Flughafen Wien Aktiengesellschaft (FLU) Earnings Call Transcript & Summary

[Foreign Language] Okay. Ladies and gentlemen, welcome to our conference call for the traffic results of the full year 2020 and the forecast for 2021 of Vienna Airport. Today's presentation will be held as usual by our Board members, Mr. Julian Jäger and Mr. Günther Ofner. The presentation will be followed by a Q&A session where you will be given the opportunity to ask your questions. [Operator Instructions] The call will be recorded and will be available on our website shortly. The slides of the presentation that will be held now are also available on our website under presentations. And now I would like to hand over to our Board member, Mr. Jäger. Please go ahead, sir.

Thank you very much, Mr. Schmidt. Ladies and gentlemen, good afternoon. It's our pleasure to talk to you today about probably the most difficult year in the history of Vienna Airport or probably of most airports, at least in Europe. In 2020, finally, we had 7.8 million passengers at Vienna Airport, which is a decrease of 75.3%. And this result brought us back in the year 1994, where we had pretty much exactly the same passenger number. It's of little comfort to us that essentially, the whole world is suffering to a different degrees from the corona pandemic and the aviation industry all over the world is heavily impacted. Our outlook for 2021 see then an upturn from these figures. We think that we'll reach for the full year around 12.5 million passengers, which is roughly 40% of the pre-corona level. We think that more than 9 million of these 12.5 million passengers will be frequenting Vienna Airport in the second half of this year. So the first quarter is expected to be very, very weak and is expected to be roughly on the levels we are seeing today. So what we're expecting is to have a very difficult first quarter, a certain relief in Q2. And then from July onwards, between 50% and 60% of the traffic levels of 2019. In -- for 2022 and 2023, it's still our expectation to reach roughly 70% of the pre-COVID levels in 2022 and 80% of the pre-COVID levels in 2023. With those 40% of the pre-COVID levels we expect to achieve a small plus in our net result. From today's point of view, it should be around EUR 4 million. But obviously, that's the assumption we are working on from today's point of view. Overall, the decisive factor, if we manage to achieve these results, will be the speed of the vaccination in Europe mainly. We expect that definitely in Q2, there will be vaccination available for a big bulk of the population in Austria and all over Europe. And therefore, we think in Q3, passenger numbers will go up significantly and that we reach the level of roughly 50% of 2019. What is obvious that the uncertainty of our assumptions and our guidance is this year, probably even more difficult than in a normal year. But I think this is understood anyway. Maybe to look back for just a second. The development in 2020 was obviously a very difficult one. We had a record January, record February, all-time highs in these months, and then we were heavily hit. And I just would like to highlight on this on Slide 3, August and July. And I think in August, we already had 30,000 passengers per day. On average, it was 25,000 passengers per day. Back then, there was no talk about the vaccine at all. So therefore, this gives us hope that as soon as there's some -- the travel freedom there again, as soon as there is a -- significant number of people got the vaccination we think that there will be a big bounce back. And I think in the first 6 months, after the freedom of travel is gained again, there will be not only a bounce back in terms of leisure traffic, but as well as business traffic, because I think there are many people who need to go out to get new customers, to meet the old customers. I think in the first half of 2022 and maybe the last few months of 2021, we will see a lot of conferences, congresses. So I'm sure that there will be a phase of 6 to 12 months where we will see a major bounce back of the tourism and aviation industries. Yes. I think Slide 4 speaks for itself. The weakest in 2020 was 154 passengers. This just illustrates how deep this crisis was and things we could not have imagined actually happened in 2020. The top priority in the crisis was obviously to be continuously accessible. I think the freight traffic played a more important role than ever. There were many special flights to get medical products to Austria. There were many special flights to get stranded tourists back to Austria. So I think this underlines the importance of the airport for the whole of Austria. I would switch over to Slide 7, higher air cargo volumes in the crisis. The pure cargo traffic increased by roughly 30%. Obviously, we were suffering from the decrease of the belly cargo and the decrease in long-haul flights. We had on average a decrease of, I think, 23% in air cargo -- in cargo for the whole of 2020. December was a minus of 11, I think this is not bad. The import is better than the export, and this is mainly due to the fact that a lot of the export, which was down by 33% went directly via trucks to Frankfurt and Leipzig, mainly. And if you -- so it's clear that in these times, those big cargo airports benefited. Others like Zurich with minus 36%, Munich, minus 40% did even worse than we did. But I'm optimistic that we will have a plus in terms of cargo in 2021 as well. I just would like to highlight that 3 years ago, we opened our pharma handling center, which increased by roughly 40% in 2020, and which would be in a position to take some vaccination as well. As long as it's produced in Europe, I don't think that there will be a lot of vaccines on cargo. But this, I think, was definitely an investment which will pay off in the long run. I think we've highlighted in our last call as well the numerous initiatives we did as an airport to make sure that our passengers can travel safe and healthy. We're still a pilot airport for the other project. So far, we did as a company very well in terms of infections of our employees. With more than 5,000 employees, we roughly have 20 cases right now. There was never a cluster at the airport, neither from employees nor from passengers. So overall, I'm still convinced that flying is the safest way to travel with public transport. A few details on our passenger numbers, passengers down to 7.8 million from 31.7 million, which was an absolute record in 2019, minus 75%. Local passengers, minus 74%, transfer passengers minus 79%. Flight movements minus 64% to just under 100,000. MTOW minus 63%. Obviously, with flight -- flights growing down by 64% and passenger seat 75%. The seat load factor went down as well. On average, it was 57%, a very significant reduction in the seat load factor, which makes the airlines obviously suffer. And cargo down, as I said before, minus 23%. The results in our group were very similar. Malta Airport was down 76%. Kosice to minus 82%, but we are optimistic that we will gain ground in 2021. Both in Vienna and in Malta, Kosice might be a bit more difficult but still, we are sure that there will be a significant increase in 2021. You can see that -- and you know, obviously, that the whole world was heavily affected from this crisis. What you can see here on Slide 11 that Europe was even more affected than North America and the Far East. Within Europe, there was the interesting development that Turkey and Russia, where the aviation industry there was significantly less impacted. In September and October, the 7 biggest airports in Europe were all Turkish or Russian airports, the biggest airport in September was Antalya. Frankfurt and Munich were not even under the top 10. So I think this is quite an interesting development, and you can see here on the bottom left, that the passenger decline of all Lufthansa hubs was pretty much in the same range between 73% and 77% reduction. So we seem to be here pretty much in the same boat. I think from a political level, what is absolutely essential that there's a better coordination out of the crisis within the European Union and during the crisis because, obviously, as long as we don't have the freedom of movement within the European Union, tourism will suffer a lot and with tourism aviation will suffer a lot. So I hope that in the course of the first 6 months of this year, that there will be the freedom of movement reestablished. And then I think this should lead then to a significant increase in the passenger numbers. As I said, our outlook for 2021 is roughly with all uncertainties roughly 12.5 million passengers. For the group, it's roughly 16 million passengers. And again, H1 will be very challenging. But we expect at least 70% of these forecasted passenger numbers to use Vienna Airport in the second half of this year. So we are cautiously optimistic for the full year 2021. As I said before, we have not changed yet our mid-term forecast to reach roughly 70% in '22 and 80% in '23. Again, as I said, what's urgently needed is a digital vaccine certificate and common European-wide regulations. I think we need a vaccine certificate, which is not only accepted in the -- in all of Europe and all of the European Union, but it should be accepted as well in the United States, in China and many other states. So I think we need a worldwide coordination to use new technologies to make clear what the vaccine status of a person is, what's the test status of a person is. And I think technology like blockchain are perfectly equipped to allow things like that. And we hope that digitalization will be used as a major opportunity to successfully emerge from the crisis. Yes. In a nutshell, that's it from my end, and I would like to hand over now to Günther Ofner.

Yes, good afternoon from my side. And as 2020 is history, we are looking ahead to the new year. And what we can present to you is a lot more of optimism than it was justified for 2020. So if we are looking at our financial estimates for '21, the base estimation is that we will see revenues of around EUR 430 million based on the passenger expectation. And every single passenger, we will see more will contribute to an even better result. On the level of EBITDA, this would equal a positive EBITDA of around EUR 150 million. And finally, we expect the consolidated net profit, around EUR 4 million. I mean, that's I think the good news that we expected, in any case, to be positive. And the result of that financial estimate is that we will produce substantial free cash flow in '21, so that our net debt position, which is ridiculous, in any case, will go down to around EUR 100 million. So some of you frequently asked about liquidity. So you see that's absolutely no issue at all. We have plenty of liquidity. And I think from the liquidity standpoint, the crisis could take 10 years. And it would not really hurt our position. Given the fact that we have an equity ratio basically unchanged of roughly 60%. So even if we need loans, we get at 0 interest right now. So we are in an absolute strong and favorable position in that regard. It's also not likely what was said by some who had the first glimpse at our figures that we will not produce positive cash flows also in the years to come. Because, as you see, CapEx has been substantially reduced, it's less than 1/3 of what was originally planned. So both south extension and east renovation are pushed further down the road and will then be revised when we see the necessity for it. One important condition for all that is the prolongation of the short work program. And I think there are no reason reasons to see that it will not be prolonged from our point of view, at least till the end of '21. Maybe it will also be necessary to provide the program even beyond '21, especially for those sectors who are heavily affected like aviation and travel industry. We are still very active in regard of testing. So we had done roughly 130,000 PCR tests at the airport so far, and we are now also offering rapid antibody tests, and there is still the need for all that. In regard of vaccination, we are part of the critical infrastructure and hope that we will be able beginning or mid of March to be included in the vaccination plan. And as the traffic figures still are low for the next weeks or months, we have not stopped our work on all the of non-aviation. So we are marketing our new office park. We are offering corona-free conferences and meetings because we have the testing infrastructure available on the airport. And we see a substantial interest also from companies moving to the airport and will continue our very successful real estate operations. So that's basically the outlook from my side, I think the worst is behind of us. And if we look at the announcements from airline side, then it looks like booking for the summer has already started. And people are optimistic that it will be possible to have their holidays in summer and autumn. And this is a very important precondition that the financial pressure on the airline sector is alleviated and I hope that what Mr. Spohr said recently that vaccination led to tripling bookings for the summer that this will continue and by that, supporting the whole sector. So that's from my side. And now please feel free if you have any questions, you come back to us.

Thank you very much, gentlemen, for your presentation. We are now able to take your questions. [Operator Instructions]

Ruxandra Haradau-Doser with Kepler Cheuvreux. Several -- some questions, please. First, given your very low net debt, when do you expect to return to dividend payment? Second -- yes, please.

Yes. not in '21 because as we expect to get some reimbursement from the state. One of the conditions is that you are not paying dividend. But from today's perspective, I would say, it's rather sure that we will start -- starting paying dividend with '22.

Okay. Great. Then last year, the Austrian government planned to introduce minimum prices per flight of EUR 40. Could you please give us an update on that? Has it been legally possible to implement these prices? And...

Yes. The discussion is still ongoing. So far, they have announced that they will do something, but no proposal is on the table. And it seems that it is what we always said, rather tricky to do it under European law. But I would not rule out that sooner or later, a proposal will be on the table. And I mean it's not EUR 40. I mean what -- to my knowledge, the only possible issue that could may be addressed by such a measure is that you can oblige that at least the taxes and tariffs have to be borne by the passenger. So that would not be a fixed sum, but airport charges plus something else of -- like our ticket tax that this is somehow a sort of a minimum price. But again, it will be extremely difficult to put that in a law so that it can be executed.

Okay. Great. Dr. Ofner, you was quoted in the press release today saying flying will never be as inexpensive in the future as it is now? I would be very interested to understand what are your thoughts behind this statement? Is it related to this ticket crisis or maybe competition dynamics? Or...

I think that's a little bit an overinterpretation. What I just said, please hurry to book now because maybe it's never as valuable as now.

If I may add something to that, I think we will see in the next 12 to 18 months, very different trends in terms of ticket prices. I think probably in the inter-European leisure market, December might be a good opportunity and due to competition due to the fact that there will be a lot of elements put in quickly again new capacity online, prices might be good. I'm pretty convinced that definitely, over the Atlantic, we will see a phase of 6 to 12 months where ticket prices will be actually relatively high when we reached a point where a lot of people need to travel again, want to travel again. And probably on long-haul flights, definitely over the Atlantic, where you don't have airlines like Emirates, Etihad, Qatar and Turkish, who sit in the middle. It might be, I think, an opportunity for the legacy, the European legacy carriers to actually get pretty good prices on these flights.

Yes. Maybe also a question for -- another question for Mr. Jäger. Over recent years, you have seen low-cost carriers increasing the direct connectivity between Eastern and Western Europe, which had some implication in terms of your transfer traffic. Mr. Spohr said at our conference this week that he expects hubs to outperform during the recovery period. Other market participants are sharing this view. So do you believe that you will be able to regain some passenger flows that may be shifted from your airport over recent years? And do you believe that the share of connecting traffic could increase again once traffic noticeably recovers?

I think this is -- our advantage as Vienna Airport is that we have a very -- or compared to other hubs, a relatively low amount of long-haul transfer passengers. So we have a relatively high share of intra-European transfer passengers, significantly lower than the other Lufthansa hubs, but significantly lower as well as Amsterdam, Paris, London and so on. So our focus is not that much on the long-haul traffic, and I think this could be an opportunity in the short run when the intra-European traffic between Eastern and West of Europe picks up that we see some quick gains for Austrian Airlines. I think overall, there will be a lot of dynamics in the market. So I don't want to hide that, obviously, for smaller and medium-sized hubs, life is not going to be easier necessarily. But I think, as you said, it's an advantage for us that Austrian has a high Eastern Europe focus that we still have the highest amount of destinations in Eastern Europe compared to the other Western European hubs. And I think our geographical location obviously helps as well. So yes, I think this is definitely an opportunity.

Stephanie Fabienne D'Ath from RBC. I have a few questions, please. The first one is on your expectations for retail. Thank you very much for sharing your guidance on traffic. Could you maybe contextualize how you see retail recover versus traffic and to which extent the fact that Asians won't be back soon. Might impact that or where minimum annual guarantees might be supportive. So that's the first question, please. The second one is on net debt where you guided for about EUR 100 million for 2021. You reported EUR 162 million in the 9 months of 2020. Is there anything to call out for fiscal '20, so for the year-end? And then finally, on market share part, could you remind us how much business that represents approximately? And where you expect Lufthansa market share to go from here?

Yes. I would start with your first question. Overall, the spend per passenger in 2020 was pretty much on the same line as in 2019. The revenue per passenger in retail increased actually. This was mainly due to minimum guarantees. This is something we could potentially see in 2021 as well, although it's really, really difficult to judge the retail results for '21, and then probably we'll give you some more insight or guidance there in our March call. But one effect, what we've seen so far in 2020 that although we missed the high spenders from Asia, from Russia, from the Arabian Peninsula, the other travelers spend actually more. So the spend per head on Ryanair, on Wizz Air actually went up by roughly 15%. So we see different trends so far in 2020, the revenue per passenger actually went up to -- from -- in the retail segment. And we'll do our utmost to keep it that way. Then you had a question regarding market share. Yes, I -- I mean, we believe that the market share of Lufthansa will be essentially along the lines we had in the past, and this is the experience we had in the last few months as well. Although, obviously, the traffic in the last 2 months was heavily distorted. But we believe that the Austrian Airlines market share should be somewhere between 45% and 50%, plus Lufthansa, somewhere around 55%. And we think that the local carriers market share should be in 2021, somewhere around 30% as it was in the past. But again, the forecasting this time, obviously, was very different from how it was done in the past. Because there are no flight plans you can rely on the -- none of the airlines has a clear plan, what they are going to do in summer at this point. So we went more from the consumer perspective, which traffic we thought would come back. We took a bit experience from last August, where we very quickly reached again 25% to 30% from the pre-COVID levels. So therefore, the market share -- there are more question marks around market share, obviously, for '21, but this would be my best guess from today's point of view.

Yes. In regard of net debt, I think the message of today is that we will not see any cash burn further down the road. On the contrary, we will definitely see a positive net cash flow for '21.

And maybe just on the business-leisure percentage before the pandemic.

You mean business and leisure?

Yes.

Yes. Roughly 30/70. So the business traffic went pretty much down over the last 10 years. And it was in 2019, it was roughly a 30/70 split. So 70% leisure, 30% business. I have to tell you, this is not hard data because, obviously, we don't know the reason for travel from each passenger, but this is from our market research, where we talk to 15,000 passengers per year. And that was the result.

Okay. Bernd Maurer speaking, Raiffeisen. Okay. I'm going to ahead. 2 questions from my side. First, regarding the impact of short-term work, quite a -- quite a good EBITDA guidance from our side. And you said short-term work is part of your calculations. I assume you based guidance on continued short-term work for the whole year of 2021. And if I remember correct -- yes, okay -- and if I remember correctly from the last call, you said in more or less full lockdown month, you received some EUR 10 million to EUR 11 million from short-term work scheme. Is it fair then to assume kind of proportionally of any flows for 2021?

That's too simple because the expectation is the traffic numbers will start to go up at least from May or June on. And that finally, for December, we will see maybe 70% of -- 60% or 70% of '19 figures. And then you need also more workforce. So it will mainly be concentrated in the first 6 months where the short work will be significantly higher and they will then melt down towards the end of the year.

Makes sense. Is it then -- can you share a number is -- what is based on the calculations? Is it then some EUR 40 million to EUR 50 million for the full year?

It's difficult to calculate the number. I mean, it will depend to what extent the traffic and in which period traffic starts to move up again. And the management is total personnel costs. And total personnel costs, if we see stronger traffic, then these additional costs will be covered by the additional turnover. And if we see less traffic, the reaction would be that people would be longer insured or would have a more extensive short work. So therefore, the outlook, I think, is even very robust towards developments or unfortunate developments in regard of passenger numbers. So even we would, for whatever reason, not reach the passenger numbers we expect now it would not mean that we have full costs then because we would then shift the labor costs to short work costs.

Understood. Can you share a number for -- for November, December, what subsidies you booked for short-term work?

I mean December is totally out of the normal calculation because some -- rest of vacations have been consumed. And vacation costs are 100% borne by the employer. So are not reimbursed by the short work program. So the figure for December will be somehow lower than the average months figures because a lot of vacations are consumed normally, especially in the second half of December. So the amount you get on a monthly basis is a very tricky issue. Because, for example, it depends how much vacation days have been consumed. So definitely, it was higher in November than in December. And it will be made even higher in January.

And to share a number for example for November? Yes.

It oscillates between EUR 6 million and EUR 10 million roughly.

Thank you. This helps. So switch to my second topic tariff scheme for 2021. I just checked on the homepage, you do not have it online yet. Can you share some changes of tariffs or when will it be announced? You talked in last calls about your view on the incentives? Are there any overall changes to tariffs transfer incentive, for example, that's something I would be interested in?

Yes. Thank you for this question. I mean, overall, we increased our gross charges by inflation. In -- with first of January 2021. So this was plus 1.45%, all our charges. Our incentives have been approved. So we had last year an incentive on the lending charges. And this year, we have proposed a so-called ramp-up incentive for all airlines who is -- 65% of the capacity they had intended to fly in 2020. And the amount is EUR 2 within Europe, EUR 3 medium-haul and EUR 3 -- and EUR 4 long haul. I hope that many airlines qualify for this incentive. You can see with the 40% overall traffic that we don't expect that many airlines actually qualify for this incentive. If they do qualify for this incentive, we would -- this would be a very happy surprise because this would mean that our passenger number should be significantly higher than what we've got in our budget. And therefore, we believe that as in 2020, our net revenue per passenger from airport charges should be significantly higher than the EUR 12.65 we had in 2019.

Maybe a follow-up, if I may, from Stephanie at RBC. Just on your 2020 guidance, I know it's probably a bit shortsighted. But can you confirm the EUR 55 million to EUR 60 million EBITDA and EUR 75 million to EUR 85 million net loss and what net debt would be in your view? Thank you for fiscal '20?

Yes, I can confirm the guidance, and we will have the final figures end of February, beginning of March. And the net debt position, we have not guided so far, but it will not differ substantially from where we stood at the third quarter.

Okay. Are there any other questions?

Yes, Ruxandra Haradau-Doser with Kepler Cheuvreux. Maybe I have some more questions. First, do you have a breakdown of your business traffic with respect to traffic related to conferences, traffic to visit clients and so on?

No. I mean, I can look up what we actually have in our market research, but I don't think that we -- you will have to ask a lot of people to get valid data if you go down to this detail. So no, I don't think that we have -- we have a split up on what's the reason for traveling up to 30%, which travel for business reasons. But I will it look it up.

Great. Then well, this crisis will likely accelerate the digitalization process at the airport. So what do you think will be consequences of this in the post-COVID world?

No. I think it's very obvious that there will be changes in the behavior of people and that the business traffic will change. So I think within Europe, I'm very sure that we will see a reduction of people who are traveling for business reasons. I think, big corporations, multinational companies who used to fly their people all over the world, all over Europe for 2-hour meetings. I think these are things which are not going to happen again. We have a good outlook now at our biggest customer, Austrian Airlines, and we obviously know how much our colleagues from Austrian travel to Frankfurt to Munich to Zurich. How many people from there came to Vienna? And I'm sure that now that everybody is used to use Zoom and Teams and whatnot, the amount of this traffic will go down. On the other hand, I think, this is an effect which will not be that much -- that strong for long-haul traffic. I think if you want to do business in China, you will still need to go to China. And this, I think, is applicable for many other areas of the world as well. So I think the trend to do things online will be less the further away a client or a customer is, the more the culture differs. And I'm pretty sure that we will see 6 to 12 months where there's a certain backlash when people travel, probably even more than before the crisis because they have to meet their customer again, they need to go out to acquire some new customers. I think the congresses and the conferences after the crisis will be fully booked because, obviously, people want to meet their colleagues, their friends again. So I think there will be a long-term implication where it's difficult to quantify, but definitely, there will be a long-term implication. I think it will be stronger in the intra-European traffic than in the long-haul traffic. But yes, we will see a shift here from business to leisure. I think leisure traffic will recover pretty soon. And yes, I mean, we are not happy if there's less business traffic, but on the other hand, our advantage as a destination in Vienna is that we are less reliant on business traffic because we didn't have that much business traffic than in the past anyway. And I think the attraction and attractiveness of Austria and Vienna as a destination will remain.

Maybe there is currently a debate with respect to the 80/20 rule. What is your view? Should it continue to be suspended beyond the winter flight schedule?

Yes, obviously, we are aware of this discussion. Personally and even within the airports, there are very heavy discussions. I'm sitting on the ACI Board and at the last board meeting, there was a strong discussion between members. We have different views on this. Personally, I think, I would not overestimate the effects of these discussions. I think -- my impression is that there's hardly any airport in Europe where slots right now are really short. I understand the interest of airlines to keep the slots even over the summer and for next winter. But on the other hand, they should be limited to keep slots where they don't even have the aircraft anymore to fly them. So I think the last proposal of the European Commission was pretty sensible. And ACI supports this proposal. So I think a balanced approach on that is justified and definitely for the winter schedule, there should be an extension of the waiver of the 80/20 rule.

I have -- this is Charles Maynadier here from Kempen. I have just one question, if I may.

Yes.

Yes. On your -- on the OpEx, so we discussed about staff costs. But could you maybe elaborate a bit more on the other OpEx, the consumables and other OpEx line that you expect to save again this year? And more generally, when do you expect your cost base to normalize? So maybe putting it the other way around, starting which year or what traffic levels you expect savings to become very hard to achieve?

Yes. I mean, we have really pushed down also all other expenses, and we have reduced energy consumption substantially. Even the years before the crisis, but again, this year and a lot of other cost positions have been substantially reduced. So overall, I think that in regard of OpEx, we will come out of the crisis stronger. You know the proverb of never wasting a good crisis. I think that's obvious that you can do things and decide measures that would have a very, very high opposition under normal circumstances. And then if it's necessary in the middle of the crisis, you can do it and you do it. So therefore, I would not at all be anxious or see a substantial problem of cost rebounce. I mean, definitely, we will be better off when we see 70%, 80%, 90% traffic again. And low inflation will also contribute that wage increases will stay on the acceptable level. So I would not see that we will face high inflation rates in the years to come. And therefore, I would say, our cost position should be rather fine coming out of the crisis.

All right. And can you maybe share any sort of number on the potential structural cost savings that you could achieve coming out of the crisis?

I mean it's all over the Board. And I have not really now a calculation. But maybe you can assume that 10%, 15%, 20% of normalized costs evaporated...

It's Andrew from HSBC. Yes. Can I ask about the tariff structures going forward? I mean congratulations on getting a tariff increase for this year, heavens above. But I mean most airports have their tariff structures defined by a return on capital to WACC. You guys have it's always been more related to traffic developments. And yet the underlying rules are kind of out of the window because no one even conceived of an idea of a 70%, 80% traffic drop when they drew these rules, did they -- so what's going to be the rule that defines your tariff regulation going forward?

I mean overall, we think that the regulation will not drastically change. And it's our aim to keep our net revenue per passenger at least on the same level as they used to be before the crisis. I think it should be even possible to increase it a bit compared to the 2019 level. I mean, I think, we had probably the perfect world where with our formula for the airport charges and on the other hand, the opportunity to define incentives. Now the whole environment changed a bit due to the decision of the European Court of Justice that incentives have to be approved by the authority as well, although in our case, they always knew about the incentives, and we informed them about every step. But I think the clarification is that now they have to -- incentives have to improve as well. But we always had a certain level of incentives. So I think we're in a good position to counterbalance things which might happen from the charges level. I think the whole government in Austria is very wary that the charges don't become too low. And I think this is the rationale behind the minimum ticket price as well. So we have an excellent relation with our ministry, which is the competent authority to decide on charges. So I'm very optimistic that we will achieve our goal to slowly but surely increase the average revenue per passenger even after the crisis compared to pre-COVID levels.

Okay. And then can I ask about the makeup of the customers because, I mean, you gave us a guidance of thinking that 30% of your traffic will be low cost. But precrisis, you had every low-cost carrier on the planet or at least in Europe growing vigorously with you. And today, it kind of looks like it's Wizz, [indiscernible] Is that the [indiscernible] and how are they...

I disagree. No, I think this observation is not entirely correct. I mean there's a lot -- it's difficult to follow the -- what's happening in the Ryanair family with Lauda, Laudamotion, Malta Air, Ryanair, us and whatnot. But overall, there's still the commitment of Ryanair to be active in the Austrian market. So I'm pretty sure we will see the presence of a number of aircraft here in summer, obviously, depending on the demand level. I mean Wizz and Ryanair are pretty quick to put in capacity when there's a demand, and they're pretty quick to put it out when there's no demand. So I think we still will see a competition between Wizz Air and Ryanair in the market here in Vienna. I'm sure we will see some easy trip again presence out of Berlin. Just today, Jet2.com confirmed that they will come back and serve the Manchester route between -- to Vienna. So I don't think that it's Wizz only.

And as a counterparty to negotiate with or you don't negotiate with them, they just take the public incentives?

That's the situation. I mean, based on our incentive schemes in the past, we signed dozens of contracts with Austrian, with Wizz, with Lauda and all the others, and that's the basis they are working on. Yes.

Yes. And in terms of the incentive structure, you say you need to get, what was it 60% of -- 65% for the 2020 plan. So is that all or bust? So you get 64% in December and you get nothing. And if you get 65%, suddenly you get EUR 2 off per passenger?

65%. Yes. That's how it was designed. I think when it was designed, and we applied for this incentive mid last year. Obviously, most airlines had a rosier picture of 2021 than probably today. Everybody applauded us for this move. Now it might be that it's difficult to achieve for many of them, but now it's delayed because the incentive has been approved. So they all applied for their slots and for 2020. So that's the measure we have. And it's 0 or 1. So there's nothing in between.

Yes. Okay. And then how confident are you guys feeling about the outlook for Austrian and the scale of its fleet, the scale of its long-haul aspirations?

I think, obviously, now if you just look at 2021 and this applies not only for Austrian Airlines, but for many airlines, it's critical that booking starts in March, April, May on a big level. I think that many airlines in Europe need this liquidity. But as I said, and I think the first signs are already going in this direction that this should actually start. Austrian for the start, we'll have 9 long-haul aircraft. And yes, I think the challenge for them is to make them profitable to get the approval from Lufthansa to grow this number. I think this will depend a lot on the yield level in the next 2 or 3 years, which is something which is difficult to judge, but I said before, I'm quite optimistic for the Atlantic. I think over the Atlantic, capacity will be somewhat limited, a lot of airlines, and actually I would be interested in your opinion, but a lot of airlines took out the aircrafts, 747 went into retirement. A lot of 380s were checked out. So I think overall, the U.S. carriers were always, in any case, very, very hesitant to put capacity in. So I think the North Atlantic could be an area where airlines actually made quite some good money in the next 12, 18, 24 months. And the Far East, this is probably a bit more difficult to judge. But in the end, I think everything will be decided how well Austrian does on the long-haul network. They just got a real expert on network development. I think they're reviewing from -- is coming from Swiss, a relatively young Austrian that worked for the last 10 years for Swiss. They will reconfigure their wave system. So I'm relatively optimistic that they will do a good job. And I hope, obviously, that they will deliver the results to justify a renewal of the fleet and expansion of the fleet.

Okay. Ladies and gentlemen, thank you very much for your big interest at this time. We are looking forward to talking to you again on the 4th of March when we are announcing our preliminary results for 2020. All the best to you. Stay well, stay healthy and looking forward to speaking to you next time again. Thank you. Bye-bye.

Bye-bye.

Bye-bye.