Good day. Thank you for standing by. Welcome to the Lufthansa Group Q2 2026 results analyst call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. We do ask callers to please limit yourself to two questions each. Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Marc Nettesheim. Please go ahead. Thank you very much, and also from my side, welcome, ladies and gentlemen, to the presentation of our second quarter results 2026. With me on the call today are our CEO, Carsten Spohr, and our CFO, Till Streichert, and they will both present our results for the past quarter and discuss our commercial outlook for the remaining six months of the year. As mentioned afterwards, you have the opportunity to ask two questions so that everybody can participate in the Q&A session. Thanks a lot in advance, and with that, Carsten, over to you. Thank you, Marc, and a warm welcome to our half-year analyst conference, also on behalf of Till and myself. 2026 is a landmark year for Lufthansa as we celebrate our centenary, but maybe more important, it's a time where the industry is facing a highly challenging environment, which is on the one hand shaped by the ongoing Middle East crisis, on the other hand, significantly higher fuel costs, and all that resulting also in bookings being made increasingly with even shorter lead times. The encouraging news is that demand remains extremely strong and continues to support yields across our airlines, and especially in our three premium classes, where we'll come to details in just a few minutes. It's important to understand that these challenging conditions, which are so clearly visible to all our stakeholders, also create opportunities for us as management to implement our agreed strategy faster and in some points, more decisively. Let me turn first to our performance. The second quarter was again marked by strong demand around the world. We increased revenue by 8% year-on-year to EUR 11.1 billion, which is a new record for a second quarter. Despite facing more armed conflicts than at any other time since World War II, it's obvious to see that the people's desire to travel remains undiminished. The impact of this conflict has, however, made air travel noticeably more expensive. On the one hand, this has been driven by fuel costs, which in our case, increased by EUR 750 million in the second quarter alone. On the other hand, as there are ongoing capacity constraints in our industry, RASK increased significantly by 6.4% in our Network Airlines and by 9.4% at Eurowings. Many bookings for the second quarter had already been made before the crisis emerged, obviously. This was limiting our ability to fully pass through the higher cost. We expect this effect to be largely absent in the second half of the year. Hopefully, there also will be no further strikes either. The financial impact of the repeated strikes by our two special interest unions representing cabin and cockpit in the mainline amounts to at least EUR 150 million. By now, these repeated strikes are met not only with a lack of understanding from our customers, but fortunately also increasingly from the majority of our employees. We are now finally back in constructive discussions with both unions, and we remain focused on securing the long-term competitiveness of also our core brand. This is the only way to halt the current downsizing of the group's largest and still most important airline. More generally, across the group, growth was not consistent in the reporting quarter marked by, as mentioned, multiple crises. Due to flight consolations to the Middle East and the impact of strikes, our seat capacity declined by 3.3% year-on-year. Among other measures, we discontinued our least profitable short and medium haul routes, equivalent to around 1% of our total capacity, and this included the accelerated wind down of Lufthansa CityLine. This also enabled us to bring forward the planned retirement of the remaining fleet of 23 CRJ900 aircraft. With the grounding of the airline, we were therefore able to cancel and take out of service the entire subfleet, and this also contributed to the fact that the earnings impact residing from the Lufthansa CityLine grounding, which we actually announced three years ago and just now brought forward, amounts to approximately EUR 180 million for a full year. As a result of this, also, among other topics, we generated an adjusted EBIT of almost EUR 400 million in the second quarter. This represents a decline of almost EUR 500 million compared to previous year. Of course, none of us can be satisfied with these results. Even though the disruptions of the entire industry and these challenges we are facing, this decline in earnings also comes as no surprise. Particularly, since we at Lufthansa have been affected much more than many of our competitors by again delayed aircraft deliveries. These delays are hitting us at Lufthansa at the worst possible time in the middle of the largest fleet transformation in our company's history. Also in the second quarter, we were affected. We received only six aircraft versus the planned 11 aircraft, which we had originally scheduled. For the full year 2026, we now expect to receive 41 aircraft deliveries in spite of the originally planned 45. Let me now provide some insights into the demand environment of our passenger airlines. One particularly encouraging development has been the performance of our Asia routes. Despite the competitive disadvantage resulting from the closure of the Russian airspace, yields increased by more than 13%. The second positive, and this one even more long-term trend, is the continued strength of demand for our premium cabins, which has been booming for years now, and also this quarter, yields are up 7% year-on-year. Yields also increased at Eurowings with a 6.5% reduction, was accompanied by a 6.8% increase in yields. Our commercial backbone remains the North Atlantic. Here, we focused on capacity discipline to protect yields, resulting in a 6% reduction in capacity. However, this fairly high figure also includes a disproportionate impact from the strikes. During the strike weeks in April, the large number of volunteer crews enabled us to maintain primarily our services to Asia, Africa, and across the South Atlantic. On those routes, our passengers would otherwise have had no alternative. Whereas on services to the U.S. and Canada, we were able to rebook many affected passengers onto flights operated by our joint venture partners, United Airlines and Air Canada. We also continue to focus strategically on above-market growth in long-haul travel, particularly in the Southern Hemisphere. At our Network Airlines, the effects of the current geopolitical volatility are being felt in full. Adjusted EBIT in this segment declined by almost EUR 500 million in the second quarter, primarily due to the EUR 600 million increase in fuel cost. At the same time, though, the Network Airlines managed to achieve a slight increase in revenue despite reducing capacity by 3.3%. RASK increased by 6.4%, while unit cost rose only by 3.1%, somewhat less than the reduction in capacity. This continues to include significant investments by our airlines in modernizing their premium offerings, including new cabin interiors, our FOX service upgrade, and enhanced digital services, to name just a few. The latest example is Starlink. This week, the first Lufthansa Allegris aircraft was equipped with Starlink. A further 50 aircraft will follow by the end of the year. As early as 2029, passengers on all currently 850 aircraft will be able to enjoy free high-speed internet on board. At the same time, the most extensive fleet modernization in our history continues. Our fleet planners have 100 aircraft deliveries scheduled over the next 100 weeks. While indeed some of these aircraft might once again arrive later than expected, eventually they will arrive. By 2028, at the latest, as promised also in the Capital Markets Day, they will enable us to operate a highly efficient and one of the youngest long-range fleets in the industry worldwide. We are also seeing a strong demand environment in the Point-to-Point segment. As a result, Eurowings achieved an encouraging 9.4% increase in RASK. This is significantly better than what our point-to-point competitors were able to achieve, and it is further evidence for us that the strategic positioning of Eurowings as a value carrier is working. The 6.5% reduction in capacity primarily reflects the flight cancellations in the Middle East. In addition to higher catering and maintenance expenses, Eurowings also incurred higher cockpit crew costs as a result of upfront investments related to the introduction of the Boeing 737 starting next year. As a result, unit cost increased by 11%, combined with more than EUR 70 million additional fuel costs, Eurowings only achieved a break-even result. Including our 50% stake in SunExpress, the overall result of the Point-to-Point segment amounted to EUR -37 million in the second quarter. In light of this year's earnings performances, both airlines have launched cost-saving measures. At SunExpress, the ambitious fleet expansion plan is currently being reviewed and most likely will be reduced in accordance with our co-owner. Overall, we continue to see a healthy demand environment also for our point-to-point operations, particularly as the uncertainty surrounding the future of one of our competitors could create new market opportunities for us, for example, in Berlin or Geneva. Let's move to Lufthansa Cargo, which delivered a strong second quarter. Yet the operating environment for air cargo was anything but easy. The conflict in the Middle East is affecting the reliability of global supply chains. Supply networks had to be adjusted at short notice. In an environment like this, one thing becomes clear once again, the more complex and unpredictable the global economy becomes, the more our growing cargo business benefits. In particular, the crisis in the Middle East triggered a surge in demand on routes to the Far East and for our new, by now, almost daily transpacific connection. Yield to Asia and on our new intra-Asian routes increased by 30%, while yields to the Middle East rose even more strongly. We expanded capacity by 2% in the second quarter, driven primarily by the marketing of now ITA Airways' belly capacities. As a result, revenue increased to more than EUR 1 billion in the second quarter of this year. Adjusted EBIT improved by EUR 42 million to EUR 160 million, corresponding to an operating margin of 11%. This commercial success is the result of the consistent execution of our strategy and our increasingly strong focus on high-margin products, such as pharmaceuticals, semiconductors, and more and more IT server equipment for the growing AI-driven investments in computers around the world and data centers. Part of our premium strategy is also the modernization of our cargo infrastructure on the ground. At the end of June, we brought the first and most important phase of our new Frankfurt cargo center into operation. This will make our handling operations even more reliable, more efficient, and more productive. Obviously will contribute to the premium positioning of Lufthansa Cargo. Beyond the premium positioning, there's also the internationalization strategy of the group, which is also paying off at Lufthansa Cargo. The integrated marketing of ITA Airways cargo capacities by Lufthansa Cargo, combined with closer cooperation with SWISS WorldCargo, is strengthening our logistics segment both structurally and sustainably. Across the group, air freight increased its earning contribution by more than EUR 100 million. This obviously includes the cargo result plus the belly profits of the other airlines in the group. At Lufthansa Technik, we continue to drive the expansion of our global footprint with major growth projects underway in Portugal, in Canada, and in the Philippines. At the same time, we are investing in new business opportunities in Germany through Lufthansa Technik Defense, building on our long-standing partnership with the German Bundeswehr. These investments reflect our strong confidence in the future development of Lufthansa Technik, even though its current global market conditions continue to present considerable short-term challenges. For example, capacity reductions by airlines around the world are translating into temporarily lower demand for MRO services, especially for power- by- the- hour contracts. At the same time, manufacturers, suppliers, and MRO providers like Lufthansa Technik continue to be affected by shortages of materials. Engines, components, and all kinds of spare parts remain in short supply. Against this backdrop, Lufthansa Technik delivered a solid second quarter, revenue increased by 11% to EUR 2.2 billion. External business grew by 21%. Today, almost 80% of our revenue is generated with customers outside the Lufthansa Group. The adjusted EBIT stands at EUR 157 million in the second quarter. Our midterm ambition for Lufthansa Technik remains unchanged. By 2030, we intend to achieve EUR 10 billion in revenue and EUR 1 billion in profit. We remain confident in delivering what we promised shareholders and the capital markets last year. A good example of this is the integration of ITA Airways. It's almost exactly to the day, 18 months ago, in January 2025, when we promised our shareholders and customers that the integration of ITA Airways would be the fastest airline integration in our company's history. 18 months later, I'm proud to say we delivered on our promise. For our passengers, ITA Airways is now firmly established as Lufthansa Group's fifth network airline. Codeshare passengers increased by more than 700% in the past 12 months. We are now at 1,500 codeshare passengers every day. Since Miles & More became ITA Airways frequent flyer program, the number of status customers in Italy has more than doubled, while the number of new members has risen to 300,000. When it comes to synergies, we're fully on track. We remain firmly on course to achieve our targeted annual synergies of EUR 450 million by 2028. In June, we therefore exercised our option to acquire a further 49% stake in ITA Airways exactly as planned. We expect the transaction to close at the beginning of next year. Subject to regulatory approvals, we will then hold a 90% stake in ITA Airways, enabling full operational integration and financial consolidation. We are continuing to execute our internationalization strategy with determination, as reflected in our offer for a minority stake in TAP Air Portugal. TAP would also benefit from the Lufthansa Group's strong growth prospects and proven ability to realize synergies among its members. At the same time, we would significantly strengthen our position in Latin America. Together, Lufthansa Group, including ITA and TAP, would catch up to the current market leader in terms of market share. The successful integration of ITA demonstrates once again the added value the Lufthansa Group creates as a long-term partner and owner. As a member of Star Alliance since 2005, TAP could continue to benefit from the world's largest airline alliance also in the future. Star Alliance offers over 15,000 seats every day to and from Portugal, which is 60+5% more than the second-ranked alliance. Lisbon also complements our Star Alliance hub system, which is further east than our competitors, better than the hubs of other alliances. Already today, Lisbon is the Star Alliance gateway to Latin America, with significantly better growth prospects than in any other cooperation. In addition, TAP would gain access to our A tlantic Joint Venture with United Airlines and Air Canada under the existing antitrust immunity granted by the U.S. Department of Transportation. This is why our proposal to the Portuguese government also incorporates modules that have been specifically agreed and designed with United Airlines. Ladies and gentlemen, we're making good progress across all our key strategic priorities. This is especially true when it comes to the numerous initiatives underway to realize further synergies. Under the motto, from a group of airlines to one airline group, we're making Lufthansa Group more efficient and more profitable. One example is our plan to reduce 4,000 administrative positions across the group by 2030. In recent weeks, we announced another module involving the reduction of about 500 positions in Germany through the rapid automation of internal processes, mainly driven by artificial intelligence. At the same time, we continue to expand those airlines that operate with competitive or with the most competitive cost structures. Lufthansa City Airlines and Discover Airlines added nine aircraft during the first half of the year and remain on track to further grow their fleets in the second half. It is obvious, ladies and gentlemen, the second quarter presented all airlines, especially Lufthansa, with a wide range of challenges. Nevertheless, we do remain optimistic about our future. We have navigated multiple crises over the last decades. What gives us confidence today is not only the strength of demand but also the fact that Lufthansa Group is becoming structurally stronger with each passing year. We are improving our portfolio, modernizing our airlines, and creating a more efficient group. This is also underscored by our highly profitable Cargo and Technik segments. This is why we remain confident in our ability to generate sustainable value for our shareholders, as well as for our customers and employees. Thank you very much for right now. With that, I will hand over to Till. Thank you, Carsten, and a warm welcome also from my side, as usual. I will now take you through the financial deep dive for the second quarter. We will focus on the key drivers of our performance and of course, the actions we are taking to mitigate current headwinds, and of course, also concluding on the outlook for the remainder of the year. Let me start with having a closer look into our group P&L. In the second quarter, revenues increased by 8% year-on-year to EUR 11.1 billion. This was mainly driven by higher passenger revenues while we reduced our capacity by more than 3%. This was outweighed by the effect of higher yields and stable seat load factors. Additionally, continued strength in air freight as well as MRO demand supported the top-line growth. This is a clear proof that demand for all our services is strong. Fuel costs have been a major headwind in Q2, as they rose by 40% and led to an extra cost of roughly EUR 750 million compared to last year. Depreciation increased due to progress at our fleet renewal, while higher cost for external maintenance mainly reflects higher material cost for engines and spare parts. All other cost line items either grew less than inflation or declined versus prior year. As a result, adjusted EBIT dropped by EUR 490 million compared to prior year, reaching EUR 383 million, while the adjusted EBIT margin stands at 3.4%. Please note that excluding the directly measurable strike effect of EUR 150 million, adjusted EBIT margin would have been 1.3 percentage points higher. Let us have a closer look into our adjusted EBIT in the second quarter and the notable deviation from last year's levels. The two by far biggest earnings drivers are immediately evident: fuel prices and unit revenues. As mentioned, material fuel cost headwind shaped this quarter. For Network Airlines, we saw a fuel price effect of EUR 658 million. Thanks to strong demand for travel, captured redirected demand, and disciplined pricing, also revenues increased materially on a per unit basis. This compensated for a large part of the fuel headwind, enabling a recapture rate of 60% as we had foreseen and expected. Overall, this confirms that our commercial performance remains robust as our pricing power. Let's also have a look at the other building blocks of this quarter, starting with ASK. Driven by strikes and further consolidation of our continental network, including the grounding of Lufthansa CityLine, we reduced capacity at our Network Airlines, leading to reduced production. At the same time, we continue to make progress on cost discipline. Looking at our 3% increase in CASK ex fuel, please note that most of it is explained by the capacity reduction. Adjusting for this capacity reduction, unit cost ex fuel at our Network Airlines hence only grew at around 1%. Proving that we can effectively withstand the ongoing industry-wide inflation. Progress at ITA is good. Operating profit was positive in Q2. Looking at the numbers, keep in mind that we do not consolidate operating profit, but instead 41% of ITA's net income. This is affected by FX movements related to unhedged lease liabilities. Therefore, the headwind from the ITA at equity result almost completely stems from FX effects. Going forward, once we consolidate and include ITA into our FX hedging, this volatility will be limited. Will be eliminated. At Point-to-Point Airlines, we see strong demand, which is an encouraging signal for the strength of the business model, particularly given that other point-to-point players in Europe have lacked challenges. However, it is not sufficient to carry away the additional fuel cost burden. Logistics and MRO are both contributing positively to the group's earnings, underpinning the value of our portfolio with diversified revenue streams. Let me now turn to the actions we are taking to strengthen profitability and protect earnings in the current environment. While higher fuel costs and disruptions weigh on our second quarter results, we remain firmly focused on the levers that are fully within our control. A core element is the Lufthansa Airlines Turnaround program, which is progressing according to plan. By the end of this year, a cumulative gross EBIT effect of at least EUR 1.5 billion will be reached. The program is built on three key pillars. We've discussed them before, and we are making clear progress on them. First one is fleet renewal and rollout of Allegris are gaining further momentum and provide by far the biggest earnings potential. Keep in mind, at midterm, we expect the fleet and product modernization across the entire group to increase our operating margin by three percentage points. Second, the ramp-up of capacity in our more cost-efficient AOCs gradually progresses. This summer, the number of aircraft operated by Lufthansa City Airlines more than doubled versus last year to reach 18 aircraft. Given that the crew costs are below the levels of Lufthansa Classic, combined with higher productivity block hours flown, this will notably support our cost control. Last but not least, productivity and efficiency initiatives, and you know that we've spoken about the more than 700 initiatives within the Lufthansa Airlines Turnaround program. They are rolled out and will improve Lufthansa Airlines' future competitiveness. In addition to the ongoing turnaround of Lufthansa mainline, we have initiated several EBIT safeguarding measures across the entire group that will provide roughly EUR 150 million-EUR 200 million of positive earnings impact this year. These measures primarily focus on reduction of discretionary spend project prioritization, external hirings, and fleet optimization. For instance, the phase out of the Airbus A220 fleet at SWISS. In summary, while we cannot influence fuel prices or geopolitical developments, we will continue to focus on the execution of our strategic initiatives as laid out at our Capital Markets Day last year. The actions underway today provide a clear path to improve profitability in the midterm. Let me now turn to cash flow. Operating cash flow reached EUR 2.3 billion in the first half of 2026, down EUR 600 million year-on-year. This decline was mainly driven by the lower operating result on the one hand side and reduced ticket prepayments due to shortened booking windows. Net CapEx of EUR 1 billion mainly covers final payments for 14 aircraft deliveries, as well as prepayments for future fleet additions. This was partly offset by positive MRO capitalization effects. On the divestment side, we generated around EUR 1.1 billion cash from aircraft transactions, including seven sale and leaseback deals, and the sale of a Boeing 747-8. Overall, adjusted free cash flow amounted to approximately EUR 1 billion and remained broadly in line with last year, despite the weaker earnings performance. Moving to our balance sheet. Our financial position remains strong and provides an important source of stability. Liquidity levels stood at approximately EUR 10.7 billion at the end of June, comfortably above our target corridor of EUR 8 billion-EUR 10 billion, and we continue to maintain investment-grade ratings with stable outlooks from all our four major rating agencies. Net debt remains stable at around EUR 8.3 billion, while the leverage ratio increased modestly to 2x, mainly due to the lower EBITDA. The increase in net financial debt was largely offset by lower pension liabilities, supported by the strong performance of pension assets and a higher discount rate in Germany. Overall, our balance sheet continues to provide ample flexibility to navigate the current environment while investing into fleet renewal and strategic priorities. Let me now come to fuel, as this remains one of the major earnings factors this year. Since our first quarter reporting, the fuel outlook has improved. Based on forward curves as of July 27th, we now expect a total fuel bill of approximately EUR 8.7 billion for this year. Our expected fossil fuel cost stands at approximately EUR 8.5 billion, with a further EUR 0.2 billion related to mandatory SAF requirements. At the same time, our fuel exposure remains well protected, with hedge ratios of around 81% for the full year and 86% for our passenger airlines. Based on the current forward curve, we currently estimate a positive hedge result of about EUR 1.5 billion for the full year. This gives you an idea of the value of our hedging strategy. Going to the next slide. Yes, thank you. At the same time, fuel markets remain highly volatile, and recent months have demonstrated that both jet fuel prices and foreign exchange rate movements can change rapidly, creating uncertainty around the ultimate fuel bill for the full year. To improve the hedge effectiveness and to reduce sensitivity to extreme market movements, our 86% hedge ratio currently also comprises jet crack swaps to an extent of about 20% of our fuel exposure. Nevertheless, fuel does remain a significant external swing factor for this year. Just for the past three months, and you can see that, the full- year fuel bill estimates have fluctuated by more than EUR 700 million depending on the forward curve observation date. While our hedging framework has served us well over many years, one lesson from this crisis is that not all hedges are equally effective under all market conditions. The sharp dislocation between crude oil, gas oil, and refined jet fuel products highlighted certain limitations. Reduced oil refining capacity in Europe and elsewhere also contributed to increased volatility between crude oil and refined products. We did react quickly, introducing jet crack hedges and adapting our approach during the quarter. Based on these experiences, we are analyzing our hedging framework. Our objective is straightforward: better alignment with actual fuel exposure, a low base risk, and a high hedge effectiveness supporting a stable earnings profile through the cycle. Let me now turn to the key question for the remainder of the year. Why do we believe the second half can improve materially compared to the first half? First, Q2 should not be seen as a blueprint for half two. Strike-related disruptions should no longer weigh on operations, recapture rates improve. The composition of the booking stock becomes increasingly favorable. When assessing Q2, we saw a positive trend throughout the quarter. Looking at year-on-year RASK comparison, June was better than May, which was better than April. What provides confidence is the quality of the booking intake. For the half two months, bookings at pre-crisis yield levels represent between 10%-30%. This means that an increasing share of future bookings benefits from the stronger post-crisis pricing environment. At the same time, current booking trends show yields running around 5%-12% above prior year, while load factors remain a few percentage points below prior year levels. The current demand environment continues to be characterized by shorter booking cycles and yield-focused revenue management. This creates initial load factor gaps. If they are filled with incremental high-yield demand, they can drive meaningful RASK outperformance. If they remain, a more differentiated management closer to departure date will be required. In other words, the development of these load factor gaps is the key swing factor for half two. To offset the almost EUR 700 million fuel headwind we currently expect in half two, we need to achieve a mid-to-high single-digit RASK increase versus the prior year. The favorable mix of post-crisis bookings and continued yield discipline can enable this, assuming the demand strength proves persistent. Let me conclude with our outlook for the rest of the year, respectively, full year. The environment in which we operate remains fairly dynamic. While demand trends are encouraging and our performance measures are gaining traction, visibility for the remainder of the year remains lower than we would typically expect. This is primarily driven by ongoing volatility in fuel markets and significantly shorter booking cycles. Against this backdrop, we believe it is appropriate to adjust our earnings guidance to a defined range. For the full year 2026, we now expect adjusted EBIT to be between EUR 1.7 billion and EUR 2.2 billion. At the same time, we now expect our capacity to be broadly flat versus the prior year compared to our previous expectations of growth of between 0% to 2%. This reflects the measures we've taken to safeguard profitability and improve fuel efficiency while continuing to prioritize capacity deployment in the most attractive long-haul markets. In our earnings range, the upper end of this range remains consistent with our previous expectation of an adjusted EBIT significantly above prior year levels. In other words, the earnings potential we saw before has not disappeared. Rather, the current range reflects the fact that uncertainty around the downside has increased in particular, driven by the renewed tensions in the Middle East throughout July. The key question for the second half is not demand versus no demand. Demand is there. The key question is the balance between fuel headwinds on the one hand and revenue upside on the other. There are four key swing factors that will determine where within our guidance range the full-year result ultimately lands. First, the development of jet fuel prices. Second, the extent to which we see an acceleration in unit revenues during the second half, and current pricing trends are encouraging, but the degree of revenue recapture of fuel remains the most important earnings variable. Third, our outlook assumes the continuation of the operational stability we have achieved in recent months, including the absence of further strike disruptions. Fourth, the current strength in the cargo market provides important support to earnings and the sustainability of the current demand environment in air freight will therefore also influence where we ultimately land within the guidance range. As always, Lufthansa Cargo's full-year result will significantly depend on the fourth quarter performance, making the peak season a swing factor. Importantly, our expectations for adjusted free cash flow of around EUR 0.9 billion remain unchanged, supported by the net investments of around EUR 2.5 billion instead of initially planned EUR 2.9 billion, primarily reflecting slightly lower aircraft deliveries than originally assumed. While uncertainty has increased, our focus remains firmly on execution. We continue to accelerate the measures within our control, strengthen cost discipline across the group, and therewith improve also our earnings resilience. With that, Carsten and I are happy to take your questions. Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, you can press star one and one again. Please be reminded, we do ask callers to limit yourself to two questions each. Please stand by while we compile the Q&A roster. Thank you. Your first question today is from the line of James Hollins from BNP Paribas. Please go ahead. Oh, yeah. Good afternoon your time. Couple for me, please. Till, thank you for the details on the unit revenue outlook, some good data in there. I think what's quite conspicuous is you seem to want to stop short of retaining the guidance you gave at Q1 of recapture rates above 100% for Q3 and Q4. Given that full-year fuel cost guidance has come down since Q1, I was wondering if I'm right in thinking you're deliberately not talking about recapture rates above 100%? I guess it might be a quick answer. Then, I guess a mix of Till and Carsten. Clear at your Capital Markets Day last year for Lufthansa Airlines, you talked about a 20% increase in crew productivity by 2028. I was wondering, A, where we are on that? B, I guess for Carsten, any update on strike potential? Is it disappearing? Maybe Till, where we are generally on the turnaround program. Clearly, the numbers have not changed at EUR 1.5 billion and EUR 2.5 billion, but just your general thoughts on the progress. Thank you. Yeah, James, let me make a start. Thanks for the three questions. First one on the unit revenue and recapture. Let me just state first, for the second quarter, we had achieved a recapture rate of about 60%. Again, that is in line with what we also announced on our Q1 earnings call. That was in line. Look, going forward, very true. Slight reduction in terms of fuel bill for the full-year at the current stage. Of course, as we go forward, we've got still a sizable booking stock ahead of us that needs to come in. We see decent yields, and there was, if you now translate both the fuel bill and the booking stock, mathematically, we will still going to need towards the back end of this year. The fourth quarter, a recapture rate, which clearly exceeds the 100% to make the guidance work. That's mathematical. Fundamental topic will be how we see the earnings. At revenue, at yield, and load factor side coming in over the next couple of weeks and months. Shall I take or you go next, and then I'll do turnaround. Okay. Yeah, James. Hi, it's Carsten. On the increase in productivity in Lufthansa Airlines, we're actually on track. I might remind you there's three factors contributing. One, obviously, is the cleanup of the fleet. As long as we were waiting for 787s, pilots being trained, pilots being pre-trained to have them ready when the airplanes come in and not being fully productive is coming down, even though, of course, there still is a significant rollover in the fleet happening, which will be over by the year 2028 you referred to. Second, we continuously put aircraft into the more productive AOCs, namely Lufthansa City Airlines and Discover Airlines, and we, as you know, grounded the least productive AOC, which is Lufthansa CityLine. Last but not least, we are now in constructive talks with our two specialized unions, who represent cabin and cockpit staff in the core airline, that they have understood, if I may say, and for sure the staff has understood, and I think also by now a majority of the union leaders, that only with productivity increases we will ever see growth and hirings in Lufthansa Classic again. Put those three together, I'm optimistic we will achieve the increase in productivity promised at the CMD. Let me take over on the turnaround question once again. Yes, we continue. We continue executing the turnaround plan at Lufthansa mainline. Here, you've seen the three pillars. Let me quickly underpin with a few figures or pointers. Confident on the EUR 1.5 billion contribution for this year on track. At fleet renewal and product renewal, if you just rewind back 12 months in time, we had a new technology share of about 22% of our total fleet. Now, one year later, this stands at about 26%, so that's a four percentage points gain. We make progress, obviously in line with the fleet renewal. We wish it would be going quicker, but of course, when you then extrapolate and scale that, in line with our order book, we expect to reach a 50% new technology share by 2030. This is a major lever, and this is coupled with obviously new product, Lufthansa Allegris, SWISS Senses. You heard Carsten speaking about the yield uplift of Lufthansa Allegris, which we are quite excited about. This is positive. Of course, beyond this, investment into FOX. Future onboard experience is an element that drives customer satisfaction and ultimately also willingness to pay. If I may, on the second pillar, just a pointer again here, in terms of AOC strategy, we have doubled the number of aircraft at Lufthansa City Airlines to 18 now. You have seen that during the second quarter, we've grounded Lufthansa CityLine, which was initially planned for a later point in time, so that's an acceleration. Of course, we continue to optimize also wet lease usage. On the many initiatives which are in the smaller category, we equally make progress. I'll close on a note, in response to the crisis or the earnings pressure, we've added basically EBIT safeguarding measures, which I wouldn't necessarily call structural. They are more short-term, just cost optimization, which I think nonetheless are very necessary. Thank you. Thank you. We will now take our next question. This is from Alex Irving from Bernstein. Please go ahead. Hi, Carsten. Hi, Till. Two from me, please. First one's on fleet, and specifically the 777X. As the first one planes with Emirates has said it doesn't want, United Airlines won't take them either. As the global launch customer, do you have enough comfort to accept them? How does that shape your confidence in being able to retire old technology in 2027? Second question, you spoke in your opening remarks about the possible easyJet [inaudible] and the potential for opportunities in Berlin and Geneva. Could you please elaborate on that? Are there other markets where you would also see opportunity? Thank you. Alex, Carsten. Hello to you. On the 777, as you know, the entry into service is still planned for the summer of 2027, with Boeing at this point promising to deliver the aircraft in Q1. As I referred to in the Q1 call, we have two plans in parallel. One Plan A, call it, 777 does come on time. Plan B, it has further delays, in which case we would reactivate A340-300, which we have kept for this purpose to cover the network. Depending on the likelihood of the two scenarios, I would probably say you see that in the schedule which we have published. We currently have published a A340 being the more reliable plan. Hopefully, the 777 deliveries will allow us to actually operate them. On that very specific topic of the first build aircraft, also, like our friends in Dubai, we are in talks with Boeing, which of these airplanes will we not accepting for commercial service and which of these aircraft will be able to be modernized, and then, of course, with the financial contribution of Boeing, we would be willing to take. A similar topic as our friends in Dubai, we're just not quite as open in public about the details of the discussion. On our friends in Luton, I just mentioned Berlin and Geneva because these are two obvious spokes in our network where we are competing with each other. Of course, depending on which shareholder they will have in the future, which strategy they will pursue. We, of course, are ready to talk if there are additional opportunities for our shareholders, and in the end, for our shareholders to make money off. I think it's too early to say, and also the regulatory environment, as you well know, is very difficult. I think I can also speak on my two competitors in London and Paris. We all like the part of easyJet, which exactly the regulators don't want us to have. I think we're all in a similar situation here, of course, we are ready to talk if there's opportunities, not just in Berlin and Geneva. All right. Thank you. Thank you. We'll now take the next question. This is from Muneeba Kayani from Bank of America. Please go ahead. Yes, good morning. Thanks for taking my question. The first one I wanted to ask around cargo a little bit more. What are you seeing in terms of demand trends related to AI equipment, and how are you seeing the 4Q peak season developing at this point? In terms of your new guidance, has your view on air cargo for this year changed? Is it more positive now than it was when you first gave the guidance earlier this year? Secondly, just on TAP then, what is the next step and where is the timeline? Your competing bidder said last week that the TAP unions had publicly expressed concerns about strikes and your labor relations, wanted to know if you have any comment on that. Thank you. Yeah, as I mentioned, Muneeba, the cargo trends are positive indeed. Next to the supply chain disruptions, which we have seen, especially after the Iran war, which have helped the cargo business, the increased need for transportation of server racks indeed has almost become an industry-shaping element. We are allocating and reallocating our network to serve our customers who try and who want to move server racks around the world. As you can imagine, for these high- risk and very expensive equipment, logistical costs are almost immeasurable, so this is a very profitable business. You do need freighter aircraft for this business by the sheer size of these racks. We would expect the adjusted EBIT of cargo to be significantly above last year because the positive trend is ongoing and the Q4, as you do know, is the most decisive quarter. On TAP, concerns about strikes, I think there has been one union out of many in TAP which has mentioned that. This is one union which is very closely aligned to our German pilot union, so think about that one. The other unions we have engaged with in TAP have been very constructive about our ideas about the joint future. Timeline and next steps, of course, up to the Portuguese government, so nothing to add on my side on this. Thank you. We'll now take the next question. This is from Stephen Furlong from Davy. Please go ahead. Hi, gentlemen. Just thinking over the next couple of years in terms of the cadence of the improvement in the EBIT margins. You said before that 2025 and 2026 are transition years. Is it really dependent on the aircraft delivery rate to see whether 2027 would also be a transition year? That's the first question. That'd be great. I guess it's related to that. I'm assuming that CapEx, which is slightly lower this year, does it step up a bit next year after or is there any change in the CapEx trend over the next couple of years compared to what you previously said, or is it a moveable feast? Thank you. Yeah, Stephen, thanks for the question. First, let me just confirm, in terms of cadence and aircraft deliveries, this is a major lever. This is why we always say that fleet renewal and moving up in the new technology share in our fleet is a powerful lever coupled with better product. There with a lot will depend upon the timing. It's true. While we have made already decent progress, and I was just quoting the 4 percentage points of new tech share increase year-over-year, we obviously would love to make faster progress. Contrary, this year, we actually expect 41 aircraft instead of 45. There is a little bit of a delay in the aircraft receipts. Does that have a certain impact on the ramp-up? There was also to your question of transition or transition year. Yeah, of course. Aircraft deliveries impact that. There with probably also 2027 will still have aspects of a bit of a transition. Second, on CapEx for this year, it's exactly that. The slight reduction in CapEx is largely associated with the f our less aircraft that we expect to receive this year. Okay, great. Thank you. Thank you. We will now take our next question. This is from Jaime Rowbotham from Deutsche Bank. Please go ahead. Morning, gentlemen. I was also going to ask about CapEx and deliveries. If you can provide any color on your expectations for 2027 now, that would be helpful. If not, second question, in Germany, the coalition has agreed on a series of comprehensive reforms, and some of them relate to the flexibilization of the labor market. I was interested to know whether you see anything yet coming from these reforms that could benefit Lufthansa and help you with those attempts to improve the crew productivity. Thanks. Jaime, it's Carsten. Again, without repeating everything which Till has said, the 2027 delivery schedule is already impacted by delays of 2026. A350s have been moved, also A350-900s have been moved from 2026 to 2027. A350-1000s, which we expected to operate in the summer of 2026, are now moved into 2027. The 777 situation I just referred to. It is unfortunate, but it's a fact that 2027 will be another element of a transition driven by these deliveries. Of course, also will have an impact on CapEx, which in general, of course, stays the same. It's just moving it from one year to the other. The labor market flexibilization, I would almost put in the same bucket as the tax increase, which was reverted in Germany. Government now starts to understand that these are structural disadvantages of Germany, which have an impact on the German economy to the point that governments need to react. Let me take that on a high abstract level as positive. To your very detailed question, I must admit that in the core of Lufthansa, the c lassic airline, our CLAs are much more restrictive coming from days of government ownership than what the government is now willing to touch. Even if the regulatory environment changes on this one, before we have agreement in Lufthansa, we need the approval of the unions to unlock these restrictions from the 1990s. While that doesn't happen, as you know, we are not hiring in the core and run up our operations in the modernized CLAs of Lufthansa City Airlines, Discover Airlines, and of course, our non-German AOCs. Again, as a call it indication that our still most important market, we only at 20% turnover now in Germany, but still we are at 20%. I find it at least encouraging, being modest, that we now see signals from Berlin that things cannot go on. I must also say, other industries are much more affected than aviation. Lufthansa, in all modesty, is probably one of the few real economy companies in Germany still growing and still being among the global leadership. There is a wake-up call, I think, which has been heard in Berlin. Jaime, if I may just complement on the CapEx. Once again, look, what we would be seeing shifting from 2026 into 2027 from an aircraft point of view, we would obviously also catch up at the CapEx level. Here, once again, the reminder, part of our strategy is that we do make use of sale and leasebacks as a vehicle. At the moment, we are standing at a mid-teens level in terms of sale and leaseback share. Therefore, completely in line with what we said at the Capital Markets Day, we will use this as well as a bit of a flexible instrument to manage net CapEx and ultimately also free cash flow, exactly in line with what we laid out September last year. Thank you both. Thank you. We'll now take the next question. This is from Conor Dwyer from Citi. Please go ahead. Hi, guys. Two questions from myself. The first one is on Lufthansa Technik. You mentioned temporary softer demand for MRO capacity. The comment on slide eight is obviously initially around the Middle East, it says, "Also lower than planned engine overhaul business growth." Could you just elaborate on this second part? Is this airlines choosing lower work scopes and shop visits? If so, are there any specifics you can give on this in terms of engine type or even narrow body versus wide body? The second question is around mid to high single-digit unit revenue growth in the back half of the year. On the slide provided there, it says yield tracking up 5%-12%, buck load factors down 1%-4%. I realize this is a bit crude, but it roughly points to unit revenue up 4%-8%. At the midpoint, broadly in line with Q2. You indicate that, basically for it to accelerate, is how you're going to meet your guide. For that load factor to catch back up, surely that needs a bit of yield stimulation to get there, which surely that should be quite challenging if capacity is guided to accelerate in the back half of the year. Thank you very much. Conor, it's Carsten. I'll take the first one. Well, we obviously see airlines around the world lowering their flight hours per aircraft and also per fleet. Many of our contracts, especially of course, Power by the Hour contracts, are directly affected by that. That's what happens, and this is very much seen on engines. It's also seen on components, be it open loop or be it closed loop in both businesses, which we at Lufthansa Technik provide. When it comes to heavy checks, companies are delaying checks because of cash saving ongoing, because as you know, pretty much every airline in the world has seen a decline in earnings. Also, that short-term weighs on Lufthansa Technik. Third, last but not least, the limited availability of spare parts sometimes forces us to turn down requests from customers. You might have heard about windows being short in supply due to a breakdown of a factory south of Los Angeles. That, of course, also affects us. This is very much short-term driven. I think the long-term perspectives of Lufthansa Technik, or if I may say, of the whole MRO industry, are rather positive. You know my view. There's airplanes being flown longer because of the supply chain issues from Airbus and Boeing, and older airplanes obviously eventually need maintenance, or you have a third shop visit for an engine, and the new airplanes coming in tend to have higher maintenance cost per shop visit than old airplanes due to the complexity of the visit. These two long-term trends in MRO are intact and confirm our view of Ambition 2030. Short term, I refer to indeed those cost saving measures by lower flight hours by various customers around the world. Let me take the question just on yield and outlook. Hi, Conor. First, your line of thinking, of course, is right in terms of mechanics. When it comes to stimulation, I would say no. We see that seat load factor gaps are basically closing in the weeks before departure without heavier intervention to stimulate. Short-term demand, and again, this is consistent with the shorter booking cycles we see actually relatively strong. Of course, sentiment is always driven a little bit by also the overall, let me say, geopolitical sentiment, undoubtedly. We do follow a yield management approach. We manage each month kind of individually and track the demand profile. You can see what I've said on the slide, the yield levels between 5%-12% versus prior years. This is healthy. It really comes down to the question of how fast the seat load factor runs up. There with the RASK, as you rightfully pointed out, needs to be mid to high single digit in order for us to get to our full year guidance or the reset, recalibrated guidance. Okay. Thanks very much, both. Thank you. We'll now take the next question. This is from Harry Gowers, from JP Morgan. Please go ahead. Morning, Carsten. Good morning, Till. First question, can I just ask on the fuel hedging for next year? Maybe just what percentage are you hedged at for 2027? Then what would be your net fuel price after hedge at the moment? So equivalent to the number $1,036 per metric ton that you give on the slide for the fuel bill for 2026. Second question, I wanted to ask about Transatlantic because your capacity was down 6%, I think, in Q2. Unit revenues were only up 1.5%. I thought that was a bit surprising just given what your peers have reported in the commentary from the U.S. airlines. You said there was some impact in there from the strike. What was the percentage impact on Transatlantic RASK from the strikes in the quarter, if you were able to split that out? Thanks a lot. Hi, Harry. Thanks for the two questions. I will start with the second one, then go back to fuel hedging. First, Transatlantic, North Atlantic traffic. Yes, indeed, you saw a decline of 6% in terms of ASK growth there. Let me just highlight one point, and that is indeed related to the strike effect at Lufthansa Airlines. That alone represented about four percentage points of ASK decline. Of course, when you think of such a traffic area, this does have a certain impact. We did see, and we have given you the figure for the strike effect, which is hard and measurable, EUR 150 million, but there was also a spillover effect in terms of just sentiment of customers wanting to book with us, particular at Lufthansa Airlines, also throughout May. On fuel hedging, we stand for 2027 at a bit more than 50% now in terms of hedge ratio. We did follow, and again, we have spoken about it. We restarted our hedging activity in the second quarter, forward looking, and we do follow our standard approach of a layered approach every month going forward, trying to reach six months before the point of departure, about 85% of hedge ratio. That's it. Thanks. Thank you. Thank you. We will take the next question. This is from Axel Stasse from Morgan Stanley. Please go ahead. Morning. Thanks. Taking my questions too, if I may. The first one is on the unit cost inflation ex fuel, sorry, in H2 2026. If I'm not mistaken, H1 was slightly above inflation. Should we get to the same extent into the second half? The reason why I'm asking is because if you get less deliveries as expected, it probably improves your D&A, but then you don't get the cost savings from these new aircraft. Just wanted to have your view on this and probably linked as well on the Lufthansa Airlines unit cost inflation guidance that you provided previously, which was below inflation, is that still the case? The second question, and maybe I missed it, on the unions and strike updates. I think in the intro you mentioned that you have constructive discussions, but you have been saying that for quite a while now. Can you maybe provide an update on where we are? Just to have an understanding if there are potential strike impacts again in H2. Thank you. Let me start with your third question, Axel. It's Carsten. Indeed, I've mentioned that we are now for some time in constructive talks. The last strikes, as you well know, resulted in no salary or pension increases. I think the union leadership has understood that the only way to come forward, and again, also stop the shrinking of the core airline, is to talk and to eventually negotiate. We have done that now with both the cabin union and the cockpit union. The cabin union, I think, was also announcing today that we are in such constructive talks. We announced that to our staff last night, and the union is or is about to communicate that to their members while we speak. On the cockpit side, where things are more complex, the same applies. We are in discussions, and as long as you discuss, there's no strikes. It may be more important, I think we have proven that there are alternatives for us to growth in the core airline, which is on short haul, Lufthansa City Airlines, and on long haul Discover Airlines, putting the non-German AOCs aside for a moment. These talks are confidential, especially with the pilot union, so I cannot give you any detail, but they are progressing, and that, I believe, is based on the non-success of the strikes in the spring. Of course, the growth of the non-scope AOCs is going on while these discussions are taking place. Axel, just on the two questions on CASK. Briefly as a reminder, in Q1, indeed, the 1% underlying, kind of ASK adjusted. This is my anchor point to start off with, of course. In the second half of the year, we do expect capacity to grow. Here again, the pointer growth in intercont, which also drives stage lengths positively, and on cont, basically slightly down or flattish. That's basically the mechanic first on an ASK level. Cost control, I'm confident about that we continue to have a good grip on this and continue to implement the initiatives that we've got. Therewith, I would probably say for half two, starting at the anchor point of 1% underlying Q2, inflation CASK should land. At Lufthansa Airlines, I would clearly say below inflation. Initially, as you said, we were targeting no more than half of inflation. That already at Q1 results, we basically adjusted, simply because of the strike effects and these cost burdens that Lufthansa Airlines had. Lastly, what I'd like to highlight is CASK will also be driven by D&A increases based upon fleet renewal. Of course, that's good news because ultimately that drives earnings up. Of course, also premiumization. For example, investment into FOX, which in a year-over-year comparison comes into the numbers. Once again, that's accretive and positive from a customer and willingness to pay point of view. Thank you. Thank you. We'll take our next question. This is from Ruairi Cullinane from RBC Capital Markets. Please go ahead. Yes, good morning. First question on Gulf avoidance. Have you seen any signs of that declining in either June or July, impacting either momentum on APAC routes or your logistics business? Secondly, does your EBIT guidance allow for any staff cost impact associated with the resolution of your union negotiations? I think you've commented you don't expect any further strikes or assume that. Finally, fuel pass-throughs have been higher in long haul in 2026. If oil prices come down, would you also expect fuel pass-throughs in long haul to be relatively high, or can higher fares be retained? Thank you. Let me start, Ruairi, with the Gulf situation. You probably know the Gulf carriers are back with almost full capacity, since there is a lot less local traffic, the transfer capacity we actually see as being on par with what we saw before the conflict. That obviously with low load factors results in competitive low pricing to attract customers from us and the other European and Asian carriers. Fortunately, we see quite a few, especially corporate customers, who have no more okay from their companies to travel on the Gulf carriers. We see a nice share of corporate customers staying with us. Of course, when you go to the other extreme of the market, the very price-sensitive customers are now seeing very attractive offers from the Gulf carriers, and we don't have that effect on our airplanes anymore. We'd rather keep the seats for higher yield traffic. On strikes, maybe I didn't said that clearly before, I don't expect any strikes for the summer due to the fact that we are in these mentioned confidential but constructive talks. Maybe I can repeat that here also, since the question came up a couple of times before, maybe I didn't answer that correctly. Till, over to you. Let me just complement. Carsten already commented on the strike and EBIT guidance. The range that we've set out is mainly driven by the balance between basically fuel and demand or RASK evolution. These are the swing factors. I also said in my, let me say, four conditions or four elements of our guidance, that strikes are not belonging to that. Again, we also don't think that this is likely to happen. Of course, fourth quarter cargo is an important one for also reaching this guidance or moving within that range of the guidance. Pricing levels, fuel price down. First of all, I think everyone is currently in a setup where fuel recapture, also throughout the year, is a priority. Therewith, of course, this requires higher yields, higher ticket prices. This is necessary. Beyond that, ticket prices are done at market level, and therewith, we shall see, but at least with the visibility of the next couple of months, and I think that's consistent with what you hear from everyone else speaking in the industry. Thank you. Thank you. We will take our last question today. This is from Marc Zeck, Kepler Cheuvreux. Please go ahead. Hello. Thank you for taking my questions. First question, I just wanted to check if I got that correctly. On the ramp- down cost of Lufthansa CityLine. I guess you said that you expect almost EUR 200 million in additional cost, EUR 180 million, due to the ramp down. Is that correct? If so, is this an all-in figure, or is it just Lufthansa CityLine employees sitting around right now doing nothing? Does it include any future severance packages that you will provision for? Does it include what benefits you might already have from the transition to Lufthansa City Airlines? Just a bit more color on that number, that would be helpful. Second question on Eurowings. I guess, the company or the airline saw quite a nice yield increase for this quarter, and I guess that's quite different for many other low-cost airlines. Could you maybe elaborate a bit where this yield increase actually is coming from? I would expect that still higher capacity from other airlines, other low-cost airlines, especially into Spain and other summer destinations, would have put some pressure on yields, that was clearly not the case. How did this yield increase come together? That's my two questions. Thank you. Marc, Carsten. You misunderstood that. The EUR 180 million I refer to is an improvement in earnings due to the fact that we took Lufthansa CityLine out. As you know, we decided to take the 1% least performing short haul out of the system, and we took the most expensive production out and then aligned this. The most expensive production was Lufthansa CityLine. All the savings from this, less negative routes, the very high maintenance on these aircraft, the very unproductive schedules for the crews, and all that put together gives us a relief of half a million per day. Of course, you will have some cost for those crews who have decided not to apply to other airlines. Many crews have applied to other airlines. Those crew members who don't will, by German law, get certain severance payments, whatever, in the end, the negotiations and the courts will agree on. The EUR 180 million is a plus, by the fact that we took Lufthansa CityLine out. That's why we do it at ICL, as you well know, earlier than planned. It was planned for, I think, 2027, and we decided to do it in April of 2026. Eurowings, I think it's fair to say that we probably, as you know, positioned the company over the last year strategically, not so much as a pure low or even lowest cost airline, but rather as the so-called value airline, where some of these catchments, think about Düsseldorf, Hamburg, are indeed high yield catchments. We also have some corporate traffic on board. That, including the ancillaries we have been able to sell to our customers, has resulted in a very positive RASK development. Even business class seats have been put into the airplanes when we used longer routes, which of course we don't fly currently. On the cost side, of course, we have our challenges. I mentioned there are surely one-time effects like the ramping up for the 737 operation. On the RASK side, coming back to your question, indeed, we're proud to see that we put ourselves apart from some of our point-to-point competitors in Europe. Thank you very much. Thank you. At this point, I will now hand back to the speakers for any final remarks. No, just thank you very much from our end for the good discussion, for the questions, and we from Investor Relations are looking very forward to continuing the dialogue. With that, thanks and have a good afternoon. Bye-bye. Thank you. This concludes today's conference. Thank you for participating, and you may now disconnect.