International Consolidated Airlines Group S.A. (IAG) Earnings Call Transcript & Summary

[Presentation] Good morning, everybody, and welcome to the IAG Capital Markets Day 2023. I'll be very brief. Usual safety briefing, emergency exits. I'm not very good at this, I'm not well trained, but there, there and there. There's no scheduled fire alarm drill today. So if you do hear the fire alarm, please make your way out as quickly as possible. We've got an app for today. Hopefully, everybody has been sent the app. If you haven't, there's a QR code on your table. There's a function on there that will allow you to put Q&A through the day into that, and we'll come to it at the end. We've got one long Q&A session at the end. So as I say, if you want to put your questions in there, we'll make sure we come to all of those as we get along with things. Our agenda for today, we're going to talk about the leading positions we have in highly attractive growth markets. We're going to talk about our world-class brands that all operate in those markets. We're going to talk about the loyalty program that IAG has and the opportunity we have in that business. We're going to talk about how we're transforming everything across the business, delivering a step change in what we do. Leadership and sustainability is a key thing we need to do as an airline, as an industry, and we'll show you how IAG is a leader in that in the industry. And then finally, how our disciplined capital allocation will lead to our intention to maximize shareholder returns. Just very quickly on the timetable. This is the running order. There will be a coffee break at around 10:30. Adam will give you the details on that later. Please go and chat to some of our colleagues who are at the back there during those meetings, during those breaks. They're all very experienced and know an awful lot about what they do. So I think a key part today is, during the coffee break and during the lunch break, is talking to those people. So without further ado, I will introduce you to Luis Gallego, our CEO.

Thank you very much, [ Stuart ], and good morning, everyone, to this Capital Markets Day, the first one since 2019. At that time, we talked to you about our unique business model and our resilience in case of a downturn. We didn't expect a pandemic after that, to be honest. But we have successfully proved that what we told you was true. We are proud to tell you that we are coming back to a strong profit. And recently, we recovered both in IAG and in British Airways, our investment-grade ratings. So our strategy delivered what we thought. However, last year, we decided to review our strategy in the context of the post-COVID environment. And the conclusion of the exercise was that we only needed a slight update in what we call our strategic imperatives. So let's talk about our strategy. First, we want to strengthen our core. We want to strengthen our positioning in our core markets. In particular, we have a big focus on America Latina. We are strengthening also our portfolio of world-class brands and operations. This means that we are investing in the customer proposition, and we have a significant opportunity mainly in British Airways. And we've also seen that there are opportunities to add light -- capital-light growth through partnerships and alliances. The second pillar of our strategy is to drive earnings through our capital-light businesses. And in particular, IAG Loyalty. This is a high-growth, high-margin and cash-generative business that also provides a lot of value to our airlines. And the third pillar is that we want to ensure that IAG is a financially and operationally sustainable business. We will continue to ensure that our balance sheet is strong, that we are disciplined with our capital allocation, and we are going to continue leading the industry through the net zero emissions by 2050. And transformation is what underpin everything. We are creating a step change in the way we do the things across the organization. We are using our proven structure and the business model in order to help the different airlines to reach their full potential. We are investing in the network. We are investing in our customers and in the operations. We are also driving efficiency and investing in innovation, IT, artificial intelligence and data. And last but not least, we are doing this with a team that has unrivaled experience in leading and transforming businesses. This strategy will deliver sustainable growth, world-class margins, sustainable free cash flow generation, increasingly strong balance sheet. And this means that we are committed to maximize shareholder returns through dividends and, when the conditions allow, additional returns. We have 4 near-term strategic priorities. I have already talked about transformation, which now is centrally driven by IAG. The aim is very simple. All our businesses must reach what we call the full potential. The approach is not only focused on cost. We attack all the angles of the company's revenues, efficiency, innovation, et cetera. And we have a successful track record of transformation in this group. We are going to leverage these transformations that we did in Spain, delivering over EUR 1.5 billion in operating profit from our Spanish businesses. This is going to provide a more balanced group and a bigger diversification of profits across the IAG portfolio. We will continue investing in British Airways. We are going to invest in order to deliver higher customer satisfaction that is going to lead to higher profits and margins. And lastly, IAG, Loyalty is not going to be anymore an IAG platform company. They are going to be more important in some way for the group. We are going to develop IAG Loyalty as a priority for us. As I said before, they are delivering high margins and it's a capital-light growth and they will deliver sustainable cash flows. And one thing that I think is important also for them is the least seasonal of our businesses. Underpinning all this, we are going to have a priority that is to have a very strong balance sheet in the core of everything we do. IAG will have a proven business model. You know that we are an active portfolio manager. We have excellent airlines attending different market segments and customer segments. But the model that we have is not similar to the model that others have. So from the group, we define corporate portfolio, we allocate capital, and we also do what we call the performance management. The concept of capital allocation is critical for this group. We are independent when we make capital decisions, and, for me, this is what we call the secret sauce of IAG. We are going to drive also value through M&A, partnerships and joint businesses. We are going to drive top talent management -- sorry. We are going to assure that we have the right people in the right place. We will continue driving the sustainability agenda, facilitating also, capturing more synergies at group level. And we will drive innovation. And in the operating companies, they will continue having accountability of the P&L, commercial and operational independence, they will manage customer proposition, and they will do locally the management of the people and labor relations. And all this is underpinned with our group platforms that you know are centers of excellence that bring specific expertise or drive the benefits of the scale. And you can see here the management committee. You can see it's a very experienced and diverse group. Some of the members, they come, within the group, with a track record of delivering transformation in the different airlines they were before. And some of them, they come from our site, and they are bringing different perspectives and different experiences. I think what is critical in this group is that they are a very collaborative team. Teamwork is in the DNA of our leaders. We share knowledge and we share best practices in order to help all the airlines to reach the full potential. Every week, we have a meeting together. And we have the opportunity to have an internal benchmark. That's very important for the group. And it's worth noting that all the CEOs in the different airlines, they come from other parts of the group. So for example, Sean Doyle, he was the former CEO of Aer Lingus. Fernando Candela, he was the former CEO of Iberia Express, Iberia, and he launched the transformation area that I talked before in 2020. Lynne Embleton now is the CEO of Aer Lingus, before she was the CEO of Cargo and she was Managing Director of BA Gatwick. And Marco Sansavini, he was the Chief Commercial Officer of Iberia in the time where we did the big transformation of the company. So you can see in the following slide the strong historical performance of the different companies in the Group. And this has been done for these people. So the right strategy implemented by an experienced management team working together has made possible that IAG is coming back to our leadership position in financial performance, but also our balance sheet is stronger and we are generating higher margins than our peers. And I think a relevant question is: Why invest in aviation? We have 2 slides to remind you that this sector has been always a long-term secular growth sector. This industry has been always a growth industry. Even a global pandemic has changed the long-term growth trajectory of the industry, as you can see in the slide. And on the right-hand side, you can see some of the drivers of that growth. Travel is an increasingly priority for the younger generation, but travel is a priority for everyone mainly after COVID. So in the aviation sector, low barriers to entry and also the rational deployment of capacity have historically been the 2 key headwinds that we had in order to generate returns above our cost of capital. I think all this changed after the global financial crisis, and since then, industry has been much more rational. It's hard to see now the rational behaviors, but I think additional to this, we are going to see a period of time where we are going to have even more constraints to enter in this sector. So we have, for example, a shortfall in aircraft deliveries. During the pandemic, aircraft manufacturers, they had to stop their production. And they are still trying to building back the production to the levels that they had before. Second, you know that there are some issues with some types of aircraft and engines, and there is a lack of maintenance capacity to absorb all these challenges. For example, I am sure we will talk later about the problem with the Pratt engines, the GTF, and the impact that can have in the narrow-body operation. As you can see from the right chart -- from the right-hand chart, sorry, that the current orders for the European network are barely enough to cover the retirements that we are going to have in the following years. And why invest in us? The total market to and from Europe is worth around EUR 180 billion per annum in revenue terms. Around 85% of our passenger traffic is in the 3 attractive markets that you can see on the left-hand side of the slide. 31% of our traffic is on route to North America. 19% on routes to Latin America and Caribbean, what we call LACAR. And it's a territory where I told you before that we have an opportunity to grow in order to generate the EUR 1.5 billion from that sector in the world. Over 1/3 of our passengers are in the European short-haul market. And the remaining 15% is in the rest of the world, mainly dedicated to point-to-point operations. We are also based in some of the largest European hubs. London Heathrow is clearly the leader in Europe. But Madrid is the fifth largest and Barcelona is the eighth largest hub in Europe. And both of them, they have capacity to grow. The size and the positioning of our hubs in the Western side of Europe also gives us a major competitive advantage in our core North and South Atlantic markets. This geographical position is ideal for passengers that they want to connect from Europe to the Americas. Likewise, our home countries have the biggest point-to-point flows to the most parts of the America countries. And this is very important in order to strengthen our hubs. And in this slide, you can see the framework that we use to allocate capital as a neutral parent between the different markets. The framework is based on the concept of profit pools, and we look at this through different lens: regions, hubs and business units. Our core markets of U.S., Lat Am and Spain domestic should be of no surprise to you. Near-core markets are smaller, but like our core markets, also where we hold #1 or #2 market share position. Other markets like India are markets where maybe we are not the leader, but where we have a competitive advantage and we have the potential to grow this profit pool. And we will select to grow in these markets either organically, inorganically or through capital-light alternatives. The North Atlantic is our biggest market and profit pool. We have a leadership position with the largest network operating around 150 daily flights from all of our hubs, and carrying 44 million passengers per year. Latin America is an attractive and fast-growing market where we have a very strong market share and when we are increasing our network. The transformation that we did in Iberia is allowing us to generate world-class margins and also to invest in the region. We are going to have more opportunities with the deliveries of the new 350s and also the 321 extra-long range is going to be an opportunity to develop new markets that we couldn't attend in the past. And Brazil remains a market to develop for us. So Air Europa is an important step to deliver our strategy in the profit pool of Latin America. Air Europa can give Iberia the scale that is needed in order to compete with our competitors in Europe. It will provide greater connectivity for our customers. We will add more origin and destinations to our network, and also, the Madrid hub will increase competition within the different hubs in Europe. This is going to be very good for our -- for the customers in general. Also to have a bigger hub in Madrid is going to be better to compete with the big carriers all over the world and in the different regions. It's an opportunity also to have Madrid -- to develop Madrid as a 360 degrees hub. Usually, Madrid, we fly to the west, but we have an opportunity to fly to the east. And it's good to say that IAG will have a very strong track record in acquisitions. So in 2013, we acquired Vueling, and we increased the number of passengers in 2013 by 43%, 70% in 2014 and 15% in 2015. In 2015, we acquired Aer Lingus. And since then, we have incorporated new long-haul aircraft, 14 new long-haul aircraft and transatlantic level. Now they have 19 routes in operation. The deal of Air Europa also will provide a more sustainable company, both financially and environmentally. Outside of our core markets, mainly flying to the east, we will fly to the main point-to-point markets. We talked before about India where we have a strong cultural ties. And we are going to have growth opportunities there. We are considering organic growth and also leverage our partnerships in order to deliver incremental profits in a capital-light way. In the slide, you can see the different colors, which countries that are included in the different joint businesses. The largest of this is the joint business with Qatar Airways. That is the one that covers the major number of countries, and Julio are going to talk later -- is going to talk later about this. So our group structure provides opportunity to grow in multiple ways: organic growth, partnerships or inorganic growth. You can see here everything we have done in the last year. But at this point, I want to talk about LEVEL. Before COVID, we had an AOC in France to operate from Paris, we have an AOC in Austria to operate short-haul operations, and we were operating also long-haul from Barcelona. During COVID, we canceled the operations from Paris and Austria, but we decided to maintain our operations from Barcelona. And as you saw before, Barcelona is the eighth airport in Europe and has a huge potential. And now we are going to revamp the company, developing the aircraft operating certificate, what we call the AOC, to operate long-haul flights in the way we announced when we launched the company. This will allow us to be more efficient and will open new opportunities to develop the company. In regards to the short-haul operations of LEVEL, we are considering to relaunch short-haul operations with a new AOC, but we are going to wait until we have more clarity about the Air Europa operation before taking the final decision. Moving to our portfolio of world-class brands. Every brand is very strong in its own markets and focused on particular customer segments, and you can see in the slide. So growing our brands and customer proposition is essential to our network strategy. As a reminder, day-to-day operations are responsibility for the different OpCos. So each one of them, they determine where to invest in order to differentiate their company from the key competitors and to deliver to the customers what they value most. We will talk later about the different brands and the investments we are making them. British Airways, I told you before, is an area of strategic focus. We are investing a significant amount in transforming our IT, our commercial platforms, our customer proposition and our operations. Particularly, we have a big focus in Heathrow. So delivering this, we will deliver higher customer satisfaction, higher profits and higher margins for the long term. And we have the best Europe's loyalty program. So IAG Loyalty has become an increasingly attractive part of IAG, and they are generating external revenue of over GBP 1 billion and profit growth of 10% per annum. This business is generating strong cash flows, high profit margins and deliver capital-light returns. We have over 40 million members, and this provides the opportunity to build relationships with our customers and gain a lot of insights. And as I said before, it's the least seasonal of our businesses. IAG is another key component of the group that is going to help to improve our margins, generate cash flow and achieve our return objectives. IAG, we have been always leaders in the path to net zero emissions. We were the first group worldwide to commit to net zero emissions by 2050, and we remain committed to this target. We have a clear pathway to arrive there. And we are investing in new aircraft, sustainable aviation fuel, carbon removals, et cetera. We are doing everything that is in our hand to comply with these targets, but it's true that we remain still dependent on government policy, particularly incentives, to develop the production of SAF. Our people. Our people is key in all this. In order to be successful, people is a clear differentiator. We are investing in our people, giving them the skills that they need in order to improve the customer experience. We are closing multiyear agreements with the different qualities of the company. And this is going to give us stability in order to develop an efficient growth. So this is my last slide before the team, they are going to explain in more detail what I told you before. So we will focus on delivering sustainable growth through disciplined investment in our core markets. We are going to invest in our brands, our customers and our operations. We are investing in our capital-light businesses and, in particular, IAG Loyalty, to deliver high growth, high margins and higher cash generation. And all this is supported by our transformation program that now is embedded in the Group and across all our businesses. And this means that our financial targets for the medium term remain the same: Margins between 12% and 15%. Return on invested capital between 13% and 16%. ASK growth will be at 2%, 3% once we have reached a steady state. And as I told you before, we remain committed to have a very strong balance sheet. So for our shareholders, our commitment is to have earnings per share growth, return to paying an ordinary dividend, and the opportunity for further shareholder returns. And now I'm going to hand over to Sean, Lynne, Marco and Fernando to talk about our global leadership position.

Thank you, Luis. We're going to do a run-through a number of slides, and we'll expand on, I suppose, the framework Luis presented earlier, which is about the discipline of capital allocation that we have in IAG. And we have core profit pools, which underpin the cash generation and the sustainable returns in the business. We go deep on the U.S. today and highlight the characteristics of that market and the competitive advantages that we do have. We'll also talk about the emerging business and the exciting opportunities in Southern Atlantic. And we'll talk about domestic and intra-Europe, which Marco will take us through. But this is our framework. And what you see here is, okay, what's very important to maintain share and grow and prioritize? Well, the U.S. is critical. We're very well positioned to capitalize on our hubs, our geographic advantage, our language advantage, and our partnerships. So North Atlantic will continue to be a bedrock of our investment strategy, and we're very confident about the returns that we will generate there. We also serve that market out of a number of our hubs. So all of our hubs, we serve the North Atlantic. And it's also supported by the value we generate in our business units. So loyalty, a critically important part of our customer penetration and, of course, the profit of the operating companies. Now that doesn't rule out investment we will make in other opportunities. So markets like West Africa, South Africa, very important to the BA franchise. And also, we have opportunities in potential future profit pools that we are very excited about, namely India. But this is kind of, I suppose, the prioritization of where we channel our investment, and we'll talk through some of the opportunities and characteristics of that. If we look at the Europe market to the U.S., it's the biggest single market. About 29% of all revenues are generated from this segment. This is rolling 12 months, I think, to quarter 2. I spoke about the fact that Dublin, Heathrow, Madrid and Barcelona, very well positioned to flow traffic into Southern and Northern Europe. And we also have opportunities to flow traffic into rest-of-world markets like Africa and the Middle East. And of course, our cultural links and our language is, again, a very powerful lever that we do have. We also have developed with Finnair and American the largest joint business across the North Atlantic, a number of gateways that we can serve over the U.S., fantastic loyalty reciprocity. And that's been a very, very strong lever for growing this business over the last 12 years or so. And because of our hub presence in places like Heathrow, Dublin and Madrid, we also have an opportunity in terms of penetration of high-value premium markets. So a large profit pool and a very, very important lever for cash generation. To kind of illustrate the importance of the profitability of the North Atlantic, these are our top 10 routes, and I guess people can guess number one. But the point we're making here is 7 of our top 10 are across the U.S. market. And if you look at the color coding, that is the absolute profit generated by operating company. It's not just all about British Airways here. You can see Aer Lingus and Iberia have very, very important profit pools, which overlap with profit pools that BA will have. So at a route level, again, you can see the diversified portfolio by hub and brand we have, but when you add it all up, this is again a very, very important part of our portfolio. And sorry, final slide for me. I mentioned premium. You can see here the U.S. IAG penetration of the premium market outweighs anything we see in the U.S. industry, and it's much, much bigger than we see in the rest of the world industry. So that is underpinned by things we will talk about later in more detail, but a strong ground experience, making sure that we have lounges, check-in, premium, curation, all of the things we are investing in to make sure that we are very competitive and relevant to that segment. And secondly, making sure that we have leading products in the air. So BA has first class, which is becoming a USP across the North Atlantic. And of course, we have got privacy suites in Iberia, in British Airways. American have been putting huge investments into their products. And as both IAG and a partnership, we're very committed to making sure that we compete effectively for this very, very important premium segment. Lynne?

So U.S. is the biggest long-haul market from Europe, it's a market that matters across IAG, and a market where we have a natural advantage. And Sean talked about the premium nature of that market. And of course, that's not equal across all of the European cities. But with IAG's portfolio of airlines, we can adapt to the different market characteristics that we see. So take London and U.K., it's a phenomenally premium market, and BA can design its airline around those market characteristics. So Sean mentioned the first-class cabin. But what we also see is the way in which the aircraft are deployed and the seat configuration means that they can tailor to that premium market. So more than 1 in 5 of the seats on the BA North Atlantic is premium. Now on the Spanish and the Irish markets, it's not as premium. And so what you see is that's reflected in the Iberia fleet and in the Aer Lingus fleet, where roughly 1 in 10 of the seats there are premium. And it's important to know that for the business cabins, we're targeting the business travelers, but we're also targeting the premium leisure traveler. And it's that dual purpose in those premium cabins that allow us to have high seat factors all year round. The other important thing on this slide, key point to note, is how the fleet is changing across the Atlantic. It has changed, and it is changing. So those fuel-first the 747s, the fuel-first A340s and the 757s that we had, have all exited. And as we transition to a modern fleet, we get all of the customer benefits, the fuel efficiency benefits and, of course, the environmental benefits that go with that. Now IAG is fortunate to sit on some of the biggest markets from Europe to the U.S. And that, of course, is helped by that historical connections, particularly Ireland and the U.K. And when we take U.K. and Ireland and Spain together, we account for 1/3 of the U.S.-Europe revenues. And on the right here, you can see that the market has consolidated around 3 large joint businesses. Now we don't think this reduces competition, but we do believe it makes the market more rational. And our joint business that we established some 13 years ago, it's deepened and it's strengthened over that time, and our joint business is the leader in that market. So with strong home markets and point-to-point demand with a great partner and with the geographical advantage of our hubs on the west of Europe, we are ideally placed to win in this market. And you can see that in our network. We've got more destinations in the U.S. than either the Sky or the Star joint businesses. And if you look at the map, the paler dots, if you can see them there, led the destinations and the routes that we had before the joint business, and the darker colors are the ones that we've developed since. So you can see an incredible growth in our network across the Atlantic. And this includes markets that we've already announced for next year: LEVEL for -- Miami for LEVEL, and Denver for Aer Lingus. And the important thing is across the airlines, we all see plenty of profitable opportunities and growth in this market. And we can get at that growth helped by a new tool in the toolkit come next year as we welcome the A321 XLRs into the fleet. This is for Aer Lingus, and it's for Iberia. And these aircraft, narrow-bodied, extra-long range. And we really like these aeroplanes. We like them for 3 reasons. We like them because they are smaller, which makes it ideal for entering into secondary cities or smaller markets that aren't overserved by other carriers. With them being small, they're also great for adding frequency without doubling capacity in the market. And they're really useful for Iberia, too, as they can match the seasonality between North and South Atlantic. So we like them because of their size, we like them because of their costs. Unsurprisingly, they are significantly more cost efficient than the older generation 757s, as you can see on the slide that they replaced. But importantly, they're also cost competitive against the larger wide-bodied aircraft that we deploy across the Atlantic. So that gives profitable economic growth for us. And we also like them because of their range. So these are getting into more cities than we're able to do with our existing 321LR aircraft. And it's important that the -- to emphasize that, that advantage of geography is much more important for us at IAG being on the west of Europe than it is for other airlines where this aircraft simply doesn't get into as many markets in the U.S. So to close, U.S. profit pool, it's important, we have a leadership position. It always has been a key, key market for IAG. It is today, and we're very confident it will be in the future. So to hand to Fernando to talk about South Atlantic and Lat Am.

So moving into Latin America market. This market is increasingly attractive. It's smaller in terms of size, in terms of contribution to the total profit, but growing really, really fast. And it's a major component of the EUR 1.5 billion that Luis mentioned before, which is the target operating profit for the Spanish businesses this year between Iberia, Vueling and LEVEL. So like the U.S., our hubs are geographically well positioned to Latin America, and also Spain has a strong cultural link with the Latin America region. Madrid, as you can see in the right-hand side of the slide, is the most important half to Latin America, is more or less is more than twice the next biggest hub in Europe to Latin America, which is Paris-Charles de Gaulle. And in conclusion, these advantages allows us -- give us the ability to have a leadership position in the Latin America market. We are servicing Latin America market with 3 brands. We are operating from Madrid with Iberia. It accounts around 43% of our total revenues. And it's an important part of the total profit of Iberia. Also from Barcelona, we are operating with LEVEL long-haul operations, and is 45%, is 50-50 more or less Latin America and North Atlantic from Barcelona. And it's a strong opportunity to growth, as Luis mentioned also before. And for British Airways, it's less important, it's a small relative weight, but also is a key contribution to this profit pool serving the largest point-to-point destinations from London to Latin America. We do believe that Iberia's improvement is structural. And let me explain with these 3 aspects why we do believe that really this structural change in profit is something that will remain. First of the enablers, one of the key enablers is the 321. The new Airbus 350s are not only more efficient and faster, are also more reliable. So it means that we have recovered capacity -- pre-COVID capacity, with less planes, increasing utilization and increase -- and improving our unit or unit cost. So Iberia has taken a conscious decision, as you see in the second part, we have the largest network from Europe to Latin America. And we took the conscious decision to recover capacity quicker than our competitors, increasing our relative market share, and now having a much more strong position that we have pre-COVID due to -- and you can see here in the red points, we have increased capacity. We have increased frequencies versus the capacity we have in 2019. And third one, it's about the demand side. We have a significant, more Latin America citizens living in Madrid, in Spain. Not only significant, 50% in the last 5 years, has increased. And also the profile of these citizens is completely different. As you see below, Bloomberg stated Madrid is like the new Miami. And it means that there is a significant increase in the demand, in the premium leisure demand, in air travel, in hotels. And also the real estate investment, for example, in Madrid is driving why we are achieving these sustainable higher yields and higher unit revenues. And also one area of relative weakness that Luis mentioned before is Brazil, is an opportunity that is untapped. Another growth opportunity we will want to take full advantage is LEVEL in Barcelona, the long-haul growth in Barcelona. As a reminder, we started this operation in 2017. At that moment, some long-haul low-cost projects were launched in Europe, pioneered by Norwegian. There have some examples of airlines that launched this model, but -- attempting to operate this model, but most of them has been unsuccessful. However, the same cannot be said about LEVEL. LEVEL is generating a double-digit profit margin. And there are some keys behind the success of this operation, not only the competitive cost base, also the huge transformation program that the team has run during the last years. But also one of the Group advantages, the IAG's extensive presence in Barcelona, the Vueling network we have in Barcelona that allows us to fly around 20% of our long-haul passengers coming from a Vueling short-haul flight to Barcelona. [ Currently ], LEVEL has a [indiscernible]. The next phase of LEVEL growth is to have around 8 planes by 2026. And also, we're excited with this new growth and also with the opportunity to develop this operation with a new -- see a new aircraft airline operating certificate that will be launching in Barcelona for long-haul operations. As we mentioned before, not only the structural benefits of the 350s, and as Lynne introduced, the arrival of the 321XLR, the extra-long range, will bring a huge opportunity also for the operation from Madrid and the next phase of growth in Latin America. The extra-long range not only allow to build frequencies, only allow us to open new destinations and to allocate capacity -- more capacity to Latin America without additional large wide bodies. The map on this slide shows you the number of growth opportunities we have with Latin America, enhancing our network with secondary cities and also increasing frequencies in the current destinations. Growth here will be a combination of organic growth, organic growth through partnerships and also, in addition, the inorganic growth through the acquisition of Air Europa that is now subject to the regulatory approvals. So I hand over to Marco to cover the European part.

Thank you, Fernando. So after having heard from Lynne and Sean about our global leadership position in North America, and now from Fernando about the leadership position we hold on Latin America. Here we are with the other 2 regions, Europe on one side, and rest of the world. And as Luis mentioned at the beginning, in Europe, we have the third core profit pool that we have as a group were represented by Spain domestic. But also we have a number of near-core markets, such as long-haul Gatwick, or profit potential pools for the future, and equally, in the rest of the world. So if we start from the European flows, you can see from this chart representation of the different markets. And as Luis mentioned at the beginning, the total intra-European market represents 180 -- sorry, the total European market represents EUR 180 billion, of which the intra-European one is 1/3, around EUR 66 billion. And you can see it here represented in this chart, through the international flows and the domestic markets. And you can see in red the ones that touch one of our home markets. And you can see that the largest single international market in Europe is the one between Spain and U.K. You can see that 9 out of the 11 largest international markets are touching our home markets. And you can see that the single largest domestic market is Spain. And no surprise, therefore, that Spain domestic is one of our core profit pools. You can see from this chart represented very graphically. In blue, what is our leadership position or relative position in the main Spanish airports. And you can see in gray what is our relative position in the international flows. And you can see that we hold an absolute leadership in all the domestic traffic throughout Spain. And we have a very strong position in the international flows. And outcomes, it comes thanks to the fact that we have a unique combination of, at the same time, a leading network carrier and 2 very efficient and competitive local carriers, being Iberia Express and Vueling, which provide at the same time a platform to compete very effectively with local carriers in point-to-point traffic and connecting traffic to the hubs in Madrid and Barcelona. And they combine it with an absolute operational excellence. Iberia Express and Vueling have been repeatedly the first and the second top-performing local carriers in punctuality throughout -- well, in the current year, for instance, and with a more than 10-point advantage versus our low-cost carriers competitors. And that is very instrumental to our cost competitiveness because that allows to have a higher utilization, less backup resources and, of course, lower EU 261 costs. And actually, that was, of course, combined with a very, very strong brand recognition. So no surprise about our core profit pool in Spain, domestic. But what about the rest? Now if we look at our total footprint as a group in short-haul Europe, you can see that almost 50% of the fleet is deployed, in fact, on low-cost carrier operations. We have around 400 aircraft, of which 197 are deployed to feed our network carriers. So these are the short and medium operations of Aer Lingus or British Airways or Iberia. But next to that, we have 190 aircraft dedicated to not only the 2 Spanish low-cost carriers, but also the growing initiatives that we have in the rest of the network. In particular, you might know about the launch of Euroflyer 2 years ago that established low-cost carrier operation in London Gatwick where BA considered that the best vehicle to compete and grow in London Gatwick was a low-cost carrier operation. Therefore, the total portfolio that we have with low-cost carriers in Europe allows us to look at growth opportunity with a lot of confidence. Even though in a different stage, Iberia spread is ready to grow in Madrid, in Spain. Vueling has a big potential to grow. But at the moment, it requires, in order to unlock these growth opportunities, to achieve sustainable collective labor agreement with all our labor groups. And we have significant opportunities of growth, as I said, both with Euroflyer in London Gatwick, but also with Cityflyer in London City that, as you know, is the point-to-point corporate market that Cityflyer helps to address. So that gives you a sense of our core current profit pool and the potential future profit pools that we have in Europe. What about rest of the world? Now rest of the world, as Luis was also indicating at the beginning of the presentation, is an area that encompasses Africa, Asia, Middle East, so highly attractive markets, where our way to grow is primarily through asset-light joint businesses that allow us to have a very, very broad debt without having to invest too much capital to reach it. You can see here the 3 joint businesses that help doing that: the cooperation with the Qatar Airways in the Qatar joint business, the cooperation with Finnair and Japan Airlines in the Siberian joint business, and with China Southern in the China joint business. And you can see the depth that allows through the map that we have in front of you. Now I'd like to focus on second a bit more deeply on the Qatar joint business, because it's pretty unique in the industry. In fact, in the Qatar joint business, next to the traditional network synergies for consumer benefits that are managed through the joint business, you can see that we have also a unique partnership in terms of establishing a global loyalty currency in the sense that Qatar Airways adopted Avios, and Adam will elaborate more on that, as their global currency, also for their loyalty program as well as additional areas of cooperation in cargo and in maintenance activities and in procurement activities that allow us to develop more opportunities to generate synergies. All in all, also, we look at Qatar not only to expand our footprint all over in the Far East part, but as Sean was mentioning, one of the -- we believe a potential future profit pool is India and the cooperation with Qatar is pretty much instrumental to enhance our footprint over there. So in summary, what we have been presenting to you in this section of the global leadership position is referring to what Luis was mentioning at the beginning. Not only are we emerging from COVID with the world-class margin and returns, but also with the mix, with a portfolio that is more balanced and more resilient for the future. What you can see from this chart is basically our distribution potential future profits by region and by hub. And you can see that while, of course, North Atlantic remains the backbone of our profitability, you can see that the highest growing profit pools are the ones related to LatAm and domestic Spain, or to the what we call adjacencies so that the additional business asset lights like indeed, the loyalty program that Adam will elaborate on. And you can see it also by hub. So you can see by hub that our reliance upon only Northern European hubs is relatively reducing, thanks to the increase of the contribution of the Southern European hubs, and that's the reference of the 1.5 billion that the Spanish businesses contribute -- will contribute in the future to the group. In essence, therefore, not only stronger in terms of margin and returns, but also more balanced and more resilient. And now let me give the word to Julio to elaborate on our world-class brands, to address this market. Thank you.

Good morning. I'm going to talk to you about our world-class brands and lay out our plans to invest in the customer experience we deliver. Just move on. IAG have several world-class brands, globally recognized and trusted. Each brand has a unique identity, customer proposition and strategy. Our airline brands are anchored around IAG, leveraging the scale, our efficient platforms such as Cargo, GBS or Hangar 51, and benefiting from world-class expertise across the group. Our customers live and breathe the airline brands and Avios, our global loyalty currency that connects the brands. Following extensive research, we have found that customers can be classified into 7 distinct demand spaces, which you see here on the top. Our airline brands are well positioned across those 7 demand spaces. British Airways and Iberia are premium brands each in their respective geographies, targeting demand spaces in the premium front cabin and the trade up back cabin. Aer Lingus is a value carrier, primarily targeting smooth flying, global gateway and leisure indulgence demand spaces. And Vueling, LEVEL focus on frugal demand spaces as well as some demand spaces in the Trade-up back cabin. Now what do our customers tell us? How do they perceive our brands? And why do they choose us? Our customers choose British Airways, Iberia and Aer Lingus primarily for their extensive network and schedule offering because they trust the brands. And for BA specifically, they like the premium -- they like the fact that it is a premium brand. For Iberia, they like the outstanding customer service with a human touch. And the Lingus passengers and customers tell us that they are proud to fly with Aer Lingus. Similarly, Vueling customers, they like the extensive network and schedule, low fares and promotions and an enhanced travel experience, which clearly distinguishes them from other low-cost carriers. LEVEL is our most recent brand. Customers choose Level for their inspiring long-haul destinations, low fares and promotions and because the brand is digital, fun and modern. We are going to invest EUR 2.5 billion over the next 3 years in enhancing the customer experience. That is twice the amount we were investing pre-pandemic. We're going to invest this amount across -- or in customer product, service and in digitalizing the customer journey. On the next slide, I'm going to show you for each brand, who our customers are and where exactly we're investing this money. Let me start with British Airways. British Airways customers are global travelers. BA is one of the few brands or the few airlines operating to 5 continents. Our customers are affluent, are willing to pay for a premium experience and our customer base is becoming more leisure-focused. 75% of BA's customers are traveling for leisure purposes. On this slide, we're showing you on the top, where BA differentiates themselves from their competitors. And on the bottom, where we're making significant investments. BA excels in a premium check-in and lounge experience, a best-in-class onboard experience and a personalized service. Significant investments. We're making significant investments, particularly in improving our lounge experience, in the cabin product and service and in enhancing customer care. And Sean and [ Jose Antonio ] will be talking in more detail about these areas. Moving on to Iberia. As Fernando laid out, Iberia connects Europe with Latin America. Madrid is the largest European gateway, and our customers are increasingly choosing our premium cabins, recognizing Iberia for constantly innovating to improve the customer experience. Iberia is investing in digitalizing the entire customer journey, particular -- with a particular focus on the early phases, so the dreaming, the planning and the booking phase. For example, through a new personal area where customers can review their past flights in a very entertaining and inspiring way. Iberia is also making improvements to all baggage-related processes from communication of the baggage carousel, to creating automatically a report when the bag hasn't traveled and proactively helping the customer throughout the process of the delivery of the bag. So customers won't have to queue at the airports and won't have to call our call centers. Iberia started rolling out the award-winning a 350 Next, cabin. The suite-style business class, which they are employing across the South Atlantic. And the Todo Empieza Conmigo, everything starts with me program, delivers customer-centric, warm customer-centric service. Around 5,000 employees, both from the headquarter and from customer-facing teams have attended this program over the last year. At Aer Lingus, we have a unique customer base, a proud Irish heritage and the large Irish [ Desbro ] in North America. Aer Lingus' customers benefit from a U.S. customs and border protection preclearance in Dublin, and anybody that as I have recently waited for more than 3 hours at customs and border control in the U.S. will really appreciate this. Aer Lingus customers are -- have a high affinity with the brand and prefer direct bookings and communication channels. As Lynne mentioned earlier today, Aer Lingus will be the launch customer for the A321 XLR from Q4 2024. In addition, we are refurbishing our short-haul fleet with new seats, and we are refreshing the cabin interior across the short haul and long haul fleet over the next few years. Aer Lingus are investing in digital self-service and disruption management capabilities throughout the customer journey, utilizing a mobile-first approach, and employees live and breathe Aer Lingus and a special training for employees ensures continuity for this very much Aer Lingus specific touch in communicating with customers. Moving on to Vueling. Vueling customers are tech-savvy explorers, who see an elevated, low-cost travel experience. Already today, 40% of Vueling customers use the Vueling app to manage their trips. And that number is constantly increasing. Vueling is investing in digitalizing all touch points, providing an end-to-end travel -- end-to-end digital and fully self-managed experience. This is particularly valuable when customers' journeys get disrupted. And we know that giving our customers this control really enhances their experience, and particularly compared to Vueling's competitors. Compared to other LCCs, as I said, Vueling wants to -- or aims at providing an enhanced customer experience, and therefore, we invest in technology, tools and a customer-centric team, highly engaged at -- in Barcelona. LEVEL is our most recent brand, and it is already now the #1 long-haul airline in Barcelona. We are very excited about today's announcement to create an AOC which will allow us to grow the airline and offer many, many more destinations for our customers. So in conclusion, IAG has a portfolio of world-class brands. Each brand has a distinct brand positioning. We believe long-term sustainable returns require exceeding your customers' expectations and are investing EUR 2.5 billion in enhancing the customer experience over the next 3 years. Thank you. Next is Loyalty. I'm going to hand over to Adam.

Thank you, Julio. Good morning, everyone. Julio has talked to you about the airline customer plans. Now let's talk about what Loyalty is doing. As Luis has highlighted, it's a central part of our strategy. What are we doing to engage with customers and drive loyalty with them? And how is the loyalty business performing? While our strategy is to invest in our customers to drive higher returns. And Luis highlighted this slide at the start of his presentation, and let me go through it because there's quite a bit here. This circle in the middle is what we term the Loyalty flywheel. And what we're trying to do is to get this flywheel to spin as fast as possible. So on the right-hand side, we're investing to drive deeper customer engagement. And if we do that, then we're delivering higher financial returns on the left. How do we invest to drive deeper customer engagement? Well, the answer is, we do that through many things that Luis and Julio have talked about. We invest in lounges, we invested in the product, we invest in service. But critically, we also invest in Avios, the currency. Because we give Avios to customers when they fly. And also, we invest when those customers use those Avios to go on inspirational rewards. And we believe if we get that right, then what happens is we get Avios earning, customers earn Avios beyond flying with our partners like American Express, Barclays, et cetera, financial services, retail and travel. And obviously, we have a relationship with them, and there's money coming in from that activity. Also, we can -- we believe we can launch new ventures on the back of that, on the back of the currency and on the back of the customer database. And we launched our first new venture about 12 months ago, the wine business, which you may have heard of. And then critically and often forgotten is if you get that right, then you get more loyalty to the airlines themselves. And so you get a greater share of wallet and you get more revenue to them. So the theory of this is that you invest in the customer, you get better higher returns for the Loyalty business and the airlines. And you can see the strategy is working. The IAG loyalty profit is up 65% versus 2019 year-to-date. Avios collection. So the Avios being collected as 20% higher than it's ever been before. Spending points is actually 25% higher than it's ever been before. So you can see there's a great deal of activity in this space. As Luis talked about, membership in our loyalty programs continues to grow. We got over 40 million members in all the IAG programs. And it's growing at its fastest rate. Over 2 million customers have already joined the IAG programs this year. That's the highest rate we've had. And the age group may be slightly different from what you might have imagined, with over 40% of customers under the age of 45. But what do customers want from a loyalty program? Well, we asked them, and we got back 3 main areas. First of all, they want a program that they can understand. The simple, but recognizes them. Great collection opportunities for the currency and aspirational rewards. So let's take each of these in turn. So first of all, making it simple, this isn't probably the simplest of slides, but what it's trying to demonstrate here is that all the IAG programs have moved to the same approach when issuing Avios for flying. We've moved to something called spend based earn. And quite simply, how much you spend is how many Avios you earn. And so we've got an example here. If you've got EUR 1,000 fare and you are flying on Iberia, so Iberia is the top line here. And you remember of CLASICA, EUR 1,000 fare times by 5, 5,000 Avios. If you're a PLATINO member, 8 is the multiplier, 8 times 1,000, 8,000 Avios. So simple, customers can understand it, and we've seen a very smooth implementation so far. We plan further simplification and recognition for our customers. So one of the things we're going to implement is a single Avios balance across the airlines. So instead of having a balance in British Airways Executive Club, a balance in Iberia plus a balance in Air Club, we're going to have one virtual balance, which is going to roll out individually in the airlines. We're going to improve benefits to the program, making some of those benefits more relevant to the individual customer. We're going to deliver more across airline recognition. So if you are a Gold Card customer flying on Iberia, Gold Card British Airways customer, you'll be recognized. And consistent elite tiers, too. So what we're trying to do here is, yes, increase the loyalty for an individual airline, but also increasing the loyalty across the group. Our partnerships, so let's move now from recognition to great collection opportunities. Our partnerships are making it easier to collect. We've launched more marquee partners in the last 4 years than we have in the previous 10. And you can see some of them here today. Some of them are existing partners we've had for quite some time, which further growing fast. Uber is probably what I would highlight. Uber's launched with British Airways Executive Club, you link the 2 accounts and you can earn Avios when you take an Uber. We've launched this 12 months ago, nearly 400,000 passengers -- sorry, customers have linked their accounts already. And if any of you, I know a lot of you are BA Executive Club members, if any of you are unsure about how to do this, because sometimes it's our best [ kept ] secret. In the break, there's a few of us up that can help you and make sure you're linking. In addition to that, we've announced new currency partnerships. This is slightly different. This is when an airline or another partner takes the Avios currency, adopts it as their currency for their scheme. So this is what happened with Qatar Airways about 18 months ago. So Qatar Airways keeps their Privilege Club. But the currency they use is Avios. And so you can transfer Avios between Qatar Airways' Privilege Club and British Airways Executive Club and soon to be Iberia Plus too, and you can redeem your points across those. And we've seen significant engagement on the back of that change. And Finnair is also going to be the next airline to come aboard. They will adopt the Avios program -- sorry, the Avios currency I should say, in Q1 2024. And customers are collecting Avios in record numbers. As I said before, collection is 20% higher than it's ever been. Over 60% of all the collection is outside of flying. And chief amongst that is financial services, where we have co-brands and relationships across the world with a number of our airlines. Our U.K. card portfolio is the strongest. And if you bring our U.K. card spend, so customers spend on the card, it accounts for over 1% of U.K. GDP. And we believe there's an opportunity to grow further in this space. I can tell you today that the majority of the BA Executive Club members do not have a co-brand. So there's an opportunity to grow materially further from where we are. But it's all very well getting people to collect points. You've got to make sure customers can actually use them. And we have been focused on making sure customers can use their points. And it's no surprise to see that the spending of points is growing at a faster rate. We delivered more guaranteed seats, over 5 million guaranteed seats across British Airways and Iberia. So every single aircraft, when it takes off from British Airways, has 4 business class seats available and 8 economy seats that you can book on pure redemption. We've implemented something called Reward Flight Saver, low cash options in British Airways. So you can fly across Europe for GBP 1 and a certain amount of Avios to the East Coast of the U.S.A. for GBP 100 and a certain amount of Avios. And surprise, surprise, 80% of our customers are choosing those low cash options. We've implemented the ability to get a discount on your holiday with BA Holidays using Avios, and now 20% of all British Airways Holidays customers are taking that opportunity and getting a discount on their holiday. And lastly, we've implemented something called Avios Only Flights. These are flights you can't get on if you've got cash. You can only get on if you're a member of the programs and you've got the currency. And we've implemented them at peak times, deliberately, as I thank you back to our customers. Geneva at half term in February, Corfu in August. And I lost my bet because I thought that the Corfu flight would sell out before the Geneva flight, and it was the other way around. So that's one of the reasons by the user point -- spending a point is up 25%. And there's more to come in 2024. Improved pay with Avios on British Airways. And this is the ability to get a discount on a commercial fare. For the majority of fares, you'll be able to discount the entire commercial ticket down to GBP 1. We're going to deliver more Avios-only flights. We're delighted with the customer reaction to that. We're going to do more of them. Iberia are going to join British Airways in adopting reward flight save, the ability to fly across Europe for EUR 1. And we're going to improve the hotel and car redemption opportunity using points for that. Working very closely with BA Holidays, because we see lots of customers looking to use their points in this way. So in summary, what we're trying to do is to invest to drive deeper customer engagement. If we get that right, then we extract higher financial returns. A couple more bits of information for you. I think as highlighted -- as Luis highlighted, we've now got over GBP 1 billion worth of revenue coming in externally from the group, for people buying the currency partners buying the currency. Our profit margin is very healthy, over 20% with a very efficient conversion of revenue to profit. And our plan is to grow this business double-digit profit growth of more than 10% every year. So focusing on investing to drive deeper customer engagement, extracting financial returns and making Avios a global currency. Thanks very much. Good news is, I'm not handing over to somebody else. I'm handing over to the break. So there's now a break, 25 minutes. I'm not quite sure exactly what time it is, but 25 minutes from now, the doors will open and you got a cup of tea or coffee. Thank you very much. [Break]

Good morning again. Welcome back. Today, now I would like to talk to you about IAG's transformation plans. I'm here with Sean, with Jose Antonio and Dave will go later more in detail about BA transformation. So I would like to share with you how we implemented the group transformation view. As Luis mentioned earlier today, transformation is in our DNA. It's in the DNA of the group. And however, well, Luis asked me to lead transformation after he was appointed CEO of the group in 2020, we decided to implement the approach in which we believe. This approach is not just the traditional cost cutting. It's an approach based on efficiency, people, culture, innovation, targeted investment and very disciplined and granular performance management. Our main objective at that time was to ensure that we reach the full potential of all our businesses and win that transformation in the DNA of our Airlines. And we drive for -- to drive that change, we created a small team at group level, group transformation office to coordinate the program, and also, we build teams across different [indiscernible] to ensure that we were delivering transformation to ensure that we've made things happening with the business areas. This transformation is already happening and is delivering value and is creating better business more resilience and more profitable. The key message on this slide is just to show you that we identifying opportunities in all of our businesses. Our businesses have done a lot during COVID. And in some way, 2023 results are due in part of the transformation initiatives the teams have delivered during this period, but there is still a lot to do more in the future, and initiatives are identified, quantified, plans are on track. We are touching every single area of the business, every single work streams, including IT, suppliers, people, operations, fleet, customer and commercial. Some of the initiatives you have heard before, where Adam presented the commercial opportunity, the customer opportunity we have in front of us in Loyalty. And some of them you will hear later. Particularly, for example, commercial re-platform for British Airways, where we expect to deliver a lot of value in the coming years. IT and operations and also a key focus for us, and of course, people and culture. We have included this chart just to show you how granular we are. And we look at every area in every business, in a forensic detail to support the delivery of world-class margins in our profit growth. On the revenue side, we have some initiatives to deliver in the coming years, normally new or improved commercial platforms. For example, boosting the Vueling bundle and products, increasing ancillary revenues, but also from the very big IT developments to the very small initiatives. For example, we are always improving the payment improvements to improve the conversion in our web finance in all our web finance. On the cost side, we will continue developing NDC strategy, particularly in BA and Aer Lingus. And also, for example, Vueling has implemented a new line maintenance model to improve efficiencies, reliability and also better cost. This slide is an example of one of our transformation initiatives supported in the concept we call best practice, which relates to Fuel savings. I find this slide particularly interesting for 2 reasons. The first reason is that it shows how Fuel is so important for us. We manage it with a lot of granularity, every ton account. And we are looking for new ways to save fuel, to reduce fuel consumption and then to reduce spend and then to reduce CO2 emissions. But most important, and I like this slide because it shows the power of this group, the power of IAG, how we are continuing learning each other and how are we adding value, sharing best practices between the different Airlines. Even 12 years after creating this group, we continue to find opportunities for improvement and learning each other. We are building on a strong foundation with the support of previous experience and execution. We have done this before. And as you probably know, Iberia transformation has been a unique case in the industry. This transformation was led by Luis but also delivered by his team. Marco was at that time, Chief Commercial Officer and now is leading Vueling. Antonio was at that time, Chief Financial Officer and now is Chief financial in BA. So they are helping to transform other businesses in our group. Iberia transformed for an unprofitable and uncompetitive Airline in 2012 to a profitable Airline, resilient by brand and customer oriented. And the story of Iberia transformation had a very clear path. First, operations were in the center. But to drive excellent operations, you need to engage people, you need to transform the culture and then customers are satisfied and then NPS improve. And then unit cost is reduced. And then higher revenues comes and you can achieve your profitability targets. I think some of you were there when Iberia [indiscernible] planted transformation in 2012 to [indiscernible]. Then in 2014, they launched Plan de Futuro to reach sustainable and growing profits, and then the team delivered what they committed. The Iberia transformation held the company to deliver 6 years of increasing profits until COVID arrives. But the strong foundations has proven its resilience and allow Iberia to recover capacity earlier and to recover quicker from this shock. And that's not only the work of the last months of the last year, it's a work of 10 years of deep transformation. As a conclusion, we follow a forensic analysis -- a forensic and granular analysis of all the transformation initiatives. We see lots of opportunities to create spaces in our businesses. We'll ensure more resilient and profit business in the future and will drive sustainable earnings for the group. So I hand over to Sean, and he will talk more in detail about BA transformation.

Thanks, Fernando. Jose Antonio, our new CFO, is going to co-present with me. But what I wanted to do, first of all, is talk about transformation that's underway in BA and talk about maybe the support we get from the center and the group, because it's fair to say that an awful lot of what we're trying to do, we're drawing from the transformation and experience that we have seen Iberia drive and Vueling drive over the last 5 years. So we get great benchmarking. We get great [indiscernible] and we also get robust challenge about the execution and the things that we are prioritizing. But what I wanted to do is give you a framing as to what we navigate through in terms of what's very important to BA, what are our strategic imperatives as we look to invest in transformation. And we spoke earlier about global leadership positions, and our leadership position is critical that we maintain that in London. That's about the depth of our network. It's also about the breadth of our network. One example is the North Atlantic. We offer 31 cities out of London and the North Atlantic. The nearest European arrival is about 22. We added Cincinnati this year. We want to keep on building out the breadth. So we have the best offering in the marketplace for travelers, but also make sure the big markets we increase the depth. So leadership is very important, lead at Heathrow, lead at city and reinforce our leadership position in London with the developments that we have at Gatwick. Premium proposition. We spoke about the size of the premium market in Europe. And the overweight exposure at IAG has that future. A lot of that is concentrated in London, where historically, it's been about 2.5x more trade up for premium passengers than you see in any other European gateway. This has always been the DNA of the brand. We need to commit to execute it and execute it consistently. And we have to drive a step change in our Net Promoter Scores. Now if you want to be a premium customer-centric business, you're not going to get there unless all of your people are aligned and behind what you're trying to achieve. So colleagues will be, and I don't want to use a cliche at the heart of what we're doing, we're putting a huge amount of effort into recruiting, training, building capability, providing support, making sure people have the tools to do the job on the [indiscernible] colleagues in British Airways are going to get behind our plan, and we're making great progress on engagement. Now efficient execution. Two core elements to this. One is we've got to drive our on-time performance up to above industry standards. And that's been challenging as we look at the rebuild we've had over the last couple of years. And secondly, we'll have to be very focused on making sure we have the right cost base for the business model that we have chosen. We have inflationary headwinds. Our business isn't as high growth as other businesses. So I think innovating on cost control is going to be a very, very important lever and discipline that we carry on embedding. And finally, we talk about sustainability, and Jonathan will talk about sustainability later from a group perspective, and this is led by group. But the point here is British Airways as a brand, is a great platform to showcase and lobby and demonstrate some of the things that we are doing to drive our businesses towards net zero. So if we execute all of our transformations, we're very confident about strong margins and strong returns and strong margins sustained through the cycle. Now what are we doing then in terms of a bit more granularity? Well, we have over 7 billion of investment planned. A chunk of that is fleet renewal and fleet replacement, but we're also investing in our customer experience, as well as taking new planes with the club suites and new products like Panasonic IFE and better seats in all cabins. We're also retrofitting all of the aircraft. [indiscernible] product is a step change in terms of experience in NPS. We've also got WiFi rolled out across nearly all of our fleet at the minute, and that gives us both service opportunities, but also some innovations in terms of what we do with our crews that we're going to explore as well in a couple of slides. Commercial. People will say to me fix the operation, fix the app. We're going to fix the app. We have a team in this building, working on a revolution of ba.com and our digital experience. We will start dropping elements of that next year. But in the next 2 years, we will rebuild from the ground up our digital experience and not maybe catch up some of our competition, but leapfrog our competition. The IT is set. We need to put in good foundations. We are in the middle of a cloud migration. By the time we get into the [indiscernible] for all of our critical applications will be out of the data centers and in the cloud. And we're using that opportunity to modernize our applications as well. And of course, the foundation layer for any airline that strives to be excellent is operational resilience and technical resilience. And I'll talk in a lot of detail about both of these levers when we get into the deck. But to talk through the customer and commercial elements of it, I'm going to hand over to Jose Antonio.

So thank you, Sean. The customers is a top priority for British Airways, and we're working really, really hard to offer them a world-class experience throughout the whole customer journey. For example, you can see here, on the brand dimension, 2023 was a year in which we launched our new uniforms designed by a prestigious creator Ozwald Boateng, alongside with some of the Iberia colleagues. Currently, we have over 30,000 BA colleagues who probably wear this uniform in client-facing activities. So pilots, cabin crew, airports, operational ground teams. We're getting terrific feedback from both our employees and the customers. And also it's worth noting that over 90% of the garments are being produced with sustainable fabrics. So therefore, further supporting British Airways commitment for a sustainable operation. In terms of ground experience, the focus is the enhancement of our launches on our check in areas. Last year, we opened 3 new lounges at JFK when we move with American Airlines to Terminal 8. This year, we have approved a budget of over GBP 200 million to invest over the next years to completely upgrade our lounges around the world. And that includes a full-scale refurbishment of London Heathrow launches. We also have invested this year in a refresh of the premium check in, the club check in area in Heathrow. We have moved to the north side of the terminal to a better place, more -- with more space, more premium, close also to public transportation and with better accessibility to the North fast-track security facilities. In terms of onboard experience, we continue renovating our fleet, and we are investing strongly on the rollout of a new club suite in our planes in London Heathrow long-haul planes. Right now, we have around 60 of those planes already with this club suite and body tendered, and we'll have 75% of those planes next year and close to 100% by the end of 2025. The feedback we're getting for our customers is fantastic. It's -- there's 23 points of additional customer satisfaction of those customers that use this club suite versus the ones that use the previous product. We also know that premium service is very important for our customers at British Airways. And we're investing a lot in growing that jointly with our cabin crew team. We have recruited additional 4,000 cabin crew members since the start of 2022. We're investing in detailed tools for them to be able to provide better service to our customers. We have consolidated all our London Heathrow teams into one single team to be able to capture efficiencies and flexibility in [ rostering ]. And also, we are launching additional training courses, both for the first-class cabin crew teams, but also for our premium cabin crew teams. And then lastly, on the customer care dimension, we have changed completely our telephony system, going to a much call centers to a much more modern system that incorporates automation, incorporates robotics to be able to minimize the manual processes. And we're also starting to test some artificial intelligence features such in speech analytics. Final point on this slide. We have launched a proactive customer care team that offers solutions to our customers while they are still on board on the planes. For example, in a situation where there's a likely misconnection, there will be this air-to-ground system that will allow our team to rebook our customer in a different flight. So the moment he or she lands into intermediate destination, the problem will be solved by that time. So as you can see, a lot of things going on in the customer space, small, medium and large, but a lot of dedication, a lot of focus and a lot of investment in this area. If we go into the commercial capabilities, our transformation plan is also fully transforming the commercial way of doing things in British Airways. Starting from the right-hand side of the slide, you will see in 2024, we will launch a new platform for payments. We are going to replace the old one, been around for a few years now. And this new system should allow us to access the new ways of paying, the alternative ways of paying. The Google Pay, the Apple Pay, it should also provide a lot of opportunities to our customers to use Avios as a currency to book their flights, further enhancing the attractiveness of our loyalty program. And obviously, the retirement of the old platform will allow us to have some cost savings by retiring that platform that's been around for too many years now. In 2024, we will also launch our new revenue management system. State-of-the-art, very modern, with new capabilities on dynamic pricing and also allowing us to forecast in a much more accurate way to demand. This should allow us to maximize even further our flight and ancillary revenues. And then on the left-hand side of the slide, the most exciting project that we have on the table now, which is the full -- on the detail side of our commercial activity. We're working currently on the re-platforming of our web page, ba.com, and the relaunch of our app. This is the biggest single large investment that BA has ever done in all its history, outside of fleet purchases. Once we complete this project, we'll have state-of-the-art app and web page that will give us full retailing capabilities, including deeper personalization, will also give us 100% online self-servicing, which will mean our customers can -- will be able to manage the whole trip by themselves without any interaction with agents with call centers, and will also allow us to have a much shorter product development cycle. Meaning, we'll be able to enhance the application and enhance the web page in a very efficient manner, reacting very quickly to changes in technology, in the market or in customer needs. We are developing this -- delivering this project through agile methodology. We have the first drop a few weeks ago, the 31st of October, with the launch of the home page and the first flight booking. And during 2024 and 2025, we're going to ramp up our capabilities, and we will roll out the rest of the app and the web into the other roads of British Airways. We are extremely excited about this project. And as Sean mentioned, once it's finished, this should place British Airways as one of the leading airlines in the world in terms of digital commercial interaction with our clients. So as you can see, both on customer and in commercial, a lot going on with focus, with dedication and with significant investment on the transformation of British Airways. So I'm going to hand over now to Sean to cover what we're doing in the IT dimension and also on the operational dimension.

Thanks, Jose Antonio. I mentioned about the IT infrastructure. And I said we are at the minute, building a lot of resilience into our operations. So as well as migrating our application to the cloud, we're also building up better BCP. So half of the desk at Heathrow now can work on what we call a common platform. If our network isn't working, we can still use those desks and check people in. We can still board people and flights, and we have backdoor access to a number of our critical systems that we wouldn't have had this time last year. We've also got an autonomous telephony system in the U.K. call center, and we have a capability with Amadeus to fall back on if our core system doesn't work. So as well as making sure that we deal with root cause in terms of getting out of our data centers, we're also increasing the level of BCP resilience that we do have. And as I said earlier, about 95% of our systems will be migrated to the cloud as we get into 2024. The investment is about 10% of our total capital budget. We mentioned GBP 7 billion [indiscernible] of investment. About GBP 700 million, GBP 750 million is going into digital capability and into IT. Now I think Fernando spoke about the Iberia transformation and how online performance was an absolute cornerstone. I think we've put that at the center of what we need to do as well. If we look at this virtuous circle, we want to tap into, one, transform our operation. Two, it drives customer experience more than any other lever. Three, our colleagues love working in an operation that's running well. It has a huge halo on MP and colleague MPS. Four, financial performance. I think, one, getting our customers to support us to come back to us. Two, taking a lot of those disruption and nonperformance costs out of the business. And finally, it's a very, very efficient way to run your business from a carbon perspective. Now the backdrop of the starting position is more challenging than it has been historically. We have aerospace challenges. We have 20% less aerospace in Europe than we did. And we see events like Sunday and events like we saw in October that we are vulnerable to variables that are outside of our control. In BA, we have taken about 11,000 people into the business since 2021. So 1 and 2 people at Heathrow are new in their jobs. So we have a challenge to make sure that we are training and equipping and giving people the right tools to fulfill a great operation for us. And supply chain, again, is challenged as we come out of the geopolitical stresses and the rebuild of China. That is what it is. We're going to have to navigate around it. We're going to have to work smarter and really be agile in the way we deal with some of these external variables, because what's at stake here is make sure we get our operation right, get our NPS up, get our employees in a much better place in supporting our operation and drive the financial metrics by really turning this flywheel much more quickly. What I've got up here is a bit of an articulation about the causes of delays. And on the left is kind of the gap that we're looking to close. So we want to improve our OTP in double digits. On the right is a breakout of all of the reasons why we don't hit those targets today. In red, we have put in the internal variables that we have control over. In blue, there's the external variables that I spoke about earlier. The good news is over 2/3 of what we can influence is within our control. That's a much better ground operation at Heathrow, much sharper onboarding processes and disembarkation processes on dealing with excess baggage at gates and just making sure that we're honest in terms of getting those doors closed, making sure as well that we roster better resilience into our pilot and cabin crews to make sure that report times are working, make sure that our stand planning at Heathrow, which is a congested environment, is world-class and also making sure that our technical performance and our supply chains are delivering far more first than they are today. So we're going to have to address every single one of them. This is a law of incremental gains. There isn't a silver bullet. If it were, we probably would have found the final. And if I summarize kind of, okay, what are our 4 top things that we are investing in to drive this. One is we're going to put a big investment into Heathrow. And I'll talk about that in a bit more detail. Heathrow is a fantastic opportunity. We have a great terminal. We need to really make sure that the operation gets to world class and has a step change from where it is today. Secondly, we need to design a better operation. We are doing much better integrated planning, upstream planning of our fleet or schedule or block times, all of the kind of sophisticated variables that make in airline work, we are challenging them, redefining them with a view to driving on-time performance. Thirdly, we need to drive technical reliability to a better place. We're making very, very good progress as we head into the winter. The external environment is more challenging, but we will be investing in our engineering and technical resilience. And finally, we have a huge opportunity to modernize the way we run our operation by pulling all of the data in our systems, putting it into a data platform and having much quicker and much more AI machine learning-driven decisions to deal with all of the various scenarios that we have to encounter. So Heathrow. What are we going to do? Well, first of all, we're going to invest in the right level of resource and we'll put more resource and train more resource into Heathrow this winter. We are going to go back to what we call team-based total working. And part of what we will do there is split up, say, Terminal 5 into 7 areas. We have a team manning a certain subset of the terminal and they will basically man and run all of the stands and all of the baggage flows across those zones as one team. And that's a step change from where we have today where we have mass allocation of big resource pools. We've benchmarked this with other airlines, and our view is this is probably the right way to really drive a step change in our what we call below week performance. Now part of what we need to do as well to shore it up, I think, this new model is invest in tighter spans of control. And we will invest in management to that we have today, which will manage those teams that are [ ASCO ] of about 1 to 30. And that's a step change compared to what we have today. And we think that team-based working the competition between teams that better management oversight would really be critical to driving an on-time culture. We're also going to invest in resources and equipment, make sure that the small and the big things that people need like tugs, like RDTs, like PCs, like chip and pin devices that, that is all working. And we have much more robust processes to audit all of our kits at the airport, which we run on a weekly basis and using performance data and dashboards with our colleagues to flag areas where we can collectively improve. And I spoke about resilience. And Heathrow is the busiest airport in the world for 2 runways. It's within 50 miles of that are busy airports. When things go along, we need to get better at recovering. We will have much better automated reaccommodation capability next summer. We'll also have much better ticketing and reaccommodation capability in our connection center. And we're also moving a lot of functions that were centralized in back office, back out to be on the front line so that we have much greater management integration of things like task allocation, shift management and the way we deal with scenarios when things are not going according to plan. So we have a big program led by Tom Moran and Rene at Heathrow. That's underway. It's getting traction, and our view is to have the vast majority of this launch by next summer. I spoke as well about what we can do in terms of design. And we're getting a lot better with what we call dynamic planning of block times. Block time is the amount of time you allocate for the plane when the engines turn to when it lands at the other end. And what we find, of course, is block times vary. They can be longer in summer. They can be longer on Saturdays when you got airspace issues and stacking, they can be shorter in the winter when you got tailwinds. But we haven't been dynamic enough in managing this variable, so we're doing a lot of work into putting more intelligence into dealing with this variable. We've also gone through every single process that we have in terms of what it takes to turn an aircraft around. And we've recalibrated all of those tasks and we've rolled out what we call new standard turn assumptions into Heathrow as we moved into the winter schedule and that is actually driving an immediate impact on performance. We've also got some rules we build the schedule. We can't have more than 4 A380s departing an hour. It causes too much concentration of resources in one place. We don't want to have more than 4 long-haul departures rolling every 20 minutes. And those rules are now being embedded in the operation with minor schedule changes and again, are driving much greater resilience. And connections that are repeatedly failing. We know what they are. Again, we're redesigning those connections to make sure that when people book a connection with a tight connection over Heathrow that the chances are you're going to make it more often than you're not. I spoke about engineering, and this again is the foundation layer. The operation sometimes has to cope with issues that emerge in the hangar. But we got to fix the basics, which is get our technical space liability up to above industry, make sure we're fixing cabin defects, make sure that we're recruiting and attracting top talent -- make sure we've got a world-class supply chain, which is delivering quality and cost. And again, we have a very big transformation program underway in this space. But also, we have opportunities to future-proof this business. And what we're doing today is we're putting all of our maintenance records onto eLog. We don't have paper maintenance records anymore. It's all electronic. Now that's creating a big data pool of electronic intelligence relating to our engineering operation. What that gives us is the ability to diagnose defects a lot quicker than we would have done. A defect on a paper report could take 2 days to figure out what you do. We can do this now and hours. And then thirdly, what we can do with all of that data is use diagnostic analysis to make sure we're doing predictive maintenance, not wait for a spare to be changed when the manual says it will but figured out when things are actually occurring in terms of faults and get out there ahead of it and avoid having to make an intervention reactively. So the right is very, very exciting in terms of the future we're creating in our technical organization. And we're doing the same in our operations. We're modernizing our applications. We're putting data out of those applications into what we call a data layer and we're building digital tools then to make sure we make operational decisions much more intelligently and much more quickly. And I got to show a little video which brings it to life here from some of the people at British Airways as to what we're doing in this space. [Presentation]

Final slide for me. This isn't all about just what's happening in the future. I want to showcase that we are seeing improvements right now. We've had a 20-point improvement between November and September in OTP. A lot of those design changes that I spoke about in the winter schedule, it came live on the first of November, and we have seen an immediate improvement. Now you might say we should expect an improvement as you go into winter because it's less busy and that's fair. But we're also seeing the gap to 2019 performance in narrow quite dramatically as we look at the last 6 weeks. I was speaking to Rene in the lobby earlier and he throws performance this morning is at 90% at the minute, the first 50 flights all left bang on time. So we are seeing the benefits of a lot of this focus and transformation right now, but there's a hell of a lot more that we expect to drive as we head into the winter and into next summer. And so the sub KPIs are also in the right direction. We have an 80% reduction in checked bag delays. We've had a 90% reduction in hand baggage delays and a 35% improvement in delayed baggage -- so to kind of wrap up, the operation is going to be at the heart of our transformation. We have a very exciting investment program planned. Our people are very excited about driving this with us. The early signs are very encouraging that we are turning a corner. And finally, just to recap, that will underpin a world-class customer experience. We can do all of the great things on board that we want, but we simply have to get the fundamentals of on-time performance, baggage and the airport experience right. We've got some really exciting plans in terms of our commercial platform. I would call it not just the commercial platform, it's going to be a customer platform. We want to win the battle for digital convenience, not just catch up with some players who are maybe better than us, but leapfrog. We're modernizing the foundation layer of our IT estate. And as I said, a huge focus on operational and technical excellence. So with that, I'm going to hand over to Jonathon to talk about sustainability.

Good morning. Thank you, Sean. Thank you, Juan Antonio. And yes, so I'm Jonathon Counsell, Group Head of Sustainability at the International Airlines Group. So what I'm going to do, I'm going to give you an overview of our sustainability strategy, but I'm going to focus on our priority issue, which is reducing our carbon emissions. And I'm going to particularly focus on sustainable aviation fuels. But first of all, please let me set some context. So Luis showed this slide. I just want to talk through it because it really helps set the scene in terms of the approach that we take towards sustainability. Now it's clear to all of us that climate change is a critical issue for aviation. We are a difficult to decarbonize industry. We have a limited set of solutions. So our strong view as this is most effectively addressed at a collected industry level. At IAG and with our airlines, we have a long track record in sustainability. And we think because of that, we're in a strong position to support that sector-wide approach. And that all starts with setting the right commitments. And the question we will get asked is what is the right target on climate change? The fundamental principle there is you need to follow the science. Climate change is not about what you can do. It's what you have to do as led by the science a leading authority on this is the United Nations. So back in 2018, the United Nations released their latest major report, basically determining from all the evidence that's available what do we need to do to avoid the worst effects of climate change. And that's when the target of net zero emissions by 2050 first appeared. So based on that evidence, the following year, we as IAG, we also committed to that same target. And we were the first airline group to do so. But for us, that was a start point. Our plan was always how do we get the rest of the industry to commit to this target. And we used our influence with our industry partners and particularly our alliance partners. So you can see in this chart, the first step for us was to persuade our oneworld Alliance partners, which in total represent about 20% of the industry. They have airlines all over the world. And that -- once we got oneworld to commit the co stock take in 2020, it's relatively straightforward then to get the complete industry commitment through the IATA AGM in 2021. And then finally, all the governments to agree just at last year's ICAO General Assembly. It's worth noting we are the only industry that has committed to net zero emissions by 2050 at both an industry and global level. But commitments are great. Now we've got to think about delivery and in recognition of the importance of sustainable aviation fuels, and I'll talk quite a bit about that. We set a target of 10% SAF by 2030. It's worth bearing in mind, the total global supply in 2021 was about 100,000 tonnes. As a company, we were committing to 10x the global supply, but we felt that was achievable because of all the momentum we've seen with government policy. But in a similar fashion, wasn't about IAG. We went through the same process. We've dissuaded our oneworld Alliance and encouraged to say that now half a dozen governments have also committed to 10% at by 2030, including in the U.K. and the U.S.. And in addition, 50 airlines around the world, representing just over 40% of global capacity. So -- it's fair to say we have a commitment across the industry, but now we really do need to focus on delivering on those commitments. So we want to do now just talk you through our carbon road maps. I love carbon roadmap, which is just as well because I spent half of my life working with them, but they are the best way to depict how you're going to reduce your carbon emissions over the next 25 years or so. So this is not IAG's latest plan. We talk about the 4 pillars, so I'll quickly talk through those. The first pillar is operational efficiencies. The second pillar is new aircraft and engine technology. We have combined those in that dark blue ridge as you can see, delivering an important 42% of our emissions reduction by 2050. But the one I'm going to focus particularly today is on sustainable aviation fuels. So that's the green ridge, 41% of our emissions reduction in 70% of our fuel in 2050, we believe, can be on sustainable aviation fuels. If you saw this chart 5 years ago, that level would have been half of that. So that's a reflection of the momentum we've seen in the last 5 years. But we recognize both at an industry level and at IAG -- we are not going to be able to get absolute zero emissions by 2050. We are going to need to invest in reductions outside of our sector. So what does that mean? At the moment, that means investing through emissions trading schemes and offsets our global offset scheme, the carbon offsetting and reduction scheme for international aviation. But as this chart shows, when they become available, we will start to migrate those investments into carbon removals because we believe they are a more robust way for reducing our emissions. So let me just go through some of these pillars in a bit more detail. So starting from the top with the new aircraft. So you can see 2023 in the next 5 years, we talk about old generation and new generation aircraft, new generation are essentially best-in-class in terms of carbon efficiency. So we're going to increase the proportion of those new generation aircraft from 31% to 58% more than a doubling and that is through delivery of 179 aircraft, 146 short-haul aircraft and 33 long-haul aircraft. And as you can see on the right there, for new narrow-body aircraft are 20% more efficient than the aircraft they replace. -- wide-bodies from 15% to 40% more efficient than the aircraft they replace. And before I go into more detail on sustainable aviation fuels, I just want to talk a little bit about some of the innovative partners that we're working with to help some of those other activities. So operational efficiency -- so we've been working with i6. They're -- sorry, the -- well, actually, they're a fuel management services company based here in the U.K. and what they've helped us to, they've helped to digitize our fuel management processes and also optimize the amount of fuel that we load onto the aircraft. The biggest variable weight on an aircraft is actually the fuel it carries. So if you can minimize the amount of fuel you can carry within safety boundaries, that's going to save you a lot of CO2. So last year, through and Fernando gave a great chart showing all of the fuel efficiency initiatives that we're following. We saved over 100,000 tons of CO2, and this organization significantly helped us with that. I mentioned carbon capture. We're talking to half a dozen companies to help develop them. This one, very excitingly, based in California. They use mineral absorption technology -- they basically take calcium carbonate, they heat it up, becomes calcium oxide and then they laid it out in a series of towers, and it absorbs CO2. And then you take that CO2 from the calcium carbonate and then you use sequester it. They launched their first commercial site last week, last Thursday, relatively small scale, but it's quite exciting to see that these technologies are happening now. One of our priorities is to make sure to help this market is to make sure these carbon credits are eligible within our primary carbon pricing instruments, particularly the U.K. and the EU emissions trading scheme. And then on the right, Hydrogen. So we believe hydrogen has a role to play, mainly in short-haul flying. ZeroAvia, the world's leading hydrogen fuel cell company based here in the U.K.. This is the Dornier 228, 19-seater. This year, it's just completed a successful test program. And there's Luis in the picture there when we visited, we declined the offer to go on that flight, but maybe in the future. they are also working on a 76 seater. So a Dash-8, so that's been retrofitted in California. Both of these aircraft types, we expect to be in service before the end of this decade. So hydrogen is happening now certainly for very short-haul aircraft. Now so that's just talked around some of the other pillars, but let me focus on sustainable aviation fuels. And this chart really explains why SAF is so important. There are 2 dimensions on this one. So this is the range of flights, and this is the timing. SAF is the only technology that is enabled -- that is available today to help us reduce our carbon emissions in any form of scale. But probably more importantly, the consensus across the industry, it is really the only viable solution for long-haul travel. And as you can see, that represents 70% of our emissions. So it is absolutely critical for aviation as a whole in terms of the decarbonization strategy. You can see here the view on where we are with hydrogen and electric power aircraft. So first narrow-body as opposed to commute and regional, we expect to be in service in the mid-2030s, but we don't expect them to reach commercial scale to the mid-2040s. Our general reviews by 2050, they could help reduce our emissions by up to 10%. So they will play a role, but it is relatively small. So where are we in terms of that 10% SAF target? The first thing is we've now built a dedicated team of SAF experts enabling us to source SAF in the U.S., the U.K., Europe and the rest of the world. We have secured 25% of that 10% to 10 million tonnes, 250,000 tonnes. That represents a financial commitment of $865 million. Our strategy is diversification, and we do that on pathways. Currently, there are 8 pathways that are approved up to a 50% blend with another 6 coming along in the next few years. So we're diversifying pathways on different feedstocks, but also on geography, which enables us to manage our SAF risk -- but equally importantly, maximize how we exploit the policy incentives and I'll talk about that in a second because that is absolutely key to any SAF strategy. These are the 4 plants that we have contractual supply with that's delivering us about 250,000 tonnes. You can see a lot of the activity is in 3 of those are in the U.S. because that's where we have the most strong policy support. LanzaJet is probably the leading SAF company in the world. Just on Friday, they were successfully awarded a GBP 9 million grant from the U.K. government to help with the early development funding development work. And between those 2 plants, we'll be looking at 100,000 tonnes of SAF a year. And then through oneworld, we have offtake agreements with a company called Gevo and also a company called -- and you can see, so we've got company, geography and pathway diversification. We are talking at least a dozen other SAF companies across other pathways. The one that is particularly exciting, you may have heard is called Power-to-Liquid or [ e-SAF ]. This is essentially where you take carbon dioxide from the atmosphere. You mix it with green hydrogen to create a truly 100% sustainable fuel. Now this will be some years away because you do need a lot of renewable electricity to make that happen. But we believe by 2050, up to 50% of our fuels could be these Power-to-Liquids these [ e-SAF ]. So when it's -- overall, one of our key metrics is grams of CO2 per passenger kilometer. -- So this measures the efficiency with which we're running our business in terms of climate change. So it's a culmination of all that fleet renewal, those operational efficiencies, but also your deployment of SAF -- so 2025, we are on track to deliver our long-term target of 80 grams of CO2 per passenger -- so it's work in progress today. But from a -- from our current plans, we can deliver another 12% improvement by 2030, getting us down to 70 grams of CO2 per passenger kilometre, which is a very competitive number relative to our peer group. And it's worth saying that across IAG, 7,400 of our managers are directly incentivized to improve this number through our bonus structure. Let me talk about policy. So how do we -- the question is, how do we make SAF happen faster and its policy. I spend a lot of time with politicians, and this is why if without policy, you are not going to be able to get that investment to build those SAF plants. We believe just to hit the current mandate levels across the U.K. and Europe we're going to need upwards of 50 plants by 2030. Now as I said earlier, the U.S., by far, in the lead here, we have very strong statewide incentives. If you look at California, Washington, Oregon and Illinois. And just recently, on top of that, you have the Inflation Reduction Act. And the beauty of policy in the U.S., it accumulates. So you get all of those all of those incentives. So there's no wonder that, by far, the majority of any investment in SAF capacity is taking place in the states. So U.S. in the lead, good progress in the EU. We have the emissions trading scheme, which covers most of our European allowances, emissions. And the mandate is now in legislation. So the EU SAF mandate 6% by 2030, escalating to 20% by 2035 and then 70% by 2050. So that is creating a very strong demand signal. In addition, they have formed some incentives. They provided, for example, 20 million SAF allowances. So this is an incentive for airlines to close that gap between the current SAF price and jet fuel. Here in the U.K., we are behind. We have gone through the second SAF mandate consultation. We wait for that to be -- the details for that to be announced, which should happen before the end of the year, but they still have to put that in legislation. As we've always said, a mandate on its own doesn't drive investment. We need further policy incentives. The U.K. government, they have committed through the energy bill, where they look at that, we don't like the current timing. They're talking about 2 years before we'll get that legislation in place. And therefore, we have a target here in the U.K. of 5 plants in construction by 2025, that looks quite difficult if you're not going to get that policy incentive to 2026. So work in progress and more to do in the U.K.. So overall, in conclusion, we have a comprehensive strategy across all of those pillars through fleet investments SAF carbon removals. We will continue to be a market leader, primarily by supporting deployment and investment in SAF production capacity. But reinforcing the message, this has to be done in partnership across the whole industry. We need suppliers, we did manufacturers. We need airlines. We need energy companies. And of course, we need regulators. So the key to all of this is policy. You only get investment where you get policy. But with that, I am absolutely fully convinced that we at IAG and the industry can get on track to deliver our Net Zero Emissions ambitions. Thank you. Nicholas should be maximizing total shareholder returns.

Thank you very much, Jonathon. This is the last section, and I'm going to be focusing on maximizing total shareholder returns. Luis has already taken you through this slide, but hopefully, this really pulls out the key points for the day. The key success of our strategy will be delivering total shareholder returns, which are underpinned by sustainable profitability and also accretive growth. You've seen we are focusing on strengthening our core leadership positions in North and South Atlantic and Europe from our major hubs. Strong partnerships are giving us real -- our customers' real global reach right across the world. strengthening our portfolio of brands, enhancing our revenue through upgrading our customers' experience. And we're also helping offset inflation through forensic process analysis, procurement scale and the use of technology and really transforming ourselves. Our loyalty business is an asset-light way of encouraging our customers to stay within our environment and also provide great cash generation at strong margins. This strategy, together with strong asset allocation and balance sheet framework provide sustainable, more resilient free cash flow and profits and careful accretive growth. I'll come back and just summarize our key medium-term ambitions at the end of this presentation. This slide just shows our revenues. We have a high quality and increasingly diverse revenue streams, I hope you've seen today. You've heard today that our Spanish business is significant and growing in relevance. On this slide, you can see that both Iberia and Vueling in the middle here have grown over 20% since 2019. And Spain now accounts for over 1/3 of our total revenue. I'd also just like to highlight that IAG Loyalty has doubled in revenue contribution since 2019 as well. Our customer revenue is also diverse. We have a high percentage of premium customers and a good split between business corporate travel and leisure and direct channels. And within the business channel revenue, you can see on the right, is also spread across many different sectors. And this diversity of revenue gives us both resilience as well as the ability to derive premium yields across the business as well. Lot on this slide, you'll have to take away to read it, but the team has shown you that transformation is across all of our operations and is encompassing revenue and also with our cost base as well. And this slide summarizes on the left that transformation touches every line of our business to deliver our revenue and margin goals. We're transforming our customer experience, to drive high yields over the long term, and we're transforming our cost base and operations, leveraging scale, reducing disruption and reengineering process. On the right, I've just set out the approach of our airline unit cost categories. On ownership costs per units do go up as we bring in new aircraft, but this is offset by the new fleet, helping to drive fuel efficiency and operational performances. In supplier costs have seen significant inflation over the last few years, and we do expect to see this moderate in the near term, and we expect also to offset the majority of this inflation going forward through the work that Sean has just talked you through in improving resilience in optimizing our selling channels and also leveraging procurement scale and the technology investments that we're making. On employment to unit costs, we are investing in our teams in 2023 and 2024, especially in BA to drive that long-term operational efficiencies that will pay back. We have agreed multiyear agreements with the majority of our teams across the group, and this provides stability to develop an efficiency platform. And we're starting to get greater links between salary and performance. We've also got team efficiency programs in all of our business, transforming our airport processes and increasingly seasonal flexibility across our different businesses as well. So overall, at an airline unit cost level, just to be clear, that's excluding BA Holidays loyalty and MRO with the investments we are making, I would expect a small overall increase in nonunit costs next year and then the investments to offset a significant part of the inflation thereafter. This will, of course, depend on the global inflation environment. Just turning to capital allocation, IAG has always had a really robust and disciplined approach to allocating capital. But there's nothing like the last 3 years to really help focus the mind on this. We will continue to operate within a capital framework of net debt leverage of less than 1.8x. We believe this provisions, positions IAG well to achieve a good cost of debt and get access to diverse sources of funding. It also provides us with the confidence and the resilience to both invest in our business organically and selected inorganic M&A if and when they arise and to pay a sustainable dividend to our shareholders. There may be short periods of time where we want to go either side of this leverage metric to make more of the opportunities in front of us or to protect ourselves at certain times. But this is principally what our goal will be. When we think of allocating capital, we do think about all of our stakeholders, and we see investing in our customers, our employees and sustainability as a real virtuous circle ensure that we can turn -- in turn, return capital back to our investors. So how do we prioritize our capital spend. Our priorities are spread across these 5 categories. Firstly, as just mentioned, we want to secure our balance sheet. And you'll see we've deleveraged significantly, but with an uncertain external macro geopolitical world that I'm sure you all read about, ahead of us in 2024, we want to make sure that this is really secure. Secondly, we want to invest in strengthening our key hubs and growth markets by carefully rebuilding our fleet. And thirdly, we invested in improving our customer service, products and sustainability. And last but definitely not least, we're committed to delivering a sustainable dividend and returning excess cash if no attractive inorganic opportunities arise. So I'm just going to step through those. This slide here on the top left shows our EBITDA, debt and leverage ratios. And it shows where we're building our balance sheet strength. We've reduced net debt by over EUR 3 billion since the peak, and our leverage is in a good place. sustainability of our leverage profile long term has resulted in S&P upgrading us to investment grade just this September. With the strong performance we have had this year, we've repaid a significant part of our variable debt. This slows the maturity of our debt over the next few years. And you can see with our variable debt, we've repaid GBP 2 billion of the U.K. EF back debt in British Airways. And we've recently, just in October, repaid EUR 800 million of the ICO debt in Iberia. This leaves us with about 83% of our gross debt now just relating to aircraft financing and the remaining non-aircraft debt spread over 6 years. And you can see actually in 2024, we've got very little to repay in the very near term. We've also had a step change in our pension position at the bottom of this graph as well for British Airways. At the bottom of the page, you can see that every year, we used to pay GBP 500 million to GBP 700 million into the pension fund. Fund is now in technical surplus, and we do not anticipate to pay any further contributions in the near term. So this is really quite a turnaround to our cash generation. This slide shows the headroom we have on our balance sheet framework and liquidity at the end of September, our net debt was 1.4x, which gives us 0.4x headroom versus our target of less than 1.8x. But with working capital seasonality, we would expect this headroom to reduce to about 0.2 to 0.3 by the time we get to our year-end. On the right that you can see our liquidity of over GBP 13 billion, of which GBP 9 billion is in cash and about GBP 4 billion in facilities. And this gives us flexibility, if necessary, to withstand the possible economic downturn, continue to pursue our strategic ambitions and, of course, execute Air Europa. Just turning to our second slide, rebuilding our flight fleet. This slide here shows the total average capital spend we're planning over the next 3 years. And you can see that just over half the spend is spent on our new fleet and the majority of this spend is replacing the fleet back to its 2019 levels to strengthen our hub and key growth markets. The fleet-related spend covers maintenance and improving our customer experience on board and IT increases as we accelerate replacing legacy IT, step-change BA commercial platform that Antonio talked about and invest in our customers' digital journey. The other spend includes upgrade in the lounges and ETS also steps up as EU and U.K. credits are phased out. So this slide shows on the top left that we are building back our fleet to 2019 level. So these are the number of aircraft that we'll have at the end of each year. On the short haul in red, we have fewer aircraft that are increasing utilization, especially in British Airways, Aer Lingus and Vueling. We are also increasing gauge as we retire the Airbus 319s and replace them with Airbus 320s and 321s. On long haul, in blue, in 2022, you can see the impact of the retirement of the 747s and the postponement and the deferrals of deliveries in the last few years during the pandemic years. Across 2023 and 2024, we have 26 long-haul aircraft deliveries, most of which are those deferred aircraft now coming in with about half of these going into BA to rebuild their capacity. And we're bringing 3 aircraft already in the fleet that we stored back into service. On the bottom left, you can see the mix of committed aircraft we are bringing in, including the new 737 MAX starting delivery in 2025. The long-haul XLRs that Lynn talked about, which starts to be delivered in late 2024, early 2025 and the introduction of the 777-9, which come in right at the back end of 2026. You can see it on the right that we are really modernizing our fleet mix to new generation aircraft that are more cost and carbon efficient. This slide shows our expected ASK growth that those deliveries will give us. From 2019 to 2023, the decline is in line with the retirement of aircraft that we've just shown you. We then have a step-up next year to around 6% to 8% increase in ASKs both short haul and long haul up around the same levels. Short haul driven by small increases in fleet count, engage and utilization and long haul are growing primarily due to the deferred claims being delivered this year and next. From there on, we expect ASKs to grow on average by 4% to 5% per year, with long haul growing ahead of short haul in line with our deliveries and with our ambitions to strengthen our core profit pools and selective growth markets. This slide just sets out the thinking on our fleet financing and ownership. On the left, you can see there are many things that we take into account when we're considering what sort of finance we're going to do for our ownership. But most of we make sure we're optimizing our funding principles based on kind of minimizing our cost of capital, maintaining investment-grade balance sheet and ensuring we have a kind of diversity of funds. We try and finance our aircraft. And when we do, when we show the funding choices on the right, which demonstrate that we have a wide pool of supply and flexibility. The fleet is currently around about 55% operating lease and about 45% owned and finance lease. Rather than have a set percentage target for each of these, we balance them case by case based on optimizing these real funding principles overall. Turning to the third priority. At the beginning of this session, I mentioned it's important to invest in all of our stakeholders to get that virtuous circle going. Over the next 3 years, we'll be investing GBP 1.7 billion on I.T. making us more resilient. And in our customers' digital experience, and we're investing GBP 1.5 billion on our products to again improve customer experience in the airports and on board which we've already taken you through. We've also allocated investment in sustainability, particularly SAF that Jonathon has just taken through to enable achieving our industry-leading target of 10% by 2030. Returning cash to shareholders an integral part of our total shareholder returns in the 5 years leading up to the pandemic, we actually returned EUR 4.1 billion to our shareholders. We're absolutely committed to generating sufficient free cash flow to enable us to return to paying a dividend in the very near term. We want this to be sustainable, so we will review our exact timings regularly over the next year or so, and we'll return as soon as possible once we've insured 2 things. We can invest in our strategy with total confidence including the acquisition of Air Europa and that our balance sheet continues to be secure. Just touching on Air Europa. In February, we announced the acquisition that we anticipate the completion to be towards the back end of 2024. On this page, I've reminded you of the deal terms, and we're working with the European Commission to complete this as fast as possible. The purchase price was fixed at EUR 400 million a year ago for the remaining 80%, and we expect this transition to have a limited impact on our balance sheet overall. So to summarize our financial ambitions over the medium term. On a balance sheet framework with our focus on free cash flow and disciplined capital allocation, we'll manage our net debt leverage to less than 1.8x. With a rigorous approach to capital discipline, we're prioritizing where we spend our capital across the fleet, customers and infrastructure, and we have plans to spend about EUR 4.5 billion per year. On returns, with the investment in our network and customers supporting our yields and the forensic analysis of costs and processes, we believe the margins of 12% to 15% and returns of 13% to 16% across the cycle, are realistic and achievable in the medium term. In the near term, we do want to ensure that we can secure our balance sheet and invest in our business with confidence -- and once we have this confidence to focus on cash flow and world-class margins allows us to be committed to dividends and returning excess cash to shareholders. So in conclusion, I hope you've taken away today that we're really focusing on really 3 kind of key things over overall transforming our business, but really leveraging the Spanish platform and really becoming a much more balanced business as a result of it. We're investing in British Airways to get back to really strong returns, but also good operating as well. And we've got a really growth platform, a great growth platform in loyalty overall -- those things, together with our disciplined approach to capital allocation and revenue and cost transformation, we're confident we'll deliver world-class margins. We continue to strengthen our balance sheet and prioritize our capital spend, and we're committed to shareholder returns once we have absolute confidence that they are sustainable. I'm now going to invite the management committee up on to the stage so that we can do a Q&A.

Just to make the point before we have any questions. We're not going to talk about trading at all, which will disappoint some of you. But the MC here will -- I'll work through the questions on the floor. Does the Slido function in your app? There are a couple of questions in there already. So we'll come to that. If we run out of questions on the floor a little bit early but we don't want to drag this on too long. So if we can have 1 question each. There's a little bit of time. We'll come back to a second one. Otherwise, we'll all be in lunch afterwards, if you want, follow-up questions. So who would like to go first. We'll start with Alex here.

Alex Irving from Bernstein. My question is around non-fleet CapEx. So we're seeing a step up in 2024 to 2026 period. I think a bit longer term, is that level of non-fleet CapEx likely to come down, preserve or grow from that 24% to 26% baseline, please?

We've got GBP 4.5 billion of CapEx as a step up from GBP 4 billion in the current year that we're in at the moment, steps up to GBP 4.5 billion. It depends what the market is like as well. You can see we're pretty committed in terms of the fleets that we're committed to over the next 3 years and I would expect it to be staying up in the kind of 4 for a few years after that as well. But we'll have to look at that when the market comes. Yes, I guess you can break that down. I think just because of the pandemic, we've been for probably 3 years where we've probably under-invested no one was investing in some of the products on board, but also in the airport. So you've probably got a slight step-up in some fleet-related spend as well. And I think you've seen some of the investments we've got in IT are quite a step-up, particularly in British Airways through the commercial platform, which we're really excited back and think it'll give really good payback over time. I think the reality, though, in IT, though, is actually you're going to see more kind of IT spend across every single business, and you probably might say it in CapEx, you'll probably say more in OpEx, particularly we're investing in kind of digital. The 1 area that you will see a step up those in the ETSs as well there. You saw that's gone from about GBP 200 million to about GBP 400 million, and that will increase, of course. The more SAF we buy, the more you can actually offset that overall as well then.

Conor Dwyer from Morgan Stanley. My question is really around profitability. So obviously, the Iberia margins tracking meaningfully ahead of pre Covid levels the margin for the group target is still kind of in line with what we kind of would have been seeing peak over. So my question is, is there an expectation of kind of a structurally lower margin for BA even after the transformation has taken place? Is that simply just around the retirement of maybe some very profitable aircraft or anything else in there.

So the question was about margins. And I think you kind of -- we've given similar sort of margin targets than we had before. And I think if you go back to kind of 2018, you were seeing some very good margins coming out of British Airways. I think probably what we've tried to talk to you today and what Sean and Antonio presented that actually we really believe and just continue to invest in the product, which will generate kind of good sustainable margins overall. So we're not giving individual margins by operating company overall. But we think British Airways operating out of Heathrow should be towards the top end of our range of margins.

In any case, we told you about the objective that we have at group level that for the different airlines in the group remains the same. So margin 12% and 15% for all of them. And so that's the plan they have for the following years.

Just one other point to add is BA will take more delivery of long-haul aircraft. So I think you'll have a better mix of long versus short haul in the years ahead than you would have had this summer. And that's another lever, I think, in terms of the margin evolution.

Stephen Furlong from Davy. I just follow on, on the BA point. In the past, there was a lot of talk about positive premium mix basically and that is kind of negative now. And is that a function of the just the fleet and how it's been retired and renewed? In other words, is the mix going to go back on premium, not premium positive?

You would have had some aircraft that retired that are very high premium mix. These kind of what we call high business class configured 747s, and we're replacing those aircraft over time with 9X and 26. But our overall average seat count per aircraft will be very similar to the run rate we would have had between 2012 and '19. We'd have between 56 to 57 business class seats per aircraft. We've rationalized first class down from maybe 14 to 8 but we would expect premium capacity to get back above 2019 levels by about '25. But there would be a minor movement downwards on the mix because of the spike we had in 2018, '19 in particular. Now I think what I would say is we're a Traveller Plus, which is a very profitable cabin. We deliver a 27% increase in that footprint. And I think considering the strength of the premium leisure market, but that's a very, very good place to be.

It's Jarrod Castle from UBS. 2019, a different world, but the question was put to then CEO Willie Walsh in order to achieve your targets, what economic backdrop do you need? And if I recall correctly, the response was, it's not about the economic backdrop, it's about the resilience we've put in the business. And hence, we think we can achieve it in most situations. Unfortunately, we then had COVID. So I'm putting the question again when you look at those targets, what kind of economic backdrop are you thinking about?

We -- the targets we've given today in the medium term, we're particularly focused on giving medium-term targets rather than near-term targets today. So I think you will -- if I could probably divide the room in 2 in terms of what people think about what's going to happen in the next kind of few months overall. So I think go back to the kind of answer you probably got in 2019. I think hopefully, today, you've seen a more resilient business. I think if you see the split between our Spanish business, South Atlantic and North Atlantic is a much more healthy balance business. I think if you look at our customer base between business and leisure, kind of variety of leisure businesses we've got and even our premium, if you look at our premium customers, we've got, particularly in BA, there's a slide up there, which showed kind of 36% of our seats at premium overall. But actually, we look at our makeup of our customers in British Airways. I guess, unfortunately, for many, we're in a much more resilient customer group than most overall. So I do think it's about being the resilience of the business as well. I think the thing that Luis has really brought to the business that was the transformation of what we're doing there as well, particularly focusing on kind of not just riding the market yields, but actually how do you invest in the business, particularly in the technology, which I hope you've shown, which gives us a better customer experience, which helps you to kind of yield manage better as well, but actually also the bit that Fernando took you through in terms of our approach to cost base as well, really reducing our kind of fixed cost base to help it be a much more resilient business as well over time.

It's Harry Gowers from JPMorgan. If I could ask on cash or free cash flow in particular. So you've reiterated the 12% to 15% EBIT margin target sustainably. What could you expect this maybe in terms of the free cash flow drop through or normalized free cash flow on average from that target midterm?

So the question is the 12% to 15% margin, what is the free cash flow overall. We haven't given a free cash flow number. Overall free cash flow assumes operating profit minus kind of interest and CapEx overall. I think hopefully, what we've given you is the components that are working out overall. So I think giving you the margin, we've been quite clear about what kind of level of CapEx it is as well. What hopefully, you've also seen though as well is this cash -- this business has been very cash generative this year. So we've got to a good place and we expect it to be good cash generative in the near term as well.

I'm going to encourage you all to use it. How are you planning to manage the GTF issues over the next few years? And is there anything you can talk about in terms of discussions with Pratt on that?

You know that we are less affected than other operators. We have 29 aircraft affected in Vueling with the 2 deliveries that we are having now. For Iberia Express, we are going to have 5 aircraft in Iberia Express, 321 also affected by this issue. In our case, it is less than 10% of our narrowbody fleet, but we are taking action in order to maintain the capacity that we want to fly mainly in Vueling. So we are talking to Pratt. We are close to reach an agreement in order to be compensated for the capacity that we are trying to lease from the market. So we are advancing in the deals with different providers in order to replace that capacity and this is not going to have an impact in the plans that Vueling have for the next year.

It's Julian Cook from [indiscernible]. Can I ask the CEOs of each airline to share their vision for the company?

Maybe if I start, I think what we want to really do is deliver on that transformation. So I get the customer experience up to where we want to get it to. But ultimately, it's about leadership, and I want to maintain that leadership position in terms of playing the role of flying to flag and connecting Britain with the world and the world with Britain. So rebuilding the network but doing it in a way that's better as an experience than we would have had even before the pandemic.

Well, what we see internally is we're looking to make Aer Lingus bigger, better and more sustainable. The bigger comes through in the fleet we've got ambitious long-haul growth for the airline. The better comes across in the digital experience and customer experience, but really importantly, in the brand, and that's for customers and it's also for our employees.

I think for Iberia the challenge is to consolidate the current moment in terms of operational excellence, customer satisfaction and financial results. And I think it's a better combination between internal factors, the outcome of the 10 years transformation plus the fleet investment and also the [indiscernible] change in the demand in the traffic between Latin America and Madrid, so to consolidate this position and to play in the first division of the European airlines.

And as far as Vueling concerned, we have articulated that internally. We will be the leading low-cost carrier in the markets we choose to serve by unfolding our full potential through Vueling to transform. What does it mean? Let's say, externally, we went through a pretty profound transformation process during the COVID that has enabled us to emerge now stronger on the cost side. So for instance, we changed the line maintenance, we changed the contracts that we have with handling, we changed our seasonality. There was a great opportunity for Vueling when it used to be a very seasonal airline with a ratio of 1.42. So we were producing 40% more in the summer than in the winter. Now we have reduced it to half. And also, we have doubled our ancillary. So all the areas that we detected that can bring us to full potential are the ones that will enable us to be the leading low-cost carrier in the markets we choose to serve. But I think what we showed in Spain domestic is a good example of that.

Guilherme Sampaio from CaixaBank. Could you touch upon the flexibility that you are embedding in your plans since you obviously are benefiting from a high premium leisure traffic on Lat Am, although with possible risks in terms of sustainability on one hand and perhaps competition aiming to get back some market share. Flexibility in terms of capacity allocation.

So flexibility in terms of capacity allocations, particularly to South America.

We said before that we are receiving the A350-900 in Iberia. We will receive the 321 Xtra Long Range. This year also, we went to the market to lease 2 additional 350s because we saw the opportunity to deploy in the different markets. We need to wait the Europa operation because in case we can do it as we hope, we are sure we are going to have remedies in these operations, so we can have an excess of aircraft that we can deploy in the different markets. So we are going to have flexibility to even put more capacity in South America, if it is needed. And then we talk also about the opportunity we have with LEVEL from Barcelona, where we are going to develop more the opportunity that we have there with new aircraft and new AOC.

It's James Hollins from BNP Paribas. My 1 question is about 2 areas -- can speak to us by their absence. The first, historically, you've talked about a group-wide technology. I think the division is called GBS, correct me if I'm wrong. I was wondering if maybe that's been deemphasized or reasons you haven't talked about it. I know you've talked about BA IT, but maybe just one of the dozen or so people might want to step up and have a chat. And the second area is on BA holidays. Clearly, another company is very willing to talk about performance, EBIT margin, et cetera, on their holidays division. I suspect yours is doing quite well. So maybe if someone likes to talk about that as well.

I will start with the IT question. So as you say, we have the IAG platform where we have IT but we have a hybrid model where we have centralized functions at group level, but we do things locally. And now we are in the middle of the transformation of that model in order to give BA the flexibility and speed that they need in order to deliver the transformation. So I don't know, Jorge if you want to add something about this because you are in charge of that.

I mean you are right. We are right now in the model to move the most capabilities to the OpCos basically because we think the development area has to be near the business. I mean because we are going to work and the future is to work in an agile world and now we are in the middle of movement. These capabilities are top cost and a clear example is nexus in BA. Nexus is the new BA platform. And I think this is going to allow us to increase our agility and our speed transforming the IT area.

Holidays has performed very well. You're correct. And I think it's indicative of the strength of the U.K. ledger market. We're at #7 or 8 in terms of Atal operators as a tour operator. I think there's 2 other levers, which are very exciting. One is the fact that you can now Earn Avios via holidays, and that's getting traction, as Adam spoke about and that's a really strong opportunity in terms of cross fertilizing both of those levers. Secondly, as we've relaunched Euroflyer at Gatwick and rebuilt that leisure network, we're seeing very, very good penetration of BA holidays packages on those flights. So I think it's a very -- it's a positive outlook on BA holidays.

Just going to follow that up with another question from the app. So what are your plans longer term for Gatwick and maybe Manchester?

Maybe if I bring up Gatwick, we've got our long-haul program reinstated there, and we've built Euroflyer up to about 19 planes this year. Based on the progress we're seeing, we're going to expand Euroflyer again next year.

If I take Manchester. So we started an airline in the middle of COVID in our U.K. AOC Manchester operations, and that was profitable very quickly. We're really pleased with how it's going. We've got so many growth opportunities. The decision really is where we put them between Manchester and Dublin, but we expect to see growth there.

I'll be quick. Neil Glynn from AIR Control Tower Research. Maybe a question for Adam on the loyalty side. You've obviously got a huge amount of new collection partners. I guess there's quite a range of performance across those collection partners. So just interested in the context of the revenue growth plans you have. Do you manage all of those collection partners to the same standard? And is that a key driver of future growth expectations?

Sure. I think I talked in the slides about the fact that the predominant partners are in financial services. So you've got travel, financial services and retail. And if you look at those -- the biggest of those is financial services. So we have a similar -- within the vertical of your life, we have a similar view of performance and how we're looking to perform. And that's split by geography. So clearly, the U.K. slightly different from the U.S. and Spain, et cetera. I think the retail environment is slightly different. And so we're looking for a few more things from retail. So visibility is very important. So the relationship, for instance, we have with Sainsbury's and Nectar, the visibility we have of this currency is a very important part of that. So when we sign deals with retail operators, visibility is a central part of it, if you want to get the obvious currency now. So we do within the vertical similar but different across the verticals.

And that is a follow-up again from the app. What are your plans to integrate Aer Lingus into loyalty?

So and I'm sure Lynne can talk to this as well. So we are -- Aer Lingus obviously have earn and burn Avios today and we -- Lingus were actually very early in adopters of spend base to earn. We talked about that when you collect Avios, and we've been working hard with the teams to extend the capability out into other places that you can use Avios within the Aer Lingus network. We've launched a number of partners in Ireland Chief amongst in the Bank of Ireland credit card. And we have quite a few plans hopefully coming to fruition in the next few months around partners in Ireland.

We've grown our Air Club membership significantly over the last couple of years. But one of the great things about being in this group is that when we have centers of excellence like the loyalty team, then there's a bit of rivalry going on between the OpCos to say we want to go first. So every time I get Adam over to Dublin, which is every couple of months, the main message is anything [indiscernible] is doing, Aer Lingus is the right place to test it out because we're smaller and agile, and we want it first. But it does normally give me first path of things, but there's so many things in the pipeline with the loyalty team and we're working really well all of the up calls with IAG loyalty.

It's Andrew Lob from Barclays. Can I ask about how you used to allocate your brands and your operating companies across the different markets. Because if we just had the example we're just speaking about a Manchester long-haul, I mean, yes, Lynne, I love you to bits, but why does it necessarily go to you? Why don't we have some [indiscernible] on that route? Or why don't you put level on it for example. At Gatwick, why the routes go to Vueling not to BA? And just looking to the future, how would you allocate capacity or operations between Europa, IBX, Iberia, Vueling, LEVEL? I mean it's simple, isn't it? I mean, it's really not that simple.

Yes, it's a very good question. And it's a question that we had in the analysis of the strategy last year. So as you say, we have different brands, attending different segments in the market and different customer segments, Julio explained before. I think the major part of the brands, as stated LEVEL now in Barcelona, they are associated to their own AOC and I think that's also important because the cost structure that we have in the different airlines is different. So when we took, for example, the decision to fly from Manchester with Aer Lingus, we're talking about that. We're talking about this LEVEL could be an option to deploy capacity there. But when we made the analysis, we saw that the opportunity that we could have with the Aer Lingus brand and the profile of customers that we have in Manchester could be more important for us, and that's the reason we took that approach. In the case, for example, of BA, you know that during COVID, we have stopped the operations or hold operation from Gatwick. We were analyzing several options at group level. For example, we analyzed if Vueling could be an option to fly from Gatwick or if BA could fly that operation in case they had the cost structure that is needed to be competitive in Gatwick because in Gatwick in the last 10 years before COVID, we lost money in a short haul in 9 of the 10. So we needed the right cost structure and the right proposal to the customer. So -- because British Airways, they closed an agreement with their people, and they are delivering the cost structure that we need, we are developing BA Euroflyer with the brand that we consider is the best for that market. In any case, we are operating, for example, [indiscernible] slots in Manchester today with the Vueling brand. And it's something that we are going to revisit in the future. If we continue delivering with BA Euroflyer in the way we are delivering is for sure, an opportunity to develop the company. If not, we have, for example, Vueling that they can deploy capacity in the market. But we are also waiting for the Air Europa operation. With Air Europa, we are going to have more AOCs and more brands in the group. And at that time, we need to take a decision if we want to keep all the brands or if we want to reduce some of them or it's better to have a dual brand strategy in some of our hubs. That's a reflection we are having, but we are waiting to take the final decision where we close -- if we can close we hope the Air Europa operation.

Savanthi Prelis-Syth from Raymond James. Just kind of curious if you could talk a little bit about your distribution strategy. That was a big focus in the past. It seems like you've had a lot of success and now a lot of it is direct distribution. But could you talk about that strategy and across the different entities?

We launched our new distribution model in 2017, you were alluding to it. At that time, less than 4 for BA in Iberia, less than 4 bookings were digital. More than 6 bookings were through the GDSs. And through the GDSs also means you lose any information and the contact to the customer. Since then, we have made great progress. We were -- BA and Iberia both were leadership airlines at IATA leadership Airlines. We are now -- we now have more than 7 out of 10 bookings digital, so either through our website, our apps or through NDC. That brings us provides us much more information about the customer, but also lets us provide a much better customer experience. And for example, we look at NPS by distribution channel. The NPS between NDC, which is newest emission standard that is used, for example, for distributing via agencies. That NPS is the same as when we distribute direct. So the customer experience is seamless, you could say. While if you look at the NPS for bookings that come via GDS, there's a big drop. And the big drop is also due to us having less information about the customer and being -- and not being able to distribute all our content, not able to distribute all our ancillaries, but also when there's disruption really supporting the customer in the same way as if it's a digital booking. So we are committed to 100% digital. As I said, BA and Iberia are more than 7 out of 10. We have Vueling, where we have Aer Lingus first with more than 8 out of 10 bookings digital, and we have Vueling way more than 9 out of 10 bookings already digital.

[indiscernible] with HSBC. Could you please talk about Madrid airport -- the airport operator plan significant CapEx over the next year, that should be reflected in the tariffs during the next regulatory period? Do you see the requirement for this CapEx? And do you expect Air Europa to move to Terminal 4 as well after the acquisition?

I think we are talking to [indiscernible] about the possible increase in the charges there. And for sure, what we want is that and Madrid Airport continues as competitive cities. The Madrid is an airport where we can still put capacities through that in the peak times, you don't have a slot, but you can distribute capacity throughout the day. So I think we are now talking with them in order to have reasonable investments to continue the deployment of capacity that we have there. And about Air Europa. Yes, if we do the operation, we will operate together in the T4. Again, we need to see the remedies that we can have from this operation that they ensure that we can have a space to operate together there. I don't know, Fernando, if you want to add something the investment?

The key point is that Madrid is not fully constrained in some [indiscernible] schedules we can grow. So we can reaccommodate with the big portfolios as well as we can accommodate the growth.

Two questions on sustainability. Do we expect the EU to increase the mandate to 10%? And secondly, how are you planning to manage the cost differential between SAF and Jet?

So starting by the ETS. We don't -- as you know, it has just been approved and became law, the 6% mandate. It scales up fast. So it's 6% by 2030, but it's 20% by 2035. So we are not expecting changes right now. As you know, we do have a commitment of 10%. So we have a commitment that is above the mandate in Europe, and this is what we are working towards. When it comes to the price gap between Jet plus ETS cost and SAF, what we have been doing -- so Jonathan was explaining that we have secured and when we say securities, it's contracted, it's not just MOUS, at what we consider very reasonable premiums. We were also talking about SAF allowances in he EU and we do expect that incentives to bridge the price gap will come into place. As you know, regulation is still work in progress. So at this point, we know what we know, but we do expect there is more coming up. So I think we are -- our ambition is until 2027 to be able to procure that 10% that we have committed to at a reasonable premium. So that will be a premium, and there will be an impact in cost. We know that. But we are working to minimize that.

Muneeba Kayani, Bank of America. I wanted to talk about the North Atlantic. You talked about the importance of the U.S. and if you look at North Atlantic capacity, a lot of the U.S. airlines have added on quite a bit already. So in your metrics, how have you thought about your capacity and kind of the big 6 on that over the next couple of years?

If I talk maybe about BA, I think we did see a lot of capacity come in this year, and that's probably to be expected because Heathrow generally is one of the places where capacity will come in pretty quickly in a recovery. If you look next year, I think the capacity outlook begins to moderate quite significantly. I think if you look at OAG published stats, Heathrow looks at the minute like it might get 2% more ASKs in summer '24 compared to summer '23. Maybe that's reflective of the natural constraints in deploying and actually some capacity has been taken back out of the market compared to last summer. So I do see -- I'm not surprised with the scale of increase this year. And I'm not surprised it's moderating as we look ahead. I think from our perspective, we have flexibility as we take more long-haul plans into the network. We have headroom to convert short-haul operations to long haul. And I think one of the things which I think is exciting is having a hub here that flies to the U.S., we can develop spokes quite effectively whether it's Pittsburgh or Cincinnati because the feed comes from the Europe end, we can develop those secondary markets, which we have been doing consistently over the last 10 or 12 years, especially since we've had the 787 fleet join British Airways.

And I think in Madrid, this is part of the resilience of the group because in Madrid, the situation is just the opposite. The capacity has recovered below 2019 levels between Madrid and North Atlantic. So that's part of the reason because Iberia has increased market share premium deals. So in some ways, it's a balance in the group portfolio between the performance the 2 has between Europe and North Atlantic.

Yes. Just a follow-up question on -- I was looking at the Europe to Spain capacity. If we look at '19 -- 2019, Ryanair had about 19% and it now has 21.8% in 2023. It's looking to have another percentage increase next year and in the meantime, Vueling and Iberia are pretty much flat. So basically, Ryanair is eating up every year, 1% more. How do you deal with that? Or are you just going to see in the next decade, the same situation as it to do where Ryanair now has a 40% market share.

You can expand on this, but Ryanair for example, they have a strategy to develop capacity in those markets. But in our case, we have Vueling, we have Iberia Express. As you said, in the case of Vueling, we are still pending to have an agreement with the quality of pilots. And we said that we are not going to invest in more capacity. And there unless we close the agreement because we need to have the right cost structure in order to compete. I think Iberia Express -- they are talking also between Iberia Express and Iberia in order to develop Iberia Express. You know that the development of Iberia Express is linked also to the development of Iberia. But in the case of Vueling, what they are doing is with the same number of aircraft, they are increasing the capacity through utilization. I think part of the transformation of Vueling is to be much more efficient. Marco, you can comment on the utilization you are having now maybe?

Maybe just add 1 consideration. 70% of the capacity that Iberia Express and Vueling operate is an overlap with Ryanair. And 90% is in overlap with other local carriers. So competition doesn't scare us because it applies in flows where we do have a leadership position or we can compete very effectively. In fact, we were amongst -- I mean, if you look at the results of the last 12 months, Vueling was amongst the top 2 most profitable airlines despite this level of overlap with Ryanair. Said so there is a growth opportunity there that at the moment still, we are not unlocking for the reason that Luis was mentioning. We need to have security about our long-term labor cost to do that. But what also Luis was mentioning is that in the meantime, the transformation is allowing us to increase, for instance, in 2019 -- in 2023, we increased ASKs by 9% with the same number of planes and the same assets in the company, and that is the result of the increased utilization. And that is a bit that positive wheel that also Sean was referring to that when you have a very, very strong operation, that allows you also to reduce the backup assets that you need to operate the network. So we increased very significantly our punctuality. Now we are one of the most punctual airlines in Europe, that allows us then to operate -- to increase our utilization. At the same time, I was referring before to the fact that we are changing quite radically our shape of seasonality. So by increasing our activity in the winter, we are able to increase ASKs without needing more assets. And by the way, that also has a positive impact on our CASK ex-fuel.

Sathish from Citigroup. In one of the slides, you mentioned that the premium cabin is up by 8 percentage points in the Iberia, and what is actually driving that? Is it the existing customers actually increasing the frequency of bookings there? Or is the new customers who come and update themselves from economy to premium cabin? Also wanted to understand is like what has been the retention rate, basically whoever comes in first -- coming in for the first time much of that customers you're able to retain them back into the premium cabin, repeat bookings specifically?

Latin America traffic -- we have experienced an increase in load factor in the premium cabins, but on top of that, an increase in yields. And particularly also in North Atlantic is an increase in the number of passengers flying in the premium cabins. Normally, load factors in premium cabins were like 10, 15 points below economy cabins and now we're more or less at the same level is due to more premium traffic from these markets to [indiscernible].

Makes us change because you pointed out that has been 50% more immigrants from Latin America coming into Spain. So is that a key driver there? Or is it just the inbound from North America is actually contributing that?

To understand your question. But structurally, we are receiving a change in the demand between Latin America and Madrid. Not just related with travel -- with travel demand is correlated with real estate investments in Madrid is correlated with premium leisure hotel demand in Madrid. So it's supporting that this change in the structural demand is something that we can expect for the coming years.

I think that the airlines in all the markets, what we see after COVID is that a lot of people that they didn't fly in premium cabin before for leisure purposes, they are flying now. So we see this in all the airlines in general. In the case of Iberia, what we see different is that what Fernando explained before is Spain and Madrid is a place where a lot of people from Latin America, they are moving, and as that is the reason he said is the new Miami. So you have a lot of wealthy people that they are investing in Spain. When you see what's happening with the houses, for example, in Madrid and the price of the houses and the number of Latin America people that they are moving there. So this movement is helping to this premium leisure traffic that we didn't have before. And I think that's something that is happening in Iberia that we don't see in other regions.

Gerald Khoo from Liberum. Can I ask about LEVEL? You clearly believe in low cost long haul, given that, why aren't you growing it faster? I think you talked about only getting to 8 aircraft by 2026, if I remember correctly. Did I hear correctly that you're looking at going back into short haul? And if that's correct, why are you doing that given the fact, you've already got a low cost -- short-haul low-cost platform in Vueling?

And why we are launching the AOC in the long haul and why we are exploring the short-haul AOC?

Why are you growing long haul faster given the aircraft doesn't sound like a huge number?

Okay. So in the case of the long haul, in the group, we decided a long time ago that we wanted to launch a low-cost, long-haul operation. And we thought that Barcelona was a good opportunity. We wanted to do it something very fast. And that's the reason we launched the company based in Iberia AOC understanding that was not the future, but we wanted to have a quick response to the market. So we said at that time, we will launch a new AOC because we need to be efficient in the company in all the areas of the company, and we see an opportunity in Barcelona. After that, COVID came, we decided to stop everything. It was the time to survive and to put the focus in -- just in trying to maximize the cash position of the company. And now what we are going to do is to come back to the plan that we have before. It's a long-haul low-cost AOC to fly from Barcelona, and maybe not only from Barcelona, in the future, we can have other opportunities. So Andrea was asking before why not LEVEL in Manchester? It's an option that we can explore in the future, we can use the long haul from LEVEL from other places. In the case of the short haul, I think we had a short haul operation in Austria before the COVID and we could fly also in the past that short haul operation with Vueling AOC, but we decided to have a new AOC because we thought it was the right structure -- right cost structure and the right proposal to the customer to have another AOC. And that's something we are considering now to have another European short-haul AOC that we can develop in some markets in Europe. But as I said, we prefer to wait to the Air Europa operation, because it can happen that we are going to have more AOCs that -- and for example, Air Europa, they operate with 737 and you know we are going to receive 737. So we prefer to wait until we decide brands, AOCs, where we put the aircraft, and that's the reason we want to have the flexibility.

Johannes Braun from Stifel. I was wondering about the holidays, how they get along with easyJet holidays, actually. You think you lost market share there because they are growing very strongly? Or do you think Thomas Cook's, demise leaves room everybody?

I think we're growing our market share. Actually, I think we're very happy with our performance. And I think we were the first kind of really in the U.K. market to integrate the airlines side and the holidays side, and I think easyJet are following that path. I think we have a different product. We have a very strong long-haul product because we fly long haul, whether it's South Africa or the Caribbean, as well as having a very strong Mediterranean product. And I think actually, the integration of loyalty to earn is the USP we have that won't be easy to replicate us considering the penetration we have in the program. So I think when you have that ability to integrate and combine these levers, it's a vehicle for growing share. So no, I think easyJet are progressing, but it looks it's at the expense of other tour operators.

I'm just going to ask another question on the floor to Nicholas. Why when so much has improved in the business, you still have the same margin targets as you did before? And secondly, do we still have the 15% ROIC hurdle for investments?

Just in terms of -- so why do we have the same margins as we had before. I guess the way we stand back and look at, we want to make sure we're giving a sustainable return to our shareholders. So we look at our cost of capital. We make sure we're giving a good premium to that. And then I think once you get beyond the 15% margin in our sector, which is, by the way, world class in many -- can you think 1 or 2 other airlines who are doing 15% margin overall. I think if you're getting over that in competitive markets where we operate, I think there's a danger that you let more competitors come into your market as well. So our view is once you get to that kind of 15%, the best thing to do is to reinvest back in the customer, back in your employees to really drive that sustainability over the long term. So that's really what we're keen to do. In terms of hurdles, for return on capital, We've given a range of 13% to 16%. The way we stand back, hopefully, you've seen how we do it, but we kind of risk assess it when we're going through it as well. So when we're looking at new start-ups such as LEVEL and how much money we put those, we risk assess it. So there's different kind of hurdle levels for different sort of investments that we have.

A question for Fernando on Latin America. Obviously, the joint businesses, the benefits are very well understood through the group. And remembering it back to -- I think it was 2017, where a JV with Lat Am was announced then Delta stepped in, of course. But is that something a joint venture as opposed to the code shares that Iberia currently enjoys in Latin America, something to think about as being on the agenda eventually in the future? Or is the current situation structurally strong enough that it's not necessary?

Okay. The current situation is quite positive. Let's say, we have -- the current agreements we have with Lat Am allows us to have enough strength in the Latin American market. At the same time, we are developing a strong plan to improve the brand awareness of Iberia and Latin America. So it's probably one of the regions where our brand is recognized far from our home markets. But I think the current situation is quite same and the relation with Lat Am is positive with the level of collaboration we have, and it's allowed by the current agreements we have.

I was there when we tried to do the business with Lat Am. So from a long time ago, we know that if we could restructure Iberia, there is huge potential in South America, as we are explaining today in this Capital Markets Day. So we started trying to launch a joint business with Lat Am. You know that we have a joint business in Peru, Ecuador, but we tried to expand that joint business. But unfortunately, we didn't have the approval from the Chilean authorities. For that reason, we have stopped the deal, and then we put the focus in Air Europa. So Air Europa is something that we signed in November 2019 and is something we continue trying to do even with a COVID in the middle because we consider it's the right thing to develop Madrid hub. Also, you didn't ask today, but we are considering if that could be an opportunity for us to develop that market because we said before that Brazil is a market where there is a huge potential, and we don't have a lot of capacity there. So we consider that gap can be a complementary option to this deal with Air Europa in order to have access to an important market like Brazil. And we consider that in the same way that in the north, we have a dual hub strategy with Dublin and London to fly North Atlantic, we can have that dual hub strategy to fly to Latin America from the Peninsula ibérica. So I think that's an opportunity. And that will increase the EUR 1.5 billion of profit that we talked before because somebody asked me during the coffee break, if this EUR 1.5 billion was with Air Europa included? No. This is without Air Europa. So all this is additional to what we told you today.

Alex Paterson from Peel Hunt. Two questions, please. Firstly -- and this would not include the U.K., but I see a lot of countries have been extending high-speed rail links, particularly in Continental Europe. And in fact, they're looking to connect them together. There's also creeping regulation to ban flights of over distances, which would overlap with high-speed rail. Is that something that you're concerned about? And how would you react to that if that continues further? The second question is in the U.K., I see Gatwick is reapplying to convert its emergency runway into a second runway. And I think the plans for a third runway at Heathrow, now I think in their 51st year have evolved again. Can you let us know what your expectations are there? And would retaining market share at both of those airports be a priority for you?

Carolina, you want to answer the first one?

On railway. No, it's not something we are concerned about. Actually, in Spain, for example, we have been advocating for over a decade to have a connection between rail and Madrid-Barajas. So it hasn't happened in other European or European hubs. That's the case. So we think rail connectivity for Madrid-Barajas would be a good thing in different terms. And also, it's about SAF again. So for us, the solution is not for beating short-haul flights or anything because that doesn't have a great impact on CO2 savings actually. But having rail connectivity and developing in Europe, the SAF plants. But the impact from what was announced in Spain recently is small for us. It's small for the environment but we are very supportive of having rail connectivity into the airport.

I think the point I made earlier about leadership gives us optionality. So we have a presence both long haul and short haul like Gatwick and obviously Heathrow was our hub. If I start with Heathrow, I think we've always been clear that any expansion proposals have to meet a couple of key criteria. One is affordability and make sure that the cost of expansion is economically viable because the worst thing we want is expensive infrastructure coming and then having too much of expensive infrastructure and airport charges, which don't allow us to compete. And secondly is the environmental hurdle. And I do actually think that the progression of SAF is one very important variable when we look at the appetite, I think, of government to approve airport expansion. I think Gatwick is an opportunity, which didn't surprise us. We need to evaluate it. I think obviously, it's a lower capital expenditure project than you see at Heathrow. And we have optionality to kind of expand our footprint there if opportunities arise, whether that means you hub in both airports, I think that would be a big step. And I think predecessors tried that, and it hasn't worked. But we have a very strong point-to-point short-haul opportunity in Gatwick and a very strong point-to-point long-haul business there as well.

Just a quick question on the revenue management tool that's been rolled out on BA. That's usually -- it could be good but then there is also kind of noise around the rollout. Could you talk a little bit more about what's -- how that rollout is going to go and the timing around the contributions?

I think we're in the middle of developing the tool and a lot of it is actually bought from the suppliers. So we're not looking to build its more, buy and integrate. I think what it will give us is a lot more dynamic price points. If you think historically, airlines are priced on the basis of the letters of the alphabet and then we put all sorts of different type of price products into infrastructure, which fundamentally is analog, and this is digital pricing infrastructure. In essence, we managed in, I suppose, filling our planes less to what we call inventory controls and more true like arithmetic-driven price points. It also allows us, I think, to integrate ancillaries and bundling or debundling into a single revenue management process and philosophy. Whereas today, they're kind of run a separate sort of revenue streams and entities. So obviously, execution is very important. I think we're working with some very robust implementation partners and a lot of this capability is already developed rather than we are developing it in the bespoke way.

Before we end today's session, Luis going to sit down, please.

So thank you very much for being here today. I hope that you have a better understanding of our -- about our strategy. We told you that we are going to focus on sustainable growth in our core markets following our discipline of capital allocation that is the secret sauce of the group. We are going to continue investing in our customers, in our operations and in our brands. We are going to develop our capital-light businesses and in particular, IAG loyalty. That is a business with high margin, high returns, high cash generation. All this underpinned by the transformation that we are having in the group and in the different airlines that we have below us. We have as you saw right now, a very experienced team, and we think that with the right strategy and this team that they have a long track record of delivering, we are going to make things happen. So we maintain the financial targets that we had in the past. Somebody asked if we cannot improve that. We need to consider that, those margins are one of the best in the industry. So it's difficult to come back to that. So we are going to have a range of margin between 12% and 15%. The ROIC will be between 13% and 16%. And the ASK growth, when we reach the steady state, not talking about possible operations of M&A would be around 2%, 3%. All this, we are sure that it's going to deliver what we want at the end, that is to maximize the shareholder returns. So thank you very much for being here today. A pleasure for all of us.

So very quickly, lunch is through there. The catering has kindly been provided by the Concord room in Terminal 5. Iberia have kindly provided the wine. There's lots of it. There's some ham on in there. You'd also find some products from Iberia BA around the corner, you've got Hangar 51 and a SIM for Vueling. So please stay around, talk to our management committee, talk to some of our colleagues out there, and I hope you found it useful.