Hello, and welcome to the Wizz Air Q3 Fiscal Year 2022 results presentation and webcast. Throughout the call, all participants on the phones will be in listen only mode, and afterwards there'll be live question and answer session from the room, followed by a question and answer session for the phones. If you wish to ask a question on your phone lines, please dial zero one on your telephone keypads to join the queue at any time. Just to remind you, this conference is being recorded. Today, I am pleased to present Wizz Air CEO, József Váradi, and Wizz Air Executive Vice President and Group CFO, Jourik Hooghe. Please begin your meeting. Thank you. Good morning, everyone. Thank you for coming to this meeting, and I also welcome those who are online and virtually spectating the event. This is reporting our fiscal 2022 Q3 performance. Let me just start with a few highlights up front. This quarter demonstrated that we have been on track to recover the business. If you look at capacity, passenger numbers and revenue, we delivered around three times more of these than in previous year. In certain peak periods, we exceeded 2019 capacity levels. We are clearly on the path of recovery, and we'll continue to recover the business going forward. We are reporting EUR 240 million of operating loss. Obviously, this is greatly affected by the COVID challenges, the pandemic itself, and the corresponding restrictions imposed by governments on travel and putting significant burden on consumers, especially when it comes to testing requirements. We ended the quarter with very strong liquidity level, having had EUR 1.4 billion of cash on hand. Since then, we issued a new bond with 1% interest. We saw very strong market demand for the bond issuance. I think that's just underpinning the confidence of the market in Wizz Air and in the prospect of the business of the company. We have maintained investment grade credit during the period. Those ratings are confirmed by both Fitch and Moody's. Despite a still difficult trading environment in the current quarter, and I think we've been trying to be clear with you on that throughout the whole COVID period, certainly guiding for the second half of the current financial year that we would not be expecting a great second half because of a few things. One, we are ramping up capacity for summer 2022, so we inherently carry some inefficiencies in the operating model. We have more aircraft, we have more crews than what we are deploying right now, but this is just the nature of the ramp up. You cannot ramp up an airline overnight adding 50 aircraft and thousands of the crews. Those assets and people have to be brought in, inducted, trained up, ready to fly. That is a process. That is a short-term inherited inefficiency in the system. Secondly, obviously, Omicron has dented our ability to operate, not necessarily just because of the pandemic effect on people from a health perspective, but more from the perspective of corresponding government restrictions. Once we are ramping up operations, obviously we're gonna be getting rid of the inefficiencies and we're gonna be resuming our ability to properly operate and properly cost the business. We are quite optimistic that, as a matter of fact, a few months down the line, the whole COVID might have just been behind us, and we see a lot better market going into spring, summer 2022. We are ready to deliver the ramp up. We have invested into our network, our fleet, our people, our systems and processes. If you just look at the employment side of the company today, we are employing 5,550 employees. This is 40% more than a year ago. We have been clearly investing into this ramp up process. Looking at the network, we have been growing and further diversifying our network. We have been adding aircraft to the fleet. We have taken deliveries from Airbus on a continuous basis. We have been adding airports, and we've opened new bases during the period, and now we are serving more countries than before. Clearly, as said, we have been investing into network, into markets, investing into aircraft and investing into people to make sure that Wizz Air emerges as a structural winner coming out of the COVID situation. I think we are having some sight on that vision. Looking at the ramp up, as you can see, we have been ramping up capacity and at certain points during the past year, actually we exceeded 2019 capacity levels. Certainly that was the case in operating throughout the summer peak and also operating through the Christmas high season. Also with that, we have been able to ramp up load factors. Now, obviously the numbers are yet sub-optimal. We are not yet on 2019 previous load factor levels, 90%+ load factor levels, but significantly higher than where we were a year ago. In terms of capacity, despite the fact that we have been growing the fleet and we have not been able to fully affect that growth into operational efficiency, but through market diversification, we have been able to to ramp up our operations a lot better in the recent period than before. All those activities have been translating into strengths in the marketplace where we are focused. You can see that in most of our markets, actually, we have been gaining market share, and we have been taking advantage of competitive weaknesses and market dynamics in the marketplace. Actually we have been trying to use the period and the crisis for the benefits of the business. I really think that once we are out of the woods and hopefully we're gonna be there in the next few months, Wizz Air is gonna be a lot better competitor, a much more formidable business, making a lot bigger impact on the industry than before. I mean, clearly, our efforts will flow through in terms of innovation in aircraft upgauging, aircraft delivering not only operational efficiency, but significantly more favorable economics and lower cost relative to the market, relative to our competitors. If you look at our business from the perspective of consumers, you can see that customer experience has been improving during the period. We have further digitalized our interactions with customers, be it EU Digital COVID Certificate or Amelia, our virtual assistant. We have been a lot more appealing to customers. Very importantly, increasingly, the market is associating Wizz with lowest price and good value for money. As you might have seen recently, we have been putting out quite significant statements on sustainability because not only that we are able to bring the lowest fares to the market, but we're also seeing we are able to bring a much greener operating model to the market. If you fear for the environment, certainly you should see Wizz delivering a better product or services than most of our competitors. With that, let me just turn it over to Jourik. Thank you, Joe, and good morning to all also from my side. Just a few highlights on the financials for the quarter. Starting with revenue, as Joe mentioned, revenue increased 172% over obviously a quarter that was affected by COVID last year. That was on the back of a very strong increase in ASKs 195%. Actually, ASKs for the quarter were almost in line with 2019, just 7% shy, despite, let's say, the Delta variant in the beginning of the quarter and the resurgence of the variant Omicron at the end of the quarter. From a profit point of view or operating loss point of view, as expected, we guided pre-Omicron at a EUR 200 million loss, and we were able to mitigate or manage the Omicron impact to 14 million since then. We're obviously going to see something similar still happening for next quarter. If you look from a net loss point of view, there's a EUR 30 million additional impact, which is predominantly driven by the unrealized FX losses that we have because of the long dollar position on the balance sheet. Again, this is just an unrealized loss on the balance sheet actually translates into a cash gain. For the company point of view, the appreciation of the dollar from a cash point of view was positive. Talking about cash, total cash ended at EUR 1.4 billion, as József said, and we'll come back to that in the next slides. Looking at the cost structure, I think there's two things here that you can see. On the one hand, you'll see that the variable costs are in line or slightly better even than pre-COVID. There's a certain element of costs that have a fixed cost component, for example, maintenance, crew, depreciation. Obviously, because we do not fully utilize the fleet or our assets, there's still around 25% utilization gain that we can achieve. Those costs are still higher. We are very confident that as we go back to full utilization, you know, during spring and certainly as of summer next year, that the cost structure will revert to the pre-COVID cost structure. Ex-fuel cost, you can see it here. Fuel cost was EUR 0.0124, which includes, you know, 75% about the cost of the commodity. Then there's 10 points of ETS costs, around 10 points of into-plane premium. Clearly the commodity impact, you can see it here, but there's also some other things in that number. From a liquidity point of view, just to clarify, the EUR 1.4 billion excludes the financing that we have mentioned, the EUR 500 million bond with a 1% coupon that will come into January. It also excludes the repayment of CCFF that will be repaid on February 2. You'll see those effects coming through in the next quarter update. We maintain our investment grade credit rating, and you can see here as well, and we'll explain that also on the next slide, on slide 10, that the cash contribution of the operation has been minimal. We have a variable you know contribution of the operation that is relatively limited. Obviously, it's the winter environment, which is generally already difficult, but then seasonally, obviously with Omicron added on top, has impacted the contribution there. What you're seeing here is basically the fixed cost coming through in the cash burn. We also had EUR 50 million worth of pre-delivery payments, and you can see that working capital, and as mentioned, FX was a slight positive on the cash for the quarter. On ancillary performance, you know, ancillary is now 60% of total revenue. That's obviously a high number, a good number. It's also reflective of some of the weakness in ticket revenue. The weakness of ticket revenue is us basically continuing to stimulate the demand environment to a level where obviously it makes sense for us to a level where it's cash positive. With that, we're attracting price-sensitive new trialists. Those new trialists generally consume less ancillary services. This is why the ancillary has been lower, a little bit lower than our guidance of one-year target. This is just linked to the current fact that we're really price stimulating demand. As prices will revert to normal, also the ancillary performance will kind of normalize to that one-year target. We're very confident in the ancillary performance going forward. With that, I hand it back to Joe. Thanks, Jourik. I mean, obviously we are much focused on ramping up the business for the coming financial year, fiscal 2023. This is all achieved on the basis of operating the best fleet in the industry. I will talk a bit more about that later. We are ramping up a strong, more diversified, cost efficient network what we have invested into throughout the COVID period. Our crewing is on track to deliver 50% more capacity in summer 2022 versus 2019. Today we have 5,550 people. Towards summer we are building that organizational capacity to around 7,000, in excess of 7,000 people. With the innovation we implement with the fleet renewal program, we are just continuing to widen our sustainability leadership position in the industry as well, which we think is gonna be a big deal. I mean, sustainability is gonna be loom over the industry for sure, and we can position ourselves on that as a winner in the industry and a thought leader in the industry. Looking at the fleet development, we have been very intact in terms of our commitment to the fleet program. I mean, we have been reshuffling deliveries back and forth. In certain periods, we took a few aircraft down, but in other periods we actually added aircraft. All in all, the fleet program has survived the COVID period. Actually we used this time to invest and continue to innovate our fleet structure and operating model. We are becoming increasingly an A321 operator. The current average seat count is 211. By summer, we're gonna be 250. Wizz Air is the number one operator in the world with the largest seat count of any low-cost carriers or any narrow-body operators. Obviously that translates into operational efficiency and economic efficiency. Of course, we are adding the neo variant to the fleet. With that technological advancement, we are building further economic efficiency for the business. We're seeing that the A321neo is a game changer aircraft. There is no any other aircraft, be it Airbus or Boeing, that can compete with that aircraft when it comes to economic efficiency and the airline's ability to deliver the lowest cost in the industry. If you look at our network expansion, I mean, we have been ramping up to a 50% bigger capacity to be operated in summer 2022. Just to give you some of the highlights of that expansion, our core market center, East Europe, is growing. We are adding capacity in the core business, and we are operating a larger fleet of aircraft going into summer indeed and than prior to COVID times. Italy is a pure growth market. We entered Italy during the COVID period, and ever since we have just been ramping that up and growing capacity. Quite an impressive growth in the U.K. As you can see, we are nearly doubling down in the U.K. Some of it comes through the Gatwick slot acquisition, but also we are opening bases in regional U.K., like Doncaster and Cardiff. Ukraine, despite all the geopolitical concerns in the country, has been performing as a very strong market and we have been following that through with additional investments into the network and deployment of aircraft in the marketplace. Albania is a new market for Wizz. Pretty much overnight we became the market leader in the country. In case of Abu Dhabi, now Abu Dhabi is ramping up very strongly. We are seeing a very strong market reaction, as the government restrictions got lifted, and we are seeing a much better operating environment. Talking about the U.K., being here you can see that our network has been substantially growing as a result of opening Doncaster, boosting our presence in Gatwick and Cardiff to be opened in the coming period. We are deploying more aircraft. We are further diversifying our network, bringing new markets connected to the U.K. on that basis. We are seeing very strong reaction on the demand side to the easing restrictions by the government. I mean, there is a very clear correlation between the level of restrictions imposed on travel versus market demand. Now we are seeing the positive side of the development and we are very pleased with that. We're seeing that the U.K. in a sense is in front of the continental European countries. What we are seeing today in the U.K., this is probably what we're gonna be seeing in continental Europe in the next four to six weeks. What we are seeing here is that falling restrictions by government and corresponding robust demand coming up as a result. Looking at Abu Dhabi, we have been making some very exciting announcements. You see that our network is ramping up in Abu Dhabi as well. We're very upbeat with regard to growing the business even further. We are looking at doubling down on fleet this year. We are increasing the fleet size from four to eight aircraft by October 2022. When we are talking about ramping up, the employment base is critical. I mean, these are the people you have to recruit, you have to induct, you have to train, you need to make sure that they are up and running and ready to fly. As said, versus last spring, we have added 40% more employees, and we look at adding another around 1,500 employees in the next six months. This is very significant. That's a big program. We're seeing that this is creating the basis for actually taking advantage of the COVID situation to be able to operate a much bigger airline with much greater impact on the markets post-COVID. Talking about sustainability, as said, sustainability we think is a big deal. We have to position ourselves for the sustainability agenda. The good news is that already, today, Wizz Air is the most sustainable airline. Rating agencies have made a statement. They ranked airlines in the world and Wizz Air came out as the most sustainable airline in Europe, number three in the world. We have a good starting point, but we remain committed to improve our sustainability impact, to reduce our carbon footprint in the industry, and we'll achieve it by continuous innovation of the fleet and also through the operating model, operating the fleet very efficiently. If Europe was to adopt the Wizz Air business model, flying the same point-to-point model with the same aircraft, already emissions would be down by 34%. This is kind of giving you the competitive advantage, the magnitude of competitive advantage we have over the industry when it comes to sustainability. With regard to outlook, as suggested before, Q4 remains a difficult period greatly impacted by Omicron. Obviously January is largely behind us by now, but we're seeing there is still a significant impact on February, especially from a continental European perspective. The Q4 operating loss will be in the same ballpark as Q3, slightly deeper, but in the same ballpark. We are a lot more upbeat and optimistic when it comes to the next period, fiscal 2023. I think we're gonna be seeing a very strong ramp up, not only capacity-wise, but also financial performance-wise, in Q1 and Q2 for sure. When we are getting the fleet back up to full utilization, we have a cost disadvantage at the moment, by not being able to fully utilize the fleet and crew, so we don't get the full utility and productivity out of the system. In Q1, Q2, we're gonna get there, and we're gonna be resuming the operating metrics similar to pre-COVID levels. As said, we are growing the crew in accordance with the fleet requirements and the market initiatives what we have been taking. We are totally on track, and we feel very comfortable that we're gonna be able to deliver on that. I mean, you also need to put that in context. A lot of airlines are kind of crying out how difficult it is to retain people, to recruit people, to train people. I think Wizz Air still comes across as a superior proposition to the market, given our growth and career opportunities fueled by that growth. We remain still a very attractive place for people to join. We are very keen on reinstating the ULCC principles, the ULCC cost structure, and we'll get there fairly shortly as we are running the business at full utility. I would also add that given the fleet program, the new technology and the savings coming through the technology, the neo technology, as well as the upgauging will give us a significant competitive advantage versus the market, versus other airlines that will continue to rely on operating an aging fleet of aircraft, with no upgauging. We're seeing that we will see a lot more structural competitive advantages coming through in favor of Wizz Air relative to the industry post-COVID than what we are seeing today. We expect the commodity markets to be volatile going forward. We also know based on empirical evidence that rising input costs feed through into the fare environment over time, over a lag of six-12 months, and this is what we are expecting as well. In summary, Omicron has been a factor, a negative factor to short-term performance. We are actually very optimistic when we look at where the world is right now. I think the world is a lot better place today than what we have ever been since the breakout of COVID. It seems that there is an end to it, and hopefully in a few months from now, this is all gonna be behind us. We are actually quite optimistic looking at the prospects of our business in spring and summer ahead of us. We have maintained strong liquidity during the period, and we have been maintaining an investment grade balance sheet in this period as well. It's been a priority, we have been running this business for cash. I think we've been able to deliver a good job in that regard. We are coming out of the COVID situation as a structural winner. It is not only just surviving the COVID times, but also we have been investing throughout the COVID times, investing into our fleet, investing into our network, investing into our people and our cost structures. Our ramp up as said is on track to deliver 50% higher capacity level going into summer 2022 versus summer 2019. Consumers recognize the value what Wizz Air brings to the party, be it economic value, seeing us as the lowest cost producer and the lowest fare provider to the market, as well as the credentials coming out of the operation from a sustainability perspective. We're seeing that the competitive gap in our favor will continue to widen going forward as we are becoming a more mature operator, upholding our ULCC principles and our fleet utility and productivity and crew productivity levels, and that creates a basis for further opportunities in the future. Thank you. Maybe I should give the floor to you over here for questions. Ashika. Hi, good morning. It's Ashika Bhavnani from Barclays. I think I'll ask three questions. The first one is, you've mentioned in the slides some good kind of forward-looking comments on the U.K. Can you just give us an idea of where forward bookings are across the business more widely? Also just thinking about the summer, if you're growing kind of 30%-50% over Q1 and Q2, what do you think your expectations are around in terms of kind of load factor impact on the business? Do you still think that you can deliver pre-pandemic load factors on that level of growth? My second question around Gatwick. There's been some feedback in the market that the Gatwick slots potentially won't be able to be kind of at group level utilization, given the timings of the slots and so forth. Can you maybe explain to us, you know, your thought process around how you're going to extract the best efficiency out of those Gatwick slots? Then thirdly and finally, on fleet financing. Clearly, you know, you've done the bonds in the last kind of couple of weeks, good pricing there. How are your thoughts changing around leasing versus, kind of cash purchases of, or, you know, debt finance purchases of aircraft? You know, looking at the coming period, once we are entering the next financial year, we think we're gonna be seeing a lot better market with regard to operating conditions. As a result, we're gonna be able to restore most of the KPIs to pre-pandemic levels. But I think it's gonna be a gradual process, so it may not happen overnight from one day to another. We don't exactly know the looming effects of COVID still at that time. I mean, looking at life from a U.K. perspective, quite likely the U.K. is gonna be a totally open market by that time, but we might see some lagging in other European territories. Overall, we're seeing that once we are entering the next financial year, the operating conditions will be a lot better, almost pre-pandemic levels. As a result, we're gonna be able to deliver KPIs like fleet utilization, crew productivity coming up to standards, to pre-pandemic level. Load factors, I think will be the subject of the market. You know, we are load factor active, yield passive, so I think we probably gonna see more pressure on yield than on load factor short term as we are ramping up the operation. I mean, we are already kind of poking at 80% load factor levels. That's an improvement versus where we were a year ago. I think that's gonna go further and it will continue to improve. Unit revenue may be under short-term pressure on the yield side, depending on competitive capacity coming to the market. Personally, my expectation is that you're probably gonna see more capacity than needed short term, because all airlines really wanna be back in the market to re-engage with the franchise. Over time, I think you will see some capacity consolidation happening. Some of it is gonna be forced by the competitive market and some of it by increasing input costs. It is a process. I don't think this is going to happen overnight. In terms of financial performance, we are expecting a strong financial performance in the first half. As we indicated before, we're seeing that fiscal 2023 should be a good profitable year for the company, the extent of which obviously will depend on the operating market conditions. With regard to Gatwick indeed, as you say, we are looking at Gatwick as a home-based carrier, but we are also looking at Gatwick as capacity for inbound flying to get the full utility out of the stock portfolio what we acquired. In essence we are basing four additional aircraft in Gatwick. We'll push the fleet from one aircraft to five aircraft on that basis. We have also launched a number of inbound routes to be operated by Wizz Air Hungary. We're gonna get 100% utilization of the portfolio what we acquired. Sorry, the third one was the Financing. I can take that one. Oh, fleet financing. If you look at the, you know, we will obviously have the next round of lease sale-and-leaseback RFP coming. The bond is good because it gives us an even better benchmark, I think going forward also for the lessors. We will continue to finance the fleet at the best terms possible. We'll need to see how the markets fit. This financing has been very good for us, and they're getting a sharper benchmark out there I'm sure will challenge the right people. Hi, Alexander Irving from Bernstein. Three from me as well, please. First of all, on demand drivers. We've seen inflation up, energy costs up, cost of living rising. Can you maybe talk a little bit on the impact of that into demand and yield into summer? And is it possible to price stimulate when the ticket is only one portion of a trip cost? Secondly, maybe following up on the question we just had, but as we look at summer, thinking about route maturity, so you're coming out of a period where you've got lots of new bases, lots of new routes, and we've had diminished activity the last couple of years. What impact will the immature routes have on kinda yields and loads into summer versus maybe a normal summer with a normal level of growth? Then finally, can I please ask a question on Ukraine? I mean, clearly the situation there is very uncertain, but if you had to suspend operations, how big would the impact be? How quickly could you reallocate that capacity and anything else that we should bear in mind there, please? Thanks. We are pretty confident in our ability to stimulate the marketplace under any circumstances. I mean, if you really think about it, if there is pressure on the industry, I mean being the lowest cost producer in the industry, so we should be in a lot better position than our competitors. If there is an upside in the marketplace, given our cost base, we should be able to take disproportionate share of that upside because of our ability to stimulate the marketplace. I think either end, we should be winning versus our competitors. Personally, I think you will see resurgent demand. I think you will see a lot of promotional activities to stimulate traffic, not only by the airline industry, but also by the hospitality industry, tourism agencies, etc. People will get bombarded by kind of irrefusable offers once the market opens up. I mean, I know that many of the stakeholders in the hospitality and tourism industry are lined up to go big once circumstances permit them to do. I'm very confident the demand will rebound very quickly and probably more robustly than many of the people may think at this point in time, despite some of the other macro challenges like energy pricing, inflation, et c. Maybe I would just take Ukraine. If you look at Ukraine, despite all the noise around the country, the market has remained totally intact from our perspective. It is, we still think it is an investable market and we continue to invest in Ukraine. I really don't wanna speculate what's gonna happen in Ukraine. But whatever happens in Ukraine, I think we have the historical track record of moving capacity together with crews if needed. By the way, Ukraine is a good demonstration of that because we have done it already. Once geopolitics affected the country in a severe way, we had to move aircraft and crews, and we were able to do that, you know, within days and weeks. At this point in time, as a matter of fact, we are seeing a lot more demand for our services and products than the capacity we can make available. I mean, you can imagine that the industry is weak right now. Many of the incumbent carriers are weak, not serving the market and not committed to the market as before. All those airports are very keen on attracting new capacity and stimulate the market from their standpoint. We have become a very attractive target. We are very selective at the moment. If we have to pull our Ukraine operation, I mean, in no time we would be able to redeploy that capacity in other markets. The second question was? Durability of the routes and profitability that we see. I mean, generally it's not a factor of how long you are in the market. It depends on the strength of your brand, the competitive position as we outlined on the charts, right? If the competitive landscape completely changes, for example, in markets like Ukraine, Albania or in Italy, clearly you can get to much faster profitability than just let's say having to spend one, two or three years in the market. It's true that in some of our markets, for example, if you think about the Abu Dhabi operation where we are more new to the market, it'll take longer time than, for example, if you open a new route in Central Eastern Europe where the brand is very, very strong. That's kind of how you should look at them. Obviously we strengthened a lot our core markets, which gives us confidence to build back that profitability very fast. Morning, Jaime Rowbotham from Deutsche Bank. Three from me. Firstly on the ancillaries, Jourik, you talked about these price-sensitive new travelers. Won't quite a material proportion of your future new customers be precisely price sensitive new trialists? Perhaps you could expand a bit on what you mean. Secondly, slightly boring, but book value of equity in the balance sheet at the half year, EUR 800 million, second half losses, probably EUR half a billion. So that net book value of equity is coming down to, say, EUR 300 million. Is that an issue? It's quite a low level. Then thirdly and finally, and certainly more interestingly, slide 14 is obviously very helpful for showing us where you've tried to grow during the crisis. As we think about you now trying to grow the fleet two and a half times over the next six years, could you just provide us a reminder of how you see that growth? How much of it you expect to be in core CEE? How much of it in new markets, more in the U.K., more in Italy, others? And maybe how much in Abu Dhabi? Anything, a bit of color there would be great. All right, maybe I'll start with first two. On the ancillary, it is really more kind of a consequence of the current structure of the markets being impacted by Omicron, where we price stimulate until it makes sense, being cash neutral or slightly cash positive. Clearly, when restrictions lift, we know that price stimulation will be not needed to that extent, and clearly will be very different. As such base, the consumer base will kind of follow. It's really a capacity demand dynamic, and demand is very weak at this point in time because, you know, it can be very annoying if you get stuck in a quarantine in a foreign country. The dynamics will completely change as the restrictions lift, and we've seen that before. On the book value of the equity, I mean, it's clearly, I think if you look at it, the current year losses have obviously impacted that, as you rightly noted. We're also confident on our ability to kind of go back to the pre-COVID profitability that has historically built up that book value of the equity. This is really what we are focused on and focused on next year to build that back. I think the best way to think about this is that today we are an airline operating 150 aircraft, and by the end of the decade, we're gonna be an airline operating 500 aircraft. The question is how that 500 aircraft operation would look like. The way we see it, at this point in time, we're seeing half of it will be operated in Central and Eastern Europe, so around 250 aircraft. 100-125 aircraft will be deployed in select markets in Western Europe, like Italy or the United Kingdom, maybe more. The remaining 125-150 aircraft will be deployed somewhere in the East. Abu Dhabi is one of the pillars of that, but likely more pillars will come into play to deliver the growth. Neil Glynn from Credit Suisse. I'll also ask three. The first one just on the subject of inflation. Can you give us a sense, the cabin crew maybe in particular, but also the pilots you're hiring today versus two years ago, how much more are you having to pay for those individuals? Second question on the subject of your growth. If you think about Western Europe, U.K., Italy, even Abu Dhabi, actually to the east, you're clearly less well-known in those countries relative to the CEE market. So can you give us a feel for how much extra you're having to do in terms of marketing and the different approach to procuring passengers beyond obviously price, if people go to the website you're using? The third question on cash. The current EUR 1.4 billion, it's about half the FY 2020 revenue level. As you grow, obviously capacity growth will be high this summer, but looking beyond into FY 2023, FY 2024, what's the optimal level of cash as a proportion of revenue, or how will cash be managed beyond the pandemic? Thank you. All right. Maybe I start the first two. With regard to inflation, yes, there is inflationary pressure on the business, and that manifests most on labor inflation, but not only labor inflation. We see, you know, some of the infrastructure costs rising, especially monopoly costs like air traffic control, some of the state-owned airports. They are the avenue to push through the airfare cost increases. With regard to labor inflation, on the cabin crew side, we are seeing something between 5%-10% in local currency. I mean, you know, a lot of it is actually captured through the euro translation. We are measuring the business in euros, so this is not a true exposure on the company, but that is wage inflation. Less so on pilots, to be honest, but more on the cabin crew. But if you look at it from our standpoint, we are upgauging the aircraft, so we are gaining a lot on productivity. So when you look at personnel costs, labor costs on a unit cost basis, actually you are not really seeing much of an inflationary pressure because an A321 operation with 239 seats requires the same number of pilots than an A320 operation with 180 seats and only one more cabin crew. You can run the numbers that even if, you know, wage is inflated, the productivity gain offsets that inflation. With regard to brand awareness in new markets. I think it's building very strongly. We don't think that this is just a marketing game. I mean, obviously you have to invest into marketing, but you also, I think can figure out very effective ways of building your brand awareness. Social media is clearly a new avenue versus historical kind of brand building exercises. I still think that this is a commodity and being commodity is low cost influence. You are the lowest cost provider. You spread the news very effectively to the market. As a result of this expansion, we are not really seeing the marketing budget to be exploded, but it's just spent slightly differently with more focus on new markets, but also activating a lot of other channels, which are now available to us, and they might not have been before. Maybe Cash? On cash indeed, the 50% level looks to be the right level, also going forward, even if the revenue continues to expand. We'll obviously need to see and evaluate that going forward if it's more 45% or 40% or 50%. But that's kind of the level we want to maintain. Just one additional point on inflation. I think growing our employee base is also very important for us to kind of rejuvenate the mix of people, the salary mix of people. If you're not growing and you're stagnant, you kind of maintain a more expensive headcount level. you know, the ability, us adding 40% of crew or up to 50% by summer, clearly will help us also to rejuvenate the mix and get also salary mix benefit on top of what Joe outlined. Hi, Carolina Dores from Morgan Stanley. I have three questions as well. First two on the growth prospects. You're ramping up capacity, not only there are difficulties from ramping up post-COVID, but also with almost 50% more fleet. What are the biggest challenges that you see to deliver the fleet growth not only for this summer, but also for the next couple of years? My second question is if you could help us, what will be peak capital expenses or cash expenses by 2024, 2025 if we take PDPs plus all the lease and interest payments? My final question now looking more into summer because you mentioned going back to pre-COVID unit costs. What sort of load factor do you need, given the competitive landscape that you expect for this summer? All right. Maybe I'll take the first two. With regard to challenges to deliver growth, I mean, if you look at growth, I mean, you basically look at perhaps four things. Predominantly you look at your market where to deliver growth. You look at the assets, aircraft, to get the right plane to actually get that done. People, you have to man the planes, and you need to look at your structures, processes and systems to what extent they are scalable for a bigger operation. With regard to markets, I mean, to be honest, probably that's the easiest part at this point in time, simply just the overwhelming number of opportunities out there. As said, actually we have to be very selective of what we are doing and what we are not doing, simply because to some extent, I mean, 50% growth is a lot to be delivered from an operational standpoint. The 50% growth is not limited by market demand. It is limited by our own capacity and to what extent we are prepared to commit to deliver that growth, what we can execute, technically, with that regard. I would not be worried about the market. I mean, obviously the people side of it is challenging, because it is a big volume of people, but I feel quite comfortable that we have the program in place to make sure that we are getting the right people at the right place at the right time when they are needed. We have been learning some lessons during the last period, especially when we were trying to ramp up for summer 2021. I think taking those lessons on board, we have become a lot more systematic and programmatic how to best deliver on this challenge. We have the aircraft coming. I think we are in a privileged position. I would say that we have short, medium and long-term access to the best aircraft in the marketplace. If you were to order an A321neo aircraft and you go to Airbus, I think you would be told that the first delivery will be around 2027. Short-term there is no aircraft available from the manufacturer. You can buy it from the market, but a lot more expensive aircraft than procuring it from the manufacturer. I think we are in a very good position, actually competitively advantageous position, when it comes to aircraft deliveries and we feel confident with that regard. Probably the single biggest challenge is moving the processes and structures and systems to make sure that we remain a scalable business. I feel very good about the way how we are interacting with the consumers. Our consumer systems have been very scalable. We got those systems created as such that it would serve the purpose of an airline multiple size of the current business. The operational systems are more evolutive. You kind of go with the flow as your operational size is growing. You have to adjust the systems accordingly. Again, I feel confident that we understand the challenges, but we didn't collapse. I mean, many of the airlines collapsed at 100 aircraft. I mean, if you see the kind of history of the airline industry, when an airline reaches the size of 100 aircraft, basically it's a milestone. That didn't happen to us. We must have been learning something to be more preventive with that regard. Clearly I think we try to make sure that we affect those learnings on a going forward basis. I would say people and our own internal scalability are the most challenging ones, but we think we've come to grips with those issues. With regard to getting unit costs back in summer. What's really driving unit cost? I mean, unit cost is driven by fleet utilization and group productivity. If you really look at the fundamental drivers of unit costs, those are the two issues. Load factor is driving unit revenue much more than unit cost. In terms of delivering unit cost, I'm very confident that we're gonna be able to do that. Once we are fully ramped up, we're gonna get the utility out of the fleet. We can split fixed costs, and we're gonna get the productivity out of the crew. We'll deliver this business at the lowest possible cost. The question mark is more on the revenue side, how that capacity program translates into unit revenue, and that's the function of load factor and pricing in the marketplace. Again, we are a load factor-active business, so we're gonna move load factor much quicker than pricing. Pricing is a market-driven issue, so we see what the market gives us in terms of pricing. I think we would be looking at restoring 90% + load factor levels going into summer. In terms of peak CapEx, you'll see a PDP outflow of EUR 85 million in the next quarter. FY 2023, we'll see a relatively limited outflow to be EUR 25 million, and then there will be another EUR 100 million in FY 2024, and that's kind of the peak CapEx linked, obviously, also to the progression of the order in the middle half of the decade. From a lease point of view, you just need to kind of take the current asset liability position and evolve it with the fleet progression, so to get an idea on what it would mean there. Hi, Conor Dwyer from Berenberg. Just as a follow-up to the question on load factors. Do you guys expect, or give a magnitude on, any load factor basically impact from the upgauging of your fleet? Or do you expect any at all? I have to say that we had some early concerns whether or not we're gonna be able to move from a 180 seater to a 239 seater without affecting load factor. That's not been the case. Empirical evidence suggests that this is just a matter of pricing and market simulations. If you get the pricing right, you're gonna get passengers on the plane. I'm not worried about the upgauging. I think it is more of a question of yield, what we can get out of the market depending on the overall demand environment and the capacity environment there. In terms of load factor, I don't think upgauging is a denting factor. I mean, maybe the best way to look at it actually, to operate a 239-seater neo is almost the same fleet cost than operating a 180-seater CEO aircraft. You are essentially getting 59 seats for free. Any questions from the call? Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Please limit yourself to two questions per person in the interest of fairness. Our first question comes from the line of Jarrod Castle at UBS. Please go ahead. Your line is open. Thank you, and good morning, everyone. Just going to slide 13. You wanna be at about 500 planes by the end of the decade and you know, on that slide by 2028, you're on 380 planes. I mean, effectively, can you actually take 120 planes in the last two years, or are you gonna bring some of those fleet deliveries forward a bit so that you get to the 500? Kind of related to that, I mean, where do you see your net debt peaking on the back of this? You know, what kind of year? In terms of competitive dynamics, I mean, can you talk a little bit about what's going on at the moment in Austria and Italy, you know, especially with Ryanair? Thanks a lot. Can we take 120 aircraft for two years? Yes, I think we can. I mean, if you look at the run rate, I mean, we are taking roughly around 60 aircraft incremental each year as it. We keep growing the base. I think we can, but also this is the current fleet. I mean, obviously that fleet then keeps moving dynamically and will get updated. I mean, we have a few levers here. Going forward, I mean, we can always order aircraft for the outer period. We can retain existing aircraft for a longer period for lease. We have flexibilities around moving the aircraft count. Yes, by design, we can do 60 aircraft per year in the last two years. With regard to competitive dynamics in the marketplace, especially in Austria and Italy. Look, I mean, I think Ryanair is doing what Ryanair is supposed to be doing. I mean, they are the largest low-cost carrier in Europe. It's an efficient business. COVID is an opportunity for Ryanair, too. Of course, they have to pursue that opportunity. I don't think the real question from our standpoint is what Ryanair is doing. The real question is how the industry is gonna be shaken up as a result of the COVID crisis. What's gonna happen to other low-cost carriers? What's gonna happen to legacy carriers? How the market is gonna be resplit, or split up, based on the new status quo. I mean, what we control is our cost base. We're clearly seeing that we are coming out of the crisis as a lower cost operator vis-à-vis the market, given the scale gain, given the operational efficiency gain and the economics gain, coming from the aircraft upgauging and modernized technology. That gives us a significant competitive advantage to compete with the rest of the industry, including every player, even Ryanair. I think that logic will flow through in every one of the marketplaces where we compete, including Italy and Austria. If you look at Italy, for example, I mean, we are now a very established carrier in the country, operating seven bases covering the whole of the country, inbound, outbound, and domestic. We build very strong footprint and a very strong backbone for the future in the country. Austria is a competitive marketplace, and I think probably there is overcapacity in the market at this point in time, and the dust will settle down at one point. Again, we have the operating model that delivers the lowest cost in the country. I think structurally, it's got to be a winning formula going forward. Great. Sorry, I don't know. Yep. Go ahead. Sorry. Yeah, sorry. The CapEx and net debt. Yeah. Sorry, you're probably gonna answer it now. Sorry about that. Yeah, no worries. We're just switching mics here. On net debt, obviously, in absolute, it's never an issue. It's also always relative to your EBITDA or through your operating cash flow. Clearly we're at a peak now because of you know, the negative EBITDA and cash from operations. The peak or the tension point is now will soften during FY 2023, and should be normalizing as of FY 2024, where we see the leverage ratio going back to below 1.5. That, that's kind of where we see it. Great. Thanks very much. Thank you. Our next question comes from the line of Muneeba Kayani of Bank of America. Please go ahead. Your line is open. Thank you. Just wanted to ask on summer bookings, if you could give us some numbers on what% of the summer is booked and how average fares right now compare with kind of summer of 2019. Secondly, if you could just go back to some of the questions on Italy and all the headlines around ITA. How do you see that kind of impacting competition, pricing, and your strategy for Italy over this summer and over the next few years? Then if you could just comment on kind of consolidation and M&A in the sector, what are you expecting? Thank you. Okay. Thank you for your question. With regard to summer bookings, I mean, indeed we are seeing very strong bookings coming through summer. I think it's more interesting to see how bookings will build up in the interim period between now and summer. Depending on where the world is gonna be with regard to COVID, I think we are expecting a very strong Easter period in April and a strong interim period in between Easter and summer as well. We have to know that the booking window has shortened as a result of the COVID situation, so you don't have a full picture at this point in time. What I can tell you is that summer bookings are lots stronger both in terms of volume and pricing than what we were able to achieve summer before or same period last year or two years ago. Regarding Italy, I don't think ITA makes any impact on us, on our ability to operate and expand and deliver a profitable business in Italy. I mean, if you really look at what is going on there, I mean, two airlines are trying to get together, which were bailed out during the pandemic more than anyone else. I mean, Alitalia, or the reincarnation of Alitalia, is a business that has been bailed out I don't know how many times, by this guy or that guy, be it the government or the private player. I'm not sure anything has changed. I don't think we are really focused on what is happening there. By the way, ITA is a Rome-focused business, while we are going national in the country covering the whole of Italy, and we are a point-to-point business, flying people inbound, outbound, and domestically, as opposed to trying to play hub and spoke in one airport called Rome for them. With regard to consolidation, well, the COVID crisis will have the aftermath. I think if you see more lines of consolidation happening in the marketplace, some airlines will go down, some airlines will be gobbled up, and some assets used by other airlines will be used by new carriers. You will see a lot of organic growth. Wizz Air has been growing on the base of organic growth, which is the most preferred way of growing our business. That does not compromise our ULCC model, our ability to run this business without any complexities or minimizing complexities coming from scale. When we are talking about Wizz 500, it is a vision built on organic growth, not on M&A. Having said that, we of course are interested in acquiring certain assets, and those assets too would be included in our business, and we would roll over our operating model on those assets. As in, the best example is the recent acquisition of some Gatwick slots that does not compromise our model. That doesn't compromise our ability to avoid complexities, and that would not create costs as a result on a structural basis. I think that's the way we think about consolidation. We wanna be consolidator of assets as opposed to businesses, but I believe the market will consolidate, and you will see all sorts of forms of consolidation happening in the next year or so. Thank you. Thank you. Our next question comes from the line of Sathish Sivakumar of Citigroup. Please go ahead. Your line is open. Hey. Hi. A couple of questions from my side. Given the rise in fuel prices and the rise in carbon offset prices, what do you think will be the impact in FY 2023, given you will be flying capacity much higher than 2019? How will you be able to offset it? Do you think you'll be able to pass on the higher fuel costs as well as the higher EU ETS costs to consumer? Second is on PDP. Given the new order, what should we model in terms of PDP numbers for FY 2023 and going forward? If I just may start with the fuel and inflationary environment. I mean, it seems to me when we are seeing issues like that, we always get surprised, but that has been happening probably for the fifth or sixth time just in my career at Wizz. Input costs, commodities are fairly cyclical. You see these prices rising, and you see these prices falling given depending on the period you are in. The industry always settles down in the end on these matters, no matter which way it goes. When input costs rise, they tend to feed through into the fare environment through capacity discipline. If the industry's input costs go up, over time, you will see capacity moderation in the marketplace by adjusting supply to demand. Vice versa. When input costs fall, you see a lot more capacity coming to the market. We have gone through this cycle a number of times, as said, but this is a process with the legs. That's not gonna happen overnight. It's not like today fuel price is up, and tomorrow you see airline capacity to fall. That takes six-12 months based on empirical evidence. It's simply a capacity discipline. The real question is, you know, how do you get out of this as a business? As far as Wizz Air is concerned, I mean, we should be winning on this game at either end. When commodity prices are up, obviously the lowest cost operator will be in the best position to retain market position, actually to gain market position vis-à-vis the high cost operators, because simply this is just gonna be a lot more painful to those people. When input costs fall, the lowest cost operator should be in a lot better position than the rest of the industry, because your ability to stimulate the market through pricing is just much greater than the rest. I think at either side of the cycle, we are very confident that it will turn into our benefits. By the way, we clearly see that when input costs are rising and capacity discipline comes into play, there is also a migration of customers from high cost to low cost. Low cost carriers tend to benefit from high input cost environment. I think we should be benefiting from a high input cost environment. On PDP, as just referenced, for the current fiscal, we'll see another outflow in Q4, EUR 85 million. There will be an outflow in FY 2023 of EUR 25 million roughly, and then around EUR 100 million in FY 2024. All in all, despite the significant order that we have ahead of us, it's a relatively modest cash outflow on PDPs. Thank you. Thank you. Our next question comes from the line of James Hollins at BNP Paribas. Please go ahead. Your line is open. Oh, yeah. Morning. Two for me, please. First one's just on the slide five. Looks like you lost market share in Hungary and Poland. I pick on those 'cause I think they're fairly important markets for you. Just wondering if you can comment on what your competitor activity's been there. Whether it's just you moving capacity elsewhere. I suppose if it is the former, you know, how you intend to react to that, whether it doesn't matter to you. Secondly, will you be profitable in Q1 FY 2023? Thanks. All right. Well, with regard to Hungary and Poland, yes, indeed, we have been moving capacity around. I think what you are seeing in Hungary and Poland is the short-term effects. When you were to model expected market share going into summer, you're gonna be seeing bigger numbers. We are ramping up both Poland and Hungary. I wouldn't worry too much about this. Well, with regard to first quarter profitability, I think depending on the circumstances, especially government restrictions, whether or not they continue to prevail, I'm actually quite optimistic looking at the current situation that we should see a much better market to operate when we come to the first quarter. Depending on those conditions, I think we should be delivering strong corresponding performance should the market be open and good. Okay. Thank you. Thank you. We have time for one more person. Those questions come from the line of Ross Harvey at Davy. Please go ahead. Your line is open. Thanks very much. Just wondering, József, can you talk about London? Obviously you have five aircraft based at Gatwick this summer. You know, what are your thoughts on being able to increase that, particularly as the slot usage rules increase? Secondly, if you were to, you know, if you were to compare your experiences at Gatwick so far with places like Luton, to what degree does that confirm or not your determination to get into Gatwick more? Thanks. I think the issue in London is not our desire or appetite to grow the business. I mean, yes, indeed, we have a hell of a desire and a hell of an appetite to continue to grow our business in London. You may recall that even during the Brexit times, certainly during the COVID times, Wizz Air has remained one of the most upbeat carriers, you know, remaining committed to the U.K., to London, in particular. We have been building our business. We have been investing in our business in the London market. The issue really is infrastructure available to our expansion, be it Luton, be it Gatwick. We are kind of running up to limits at both airports. I think it has become quite challenging. Indeed, we have an interest to continue to elevate our presence in Luton and continue to expand in Gatwick. These ambitions remain subject to our ability to access the airports, the airport capacity, given the slot constraints at both places. This is what we are working on, and we are looking at ways of getting more success through market transactions or hopefully also through kind of organic growth of the airports providing us with more opportunities for the future. Absolutely, we are interested. Well, with that, I think we conclude the event. Thank you very much for your interest. With that, I'm heading back to the Operator. Thank you. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.