easyJet plc ($EZJ)

Welcome, everybody, to easyJet's half year presentation of the results to the 31st of March 2026. I'm joined today by our Chair, Stephen Hester and the Management Board here on the front row. We've already released our full presentation to the website this morning. I don't know whether you've had a chance to have a look at it. But if you haven't, I will give a brief summary now before we go through to Q&A. So starting with our performance for the first half. The underlying H1 results were consistent with expectations and were in line with what we put out in the April trading statement, there was a very limited impact from the Middle East in terms of trading, but obviously, there was a fuel impact with volatile fuel pricing in the month of March, which caused a GBP 25 million additional costs. Now we clearly recognize that these winter losses are not where we plan them to be when we set out the 2023 targets. And it remains a focus for us to structurally improve our seasonal losses and bring them down over the course of the coming year, years. But what's important to recognize is that we've made some important investments. So over the last 3 consecutive winters, we've added 24% in terms of seat capacity, which is 33% in terms of ASK flow. And that has given us a productivity benefit when it comes to crew. But importantly, it's also given us better aircraft utilization. And our aircraft utilization is now 20% higher than it was in 2023. And what that means is it's back and restored in terms of where it was pre-COVID. The good news there is that we can now moderate our growth as we look forward to the following winter and future winters because we've restored that kind of capacity, and we've restored the utilization, and that should allow our route investments to mature. We also saw quite rough bus demand during the first half. So we saw 6% extra passengers come and fly with us on the airline. That was from 4% extra seat. So the load factor improved 2 percentage points to 90%. And easyJet Holidays continue to take share and grew by 22% when it came to passengers. The performance in the half for the airline was impacted by a number of things. The first was market oversupply on some thick [indiscernible]. This happened in part because most airlines pulled out of their routes into Tel Aviv and therefore, redeployed them on longer leisure beach flows. And that led to some market overcapacity. It was particularly the case in the London, Spain market. We also had our first winter of operations following our investments in Italy, in Rome Fiumicino and in Milan Linate. We're expecting that to come at a cost because you don't pay the slots in Europe, you fly remedy routes, and we have experience of doing this in the past. And over time, those routes mature and we fully expect those 2 airports in Milan and Rome to be great catchment airports and to perform very well for us. And we also saw cost inflation weighted towards the first half. We had annualized inflation from resilience meters we put in, which did work really well through the summer '25, but we carried some of that cost into the winter. We had some above-inflation airport fee increases like Stifel, where we saw the airport fees go up 35%. We've got an ongoing investment in digitalization and there's a natural cost impact of 2% extra load factor when it comes to departing passengers. But we expect that to normalize as we did when we entered the winter season and looking forward to the summer we're expecting our CASK ex fuel to develop a low single-digit amount. As I said, easyJet Holidays continue to grow with 22% extra passengers generating 39% extra profitability in the first half generating GBP 61 million PBT. And one of the most satisfying things was to see the on-time performance, which has already been substantially lifted compared with the '23, '24 years. We've got a further 1 point improvement on on-time performance and customer satisfaction coming on from that on-time performance, but also from better service features improved by a further 2 percentage points for the airline to 84% and 1% point for easyJet Holidays to 85%. So good resilience operations. So if we look at the impact from the Middle East, the first thing to talk about is demand. I've obviously been watching the announcements that have been coming out. And it is the same picture for all that the booking window has shortened. We're seeing strong demand. We saw it strong in the month of April. We're seeing it strong as we run through May. But as you go further out, the consumer uncertainty is meaning that people are waiting before they make that booking. And you can see that if you look at the development of bookings since the April trading statement, for instance, when we did that just back in April, our Q3 was 2 percentage points in terms of deficit on load facts about [indiscernible]. However, Q4 is still behind where it was last year. That will need a certain degree of price stimulation. But at the moment, we're holding prices above the level of last year. And conversion is good. So it shows that it's really the searches that are down for that further out period. And when people come, they are buying. For Jet fuel, we're well hedged. We've got 72% covered at $726 a metric ton. That hedge actually goes forward. We've got over half of next winter covered at again, in the 700s, we've got almost 30% of the summer after that covered again in the $700 million. So A lot of the hedging has been locked in precrisis, and we're actively managing the hedging as we move forward. But that allows -- that protects not only easyJet, but more importantly, protects our customers from that real volatility. But we should note that every $100 of fuel on the unhedged portion is the equivalent to GBP 35 million sterling. We have one of the best investment-grade balance sheets in European aviation, and that allows us to come in and manage this conflict and the impact on fuel prices from a position of strength, meaning we can take measured and disciplined response to the action. We have GBP 4.7 billion in liquidity, which sits over GBP 1 billion above our liquidity policy. We have a net cash position with GBP 434 million of net cash. And more -- and importantly, from the aircraft ownership side, 86% of the more valuable NEOs we have in ownership. And when it comes to managing the near term uncertainty, we're being quite active in our hedging. We suspended the hedging in the Neo 2 because it's extremely volatile. I think it's dropped 5% this morning. but it's been bouncing between 1,600 and 1,200. And therefore, we're coming in when we see the opportunity. But further out, we're continuing to layer on hedges because the curve, as you all know, is in backwardation. And therefore, if you're hedging 12 to 18 months out, the prices aren't materially different to where they were before. So we continue to build the hedge position, which is why we're 30% hedged for the summer in advance. In March, we looked at how demand was being impacted following the outbreak of the conflict. And we reallocated about 400,000 seats from countries adjacent to the Gulf region being Turkey, being Cypress, being Egypt and moved them into the Western Med or city flows or domestic flows. And we also trimmed some of the capacity in April and May on some of the thicker routes because of the elevated fuel prices. But when that was all swept through, that led to a 0.3% reduction of capacity in the summer. We now plan no further changes to the schedule. As you know, airlines make more than the annual profit in the 12 weeks from July, August and September. And therefore, almost everything we fly is contribution positive. I'd say everything we fly is contribution positive. And therefore, we're not making any further changes to the schedule. Customers can book with confidence. We're not intending to do any fuel surcharges, and that's the message will be given. On supply itself, we have seen no issues at any of the 165 airports we fly in and out of across the U.K., Europe, North Africa. And what is -- and we stay in constant contact with airports, governments, fuel suppliers. And what they tell us is that fuel supply is being diversified. So yes, there was a lot coming through the Strait of Hormuz and coming out of the Gulf region, but now more production is coming out of the Americas, more production is coming out of places like West Africa, like Nigeria, Norway ramping up their production. And refineries are increasing productivity when it comes to jet fuel refining, which is probably not surprising giving how expensive it is. So it's a good thing for them to be doing. And that is rebalancing the supply of Jet Fuel and that's why confidence is lifting that this summer will be uninterrupted when it comes to our flying program. Okay. So looking forward, we remain very focused on the delivery of our strategy and our margin improvement to generate hover GBP 1 billion in PBT. We're going to take a very disciplined or continue to take a very disciplined approach on allocation of capital. When it comes to putting new aircraft -- growth aircraft into basis, we're introducing a hurdle rate of GBP 2.5 million per aircraft, and that means that these bases will already be operating at or above that level, which is the level to be in the middle of the GBP 7 to GBP 10 per seat range to put it into context. As I said, now we've restored utilization levels to where they were pre COVID, we are able to moderate the growth in the future winters, which allows the routes to mature, and following all the delays we've seen from the OEMs, the good news is the upgauging now moves to the near term. So we're saying next year, full year '27, the year after that, '28, we expect to see EUR 0.25 billion of P&L efficiencies come through our P&L. And that's really important because that has been one of the things moving to the right. So you'll see from the fleet slide, we still expect to receive the 17 aircraft this year. We still expect to receive 30 next year and 43 afterwards by the year after. Airbus are firming up on those deliveries. Yes, they're slipping a bit, but not structurally. They're slipping 1 or 2 months, and we're working through that to manage that in our schedule and working with Airbus on what that means, but the confidence has grown, and that's why we're now going to accelerate the retirement of our A319s and get them all out of the fleet by 2029 because we're taking this more disciplined approach on [indiscernible] allocation. When it comes to easyJet Holidays, we're still progressing well on our new target of GBP 450 million. We're going -- we're growing in the U.K. and taking market share in the U.K., and that will continue. In Europe, [indiscernible] is looking to turbocharge the growth in Europe. It's growing very well, but from a low base. And in Germany, we're signing up 500 travel agents in the Berlin catchment area, connecting to digitally way they distribute products. And that's important in Germany because still about 70% of the German travel market is booked offline. So that will make -- that's an important distribution channel, and that will be open to us from later this year. And we're also introducing a new flight plus hotel proposition, which will embed in the airline book flow. At the moment, if you come into the app, you have to choose upfront, whether you're doing a flight search or you're going to do a holiday search, that would include City bricks. Now you can enter the airline flow, well, not yet, but that will be the case you'd be on to the airline. So secure the flight, securely [indiscernible] you need with it and then look at the accommodation offering, and it will be served in a place that I think is more like the way the customer wishes to search, and we're bolstering the inventory we have behind that. So we're increasing our wholesale inventory from 8,000 to 13,000, which means we'll have a richer offer for the consumer. And we're also going to introduce a new loyalty program from the start of next year. And there's been a lot of speculation. So we thought we'd put it on the slide, but that's where you're getting. There will be a seminar at the start of next year. It will complement the easyJet Plus program, and we expect it fully to drive engagement, drive repeat bookings and be accretive from a margin perspective. The aim is to leverage the group more efficiently to continue to build on the strength of the brand, which is improving the more we improve our operations and further improve the seamless customer experience. We're also looking to move to being a more leaner digital organization and have investments running through our P&L around automation, around data and around AI, which will help improve our cost position but also help streamline our operations. So in summary, we are navigating this near-term volatility coming from the macroeconomic uncertainty from a position of strength when it comes to the balance sheet, when it comes to the hedges that we have in place for fuel. Our longer-term focus remains on executing against our strategy. And what we're doing is we're underpinning that by a real disciplined approach to capital allocation, only putting those aircraft in the basis where they perform the best. And our aim is to drive a tangible improvement in our margin performance. as we move away from the current position into a more normalized environment. So our medium-term ambition remains unchanged. It remains to deliver GBP 1 billion in PBT and more, and we're very focused on that. So I'll now move to Q&A. So if you have any questions for me, for Jan or the management team, then Adrian will organize the questions.

It's James Hollins from BNP Paribas. Thank you for that. Three, please. First for Jan. On costs, I think you've alluded to in your [indiscernible] video earlier in the slide. So kind of a doubling down on cost focus. Is there an official sort of cost program underway, making the most of a crisis? And ideally, if you can sort of quantify what you expect from that? Second one for Garry. Just on holidays, my feedback to you from this morning, there wasn't much discussion in the MD&A around the holiday side. So maybe we can hear from Garry on holiday bookings? And I guess specifically, whether that differs much to the chat around what you're seeing on the airline side. And then finally, I'll come back to you, Kenton on jet fuel. Clearly, you and others have seen remarkably confident in no shortages certainly through the summer. Maybe if we look beyond that, maybe what scenario would drive some trimming of capacity beyond the summer and nearer term, do you think the message is now getting through from all that media scam on going around shortages? Do you think the message is now getting through to consumers that -- they should be fine this summer.

All right. I think that's the first time, I'm getting the first question, thank you very much. Nobody is always for Kenton. Well, in terms of our cost focus, I think, first of all, it will never be a cost-only focus. It will be a margin focus. So there are a lot of domains where we can still improve. The first one and Kenton already alluded to it. is capital allocation. So we will be much more respective in terms of where we are putting capacity with our hurdle of GBP 2.5 million per aircraft, which means that we will grow only there or redeploying capacity where we're not making GBP 2.5 million profitability. That also means because very often, where we're not making profit is because the cost position is not the most optimal. So moving from more cost -- higher cost basis towards lower cost basis will improve our overall cost position. The second one is definitely the biggest opportunity in terms of upgauging. And so as Kenton said, the application has been a little bit delayed versus what we have initially set out in our medium term targets. But now it's moving from the medium term or the near term. We still have 79 A319 aircraft in our fleet. And as already repeatedly said, 10% more fuel than the 320 and as the unit cost position, which is 24% more expensive. So just moving from the 2019 to '20 will provide an important profit. We've not first, I'm also quantified that. So we're expecting GBP 110 million cost improvement for that in 2027, GBP 140 in 2028 additional that means that by 2028 will be a GBP 250 million improvement. Now we've used this crisis to accelerate also that upgauging strategy. So decision taken out to get and all the 319s out of the fleet by 2029, so which means that next year 19 aircraft, which is 6 more than initially planned, then moving up to 35 and then 25, so were all begun. So that's an important one. We will continue to focus also on asset productivity. Although as Kenton said, especially in the winter aircraft utilization already went up by 20% and back to pre-pandemic level. I think there are still further opportunities, opportunities in terms of further network optimization, although we will not be increasing staging as much as we have done over the past winter, we will continue to increase just only this summer, increasing stages by 3%. So we're still optimizing where we can. We're also investing in our scheduling process within limitation of [indiscernible] which will make that we will have a more efficient schedule, which will drive productivity. We're also investing quite a lot in our crew planning process, whether it's in teams, whether it's in process, whether in systems, which will negate we will be able to plan much more accurately and much more much more into the detail, which will kind of reduce the buffers we currently are having in our systems. So also that is helping. And also focusing on turn improvement. And I think last time we said that we -- in 2025, we really reduced our turn by 4 minutes. We're targeting a next improvement of 2 minutes this year, and we are performing that and that's happening to a better cognition between our ground crew people or cabin crew people or cockpit people. but also digitizing and return. So we're getting rid of all the paperwork, which improves the turn. But even doing investments like SmartStand in Gatwick, and so this will be AI-powered cameras, which are monitoring the turn, which are providing more accurate information on how the turn is going on. So that helps you to move faster. So all those elements are helping asset productivity, which is great. And focusing on aircraft ownership. I mean last time we told you about the aircraft buybacks, we have not any planned this year to do, but as soon as we see opportunities, being able to switch the more expensive leasing towards cheaper final aircraft definitely one. And one specific one is only now [indiscernible]. So we are having, of course, a GBP 20 million loss in summary, the GBP 30 million this year, part of that loss is induced by the fact that we have a less optimal wet lease set up. So we will be getting rid of that what set up in as of next winter that should support. We are also investing at the moment in additional spare aircraft, spare engines and also LOPs. All of that helped to support disruption costs and disruption cost already, we use the disruption costs GBP 50 million last year, and that remains the focus. But also we kind of also decided to have a more moderate growth than initially foreseen. So already the next winter, we will grow in that next summer, we're also planning to grow less. Last year, we increased our peak line of flying by 10 aircraft approximately. Next year, we're planning to only increase by 5 aircraft. That does mean that the investment costs we're doing in the winter will be lower, so that will also support. And finally, we are reinforcing our investment into digitalization and all tech investments with an objective to reduce cost, to improve customer service and improve operational resilience, and there is a whole bunch of projects which are currently ongoing, both in operational domain or commercial domain and in the general company environment. I can continue speaking on all the projects that you want.

Garry, go on how you're seeing holidays.

Yes. Yes, on the holidays, we -- I think we said earlier in the year we were expecting 15% growth year-on-year. I think given the crisis, that will be below that, but we're confident it will be only a couple of percent below that. I mean it will be probably 10%, 11%, 12% growth at least we're seeing very, very strong demand coming in, in the late, particularly 4 weeks out. And we do think that's been driven by customers just having the confidence that there will be enough fuel for 4 weeks, but thinking further out. So I think once they gain more confidence that the summer is going to be kind of safe from a fuel perspective, then we're very hopeful that can lift up. But when we look at that 4-week demand, it's very, very, very strong year-on-year. They're pulling a lot forward. And I think that's helped by the hoteliers have reacted very quickly with pricing. So they pulled the prices down in Turkey, in Egypt, in [indiscernible] pretty much when the crisis started, and we went from a negative position in Egypt to a very strong positive position year-on-year within a matter of a couple of weeks, just as those prices come down, and we're seeing that sticking. So that's looking good. I think if we look at versus the competition and how we think we'll play out, I think we're in a bit of a sweet spot in some ways. And that if you look at the big legacy tour operators, we've got fixed capacity, fixed commitments in the hotels, they'll be really focusing on trying to fill those where that gives us an opportunity is that the other third-party hotels who maybe aren't getting that focus from them are pulling their prices down and we're able to pass that on to the customer. So we'll probably see a difference in mix in terms of where the customers go this year versus last year just based on that. But certainly, when the hotels are reacting, from a price point of view and we're then passing that on to the customers, then we're seeing really good demand in the rates. And if that could just in the next few weeks, start figure out kind of from the 4 weeks to the 6 weeks or 8 weeks, I think that would give us quite a lot of reassurance, but we're confident that our position at the end of this year will be a positive one and not too far from the guidance that we gave.

And the last question is around fuel supply and what it might mean going further out into the winter. I think the rising confidence for this summer is the success that the fuel suppliers have had on diversifying their sources of both oil and refining capacity, which has really stepped up in the absence of -- coming from the Gulf region. And governments have played a part in that to look to contingency planning to see how they could even bolster it further. So that is increasing the confidence and you have heard from most of the sector that, that confidence is rising for the summer. When you go beyond winter and what it means for pricing, capacity and supply. On the supply side, let's see. The world is rebalancing. We saw the U.K. government green letting potentially. I'm unclear really on the sanctions, but potentially rationale being refined outside of Russia to support. So assuming the fuel supply remains uninterrupted beyond the summer because the strength of the news don't open, what we're seeing in pricing is the curve in backwardation. So people are expecting that fuel will come down. It's above where it was because now you're hit in the summer, you're inside that 12-month window. It's above where it would have been pre-crisis. But as I said, we've got 53% hedged, an amazing rate of $714 a metric ton, so that puts us in a good starting position. Regarding capacity, as I said, we would anyway be looking to moderate our capacity next winter. We no longer need to -- we've added 24% in seats over the last 3 years. We don't need to grow at that level anymore. So we will be moderating the capacity we've seen the utilization benefits come back in. As Jan said, we will obviously look for more, but that will come through network refinement through use of technology like SkyMax. We're also looking at the best way to optimize the network. Now cities and VFR flows are coming back. And we'll be thinking about the capacity we put on some of those sticker London Spanish flows and looking to to manage that as the reason mature. So for us at any rate, I would expect a more moderated winter, but we've given ourselves a good strong position from a hedge, I think the others will -- I think it will be more moderated next winter actually.

[indiscernible] start with bookings. You've obviously talked about some softness in bookings but closing being strong. Where is the crossover point in terms of weeks before departure. And why do you think Q4 bookings have so -- are sort of further behind than they were in the April update. And I think you talked about taking aircraft deliveries into ownership this year. What's your thoughts in what you would do to finance deliveries beyond this year, please? Okay.

Well, starting with bookings. The strength in month is a rolling strength. So now we'd be starting through the front half of June, strengthening and may remain strong. But it is really anything 6, 8 weeks out, you see that the customer is not booking. Our conversion is strong. So when they come to the website, they're converting. So it's not necessarily a price thing, which is why the price is slightly above actually where they were last year in terms of yield. However, it's a rolling caution. Now whether that's been generated by unhelpful comments from energy ministers in Europe, saying there won't be any fuel by the middle of May. It's past that now. So it should have run out. But -- so there have been a lot of unhelpful comments. I think even as a sector which should reflect on the way we communicate because we've never had more than 4 weeks visibility. And communications back in March of April saying it's the middle of March, we've got the usual visibility, which means we're fine to the end of April, created headlines of it all runs out in May as opposed to what was actually said, which was [indiscernible] at the end of April. So that hasn't helped. And I think that is in the mindset. But people are booking -- the booking with strength in the late. Is it enough to make up for the loss forward bookings? Let's see -- and then if there's any color on what you're seeing destination-wise or shape within that.

What's interesting is where we initially saw a move away from the Eastern Med into the Western Med destinations. Actually, that's balanced out now because hoteliers in the Eastern Med offering really great deals, whereas the Western Med has oversupply in terms of airline seats actually hotel prices aren't so great. But we were already seeing -- and we saw it last summer, we saw quite a lot of softness into -- from U.K., Spain, and we talked about that, I think, at our full year results. In terms of what's happening in the lakes and to give a bit more color on to that. I mean, if we were to look specifically at May trading as of the 23rd of February, we were 2% ahead in May in terms of overall in terms of load factor. That dropped to 0.7% behind when we're at the beginning of April and then by the 11th of May, that was only 0.2% behind. So as Kenton said, we might not necessarily make it all back, but you've definitely seen that strengthen the late. If we were to look ahead to August, we are currently 7% behind where we were in terms of bookings for August. So and I think that is all around confidence. People are just waiting to understand. And it's all about the fuel narrative, so it's really important that we're reemphasizing that. And then in terms of route mix, it's all down to capacity in the market really and what's driving where people are going. We have had questions about whether we're seeing any improvement from people not flying long haul, I think not yet, we're not really seeing that coming through. But certainly, in terms of destinations and routes that are popular, it's a lot of the long leisure as well as city breaks that are coming through, particularly strongly, and in terms of our network mix that actually plays in our favor. And we're seeing more of a strength in Europe than we are from the U.K. So in terms of our network mix for H2, 17% of our network from Europe is on to leisure and 29% is nonleisure, so that's your cities and domestics. For U.K., our leisure is 25% and non leisure 29% from the U.K. So we actually have quite a broad mix of routes. So we're not overexposed, but we are exposed to U.K., Spain and U.K. leisure. But that is, as Kenton said, that's coming in, in the late but it's very tight. So it comes in the last 4 to 6 weeks. And really, no 1 is booking yet for the summer holidays. I think we'll wait to see what happens after May half turn because normally that's an inflection point when people then come back after the half time start thinking about summer holidays. But I think the book with confidence message is the point we keep reinforcing to give people that confidence that we plan to operate the summer schedule we currently have on sale. We don't have any intentions to [indiscernible] capacity.

And Jan, on aircraft .

Yes. On the aircraft financing. So one, the number of aircraft we're expecting now to get delivery out in the next years or 17 this year, 30 next year and 43 and the year dewater. So we're speaking about total CapEx of GBP 1.7 billion and moving to GBP 2.3 billion and GBP 3.3 billion. But that's assuming that we're taking 100% of those aircraft into ownership. I think the positive thing about easyJet is that we have a strong balance sheet, and that does allow us different options in terms of financing -- the most important one will be to find its true on cash. We have GBP 3.3 billion of cash currently on our balance sheet. And that means that the first option will be to finance through cash -- the second thing is a debt capital market. I mean we have 2 bonds currently. There is none of them which is maturing before 2028. Obviously, we can have access to the bond market. . And thirdly, we have last year and also this year restarted with our [indiscernible] financing, Japanese operating lease with a call option, and that is something new, and it's probably -- it's a cheap way of financing, which we probably will continue to look for in the coming years. Of course, the market is limited, but at least what we can do, we will continue to do. Currently, we have 8 aircraft which have been financed through cost -- and then obviously, we have any asset-backed finance option, which is still available to us. But currently, 86% of our neo fleet is owned, total is 59% of fleet, which is owned. So I think we have sufficient options to be able to finance ourselves. And ex of EUR 3.3 billion cash we also still have an RCF to our availability of $1.7 billion. So .

Jamie Rowbotham from Deutsche Bank. Two from me, potentially for Sophie. In terms of the thicker routes that you chose to trim in April and May. Looking at some of the scheduling data, it looked like it was Geneva to some of the Spanish destinations that was one of the most affected corridors. Does that resonate? And if so, any particular reason for trimming there? And then secondly, you say you won't cut anything more now for peak summer. It doesn't look like Ryanair or Wizz are cutting either. Its growth full steam ahead. Are you seeing any competitive capacity actions from maybe some of the smaller players that might mean a bit of an opportunity for easyJet in terms of market share?

So in terms of Geneva, I mean, Geneva is part of the mix that we did adjust for April and May, but that was -- I would say, what you saw in Spain was probably what you saw from most of the airports in terms of the trimming that we made. Actually, what we have been doing from Geneva is adjusting slightly some of the shorter sectors and growing more the longer leisure. So we did take some capacity out of Amsterdam out of out of Geneva into Paris as well. And we've redeployed that into [indiscernible] and some of the new routes that we've launched. So we are about 1.5 percentage points down in seat capacity, but we're at 1.7% in ASKs. So there is kind of route optimization. Now you'll see that in pockets across the network. We've done it also in Amsterdam. Predominantly in Amsterdam because the airport costs are so high. Actually, you can't cover the cost on a lot of the short sectors we have to reprofile a bit in Amsterdam. So Geneva seem something similar in terms of what we've done on reprofiling around the edges there. And then in terms of competitor capacity, I mean, the biggest noise came out with the Lufthansa announced sort of the 20,000 seats, but that was the CityLink operations, as you know. And actually, that doesn't really overlap with our network. That's a lot of the kind of short German sectors. So there's not a massive amount coming out. We're not seeing, as you say, [indiscernible] right now aren't really touching their capacity. We're seeing a little bit of moderated in volatile but only a very small amount within France predominantly, but it's just kind of trimming around the edges, and we've not seen anything from jet to leisure either at the moment. So I do think -- I think peak summer, as Kenton said, most airlines make money in peak summer. So I think most will be reluctant to take significant amount, I think winter will be more interesting because it's much more marginal. I think one of the interesting points to add is the EFT announced slot leviation potentially to go through and be approved. Now the slot leviation that they've announced is that you can get back 5% of your slots before the ninth of July and have full historical slot rights on those for the summer? And then beyond the month of July, you can nominate another 5% of sort and retain your historical rights. At the moment, easyJet doesn't have any plans to take advantage of that as a summary where we make the money. Interestingly, that is also going to apply for the winter. And that is where we'll be looking and running some scenarios over the coming weeks in terms of what makes sense and with different signs of rate fuel prices essentially. But winter is very much BAU because we always in sort of early July time, look at our winter schedule based on forward bookings and based on cost, and we always make moderation to our winter capacity. The slot alleviation is a new thing. But certainly, we and understand other carriers won't you take an anchor it -- some may, but certainly, we don't plan to continue.

It's Andrew from Barclays. Can I ask one -- sorry, back to Soohie, I think. How on earth -- maybe not, how do we do the revenue management in this environment when it's a game of chicken, I think, with the consumer isn't it? Because you don't want to see the loads for peak summer drop too low, down 7 [indiscernible] already for August. Yes, how are you thinking about managing the [indiscernible]? Second question for Garry, I think Jaime alluded to it in his early question, but you haven't given us very much detail or KPIs on selling prices and volumes for the summer. How -- what can you tell us about that? Or if you don't want to play with those some KPIs because perhaps they're not the best. What can you tell us about your ability to defend margin in the current environment, which is perhaps more important, and then if I dare a third question, what can you tell us about the MRO development? Because I think your planned acquisition in Slovenia has got a legal block. I know you've done Malta, but where are you going with the MRO development up there .

Great. I'll start then on the revenue management. I think one of the great things is we're fortunate to have our own in-house system. So actually, we can -- and we've got a great core dateline team that are dedicated in the revenue management team. So they're able to make sure that the system is optimizing for the current scenario. Now if you left the system alone, what it would want to do is it would be low bookings coming in, and therefore, it want to lower the fares because that's the way system naturally works. What we're doing is we're putting in an overlay that's not letting the system overreact to a drop in bookings. So we are adjusting what we call the rate of sale. So essentially, where you see lower bookings coming in, we're not letting the system drop below certain minimum levels. And -- but if bookings suddenly start to pick up, then it reacts more more rapidly to that increase. Now the way we're looking at something like August is because we know the traffic isn't coming in, we don't want the system to artificially pull down the fares, and so we are holding the system where it is. But what we are seeing is good conversion when people are looking for August. So searches for August, we were looking at it the other day. searches for August were down 15%. So people are not searching at the moment. But when they come in, the bookings are converting 13% up year-on-year. So that goes to illustrate that the demand isn't there at the moment because people aren't searching people are cautious. But actually when they're coming in, they are booking. And therefore, there's no reason to believe that we need to drop the fares anymore, but it's more about how we give people confidence to get people into the book flow in the first place. So -- so that's how we're adjusting the system, and that's how we're approaching revenue management for our Q4 is making sure that we are not letting the system react and we hold the fares where they are.

And the maintenance capacity. So we -- as you know, we bought our own heavy maintenance facility in Malta. We've been operating just over 4 days since we've got it. We're actually a very attractive employer in the area, and therefore, we've been attracting engineers and we're now able to open a fifth and sixth bay. So we will be increasing the capacity in our own maintenance it there. Regards future plans, I'll let Jan talk to future plans, but Steven was an interesting one. .

Yes. Well, I think the opportunity in Asia or in Slovenia was an interesting one. But as you're saying, we're currently waiting to be able to close that deal given that there is a ammenitization which is ongoing. But we can't really say anything additional to it. But so hopefully, that will be resolved because that will increase in the number of base that we will be able to in-source moving from a 25% currently in source heavy basement around 50%.

On hoses, -- there's such a lot of mix in what's being sold at the moment for H2 given the shift -- the initial shift away in demand from Turkey, Egypt, Cyprus and even Greece into Spain. And with that, when you look at that mix, then that does have a shift and a change in the margin. But as a kind of cost plus business, we will effectively take those reductions that earlier given as we'll put the mark up on and we'll sell through. I mean what I can tell you is that the average selling price has come down for H2. When we look at it versus some of the traditional players, clearly, where they've got the fixed costs within the accommodation and on the flights, they are really pulling the prices down to places like Spain, we're choosing not to go there. So we will maintain a base at which we will just not go to the kind of prices that they're going to. But we are confident by the end of the year that we will grow by kind of low double digits we won't go backwards on profitability. We will grow in profitability, and we will certainly take market share. So we're very, very happy at those kind of big levels that we are taking green boxes in that and doing very well. And that's where the model is there. in order to be able to react. It can move with the demand that can move as a cost base business where the customer wants to go and where the pricing is.

It's Jarrod Castle from UBS. 3 as well. On Slide 12, we show the base case look there. I was just want to get an idea, does that incorporate the tariff backdrop or geopolitical backdrop improves? And what would it mean if it doesn't incorporate that, what would it mean for the base case plan, I mean, could we see deferrals or groundings, et cetera, to -- over the next 2, 3 years, I guess? Secondly, any change in views on how you view the Middle East, let's say, again, the is behind us or rather Middle East exposed markets going forward, I guess, over the medium term, the current situation change your medium-term plan? And then just lastly on loyalty, can you give a bit of color what's changed your mind about having a loyalty program, maybe looking a little bit more like a full-service airline? And would you do anything else, maybe airport down to take it the answer no. But just how you've evolved in terms of loyalty thinking.

Jan, do you want to start with the fleet question.

Yes. I hope I understood the question well. The sort of base fleet plan gives you a view of what the aircraft or what the fleet will be at the end of the year. And so having those [indiscernible] 70 aircraft, for example, 2026 is the number of aircraft we're having at the end of the year. However, what we call it. I think the first time we called it out the peak lines of flying is really the number of aircraft that we have available at the peak moment, which, of course, what is driving your results. The difference between the base fleet plan and the peak line of flying is linked to the timing of deliveries of the aircraft. We normally always hope to have those aircraft before the summer. But because of some of the delays we have experienced with Airbus, they are also coming after the peak summer into the winter as the main explanation. Now within that base plan, but even in the peak lines are flying, we do have some flexibility, flexibility in terms of one, timing of deliveries of the aircraft firstly. But secondly, also into the decision as to whether or not prolong some of the leases that we have. So we have both upward and downward flexibility if we would need some.

And on the other 3 questions, I don't think of what's happening in the Middle East a change for long-term structure in the aviation industry. I don't see this as -- we will never get oil out of that region. Clearly, this will be resolved at some point. It's just as important but a rand to be having oil passing through the Strait of Hormuz as any other country. So longer term, life will go back to there being sufficient oil supply coming from everywhere, and that will drive prices down over the longer term. Will they come back to where it was, I don't know. Is that the question?

I'm really talking more about the network.

We don't really go to the Middle East. So no, I mean what we're seeing is the Egyptian in particular and anywhere around North Africa are incredibly responsive when they see demand pattern shift. And there are some fantastic offers, which means having dropped in the first few weeks of the contract by 50%, 60% to 70%. They are now performing up year-on-year with amazing for us very attractive, 5-star properties in Egypt being equivalent to 3-star properties in Spain. And when people really get out their maps and realize the Suez Canal isn't part of the Strait of Hormuz but it become more extent. And it's certainly doing really well in terms of searches, in terms of conversion, in terms of people traveling there. So no, it will be the short answer. No, I don't see anything in our network that would change. The only thing we have done is when it comes to flying back to Tel Aviv, we prolong the decision not to reenter that market to give us clarity on planning next winter. So we won't be going back to Israel next winter just for clarity. On the loyalty program, change of mind, I never thought it was a bad idea. We just didn't have one. I don't think that can't change in mind. We have we have -- we have 100 million customers, we are a very attractive airline from this markeplace. There's a white space in the market. We know that with British Airways becoming more of an elite program, points harder to get. They're kind of really not rewarding the frequent flyers to them from Scotland anymore, there are just opportunities in this space, and we'll reveal more about the type of program that will be, but we're seeing a growing membership anyway for easyJet Plus customers.

Ruairi Cullinane, RBC. So first question on staff unit costs, up 11%. Can you break that down at all? And how should we expect that to evolve -- and then secondly, fuel may not be passed through to fares this summer in short haul, how do you see that playing out? Does it just come back and dependent on competitor capacity? Or how do you think about that?

Do you want to start with the CASK.

I'll take the CASK. So one, first of all, overall CASK increased by 5% to be almost not or in line with our expectations if you the additional fuel cost into the Middle East price of GBP 25 million also the legal provision provisions that we've taken for some of the historic legal cases of GBP 32 million. If you look at CASK ex fuel that increased by 8%, obviously, higher than what we've experienced in the previous quarters and the previous years. It's not what we're expecting for the rest of the year. So for summer, we're expecting to come back to normality, which means on the CapEx fuel, which will increase with a low single digit. Now if you look at the CASK fuel increase of 8% was the reason for that. So partially, this is a bit linked to the one-offs, as I explained. So in the first half of 2026, we have those extra legal provisions of GBP 32 million, but also we didn't have the benefit that we had last year from the aircraft buybacks, which had a positive effect that's not returning. And secondly, we have been investing in additional resilience in summer, which has benefited our similar performance with disruption costs going down by GBP 50 million, and the divisional resilience, which is coming through additional crew is, of course, a cost that you are -- that is continuing during the winter. And the third element is linked to the load factor growth. So as Kenton mentioned earlier, our load factor grew by 2 percentage points. So that means that everything which is passenger rated costs is increasing. And fourthly, we also had an unfavorable foreign exchange movement with the euro evolving unfavorably versus the pound. And then finally, we have, of course, the above-inflation cost increase, especially in airports like Amsterdam, where cost increased by 34%, but also the general increase in terms of wages and salary. And all of that was not compensated sufficiently by the productivity increases that we've seen in terms of aircraft utilization but also productivity, and all the operational initiatives that we have seen. But so I think it will be a onetime element, this first half. For the second half, we're expecting CASK fuel to go down again in the sense that it will only increase but in low digit -- low single-digit amount.

And back to the fair question and the ability to pass on the incremental fuel costs. [indiscernible] this summer are going to be dynamically priced the way logos carriers always do. So it will depend on the real will bend on the demand, it will depend on the timing of the route. At the moment, spares are slightly above where they were last year for peak season, but that will be dynamic. And if competitors are looking for for fairs to be flat or down, then there will be some elements of that driving the market will depend route by route what the situation is. When you look further out, -- we're in a more inelastic period for people booking in winter. That's why we have increased the minimum fair price to start reflecting the -- our outlook for fuel costs. And at the moment, obviously, that price is sticking people are buying. Our load factor is marginally up for where it was this time last year for winter. So it really is the the concern of the rolling 4 weeks that has created the uncertainty and people are just leaving that decision later. But it's -- but we don't yet know what the fair environment would be for the latest in July or was in September.

[indiscernible] here from Bloomberg Intelligence. So just to pick up on an earlier point. I mean, what does this sort of move away from the longer leisure phase towards more cities and domestic. What does it mean for your utilization? And to what extent does that actually play into your actual cost guidance? And then Second one on the demand side, while I can appreciate the geopolitical concerns and concerns on [indiscernible] when everything are contributing to the shorter booking window. What is your general sense on the underlying demand help of the consumer, given that things like higher energy bills will no doubt hit people in the pocket?

I'll start with the last question on demand path and then to Jan to talk about the CASK impact of some of those shorter measure routes, although this isn't a wholesale move. So it's on the edges we're looking at here in terms of that. In terms of the demand health, I think you've got the world before the Middle East crisis and the world after. I mean before customer was there. We were growing. We saw a 6% increase in passengers. For the airline, we saw a 22% increase in passengers. The holiday is we know we've put a lot of investment in those in that capacity, and I'd expect those to mature over time. So people were definitely traveling, they were buying, the mom was robust. As we look forward, it remains very strong in the month of departure. So people are traveling and they're traveling in -- their masses and searches really ramp up. I think what's hard to gauge is what's fully behind the uncertainty with so many factors? Is it the price of petrol [indiscernible]? Is it the the rumors that fuel is not going to be there, which hopefully will start abating as more of the conversation comes out that pure supply looks good for the summer. Is it the impact of supermarket costs? Really hard to put your your finger on it. All we know is when it comes to the in-month window, people are looking at the bookings strong. Hopefully, as these fuel concerns and supply start alleviating at least for this summer, we'll see people coming back earlier but there has been a watch-and-wait approach, but we haven't yet got into high season. We still got the majority of our seats to sell for Q4. So that's wait-and-see

Sophie, you can always or you want to answer or I can try it first. You start.

I'll start anyway you probably had on the cash but I think what's interesting is, although we are adding cities and domestic but also having long leisure, so a lot more into non-EU. So on the net balance is actually our ASKs are still growing. So seat capacity for the second half is up 2%, but our ASKs are going to be up 3%. So -- or sorry, the ASK is actual up 5% for the sector length is up 3%. So what you'll see in that mix is kind of rebalancing of what you have in your kind of core leisure beach. You've got some more long leisure coming in, so we've got Egypt, we've got a lot more into North Africa. And then you're balancing that with more cities and domestics. And net-net, you're still going to see capacity growth greater than your seat growth in the market. So it's a bit of a mix effect taking a bit of remixing that leisure. And that's also at holidays and some of the success you've had there with some of that long leisure as well.

Yes. And I think adding to that, first of all, growing a little bit more on cities in domestic is not necessarily a wrong thing because if we look at our current RASK development, we do see that sales and domestics are more resilient than currently more leisure destinations, first of all. And secondly, I think the growth in cities and domestic is probably more focused on U.K. and more specifically on London and in winter because if you would look today at the repetition in terms of seat capacity cities versus leisure or non-European and especially out of the U.K., the amount of seats on cities have gone down in proportion. So we feel that there is an opportunity to rebuild at the future position, especially on winter out of London. And that does mean that it will also drive your aircraft utilization because currently, our productivity in winter out of London is probably not the highest. So that should have also a positive cost benefit.

It's Harry Gowers from JPMorgan. The first question, I wanted to ask about the kind of market pay the supply on beach roots, which you mentioned during winter, and I think maybe a little bit into summer, especially U.K. Beach. Are you starting to see that kind of change in any way, whether it's summer or looking early out to winter? And is that just completely relying on Tel Aviv or Israel reopening? I guess you could argue structurally some capacity will -- might never go back to that kind of adjacent region. And then just going back on the Q4 kind of holding on to the higher yields at the moment in revenue management. Is the aim at the moment to be flat on load factor year-over-year when we get there? Or would you take lower loads to higher prices. So would you be happy with the current mix once we get into properly into Q4? And then just final one. You do have this new GBP 250 million cost benefit number from the phasing out of the A319s over '27 and '28. Just to confirm, that's basically a pull forward of upgauging. It's not completely incremental to the GBP 1 billion PBT number, medium term? And I guess for us, kind of simple should we just add GBP 250 million to our numbers for '27 and '28 or not?

I'll start with the last question. It was a pretty interesting one, isn't it? I mean the GBP 250 million is saying, if in '28, we flew the program that we flew in 2016 with those 28 aircraft, that will be the cost benefit. It burns less fuel when you have a neo flying on an A319 route. And therefore, if you have the same capacity and you remixed it with those aircraft, then the fuel savings, the the pilot savings, the cabin crew savings would land through a EUR 0.25 billion. So that's the cost benefit. And okay, if you do it on '28 capacity, you also get the scaling benefits of having more seats on the planes, and that's when the fixed costs come through as well, which is why there's a delta between cash and fixed costs. The impact, but to make it very clear, they are part of our medium-term targets. So you can't handle of a digitally. I mean, always part of medium-term targets was the profit improvement in holidays, which is coming through. The upgauging, which is unfortunately since 2023 moved to the right and then hard to get your fingers on. What we're saying now is -- coming in the next 2 years, a large chunk of that will come. So that's what's coming -- the update is coming near term. It was always part of the medium-term targets. We always said it's about GBP 3 per seat. How much we then trade off with revenue dilution from filling the actual seats will learn more. It hasn't -- we haven't seen much from the -- going from 100 A319s through to 80, but this is all 80 going effectively in the next 3 years. but that will be on the figure routes. It will be in slot-constrained airports. You don't need to put a new route in play, so it's not proving out new routes, whereas the 24% increase in CASK that we've done over the last 3 winters, our gauge is very moved. So that is new routes, aircraft flying new places that means maturing. This doesn't need maturing to be for the same way. Oversupply on U.K. Beach, so [indiscernible]

Yes. I mean there is more capacity on U.K. Beach even this summer, 8% up in Italy, Portugal and Spain. So all of those seen more capacity. I mean, interestingly is where that's coming from. From our own perspective, our growth has only been on the Newcastle base opening for this summer. So that's where a lot of that beach growth has come from us. If you look at something like Gatwick, 53.7% of our capacity in H2 in [indiscernible] cities and domestics. And to my earlier point, that is where we are growing more. So adding H2 capacity on cities and domestics at Gatwick this summer, up by 3.1% versus last year, compared with removing 0.3% on beach routes. So we are, as we said earlier, that's part of the network optimization. So for us, it's routes like adding a new key, which we see as a great opportunity for the summer, those sorts of things that just make sense. And then building back more into places like Dusseldorf, Madrid, Porto Berlin and so on from Gatwick. So yes, we're seeing -- still seeing pressure, I think, on U.K. leisure more broadly. The benefit we've got is the fact we have Easter holidays, that gives us an advantage over many other airlines and the fact we've got flexibility with the Easter holidays model, that means we're not fixed to certain destinations. So if the Egyptian hotels find great deals, we'll just sell more holidays to Egypt and less -- and if the Spanish hotel is keep their prices up, we'll just see less conversion there, but will still seem on flight seat only. So that's kind of what we're seeing. I don't think Tel Aviv would make a significant difference kind of longer term in terms of capacity from the U.K. versus the leisure market. And then on your point around Q4 yields, load tractor and where that balance is and where we get that right. I mean ultimately, we get -- we aim for the balance to get the best net profit. So whether that means that we don't take the full load factor. In terms of load factor objectives, we want to continue to achieve the load factors we have done historically. And we want to be realistic, but we're not going to go for that load factor at any cost. So obviously, load factor for us, we benefit then from ancillary sales. and ancillary sales continue to be strong for us. And therefore, we take the balance of both ancillary plus ticket when we're making a decision on overall final load factors. So we will still aim to get the load factor, but we're not going to do any cost in terms of ticket yields. And there will be certain routes where you're right, where actually, if we don't see the demand coming in, it makes sense just to take the yields you can on the people are coming in and you'll keep the yields high. But generally, for Q4, most will be demand led in terms of bookings and pricing.

Well, thank you very much for all the questions. Thank you for coming today, and we will be around for a few minutes if anyone wants any kind of one-on-one questions afterwards, please come forward. Myself, Jan, and the team will be here.