Good morning, ladies and gentlemen. For joining us short term for this conference call regarding our investment in ITA Airways. We're hosting this call for both analysts and investors, as well as journalists. Our CEO, Carsten Spohr, will present you the transactions and our plans to support ITA. Afterwards, we'll answer your questions. First part of the Q&A, Carsten Spohr and our CFO, Remco Steenbergen, will answer the questions of our analysts. As Francine said, I would like to ask you to limit your questions to just one. Second part of the Q&A, we'll answer the questions of our journalists. The second part of the call, we will be bilingual. Questions may also be asked and answered in German. Both analysts and investors are welcome. Over to you, Carsten. Thank you, Dennis, and also on behalf of Remco and Andreas, good morning, ladies and gentlemen. You won't be surprised to hear that I am very much convinced that yesterday was an important day for the Lufthansa Group. By investing in ITA, we have taken once again, a major step towards positioning our Group better for the future of our industry, both in within Europe and global competitive landscape. For that, ITA will help us to become even more international and somewhat less dependent on our home markets, which we believe is the key to maintain our competitive positioning around the world. That obviously must and will result in benefits for shareholders, for customers, existing customers, and new customers, and of course, our staff, the combined companies in the group. Our investment in ITA will further broaden our access to the key Italian market, which I think is a major difference to the investments we have done in airlines before. Usually, we enter in a quite hostile environment. In the case of ITA, this is a market we have been looking at and considering a key market for many years, and we have been building some strength, which, of course, was also made possible by the weakness of the predecessor of ITA, of Alitalia. Therefore, that was the same reason that we did not invest in Alitalia, because we believed that was not a valuable investment for our shareholders. Now the combination achieved, we are convinced will create value. ITA really has nothing in common with the old Alitalia, besides its market. It's a new airline that does not carry any of the legacy burdens of Alitalia, fully restructured, and it's now a new right size. Key in our industry, it has a competitive cost base. Ready to grow, and obviously for that need, and will get the support from a leading European airline group, which is us. We have what it takes to turn this startup company, like I, how I like to look at it, this what it is, as ITA into a strong national carrier that will connect Italy to the global markets. We are confident that ITA will become profitable and value creating business. As Remco has pointed out a few days ago to the media, this will not happen overnight, but surely there will be quick wins. Other changes will take somewhat longer. If the transaction closes in 2023, and if we can assume joint control operations in half a year or so, we are confident that we can make ITA profitable within 2025. Follow the example of Swiss, which obviously turned into a profitable airline eventually, after we invested, by the way, 20 years ago. Profitability for us is the key criterion for a full takeover, provided that we jointly reach this goal, the way is clear to take over ITA Airways in full. An option mechanism ensures that we cannot be forced into a full takeover as long as the joint business plan targets are not achieved. That was key in our negotiations. We are confident, ladies and gentlemen, that ITA Airways is a great addition to our group of airlines. Although multi-airline, multi-hub, multi-brand means maximum value for our customers, coupled with significant synergies and operational efficiency. It's increasingly becoming our central strategic success factor. Being successful in a diverse market, such as Europe is, requires strong national brands, at least in our industry, aviation, with a clear, unique identity that customers and staff can identify with. The customer proposition that considers the specifics of the individual market. Germany is not Switzerland or Austria, Italy and Belgium are not Germany. That's why we still preserve the unmistakable Italian heritage that ITA embodies. Still, connection of networks offers customers an unrivaled choice to reach their destinations as flexible and as fast as possible, be it point to point or via one of our hubs. At the same time, we must closely integrate our allies commercially and operationally, thus generate synergies from the size of our group. We are succeeding better and better in doing this. Create synergies in the back end by keeping the individual flavor of each of our friends, sorry, facing the customers and the staff. Our network is designed to make the customer experience overall as seamless and smooth as possible. Let's talk about the Italian market a bit. Economy is the third largest in the EU and the number three aviation market in Europe. Italy has always been a focus market, therefore, for the Lufthansa Group. The regional perspective perfectly complements the Group existing footprint with our home markets in Germany, Switzerland, Austria and Belgium. Already today, Italy is the Group's most important market after our home markets and after the U.S. More than 1,000 flights are operated by our Group airlines every week to bring passengers either from Italy or to our home markets. It's EUR 4.6 million in total in 2022. An interesting fun fact, almost half of them connect to other flights at our main hubs, especially to intercontinental destinations. Italy, though, is not only an important source market, but also the world's number five in terms of international tourist arrivals. Another fun fact here, in our network in 2022, our airlines flew more U.S. passengers to Italy than our airlines flew passengers to Germany. Not surprisingly, the key destination of those going to Italy was Rome. The economic strength and export orientation of Italy also makes it an important corporate travel market, especially when it comes to the north. Milan is the second most important city in terms of local passenger traffic within the EU, and number three, if you add London to the list. The combination with ITA will make us even more stronger in this key market. More than double our share in a highly fragmented market with a large touristic low cost offer, but an underserved long-haul market. That's why there's great potential in growing the hub in Rome, Fiumicino, based on enhanced feeder network and the group's sales network and distribution power around the world. Also, our existing hubs will benefit from ITA joining Star Alliance and our joint ventures, that Italian passengers who do not connect via Rome will have the choice to fly over Zurich, Munich or Frankfurt instead of Paris or Amsterdam. With ITA's established position in Milano Linate, we will also be able to capitalize even more on the attraction of Lombardy and Milan as a premium leisure and business travel destinations. In addition to these revenue synergies, both partners will benefit from cost synergies. Finally, also, Lufthansa Cargo will get access to additional belly capacity. Lufthansa Technik will be the preferred vendor for a fleet it can support with its full portfolio of MRO services. Before discussing the details of the transaction, let me highlight what guided us in our decision-making process. First, we're to make sure that we stagger the risk that's associated with this investment. First investment, also ensuring that ITA has sufficient liquidity. Second, we wanted to create optionality, provided that things go according to plan, and only then we want to have the option for full takeover and predefined terms that ensure we do not overpay. I'm very pleased that our agreement reflects exactly these guiding principles. Together with the Italian Ministry of Finance, in short, MEF, we ensured that ITA will receive the necessary funding to implement the jointly agreed business plan and live up to the roles of Italy's national carrier. Our investment in the company, EUR 325 million for 41% stake, benefits ITA directly as we invest via a capital increase. MEF has committed to injecting an additional EUR 250 million of non-refundable, interest-free equity under the total EUR 1.35 billion framework cleared by the European Commission. We expect the transaction to close by the end of the year, latest. Upon closing, we will assume joint operational control of the business. That means transfer know-how and people to ITA's organization to implement the joint business plan. The MEF will remain on board as the majority shareholder, overseeing the business through its representation on the board of directors. Responsibility for strategy and operations, however, lies with the executive board, for which we have the right to nominate the CEO and one additional board member. Accounting-wise, our minority stake means that we will not consolidate ITA's results. Instead, we will account for it as a jointly controlled equity investment. We will participate in ITA's profits and losses on a pro rata equity change basis, starting as of the closing of the transaction. As we will finance the investment from available liquidity, we do not expect an impact on our credit rating. An option mechanism structure ensures that we have the right, not the obligation, to take over ITA Airways in full. As said, we intend to take this step once the business has become profitable or it at least is on a clear path to reach profitability. Price to be paid for the remaining stake will, in principle, be determined based on a predefined mechanism, considering ITA's EBITDA and net debt. There's also put options for the MEF. This conditional on ITA realizing its business plan, is the same valuation mechanism and can only be exercised in the medium term. The entire mechanism ensures that our capital structure remains protected as far as possible, also in case of full consolidation. As I said, ITA is a different company compared to the previous national carrier, Alitalia. ITA Airways was established as a new operation, relieved from the financial and legal legacy of Alitalia in late 2022, with operations starting in autumn 2021. labor contracts were renegotiated to a level of around 30% below Alitalia. In addition, the structure of co-determination was simplified, bringing the previous plethora of union contracts to an end. All the Alitalia pension obligations were taken over by the state of Italy. Handling and MRO operations were fully outsourced, was set up as an all-Airbus fleet, and all IT and supplier contracts were reset. Network was right-sized across short and long haul. As a result, ITA is a much smaller, leaner, and more flexible operation today, with around 3,900 employees, compared to the about 10,000 employees employed by Alitalia in 2019. ITA's results in 2022, with an EBITDA of - EUR 338 million, with EUR 1.5 billion of revenue, reflects the fact that ITA is a startup company in the midst of a steep ramp up, so far without the backing of a major airline group. As I will discuss in a minute, we have identified multiple levers to improve the company's performance, the restructuring has been done and has been done successfully. It has no financial debt, only the operating lease obligation of EUR 1 billion related to the current fleet. Cash almost amounts, sorry, to almost EUR 1 billion on a pro forma basis. That means when adding the financing by the MEF and the Lufthansa Group to the position at year end 2022. ITA Airways is in a good and structurally cost-competitive position to break even in the short to medium term. Ladies and gentlemen, we have spent considerable time with the team in Rome to analyze ITA's business in depth and to find concrete measures on how we can contribute to ITA becoming profitable as quickly as possible. First, it's ITA's network, which we plan to closely link to our existing multi-hub network. We'll rebalance ITA's short and long-haul business. We'll optimize, in parts, also right-size short-haul feeder network so that it supports growing a larger, profitable, long-haul business out of Rome Fiumicino, where we obviously intend to grow our share. This will also include exploiting the potentials of intermodality, especially on the axis Bologna to Florence, Rome, Naples, where the alliance already existing with Ferrovie dello Stato allow to shift traffic to the high-speed train network. Secondly, we provide profitable growth based on ITA's favorable cost position. Fleet growth will be measured and at least initially, purely lease-based to limit investments and maintain far-reaching flexibility. Based on the planned growth, we will also expand and invest into ITA's workforce, nurturing the entrepreneurial and hands-on culture of the business. Last but not least, we'll generate significant synergies in terms of both revenues and costs. Let me discuss three of these elements in somewhat detail, starting with network. Let me emphasize that our focus is on growing a profitable long-haul business out of Rome, with a complementary feeder network, enabling to grow the long haul. ITA will be focused on strategic feeder markets. This will also include feeding more Lufthansa Group passengers into the hub. This is a close linkage of the networks to optimize choice and connectivity for our joint customers. Focus of the long-haul business out of Rome will be on core North and South American destinations, with the upcoming integration of ITA into our A ++ joint venture with United and Air Canada, and our global sales network will offer greater connectivity and a much wider commercial reach. However, we'll also build on ITA's established strength on routes to Asia, Northern Africa, and the Middle East, such as Tokyo, Delhi, Cairo, Algiers, and Tunis. ITA's second mainstay is Milan Linate, which is a key destination for corporate and premium leisure point-to-point travel due to its ideal location, very close to the city center of Milan, obviously the economic powerhouse of Italy's north. We see good potential to expand the touristic offering, especially on the weekends. For this purpose, we will jointly work on upgrading the current infrastructure and customer service offerings in Linate. Business plan for ITA provides for profitable growth in the coming years. In 2023, the business is expected to significantly reduce its EBITDA loss. Revenues will grow by more than 50% based on the continuous ramp-up operations, which only really started in 2022. ITA's favorable cost position is the enabler for the planned growth. Labor costs are particularly advantageous, with a gap of 30%-40% compared to the Lufthansa example, mainline pilots. In addition, productivity is at group leading level due to mixed fleet flying. Considering also the lean overhead structures and largely variable cost base, we expect ITA to have a sustainably lower unit cost position compared to the whole rest of the group in a few years from now. Modernization of ITA's all-Airbus fleet will yield additional cost advantages related to lower fuel consumption and less emissions. Homogeneity enables further efficiency gains in operations and maintenance, also obviously given its complementary nature to the existing Lufthansa Group fleet. By 2027, the fleet is planned to grow to 94 aircraft. More than 80% of the fleet will then consist of new generation aircraft. Depending on the progress made in improving ITA's results and cash flow, we gradually shift towards more outright buying of new aircraft instead of leasing. However, in the short term, the business model will remain operating lease-based to enable the generation of free cash flow. That's why we do expect business to have sufficient liquidity to finance its planned expansion, no need for other external financing, be debt or equity, at least for the foreseeable future. Ladies and gentlemen, our investment in ITA is further evidence that consolidation in the European air industry is continuing and you know my view, necessary. Especially against the current macro backdrop, economic success depends on scale and the ability to combine the strengths of different air operations under one roof. Strong players are getting stronger, and it becomes more complicated for the smaller ones. These are becoming part of our group, the business gains access to know-how and a large platform providing scale. The access to our global airline partner network, first and foremost, the Atlantic++ joint venture already mentioned with United Airlines and Air Canada, will greatly enhance ITA's attraction as a transatlantic carrier. Integration into our global distribution channels will improve the visibility and flexibility of ITA's offer. ITA has access to our digital products and services that our customer service innovation push and delivery services, and enable better revenue and pricing management. Joint procurement, including aircraft leasing and buying, purchasing, the joint contracting of ground services, just to name a few examples, provide for significant cost synergies. In corporate and administration functions and processes, it will be able to benefit from the know-how of a large global airline group, which obviously we have grown over the last decades. Ladies and gentlemen, let me conclude by highlighting that our decision to invest in ITA is driven by the conviction that this investment will create value for all stakeholders. It consolidates and expands our strong market position, diversifies our group of airlines, and opens up growth opportunities which we could not have developed organically, and it's a perfect fit for our multi-brand and multi-hub strategy. There is no surprise that we always have said, when it comes to consolidation, ITA is our top priority, because we do believe this is the perfect addition to our current portfolio. Nonetheless, you know us long enough that we are conscious of the challenges ahead of us. We have spent considerable time analyzing and addressing them. The structure of the transaction you are presenting here today shows you that we have done everything to minimize any financial risk at the same time as we create optionality. ITA is a fully restructured and cost-competitive airline, jointly now turned profitable based on a sound business plan. We're confident that we can make the combination a success, the support of the whole group. Now, Remco and I look forward to discuss this with you further and look forward to your question. Thanks for listening. Allow me to giving you a 360 on this transaction, now we look forward to your question. It's back to you. Operator, we'll now be happy. Ladies and gentlemen, at this time, we will begin the question and answer session. In the interest of time, as mentioned, please limit yourselves to just one question. Anyone who wishes to ask a question may press star followed by one. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. Our first question today is from Jarrod Castle from UBS. Your question, please. Thank you. Good morning, everyone, and congratulations to the Lufthansa team on today's announcement. I just wanted to ask about, in the short term, the synergies for the Lufthansa Group, because, you know, at the moment, you've got this 41% stake, which you're not consolidating, but you want to reinforce the Italian market, you know, such as, you know, more long haul from Fiumicino. What does that mean in terms of, you know, traffic that you were directing through your other hubs, like Frankfurt, from the Italian market? Will there be some leakage away from Frankfurt into the Italian market in the short term, even though you don't have 100% of ITA at the moment? Thanks. Oh, thanks. This is a very good question because I think one of the key elements of the transaction is that we already have path towards a 100%, which will allow us, actually, in the nature of your question, that as soon as transaction closes, to treat every hub the same. We can then optimize the flow of our passengers. If somebody from Brussels now goes via Zurich or in the future goes via Rome, go to Buenos Aires, will commercially basically be the same for us, which is how our system works, even if we have not yet a 100%, which one day we will have. The other way around as well, of course, we can bring passengers from Italy, additional passengers from Italy. Just think about the frequent flyer program, which of course, will be harmonized via our existing hubs into destinations which are not served, for example, out of Rome directly. The basic strategy of our mighty hub model can start as soon as we have closed the transaction, not only when we have reached 100%. That's why it was so important to agree on pricing beforehand. There will be some leakage? I don't get the term leakage because it's all sum of all parts. In the end, all the money the passenger pays will end up with Remco anyway, long term. It doesn't matter if a passenger from Bologna will buy a Rome, or if he goes via Zurich, Contribution Margin is always what ends up in our cash box long term, because also the contribution going to ITA, knowing that we buy 100% if things go well, ends up Remco, and the value of our shareholder creation. Okay. Sorry, if I'm not mistaken, then there could be some short-term leakage while you kind of accounting for 41%, but eventually you'll capture that benefit, if and when you take over the remaining stake. Yeah, Remco here. Yeah, I understand your question in the logic of the 41%, correct? If there's 41%, we have only 41% in our results, although we don't consolidate it yet, right? You have also to see that there are some synergies coming very quickly. Yes, if you have a passenger which goes through a Swiss and we have 100% of the result, and now he goes via Rome, we have only 41%. You're absolutely correct in there. It's, there are also synergies on the short term, on the cost side and other elements which otherwise wouldn't have come, correct? Also, the rest of the group is benefiting from. For us, of course, the most important is to make sure that ITA gets as quickly as possible profitable, and that is also included in the price mechanism we have agreed later on. If you would only look at the passenger and then the 41%, you are absolutely right, but you have to look as well at the rest of the synergies which are benefiting the group, plus the purchase price mechanism on which we take it over later. We believe that the net of that is certainly much more in our favor. Great. Thanks very much. Very clear. The next question comes from Jaime Rowbotham from Deutsche Bank. Your question, please. Morning, gentlemen. Congrats on the deal. Can you talk a bit more about the long-haul market out of Milan and Rome? Before COVID, I think ITA or Alitalia back then had over 25% market share on the transatlantic, but with the scaling back, that's fallen below 20%. Would it be fair to say that part of your plan is to try to redress the balance a bit there? Thanks. Indeed, the market share of the Lufthansa Group long range was almost the same as the one of ITA. Combine those, I think you are reaching the market share usually a national carrier has. In a way, we are helping ITA to go back to that natural balance of what usually an outbound carrier has. This market is, first of all, underserved, and it's surely in a way, in terms of%, overserved by outbound carriers, which was allowing Lufthansa, for example, to take such a high share of intercont, especially via Munich. I'm sure we'll see a rebalance there. As I explained, we see definitely potential in long haul. We bring it up to 24 aircraft in our business plan, the long haul fleet in Rome over time, and that will rebalance again the market share of a carrier which surely has not had its natural market share for quite some time. Thank you. The next question is from Sathish Sivakumar from Citi. Please go ahead. Yeah, thank you. Good morning. My question is actually on the loyalty program. Obviously, the predecessor, Alitalia, was part of the SkyTeam Alliance, and now, how does that has actually transitioned into ITA, and how does the current loyalty program of ITA would fit in the wider Star Alliance program? Any color on that would be really helpful. Thank you. Sorry, I had some acoustic problems. Obviously, we are variating now to bring ITA across from Sky into Star. That was the question, the frequent flyer programs were brought along. How we exactly deal with the current program, we have not yet detailed out, but it's obvious, like every airline we have integrated, that there will be full integration of frequent travelers, including the existing ones. Okay. Like, do you see, like, any, like, revenue opportunity there, as it stands today from ITA? What is the size of the ITA's loyalty program, with, as it has actually shrunk, versus compared to Alitalia? Of course, Remco here. Yes, of course, correct, because integrating in our loyalty program, correct, there are clear benefits for this, which also benefits the total group. Of course, we don't have the plans concrete yet. We were looking how we integrate Volare, but of course, on balance, this should have a benefit for both ITA as for the Lufthansa Group. Cannot comment yet this point in time. It's too early. Okay. Yeah, thank you. The next question comes from Neil Glynn from AIR Control Tower. Please go ahead. Good morning, everybody. Just a question on long-haul revenue. You mentioned Rome long haul is profitable, but I guess probably not very profitable at this point. I recall many years ago when Air France-KLM was talking about the old Alitalia, it talked about a revenue problem rather than a cost problem, which I think is probably the opposite to how many people think about the business. I was wondering, can you give us some sense as to where the long-haul RASK? ... for ITA is relative to Lufthansa standard today, to give us a sense for the improvement need or even potential? Yeah, Remco here, correct. It's too early for us to comment on that particular question, correct? We have to wait for the closing, some more work to be done here, correct. Of course, it's also clear that when ITA gets integrated in our network, correct, that also the pricing and the whole commercial thing will be aligned to our network. It's too early to comment on exact RASK figures towards the rest of the group. First have to work on the closing, further continue on the business plan. Clearly, we have looked at this, of course, as part of the overall plan. I think compared to those days, because I was around those days as well, the inbound strength of the Italian market has increased quite a bit. We see the Americans, as I just explained, more Americans going on our airplanes to Italy than to Germany. We add on top to that, China. It's very strong from China to Italy, and now the Indians are also coming. I think compared to those days, something has changed very much when it comes to the inbound element. This is why we have more Italian-bound Americans on board than German-bound Americans on board. They never had that in the history. Also serving more airports in Italy right now than we serve airports in Germany. People always forget that as well. The next question comes from Muneeba Kayani, from Bank of America. Please go ahead. Good morning, everyone. I just wanted to understand from the staff side, so for the 4,000 employees now, what are agreements at this point? Just some color on kind of the union structure. Have pay deals been done, and how does that factor into kind of your cost outlook here? The staff numbers, I think we pointed out, there are obviously significant growth because we are growing the fleet. The number looks high for ITA. At the same time, the whole growth is about what we are hiring per month in Lufthansa. I think it's also, if you could put that in relative terms, so for the overall growth of the group in terms of staff, this is not that much. For the existing staff, you probably know, there were some adaptions of the salary structures just a few weeks ago, which of course, we were aware of. There's basically just the key team on board of ITA, pilots, flight attendants, some overhead. All the others are outsourced. Very high level of outsourcing after the transfer of the market from Alitalia to ITA. No MRO. airport staff is, ground handling is service company, so it's basically the key core team only, which we are here investing in. If I may add to this, correct, we also to make a distinction, I'm not sure on your question, between Alitalia and ITA. ITA is the restructured company. In Alitalia, there are many different unions that's much more simplified in its current space. Exactly, of course, in the business plan going forward, we have certain assumptions on cost increases as we have in our other airlines. There's no difference here in ITA, and that really depends how things are going. Of course, there's a relationship between inflation and also what yield developments are, and we will take that along, well, once we, once we are in and we co-manage this. By the way, the collective bargaining agreement is lasting until 2026, probably the longest one we have in the whole group. Longest lasting one. Thank you. The next question comes from Harry Gowers from J.P. Morgan. Your question, please. Yeah. Morning, gents. You mentioned, I think there is no financial debt and about EUR 1 billion worth of leases. I was wondering if you could share what level of net debt to EBITDA you're expected to achieve over the coming years as profitability grows, including the leases, obviously. Thanks. Yeah, Remco here. I think first, let me start still by saying what the cash position, right? By the end of last year, we put it also out in our publication, the cash position, ITA, was slightly above EUR 400 million. The MEF puts another EUR 250 in, and EUR 25 for our share goes also on the cash position. If you do that on a pro forma, as Carsten said in his speech, you come close to EUR 1 billion to start with, right? The company has operating leases of about EUR 1 billion. Right now, we know that there's a little bit of ramp up and the free cash flow for the coming years will still be negative, correct? Overall, this level will go down. Of course, we have to see how fast we can ramp up once we consolidate, but this is for the term, how we move on to the cash CapEx and then finding a new balance. Overall, we expect for ITA, also on the mid to longer term, an EBIT margin of 8%, what we have for the rest of the group. That is clearly our target. Overall, in the overall position, also with the debt, net debt ratio to come, the targets where we are overall in the group, once we also build out a little bit that operating lease number. ... Really the same financial discipline as we have for the rest of the Group. As I said before, it take a little bit of time to get there, which we have included in the plan and also in the way our financing and our gaining purchase of the remaining shares valuation has been built up. Right. All clear. Thank you. The next question comes from Andrew Lobbenberg from Barclays. Your question, please. Hey, guys and Carson, congratulations. I know you've been after this fish for some time. My question's about the fleet. I mean, if we look at the current fleet, 55 of the 68 aircraft are old generation, old 320 family aircraft, with an average age of 16 or 17 years. Then you spoke about building out the long-haul fleet to 27, going from 14 aircraft to 24. That's an awful lot of shiny new birds that you're trying to bring into ITA. We know, and it's a key part of your equity story, that the aircraft market is super tight at the moment. To what extent has ITA procured these aircraft already? How confident are you on the pricing of them? Obviously, you know, the tightest part of the aircraft market are lessors leasing out new generation aircraft, because that's a super tight part of the market. Are the planes sourced? How expensive are they? Can that, you know, sustain the low unit cost performance at ITA that you've got? Equally, you know, as you're bringing in so many shiny new aircraft, what's that going to do to the debt? Which looks very moderate at the moment, but if you're re-fleeting to such an extent, you know, how high is that debt going to go? Great question, because believe it or not, the secured aircraft slots ITA has, we believe, are an asset of the company. Not the reason to buy them, but it on the positive side. In more detail, that's 40 old aircraft ITA will retire by 2027 fleet time. For that, there is already ordered an order coming in of 10 A330neos, 11 A320neos, and 7 A220s. To answer the second part of your question, yes, indeed, the prices of those airplanes are secured. We even believe that with the leasing companies in between, which of course, these leasing companies we know might have some room for renegotiate those deals, but we'll take that after the closing initial opportunity. Obviously, the lease liabilities will increase. They're currently EUR 1 billion. They will increase to EUR 2.6 billion in 2027, which is due to the fleet size going up. We have some everywhere, but that was, you know. Yeah. Carsten, just to understand, that the 10, 330s and the 320s and the 220s, they're all secured off the order books of lessors, or are they- Yes. orders belonging to ITA? No, no, they're actually, most of them are coming, I think, from Air Lease. you know John Plueger, he was very active with ITA and secured some deals there, and these deals were secured, I think, in 21, when the aircraft market was not anywhere as hot as it is now. I think to be honest, I don't know by detail, I think this is not reflecting how hot, as you call it, the air market is today. These were secured in 21 when ITA was started, and they are obviously so. Of course, Andrew, you know once we own the company, of course, we can play around with aircraft either any way, yeah. We can move aircraft from one airline to the other or orders, place them anywhere. I think the room to optimize with incoming aircraft for the Lufthansa Group will grow by ITA. Two ways: to put aircraft there, but also because they're bringing along a nice order book. Cool. Thank you. Grazie. I have two more questions from the analysts before we start with the journalist session. The next question comes from Stephen Furlong from Davy. Please go ahead. Hi, guys. Congrats on the deal. Just was wondering, just maybe talk about the plans for Milan Linate. I mean, I know you talk about growing the premium point-to-point traffic. Is that short-haul, medium-haul, long-haul? I know you'll interconnect with the other networks. It's obviously very competitive in that market. I mean, I've been around a while, and I just want Carsten Spohr, maybe you might just talk about where do you see this deal, of all the deals that Lufthansa have done? I mean, obviously, Swiss is up there as probably one of the best ones you've done, but, or has been done in the last 10 years. Thanks a lot. Linate. Sorry, I need to wait for the microphone. Linate, unfortunately, has no license for long-range flights. There's a maximum nautical mile radius around Linate as part of the operating certificate, so there's no such thing as long range from Linate, and therefore, ITA currently has its only long-range flight out of Milano from Malpensa, which goes to New York. We need to look at that, I think seven times a week, so every day. There's also competition on that route, the Gulf. That route obviously is served. Everything else is short haul. There we do believe that we can optimize the network, let's put it that way, our data we have on that one. Your second question, you ask me again in a few years, but I think when you look at the strategic importance, look at the size of the market, I definitely think that ITA can be our number two after Swiss one day in a full, you know, mature environment. Let's also use this opportunity to let you know, which some of you probably know, P&L, we are running our airlines by high degree reflects the optimization we do via multi-hub. There's also elements which don't show up on the individual P&L. Our best example is when we bought Brussels, many people in Belgium love to travel via a French speaking hub. Obviously, Zurich is more or less considered to be. You see a lot of increase in market share of connecting passengers from Belgium after we bought Brussels Airlines in the results of Swiss. Don't show up in the P&L of Brussels. Of course, you have these effects all across the group, so I think it's for us, it's always two things. P&L of the individual airline, which we obviously run our company by, and if you look at my competitors in IAG, they only do it that way because they don't really have overlapping hubs. In our case, with a strong overlap of the hubs, we also see overlapping effects. Surely, in Italy, which is similar to Germany, it's a market where the wealth is very well distributed. It's not all in Milano or not even in Rome, like it is in Paris or London. It's more like Germany, where you have many commercial centers. You see a huge effect of our success buying ITA also showing up in the other hubs, and not all of that showing up in Rome. Of course, again, some of the market share increases we have done through our purchasing over the last 20 years in Belgium, Austria, and so on, will show up by additional passengers in Rome. That maybe I know that was not your question, but maybe it was a nice occasion to explain that, because I guess it's a little bit more complex for you as analysts from the outside to see that in our data. It probably is when other, our competitors are running the hubs more independently than we do. Does it make sense? The next question comes from Sumit Mehrotra from Societe Generale. Please go ahead. Yeah, thank you. Carsten, my question was indeed on the topic you just touched of overlapping hubs. Yes, two more hubs to sharpen your operational efficiencies now. How do you see the logic and the plan to confront the challenges of operating the two hubs that you now inherit? Thank you. Maybe I misunderstood. Again, the acoustics are not perfect. Of course, it's only one more hub. It's Fiumicino. Milano is not a hub. There's no such thing as much connecting traffic in Milan. Again, ITA doesn't operate out of Malpensa, with the exception of the one long-range flight. The hubbing, as we consider hubbing in Lufthansa, Frankfurt, Munich, Zurich, Vienna, Brussels, we add one to it, Rome, in a total of six. Now, for us, it's a very strong catchment. We, of course, will try to serve, like we serve other strong catchments. It's number three, Milano in Europe after London and Paris. For the Lufthansa Group, the strongest catchment we own as a whole market in the future will be Milano. Probably the only airline in the world which buys another airline, and by that, buys its market presence in its strongest catchment. Usually, all airlines start in their strongest catchment, and then by weaker catchments, we now with ITA, will buy the airline, allowing us the strongest catchment in the group to be one of those we have acquired by a transaction that probably is a first to our industry. I haven't looked at that, but I cannot imagine there's many others of those. That answer your question? With Rome, obviously, we optimized it while we have optimized the other five. As you know, and I pointed out before, it's the most southern hub by far. Those up south we have so far is Zurich, not very south. With the growing importance of the Southern Hemisphere in the decades to come, not just Latin America, also Africa, but also Southeast Asia, being Rome has a special upside in our multi-hub system by a geographical position based so far south, which surely are currently disadvantaged to our competitors, which have a hub either in Madrid or Paris. We will now be able also geographically, to have less backtracking to the Southern Hemisphere and southern markets via a hub in Rome. Think about Latin America and Africa again. All right, thank you, Carsten and Remco, and over to Andreas, who will make the second part of the Q&A for Germany. Yeah, [Foreign language], Dennis, [Foreign language]. A special welcome also to all the journalists from Italy or other international destinations. You're more than welcome to ask your questions in English as well. [Foreign language]. [Foreign language]. Hi, can you hear me? Yes, we can hear you. Go ahead, please. Okay, thank you. I have to say congratulations for that, for this first part of the agreement. I can see after a few years you are pursuing the Italian market. My question is more operational. You have said that the CEO and one member of the coming board of ITA will be from Lufthansa Group. My question is, have you already a name of that for that position, for the CEO position, and if yes, if you can tell us? Thank you. Sure. Good afternoon, or good morning for me. Thanks for the feedback. I promise you are the first one to know once we have chosen the name. It's too early now. Let's close the transaction. Thank you so much. Thank you. [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] Yteke de Jong vom De Telegraaf. [Foreign language] [Foreign language] I have a few questions. Do you hear me? I'm in my car. Ja, we can hear you, Yteke, but please limit it to one question. Only one. I wondered, where are the cost synergies and on the short notice? Yteke, good morning, Remco here. Of course, on short notice, by participating, correct, once there's closure with the CEO and operational knowledge, we will do everything what we have within the Lufthansa Group and apply that, correct? You have to think about different things. You can think about technique and MRO, because we have a lot of experience. Okay. Yeah. Mm-hmm. Tool side, we have a lot of activities, correct, where we can help. I think the more important is to think about the midterm, correct? Both on the top line and the cost when you fully integrate, because of course, then the whole functional expertise can be integrated in the Group, and you can bring some of the synergies there. The big part, of course, is the overall network, because ITA, it has a very good cost position to start with already, right? As Carsten explained in his speech. Yeah. Alitalia was never profitable, and KLM had a lot of problems with them in the past. I wondered what your silver bullet is then, eh? What are you doing, what Air France-KLM didn't do? You're right, ITA is not Alitalia. Alitalia is gone, belly up, correct? That stopped. The complete new company, ITA, has been established with a different cost position. As I said before, 3,700 employees instead of 10,000, a different fleet to start with. Fleet simplified, contract with the unions, not all the different unions, but one. salaries are 30% lower than it was with Alitalia. That restructuring has already taken place. It's hard to, for many people who are not so much involved to really get, but that, of course, made a big difference for us for going into ITA, because that difficulty we don't have at this point. Thank you, Yteke, for your question, and drive safe and carefully. We come to the next question, please. Ladies and gentlemen, if you would like to ask a question, please press star and one. [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] Richard Schürmann vom AirInsight. [Foreign language] Good morning, Richard Sch ü rmann here. I have two questions. What are your expectations that your commission will say of this deal? Will they make any reasons for not approving this deal? The second thing, you are entering Italy, where Ryanair said on Monday that they have a 40% market share, so there is a huge competition in Italy. What do you think the position and the options for ITA Airways are to get and grow its own market share and fight the low cost competition in Italy? Thank you. Richard, thanks, especially for the combination of questions, because the second question answers in a way the first question. The market share of our friends from Ireland is so dominant in Italy, that the European Commission must be afraid of almost a monopoly of Ryanair in that market. I very much hope that the European Commission sees that by a strengthening, by a strengthened ITA, we now again, finally have competition in Italy, which the Ryanair was about to abolish. Therefore, I think they will look at this positively. Let's also not be fooled. We know that any transaction in aviation is always very political, and the European Commission has always proven that they look at this very thoroughly, and I'm sure they will. There's not that many transactions in our industry. Also, with the recent court rulings, I think we should not be naive. There will be a very detailed legal look at this. Again, you kind of answered the question: with such a low market share of ITA, which probably is the lowest of all national carriers in Europe, and such a strong market share of the strongest low-cost airline in Europe, I'm sure they will appreciate that now there's fair competition again, which the consumers in Italy and to and from Italy will take advantage of. The market share, actually, at the other low-cost carriers, we get close to 60% of market share, and ITA is not even the second or third largest market share in Italy. It's only number four after the three low-cost carriers. That, I really think, is room for us to hope for a fast closure. Any delay will mean that we will only be later be able to influence the company and use synergies. Dominant player would only get stronger. They probably will do everything, including the media, delay the approval. The consumers and the competition situation should rather ask for a fast closure. It will competition. What is the exact market share of ITA right now? Within Italy, it's 10%. Number four after Ryanair, Wizz, and EasyJet. It's not only the. Thank you. -of all carriers, it's, I think it's also unheard of the national carrier is only number four in its own market. Thank you, Richard, and best regards. We come to the next question, please. Ladies and gentlemen, if you would like to ask a question, please press star and one. Hello, [Foreign language]. [Foreign language] [Foreign language] [Foreign language] [Foreign language]? [Foreign language] Okay, [Foreign language]. [Foreign language] We open this Q&A session with the first question from Leo. Here is Leo again with probably the last question. Leo, go ahead, please. Hello again. Okay, you know, I have a lot of questions, but I will finish with one. According to our sources, the investment of Lufthansa will be in three steps, 41%, the first step, 49%, the second step, and then you will take the remaining 10% for, I mean, for a investment of EUR 830 million. Is that correct? Can you confirm that? Well, Leo, first of all, as a tribute to Italy, we give you also a third question today, because you're the last on the list. If you have one more or two more, go ahead. On that question, we cannot confirm that at this point, or we won't confirm any number at this point. We confirm the number for the first 41%. I made that comment about being able to reduce the price for the remaining shares, as I mentioned, and also, as Remco pointed out, there is an element of variable element in there, depending on how the company is performed. That formula, at this point, we cannot disclose. To be honest, the value of this transaction in terms of the strategic value, I think we found a fair balance between this being a start-up company, losing money and the strategic importance it has for Italy and for us. I was sometimes surprised to read EUR 10 million upper right in the Italian media. I think especially for the government of Italy, that number is not, you know, anyway, reflecting the importance of having a national carrier connecting Italy to the world. I'm not trying to talk down the purchase price here because my M&A people are listening. Let's be honest, this transaction was not the key element. The strategic importance for both parties, the Italian government and the Italian economy, and the Lufthansa Group, I think, is much larger than the purchasing prices at stake due to success. Okay, I will take the opportunity for the other question, and I will finish this day. Do you expect in the coming weeks to start with the codeshare flights? Then, I assume at the end of 2023, beginning of 2024, to move ITA to Star Alliance and the transatlantic joint venture? Thanks. Depends on the time of closing, but once we close, this is among the first thing we do. Once we close, we do things like, you know, code sharing, frequent flyer programs, Star Alliance, optimizing the schedule. This is almost our, you know, basic tool set when we enter into new partnerships. Until then, we can only do the things we can also do with any other competitor. Of course, there is things commercially you can do with competitors, like we do it with SAS or other members of the Star Alliance, or even airlines outside of Star Alliance. We are having a commercial agreement with Cathay Pacific, for example, which is another alliance. These things we can look at, but anything else needs closing and approval from Brussels first. Thank you, Leo, and our best regards to Milan. [Foreign language]!