Good afternoon. Welcome to Cathay Pacific Airways Limited 2022 interim results analyst briefing. Thank you for joining us. Before we begin, allow me to introduce myself. My name is Andy Wong. I'm the General Manager, Corporate Affairs for Cathay Pacific. We're delighted to be holding the analyst briefing in person once again, and it's a pleasure to see you all here. With that in mind, I would like to introduce our speakers. Our Chief Financial Officer, Ms. Rebecca Sharpe, and Chief Customer and Commercial Officer, Mr. Ronald Lam, who'll be joining us remotely today. We'll begin with a presentation by Ms. Sharpe, after which we'll open the floor to questions. Those of you attending in person would have been given a copy of the presentation slides at the reception. Those joining via webcast would have received a copy via email. Without further ado, allow me to invite Ms. Sharpe to begin the presentation. Thank you. Thank you. Thank you, Andy, and good afternoon, everyone. Or indeed, I think we have got some people online, so maybe it's good morning or even good evening. Welcome. I'd like to add my welcome. This is the first physical briefing I've got to do since becoming CFO 18 months ago, so it's great to see you in person. Much more sort of interactive, as it were. Now, I did say when we met virtually back in June, at the last briefing, that things were starting to feel a little bit brighter, and I think this is still holding true today. We welcome the Hong Kong SAR Government's announcement earlier this week regarding the adjustments to quarantine arrangements for the inbound arrivals, entering into Hong Kong. These adjustments are definitely positive steps to help facilitate travel into Hong Kong for our passengers. We are asking the government to urgently provide a clear roadmap to help show how the complete removal of restrictions for both crew and passengers can be removed as soon as is feasible, such that we can protect Hong Kong's international aviation hub status going forward. Sorry, I need to press the button harder than I thought. Okay. Today's presentation will follow a similar structure to previous presentations and briefings. Firstly, a reminder of the ongoing responses to the very dynamic and uncertain times that we do actually continue to operate in. Secondly, financial and operating figures for our first half of 2022. Thirdly, some commentary on outlook. Then, of course, we're happy to take questions. Before I move on, you may wonder this picture that I've got on this slide, the nine people. These are nine amazing Cathay people, just nine of the many, many thousands of amazing people that are working at Cathay these days. I'm not sure whether any of you have seen the Cathay Stories on social media. I'm not sure whether they did actually play before we came in. We've created some Cathay Stories about the amazing things that our people have done in support of customers or in support of the operations through these very, very difficult times. I would encourage you, if you haven't had a chance to look at any of these, please do take a look because it gives you a bit of a feel for some of the things that the great people in the Cathay team have been working on through the difficult times that we faced over the last two and a half years. If I start at the beginning with some of the headline figures for the first half of 2022, compared to the first half of 2021, and I'll begin with revenue. Revenue for our first half was HKD 18.6 billion. This was a 17% increase on the same period in 2021. You'll see some analysis in later slides, but both passenger revenue and cargo revenue did increase compared to the first half of 2021. Our group's attributable loss at the bottom of this slide was HKD 5 billion for the first half. Now, that's still a substantial loss, but it is improvement nevertheless. The third P&L related item that we've included on this slide is in the middle there, the two and a half billion HKD loss we show, and that represents Cathay Pacific plus the subsidiaries. The improvement at that level in our sort of the constituents that make up our consolidated loss was greater, approximately 60%, down on where we were a year ago in the first half. You'll see the drivers again for these different elements as we go through the presentation. On the right-hand side of the page, we've got the liquidity and gearing numbers. This obviously continues to be a very key focus for us as an organization. We completed the end of June at a balance of HKD 26.7 billion in terms of available liquidity, which was slightly lower than where we were at the end of December. If you remember, the December number was HKD 30.3 billion. A year ago, June was HKD 32.8 billion. It still remains at HKD 26.7 billion, a healthy, elevated number. The gearing at June was 0.74. Quite a step change from where we were June last year, but relatively similar to where we were at December of 0.75. Now, I've shown this slide many times. We were hoping we didn't need to repeat it so many times, but COVID's obviously gone on far longer than any of us expected. We have changed it a bit in that we've dropped the 2020 data off. I hope this provides a sort of snapshot that's an easy reference for you all in terms of some of the things we've been doing over the period. The key point I'd like to highlight here is on the fleet, so on the right-hand side of this slide. At the end of June, we had 228 aircraft, of which 69 were parked either in Hong Kong or overseas. You can see compared to where we were a year ago, that's a reduction of 20 aircraft that were parked. Now half of these have returned to our fleet, and half have either been lease returned or retired. Again, a sort of positive step in the right direction. In terms of capacity, operating costs, and liquidity, we will cover those in a later slide, so I won't dwell on them here. The one thing I did want to call out under liquidity was around the operating cash. That was towards the end of the first half of the year. We did become operating cash generative. Despite the very, very difficult start to the year where we were not operating cash generative, towards the end of the first half, we did become so. You'll recall that from the first of May, some of the restrictions were removed, and the travel sentiment definitely picked up from that point. If I move on to the first half results in a little bit more detail, and this slide sets out the key elements of the consolidated attributable loss split by the half year period. Now I've also added a graph on the right-hand side, so for people who prefer diagrams rather than numbers, you can take your pick. In the graph, again, we also show the split between the different key elements of our consolidated loss in terms of the airline subsidiaries associates. Of course, it is disappointing to see that we are still in a loss-making position, especially after the fact that the second half of 2021 we were profitable. However, you can see from the graph, in terms of comparison with the first half of 2020 and 2021, this is an improving trajectory, despite the impact of the capacity reductions in the first half of this year due to the tightening of the restrictions. This reflects our continued focus on revenue maximization and prudent cost and cash management, and of course, the continuing strong performance of the cargo business. You can also see that improvement that I referred to earlier at the airline-only level. The first line on this table is the Cathay Pacific loss before associates or subsidiaries, and you can see that big step change from the HKD 5 billion that was the loss in the first half of 2021 and the HKD 1.5 billion loss in the first half of this year. This slide is to put those figures in a bit of context over a longer period. This depicts five years, including 2022, and shows again the analysis between the different elements of the airline, the subsidiaries and associates. You can see, again, the improving trajectory as we go across these three year periods. Another positive point to note for the first half of 2022 was that there were no impairment adjustments or one-off adjustments. For example, we've had restructuring in the past and other one-offs. You'll recall that in 2020, both halves, and 2021, both halves, we had to make adjustments of this nature. Therefore, for the first half of 2022, this is definitely a positive step in the right direction that none were deemed necessary. This slide shows an analysis of the major changes between the HKD 7.6 billion loss in the first half of 2021 to the HKD 1.5 billion loss in the first half of 2022. You can see the positive benefit in terms of variance that the one-offs created, i.e., through not having them in this first half. You can also see here the improvement in the bottom line, effectively, of passenger and cargo revenue. Both of them increased. You'll see a bit more detail later in the slides. The passenger revenue increased more so. We do need to bear in mind that passenger is operating at really, really low levels. While this is a big number, in normal times, when you're talking much, much bigger numbers of billions, HKD 1.3 billion would be nothing. It is a step change for us in terms of the revenue number for passenger. The other aspect that you can see in here is the negative for associates. I touched on that. They were a bigger proportion of the loss in the first half of 2022 than they were in the first half of 2021. If I turn to the balance sheet and liquidity, this slide sets out our adjusted net debt position over the past few years and the debt to equity ratio across the same period. You can see that the net debt position has reduced over the first six months of this year. Looking at liquidity, this slide sets out our liquidity journey. Again, we've shown this before. Over the past two years, sort of from pre-COVID to bringing it up to date, you see the impact, the cash inflow of the recapitalization in 2020. The liquidity balance at 30th of June, as I said, was HKD 26.7 billion, a little bit lower than where we were at the end of December. This, just as a reminder, includes both liquid funds and the undrawn facilities that we have committed to us. I know a number of you asked me about this, but that undrawn facilities does include the HKD 7.8 billion bridge loan from the government. We've not drawn that facility this year, but it does provide us with flexibility and support in having it available to us. We were very grateful to the Hong Kong SAR Government earlier this year when they agreed to extend that drawdown period for a further 12 months. That takes the drawdown out to June 2023, and then you'll recall we have a repayment period of 18 months. That then takes us through to December 2024 in terms of the facility as a whole. In this slide, we're mapping the liquidity balance at the end of last year through to the liquidity balance we've got at the end of June, and showing the key flows in that timeframe, the key categories of flow. I guess a couple to highlight here. You can see the strong cash inflow from operating activities in the first half. Now, a large proportion of that was actually generated towards the end of the first half as the travel sentiment improved and the travel restrictions and adjustments came into or were adjusted on the first of May. In terms of financing, you'll all be familiar with the volatility that we've seen in the markets over the past, well, from the end of last year and through into this year. Despite that, we did manage to raise over HKD 4 billion in new financing during the first half of the year in support of our business. As I've talked on this before, sort of if we can raise financing at a reasonable cost, given the uncertainty of the environment that we're still operating in, then we do continue to do that. A question that I'm also asked is around sort of our approach and whether that will continue. Liquidity at the moment is, we believe, at a healthy, elevated level. Wouldn't normally have these kind of levels on a day-to-day basis, but the environment that we found ourselves in is very dynamic as we saw at the start of this year, and therefore we are wanting to continue for the time being with elevated levels. We will continue to talk and review different financing options such that if they are available at a reasonable cost, we'll consider taking them on board. The final topic I just wanted to cover in this section was related to ESG. You'll recall we started including some information about this in connection with our annual results meeting briefing back in March. Two of our very ambitious goals in this area are our commitment to net- zero carbon emissions by 2050, and a slightly nearer- term goal, our ambition to use 10% sustainable aviation fuel in terms of proportion of our fuel consumption by 2030. In conjunction with these targets, we launched Asia's first major corporate sustainable aviation fuel program in April of this year. This is where eight corporate customers have participated, and we uploaded a small amount of sustainable aviation fuel for the first time at Hong Kong International Airport. This program has provided customers with the opportunity to reduce their carbon footprint, either if they're a corporate customer or they're carrying air freight with us, by contributing to the use of that sustainable aviation fuel on a Cathay flight at the Hong Kong International Airport. The other thing I wanted to highlight here, and because I know quite a few of you ask questions on the ESG space, so I did want to remind everybody that we did publish our 2021 Sustainable Development Report back in May this year, and that's got a lot of information on all that we're doing in the areas of ESG. If you've not had a chance to look at that, please do take a look, and we can, of course, answer any questions at a point in time. Last but definitely not least, in June of this year, we secured the first sustainability-linked aircraft financing for one of our Airbus A321neo aircraft that were delivered. That was a first for us, but a good step. Now if I move on to talking in a little bit more detail about the operations. My first slide is not my favorite slide, but we again have shown this one before because I think it does sort of in one slide, if you like, capture the challenge that all of us have been facing here in Hong Kong. Just to remind people, the dark green and the lighter green that you can see to the left was back in 2019, and these are passenger numbers into Hong Kong Airport. The dark green being Cathay, lighter green being other airlines. Then you can see the dramatic reduction in passenger numbers into Hong Kong from sort of February, March 2020. That little sort of green line that you can kind of see along the bottom is the numbers that we've seen in 2021- 2022. We've added an inset graph because we want to highlight sort of how that is changing. The positive to note from this slide is particularly, as you can see from the May-June period, the passenger numbers did tick up quite significantly, albeit they're still a tiny fraction of what we used to see coming through Hong Kong. How is this related to Cathay Pacific specifically? You can see on this slide that the number of passengers we carried in the first half doubled, more than doubled, compared to the first half last year. That's the fourth line down in terms of the 335,000 passengers. Again, I talk about it doubling, that sounds great, and it is, but of course, it's a fraction of normal times. This, despite the fact that our capacity, because of the tightening restrictions in the early part of the half, reduced by 26%. As you can see there, the load factor, of course, as a result, was much more significant than it has been in the first half of 2021. This delivered an improved revenue passenger kilometer number there again, over 100% increase. Overall, in the first half, just to sort of put it in context, as a percentage of the pre-pandemic capacity, we averaged 4%. Now, that did increase in June, similar to those charts you saw for Hong Kong passengers, but the average for the half was 4%. Here, we map those key metrics sort of across periods, so you can see a bit of a trend in these numbers. You can see that reduced capacity that I mentioned. In first half of 2022, the capacity was actually the lowest that it's been over this time period. However, you can see, as I also touched on the step change in the load factor, obviously not back to the first half of 2020 levels yet. You'll remember the first half of 2020 was a little bit different in as much as January and into February, we were still carrying quite high numbers of passengers. Getting closer to those levels in the first half of 2022. Yields remained at elevated levels in the first half, being a little bit higher than they were in the second half of last year, but still at elevated levels, given the much lower capacity that we're operating with. Now, cargo performance. This part of our business continued to perform strongly. We saw a revenue increase of 9.3% compared to the first half of 2021. This again was despite a reduction in capacity. We had a 31% reduction in capacity. You can see there on the second line of this table. That, the reduction in capacity, of course, was due to the tightening of the requirements in I think it was the very late December in terms of the crew quarantine requirements. The absolute amount of cargo we carried was not too dissimilar from the first half of last year. But the Revenue Tonne-kilometres did reduce, and that's because we were carrying more in regional on regional flights as we managed the capacity that we had through the first half. In addition to the capacity we operate, as I've touched on, I think before, the capacity we operate on the freighters and the bellies of our passenger planes, obviously that was restricted with the capacity reductions. We do still continue to operate cargo-only passenger flights as a way of increasing capacity. The six Preighters that we have that we still are operating, you'll recall, we refer to a Preighter, which is a passenger plane, where we've taken out some of the economy seats, so you can carry cargo in the cabin. We are still using those as a way to boost our capacity. Again, similar to the charts for passenger data, this slide sets out the capacity load factor and yield for cargo. Again, you can see the trends, and it's a somewhat similar story to the passenger part of the business. You can see the capacity reduction to even lower levels, similar to the lowest across the whole period. Again, in terms of load factor, slightly different story to the passenger story in that it reduced a little bit. It was affected by some of the supply chain issues that we've seen in the first half of the year. Finally, yield. In the same way as capacity was the lowest in this particular half, yield has been the highest in the past three and a half years. That's reflecting that supply-demand imbalance that we see driving in sort of basic economies, the supply and demand driving the yield higher. If I then turn to operating costs. Cost management, our effective cost and cash management still remains very, very key focus, as it should for any business at any time, but particularly so for us. You can see that the cost in total, in absolute terms, excluding fuel, the fuel is on a separate page, have come down. Now, part of the driver for that, of course, is capacity reductions. The other aspect of that as well is you can see the impairment and restructuring one-offs that we had in the numbers last year, that this year we haven't got. I'll cover these in a little bit more detail on the following slides. If I start with fuel, this of course, is our highest operating or largest operating cost as a business. As we all know, fuel prices are very high at the moment and have been for some time. We can see this in the increase in our gross fuel cost. You remember the capacities are reduced, but the gross fuel cost has gone up, and that's reflecting the in the historical prices of jet fuel. You can see in the chart on the top left. That the price from December 2021 up to June 2022, that increasing jet fuel price. The chart on the top right, you often ask me about this in terms of our fuel hedging profile, looking forward from 30th of June. You can see the bars reflect the hedge cover that we've got in place and the line reflecting the strike price that we've got that cover in place at, set out on a quarterly basis. Overall, our fuel costs increased, and that is despite the reduction in capacity and despite the relatively significant fuel hedging gain, that we achieved. Now, another question in connection with fuel hedging that I'm often asked is about our fuel hedging policy. We do have a fuel hedging policy that we continue to follow. There's no change to this. I can confirm that we have it in place, and we follow it. It's very prudent. It sets out the clear pricing matrix that we follow dependent on the price of the fuel, the consumption we forecast, and based on that, we then execute accordingly. Yes, just to confirm, we are still operating our fuel hedging policy. Interest. We've added a bit more detail here because obviously in the current environment, with the interest rates going up, quite dramatically, wanted to share a bit more information on our position with respect to this. The chart on the right just sets out the net financing charges that we've incurred over the past few years, split by half. You can see that for the first half of 2022, the net financing charge is very similar to that of the second half of 2021. The chart on the right is one that I shared, a similar one at the June briefing, in terms of the fixed and floating rate we have on our borrowings. The bar, the lighter color at the top is the fixed rate proportion, and the darker bar at the bottom being the floating rate. We do, on an ongoing basis, try and keep a proportion of our borrowings on with fixed rates in order to mitigate that risk of or exposure to the fluctuating interest rates. Just to share, sort of that is obviously information in our interim report as well, but we've added that here because I know, again, it's a hot topic at the moment. This chart, I think it's the final chart on operating costs, just maps those total operating costs from the first half of last year to the first half of this year. You can see that net fuel cost increase there, not too significant. Staff costs and some of the other costs are driven by changes in capacity, but also there were less in terms of total head count in the first half of this year versus first half of last year. Aircraft maintenance tends to be a bit cyclical, so some of that will be a little bit lumpy as it comes through the P&L, but also affected by capacity for some of the things, if you think about line maintenance driven by the number of flights you're operating. The other items, the negative there, is an exchange loss on our U.S. dollar borrowings. Suffice to say, overall, in terms of our operating costs, they did come down compared to the first half of 2021. Having talked through the Cathay Pacific airline figures, the next couple of slides just give some very, very brief commentary on our subsidiaries and associates. Starting with our low-cost carrier, HK Express, which did make a significant loss in the first half of HKD 0.8 billion, albeit this is again an improvement on where we were a year ago. They're currently operating to six destinations. Of course, that's also a fraction of what they would normally be operating. They too continue with their cost preservation and cash optimization initiatives in order to manage until we can start the recovery in earnest. As has been the case throughout the whole pandemic, the operations of the other major subsidiaries typically follow the passenger or the cargo story. Air Hong Kong being our 100% freighter operation, it's all cargo-focused. They do reasonably well during these times that are more challenging for the passenger side of the business. The other parts in terms of subsidiaries, sorry, in the service airline service subsidiaries, we tend to refer to them, they're driven by passengers. With lower passenger numbers coming through the operations, their numbers have not been so good. Finally, in this section of the agenda, our major associates. A reminder that Air China and Air China Cargo are our two major associates. We have other smaller ones, but these are the two significant ones. For both of them, we capture their results three months in arrears. The numbers included in our first half 2022 figures are their numbers from the 1st of October 2021 through to the 31st of March 2022. As I noted at the start of this presentation, approximately half of our loss or consolidated loss for the first half of this year was the results from associates. Moving on to the final section, before opening up for questions with some commentary on outlook. Now, I know you'd all love me to be able to tell you exactly what will happen for the rest of this year and beyond. I think we all know, particularly having experienced and lived this past two and half years through COVID times, the uncertainty and dynamism of the world that's going on around us is, yes, too hard to predict. In addition to the COVID situation, we now have high fuel prices, increasing interest rates, potential talk of recession in different parts of the world, and inflation, of course, being reported. It's an interesting time that continues, shall we say. My crystal ball is not working very well, but we are preparing for recovery. Now, there are many different aspects, of course, to preparing for recovery as an airline. The key elements are people and planes. We're gradually starting to bring the aircraft that we've had parked overseas back. They need to go through maintenance checks, but we have a plan to progressively bring them back over time, subject to the direction of the capacity projections. In terms of people, given the lead time that is needed to recruit and retrain people, we have to plan for this in advance. We are starting to execute a recruitment plan. You've probably seen some of the commentary on that in the media. Includes several thousand frontline employees, and for Cathay Pacific specifically, about 4,000. This will all happen progressively. It's not sort of happening tomorrow. Subject to the operating environment, we have sort of started to execute this plan, and we'll build up accordingly. That's all needed, of course, to support the travel and cargo outlook. In terms of outlook on the passenger side of the business, our capacity remains constrained, and this is because of the COVID-related operating constraints. These constraints have placed an enormous burden on our pilots and cabin crew and their families, and restrict our ability to mount additional capacity despite growing demand. We are seeing positive signs in terms of the sentiment for travel. We've got a significant backlog of retraining that needs to happen for our crew. Many of them haven't flown for over a year, and this backlog cannot be adequately addressed until the constraints around how we fly can be removed. This, combined with other operational complexities, means that our capacity can only be gradually improved or increased over a period of several months once these constraints have been removed. It'll take time for us to build that capacity back. This is why we very much welcome the announcement, as I mentioned, by the government earlier this week, that the quarantine rules are being altered, so moving down to less time for passengers in hotels. We would like to see a clear roadmap which sets out the complete removal of all these COVID restrictions for our air crew and for the passengers, such that we can get back to normality as soon as is feasible. Based on the current operating constraints, the numbers we're talking about in terms of capacity are 25% on the passenger side of our business by the end of this year if things continue as they currently are in terms of the operating constraints. In terms of our cargo outlook, we do anticipate this imbalance we've seen between supply and demand is continuing, albeit the amount of passenger belly space is starting to increase as other airlines globally are mounting more passenger flights. That will start to put some pressure on yield and load factors as we move forward. We did resume our full freighter capacity back in June, and that will be further supplemented as we increase the passenger capacity. Obviously, that brings more belly space, so that will support cargo and the increasing flight frequencies that that capacity will bring. It supports the cargo part of the business as well. We'll continue to operate the cargo-only passenger flights as a way of maximizing our capacity. Overall, in terms of cargo performance in the second half, we are expecting, projecting a solid peak performance. You'll recall that the second half of the year is typically the stronger half for cargo performance. In terms of Cathay, this is our relatively new premium travel lifestyle brand. There have been a number of shopping, dining, credit card initiatives launched that you may have seen. A couple to perhaps just bring out or highlight is we launched a new wellness proposition earlier this year. This has got two key elements, a wellness journey, which is a new and interactive feature on the Cathay lifestyle app. You can now link your health- tracking device and receive a Health Score and earn miles at the same time. I hope you're all doing that. We've also got a collaboration with Cigna Hong Kong, where we offer an exclusive insurance product through the Cathay website, again, that you can earn miles through doing. The second one I wanted to highlight here is the customer relationship program that we're hoping to launch later this month. This is where we're going to bring the best of Marco Polo Club together with Asia Miles and create one sort of simpler platform, to make easier for people to earn their miles, burn their miles, in one place. We look forward to seeing that later. My final slide in this outlook section is on cash. I think this is also a top question for all of you. This sets out, we showed this before, the declining trends. Sort of stepping down through the halves over the past two and half years, to the point where in the second half of 2021, we were cash generative marginally, just slightly. As you can see, the next bar for the first half of 2022, gone back the wrong way slightly because the impact of the restrictions we saw in the first half of this year did mean that our operating cash in the early part of the half was obviously cash burn. As I said earlier, as a result of the travel restrictions or adjustments changing and the improving travel sentiment, we did see cash becoming more positive, such that we were cash generative towards the end of the half. We are targeting to be cash generative going forward. My final slide before we open to questions summarizes the key metrics here. Sort of try to give you in one page our key metrics with a bit of a trend or history. Attributable profits or losses, our average monthly cash flow across this period, and our liquidity balance. We note at the bottom of each of those boxes for your easy reference, the sort of key point about our outlook expectation against each of those metrics. I guess the key highlights for this first half would probably be reduced losses. Losses have reduced compared to where we were a year ago. Another positive, I think, is the fact that we didn't need to make any impairment charges. No one-off adjustments have been put into these numbers. The fact that we became cash generative again towards the end of the first half, again, another positive. Liquidity, while a little bit lower than where we were at the end of December, is still at a very healthy level for our business. None of this, of course, could be achieved without the support and continuing support of our customers, which I hope all of you are. Thank you. Our shareholders, of course, their support and the Hong Kong SAR Government. Of course, our people. None of this would be possible without them. Their determination and resilience in keeping the airline flying and doing incredible things is definitely something that we're sincerely grateful for. An opportunity to say thank you to them. I won't ask you all to clap, though. As we get our teams ready to meet the demand for travel, as we are starting to see these green shoots, and we begin to execute on the bringing the planes back, the recruitment, retraining, getting people current again. The recovery definitely feels like it's that little bit closer, but we are still hampered by the restrictions that are in place at the moment. The capacity won't, as I say, be able to change much more than the 25%. We won't be able to. 25% is what we can achieve on the passenger side of the business, and 65% on the cargo side of the business by the end of the year, operating under the current environment. We do remain very, very confident in the future of our airline. We're obviously, yes, still facing short-term challenges, and we do welcome a roadmap from the government to help us see clearly sort of a pathway to removal of the quarantine restrictions for our air crew and for passengers as soon as is feasible. Saying that, in terms of the longer term, our confidence in the longer term remains. The future of Cathay Pacific, Hong Kong as an international aviation hub, definitely for sure, we're extremely confident and we remain as steadfast about that confidence as we ever have been. At that point I'll stop and open up for questions. Thank you, Rebecca. Also thank you, Ronald, for joining us online. Now let's open the floor for questions. Kindly raise your hand and I'll call on you, and our colleagues will give you a mic. Please state your name and organization before asking the questions. Any questions? Gentlemen on the left. Thank you. Hi. Thank you. Good to see you face to face again at this briefing. Absolutely. Andrew Lee from Jefferies. Three questions. Passenger yields in the first half was very high, and you're gonna bring back more capacity, right? A 25% target by year end. Would that lead to some pressure on passenger yields into the second half? That's my first question. Second question is on bringing back the parked planes. Could you give us a little bit of guidance in terms of how your costs, on which costs would increase as you bring back more planes? I assume there's like more maintenance costs. Third question I have is on the deferred dividends on the preference shares, under what scenario would you need to basically start paying these dividends back? Is it based on profitability? Just a little bit of guidance, please. Thank you. Okay. Thank you, Andrew, for your questions. I'll ask Ronald to do the passenger yields, but I can perhaps start in reverse order maybe with the deferred dividends. Yes, we have announced that we will be deferring the dividend that is due this month for the preference shares. The reason for doing that is as part of our prudent cash management. The understanding or the agreement is that sort of we are managing our cash position. Whilst yes, this is something I perhaps want to sort of share. Definitely we're seeing positive shoots, but things are still uncertain. The capacity levels that we're operating at the moment are pretty low compared to parts of other airlines in parts of the world. Under that sort of premise, we're looking at the cash flows and determining that it's not the right time for us to start paying. We do have some flexibility with when we do that, and it is tied to effectively the cash flow projections that we would have as to what that would be that would determine when we believe it's affordable for us to start repaying them. In terms of your parked plane question, yes, you know the answer. There will be impact on maintenance costs. Depending on how long the planes have been parked, what stage they are at in their life, so whether they're due one of their major checks or minor checks. Yes, there will be some impact on maintenance costs as we start to bring them back. So depending on, I mean, it varies plane to plane, depending on what it requires. Yes, that will have an impact to some extent. Not huge, but yes, there is an impact on aircraft maintenance. I'll let Ronald answer the passenger yield question. Okay, thank you, Rebecca. On the passenger yield side, the first half of the year, we are under a very special demand and supply situation. I wouldn't read too much onto the yield trend being a long-term yield trend. We expect to get back to a more normal level as we recover more. It's pretty hard to predict the yield for the second half because it really depends on a number of factors, including ticket prices. More importantly, what kind of routes do we resume? Because yield is a function of the mix of different long-haul and short-haul routes together. I wouldn't expect the yield situation in the first half, which was very exceptional to continue for the long run. Thank you. Okay. Rebecca and Ronald, thank you. Next question. No questions. Does that mean I talk too much? Very, very comprehensive presentation you had. Okay. Okay. All right. Andrew can have another one. Okay. Andrew Lee, Jefferies. Okay. You mentioned before on the cargo side that you see that there could be a little bit of pressure on cargo yields. Do you mean that second half could disappoint in terms of the peak season, or do you mean more of a longer term, whereas capacity comes in? So, I'm trying to get is this into next year you talk about the pressure on cargo yields, or are you talking about into the second half, which is normally the peak season? My comment was more general, in terms of sort of an overall as more capacity comes back, then there will be pressure. Maybe Ronald might want to elaborate a bit more on the cargo part of the business. As we all know, the second half of the cargo market usually is stronger than the first half, and we still do expect to see the same this year. But I think a number of economic indicators like the PMIs start to show softening compared to what we've seen in the past 18 months, I would say. We expect the peak will still be strong and will still be stronger than normal year. Compared to second half of last year, we don't expect as strong a peak this second half of last year. It's all relative because last year second half was exceptional, and we expect we will still have a strong peak, but not as exceptional as the second half of last year, given the economic indicators worldwide. The reasons behind probably is due to high fuel prices and high inflation and consumer confidence that is affecting the air cargo demand worldwide. Okay. On the loop. Hi, Rebecca, this is Caroline from HSBC. I have a question about the cost structure. How do you think how sustainable is your current cost structure, especially as you start to ramp up the capacity and also recruit more staff for the airline, then how would that impact the overall cost structure in the future? Thank you. Thank you. That's quite a big question. I guess one of the things we've got to bear in mind is the cost structure as we sit today is sort of relatively fixed. Logically, as things start to ramp up, yes, you'll be adding people, but you'll also be adding more capacity. In a sort of very theoretical overview, I would say sort of I'm not expecting it to, sort of double as we double or anything like that. I'm expecting it to be a sort of, curve, if you like, in terms of the costs we need to add in, because you've got the fixed base that we're paying already, will not be as steep, if you like, in terms of adding or the ability to add that more capacity. Some of it will be more, much more variable as we move forward. Obviously, fuel is our biggest cost, so really depends what happens with the fuel price. But yes, the sort of more on the headcount, the people cost side of things, as we ramp up, it will not be because we've got sort of a base cost, if you like. As we add much more and more capacity, that will sort of add an incremental cost, if that makes sense. Hi, Rebecca. This is Qianlei from Morgan Stanley. I have several questions. The first question is about the capacity plan maybe for next year. Is there any color that you can share to which extent you are going to resume your capacity on both passenger and cargo front for next year? This is the first question. The second question is, considering there are still some capacity remain parked, will you continue to return your operating leased capacity into next year? I have a question on the fuel hedging. I mean, if you look at historical results on fuel hedging, sometimes they're making profits for you, sometimes they make loss. Considering a majority of your competitors, they do not do fuel hedging. Is there any, like, discussion or probability that you may change your fuel hedging policies? Thank you. Thank you for your question. I'll start backwards if I may. Ronald can perhaps add a bit of color on capacity, when we get to there. In terms of fuel hedging, I would say it's not correct to say that our competitors don't fuel hedge. When we do peer analysis, there's a mix. You've got some airlines that do and some airlines that don't. In terms of sort of our competitors, we compete with over 100 different airlines on the different routes that we fly. When we've done analysis, we are not an outlier. It's a mix of airlines that do and airlines that don't. We've got no plans to change our current policy. We're trying to mitigate the sort of short-term volatility, because obviously ticket prices don't change straight away. We believe it's a prudent policy to adopt, and there's no plan to change that. In terms of capacity and aircraft parked, yes. I mean the plan is to bring them back as the sort of projections around operational requirements determine. Typically, we need to plan these things a few months ahead, in order to get them maintained appropriately. In terms of saying whether we definitely will or definitely won't return something or not, I can't say at this juncture. It will really depend on the operational environment at the time, and we make the decision much nearer the time. Maybe on capacity, we haven't given any indication for capacity for next year. Again, it will come down to the operating constraints that we've got here. I don't know whether, Ronald, there was anything you wanted to add on capacity for 2023. Sure. As Rebecca mentioned, we haven't made any projections publicly about the capacity for next year. The reason is because there's so much uncertainty facing us still, both on the demand side, how the demand will change, and how the travel restrictions will change in the coming months will be a key factor. More importantly, for us, is also the supply side. How would the crew restrictions that are constraining us will change in the coming months, if not next year? I think will be a key driver for how much capacity we will be able to mount on both the passenger and cargo side. We have every desire, whenever possible, whenever supply and demand allows, we would maximize our capacity resumption back to the pre-pandemic level. Thank you. Any more questions? Okay. Okay. Okay, final question from me. Please. Could you give me a little bit of guidance about the forward bookings? How strong are they, just in the near term on the passenger side? Okay, that's definitely a question for Ronald. Sure. Well, we've been seeing very last-minute bookings throughout the pandemic. People are not planning that far ahead throughout the pandemic. The booking has been last minute. All I can say is that since the Monday announcement by the Hong Kong government, we are seeing some bookings that are well advanced, say, into Christmas holidays, New Year holidays, which is pretty encouraging. It's probably an early indicator that people are gaining back some more confidence about their holiday bookings ahead of time, given the good or positive announcement by the Hong Kong government recently. Okay. Also one question on the load factors you disclosed on different region. I noticed that for some of the region, the passenger load factors in the first half has been lower compared with some other regions such as the U.S. and Europe. Just wondering the reason behind that. Is it because of the supply and demand difference or just because of the disruptions of the travel restrictions? How is the load factors trend after May, maybe in the past two months? That's a Ronald question. Sure. Well, for this year, since earlier this year, I think we're seeing a positive trend on the load factor. As you can see, our overall load factor for this first half of this year is much higher compared to first half of last year. That is partly a function of a lower supply in the first half of this year compared to last year. But also, I think a positive trend on the demand we're seeing on many of the routes. In general, we're seeing demand. I think people's willingness to travel has increased. Not just in and out of Hong Kong, but for us, we also carry quite a lot of traffic via Hong Kong, using Hong Kong as a transit hub. As the rest of the world opens up, the transit via Hong Kong demand certainly has seen a surge, based on the little capacity we run. We are seeing more demand of people who transiting via Hong Kong, getting to different places of the world. I think that has played a role in boosting up the load factor. We expect, hopefully, that the same trend will continue in the coming months. We'll see better load factors. Okay. Okay. With that, thank you for all your questions, and thank you, Rebecca, and thank you to Ronald. This concludes our briefing today. A copy of the presentation slides has been sent to all the invited attendees by email, and will also be available for download on the investor relations page on our website later. If you have further questions, please email them to ir@cathaypacific.com. Thank you very much for joining us. Goodbye. Thank you.