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[Foreign Language]. Good morning, ladies and gentlemen. Welcome to the Transat Conference Call. [Foreign Language]. This call is being recorded.
[Foreign Language]. I would now like to turn the meeting over to Ms. Andrean Gagne, Senior Director of Communication and Public Affairs. [Foreign Language]. Please go ahead.
Thank you, Frank. Hello everyone and welcome to the Transat conference call for the Presentation of the Financial Results of the First Quarter Ended January 31, 2023. I'm here this morning with Annick Guerard, President and CEO, and Patrick Bui, Chief Financial Officer. Annick will provide the comments and observations on the current situation and on the operational and commercial plans for the future. Patrick will after reviews the financial results in more details.
We will then answer questions from financial analysis. Questions from journalists will be a handled offline. The conference call will be held in English, but questions may be asked in French or English.
As usual, our investors' presentation has been updated and is posted on our website in the Investors section. Patrick may refer to it as he presents the results. Today's call contains forward-looking statements. There are risks that actual results will differ materially from those contemplated by these forward-looking statements. For additional information on such risks, we invite you to consult our filings with the Canadian Securities Commission and on SEDAR and are incorporated through this statement.
Forward-looking statements represent Transat's expectations as at March 9, 2023. And accordingly, are subjected to change after such date. However, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required by law.
Finally, we may refer to IFRS and non-IFRS financial measures. In addition to IFRS financial measures, we are using non-IFRS measures to assess the corporation operational performance. It is likely that the non-IFRS financial measures used by the corporation will not be comparable to a similar measure reported by other issuers, all those used by financial analysts, as their measures may have different definitions.
The measures used by the corporation are intended to provide additional information and should not be considered in isolation or as a substitute to IFRS financial performance measures. Additional information on non-IFRS financial measures such as their definition and their reconciliation with the more comparable IFRS measures are available in our Annual Reports and our investor presentation.
With that, let me turn the call over to Annick for opening remarks.
Good morning, everyone. Thank you for joining us this morning. Some of you have already attended Transat annual general meeting of shareholders that took place just prior to this call. Therefore, you have already heard some comments about the first quarter of 2023. We were pleased to share these Q1 results with our shareholders which were achieved in a challenging but nonetheless favorable contexts were to continue travel recovery and the relaunch of Transat. We saw that the momentum that took shape in the second half of 2022 is being maintained.
Our financial targets are being achieved and the outlook for 2023 is positive. On this call, we will go into more detail on our first quarter results and comment on trends for 2023. Patrick Bui and I will then answer your questions.
In 2022 Travel resume. In 2023 Transat is moving towards a gradual return to profitability. During the first quarter revenues reach $667.5 million more than tripled the first quarter of 2022. Adjusted EBITDA was $3.3 million a year-over-year improvement of $39.7 million. The operating loss was that $38.1 million compared to $73.8 million in 2022.
The company's financial position is strengthening considering that the first quarter is historically the lowest of the year. These positive results reinforce our confidence for the future. During the first quarter Transat deployed capacity similar to 2019. Our load factor was slightly lower than in 2019, but yields were more than 20% higher. Since the middle of 2022 customers are back and eager to travel. This strong demand keeps prices high enough to evolve in a volatile environment that puts pressure on costs.
This was to illustrate, is illustrated in the first quarter when fuel prices surged 46% over the same period last year. The combination of resilient demand and higher prices will allow us to continue to make progress in 2023. Even though we remain in a high-class environment.
The first quarter also demonstrates the quality of our execution. Throughout this period. We have act with prudence and rigor in order to seize market opportunities while limiting the risk associated with our operations. That's where they both maneuver well through the delays and setbacks that disrupted North American airports in late December and early January.
The circumstances at the beginning of this fiscal year contribute to repositioning Transat as a carrier that offers and prioritizes quality service to travelers. Strong demand, higher prices, quality of execution and good solid brand image are for us the assets of our recovery.
Our path to profitability is progressive and prudent, considering the economy context. Deviation and trouble sectors have not fully recovered. Among other things, the industry supply chain is experiencing sporadic difficulties. For example, some of our aircrafts are delivered late requiring the implementation of short-term aircraft leases. Transat like other carriers deals with the unexpected.
In this demanding environment, we are improving our execution, optimizing every aspect of our operations, while maintaining extreme vigilance in managing our costs. As a result, we are strengthening our position quarter after quarter. The modernization and simplification of our fleet to two aircraft models combined with the deployment of a more robust network that capitalizes on our historical strengths allow us to significantly increase the utilization of our assets.
As an example, this winter we are operating 34 aircraft compared to 55 in 2019, which represents a reduction in physical capacity of 27%. While we manage to deploy 97% of the pre-pandemic capacity, thanks to an increase of 21% in aircraft utilization. We also continue to develop commercial agreements as part of our co-sharing partnership strategy.
These partnerships are key to our transformation. They allow us to increase our attractiveness and customer offering, expand our network and connectivity opportunities, and again, optimize the use of our fleet. On the revenue side, we have implemented a dynamic management and pricing optimization system, allowing us to improve our revenues per passenger.
Through enhanced revenue management during the quarter we were also able to increase our ancillary revenue per passenger by 55% compared to the same quarter in 2019. From the cost side as, we continue to straighten the controls in place, we have just launched a complete airline operational transformation plan, which aims at increasing overall productivity and efficiency within the operation. Among other initiatives, we announced in January the closure of our Vancouver base allowing for a better allocation of crews and a permanent introduction in operational costs.
In summary, the financial situation is in a much better position today than it was a year ago. The year is off to a good start. We are looking ahead. The outlook for 2023 is encouraging. The demand is supporting prices that reflect cost reality. Our 2022 - 2026 strategic plan continues to guide our evolution. We are confident that we have the plan and the teams to succeed. Transat is advancing in the right way and in the right direction.
Thank you. I will now turn it over to Patrick Bui.
Thank you, Annick, and greetings everyone. The first quarter ended on January 31st, represented another important step forward as Transat is engaged in a sustainable trajectory towards profitability. We opened 2023 with an adjusted EBITDA of $3.3 million. The first positive quarter since Q2 of 2020.
First quarter is typically the weakest of the year given the seasonality in our business. As mentioned by Annick the strong yield environment will help us offset the strong inflationary pressures on costs and the volatility in fuel prices, which remain amongst our greatest challenges of 2023. To these unforeseen events such as delays in aircraft delivery may also negatively impact our costs. But our strong cost containment initiatives, the implementation of our strategic plan in our fuel and currency hedging program will help us contain these cost pressures.
As always, we remain vigilant on the economic situation and the potential impact on demand. But at the current time, we do not see a negative impact on our booking trends. The ongoing pent up demand seems to provide for a typical resilience, but we remain highly vigilant. Of note this quarter, we generated over $145 million in cash flows driven by major improvements in our working capital, notably with our credit card processor partners, and also driven by our strong bookings.
As we started fiscal 2023, our focus went from cash preservation, which is consistent with a crisis mode mindset to focus on cash generation and profitability, which attests to a return to normalcy. We previously communicated that we were aiming to be cash flow positive by 2024. We are now aiming to be cash flow positive this fiscal year.
We closed the first quarter of 2023 with a strong cash position of $468 million. On our capital structure 2023 will be an important year as we target to reduce the burden of deaths. And now with respect to our Q1 results, revenue stood at $667 million, up from $202 million in 2022. Driven by the resumption of operations with the capacity matching 2019 levels, adjusted EBITDA was positive $3.3 million for the quarter, compared with negative $36 million in 2022, which represents a significant improvement on the adjusted EBITDA loss, compared to Q1 of 2022. There was a 46% increase in fuel prices. Adjusted net loss was $62 million compared with $95 million last year.
And as for our financial statements, net loss was $57 million compared to $114 million last year, a $58 million improvements. With respect to the balance sheet as of January 31, the Corporation's cash and equivalents amounted to $468 million with undrawn facilities of $100 million. For a total unrestricted liquidity of $568 million. Cash and trusts or otherwise reserves totaled $555 million. If we add this amount to the cash and cash equivalents, the corporation closed a quarter with over a billion dollars in cash.
Deposits for future travels stood at $898 million, a new record surpassing the previous peak in January 2020 by 11%, reflecting the recovery in demand and higher average selling prices. We also generated free cash flows of $145 million for the quarter, driven by significant improvements in our working capital. And of note proximately $75 million was released from our credit card processor, receivables and the transition of our European volumes to our new partner new vibe.
With respect to our indebtedness, there were no further drawings on our credit facilities during the quarter we remained at $163 million. These liabilities slightly decreased from $1.88 billion $1.25 billion during the quarter. Off balance sheet agreements excluding agreements with suppliers sit at $1 billion, this is an undiscounted figure, mainly related to 7 LRs and three XLRs yet to be delivered as on January 31st.
The date for the second quarter of 2023 although load factors are 3 percentage points lower than in 2019, yields are more than 25% higher. While it is too early to have a complete picture for the summer, the winter trends seem to be continuing into the summer of 2023. As previously stated, for the full fiscal year 2023, the corporation expects the deployed capacity equivalent to 90% of 2019 levels.
Bearing in mind the indicators to date, the corporation reaffirms its target of an adjusted EBITDA margin of 4% to 6% for fiscal 2023.
Thank you, and we are now ready to take questions.
[Operator Instructions] Our first question comes from Kevin Chiang with CIBC World Markets. Please proceed.
Hi, good morning. Thanks for taking my question here. Maybe Patrick, just congrats on offset acceleration on the cash flow target here to this fiscal year versus previously targeting fiscal 2024. Just wondering how that changes how you plan on tackling your capital structure and maybe how the timeline might shift here, as you look to do leverage the balance sheet?
Yeah, it's a good point, both our ability to generate cash and our ability to deleveraged go hand in hand, the fact that we are now seeing a positive free cash flow in this fiscal year is indicating to us that we want to start deleveraging in 2023 as well, for sure. When you look at our debt stack, there's a tranche of senior debt about $200 million that is a variable rate, piece of debt. So obviously, with the increases in rates, the rates have gone up. It has a maturity in April 2024. So, it is a focus where we look at a combination of pushing out that maturity, but also potentially partially repaying that piece of senior debt.
That’s helpful. And then, you mentioned in the prepared remarks, ancillary revenue of 25% versus the same quarter in 2019. I mean, I guess it was all happening, without a loyalty program, really. I'm just wondering as you guys have indicated you're moving from crisis mode to obviously one where there's a little bit more, more visibility on your long-term plans. Just how a loyalty program might play into that recovery. As you look at the next few years here?
Yeah, that's also a good question. Look, and we can't hear you very well, Kevin, but I think the gist of it is how does the loyalty program fit into our ongoing strategy? Our strategic priority, and you see it in the investor slides. We always look to enhance customer engagement and loyalty. We constantly analyze, customer database and review our practices.
It frankly, it may in the future, may or may not lead to the full deployment of a loyalty program. It's a little early to say, today. I think right now our focus is to make it easier for clients and prospects to interact with us on the customer journey. We've revamped our mobile app, improvements at our call center, chat bots and so on and so forth. So, we're very focused on the customer engagement side. And again, as we look into the future, it may or may not include the full deployment of the loyalty program.
Okay. And maybe just last one for me, obviously a lot of and hopefully you can hear me better here, but obviously a lot of headlines around the issues Sun Wing had during the December travel season. Just wondering are you seeing any positive impact from that as customers look to plan their March and summer vacation travel plans? Do, does it feel like you're gaining a market share against some of your peers here?
I would say that it's a little bit difficult to say right now. We continue to see strong booking momentum for winter and summer. We didn't see, at the beginning of January, we saw potentially an effect because bookings went up suddenly. But, the booking momentum has been strong since last fall. So that's nothing specifically linked to Sun Wing.
Okay. That's it. That's it for me. Thank you very much for taking my questions.
Our next question comes from Konark Gupta with Scotiabank. Please proceed.
Hi, thanks operator. Good morning, everyone. Hopefully you can hear me okay. Perfect. Thanks. Morning. Just wanted to follow up on Kevin's question on the cash flow. So just to clarify, you guys expect the cash flows to be positive this year instead of 2024 and I guess you got the $70 million from credit card processors in Q1, so that cash flow guidance you are laying out includes the $70 million?
Yeah, that's correct, Konark.
Okay, thanks, Patrick. And what if you strip it out, how does the cash flow look without that payment?
I mean, frankly, hard to say. I mean that $70 million is an important part of the improvement in cash flows. When we say, you know, we'll be cash flow positive for the year, we're not saying that we're going to be, 70 million or more positive cash flow. It's going to be positive, but, close to breakeven. So that $70 million is important.
And just to clarify, the other factors that give us comfort, why we say we're going to be cashflow positive this year is it's not only that $70 million to $75 million, it has to do with our strategy, our credit card processor's strategy. You will see on our balance sheet that we still have, call it about, you know, $150 million of cash with our credit card processors.
So hopefully our strategy works out well and as the year continues, we'll be able to free that cash that is currently with the credit card processors. And then I'd say the other factor that gives us confidence that we should be positive this year as well, is frankly the, you know, the very good booking trends, the good volumes, good pricing, so on and so forth. That should bring us, that should bring us cashflow positive.
Okay. And you are not modeling in or expecting incremental freeing up of cash from credit card processors, right in this fiscal year.
Yes. The free cash flow positive, again has to do with working capital. We don't expect a onetime release necessarily. We're looking at gradual improvements of the working capital cycle. We're looking working capital to be a little bit more consistent with prior trends.
Thank you, so much for that. On the net debt, so the Q1, I think, was the first material sequential improvement in net debt since the pandemic had started. So, I'm just thinking of it the free cash you are expecting this year? What's the best bogey for net debt to end up this year?
What's the best bogey? Look we a few things or our net debt it went down, because we have higher cash. So, when you net out the cash, we get to a lower net debt. Obviously, when you look at historical trends and trends that our cash is high, but it's also normal at this time of the year. We do expect despite being cash flow positive during the year. We do expect later in the year, perhaps Q3 or Q4 to have some consumption of cash towards the end of the year.
So far assessment when we get closer to the end of the year. And again, it's still far away. But if we have an assessment that we do have excess cash on the balance sheet. And a little bit to question, we may elect to use some of that cash to deliver the balance sheet.
Okay. Thanks for that. And then maybe the question for Annick. In terms of the fundamentals, clearly the macro and in the consumer's ability to pay for a lot of things with inflation all that is a key kind of concern for a lot of investors. Just wondering if you look from your standpoint, the way it sounds like you have some acceleration and yield happening in Q2 from Q1, but the load factor seems to be tracking slightly down from Q1 at this point.
And then in the summer, looks like your capacity is recovering to something like mid-80% versus high-90s. And in the winter, any perspective you can provide in terms of how you see the demand and capacity shaping up as the year progresses, are you expecting or building in some softness because of macro?
Overall, we're still seeing a strong momentum in sales both for the rest of the winter and for summer as well. When we look factors and we compare as well to the yield. It's mainly a function of revenue management practices. Given the strong demand, we saw an opportunity to increase yields significantly in a way which allowed us to maximize overall revenue.
So, revenue management optimization looks at reaching the best balance between multifactor and revenue per passenger. So, if we're looking at Q1 for instance, 85% of load factor with the quality of yields obtain is very satisfying overall. So, the same goes for Q2, where we're reaching at this point more than 25% yield higher than what we saw back in 2019. So yes, the overall load factor is a little bit lower, but we're very confident that the overall revenue or slides are going to be -- are going to be solid.
Same goals when we looked at summer right now, even though there are some economy instability, we don't see a decrease in demand, we still see strong bookings coming in. And again, strong increase in yields compared to 2019 and 2022, as well. So, the mix is going very well, between the load factor and the yield, and we are very confident on the revenue side.
And the last one for me before I turn it over. Just on the fuel side of things, so you guys have not changed or made any changes to your assumed fuel price for the 4% to 6% EBITDA margin guidance. Where the fuel prices are standing right now? Are you seeing any potential for easing in fuel prices? Any color you can share in terms of your exposure to the east coast or refineries where the fuel prices seem to be pretty high?
Yeah, I looked at it. The situation is very volatile. Like the field price if you go back a few weeks, spike refineries on East Coast, were very high, historically high. And we're as a Eastern focused airline, we were highly exposed. Fast forward a month later, and things have eased as well. So, the only thing we could take away there is that, there's a high volatility looking forward. If you look at the forward curves, there seems to be a potential to decrease, a decrease in pricing, reducing the costs.
But then again, we're highly vigilant. And for this reason, we do have, as you know, a hedging program or hedging book in place, because we do expect going forward, there will be good volatility. But in many respects, we hoped the forward curve to be correct and appropriate. If that's the case, we do see some upside but again, it's a very volatile market. So, let's see what the next few months will look like.
Okay, that's great for Patrick. And I see you don't disclose the hedging numbers here but assuming there's some hedging there.
Yes, correctly. In prior calls, we mentioned that, in this context of high volatility, we do want to cap our downside, if the price of fuel, but I'll also add in there, the U.S. dollar. If they were to spike materially, we want to be covered for that downside. At the same way, if field goes down, or the U.S. dollar depreciates, we will also benefit in that potential. But yes, it is our philosophy right now to protect a significant portion of our fuel and U.S. dollar exposure.
Okay. That’s great. Thanks for the color, appreciate guys, thank you.
Our next question comes from Cameron Doerksen with National Bank Financial. Please proceed.
Thanks. Good morning. I just want to go back to the against the balance sheet question that Kevin had earlier. You did mention that you may have some excess cash to pay down some debt at the end of the year. And obviously, you're focusing on putting some of the maturities on some of this or refinancing some of this higher interest debt that matures in 2024. But when it comes to sort of the optimization of the balance sheet, I wonder if you can maybe update on your progress there or what your strategy is going to be, just because I look at expectations for 2024 and getting back to kind of a more normalized EBITDA margin for the business.
Your leverage ratio is still going to be, significantly higher than where we would normally see with an airline business. So maybe just give us an update on, what your sort of plans are or how you're thinking about optimizing the balance sheet.
Yeah. I think in, if you go back in time the markets were more conducive to a refinancing with where rates are and what the general state of markets is. We think a one wholesome refinancing will be, is not in the cards as we speak. However, we're going to, we're thinking about it from a incremental mindset. If you look, again, if I go back, if you go back to your cap, our capital stack the senior debt is really our focus and priority right now.
Again, both because it's a variable rate and the interest rates are high, and also because it has a maturity in 20, in April of 2024. So how do we repay that? Yes, it may come from some excess cash, but as we've consistently mentioned, we're looking to divest some assets. The notable one being the land in Mexico, we have tested the market and we believe there's appetite for that asset, might update in due course, but that's a source of capital. And we will look at all other alternatives, but if you should ask about strategy, our near-term strategy is really to focus on that senior -- senior tranche, which totals about, 20% of our debt stack.
Okay. That's fair enough. And just as far as like the bank facilities, you've got covenant relief that runs out to, I guess, end of October this year. I mean, are you fairly confident you're going to be, I guess, on site with the covenants once that relief ends?
Yes. You're right. We do have covenants by the end of the tail end of this year. And we're confident to meet those thresholds.
Okay. Great, that's good. And maybe just a question on maybe the sort of the competitive environment. I mean, obviously yields here are very strong. I assume that's probably the case for really the, all the industry players here. I'm just wondering if you can maybe talk a little bit what about what you're seeing on the competitive environment, and particularly what you're seeing, I guess looking ahead for the summer. You know, how's the competitive capacity in your markets looking? Just any thoughts around among your expectations are for competition in the summer period?
So, when we're looking at summer right now, capacity is not fully back to pre-pandemic levels. We are deploying on our side a strong program going back on all the routes that were profitable before the pandemia. As for the competition, we've seen West Jet that is pulling out of the European market out of Eastern Canada. So, this is a positive for us. We see, as well opportunities for us to increase frequencies on routes that are key for us on the European market.
And as for the south market, we intend to increase our capacity, especially during spring and at the end of the season as well to be able to increase our overall, our aircraft utilization. So, our program is very solid. We understand as well that there are opportunities for us to increase our competitiveness. Most of the competition right now is around the domestic and the U.S. markets with the flares and the links and the xref [ph] all these worlds. So, we feel that we have a good playing ground, I would say to be able to meet our plan for this summer.
Our next question comes from Benoit Poirier with Desjardins Securities. Please proceed.
Good morning, everyone. With respect to the collection from a credit card processor, you mentioned great color about the 70 million impact. But just wondering what are the new partnership with Nuvei with this selection? And could we expect further benefits of going through fiscal year '24?
So, part of our strategy, integrating Nuvei into our sales in Europe is key to our strategy. Every credit card processor has their own risk assessment and guidelines there. Some may want to hold back cash a little longer than others. And that criteria was part of our selection of Nuvei, where we think there's a there was an opportunity to collect cash more quickly, and so would favor our working capital dynamics.
So again, when we go to why we said we think we would be cash flow positive is as we migrate volumes to other credit card processors, like Nuvei we think that cash will be remitted to us more quickly, and just frankly, returning to more normal working capital dynamics.
Okay. Perfect. But it's mostly a fiscal year '23 story Patrick, right?
It's all over the year, first of all, so it's a gradual thing. The 70, 75 was a onetime thing. But we expect like I previously mentioned, there's still about $150 million with our credit card processors. We think that's going to improve throughout the year. And we think we will also see benefits as we enter into the next fiscal year as well.
And are you seeing any early success from the new promotional campaign that was introduced in January? And could you maybe give us an update on the traffic generated from the Porter and WestJet the codeshare agreement.
Regarding the promotion that we launched, it was very well received in the market. We saw an urge in the bookings. So, the trend was continuing. But we started nourishing the moment we launched the campaign. So that was very good for us. For both cells for the winter season and the summer season, as well. As for the agreements that we share with Porters and WestJet.
These are while we're the beginning of these are partnership of this point, but we are pretty satisfied with those results so far. We can say that, at this point, they're represented between 1 to 2 points of percentage of our load factors, but this will increase over next summer and eventually will continue to increase in 2024.
Okay, that's great. And with respect to the Mexico asset, you mentioned that you got some appetite, any color about the timing whether it could be done in fiscal year '23?
Yeah, we'd like to, our objective is to provide better color by this summer. Obviously, like in all transactions, there's a potentially a timing gap between announcement and closing. But our objective is by the summer to be able to provide more color on that process.
Okay. That’s perfect. And when we look at the pilot shortage, we've seen many more articles about pilot shortage in Canada. Also, some supply chain headwinds with Airbus, so does it impact your ability to take delivery of planes or to train people or you've been able to do manage those concerns?
Now we've been able to manage, we -- of course the labor market is tight right now. But so far, we've been able to attract and retain all the people we need. So, we do not see any issues with hiring at the current time, we are recruiting on average about 120 flight attendants per month and 20 pilots for a month. And so far, is going well.
That’s perfect. And last question, just in terms of booking post pandemic, have you seen a shift in timing for booking with more last-minute booking or less last-minute booking any?
Well, we used to see this in 2000 when we did the resumption of our operation back in 2020. And then 2021, people were booking much less minutes, but the trend is back to normal right now. So, we're seeing similar trends as we saw in back pre-pandemic, so people are booking more in advance, which is good for us because we are able to buy them a little bit more in advance in terms of load and of course, in terms of radius.
That’s great, color. Thank you, very much.
Our next question comes from Tim James with TD Securities. Please proceed.
Thanks, very much. I'm just wondering if you could comment on the three ACMI aircraft that are showing in the fleet schedule in the PowerPoint and what those are and just talk about the timing and use of those?
Yeah, so, we have, first of all we have three A321 LRs that are, that will be delivered late. And in addition to that, we have one Airbus 21 LR that is out of operation because it was damaged underground in Vancouver. So, we don't have access to that aircraft right now. So, we have to contract three ACMI for this winter with this martling. So, we are operating A321 ceo’s and Boeing 737. And for next summer we will be operating four ACMI, two Airbus A330 plus, two 737 Max.
So, these contracts allow us to maintain the fight programs that we have announced and we don't see necessarily additional cost. We want to make sure that we keep the program we have because we have already bookings, of course, that are coming in on those routes. So, we started the ACMIs mid-December and it's going to last until the end of the next summer.
Okay. Thank you. So just to confirm, so you're using three under ACMI through the end of the winter and then you're going to four for the summer of fiscal ‘23. Do I have that correct?
Yeah. Exactly.
Okay.
Which are aligned with, yeah, go ahead.
So, I guess that just builds and leads into my next question. Just wondering if you could talk more generally then about your expected timing of your 321 LRs that you have on order and I realize it's further out, but also the XLR deliveries and just kind of how you see those playing out over the next several years.
So, the three Airbus 21 LR that are due, that were due for this spring will come at the end of the summer. It will be delivered at the end of the summer. And then we have, so that's going to be up to 15, and then we have the remaining, LRs that will come in 2024. Then we'll have the first Airbus XLR that will be delivered in 2025, two in 2026. And we have an option in 2027.
Okay. I guess my last question, just looking at the slide, slide seven, the clear trend here is pricing is moving higher, traffic levels, passenger levels relative to 2019 since the start of the year have actually started moderating. I don't know if you can answer this question, but do you think that's a function of, the higher pricing, just kind of moving some passengers to the side-lines? Or do you get a sense that sort of economic conditions maybe just sort of causing, what was very rapid growth in passenger numbers to moderate or pause here?
No, I think it, like I said early, when we looked at revenue overall, it would be possible for us to, it would be easy for us to increase the low factor. What we see right now is really an important key to maximize overall revenues by increasing revenue by passenger, given the strong demand. So, we saw this opportunity to increase the yield significantly to be able to maximize it's really a question of revenue management optimization.
And we keep looking, always at the best balance between the load factor and the revenue per passenger. So, we're satisfied with what we see right now. We think right now that it's better to push on the yield and maybe, cut a little bit more on the load factor depending on the flight, of course, because not all flights react in the same way. And right now, we have implemented a tool that helps us maximize as well. And when we look at the algorithm, that pros the tool that we're using, so with that, too, with the experience that we have right now we really believe that we are maximizing revenues on all our sites, I would say.
Great. Thank you, very much.
There are no further questions at this time.
Very well. Thank you everyone. Let me remind you that our second quarter results will be released on June 8, 2023. Thank you and have a nice day.
That does conclude the conference call for today. We thank you for your participation. And as that you please disconnect your line.