Finnair Oyj (FIA1S) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. I'm Erkka Salonen from Finnair IR and it's my pleasure to welcome you all to this Finnair Second Quarter and Half Year 2023 Earnings Call. I am here with me, Finnair's CEO, Mr. Topi Manner and he is joined by our CFO, Mr. Kristian Pullola, for the Q&A session. I will now turn this call over to you, Topi. Please. Go ahead.

Thank you, Erkka and good day, everybody and welcome to this Q2 earnings call. This was a strong quarter overall for Finnair driven by strong demand and successful strategy implementation. And on the back of this, we are today, raising our long-term profitability target to 6% of EBIT by end of 2025. As stated, a strong quarter on all accounts. Our comparable EBIT landed at EUR 66 million. This was the fourth consecutive quarter of comparable -- positive comparable operating profit. And the third consecutive quarter of positive net result. During the quarter, we carried 2.8 million passengers. We operated 75% of our Q1 -- sorry, our Q2 2019 ASKs in terms of our own scheduled service. And when we calculate in the wet lease operations for our partners, the capacity number was 78%. This was a bit less than we originally planned. And the reason is, basically the core global capacity bottlenecks that we are seeing all around the global aviation. There's lack of aircraft, lack of pilots and other staff and lack of spare parts as well. And especially the lack of spare parts has prolonged the maintenance schedule of some of our narrow-body aircraft and then that impacted our capacity a bit temporarily during the quarter. The flip side of the capacity bottlenecks, however, is that we have experienced good demand for our wet lease services as witnessed by the Qantas deal that we announced during the quarter. The overall capacity situation, the supply situation versus demand in European Aviation and in Global Aviation is tight at the moment. And that is contributing positively to the unit revenue development. So our RASK was 27% above the Q2 2019 level. The load factor in almost all traffic categories improved. Our overall load factor was 76% during the quarter. Customer satisfaction was at 35, so a good number in international comparison. For example, the average of the U.S. airlines seems to be at present time, around -- hovering around 25. On-time performance, 85% is a good number for the quarter. And during the past months, we have been one of the most reliable airlines in Europe. So as stated, our strategy implementation is progressing well. During the quarter, we announced the mentioned deal with Qantas. So we are wet leasing first, leasing aircraft and crew for Qantas, 2 Airbus 330s for 2 years. And then the lease will continue as dry lease. So without crew for 2.5 years. So this is a long-term deal and quite a groundbreaking partnership in global aviation as now -- now we are partnering with an airline that operates on Southern Hemisphere, quite far from our Helsinki hub. And this is a testament to Finnair's operational quality. Qantas, of course, is a renowned and quality airline and the fact that they have been choosing us as a partner speaks for itself and then also that we are able to operate from Singapore and Bangkok to Sydney is also a noteworthy thing. During the quarter, we introduced a new Superlight ticket and new package allowances as part of our product offering updates. The Superlight ticket is part of our strategy in a sense that as a network carrier, as a quality carrier, we offer wide range of services to different customer needs. At the other end of the spectrum, we have our long-haul business class, which is award-winning and really a 5-star experience. In the other end of the spectrum, we have the Superlight ticket in our European short-haul traffic for the most price-sensitive customers. And then we have various cabins; business class, premium economy, economy and various fare types, as well as ancillary services for different needs in between the opposite ends of the spectrum. During the past years, Finnair has been one of the only carriers that has been investing significantly into cabin refurbishment and that we have been doing in the form of our elevated long-haul experience. This has been a significant investment altogether, EUR 200 million. And it is progressing well as we speak. So currently, we have 18 out of 25 widebodies completed and we expect to complete the full rollout by spring next year. Customers like the new cabins and we are clearly getting positive feedback of that. The premium economy travel class has been finding its customer base. So we are very happy with that. And the business class offering that we have in the form of air lounge seats, is clearly differentiating us from the competition. And then we have been reaching the targets of this investment, both in terms of customer experience as well as in terms of commercial and financial development. Another noteworthy happening during the quarter was that we were yet again selected as the best airline in Northern Europe. Actually for the 13th consecutive time by Skytrax Customer Review. And then our home hub in Helsinki-Vantaa was selected as the best European airport in its category during this year. It is a well-functioning airport, very smooth, modern experience for our customers. So first and foremost, we would like to congratulate Finavia, the airport operator. But then again, we are also big part of the Helsinki-Vantaa operations ourselves and the airport is big part of the customer journey of our customers. So we are happy that we can offer the airport services also to our customers. This is a differentiating element in the customer experience of Finnair in comparison to many other airlines. When we look at the specific risks related to our business environment, we conclude that they have normalized. And with the specific risks, we especially refer to the pandemic on one hand and the Russian airspace closure in the other hand. The impacts of the pandemic have basically faded away. And then the Russian airspace closure is sort of a new normal and the market has adapted to this reality and the same applies to Finnair as well. Having said that, we still see that inflation and rising interest rates are causing uncertainty in our operating environment. And those risks are on elevated level when it comes to customer purchase power. Yet at this point of time, we see a strong booking curve and we clearly see customers, consumers prioritizing travel spend as part of their overall spend. We have been starting to pay back the debt that we have accumulated during the quarter and now our net debt has decreased to EUR 850 million. And now the strong cash flow stemming from the profitability, together with the decreased risks of our operating environment basically enable us to call the EUR 200 million hybrid bond in September. That is our intention. And with that, we are avoiding the bond annual coupon of EUR 20 million and being able to decrease our finance expenses, which is important for our net profit development going forward. So when we look at the Q2 numbers little bit more in detail. The Q2 comparable EBIT margin was 8.8% and clearly better than the comparable operating profit in Q2 2019. And this, despite the fact that in 2019, we operated through the Russian airspace, our Asian network. So the Q2 revenue was EUR 749 million, comparable EBITDA at 17% level, roughly speaking. And comparable operating result, I mentioned, EUR 66 million. I mean when we decompose the number a bit, then we see that our sales efforts as well as our revenue management has been successful during the quarter. And all the strategic initiatives that we have been taking to increase the share of direct distribution in the past, improved the digital sales and marketing, taking into usage advanced revenue management tools, they are visible in this number. The same applies to our cost management measures, despite the fact that the fuel in 2019 was on lower level, our operating costs are lower than back in 2019. And as stated, the measures that we have been taking during the past years, as well as during the quarter, are visible in the cost numbers, improving our operating leverage. The result before taxes was EUR 44 million, which is a good number in itself. But then given the fact that our longer-term profitability outlook has improved due to the successful strategy implementation, we are also re-recognizing writing back EUR 99 million of deferred tax assets. Those deferred tax assets that we wrote down in Q2 of last year. And on the back of that, our result for the period was EUR 139 million. So as stated, this is the fourth consecutive quarter of comparable -- positive comparable operating profit. And when we look at the past 12 months, our comparable EBIT has been at the level of EUR 120 million. So with that, we can clearly say that we have turned a corner in terms of restoring our profitability. And we have turned a corner in terms of coming back to profitability on full year basis. And we expect the good profit development to continue. As part of our guidance, we are stating that we expect the EBIT for this calendar year to land within the range of EUR 150 million to EUR 210 million, the midpoint there being EUR 180 million. As you would know, the Q3 is always seasonally the strongest in aviation. And when we look at the bookings for Q3 we conclude that we expect that it will be a good summer. It will be a summer of busy travel and that is part of our expectations for the remainder of the year. Looking into the cash position. We started the quarter with little less than EUR 1.6 billion of cash. There was a strong operating cash flow generation of EUR 176 million and during the quarter, we also started the repayments of our loans, repayment of pension premium loan, there the first down payment was EUR 100 million. And the quarter ended with a cash balance of a bit more than EUR 1.5 billion. The cash-to-sales ratio being 54%, which is a strong number. The positive net result is visible in the balance sheet ratios. So clearly, the balance sheet ratios still need improvement and we will continue to work on that going forward. But the direction of development is the right one. So equity ratio at the end of the quarter stood at 13% roughly. And the gearing decreased to roughly 150%. As stated, we intend to pay back the hybrid, the EUR 200 million hybrid in September and that will be having a negative impact to both of these ratios during Q3. But at the same time, as stated, Q3 is always seasonally strongest and then the bookings for that quarter have been good. So that basically covers the quarter but as stated, in our profit warning a couple of weeks back, we are now in a situation where we can say that we will reach our previous profitability target of 5% EBIT from mid-2024 onwards, 12 to 18 months ahead of time. And this means that we have been proceeding faster and better in our strategy implementation as we originally anticipated. And therefore, today, we are increasing our midterm target, our longer-term profitability target to 6% by end of 2025. And we are also making selected evolutionary updates to our strategy. We have been having pretty much sole focused to improving our profitability during the past year. And now we can say that we have restored the profitability and that enables a bit more balanced approach for us going forward. So we will certainly keep our focus on improving profitability as witnessed by the increase of the target to 6%. But at the same time, we will be balancing the approach and we will be, in addition to profitability focusing more on customer satisfaction and employee satisfaction because we believe that they will be crucial in the long-term success of Finnair. We have 6 strategic themes: customer-centric commercial and operational excellence being the first one, balanced growth enabled by optimized fleet being the second one, continuous cost efficiency to stay competitive. We maintain our focus to sustainability. We want to be among industry sustainability leaders. We maintain our focus to balance sheet. We want to build a sustainable balance sheet over time. And then as a new theme, we are introducing adaptable Finnair culture driven by engaged people. So when we take a bit deeper look into the strategy themes, with respect to customer-centric commercial and operational excellence, I think that we have accomplished a lot during the past years. As stated, we have been improving the share of direct distribution. We have been improving our digital sales and marketing, the product offering, taking advanced revenue management tools into use. And the next step, the next chapter of this will be that we will be focusing more on customer need and data-driven retailing. Instead of sales transactions, we aim to create more relationships with our customers, across products, across customer segments. And with that, we want to drive loyalty and we want to drive continuous customer engagement, also being able to ultimately monetize the loyalty. In order to do this commercially, we need excellent operations. We will continue our focus to safety and on-time performance. And we will be increasing our focus and investing more in data and analytics to deliver smooth journeys and be able to deliver through operations, the more personalized offerings to our customers. In terms of balanced growth supported by optimized fleet, here, the starting point of our thinking is that we have now optimized our fleet. And on the back of the Qantas deal of 2 Airbus 330s, we are happy with the fleet that we are currently having. So going forward, we want to grow in line with the market, while we want to maintain the flexibility to rebuild the Asia-Europe connections, if one day in the future, there would be a peace in Ukraine and the Russian airspace would be open again. So growing with the market, while maintaining this Russian airspace option is part of our thinking. And the reason why we think that we can grow with the markets, with the current fleet is that we think that we have an efficiency possibility in terms of faster aircraft turnarounds and improved aircraft utilization by doing smart changes in our network and scheduling. And also, we have an opportunity to pull back some of our wet-leased, narrow-body capacity. And together, these 3 elements enable a cost competitive way for us to increase capacity and as stated, to grow in line with the market. This would be also meaning a bit more employment, a bit more recruiting needs in Finnair during the upcoming period. In terms of continuous cost efficiency to ensure competitiveness, during the past 3 years, we have been running a program-based cost resetting, basically adapting to the circumstances in our surrounding environment. Going forward, we want to increasingly move to continuous, yet more incremental improvements in cost efficiency. To stay competitive versus all of our competitors, the network carriers and low-cost carriers alike and at the same time, to make sure the true cost efficiency over time, we have the possibility to invest in our customer offering and customer experience. In terms of sustainability, we want to be among industry sustainability leaders as before. We are fully committed to reaching carbon neutrality by 2045, that being our strategic target in terms of environmental sustainability. And in doing so, we are now moving away from the use of offsets in favor of various types of measures that truly reduce our direct emissions. And while we are doing this, as communicated before, we are committed to Science Based Targets initiative. And now what we will be doing is that we will be submitting our sustainability targets to validation by the Science Based Targets initiative during the fall and we expect that we get the targets validated early next year. So Science Based Targets initiative being a global best practice in the -- in terms of carbon reduction, we think that this is a good step forward in our sustainability agenda. And we do acknowledge that over long term, over time, this will be meaning increased investments to reduce carbon emissions by means of using, for example, sustainable aviation fuels more -- clearly more and investing to new aircraft and engine technology producing less carbon emissions. As stated, we want to build a sustainable balance sheet over time through profitability. The re-recognition of the deferred tax assets we already covered. And the next step indeed would be this payback of the EUR 200 million hybrid bond in September. Finally, last but not least, adaptable Finnair culture driven by engaged people is the last theme of our culture. And when we now look back, I think then we can conclude that Finnair has a huge strength in the adaptable culture of working together. I'm really proud of the way the whole Finnair team has been taking the company through the pandemic, adapting to Russian airspace closure, defining a new strategy and then implementing that strategy successfully to the extent that now we can announce the best Q2 results ever in the history of Finnair. So this adaptable culture of working together is something that we want to nurture going forward and we want to strengthen even more going forward. And we acknowledge that, that stems from our people. So we will be increasing our investments to training, competency and capability development, generally to well-being of our customers and we believe that while doing so, that will be improving our customer experience and our profitability hence, the more balanced approach to strategy. As stated on the overall, an evolution of the strategy that we communicated in September last year and selected updates to the strategy. This brings me to the last page of the presentation, the outlook and guidance. In terms of outlook, we are reiterating our capacity guidance for the year, where we estimate that we will be flying 80% to 85% of ASKs compared to 2019 level. We are also reiterating our previous guidance in terms of revenue, so we estimate that the revenue will be increasing significantly year-on-year but will not yet reach the 2019 level. And the range related to operating results, we are specifying that guidance and indicate a range of -- from EUR 150 million to EUR 210 million, as I stated previously. And then we are reiterating the comments that I made earlier in the presentation in terms of the specific risks of our operating environment normalizing, yet interest rate risk and inflation still being on elevated levels. And as per usual, we will be updating our outlook and guidance in connection to Q3 report during the fall. So as stated, a strong quarter from us, best in Finnair history, if we look at Q2 isolated. And on the back of the successful strategy implementation, our longer-term outlook has improved. And therefore, we are now in a position to make these selected updates to our strategy and increase our long-term profitability target to 6% of EBIT. I'll stop at this. Thank you.

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

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

Congrats on the strong numbers in Q2. Regarding the second half outlook, you must have a pretty good understanding how Q3 will turn out. However, have you -- do you have any kind of early indications on the booking curve you see towards Q3 -- Q4, sorry, how does that compare to 2019? And do you have kind of a confidence that the demand momentum will sustain in Q4? What are the key risks for that?

Yes. Thank you for the question, Jaakko. I stated, I mean, we have sort of statistically significant forecasting models, especially now for Q3 and that indeed looks to be good, as you alluded to. Then the bookings further out in the curve for Q4 are still a bit more thin, just the way the normal booking curve looks like. And then therefore, they are not statistically as representative as the sort of 3-month outlook. But certainly, I mean, if we look at the current bookings that we have currently and if we compare that to second half of 2019, the booking curve looks pretty much similar. So therefore, there are no sort of signs of weakness in the booking curve. But we just acknowledge that the Q4 part of the booking curve is little bit less statistically representative. Kristian, I don't know whether you want to [indiscernible].

Yes, nothing to add. So no indication that there would be any change. However, the normal booking curve is such that we only have a small number of bookings at this stage for Q4. And because of that, we need to be kind of holding our eyes open for how consumers in the end will respond to inflation and higher interest rates and in that sense, choose to travel going forward.

That's very helpful. Perhaps a follow-up on that one. If the demand starts to kind of deteriorate from the current strong levels towards Q4, do you have kind of a room to adapt your capacity in order to keep the profits on a healthy level?

I mean when we look at the situation, as it is, as stated, there are these capacity bottlenecks in the overall aviation, globally in Europe and that also applies to our traffic. So if we would have had the possibility to fly more during Q2, then we would have actually done that. Then again, the flip side of this is that the tight capacity -- sort of demand supply situation on the market, of course, is a good environment for revenue management and that certainly is visible in the RASK development. So for the time being, I think that we can still maintain discipline in terms of capacity allocation even if the demand environment would turn in to be a bit softer than it is today.

Then my second one, regarding the strategic plan and the optimized fleet. Looking a bit further down the road, do I read you correctly that there is no near-term plans for fleet investments, excluding those agreed 350s that are coming in? And could you remind us about the oldest aircraft you have here on your fleet? When will be the time to kind of replace those?

So I mean on the overall, if we look at the growth prospects, as stated in terms of our strategy update, we have now optimized our fleet and we are happy with our fleet. And that includes, to your point, the order book that we are having. So we still have 2 Airbus 350s coming up, 1 in late '24 and another 1 in Q2 '26. And we see a use case for these aircraft. So we are planning to take them to be part of our scheduled service going forward. So -- then we expect that we can grow in line with the market going forward by increasing the utilization, especially of our narrow-body aircraft with faster turnaround times, generally increased utilization, doing network and scheduling adjustments and then taking back some of the wet lease capacity into usage. So this is the sort of short- to medium-term agenda in terms of us being able to grow cost efficiently with our current fleet. Then looking little bit further ahead, the narrow-body replacement with new technology is on our agenda. It's not actual right now. But when you consider, for example, the age of our fleet on one hand and then the Science Based Targets for sustainability on the other hand, then they point to the direction that a narrow-body replacement will be needed at some point of time. As stated, this is not agenda -- the agenda right now but eventually, we will be coming back to this.

Then on cost and the maintenance costs, you mentioned that the lack of spare parts have prolonged the maintenance schedule there, probably explaining the declined costs in maintenance line. When should we expect the maintenance schedule to kind of be catched up and will we see then elevated maintenance costs?

I don't think it's that visible actually on the cost side. It's more visible on the amount of flying. So the fact that we were a bit soft on ASKs compared to '19 is maybe where you see the impact from slightly longer maintenance times. On the cost side, the fleet optimization is also optimizing to some extent, the maintenance cost. We bought back some leased aircraft, which allows us to optimize for maintenance cost also. So I don't see this as something where we would somehow have higher maintenance cost when there is a possibility to catch up. And the tightness in the market doesn't seem to be going away anytime soon. So I think this is a thing that we need to learn to work with over the quarters to come. And maybe a bit back to the previous question also. The narrow-body fleet is working well for us currently. It is getting older. The average age is a bit north of 20 years. But still, these are aircrafts where the operating life cycle is 30 to 35 years. So in that sense, there is still life in them. But as Topi said, at some point of time, from a fuel efficiency point of view, moving to new technology will be required but we have time to plan for that. And in that sense, we also have time to see that the new technology matures. And from a maintenance point of view, becomes cost effective.

Then perhaps a final one regarding the tax assets that you've kind of exploited in the P&L this quarter. Do you have still those assets in kind of -- in your reserves? Meaning that, I understand that you don't have to -- from a cash flow perspective, you don't have to pay taxes for some time. But can you still show positive taxes on the P&L going forward?

Yes. So we booked now the approximately EUR 100 million of the deferred tax assets. And in total, we had some EUR 160 million of them. So there is still some EUR 60 million or so to be recognized if the current kind of profitability trend continues. And then when it comes to cash taxes, we now have a buffer for years to come. And in that sense, the losses that the company has made over the past years will now then be used to offset cash taxes for years to come.

The next question comes from Achal Kumar from HSBC.

First of all, well done on this -- on such a strong results. So I -- so first of all, going back to the yield, so your Q2 yields were up almost 35%, 36% versus pre-COVID levels. You mentioned that Q3 yields looks pretty strong. But I mean, how should we look at Q3 yields versus Q3 2019? And how do they look like versus pre-COVID levels for Q3? And then in this -- the performance in the second quarter yield, which you reported, could you please give us a bit of color as to what was the underlying yield growth, if you need to compare apple-to-apple versus pre-COVID, how much of it was driven by Qatar operations or you know -- so if you could give us a bit of color on that, that would be very helpful, please.

Yes. So I think first of all, so we are not guiding specifically yield development going into Q3. I think we've given you quite many tools to assess our future performance on both in terms of how we see overall revenue development as well as then giving a guidance range for profitability. So again, as we said, we have better visibility into Q3 from a demand point of view. There is still tickets to be sold. We haven't seen any change in the demand for travel and then, of course, going into Q4. As we said earlier, there is less proof points because we have sold less of Q4, which is normal at the time, it's really kind of when people come back from this vacation period when they start booking the following one. So say, mid-August, we'll have a better view on how Q4 starts to pile up. But I don't know, Topi on the drivers for yield.

I think that you covered it well. The only thing that we have been probably saying related to yields previously is that we would be expecting the normal seasonal patterns of yield to apply. So that, of course, gives you some idea of Q3 as well.

And I think if your second question was a bit on what drove yield in Q2? Clearly, the demand has been broad-based. We see good demand for all of our business, including domestic business. And as a result of that, that is visible also in prices. And in that sense, I don't think there is one single reason for the strong yield development versus '19. The Qatar deal by itself isn't kind of moving the needle on this one. So it is a broad-based development across the board, which is coming from also the fact that we are addressing the customers that we fly more directly. And as a result of that, we have been successfully managing revenue in the direct channel, which is then also visible on -- in yields.

The other one I wanted to understand, if you could please help on the -- so you mentioned that you have come out with a different -- with a new product, let's say, like a light fare. Is that a product you have launched on all of your network or is it just for the European network? What's the status? And if that is the case, do you have any sort of a long-term target for your ancillary revenue?

So the Superlight fare that we have now introduced during the course of the Q2 is only applicable to our European short-haul traffic. We do have light fares that are little bit different from the Superlight fare that we apply in our long haul parts of the business as well. And this yet again comes back to our strategy of offering various travel classes, various fare types to different types of customer needs, ranging from very price-sensitive consumers to affluent, premium-oriented consumers and everything in between.

And any long-term target for your ancillary revenue?

No. We haven't disclosed any long-term targets for ancillary revenue specifically. But clearly, when we come back to our strategy updates that we just covered, the customer-centric commercial and operational excellence, is obviously zooming in on this part in particular. So I think that we have been taking significant steps forward in this agenda. And the next step really is the customer need and data-driven retailing also driving loyalty going forward. And in the loyalty part of business, we see that we are underpenetrated at this point of time. So that would be an example of where we see upside going forward. So we are very focused on driving upselling, meaning upselling of fare types, upselling of travel classes at this point of time. And we are very focused in terms of increasing the ancillary sales. And then we are proceeding well on that strategic agenda and it is clearly contributing positively to the RASK development that we have currently, so to the 27% RASK increase that we saw in Q2.

You could say that the long-term target is more.

Yes.

Fair enough. Could you please also give us a bit of color in terms of trading in different markets? And then how the competitive landscape looks like in those markets, please?

Well, I mean, as stated, we have been seeing a broad-based good level of demand across our travel classes. So that's good to see. I mean, if I take a travel class, by travel class or travel category, by travel category, in Asian traffic, the market has adapted to Russian aerospace closure in the markets like Japan, Korea, Hong Kong, Singapore, India, Thailand. There's a level playing field and even though the cost of flying has been going up significantly, also the yield levels have been going up significantly. At the same time, we see that European network carriers have not been deploying as much capacity to these routes as before because they are also having these capacity bottlenecks that we alluded to and they have profitable flying elsewhere, for example, in the Atlantic traffic. So therefore, the profitability of the Asian travel traffic category for us has been clearly a positive surprise and we see high sustained yield levels there. In -- when we talk about long haul, the Middle East traffic category, there the commercial agreement with -- the commercial partnership with Qatar Airways is working well. We have stability in our operations. But of course, the seasonality of that traffic is little bit opposite to our own seasonality. So when interpreting the traffic numbers, you will need to take this into account. In the North American traffic category, I think that there we see probably the most competition at this point of time. There's quite a bit of competition in the Atlantic. Yet again, we are benefiting from the distribution power of our oneworld partners, American Airlines and Alaskan Airlines in the U.S. market. So on the overall, we are happy with that travel category as well. And then Europe and domestic included, is performing well. So the demand for short-haul traffic, both to and from Finland has been strong and that clearly has been reflected in the yield levels.

But how does the competitive landscape looks like in Europe market, European market, please?

Well, I mean if we see -- look at the market share development in Helsinki hub, that is probably the most relevant number for us. We see a stable development of the market share. So the competition definitely is there and we meet it every day. But market share wise, there has been -- there has not been any big swing -- developments to one direction or the other.

Fair enough. In terms of Asia, I think you rightly mentioned that most of the European carriers are still limiting to the capacity they are deploying in Asian markets. Now of course, I think yields had been very strong and that's why I think you have deployed the Asian -- your [indiscernible] capacity in Asia. But I mean, of course, tomorrow, of course, there's is a clear risk of yields normalizing. And in that situation, of course, in case the Russian market -- Russian aerospace remain close, then, of course, these operations will not be -- will really not be profitable. So do you have any sort of anything in mind as to what will happen to your Asian operation and where would you deploy that capacity in case these things happens? And then given that yields are so strong. And then, of course, the passenger will have an option to fly with Chinese carriers, so -- who do have access to Russian. So how does the overall equation looks like in your mind? Please give us a bit of a color or thought process there.