, and a very warm welcome to our first half results presentation. Thank you for attending today. I'm joined by Caroline Borg, our CFO. So let's begin. Let's turn to Slide 4 for our takeaways from the first half. As you can see, we opened '26 with solid growth and profitability. From March, the geopolitical situation in the Middle East has significantly impacted global traffic with IATA announcing negative growth in April and May, the first time in 15 years, excluding the COVID period, despite this macroeconomic impact moderating our growth, our relevance continues as reflected in our continued commercial momentum. Overall, we are pleased with our performance in first half, demonstrating the strength and resilience of our diversified business. In the first half at constant currency, Amadeus delivered 5% revenue growth or 5% adjusted EBIT growth while adjusted diluted EPS increased 7%. We continue to deliver solid unitary revenue growth and our Hospitality and Other Solutions segment continues to deliver against our strategy. Commercial momentum remained strong throughout the second quarter. We expanded our customer base across our segments, increase our option of our solutions and continue to cross-sell more solutions across verticals. As always, we remain focused on delivering long-term growth, investing with conviction for the future. As a leader in technology, our goal is to be a neutral embedded orchestrator in an AI-enabled travel ecosystem. We continue to advance our AI road map working closely with our customers to address their needs, developing AI capabilities with our partners and enhancing AI solutions and offerings across our portfolio. We also continue to execute our strategy by supporting our customers with our retailing transformations with AI power next-generation solar sales. This quarter, we welcomed a new Altéa PSS customer launched the Amadeus advertising platform in partnership with Accenture and signed a [indiscernible] sales agreement for the acquisition of [ IPS ] that we announced previously. We believe we will capture value as the central infrastructure powering the travel ecosystem, including emerging AI players, expanding our role and increasing our relevance. We are closely monitoring the challenging macro and geopolitical context, making it difficult to predict in the short term. Lower traffic leads to a revision of our outlook, particularly at the lower end of the range, specifically for the distribution segment and consequential effects on the group results. We are prudently providing our revision to our '26 outlook by providing a wider than typical outlook range. We continue to focus on what we can control and [indiscernible] moderated fixed cost growth as a result. Resilience and financial discipline, I'm sure we are well positioned to navigate these certain uncertainties. Now let's stand to our strategy of how it translates into commercial wells. We are leading the airline industry's retailing transformation with Nevio, our AI native next-generation [indiscernible] IT platform. As you know, Lufthansa Group, [indiscernible], Saudi Alpine are engaged in Nevio with 25% of Altéa now involved in a Nevio program. Looking ahead, we see strong interest across all regions and expect momentum to build beyond Europe. In the second quarter, we are pleased to announce that an airline group carrying over 40 million passengers annually has selected Amadeus Altéa passenger service system as a cornerstone of its broader technology transformation alongside complementary Amadeus Solutions. Deployment is expected to be completed by 2027. We also continued to grow the scope of sous adopted by our customers. [indiscernible], which provides airlines with enhanced control over retailing pricing and servicing across indirect channels and the NDC standards and [indiscernible] has deployed our AI enabler pricing optimization. We also had a strong commercial traction in airports such as [indiscernible], Adelaide Airport, Lisbon [indiscernible] airports and Austin [indiscernible] from international on in Austin, Texas, some of others. This momentum goes beyond air. We are becoming the IT provider of reference in hospitality. The Amadeus Hospitality Platform offers the most comprehensive AI power portfolio of core capabilities to the hotel industry, and it is the most broadly connected ecosystem that we have. We also continue to execute our strategy by supporting our customers with the retailing transformations with AI power next-generation solutions. This quarter, we welcome a new Altéa [indiscernible] -- sorry for that. We continue to progress with ACRS, customer implementations for Marriott International, Accor and Ascott Limited. In the first half of the year, we continue to have commercial momentum. In hospitality, we have customer signatures across our portfolio, including with Radisson Hotel Group for advertising and in payments, Hainan Airlines [indiscernible] for outpaces exchange payment platform. As a demonstration of the interconnection of our solutions, the airline [ Avianca ] has expanded its use of our advertising solutions. We are growing leadership in airline distribution. We signed new agreements, including with Alaska Airlines with travel sellers across the globe and expanded the content distributed through the Amadeus Travel Platform, such as with [indiscernible] areas. We are probably in the largest ecosystem of connected open AI-enabled solutions to avail. We remain on track with our AI growth ladder. We continue to advance our partnership with Microsoft and Google, and we are pleased to announce that we are the first B2B foundational partner to codevelop the universal commerce protocol for [indiscernible] and we continue to expand the number of AI use cases that we have in production. Amadeus is uniquely placed to deliver agentic AI functionality into products and solutions supporting our customers on their journey and to serve as a neutral [indiscernible] in an AI enabled travel ecosystem. Please turn to Slide 6 for our AI milestones this quarter. As you know, Amadeus plays a distinctive role with the travel industry. We operate as embedded neutral execution layer at the core of the travel ecosystem. And we are also the system of [ record ] that underpins how travel operates day to day. With this positioning, we see a clear opportunity for Amadeus to act as [indiscernible] new players such as digital assistance and AI-driven services rely on to operate effectively within travel. Our technology is deeply integrated into real operational processes, connecting travel suppliers, sellers are increasingly AI-enabled interfaces. This debt of integration is what allows AI to move beyond experimentation and operate reliably within real-world workflows. Just as importantly, we delivered this as global scale with high levels of reliability, integrity and trust. This combination of the integration scalability and operational discipline continues to differentiate Amadeus within the industry. This quarter, we continue to advance our a strategy with a series of announcements, expanding our strategic partnerships and customer-facing solutions. We became a founding partner of Google's universal commerce platform for [indiscernible], helping safe how AI-enabled commerce will bore across the hospitality sector. This announcement underlines our commitment to building AI in an open, trusted and collaborative way alongside leading technology partners. Most importantly, we continue to bring AI power solutions to market across multiple travel verticals. We expanded our hospitality AI strategy introduced Amadeus [ max ] capabilities across hospitality, airlines and travel sellers and launched the Amadeus Travel Advertising Platform to help travel brands make smarter AI-driven advertising decisions. These announcements illustrate how we are embedding AI directly into the products and workflows used by our customers every day. So the key takeaway is that our AI strategy at translating into tangible axles. Across our partner ecosystem and our product portfolio, we are building momentum and delivering proof points. Quarter after quarter we are showing how Amadeus is working with customers and partners to bring AI into production at the scale and create practical value across the travel ecosystem. We are embedding AI into potable processes, scaling it responsibly and reinforcing our position as the trusted neutral technology backbone and platform for the industry. And now I will pass on to Carol for our financial overview.

Thank you, Luis. We started the year with solid growth and profitability. However, since March, the ongoing Middle East situation moderated our volumes and consequently, our growth ambition. We are pleased with our performance in half 1, showing strength and resilience supported by a diversified business. Revenue amounted to EUR 3,335 million, representing 5% constant currency growth, reported growth was 2%. Adjusted EBIT increased to EUR 1,012 million, equal to 5% growth at constant currency, 4% reported growth. Adjusted diluted EPS expanded by 7% at constant currency. Free cash flow amounted to EUR 472 million, equal to 1% growth. Diluted EPS was EUR 1.64, 1% growth. We deployed R&D investment of EUR 682 million, equivalent to 20% of revenue. Leverage was at 1x net debt to EBITDA at the end of June and we completed our EUR 500 million share repurchase program. In half 1, our group revenue grew 2.3% on a reported basis or by 5.1% at constant currency. Our IT Solutions delivered a strong performance, growing by 8.7%. Hospitality and other solutions continue to deliver fast growth, growing by 9.2% and Air Distribution delivered 1.1% growth in the first half. These results demonstrate that these results demonstrate that relevance to our customers continues. Despite negative volume growth, our diversified business provides resilience, evidenced by our solid unitary revenue growth and continued momentum in hospitality and other solutions. At constant currency, our adjusted EBIT grew by 4.9%, and adjusted EBIT margin was 29.8% in line with prior year. On a reported basis, adjusted EBIT grew 4%, driven by the revenue growth I described previously and a cost evolution consisting of the following. Cost of revenue increased by 2.2%, fundamentally driven by an increase in transactions in hotel distribution bookings and in payments due to the B2B wallet expansion as well as from our Airport IT business expansion. Fixed costs declined by 0.1%, mostly resulting from resource decreases following the completion of the migration of our systems to the cloud at the end of 2025 and cost containment measures in response to the Middle East geopolitical situation. This was offset by higher unitary personnel costs and transaction processing costs from prior year ramp-up in our cloud -- in our migration to the cloud. Ordinary D&A expense increased by 6.4% as a result of higher amortization of internally developed software to continue to maintain our leadership position. So now let's review the performance of our operating segments, starting with our Air IT solutions business. Our IT Solutions revenue increased strongly by 8.7% at constant currency driven by a 7.5% higher revenue per PB and Amadeus PBs increasing by 1.1%. Revenue per PB experienced strong growth in the 6-month period, primarily due to incremental revenues from our Amadeus Nevio portfolio, renewals and inflation. Secondly, PB linked performance from upselling of our solutions such as Altéa NDC loyalty and disruption management. Thirdly, Airline professional services and Airport IT expansion. And finally, transactional non-PB linked performance such as digital commerce, Amadeus Ticket Changer and direct distribution, partly due to an increase in transactions linked to the air traffic disruption caused by the situation in the Middle East, as commented previously. Our Amadeus PB evolution was moderated by the air traffic disruption experienced due to heightened geopolitical instability in the Middle East region. It is pleasing to see that over the first 3 weeks of July, our PB growth is close to 1%, an improvement versus June. In Q2, all Nippon Airways migrated its domestic business to Altéa. This migration will support our PB evolution throughout the rest of the year. In Q2, we continued to partner with airlines and airports around the globe. Luis has already mentioned our commercial success in Altéa with a new customer signature, Altéa NDC and air pricing optimization. In addition, Sun Group selected Amadeus loyalty and reward solutions. In Airport IT, we continue to expand our presence across regions. In Asia Pacific, Thai Aviation Industries is exploring the deployment of biometrics and seamless passenger processing technologies across several airports in Thailand. Also, Adelaide Airport in Australia signed for airport cloud use service and other solutions. In Europe, several airports across Portugal will expand the use of our technology in the U.S. Austin-Bergstrom International Airport will extend the deployment of passenger processing and airport operation solutions. Air IT Solutions contribution increased by 9.1% at constant currency, resulting from the revenue evolution I described previously, offset by cost growth of 7.9% and which was fundamentally driven by airport IT and professional services business expansion. Contribution margin at constant currency was 70.2%, 0.3 percentage points above prior year. Hospitality and Other Solutions revenue grew by 9.2% at constant currency. Revenue growth was driven across both hospitality and payments due to new customer implementations and increased transaction volumes. Within Hospitality, the fastest-growing solutions were customer implementations of our central reservation system and hotel distribution. In payments, both our merchant services and our payout services reported strong growth. To further elaborate on what Luis said, we continued our commercial success worldwide, spanning across our portfolio, such as with Radisson Hotel Group, [ Nobre Hotel ] Group and [ PrimeStar ] Group for advertising solutions and with several destination marketing organizations for travel intelligence. [ Jupe ] Hotels and [ Mondo Imperial ] contracted, our [ iHotelier ], CRS and Delphi solutions, respectively, and we had several customers signing for our distribution services. In payments, Hainan Airlines and Boliviana de Aviacion, adopted Amadeus exchange payment platform, our orchestration platform, which helps to manage payment flows across multiple providers and FX box and a multicurrency pricing solution. We also expanded our B2B Wallet customer base with several travel seller signatures. At constant currency, Hospitality and Other Solutions contribution was 11.2% above the previous year as a result of the revenue growth previously described offset by cost growth of 8.1%, mainly driven by the volume expansion in both hospitality and payments. Contribution margin was 34.4%, 0.6 percentage points above last year. Air Distribution revenue increased by 1.1% at constant currency, driven by revenue per booking growth of 5.1%, primarily resulting from positive pricing effects from renewals, new agreements and inflation. Amadeus bookings declined by 3.7%. Our booking performance up to February was strong. Since March, our booking evolution has been impacted by the Middle East situation. This caused a reduction in air traffic as well as a deceleration in new bookings and an increase in booking cancellations globally. Over the first 3 weeks of July, our booking performance has been broadly flat, improving from the June performance. Although the geopolitical situation remains -- sorry, although the geopolitical situation remains challenging, we expect our Q3 booking evolution to outperform our Q2 evolution. Complementing Luis in half 1, we broadened our airline content offering through the Amadeus travel platform with [indiscernible]. We signed several NDC content agreements such as with Alaska Airlines, Fly Dubai, and Royal Air [indiscernible]. We also signed several contracts with travel sellers for content distribution, including ITL World, [ Cano ] Travel and [ Kona ] and another 2 customers in China and with corporations for [ Strike ]. Air distribution's contribution grew by 1.5% at constant currency as a result of the revenue growth described previously, partially offset by a 0.8% cost increase. The contribution margin of the segment expanded by 0.2 percentage points to 51.1%. Let's move on now to review our R&D investments. Our R&D investment amounted to $682 million in the first 6 months, equivalent to 20% of our revenue. It decreased by 6.3% versus prior year, following the completion of our migration of our systems to the public cloud at the end of last year. Given the challenging geopolitical environment, we are prioritizing our investment where it matters most for our future growth, whilst preserving spend in critical areas such as cyber security, reliability and stability. We are well versed in ensuring we continue to invest in the right place at the right time. Our ability to continue to progress on our AI program, our strategic projects and customer implementation efforts and services is a further example of our financial discipline. We continue to execute our strategy to maintain our leadership position within our capital allocation framework and financial commitments. We continue to prioritize investment in R&D to deliver our organic growth. We are proud of our commitment to remain relevant for our customers and ensure that emerging technologies such as AI continue to enrich our entire portfolio. Half of our investment was dedicated to the expansion of our portfolio as well as the evolution of our solutions. We are infusing AI and developing AI capabilities across our portfolio, and are undertaking of strategic developments, including Amadeus Nevio and [ Navitas Stratos ] per Airlines, our hospitality platform, NDC technology for airlines and travel sellers and solutions for airports and payment services. Our third was dedicated to customer implementations across our business, such as Marriott International and a core for ACRS, new Nevio customers and airline portfolio upselling customers implementing NDC technology as well as efforts related to bespoke professional services provided to our customers. And finally, the remainder is investments in our IT infrastructure, including AI developments and our partnerships such as with Microsoft, Google and Adobe, among others, as well as platform developments related to stability, security, data protection, exchange, and exchange management and cloud optimization. We generated EUR 472 million of free cash flow, 0.8% ahead of last year, as a result of our EBITDA expansion and lower capital expenditure, partially offset by a higher change in working capital outflow and higher interest and tax payments. Capital expenditure decreased by 16.8%, largely reflecting the completion of the migration of our systems to the cloud and cost containment measures and represented 9.8% of revenue. Net debt amounted to EUR 2,578 million at the end of June, EUR 436 million higher than at the end of December 2025, fundamentally due to the acquisition of treasury shares under the share repurchase program and the dividend payment as well as the acquisition of SkyLink partially offset by our free cash flow generation. Our leverage was 1x net debt to EBITDA at the end of June within our targeted leverage range. And finally, please turn to Slide 16 for our revised FY '26 outlook. Our long-term ambition remains unchanged. Our relevance continues, evidenced by continued commercial momentum, new customer implementations and positive pricing dynamics. We are pleased with our performance in H1, showing the strength of our diversified business. However, the Middle East situation has impacted our short-term growth. Fuel prices and supply have been impacted, driving some airlines towards capacity adjustments. In this context, [indiscernible] global air traffic growth assumption for 2026 has been reduced in June to 1.9% growth from its 4.4% growth assumption in December. We continue to monitor the challenging situation. However, the short-term impacts remain difficult to predict with confidence. Achieving our original outlook is still possible if the global air traffic evolution improved notably in half 2. However, the current volatility in the Middle East prompts us to prudently revise our outlook, particularly at the lower end of the range. We also take the opportunity to provide a wider than typical range in line with the downward revision to [indiscernible] traffic growth assumption. Despite a softening in our PB growth assumption for the year, our views on Air IT Solutions revenue growth remain unchanged at high single-digit outlook range. This is supported by customer implementations, upselling, Nevio and disruption revenues as well as healthy performance of our airport IT and professional services business. We are also expecting our Hospitality and Other Solutions segment to deliver on our original low double-digit revenue growth outlook range. as we continue to progress with our customer implementations and healthy evolution of our hospitality and payments business. We are now cautiously assuming a softer booking performance than our original 2026 outlook released in February, driving our air distribution revenue growth outlook to a low to mid-single-digit range. We expect a solid unitary revenue evolution throughout the year, partly mitigating the booking moderation. The revision of our views on air distribution drives our group revenue growth expectations to a mid- to high single-digit range and our adjusted diluted EPS growth expectations to a high single to low double-digit range. In light of this macroeconomic context, we continue to focus on what we can control. Our continued cost containment efforts partially mitigate the impact of the revised revenue outlook range and support our original expectations for adjusted EBIT margin stability and free cash flow generation of EUR 1.35 billion to EUR 1.45 billion. We also expect to deliver on our original outlook for segment margin evolution. That is slightly dilutive Air IT Solutions margin evolution, hospitality and other solutions margin expansion and stable air distribution margin. Whilst the current environment is difficult to predict, historical patterns show that a rebound in air traffic typically follows a resolution of a geopolitical situation. We are seeing in the first 3 weeks of July, an improvement on the June volumes. The revision of our 2026 outlook reflects our current views and expectations, which affect the short term. The fundamentals of our business remains strong, and we continue to maintain our previously communicated midterm outlook. So in conclusion, our resilience diversification and financial discipline, ensure we are well positioned to navigate these short-term uncertainties. We remain focused on what we can control, being a trusted partner for our customers and executing our strategy to ultimately deliver long-term value for our shareholders. With this, we have finished the presentation, and we can now open the call for any questions that you might have. Thank you.

[Operator Instructions]. Your first question comes from George Webb from Morgan Stanley.

A few questions, please. Firstly, just in terms of what you saw during Q2 on the air distribution bookings, noting that 7.6% down for the quarter. Could you kind of share the month-by-month walk for that for April, May and June, so we get a better feel for how that feeds back into that broadly flat that you've called out for the start of July? Secondly, on the Air IT revenue per PB, of that 6.2% constant currency revenue growth in the second quarter, how much of that was still benefiting from the rebooking and disruption solution revenues? And alternatively, is that mid-single-digit underlying growth rate for revenue per PB a fair ballpark for the second half at this stage? And then lastly, just a bigger picture question. From your vantage point, could you provide an update with regards to how you're seeing the industry evolve around bilateral direct connections between suppliers and some of the larger travel management companies. I think as one example. [indiscernible] recently launched a direct [ SAS NDC ] connection and announced plans to integrate directly with Hilton CRS on the hotel side. So as some of those more tech-forward TMC scale their connections, curious how you see the potential longer-term impacts on Amadeus.

Okay. Let me start with the bookings. I mean, I'll give some color about that. I mean coming back to the seasonality, okay? We have seen match that was very weak. This has stayed in April and May. And then in June, things started to recover. And of course, this continues into July. A couple of comments about that. I mean, as you know, I mean, we take traffic, okay, and then we can translate into bookings. I mean, the latest figure we had before the world started was [indiscernible] in February, releasing 1%. You have seen the evolution per month coming down to minus 2.4%. So there was an 8-point difference. Very difficult now to assess if all that is due to Middle East because, of course, when we talk about Middle East, we analyze the direct effect, which is more of the bookings that are going through that region or even the region. But if you see the figures of passengers, I mean we have seen negative figures in some domestic markets, including the U.S. that was coming from positive. So we feel there has been an overall adjustment, not just due to the Middle East impact, which was at the beginning, but also the fact of capacity adjustments an increase of prices in some part of the world that has had an impact. And in our case, in the bookings, what we saw is that there were many cancellations at the beginning and not many new bookings, okay? People were waiting. So we feel there was a delay in the booking figures compared to some of the figures of the traffic. But in June, there has been some small improvement in [indiscernible] but we have seen a better improvement in bookings and then in July, okay, we don't have official figures from the industry, but our PBs and our booking are today very similar. So what we need to understand again this is purely catch up because there was a delay. People were waiting to see, and it's just purely catch-up of reservations for the rest of the year. Or this is really a new trend. Our feeling is that the worst has happened already with all these cancellations, adjustments of routes, adjustment of capacity of the airlines. But of course, the current geopolitical situation may [indiscernible]. But I mean, to be honest, the last weeks since the beginning of June, we have seen a progressive improvement in the bookings. The same in DVs, but in PBs coming from not so low base than in the case of the BP. So that's the overall pick. -- let me take the other --

Third one and then --

You can go to the second one. So that connects I mean [indiscernible] happen, as you know, between big players. In general, as you know, this is not a trend. We don't think this is the trend. But from time to time between some of the big players decide to connect the data -- connect, as we have explained many, many times, as the complexity and the challenges as you know, because this is for one-to-one requires integration. It requires optimization with other players because not everybody is doing [indiscernible] with when you talk about hotels all airlines with everybody that is part of the industry. You need to maintain that. You need to optimize the shopping [indiscernible], so that is not what we feel is the general train in the industry, and you hear less today than some years ago and the airlines are doing less probably than before. And there are some cases what this can happen, and this is part of what we have had in the past and we may have in the future is very limited to some specific players, and we don't see that as a general trend.

Okay. And George, on your question on disruption revenue, as we said last Q, it's more prevalent in our Air IT solutions business. And I think we said in Q1 that it contributed about 1/3 of our goals? And I also signaled in Q1 that we didn't expect that to continue into Q2 because the biggest impact of the disruption was happening in the month of March when the conflict started. So Q2 doesn't have the same degree of impact. In fact, it's a more tapered result. But yes, if you look Q-on-Q, that kind of 1/3 has fallen away in terms of our unitary pricing on revenue per PB.

Your next question comes from Alex Irving from Bernstein.

First question from me is on the contract win for the new more than [ 40 ] million PB airline in Altéa. I'm surprising an airline, it's all the efforts and trouble of platform that's rapidly being superseded by next-generation technology. What factors led to the selection of Altéa rather than going straight to Nevio? Second question, can you please update us on what you're seeing in AI distribution? Are you supporting any airline development of MCP APIs, but if not, do you plan to? And if I could sneak in a third, your personnel costs are down year-on-year despite higher unitary personnel costs. Should we expect that to continue? And is the head count reduction as a result of AI deployment or something else?

So Alex, it was a bit difficult. We're going to replay the questions that you had. So the first one was the new Altéa [indiscernible] and why Altéa not Nevio. The second one was about MCP -- MCP for airlines yes. Is that right?

Yes. yes, correct. If you're supporting any airlines in building them and if not, are there plans to?

MCP airlines. And the last one was the unitary cost in personnel costs, yes?

First -- costs are down. EBT costs are up, then head count is down. Is this AI or something else?

Yes. Got it. Okay.

Why Altéa and not Nevio directly?. Again, we offer both at this point, the airline decide that really come to alter course at one point, may go to Nevio but Nevio is again, it's a different way of dealing with your traffic, the way you sell and they consider they want the first to really come to Altéa. That's what I can say. Again, I mean, the fact that we consider maybe as the future platform does not mean we are not allowing the airlines to choose Altéa and then the site of Nevio, if this is the intention. We also migrated last year. It's not exactly the same because the contract was signed many years ago, but as you know, we migrated [indiscernible]. Of course, there will be discussions with all the carriers, including the Nevio, but it does not prevent them to really move to Altéa or with us -- see how the platform works and then from there do as move migration to Nevio.

Yes. And I might just compliment that while you're thinking about the MCP question, Luis, I mean I think to the -- first, what I'd say, Alex, is that we can coexist with an Altéa and a Nevio world, and we think that we would coexist. But then as what Luis was mentioning, the move to offer and order requires a really significant process adjustment from the airlines, right? And some airlines might not be ready to do that. They might not be ready to rewrite their business processes and things like that and the transition period. So we don't see it as strange for a customer based on where they are on their modern retailing transformation to actually take it in 2 steps. Do you want me to continue on the personnel and then we get to the other one? So you're right. We issued salary rate increases to our personnel. That happens at the start of the year. So that's already been factored into it. It is true head count is reducing year-on-year. I don't think of it more as a structural AI evolution, which is, I think, what you were alluding to. This is disciplined, tactical cost containment measures to prevent ramp-ups that we're seeing to take advantage of our flexible R&D structure, which relies on the use of contractors. All [ salt ] maintaining investments that drive future growth for our business. So we expect a continued moderation of fixed costs into the second half. But do bear in mind that we had -- we were benefited from FX in the first half a lot with our fixed cost growth. So that won't continue next time. And then the --

Just an overall comment. Again, there are different protocols. Things are evolving on the AI front. And we work with airlines to really support them in the connectivity. It could be whatever depending on how the platforms are facing this matter. And yes, as part of that, of course, some airlines may need to think about how they are going to really face and connect to all these AI platforms that will be in the future a new channel of connectivity to travelers and of course, to the inventory of the airline. So it's part of our road map. It's part of our discussions with the carriers to really see how we can support in the different connectivities and the different protocols.

Your next question comes from Sven Merkt from Barclays.

Can you maybe comment first how you internally see the 2% passenger growth forecast from at? I fully appreciate you don't have a crystal ball either, but does this forecasted more on the bullish side or more on the cautious side? It would be great if you could put us a bit into context for us? And also if the conflict continues, what could be the downside? And then a question on the pipeline for Nevio. Finer recently reported strong ancillary revenues and BA also called out its new retailing strategy. Does this change anything in your discussion with new prospects, having a few more proof points that Nevio [indiscernible] to drive real benefits for customers?

Okay. So I take and then Carol add anything like I mean with regards to -- fine, of course, when an airline is stocking and it's not just been here about the benefits that Nevio is bringing to them, it helps definitely because some airlines that may be wondering and thinking when to take this decision, the fact that airlines are talking about the benefit is always positive and it's always good and fine has been quite explicit about that, but also be in some comments, another outline up talking about this. So it helps. We have a healthy pipeline of discussions as we speak. As we have explained, this will be a journey. It will take years for the whole industry. But yes, definitely, it will be positive to really be able to approve points of the value of Nevio, and Carol has explain, we see also in -- already in our results as part of the upselling that we are doing with Nevio. With regards to the volumes, I mean it's very difficult to really -- the only thing we have are some data. That's what I was trying to provide some data when I was talking to about the figures, okay? There are 2 data today. One is the estimation of the 2% for the rest of the year. And the second one is the actual numbers, okay? And the actual numbers in July. It's true -- I had a release yesterday, the figure of June was still negative. What we have seen in terms of bookings is positive. So how things may evolve with the war, I have no idea, to be honest. I mean, today, there is some conflict going on. And for the time being, the figure seems to be positive, okay? Therefore, we have not seen the similar impact we saw when the world started and this brings us some optimism to us for the rest of the year. Some things deteriorate, yes, I mean, it depends how the conflict evolves. So I will say, look, the 2% of IATA is there and also our figures that we have seen an improvement especially in bookings, but also in TVs in the months of June and July, and the trend is positive. From there, it's very difficult to really make any prediction of what may happen. I will say, look in normal circumstances and if things will settle. I believe that we will move in a positive way. And therefore, we should see positive figures for the rest of the year. But again, this is just an assumption because, to be honest, I don't know how this may [indiscernible].

And to complement Luis and then to address your third question about downside, I mean, I think the 3 messages I want to leave on this call is that we have had resilient performance in H1 despite the environment that we do desire to create sustainable value in a transparent way. And I think we've been very clear on what our outlook has been based on. And then we focus on what we can control, yes. So as Luis said, we don't know. We don't have a crystal ball. Having said that, to your question about downsides and all that sort of stuff, we have presented -- or we have prepared a whole range of scenarios in order to develop the outlook range that we've provided for you or the revised outlook range. And we feel, from what we know today and what we can see today, based on all of the information that we have available that we can deliver within that range. And of course, if things change, negative -- strongly negatively to the worst, we will again come back in a transparent way.