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Hello, and welcome to the easyJet Q1 2020 Analyst Conference Call. My name is Courtney, and I'll be your coordinator for today's event. Please note that this conference is being recorded.[Operator Instructions]And I will now hand you over to your host, Johan Lundgren, to begin today's conference. Thank you.
Good morning, everyone, and thank you for dialing into our Q1 2020 trading update. Joining me on the call are Andrew Findlay, our CFO; as well as Michael and Holly from our IR team.You should have been sent the slides along with the statement, which is also available on our corporate website. And as usual, I will briefly talk through the Q1 results and then follow up with plenty of time for any questions you may have.So firstly, an overview of the quarter in which easyJet has delivered a strong performance. Our revenue performance highlights advantages our network strategy has delivered. Having Europe's leading point-to-point network between the continent's primary airports is a strength that shouldn't be underestimated. Revenue per seat performed ahead of expectations with our deal initiatives continued to be a major factor in the strong performance. We're also seeing a robust level of demand across Europe, while competitor capacity growth in the market was around the same low levels we highlighted at our full year results in November. These factors together have resulted in an upgrade to our RPS guidance. Underlying cost performance in the quarter was in line with expectations as we continued to deliver on our cost program, leading to no change in our cost guidance for the full year. easyJet Holidays was launched successfully at the end of November with a strong momentum. And our operational performance has been strong this quarter in spite of strike and an air traffic control environment which remains challenging as demonstrated by our improved OTP and CSAT scores.I'll now run you through the key financials. We carried 22.2 million passengers during the quarter, an increase of 2.8% from last year as easyJet value for money offering invites good demand from our customers. Our capacity grew by 1% in the quarter, in line with our expectations, and when combined with stronger demand and continued execution of revenue initiatives, this led to our load factor improving by 1.6 percentage points to 91.3%. Passenger revenue grew by 9.7% in the quarter to just over GBP 1.12 billion, and ancillary revenue grew by 10.8% to EUR 301 million in the quarter. Please note that the per seat numbers which follow are on airline-only basis, excluding easyJet Holidays. Total revenue per seat at constant currency, excluding easyJet Holidays grew by 8.8%, which is a strong performance. Airline cost per seat ex fuel at constant currency was in line with expectations and increased by 4.3% in the quarter, as we will discuss later in the presentation.I will now run through revenue in a bit more detail. And starting on the left-hand side of the graph, the bankruptcy of Thomas Cook provided a benefit in the quarter, representing 79p per seat at constant currency. Ancillary revenue increased by GBP 1.08 per seat, due mainly to further innovation and conversion uplifts supported by the use of data. This success included continuing to refine our seasonal pricing on allocated seating as well as pricing algorithm on bags. Underlying training has been particularly strong, leading to an increase in revenue per seat of GBP 2.87 at constant currency, and this was driven by a material increase in Berlin, reflecting the work we have done to optimize our German network, robust demand as well as low growth by competitors on each of these markets. And finally, about 1/3 is due to significant increase from our successful revenue initiatives that started delivering results through second half of 2019 and have continued the momentum into the start of 2020. Our commercial team have delivered these initiatives across a greater section of our network, but have also begun to expand the timing of our late yield initiatives. In summer 2019, we concentrated on the period 7 days out from departure. This is now expanding to 10 to 15 days from departure with further refinement and expansion across the network to come.Moving on to cost. Focusing on cost continues to be a key strategic objective for easyJet to ensure we maintain our competitive advantage on the network we operate. As expected, we delivered a cost increase of 4.3%, excluding fuel at constant currency in the quarter. This increase is mainly driven by lower capacity growth for the quarter, which will continue to be low in Q2; ongoing regulatory and inflationary pressure across our airports and maintenance and ground handling charges; ownership costs; and crew pay agreements and higher retention levels. It is important to note that costs were delivered as expected despite the impact of strike in France, which drove over 800 cancellations over a 3-day period in December. These increases have been partially offset by a continued focus on costs, including our ongoing Operational Resilience programme and the up-gauging of the fleet as easyJet continues to move from A319s to A320s and A321s.Moving on to fuel and FX. This slide summarizes our forward jet fuel and currency hedge positions. Our hedging policies continue to represent a cushion against the risk of major volatility in fuel prices. As of 31st of December 2019, we have hedged 71% of our full year '20 jet fuel exposure and 51% of our full year '21 exposure.Turning to forward bookings. H1 remains slightly ahead of the same time last year with around 75% of the seats booked for the half. 58% seats are booked for Q2. This is slightly ahead of where we were this time last year.Next slide shows the expected capacity growth across European short-haul network through the winter. And as you can see, short-haul capacity in easyJet markets is expected to grow by just 0.5% in the half, with easyJet reaching 1.5% growth. In terms of competitors on our routes, we are expecting a decrease in capacity of 0.2%. This is a decrease of 0.6 percentage points compared to the figure we highlighted at our full year '19 results in November.Now moving on to our industry-leading sustainability program. The strategy we launched in November was a groundbreaking one for an airline taking immediate action on carbon emissions. We hope that this will drive real change and that others will follow our lead. We continue to focus on driving efficiency, and we're working to reinvent the vision through our partnership with Airbus and Wright Electric, because as I said in November, we see carbon offsetting as an interim measure. In terms of progress since our announcement on the 19th November, we have offset the carbon emissions from fuel used for all our flights. We have offset the 800,000 tons of carbons so far, with 9 million easyJet customers have been now taking a net 0 carbon flights.Customer reaction has been very positive and well received. We've seen a significant improvement in customer satisfaction as a result of this initiative with a 7 percentage point increase from customers who are aware, their flight was offsetted and with 11% more customers saying they will choose easyJet the next time they fly as a result of the flight being offset.easyJet Holidays. I'm very pleased to report that easyJet Holidays was successfully launched on the 28th of November, with the first passengers traveling on the 6th of January. At launch, we offered holidays to around 700 handpicked hotels in over 100 destinations, and so far, customer feedback has been very positive, not only with the holidays and offer themselves, with 85% of customers citing great value, but also with the user experience on the website, including the ease with which a booking can be made.Our direct contracted hotels have performed well, accounting for around 50% of all our bookings, in line with our expectations. We're seeing strong demand for flexible dates, leveraging the easyJet network with around 50% of easyJet Holidays customers so far choosing durations other than the traditional 7 or 14 nights. We've also seen a strong demand for 4 and 5 star hotels, which are currently around 75% of all our bookings. The access to great value easyJet flights and our highly efficient operation had resulted in our holidays on a like-for-like basis, being highly competitive in the market, and we are on track to deliver against our guidance of being at least breakeven in our first year of trading.So moving on to outlook. During the first half, we will grow capacity by around 1.5% as we continue to focus on driving profit per seat in cash. This is slightly lower than our previous expectations of 1.7% growth primarily due to the impact of French air traffic control strikes. As we explained at the full year results, we plan to grow full year 2020 capacity by around 3% which is towards the lower end of our historic growth rate of between 3% and 8%. In the first half, we expect revenue per seat at constant currency, excluding easyJet Holidays, which show a mid- to high single-digit increase. This is an upgrade from our previous expectations of low to mid-single digits. For the first half, we expect headline cost perceived for the airlines, excluding fuel and at constant currency to be up by mid-single digits. This will include an expected one-off maintenance charge. For the full year, headline cost per seat for the airline excluding fuel in the constant currency is expected to be up low single digits, assuming normal levels of disruption, which is no change to our previous guidance.Based on exchange rates highlighted, we expected GBP 70 million year-on-year positive impact from FX on a full year headline PBT basis. Around GBP 25 million of this is part of the total fuel bill. Unit fuel is expected to have an adverse impact of between GBP 110 million and GBP 170 million. The total fuel bill is expected to be circa GBP 1.64 billion, including our GBP 25 million investments in carbon offsetting unchanged from previous guidance. As a result, we currently expect to deliver a headline loss before tax for the first half of 2020, which is better than the loss experienced in the first half of 2019.easyJet Holidays is expected to be at least breakeven in 2020, which is no change to previous guidance. Regarding H2 expectations, it is still early in the year when considering the number of seats booked, and we'll give you an update at our half year results in May, when there is more certainty around the outlook. So thank you for listening, and we are now more than happy to take questions.
[Operator Instructions] Our first question comes from the line of Jarrod Castle calling from UBS.
Three, if I may. Firstly, just on Germany. If you could give some color on how performance is there? And also just thinking about moving into Q2 with higher taxes and potentially more kind of rail supply coming onstream, what that means for the business? Secondly, just on the costs. I mean, looking further ahead, I mean, if you're in a low kind of capacity growth environment, call it, more towards the 3% than the 8%. Over the medium term, how would you think about the ability to kind of stabilize ex your unit costs? Or indeed, what kind of bandwidth are we seeing in terms of the increases? And then just lastly, on easyJet Holidays, I'm thinking a little bit about booking profile. Obviously, tour operators tend to do a lot of selling at the moment. Given the core product is still obviously the airline, do you expect the way that holidays gets booked through easyJet is slightly different to kind of traditional tour operators or very similar? Or is there some nuance there?
Yes. So I'll start with holidays and the booking profile. So traditionally, the holiday segments are booking earlier, which is good for ourselves. So that's something that we like, early bookings. Also, the focus around the holidays when it comes to the financial outcome, it's clearly an initiative also to drive profit per seat. We've said that our focus is about profit per seat, ROCI and then also sustainable positive cash flows, and the holidays does just that. So it's actually a good complement to what we're seeing is the normal demand curve from an airline point of view.On Germany, Berlin, we are really pleased with the performance in the quarter. It's one of the strongest performers on a year-on-year basis. We talked earlier about also double-digit increase and then RPS environment in Germany, and this is very much down to the optimization of our network, and we see that, that will continue. In terms of going into Q2 and then factors beyond that's it -- partly beyond our control, I think that we still have quite a good opportunity to do more from an optimization point of view. We reckon that the Berlin is just optimized around 75% of what we think we can do. So this is very much down to the control of ourselves, and we see that we have more opportunities to improve the situation better to also mitigate impact that might sit outside our control. So I'm not very concerned about that. I'm very pleased with that performance. On costs, Andrew, do you want to...
Yes. So I think we've got a number of opportunities. So just take you through what happened in the quarter. So effectively, as you would expect, we've been low at capacity growth and put more pressure on somebody just from a cost per seat perspective. And that was also impacted by the French national strikes. We had an impact on a cost basis but also it took our capacity in the quarter. We had some increased inflationary increases associated with ground handling, particularly. But that -- to be fair, that's as a result of us transitioning a slightly different model in a number of our airports to an open book model, which will give us opportunities in the future, which is something we did at Gatwick a few years ago, which is working well, and we've done with a couple of other of our U.K. bases.And with respect to maintenance costs, with the vigorous reduction in capacity growth in the half to take out that capacity and focus on contribution, we took the opportunity to do quite a bit more maintenance activity in the quarter, and we'll see that in Q2 as well. And hence, the comment about the one-off activity that we're doing there. And we also saw some impact as a result of the lower crew attrition rates, which we've seen over the last couple of quarters, but we expect to equalize out in the second half of this fiscal year. So from a point of view of this quarter into the full year, we haven't changed our full year guidance. And as we've said, it will be slightly higher cost per seat in the first half than we expect in the second. Longer term, we are absolutely focused on continuing to focus on operational resilience. That's something we're all focused on as a team, and we see opportunity there. We see opportunity in crew productivity around how we work with our crew to improve that and how we raise our crews. It's something we're working on. Another area of focus, as I said, is ground handling and leveraging the open book deals that we've signed up in 2019, which is a good model, works well. And obviously, we've got the underpin of the up-gauging. We've only got 8 321s in the fleet as we stand, and we've still got -- we've got the order book out to reach 30 over the coming years. We are, over the coming years, we're taking out quite a few A319s and converting those into high-gauged aircraft. There's an opportunity there. So there's quite a bit to go after, and we're comfortable with our guidance that we've given for full year on costs.
The next question comes in from the line of Savi Syth calling from Raymond James.
Just 3 quick questions for me. On the U.K. side, just wondering if you can provide a little bit of color on demand? Last year, I think you saw a lot of kind of maybe Brexit uncertainty related kind of demand weakness. Is that kind of now fully recovered? Or just not getting worse? Or what you're seeing in the U.K.? Second, just given the strength in the environment, I know you are not increasing your capacity outlook today. But just wondering what your willingness is to maybe push the past a little bit more? And then finally, kind of a minor question. And I know Flybe doesn't really kind of go in a lot of markets that you're in, but any opportunity there to take on any kind of intra-U.K. flying or anything that Flybe does?
Yes, thank you. Yes. So on the U.K. this time, I think it's just worth pointing out that we see that it's a good demand environment really across the whole of the network. But it's correct to say that we're seeing no impact on bookings related -- in, for instance, to the 31st of January, Brexit date. We have kind of the Brexit-tractive from a booking point of view. And as for the 31st of March last year, where we had one of the deadlines, we could see the bookings were impacted at that point in time. That didn't happen in the -- in October, and that is certainly not happening in here on 31st of January. So I think from the uncertainty around Brexit, I think that, that is going away. People have to get -- kind of get used to that and moving on and planning on going on with their lives as certainty has increased as we move forward into that process. So robust and a good demand really across everything in the U.K.In terms of the capacity and the growth and opportunities, I think it's fair to point out, first, the company has grown quite a lot in the last couple of years. We've taken on some strategic, great positions in the last couple of years. We've grown 20% in capacity without the Berlin transaction as an example. And the focus is really on moving into more of these #1 and #2 positions as a primary network, and that's something that is still at the core of what we're doing. So I think even if we are at the kind of lower side of the growth path, the capacity, it's now this year being up 3%, we will still focus on getting on to these positions. We're operating and flying to around 160 airports, and we have these leadership positions in just a little bit more than 50 of those. So we still got more to do on that. So we will not be constrained by making actions and taking these positions across the network, but overall, 3% to 8% is where the company has been previously, and that's where we continue to be. And now we see that the growth that we've had in the past, we want it to mature, we want to optimize the results on that. But we would be, of course, also looking out for opportunity where we can strengthen our position, as I mentioned, on this network.On Flybe, I mean, it's -- we are -- as we do in any market, we are looking into opportunities that exist and we are also looking into opportunities that exist because of changes in the competitive environment, and this is no different from that. But we will see and continue to watch what that will mean also in the U.K.
The next question comes in from the line of Andrew Lobbenberg calling from HSBC.
Could you talk a little bit more -- I mean, I know you -- Andrew has spoken already a bit, but about how aggressively we think costs can improve into the second half? Can they go negative? And what can drive it? How much confidence can we have in that strong cost inflection? Can I ask about your views on the -- describe the government review of their passenger duty? And then can you just tell us what's going on with Peter Bellew? When does he come on board? What will his role be relative to the rest of the group?
Yes. So I can pick up on the bottom there. Peter actually joined us yesterday. So he's in the company as of now. I'm really pleased to have him on board, and he will be a great contribution to continue to deliver on our plan with all the priorities and the focuses that we have. So it's great to have him on board. And like I said, really looking forward to be working with him.On the APD revision. I mean, we are liaising directly with the government on this. We believe that this is an opportunity, given that this has now come up on the top of the agenda for a number of reasons in terms of the situation with Flybe, that this should be revised. We believe it should be reduced overall. It's one of the highest passenger taxes in the world, and none of the revenues, as far as we can see, goes into anything. What we believe it should do, which is to really decarbonize aviation, to continue to have the industry for the -- have the ability for the industry to continue to grow, and therefore, making sure that connectivity in the U.K. is maintained and increased. So that's what we want to do. We also want to see that they define clearly how the APD has changed. We think it should be related into the efficiency of the airlines and then also possibly into the carbon emissions that exist. And taking into account also that we, as the first major airline in the world, have decided to offset the carbon from all our flights. We believe that, that is something that also should be taken into consideration. But that's something that we are and myself are personally engaging directly with the government on. Andrew?
Yes. So -- Andrew, so number one, obviously, we've got increased capacity growth in the second half of the financial year. So effectively, the denominator increases with a CTS perspective. But that said, we are absolutely focused on the absolute numbers. So Operational Resilience continues to be a huge focus by the organization, and we're confident of the measures we've put in place around the way we manage disruption in the business. And we've seen that actually seeing that come through in the first quarter of this financial year as well as the underlying performance, taking away the French strikes and we've seen improvements in our three-hour delays in the first quarter, and we hope to see that come through into the second half as well.Other areas we're focused on, obviously, the maintenance cost of the activity that we've done in the year -- the first half. We won't be replicating a lot of that activity in the second half. But we have taken the opportunity this first -- to do quite a bit of maintenance, that's increased year-on-year. So from that perspective, we're comfortable with our full year guidance. And as I said, we'll continue to focus on costs over the medium term, as I answered to Jarrod. I think it's clear from our perspective that -- no, with data and the effect of data in our underlying operation and the success that has had on Operational Resilience, there's other opportunities where we can apply that capability set, and that's what we're thinking about now.
And can I just ask on cost. You speak about maintenance a lot. And I think you mentioned some maintenance one-offs, but there's going to be more maintenance in Q2 than Q1. And you're thinking of the maintenance one-off budgets going into the headline cost number. Is that right?
That's right. So effectively, there's a catch-up -- we may need to do a catch-up in the second half, I was hoping it to be a charge for a catch-up that we need to do over the coming years in our leased aircraft that we are expecting to do in the second half -- in the second quarter, so we can give you a -- effectively given you a heads-up on that. That will go into headline costs, yes.
The next question comes in from the line of Neil Glynn calling from Crédit Suisse.
If I could ask 3 quick ones, please. The first one, just following on from the topic of maintenance. Just interested could you confirm if you have any aircraft disposal plans through the rest of the year? Is some of that maintenance in any way related to disposal plans or completely unrelated? Second question, the load factor was up quite nicely in the first quarter, and it's the first meaningful increase in a couple of years. Just wondering is this a function of disruption? Or how should we think about that as you balance volume and pricing given that the preference has been more for pricing than load factor over the past couple of years? And then the third question on ground handling progress. Andrew, you mentioned Gatwick, where obviously you contracted with a new supplier on the ground handling side, has been followed by a couple of other U.K. bases. To what extent should we expect there to be rolled over with perhaps new third-party providers across the rest of the network over the next few years? Or have those plans firmed up at all?
Yes. I mean, on the last thing, yes, that's the new model. I mean, we would like to see rolling out into other places. It's something that works actually for all the parties. It works for the third-party, works for ourselves as well, it gives clarity, it gives incentives and it gives penalties on the performance -- and the operational also performance is, we believe, better with that type of incentivizing and penalizing the procedures and the outcome of that. So that's definitely something we would like to see, and we are discussing also currently across the other companies in the network.On the load factor, yes, I think it's fair to say that the self-help initiatives that we've been doing in the last year, that is also working on when we're seeing -- that we introduced in the summer, where there is clearly a big demand. Even when we're then going into lower demand periods, such as January as an example, we knew that we can then look at the benefit of them selling in earlier than we probably did before as well. You see January, as an example, we're up 3% on the load factor there. So it goes both ways. And I think it just becomes better because of the data initiatives we've been doing when we're comparing to similar routes at other points of network that we learn from that and can be more aggressive earlier on when we see that the demand is lower. So we feel very excited about what these initiatives are delivering for us. And even if it's now been -- these initiatives have been expanded across a greater of share the network, it still must not implemented everywhere, clearly. So we still got a lot more to go with these initiatives, and we also got planned initiatives to come. And one of the great things with these data-driven initiatives is that they take about from an idea of analyzing the opportunity, it takes us about 8 to 12 weeks to get them in place and getting them out across the network. So it's a very, very quick way of seeing and getting upsized. So we're very excited about that.
So Neil, on the maintenance, the main driver is a level of fee checks that we've been doing. So obviously, as you know, the heavier of the checks that we do on some of our older aircraft. And as we said, there was the underlying inflation pressure of maintenance, there is some. But mainly, it's a result of the activity around the fee checks. The level of returns that we've got this financial year is actually relatively low. We've got quite a few deliveries this year for the exit, so the retirements are relatively low. We -- as we said in the statement, we've just completed another 10 sell and leasebacks for this financial year, and we are undertaking, as we do every year, another review of our fleet plan over the medium to longer term as well.
The next question comes in from the line of Rishika Savjani calling from Barclays.
Three questions from me also. The first one, I know it's still potentially a little bit too early with not all our lines having finalized their plans for the summer, but could you give us an earlier indication of how you think the summer environment will look given the very low rate of capacity growth that we've seen in the winter? And then my second question relates to that. Can you just touch upon what you decided to do with the Thomas Cook slots in terms of utilization routes and so on? And then very finally, just on your H1 RPS guidance. I guess, given what you've delivered in Q1 and the easy comparable in Q2, the inclusion of mid, I guess, the mid- to high single-digit guidance seems a little bit conservative. So is there anything specific that we need to be bearing in mind in terms of the Q1 versus Q2 phasing that makes that mid-single-digit outcome a realistic one?
No. I think it's -- it is -- we think the appropriate guidance to give at this moment in time, we've had a good start to the year, there's no doubt about that. We see that the strong momentum that they had at the end of the financial year that continues into this -- clearly, into the quarter, and we look forward to that to continue. So it's a combination really about the better demand environment, a better capacity environment and then also the self-help initiatives that we're doing ourselves.So looking forward into the summer, it is, as you say, it's early on. It's too early on to give any more guidance on that, but we're looking forward, clearly. Hopefully that this momentum that we're into that, that will continue into the quarter, and then we'll update to talk more about the -- some performance later on. We are slightly ahead of the bookings for the summer versus last year. But we'll update you a little bit more on that when we get into May.Yes. So basically, a bit -- yes, it's about Cook slots as well there were summer slots that we had in Manchester, sorry, Gatwick as well, and then also in Bristol. So we're looking to fly them, we're looking to optimize them, and we have them included into the network that we are on sale right now. So...
The next question comes in from the line of Malte Schulz calling from Commerzbank.
Also some clarification from my question. First of all, maybe can you give us a little indication on or just a reminder on how many NEOs you're fleeting? And then how you're profiting from the 737 MAX delays? I mean, that your competitors are not fleeting in new more efficient planes. And that -- the return of the or the timing of the return of the 737 MAX, does this play any role into your scheduling or into your growth planning? And the second of all, maybe if you talk a little bit current bookings in market? Is it particularly different between anything? I mean, you mentioned also that billing was quite good or the rest of the market, but is there anything we keep in mind, any market, which is a little bit concerned over the next months?
Yes. So on the MAX, I think it's not like we are doing changes to our schedule and to our network speculating where the MAX will come in, in order to do that. So I think that, that's all included in what we're seeing overall from a general capacity point of view. I know it does affect some place that is out there. But we don't do anything that is specific in relation to that because we don't know when they're going to get back in. So I think that is that. What other question was -- Berlin?
[indiscernible]
Oh, the third piece is Berlin. Yes. So I mean, it's basically, if you're looking across what does well for us, Berlin is definitely one of the strongest performers on a year-on-year basis. But really across the network, we're seeing also good demand for beach destinations where we are. We're seeing also a good demand also from Amsterdam. So U.K., so it's a strong and robust demand really across the whole of network.
Just -- and Malte, just on your point on NEOs. So we've got probably 34 NEOs in the A320neo and A321neo, every aircraft that we'll get now will be NEOs, and obviously, we'll be migrating more towards NEOs as we retire off the A319s what I would say in these times.
The final question comes in from the line of Muneeba Kayani calling from Bank of America.
A few questions from me, please. On the unit cost, is it possible for you to quantify the impact of the French strikes and the ground handling? Also wanted to revisit the earlier question on higher taxes in Germany and how you think that will impact pricing or demand out of Germany? Also, did the French strikes have any impact on unit revenues during the quarter? And then lastly, if I could follow up again on a previous question, what routes would you be flying on the Thomas Cook slots?
Yes. So all the costs on the French strikes, we haven't given a specific figure, but it was single-digit millions impact on cost. So as you'd expect, that's not great, but it's something that we've absorbed within our cost number in the Q1. With respect to -- it does have an impact on unit revenues, but we haven't given that. It is relatively small, but we haven't disclosed it in the bridge. But again, 800 cancellations was the impact on that. I think with respect to the Thomas Cook slots, it's fair to say that now we -- as you'd expect, we circulate these slots within our schedule, and we try to optimize the schedule. So we can't tell you exactly what those specific slots were used for as we'll -- we start within our main schedule, but you will have seen that we've started to fly, again, to Schönefeld from Gatwick, and that will have helped towards the utilization of those slots that we took over from Thomas Cook. The majority of those slots where are you being used to fly to the legit destinations that we thought already, but we've obviously restated those to optimize the amount of our Gatwick base.I think just on taxes, in general, we are engaging really quite a lot of time with governments across Europe as well on these discussions on taxes. We believe that taxes and duties unfair, first of all, they should be reduced. We see that no other revenue of these things to the extent that it should be -- should go into activities that really decarbonize aviation. So we have today, I think, too little transparency on what the revenues of this so-called ecotaxes, sustainability taxes or duties are actually there to do. So that's one thing. And the other thing that we are -- also are speaking to and requesting is clearly that taxes should be defined, and that would be the same thing in Germany should be defined around the output of the -- efficiency of the various airlines. If you're taking our carbon offsetting that we have done, which we know is a credible methodology of compensating for the carbon that you emit, we believe that any taxes -- and that it comes on to the ticket price should be linked into that performance. And I think it's fair to say that there's an understanding for that argument across the Europe and also in the U.K., and now it's just more down to how these taxes are being defined. So we believe that we have made the right decision to carbon offset what we do, and we are arguing strongly that this should also taken into consideration when governments are looking at taxation. And then also that any taxes that are out there that we need to make sure that the revenues out of this one ends up in going into activities to decarbonize the aviation, so we can continue to grow and we can continue to grow in a way that has less impact on environment going forward.
Okay. We have no further questions coming through. So I shall now hand it back over to yourself, Johan, for any closing remarks.
No. Like I said, to summarize, we're having a very good start of the year, and we're looking forward to this momentum to continue, a lot of opportunities and a lot of self-help initiatives on its way. So thank you very much for joining.
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