Good morning, and welcome to the Air France-KLM half year 2023 results presentation. Today's conference is being recorded. If you would like to ask a question throughout today's call, please press star one on your telephone keypad to join the queue. At this time, I would like to turn the conference over to Ben Smith, CEO, and Steven Zaat, CFO. Please go ahead, sirs. Okay. Good morning. Thank you, operator. To all those who've called in today, good morning, and thank you for joining us today for this presentation of the Air France-KLM Group's results for the Q2 of 2023. I'm here with Steven Zaat, CFO of Air France-KLM, Anne Rigail, CEO of Air France, and Marjan Rintel, CEO of KLM. All of us will take your questions at the end of this presentation. As usual, I will start with an overview of the quarter's highlights, after which I will give the floor to Steven for a detailed presentation of our results and the outlook for the next quarters. This will be followed by a short rundown of the contemplated financing we announced yesterday. Before I begin, I'd like to thank all of our colleagues across our group for the hard work and dedication they continue to display, especially during this busy summer season. Turning to Slide three, Air France-KLM delivered a solid performance in Q2. We carried 8% more passengers compared to the same quarter last year, thanks to a strong and sustained demand for air travel. The increased amount to nearly 2 million more passengers and translated into a 14% growth in group revenue versus last year for the same quarter. We posted equally strong numbers in terms of profitability. Our operating result improved by EUR 347 million compared to Q2 2022, and our operating margin grew to a historical level of 9.6% for the same period. We also generated positive cash flow, with the Group's adjusted operating free cash flow amounting to EUR 600 million. Last but not least, we continued putting a lot of effort into restoring our equity through quasi-equity financing, which Steven will cover in more detail in a few minutes. We stayed the course of deleveraging the Group from last December to the end of June. Our net debt to EBITDA ratio dropped from 1.8x- 1.2x. Turning on now to Slide four. One of the main reasons we enjoyed such strong momentum in the Q2 was our ability to significantly improve the robustness of our operations at our main bases. We have been delivering better quality service more consistently, despite carrying more passengers and contending with external factors. First and foremost, I'm very happy to report that operations have remained steady at Amsterdam Schiphol since the holidays in May. Also, we implemented continuous improvements to our operational processes that are helping us narrow feedback loops across the board and manage resources more agilely. Moreover, we set up multiple initiatives with our partners aimed at strengthening our operations and customer care moving forward from bulking up the baggage flow, especially for connecting flights, to tooling ourselves for a seamless customer journey. We reinforced our training programs for both our internal and external staff to harmonize the quality of service we deliver and added close to 3,000 FTEs in temporary and permanent staff to our organization since the beginning of 2023. Turning now to Slide five. Our commitment to deliver on our customer promise did not waver in Q2, with continued investments and improvements. June marked KLM's first flight with our new state-of-the-art World Business Class seat on a Boeing 777 aircraft. The new Premium Comfort cabin is now available across the entire Boeing 787 fleet at KLM. Air France continued to roll out its improved new business and premium economy cabins on board select 777s and A350 aircraft. Air France also launched new in-flight entertainment content on its long-haul flights. Both airlines improved their in-flight dining experience through new exclusive initiatives. A resolve to honor our customer promise once again earned us the recognition and accolades of Skytrax and APEX. During Q2, Air France and KLM were both certified as five-star airlines by APEX. APEX also rated KLM a world-class airline, along with only seven other airlines in the world. Air France was voted best airline in Western Europe by Skytrax, and it moved up a spot from eighth to seventh in the Skytrax World Airline Rankings. We're extremely proud of these results, which speak to our team's unflagging dedication to excellence, and I want to commend them for their hard work. I'll now turn over the floor to our CFO, Steven, who will go into more detail about our results for the quarter. Steven? Thanks, Ben. Good morning, everybody, thanks for taking the time to listen to us. As you can imagine, I'm quite happy with the result. It's an historic result. We are beating our best result of the group in 2017, where we're just below EUR 500 million. We are above that. If you see where we are today compared to where we were just before the crisis in 2019, in Q2, we had a result just above EUR 400 million. We are very pleased with these results. Let's start with the revenue side. Of course, we increased further our capacity with 8%. which brought EUR 560 million in terms of revenues. At the same time, we were able to increase further our load factor. At three points up further, bringing an additional EUR 200 million to our revenues. We could further increase the yield with 2% to, which brought EUR 137 million. There's a difference between cargo and passenger business. I will come back on that later, but there's, let's say we had very good performance on the pax, and cargo is actually coming to normal levels. We see a unit revenue, which is still 10% above 2019, but more than 40% drop in unit revenue per ATK. If we go to the cost side, actually there are three aspects. Actually, we grew, the growth brought, let's say, EUR 500 million. If you look at the two elements which impacted our cost, you have the fuel price, and we have the unit cost, excluding fuel price. That is actually very well showed on the graph on the right side. You see that actually the fuel price is compensating the unit cost increase. I will take you further through this unit cost increase because we are currently actually at the peak of the increase, because last quarter, all the inflations, and we didn't increase the salaries with new CLAs. The storyline is actually unit revenue further up, EUR 360 million. Fuel price drop coming more to normal levels. In Q2, we had a fuel price last year of EUR 1,300 per metric ton. We are now more to EUR 900 per metric ton, and it's still above 2019, which was EUR 700 per metric ton. We're getting to normal levels, and with keeping the yield up, we are able actually to restore or increase further our profitability. That leads to a margin of 10%, and which will also lead to a net income of EUR 600 million, which is actually contributing further to our equity. If we then go to slide eight, you see actually what is happening business per business. On the passenger side, we grew capacity further with 8%. We could further increase our unit revenue with 13%. If you look at the split, it is actually coming, especially from the yield. Yield is up with 10%, and the load factor is further up with 2%. That brought, let's say, around, let's say, a quarter of this unit revenue increase. In total, revenues increased with more than 22%. We then go to the cargo, it is a slightly different story, so a drop of 42%. We further increased our capacity, which is fully coming from our passenger planes, and then you see that it has also an impact on the load factor. We are bringing the planes, especially to places which are a little bit less cargo-friendly, but we also see a softening into the market. If you look at both aspects, 2/3 is actually coming from the yield, which is the softening of the market, and, let's say 1/3 is coming from the load factor, where we are shifting capacity and growing capacity on the bellies. Transavia. Transavia, we grew further the capacity, and we were also able to further increase the unit revenues, coming 50/50 from load factor and yield, and we have a break-even-ish result. It was quite a tough quarter. We had, at Transavia Netherlands, we had the problems with our fleet, and we had ATC strikes in France, so that's impacting Transavia France. Seeing this unit revenue and seeing this demand, and we will also see it later when we look at the forward bookings for Transavia, it is very promising for the Q3, which is the peak period for our Transavia results. Last but not least, our maintenance division. Also in quite a tough operating in a quite a tough climate. It is especially impacted by the supply chain, and on top, we have also labor shortages, especially in Amsterdam. If you look at it, you see that we have now an operating margin of 4.4%, which is close to the 2019 levels, which was 4.7%, but we are not able actually to, to deliver all the shop visits at this moment. We are holding back actually our revenue development on third party, where we make actually our profit. That brings us that we are, let's say, less profitable than last year. We have quite a good margin, and we should further increase the revenue on that side. If we go to page nine, you see the results of both airlines. Both airlines grew capacity with 8%. If you look at Air France, we see a very strong performance. We have to go back to 2006 if we look at the results. Air France beat the results, which they ever made in the Q2. A revenue increase of 15% and a very strong performance on our long-haul network. Coming to a margin of 10%. If we then go to KLM, you see that the margin is, the operating result is actually flattish. We are still operating, which what we say in Dutch, with the brakes on, we still have a very tight labor market. We had fleet issues at KLM Cityhopper and Transavia in the Netherlands, as earlier explained. KLM is currently actually 14% below the level of 2019, so there's still potential over there. Let's go to the next slide, which is page 10. This is actually the picture over our network. 8% increase in capacity, further increase of our load factor of 2.6%, and a yield increase of 9%. You see that both premium and economy are holding strong, and what is still very promising is that we, on the premium side, we are still above the load factor of 2019. Strong demand on the premium side. You go to the long haul, you see actually on the long haul, everywhere, very strong yields. If you see Asia, then you see a minus, but you have to keep in mind that the yields were very strong because we had a very low capacity in last year. The yield increased compared to 2019 with 38%, and we are still 34% down in capacity versus 2019. On the short and medium haul, it's more a mixed picture. You see that we are still growing with 4.1%, but actually this growth is totally coming from our hubs, where we grew with 6%, where actually our point to point in France, we reduced further in line with our strategy with another 14%. Then last but not least, Transavia, almost 10% up in load factor, 4% up in, Sorry, 10% up in capacity, 4% up in load factor. Still slightly below 2019 because our route still needs to mature, especially in France. You see the yield up with 4.1%. We are actually up 26% versus 2019. North America, South America, very strong. Caribbean, more than 20% increase in yield, where we reduced the capacity because we had better spots to fly the planes. On the unit cost. I think if you look at the graph on the unit cost, you see that in the first quarter, if you take out the furloughs, our unit cost, excluding fuel price and excluding currency, was up 0.7%. That was with the growth of 20%. In the Q2, we grew only 8%, because actually the Q2 last year was already a after-COVID period. Actually, that is for us, the peak in terms of unit cost, because all the inflation actually kicked in actually more in the Q3 and the Q4, especially on the Q4, because then the new CLAs were there. We had a new CLA at Air France, which was actually starting in the salary cost of November 2022, and we had a new CLA at KLM, which started in October 2022. We increased from that moment, let's say, with around 5%-6%, our cost levels, and we closed the CLA in France now, for Air France, with 3% in March. The, the increase of our salary cost is actually kicking in in the Q4 last year. You see also year-over-year, that the increase in the Q4 is much less, and we expect to have low single-digit unit cost over the full year. If you go to the right part of that slide, you see that, you should actually see there are two impacts. One, we decreased slightly the capacity, but that still has, of course, an impact on your unit cost. The profits are beyond our own expectations. Because the profits are beyond our own expectations, we increase the profit sharing, which we share with our staff. Also the fact that you have a load factor, which is higher than actually anticipated, you will see that your costs are going up because you have catering and all kind of passenger-related costs. If you look at this non, what we call non-structural or compensated results, it's around 2% of the impact of our unit cost. There are more structural increases. That is, of course, the salaries. We are done totally on Air France and Transavia, France. And on KLM, we are still ongoing discussions on the CLAs. We have additional ETS costs, because the ETS costs are going up because the let's say, the, the rights we had during the pandemic, we have an average cost of, let's say, our rights. The ETS cost is in the market going up, but also we had still rights left over from before, which were, let's say, much cheaper than what we see today. Let's go to the cash, on page 12. You see a very strong cash flow development, EUR 1.3 billion coming from our operations, EUR 1.5 milliocoming from the working capital, of which EUR 1.8 million is related to the ticket sales. If you then deduct our investments, you see that we have an operating free cash of EUR 1.7 billion. If you then also take out the payment of the lease debt, you get to EUR 1.2 billion. The net debt reduced to EUR 4.9, lower than where we ended in 2019, and that brings us at a net debt EBITDA of 1.2, which is actually already below our own target. We know that the summer, in the summer, we sell less tickets than we fly tickets. A very solid cash at hand of around EUR 10 billion. We then go to the outlook, it is page 14. Let's start with the capacity. The Q2 capacity is at 92% compared to 2019. We guided you between 90% and 95%, so we are very close to that guidance, or we are within the range. If you take exactly the mid spot, we are slightly below, but not that much. On Q3, we keep our 95%, for the Q4, we still expect to be above 95%. In total, we are still at 95%. We were more at the upper range. We are still, let's say, at this range, so we expect to operate 95% for the full year, which is also, I come back on it, if you go to the midterm guidance, where we expect to be in 2024, above the capacity of 2009, we are ramping up to those levels. And that's the question, and I will get it, I think, a lot probably also during the call, is how do we see the winter and how do we see current bookings? Do we already see a weakening, et cetera? We don't see any weakening at all. If you look at Q3 and Q4, you see that actually it is almost the same as we had last year, and we increasing capacity. Even Transavia is now doing better than we did last year, where we increased significantly the capacity. I look every week at this booking report, and I sometimes ask if they didn't send the version of last week, because the yields are still very strong and also the bookings are very strong. If you look at the first three weeks of July, I can tell you it is amazing. Let's go to the fuel hedge. On the fuel, fuel is, as I already explained, is coming back to normal levels. Still not at the 2019 levels, but we are getting to normal levels. We are quite hedged, so for the Q3, we hedged 70%. We are almost at 60% for the Q4, and we will increase that part to 70% at the end of this quarter. Almost 70% for the hedge for the full year, and we're starting now also to hedge for Q1 and Q2. You see still a backwardation. We saw the fuel going up, especially, oil price and the crack went up actually. We see that still the market expectation is that it will come down in the period to come. On page 17, you find actually the summary of our outlook. Group capacity at 95%, unit cost low single-digit increase, and net CapEx, we stay at the EUR 3 billion. Then we, let's say, to confirm again our midterm guidance. One, we will reach our operating margin of 7%-8% in that period. We are ramping really up to that levels this year already. Capacity will be back on the 2019 levels. We will see in, in this period a decrease of the unit cost year-over-year. We gave a guidance compared to 2022, but we see now an impact of 2023. In our trajectory, we still have a year-over-year decrease of the unit cost in that period. We keep our net debt EBITDA target of 1.5-2.0, and we keep our positive adjusted operating free cash flow, excluding the exceptionals, which are the repayment of the wage tax in for KLM, and the repayment of the social charges and pensions for Air France. Let's go to loyalty. I hand over to Ben, and I will do the second part. Ben, the floor is yours. Thank you, Steven Zaat. Let's go to page 19 or page 20. Let's now take a closer look at the announcement we made yesterday regarding the discussions we've initiated with Apollo for EUR 1.5 billion in new non-dilutive financing to be backed by our loyalty program. Flying Blue is a fantastic asset for the group. It is both a source of recurring revenue stemming from third-party contracts and co-branded card activity, as well as an outstanding driver of customer loyalty. Today, Flying Blue has 39 airline partners and over 19 million card members, with a new member joining every six seconds. 44% of Air France-KLM customers are members of the program. To further leverage the potential of this asset, we intend to set up a dedicated and scalable Air France-KLM NewCo focused on miles issuance with third parties. This NewCo would host some of the revenue-generating commercial assets related to the Air France and KLM Flying Blue program. This would allow it to raise financing through perpetual bonds issued to third-party long-term debt investors, which would positively impact Air France-KLM's equity. After this quick highlight here, Steven will just go into a few more details on the mechanics of this contemplated transaction. Yeah. If you go to slide 21, let's first start, and I think that's very important. There will nothing change for the members. There will nothing change for the staff. We don't sell any assets, and we don't change any ownership construction. What is actually happening, it is an internal reorganization to actually create quasi equity. Actually, we kill two birds with one stone. First, we optimize our structure regarding the third-party contracts. This structure is already done by all European competitors. Avios, we have at IAG, we have the Lufthansa Miles and More, which is just one entity, let's say, at the group level. The second one, the second part is that we use this structure to put a hybrid bond in place, actually, to solve our equity gap. Actually, this is a structure which is in place at almost all U.S. carriers. They use it actually to finance the company by securing the stable revenue stream coming from the third-party contracts, which is related actually to, let's say, for us, for instance, for American Express or for Accor or for Hertz. Those kind of contracts, we move those contracts to a group entity in a NewCo, and we will move the Flying Blue trademark to that NewCo. In the airline stays the full ownership of the Flying Blue database, and as I said, there is no change on any social aspects or operation vis-a-vis the Flying Blue members. When we have moved these revenue streams to the group, we will provide cash actually to both airlines, which will improve further their equity. At the same time, we have an operating agreement between NewCo and the airline to formalize that there's access to the Flying Blue database and for the services provided from their staff. The third-party contracts are in this NewCo. It will be a dedicated loyalty comp, company, which ensure that we can further scale this business. Secondly, it will be the entity who will issue the miles. In that entity, we will put a hybrid perpetual bond. We are currently going into exclusive negotiations with Apollo for an amount of EUR 1.5 billion, where we have a fixed coupon, where we actually have this entity, the revenue streams actually generating the cash to pay that coupon. That's actually what we are doing. It looks like a revolution, but it's actually done at all the other airline groups and also, let's say, in, in all the American carriers, to use it as a finance structure to finance the company. With that, and we already did EUR 500 million, we closed just this week, the deal on the MRO side with Apollo. We are solving actually the negative equity situation in our Group. I hand over to Ben to walk us through to the conclusion and to our very ambitious sustainability trajectory. Okay, thanks again, Steven. Just quickly here on the last few pages, page 23. Before wrapping up, I'd like to highlight some of the progress we've made on our sustainability roadmap. As you know, the two main leveraging tools at our disposal to decarbonize our operations, like all other airlines, are fleet renewal and the increased use of sustainable fuels. We've been very active in developing innovative projects in partnership with major players in the sustainable aviation fuel or SAF supply chain. For instance, we signed a deal with EDF, NG, and Elyse Energy to support ongoing projects to develop a French e-fuel industry dedicated to air transportation. We also continued to secure SAF volumes with our existing partners and signed procurement contracts with new partners to further expand our supply sources. Quarter after quarter, we strive to make tangible progress in sustainability. This applies, of course, to our environmental roadmap, but also to our corporate governance and our approach to internal social issues. I'm pleased this progress is being recognized by independent third parties, as was the case again in Q2, with S&P awarding our group an ESG score of 65, up from last year, which places us among the solid performers amid our peers in the airline industry. To conclude this presentation, I'd like to briefly underscore again some of the group's major achievements during the past quarter before looking ahead to the rest of the year. This momentum remained strong throughout Q2. We delivered yet another set of strong results, thanks to the unabating increase in the number of passengers carried, high load factors, and strong yields across the majority of our network. We posted double-digit growth in our revenues and a record operating margin. This solid performance translated into a robust cash flow generation, allowing us to further deleverage the Group. In this favorable environment, we succeeded in demonstrating operational efficiency. We worked hard to bolster our capacity to cope with steadily increasing passenger flows since the upturn in traffic. Further operational initiatives are in the pipeline for the near future. These will help further consolidate our operations and nurture the trust of our customers. I'm also very pleased with the significant progress we have made in further restoring our equity and consolidating the Group's balance sheet. The non-dilutive transactions we announced and carried out not only increased our equity level, but also highlighted the exceptional value of some of our assets. Looking ahead, we've made good reasons to remain optimistic for the H2 of the year. We will continue to increase our capacity to meet an ever-increasing travel demand. As Steven mentioned, we expect to end the year at 95% of our pre-pandemic 2019 level and to return to 100% capacity during next year, 2024. Sales momentum for the upcoming quarters is encouraging, and we are seeing a good level of post-summer bookings still in a strong yield environment. As demonstrated by our planned Flying Blue transaction, which we announced again yesterday, we are relentlessly pursuing our efforts to sustainably restore our equity and strengthen our balance sheet by focusing on non-dilutive initiatives. Putting the group back on a solid financial footing is essential to ensure we emerge stronger from the pandemic and play a leading role in the competition for European leadership. This goes hand in hand with our sustainability roadmap, which is a core component of the group's strategic agenda. The coming months will see the arrival of additional next-generation aircraft, along with a further acceleration of SAF procurement contracts. A final word to let you know that we'll be hosting three years, an Investor Day on November seventh in Paris. We hope to see many of you in attendance. With that, thank you, and we'll now take your questions. Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Our first question today comes from Harry Gowers from JP Morgan. Please go ahead. Yeah, good morning. Thanks for the time. The first one, just focusing on the ex-fuel cost guidance in terms of the drivers that you mentioned on the cost increase on slide 11. Would you be able to maybe split out and quantify the different moving parts in terms of what's actually causing the increase of a few percent year-on-year versus flat previously? Steven, I think you mentioned on yields, you, you gave some comments that the first three weeks of July were amazing. If the yields were 25%-26% above 2019 in Q2, could you maybe quantify how amazing they were versus 2019 in those first three weeks of July? Thanks. Yes. Let's start with the unit cost. If you look at the unit cost, I think I already explained that the non-structural part is around 2%. Let's say the main part of that 2% is, let's say 70% is in the capacity decrease, and the other one's in the increase in profit share and the load effect. That is more or less the split of the low single digits, and I don't provide you any more details at the moment. Amazing is better than what we see in the Q2, so what we see now. That is what we see. We are just three weeks, and we don't guide, as you know, yield, because yield will always be played out in the last weeks. We see strong pricing momentum in the market, but the yield game is, is played by the revenue management in the last week before departure. Maybe, Harry, I'll just announce... I'll just let you know a couple other points. On our strongest markets, the North Atlantic and the South Atlantic, you know, if we had more capacity, we would be even happier. I mean, those markets are performing extremely well, both on the business front, but also in particular, especially into Paris, on the high-end leisure. You know, our premium cabins are doing very, very well with this new segment that is, they're buying tickets at levels we've never seen. Great. Thank you very much. Thank you. We now move on to our next questioner, which is Andrew Lobbenberg from Barclays. Please go ahead. Hi there. Can you talk a little bit more about Transavia and how confident you are about the inflection to the Q3? You know, are the operational problems that you saw in Amsterdam and Paris, I mean, to what extent do they go away in the Q3? You know, to what extent do we see revenue strength there, given that I think at Q1 you spoke about the challenges of, of inflecting Transavia France, with it growing so quickly and, and moving from domestic to international? Can we just come back to the situation at Amsterdam? I think you guys have launched a legal challenge to the plan to cut capacity. What do you think the timeline is on, on this process, and how does that timeline sit in the context of the, the, the new elections that are, that are coming in Holland? Thanks. Okay, thanks, Andrew. First off, Transavia. This time last year, Transavia France, we had unbelievable operational difficulties this weekend. Particularly, going into this weekend, we definitely see a much improved situation. We've struggled since January with external air traffic controller strikes that mostly concentrated around Orly Airport, which is where Transavia has its main base. We are disproportionately affected in Transavia. From a controllable, growth and stabilization, perspective, quite pleased with the latter half of Q2 and going into Q3, how that unit is developing. The bookings, the yields, the robustness of the operation, is, I mean, I would say in some areas exceeding what we had hoped. The aircraft are coming in slightly late, but the transition of the domestic slots over to European slots, as I said, a little bit later than we had planned, but the initial plan we had in place, we're super confident that that is the right plan, the right strategy, and we're moving as, as far ahead and as quickly as we possibly can. In terms of the overall Transavia France strategy, we're still sticking to it, and we see no reason to shift from it. As I said, we can't move capacity out of domestic France faster than what we're currently doing. We would love to go faster, but it's, it is, it's a challenge. We have new management at Transavia France that has a little bit more experience in growing, growing an operation this quickly. We're happy with the cost structure, so let's let's continue to do that. I think after Q3, I'm hoping that we'll have even a, you know, a better story to tell. At Transavia of the Netherlands, after a difficult Q2 operationally, we now see that things are getting back to normal. Here again, we believe that going forward, we should see a return to normal and taking full advantage of the positive and strong demand environment in the Mediter- Mediterranean basin. On the second question you have regarding Schiphol, I'll let Marjan take that one. Yes, we started cassation because the verdict in the appeal was really unexpected for us and creates a lot of uncertainty. The judgment will not likely have impact on winter season, probably on summer season, but first it's unclear, and it, it creates operational uncertainty for all the airlines flying from from Schiphol. Parts of the decisions are not motivated at all, and if motivated, these are not done truthfully. That's why we started the cassation, because we need to make sure for the future what it means, otherwise it will create a negative precedent, not only in the Netherlands, but also in Europe. That's the first part of the question. The second part, in regard to the government. The government, the parliament, will decide in September which topics they still will discuss, which topics will be controversial. We need to wait until September to have clarity on this. Sounds very messy. Thank you, though. Thank you. We're moving on to our next questioner, which is Jarrod Castle of UBS. Please go ahead. Thank you, and good morning. Three as well. Firstly, just on TAP again, coming back to that, seems like the process is kicking off. Are you still interested, and if so, what would you now say about the strategic rationale? Secondly, just on conversations with rating agencies, you've, you've obviously got to now 1.2x net debt, EBITDA. Interested how they view quasi-equity and how, how conversations are progressing. Then just MRO, you know, is there anything you can do to improve the situation at the moment? How much is in your control, or, you know, how much is linked to the OEMs? Thanks. Okay, thanks, thanks, Jarred. On Tap, our position is unchanged, and our views are unchanged. You know, more than 1/3 of the Tap long-haul destinations, they don't overlap with Air France-KLM. You know, we're very, very interested in their big position in Brazil and some of the unique African destinations. You know, we're very strong in Africa, Air France, these would, you know, their, their African network, along with, just, you know, the extensive, Air France Africa network, would put us in a great position. You know, there are 11 destinations to Brazil, along with, our position, from, Amsterdam and Paris into Brazil. We're pleased, or we would be pleased, to the improved position that, that would put us in. The, you know, we believe the product is solid. They've gone through an excellent transformation. The margins that they've recently been publishing, we see it with you know, with their southern base as a nice complementary addition. If we were to move forward on such a transaction, it would fit quite well. Depending on the conditions, depending on what the Portuguese state puts out as, you know, as minimum requirements, we're, we are following it closely, and we're interested, and we'll see, we'll see how it plays out. For questions, your question number two and three, Steven is just next to me. We'll have him take those. Yeah. On the, the rating, as you know, we are contemplating that, so I cannot give any, disclose anything, on that side, at the moment. For the MRO, it is, it's on, if you look at Air France Industries, it is specifically dedicated to a topic of the blades of the GE 90, and we are heavy discussions with GE. When that situation is solved, then we will restart fully our, let's say, production speed in the engine shop. At KLM, it is more related to labor. It's also related to the supply chain, but it is also related to labor, and we are, we having, recruited, quite a number of labor. I think that will stabilize in the period to come. Thank you. Thank you. Up next, we have Stephen Furlong from Davy. Please go ahead. Hello, good morning. Yes, two questions. I think they're mainly for Ben, but just generally, maybe some color, do you think that the very buoyant, strong revenue environment, do you think it's, it's more to do with pent-up demand or the real supply constraints in the system, or the great initiatives you guys are doing, particularly Roissy-Charles de Gaulle, in terms of point-to-point traffic, so, and the product sets, or is it just a combination of all three? The second thing, can I just ask about sustainability and the excellent work you're doing there? I know, do with ETS, I know that ICAO Assembly were saying that the if the CORSIA scheme wasn't strengthened or there wasn't... If there was an insufficient number of countries implementing it, the commission would propose, you know, that all flights departing the UK would fall under ETS in, in 2027. I know it's a while away, the Emissions Trading Scheme, so potentially long, long haul would come into scope for ETS, and I was just wondering. ... Do you agree with that, does that worry you? Thank you. Okay, you seem to be following, even our our, you know, our view of how things are playing out. All of the things you mentioned there, you know, pent-up demand, you know, I think people prioritizing travel ahead of some of their other, some of their other, you know, where their disposable income sits. We're, we're still absolutely amazed, the number of people that are inbound into Europe, from from some of our biggest markets, in particular, the United States. As I've mentioned over the last quarters, buying premium cabin tickets, and the the elasticity of demand from these, these particular segments, is different to what we're seeing with others. As I've said in previous calls, you know, I don't know if you follow the hospitality industry here in Europe. It's obviously across the whole, you know, the whole spectrum here. As of today, we don't see any changes in this demand. Obviously, we look at this very, very cautiously. We've got a lot of flexibility when it comes to pulling down demand if things do change. We are going full out at both both full service carriers in terms of flying all the airplanes we have at full capacity, ensuring we have enough pilots. If there is a, if there is a slowdown in this, we do have a lot of unencumbered wide-body airplanes. There are, there are some delivery delays, as you may know, from Airbus and Boeing, so we're taking advantage of some of the airplanes that were supposed to exit, to ensure we can fly the planned schedule. Same thing on the narrow body. No, I, I don't want to be too positive on this. I'm, I'm always careful with my optimism, but, you know, 33 years in this business, to see a rebound like this, we're, we're quite, quite positive on it. On the, on the environmental front, I've got Anne Rigail and Marjan Rintel, as I mentioned, in front of me. Overall, what we are pushing at the EU is for a level playing field in any strategies that come out or any policies that come out. So far, what we're hearing from the regulators is, I would say, what we'd like to hear, that this, you know, there is an understanding of how important that is for European airlines. Obviously, there's a lot of talk about how rules could be tightened or charges could be added to what's already in place. The level playing field, which is so important for us, against our international competitors, seems to be holding. As of today, we don't see any anything yet, not to say that it wouldn't happen, that could put us at a disadvantage as some of our international competitors. If Anne and, or Marjan would like to perhaps add one or two other comments on sustainability. Yeah. On sustainability, we're quite proud at Air France-KLM to be pioneer in the use of a sustainable aviation fuel above the acceleration of the fleet renewal that you know. We noticed that last year we used 17%, 17, of the global worldwide sustainable fuel, which is quite a lot for our size. We are also committed to go above the mandates that we have in France, and by the way, KLM is doing the same without any mandate. Above the 1% that we need to put in our aircraft, and we committed also to go to 10% SAF by 2030, which is a lot, giving the current market. We're fighting, as Ben provided you all the companies with whom we secure some sustainable fuel. Strong commitments. Our strongest worry, as Ben mentioned, is to keep a level playing field because the mandatory mandates, the mandates of sustainable fuel, are only for European airline are mostly for European airlines departing Europe. We fear that it could create some discrepancies on travels that can be disrupted by some airlines like Turkish Airlines, we hope, that are right near to Europe. In that sense, we think that CORSIA ensures at least a level playing field. At the moment, when we see the pressure on our cost of ETS, of future SAF, CORSIA is really marginal. We think, the regulation should become more and more, worldwide so that we ensure a level playing field, and that's what we tell to European regulators. Very good. Thank you. Maybe one add, so, so, we are on the same page. Maybe one thing to add, we submitted our view in the Netherlands for the balanced approach for a more cleaner, more silent, and more economical way of the reduction of flights, but at the same time, reduce noise with 20% in a better way than the government is proposing, with fleet renewal and all kinds of operational measures. Thank you. Thank you. We're moving on to our next question, which comes from Sathish Sivakumar from Citi. Please go ahead. Yeah, thank you. I actually got two questions here. Firstly, on the premium traffic recovery, right? Obviously, we've seen momentum on transatlantic, but now Asia/China opening up. What are you actually seeing on that part of the network? How does it actually compare versus, say, transatlantic, even both in regards to booking curves and then the load factor as such? The second one is on the asset monetization. Obviously, you talked about engine and then loyalty program with more, with those two being done. What else do you all like have the pipeline for further monetization, or are we done with most of the program here? Thank you. Okay, thanks, Sathish. Okay, on the Pacific, you know, China, which was very, very restrictive in allowing capacity into its market throughout COVID, and quickly, just recently, abruptly removed the bulk of those restrictions. We quickly put in place capacity. We are now operating daily flights from Amsterdam and from Paris into Beijing, Shanghai, and near daily into Hong Kong. We put those, you know, those flights in relatively last minute, and the demand for those and the bookings for those far exceeded what we expected, so those flights are going out full this summer at strong yields, despite the fact that we are not flying over Russia. The costs are higher, but the yields are putting in the market are more than being absorbed. We're back in in Tokyo, Haneda and Tokyo, Narita, Seoul, plus all the southern Asian destinations that we were serving prior to the pandemic. We don't have the capacity levels back to where they were. We are, you know, going as steady as we can. We don't see the rebound happening as quickly as North America, but it is it is rebounding. Obviously, we have much more competition to that part of the world before the crisis and even now. We don't have the capacity levels back to where they were in 2019. We are gradually getting there, but we are, we're, we're following the, you know, the, the, I would say, pent-up demand, but the return to demand levels that we had before 2019. It's, I'd say it's positive. We don't see any surprises, which is quite. You know, it's new for us not to be overflying Russia, and we're taking the assumption that that will be in place for the rest of this year and for next year. Thank you, Ben. Sorry, Sathish. No, no. Yes. I will still answer the question on the asset monetization. We have- Yes, sure. ...equity of EUR 2.2 billion before, actually, the, the deal which we closed on MRO. That was EUR 500 million. When this loyalty deal will be come to a conclusion, if you get an agreement with Apollo, that will be another EUR 1.5 billion. With the EUR 2 billion, we close the equity situation because, of course, we will have a net result also this year. We have no other plans to solve our equity gap because it's solved. Okay. Yeah. Thanks, Benjamin, for that clarification. Thank you. We're moving on to James Hollins from BNP Paribas. Please go ahead. Oui, bonjour. Air France wages looked pretty good to me in terms of the deal you've done there. I just wanted to follow up on Harry's question about the costs. I assume you're going to say, "No, we've told you everything," but I'm just myself a little bit surprised that the cost guidance has moved. Obviously, you talked about the wages in October, November last year. The Air France deal felt okay to me. I suppose I'd phrase it like this: Where's the surprise? I mean, obviously, load factor higher, get that capacity tweaked down very slightly. Just wondering if there was any other cost pressures we should be thinking about, whether you're factoring in other significant KLM wages increase. To follow up on the Apollo deal, should we be assuming a 6.9% coupon like the MRO deal you did with them? Is there anyone in the real world that actually looks at quasi-equity as anything other than debt, and Apollo having EUR 2.5 billion of quasi-equity might, might have some sort of ownership issues? I would assume not, but thought I'd ask. Thanks. Coming back, indeed, the, the, the CLAs were no surprise. As I told you, the, the, the, the capacity and the load factor, that came to a surprise, with the profit sharing, which also the, the, the high profit also came as a further surprise, that is around 2%. We have also an impact of the supply chain. That is actually in our external M&A, sorry, engineering and maintenance revenues, and that also has an impact on the net cost, because we always talk about net cost, including those revenues. Those three elements, I agree with you, the, the, the CLA is not a surprise at all. On the, I, I don't disclose the, the coupon. We, we, of course, we, we have an agreement over there. We first need to finalize it before I can disclose it. We will not sign a deal if we are not happy with it. I cannot give you any further information. On the ownership, there is no ownership. It's just an quasi-equity bond. That's it. There's no ownership. They don't have any stake in this company. Maybe one last make about about wages at at both airlines, but in particular at Air France. There is a significant number of older employees, older population of the employees that are exiting, so we do have that effect as well. Okay, thanks. Thank you. Up next, we have Johannes Braun from Stifel. Please go ahead. Yeah, thanks for taking my questions. Two for me. First one, sorry if I missed it, but can you give us the reason why you actually reduced, slightly reduced the capacity guidance for the network airlines? You said 90%, I think previously it was 90%-95%. Secondly, maybe related to the first one, you mentioned the bottlenecks and staff shortages in your MRO segment, holding you back to grow the business. To what extent those, those, those bottlenecks, not only, I guess, in your own MRO business, but also in the broader supply chain of the industry, holding you back to grow? Johannes, I'll take the first one here on the capacity guidance. You know, we've been working extremely hard to get back to 100% as quickly as possible. As I mentioned earlier, there are a few aircraft delays that we've been experiencing across all of our airlines, both long haul, short haul, and regional. We've managed to cover the bulk of those, as I said, with airplanes that were supposed to exit, as well as a few wet leases on the medium haul. That's put a little bit of pressure there. Also, with the supply chain being tight, some of the airplanes we had in line and heavy maintenance have been slow to exit. The last point being, because some of the supply chain items that we need to run the operation effectively have forced us to have more backup aircraft in the fleets to ensure that the operations run smoothly. The airplanes are there, the pilots are there. We're just, we're dealing with supply chain, and we're dealing with overall strains on the operation. Yeah. Hi, Johannes. On the, the bottlenecks in the supply chain, I think it's a general problem. It's not only for us, it's not only the GE90 blades, it's everywhere in this segment. You, you have seen also the delay of the, the planes. For us, it's relatively well, but it is quite difficult for this whole, let's say, industry, to come that quickly back on the capacities, where we want to be. I think it's a broader problem. It's not only for us. Thank you. Thank you. Our next question comes from Conor Dwyer from Morgan Stanley. Please go ahead. Thank you very much. The first question is actually back to CORSIA. Just on that, if indeed it is marginal in terms of cost, do you think that that actually increases the risk that ETS itself is extended to include long-haul emissions? Then secondly, Ryanair obviously commented the other day that they were seeing some slight weakness in late book fares, but clearly you guys in Air France aren't off calling that out today. I'm just kind of wondering what the difference is here. Is it a business exposure mix difference? Is it, are you seeing some slight weakness in short haul, but that's just less relevant for you? Interested to hear your thoughts about this. Thanks. Yeah, of course. That is exactly what we tell the European regulators, that everything about long haul should be put in the CORSIA regulation, because, again, ETS is not ensuring a level playing field towards the hub that are near Europe, like Istanbul or Gulf hubs. That's... I think they understand. We give a lot of examples. For example, if you go from at the moment, from Nice to Singapore, you can go via Paris or you can go via Istanbul, and it can make a sharp difference, given the European mandates of and the and the SAF mandates of more than EUR 100. I think that more and more regulators are understanding that they must ensure a level playing field for the European airlines. Yeah. On Ryanair. Ryanair is usually pessimistic. Let's start over there. They, they, predicted that the high inflation would have an impact on the residual income of people, and they will not fly on legacy carriers and see what our yields and demand is today. I don't know what they are seeing, but we don't see any drop in the bookings and in the yield. Great. Thank you. Thank you. Up next, we have Muneeba Kayani from Bank of America. Please go ahead. Good morning. I just wanted to follow up on the Apollo financings. If the structure of the recent one is similar to the previous ones, from what I understand, the coupon is fixed for three years, and then it steps up. How are you thinking about these financings in three years' time, as those coupon step-ups come through? Secondly, just on your medium-term guidance, you have unit cost expectations to come down in 2024, 2025. How confident are you about reaching those, and what could be potential risks to that? If I may ask a third one, actually, on loyalty and the slide there, that's very interesting. Can you give us a sense of what EBIT contribution you've had from loyalty and the revenue growth you've seen there and what your expectations are? Thank you. Thank you. Let's first start with the financing. You know that this, this, this tool is actually used to bridge the gap between the net result generation in our equity. We have, let's say, three to four years in terms of, but that's actually the call date, and we are confident then that we have a positive equity at that moment. That is the moment to, to review it. As you have seen, the coupons are not that bad, and even if the coupons goes up, that increase will be especially used to pay down the principal. We have quite an interesting deal over there. We will make the call, of course. At the moment, it is the call date, but we have in our trajectory sustainable net result generation to pay off these coupons. On the unit cost, the unit cost, there are still further growth, so there's still further growth to come. We know that KLM is actually operating with the brakes, and we are continuing our transformation plans, where we have dedicated groups working on transformation, and we have dedicated plans. We are quite confident on that side. On the loyalty, I cannot, I will not disclose the EBIT contribution, but it is quite significant. That's also why we can put such an instrument in, in such a new co. We're moving on to our next question now, which is Neil Glynn from Air Control Tower. Please go ahead. Oh, good morning, all. I'll keep it to two questions, please. The first one on corporate traffic. Just interested in your thoughts as to whether we're at full recovery or normalized corporate traffic at this point. As people worry about how demand moves into 2024, might there be an additional step up in corporate traffic, or are we effectively there now? Then on the MRO side, we've seen a 12% operating margin in the Q2, following a couple of quarters of only 4%. Can you give us a bit more detail in terms of whether MRO is fully recovered from a margin perspective, or whether we should expect that to remain volatile for the foreseeable future? Thank you. Hi, Neil. On the corporate traffic, demand continues to edge up, you know, in all of our sectors, with the exception of the domestic French market, which continues to be very far from where we were in 2019. We see decreases in demand, and we're pulling capacity accordingly. What's different with the Air France-KLM versus some of our other European long-haul competitors is, you know, even prior to the crisis, the leisure component of our premium cabins was, was much, was much more important. The percentage was higher. Because of the stronger demand in leisure, that balances out quite nicely with the corporate traffic that we're purchasing tickets in our premium cabins. We're not there at the 2019 levels. It is slightly improving. Obviously, right after the crisis, we saw a big step up toward the levels that we enjoyed in 2019. It's, you know, it's, it's not like our, like our competitors. We're not seeing 100% as of yet. We believe in France, we will, we probably won't. Well, we're not going to get there. Yes, then on the maintenance side, I don't recognize it, 12% margin. Maybe you mean the decline in results compared to 2019. I think on the margin side, we are getting close to the 2019 levels. In 2019, we had a margin of 4.7 in the Q2. In this quarter, we had 4.4. When we grow further our external business and when we don't have, let's say, the, the supply chain issues in our engine shop and also in our component shop, when external revenues growth, then also our operating income will grow because that is where we make our profits with our MRO business, not so much on the internal business. Thanks. Just actually on the MRO side, you've got a pretty slight edge. You've got an operating result of EUR 46 million and revenues of EUR 384. That's where I'm getting the 12% margin. Yeah, that is, that is because the revenues are only the external revenues, and the margin includes also the internal revenues. What they supply, let's say, to the, to the airlines, Air France and KLM, and also to Transavia. The 4.4 is actually the margin over the total, and the margins on external is still very good, but we don't have the size, the revenue size. That needs to come back to the 2019 levels. Thank you, Steven. Thank you. Next up, we have Sumit Mehrotra from Societe Generale. Please go ahead. Thank you. I would like to know that what's driving you to change your medium-term unit cost outlook from -1% to -4% earlier? How should we look at this development? Secondly, what do you think is the outlook for free cash generation for this year? Do you think you can be free cash flow positive this year? I have a question about your cargo outlook. I mean, do you have any visibility how things will settle into next year? Thank you. The midterm guidance is updated because we compared it to 2022. That is the reason, we still, we changed it actually because we don't want the, let's say, the, the impact of 2023 in it. We still expect, cost decrease, let's say, for the years to come. On the free cash flow, I don't guide that, but you have seen that we are significantly positive up to now, there is still the summer to come. We don't give you any guidance on that one, so I can give you not more information. On the cargo outlook, I think we are, let's say, getting, we have actually reached the, the, the new normal, which is still 10% better than in 2019. As you know, the cargo market is really a late booking market, so you can really have a real say on yields and load factors two weeks, now, maybe one week before, because then the bookings are actually starting. We have the assumption that it is exactly the same as what we have seen for now on the development. May I ask, do you see the, the yields, going down further into next year, or we have already reached the bottom, from what you're seeing now? We expect that we will be above 2019. We still keep it, let's say, we expect the levels, what we see now, 10% above 2019. That's more or less what we expect. Again, we have not even 1 booking in for 2024. Thank you. The analysts in the industry say, the analysts in the industry say that still, despite the fact that it comes down, that we still will be better than where we were in 2019. Due to, one, there is less capacity, and second, you see more e-commerce, which has a positive impact on our business. Okay? Thank you. Now we're moving on to Akhil Kumar from HSBC. Please go ahead. Yeah, hi. First, going back to Asia, so basically, Asian yields have been strong and hence, the operations have been profitable despite the increased stage length. Now, of course, the yields have softened according to your today's results. Just wanted to understand, I mean, how much yield decline you can afford to for these operations to remain profitable? I mean, are you-- how do you see the fares? I mean, are you sort of, is it something wherein, because you need to compete with the Chinese carriers who are still enjoying shorter stage length, so you need to drop the fares now or, or, or, the fares are still high, but then, of course, the booking mix has changed? What, how, what's happening there, and how much the yield decline you can afford on the Asian side to make the operations profitable? Second question is about the consensus. You know, according to the consensus, I think, full year consensus stands at EUR 1.9 billion in EBIT, which means in the H2, you need to make EUR 1.5 billion EBIT to meet the consensus. Are you comfortable with that number? How do you see the H2 among those? My final question is, any thoughts around the recent development with Pratt & Whitney engines? Do you see that could actually, that could actually tighten the capacity further going into FY 2024, and that could, that could help the yields further? How do you see the situation there? Thank you. Okay, Akhil, it's very hard to hear you, but let's see if we can answer your questions. We think we got it. If we, we're not doing it, you could, you could re-ask them. From what I understood, you were asking about yields on Asia. Out of Japan and Korea, they're where we've expected, or we, we don't feel any concern at this moment. Demand is good, yields are good, we're not quite at capacity, but we're moving back to 2019 levels, and that's what we have planned. On China, it's we're being a little bit more cautious. We're not nearly as exposed to China as some of our competitors. Just to give you an example, we had prior to, prior to the pandemic, at Air France, we had 2, 3, 4, we had 5 flights a day into China, and at KLM, we had four flights a day into China, and we've cut that to more than half. We're finding our highest yielding customers are avoiding flying Chinese carriers because of the China overflight. In terms of yields, in terms of reaction of our customer behavior, and the significant lowering of capacity since 2019, and the fact that we have very strong areas to deploy that capacity that was there before, such as the transatlantic. Overall, the network, the impact on the, on the, on the conditions in, in overall Asia, in particular in China, we're okay with that. It's not, it's not something that, we have, too much concern at the, at the present time. Yeah, and then on. As you know, we, I don't give any EBIT guidance, but you see that we give a midterm guidance for 7%-8%. We are very well on that above. That is all I can say. The third question was totally unclear for me. Sorry for that. It was probably the line. Can you repeat your third question? Okay. Yeah, sure. My third question was about the recent issues with the Pratt engine. So, I mean, do you think that could actually tighten the capacity further going into 2024, which means you'll get a support on the yield side? That's my question. What are, what are your thoughts on that? Do you say the Pratt engine, just to be sure? Yeah, Pratt engine. Yeah, exactly. Then you refer to the KLM Cityhopper situation? I'm generally talking about the industry, overall industry. I mean, if the Pratt- I- -issues and further tighten the capacity and- Okay. -and how- Okay. What are your thoughts on that? Okay, my, my thoughts. Let's say first, we are, we have, we have not a very big Pratt & Whitney fleet, so we have it on the A220s. That is building up, though. Those are pretty new engines and, and, and, so let's say we are not impacted as we have seen for the competition. We have on KLM Cityhopper, there is, we have a fleet on the ground related to that engine type. We are a, a, a small Pratt & Whitney player in our engines, in our fleet. Yeah, we don't have the, the, we don't have any PW engines coming on the, on the Airbus, narrow body, the NEOs that we, we ordered, 18 months ago. We selected, as you may know, the CFM engine, so we will not be exposed to, to that with the new airplanes arriving, starting this fall. Okay. Thank you. Up next, we have Yann Derocles from Oddo BHF. Please go ahead. Yes, good day. Good morning, everyone. Just have two, two questions left. The first one is a follow-up on Schiphol, because I would say if your capacity is cut by 12%, knowing that it will only be a first step, as you... Can you still continue to operate on Schiphol as a real, I mean, in a strategic standpoint? Then the other one is on Flying Blue. If I understand well, you are creating, I would say, a kind of separate entity, and I was wondering if in the near future, you might see the, I would say, the, the possibility of a transaction, that will crystallize, the value of this, of this asset. Take the first, you take. Okay. On Schiphol, Yann, you know, whether how this plays out with the potential reduction in slots in the mid to long term after we go through these different processes, the cessation and then the balanced approach by the European Union. You know, if we get a reduction in slots, the hub has been built up over, you know, 50 years. You know, each year up until the 500,000 artificial limit was put in place, We've had steady growth, through, you know, a few airplanes, a few flights being added each year. Obviously, this would be a step back, but we do have strong ability to continue to perform very well vis-à-vis the other hubs in Europe. We have the ability to upgauge the aircraft. We are not, today, we've got on the wide-body side. You know, we don't have that many airplanes in the top end, top-end size airplanes, and we've got the ability on the lower end to upgauge as well. Same thing on the medium haul, same thing on the, on the bottom end. We can maintain the same capacity level if that's the model we'd like to continue. Of course, we could reduce exposure to some of the lowest yielding traffic. We are modeling all that out. We're modeling out the different scenarios from a slot perspective. To answer your question, can Amsterdam remain a viable hub in Europe? Absolutely. That is, that's not something that, you know, we're, we're concerned about is how well we position, the fleet and the network vis-à-vis a potential new reality from a slot perspective. Then, to answer your question on crystallize the asset, I didn't know that saying. For us, it is a very highly profitable business, and we want to be full control of the program, so we don't have any plans for that. I think with this new setup, we will actually, will optimize further, let's say, the scalability of this business, and we will keep it for Air France-KLM. Thank you. That concludes today's Q&A session. I'd now like to hand the call back over for any additional or closing remarks. Okay, thank you to to all of you for participating today and for all of your questions. We look forward to to hearing from you at the at the next quarter end in in October.