Good afternoon. Welcome to the Cathay Group's 2026 interim results analyst briefing. My name is Ivan Chan, General Manager of Corporate Affairs for Cathay. Whether you're attending in person or online, it's a pleasure to see you all, and thank you for joining us. Introducing our speakers for today, we have Chief Customer and Commercial Officer, Ms. Lavinia Lau. Our Chief Financial Officer, Ms. Rebecca Sharpe. We'll begin with presentations by Lavinia and Rebecca, after which we'll open the floor for questions. In case you haven't scanned the QR code at the reception for an electronic copy of the presentation, the slides and a video recording of today's briefing will be available for download at our investor relations page of our website later today. Without further ado, may I now invite Rebecca to start the presentation. Rebecca, please. Thank you. Good afternoon, everyone. It's great to be here, and I'll add my welcome to all of you today. Let me move to the agenda. The plan for this afternoon is that I will speak for about 20 minutes or so, and I'm going to cover the results highlights and some of the business performance, more operational metrics. I'll pass to Lavinia, who will take us through some outlook and strategy. We'll of course open it up to questions for all of you. Let's dive into those exciting first half numbers. On this slide, we've got six of our key metrics. I will talk some of these in more detail as we go through the presentation. Maybe just to touch on the three of them here. Revenue in the first half was HKD 68.1 billion, and that's a 20+% increase from the first half last year. It is also the highest first half revenue on record, just for interesting fact. As you see, as we'll go through the presentation, you'll hear about the background as to what the drivers for that have been. The other one I was going to touch on here is our dividend. We've announced a first interim dividend for 2026, in the amount of HKD 0.26 per ordinary share. That's a 30% increase on the number that we paid last year. First half 2025 was a HKD 0.20 first interim dividend. Of course, the strong results come through in our earnings per ordinary share. At the bottom, over 75% of an increase that you can see there. This strong performance that you see in these numbers presented today, I think is testament to the resilience that as an organization we've built into our operations over the last few years, that's enabled us to weather a very challenging, particularly second quarter for this year. This slide, you've seen it before, is the summary of our profit numbers, but we're looking at it at different levels. You can see there, we start at the line that's without any non-recurring items and without any associates. You can see that at the Cathay level, before all these sort of more one-off or other items, we've increased by about HKD 1 billion. You can see that we had non-recurring items. You'll have read about that in the traffic report as well, I'm sure. The major one in there was a HKD 1.4 billion gain on deemed disposal when Air China did an A-share issuance in June. That diluted our shareholding from 15.09% down to 12.85%. We've also got the share of associates number in here. You can see we've seen an improvement in that number too. The biggest associates we have in that number are Air China and Air China Cargo. Just a reminder that we capture their results three months in arrears. Their numbers included in our first half are their Q4 number and their Q1 number. They haven't got any real Middle East impact in those numbers just yet. We'll see their Q2 number in our second half figures. At the bottom line, a profit for the first half at the consolidated level of HKD 6.2 billion, compared with the HKD 3.7 billion that we made this time last year. This chart is looking to map last year's HKD 3.7 billion to this year's HKD 6.2 billion. As you can see on the chart, there's quite a few large variances in amongst this roadmap. On the revenue side, HKD 10.1 billion, for the customer travel business, the premium travel business, that's added to these numbers, combination of capacity change and strong demand. The cargo business has contributed a HKD 2.9 billion variance. But, of course, you can see a couple of large red bars in terms of the cost side. You'll be not surprised to know that we've got a negative impact in our numbers of HKD 8.6 billion on fuel costs. Some of that's capacity related, but of course, the biggest portion relates to the fuel price increase that we've seen. Other operating costs, they've also increased. Again, some of that is capacity related, but some of it is cost increases. Suffice to say, that's what takes us at the high level down to, or up to rather, our HKD 6.2 billion profit for the first half of 2026. If I dive into that fuel question, because I know you're all going to ask me about fuel. Let's talk a little bit about fuel. Of course, there are three key elements to fuel. We increased our consumption. Our capacity increased, as you'll see on some of the later slides. Of course, that drives an increase in cost. We have got a hedging gain in our first half of HKD 9 billion. The biggest driver by far and away in our first half is the increase in the jet fuel price. You can see there overall for the first half, a 45% increase in our into-plane cost. As usual, on the right-hand side of this chart, you can see our fuel hedging profile, and this is the position as at the 30th of June. You can see that roughly for the next 12 months we've got just over 30% hedged. We hedge, as I talked last time, Brent, and our fuel hedging policy remains unchanged because that's another question I always get. It's not changed. If I then look at operating costs at a company level, but ignoring the fuel, although fuel is on here, we're showing you the fuel number plus the other operating costs, and of course, they've gone up. Even the operating costs have gone up, even if I take the fuel out, so that's the dark green bar at the bottom. Over to the right, whilst of course these increases are related to capacity increases, they're also related to some other factors. As you can see in our cost per ATK, that number has gone up as well. There's probably three key elements to the increase in our cost per ATK. We've got the sort of uncontrollable costs, so things like overflying costs increasing or landing and parking costs increasing in different parts of the world. You've also got some timing differences in here. For example, this year in the first half, we've had more maintenance requirements being undertaken, so that has a slightly higher impact in our cost per ATK this year. We've got things where we've consciously spent more money, so investing for our customers. Our lounge, we've opened The Wing, First this year. We've had the Beijing lounge open now for the sort of full first half. It opened partway through last year. There's cost increases for running the lounges. Also investing in our dining proposition. We're really looking to, of course, delight our customers. There has been more investment in our dining proposition on board, and that drives a little bit into the cost per ATK. Over and above that, of course, in the current economic environment, inflation is always there on different elements, different parts of our cost base. I would be remiss to not mention there is an element of inflation here too. Turning to financing charges. You can see the big story here is the dramatic reduction in what we spent financing our business in the first half of this year compared to the first half of last year. The cost or the net charge, the P&L, has gone down by 26%, and the key drivers of that are we've got less debt. Our strong result last year, of course, puts money or enables us to repay some of our debt. We also benefited from the lower interest rates that we've seen since the first half of last year, although not sure where that will go this year. The other element is having more cash around us enables us to put it on deposit and earn some interest there, which offsets the interest we pay. A number of factors supporting that drop in interest charges for 2026 first half. Chart on the right is more for your reference. A number of people asked me about that. This is our split between fixed and floating rate borrowings. I've said before, we generally like to try and aim to keep it around 50/50, and the balance at the end of June, not that different from the balance we had at the end of December. While we're talking about financing numbers, let's look at cash. Similar to the waterfall or roadmap chart we had for our profit numbers, this chart maps our liquidity balance at the start of the year to the end of June, and you can see that it's not too different in absolute terms, HKD 25 billion coming down to HKD 23.6 billion at the end of June. You can see the key drivers in there. The inflow we've seen from net operating activities, HKD 13.7 billion, driven by the strong financial or profit number. That is a couple of billion higher than we saw in the first half of last year. I think that number was HKD 11.2 billion. You can see what we've done with that money. The financing, the ins and outs, we draw loans, we repay them, you can see that kind of stuff on the right-hand side. The key ones to mention there are the dividend. We paid the second interim dividend related to 2025 in the first half of this year, that's the HKD 3.9 billion number there. Of course, the Qatar share buyback. You may remember I talked at the end when we did the annual results briefing about the reason we had the sort of higher or elevated liquidity at the end of December was we could pay for the Qatar shares. That was a HKD 7 billion outflow. You can see in this first half map that coming out there too. At the end of June, we've got HKD 23.6 billion in our liquidity. That is cash and it's also access to facilities, and of course, we've got upcoming, about two weeks' time, our straight bond of $650 million that we're due to repay. You remember we took that out in first half of 2021, due to repay later this month. We're having a little bit of elevated levels of liquidity at the end of June in preparation for being able to repay this straight bond. Qatar, I've mentioned that. We've included this slide. I won't be going through all this information. It's for your reference afterwards when you look back at this deck. The only thing that's different in this slide from the one I shared in March is the fact that we did a capital reduction in May, at the annual general meeting, our shareholders approved that we could do a capital reduction to offset the HKD 7 billion we'd paid for the Qatar shares. It meant that we moved HKD 7 billion out of our share capital number and into our distributable reserve. If you're looking at the numbers, you can see the share capital number change, and you wonder why. That's why, because we did a capital reduction to offset the buyback. Of course, we were very excited earlier this year to do our first Hong Kong dollar public bond, which I know I shouldn't necessarily say, but I think this was seen as a success. Largest bond that's been done for a corporate. Lot of interest in this. We issued HKD 2.88 billion in the end, this was us preparing for the straight bond that I said we're repaying later this month, putting some money aside to do that. What does all this mean in terms of liquidity and gearing profile? You can see here our gearing has ticked up a little bit from the end of last year, buying back the shares from Qatar has had an impact. We're in a significantly lower gearing level than we were a year ago, off the back of the strong results in 2025 and into 2026. In terms of, if I just touch on, and as I say, you're familiar now, but the slides we've got here, I won't touch on every one because I'm conscious we want to get to questions, but you can refer to them later. Maybe just some of the key stats for Cathay Pacific, our premium travel brand. It's exciting for me to see green numbers across the board this time. You can see the revenue number up by 26.3%. This, of course, is driven by a number of factors. One of the things that I think is quite standout on this slide is the passengers we've carried. The number of people who've flown on our planes in the first half has gone up by 17.5%, and that's a big driver for the revenue number going up. Of course, we have added capacity. First half versus first half on the ASK basis, it's gone up by 11.8%. You may remember in March, we talked about estimating around a 10% increase year-on-year, and we're on track to do that for 2026. Of course, the passenger numbers come through in the load factor at 87.5%, which is high. We have seen an increase in yield too, which is underpinning the revenue numbers. Charts that you're familiar with in terms of capacity, load factor, and yield, and we set these out half by half so you can compare the six-month periods. I suppose there on the load factor one, you can see, looking back at our records, the load factor we've seen in the first half of 2026 is the highest on record for a first half, and that is where all these passenger numbers have come from, and the change in yield also here. You may remember when I talked in March, the strong Q4 that we saw in terms of passenger demand has definitely carried on into the first half of this year, and that underpins the numbers that we're sharing with you today. If I move on to touch on cargo briefly, similar slides, again, green across the board, which is very exciting to be standing here talking about. A similar story relatively. We've got the revenue going up by 23.9%, that again is underpinned by some increase in capacity. You may remember that a lot of our capacity comes from our passenger bellies. As the capacity on the passenger side of the business has increased, it increases our cargo capacity too. That's coming through there. We've carried more cargo, 8.5% more cargo than we carried for the first half of last year. We've also seen an increase in our yield. Same charts on the three metrics, capacity, load factor, and yield for cargo. Some of you may say, "Well, why is your capacity so much less in the first half of this year than it was in the second half of last year?" It's higher than the first half of last year, but it is down on the second half, that's because typically in the cargo space, we have a peak in the second half. Maintenance needs to be scheduled or more maintenance needs to be scheduled in the first half, that is the case for 2026. We have done more maintenance, which takes some of our freighters out of the fleet for a while, also some of that maintenance has actually been more extended than we anticipated. Capacity on cargo has been a little bit down, more because of maintenance. You're doing that as an organization or any airline to ensure you've got your maximum capacity available for the peak in the second half of the year. Load factor, a little bit higher, but not too different from our typical load factor in cargo. Again, this is just as a reminder. In our where we are as the largest air cargo hub in the world, we're very strong on the traveling west, the front haul, if you're a shipping analyst as well. The front haul, taking the cargo west. Cargo coming back this way, there's less of it. Typically, our planes are close to 100% full of cargo on the way out, but there far less cargo being carried on the way back. That balance has improved a little bit, and that's what ticks up the percentage there. Regional cargo has been coming into Hong Kong. Yes, that's the reason why load factors for cargo are quite different from load factors for passenger business. Passengers want to go both ways. They generally want to come back again, but the cargo doesn't. Yield, again, a strong demand story. As I'm sure you all have read about the cargo demand in support of the AI infrastructure boom is definitely very real. AI infrastructure, tech products are moving and driving a high demand, hence supporting yields. If I just touch briefly on HK Express. HK Express, of course, is our low-cost carrier, and they've also got a happier story. I can't say green across the board just yet, but we're getting closer. Their loss before interest and tax level was HKD 73 million. Significant improvement from where we were for the first half of last year, when we lost around HKD 0.5 billion. They had, I think I talked back in March, a strong start to this year, and that continued. Of course, the jet fuel prices have impacted them in the second quarter, which has had an impact on their overall numbers for the first half, but a big step change towards their turnaround journey that they are on. We see their fundamentals continuing to be strong. Things like the on-time performance, their focus on cost discipline, operating efficiency, these are all the things that are heading in the right direction in support of this substantial improvement on their path to a turnaround. Sustainability, I won't dwell on this because I'm conscious I've got to pass on to Lavinia. Again, a bit of information on some of the initiatives we're working on as a Group. This remains a challenge for us as a business, for all aviation. Yes, we're continuing to work on this. I'll pass on to Lavinia. Before I do, I do just want to say thank you to all of you. Today is my last financial briefing before I retire next month, and I know all of your questions and your support that I've received and your interest in Cathay Group has been fantastic over the last five and a half years. Thank you very much. Thank you, Rebecca. After a pretty encouraging first half, I guess naturally you all want to know how we see the second half of this year. Allow me to provide some insights. Starting on the passenger side, on the travel side, while we are cautiously optimistic about the second half, looking into our current bookings and summer, while we are halfway through quarter three. In terms of the summer bookings and the strong travel demand actually extends throughout quarter three. I think we remain pretty robust about quarter three. As to quarter four, I think it really depends on the Middle East situation. We believe that the underlying demand is still strong, but of course, we need to watch out on whether there's any further developments in the Middle East and whether there are other macroeconomic factors at play. In terms of capacity, I think Rebecca has mentioned, I think overall, we are still looking at a growth of around 10% for the group for the whole year. I think that is very important. I think last year we added a lot, especially during summertime on the long-haul routes, added a lot of capacity on the Americas and Europe, and Australia. This year, we also do it in a more balanced manner. We added more regional growth, and that is very important because we are a network carrier. As we continue to add more flights on each part of a route, it creates more connectivity via the Hong Kong hub, which will help us to build more loads and become more attractive to our customers. In terms of jet fuel, while we don't have a crystal ball, again, that really depends on the Middle East situation. I guess our best guess is jet fuel will stay at a pretty high level or at the current level, at least unless there are any new developments in the Middle East. To mitigate that incremental cost, we'll continue to leverage our two tools, both hedging and fuel surcharge, to continue to offset some of those incremental cost increases. From a cargo perspective, yes, it's the same words that I'll use. We also remain cautiously optimistic about the second half. Rebecca mentioned about a lot of the cargo growth this year is really, again, there's very strong demand, driven by this whole AI boom. A lot of high-tech products traveling both within the region and also from Asia to U.S. I think we have to say that our strong network, both on the freighter side and on the passenger side, did allow us to capture this AI boom quite effectively. Our teams have been talking to different customers in the past few weeks, trying to gauge their overall sentiment on the cargo peak season, which will start very soon. Again, I think overall, I'll term that as cautiously optimistic. They do believe that the current AI boom will at least last till the end of this year. Again, to leverage that, we will be adding capacity as usual during peak season, particularly on the strong trunk routes. It's Hong Kong to the Americas, we'll be adding capacity. Also within the region, again, because some of this AI boom involves a lot of traffic between Southeast Asia, Northeast Asia, between Chinese mainland, Southeast Asia, et cetera. To capture these flows as well, we'll also be leveraging our subsidiary, Air Hong Kong, use some of their capacity to help carry some of this traffic. I think overall, on the cargo side, while we are very committed, actually earlier this year, we have placed an additional orders for two more A350 freighters. Air Hong Kong, they're also going to lease an additional Airbus A330 freighter to cover this peak season. I think all in all, this demonstrates our confidence in the ongoing development of the Hong Kong cargo aviation hub. I think this is a brief summary of how we are seeing the second half. Let me shift gears a bit, talk a little bit about longer term. This year is our 80th anniversary, a very happy time and a very important milestone for us. At this time, when we reflect on what our next 10 years will be, we think that we'll continue on this dual track, sustain and elevate. We had three very positive years in terms of profitability. This year, first half looking good. Hopefully, we'll also see a good fourth year. It's very important that we continue to sustain our profitability. Obviously, we want to keep our shareholders happy, but also very importantly, we do need these profits so that we can continue to invest in our business and invest in the Hong Kong aviation hub. This is what exactly we plan to do in the next 10 years. Some of you may remember that in the past couple of years, we always give three 100 numbers to showcase our commitment to Hong Kong. This year, I think, well, at our 80th-anniversary milestone, we decided it's time for us to elevate our narrative to, again, demonstrate our commitment to our business and to the Hong Kong hub. These are the three new 150 numbers that I want you to remember. Firstly, we have already committed around HKD 150 billion investment already. This is committed. For the next 10 years, obviously, we'll continue to add more investment. Our target in 10 years' time is to bring in a total of 150 new aircraft into the Cathay Group, also as a group, fly to 150 destinations. Just for sharing, currently, we fly to 103 destinations as a group, but in 10 years' time, we want to go 150. This is our ambition. In terms of our investment, when we think about the already committed HKD 150 billion, where the most of this investment, and also where will most of our future investment go into? They go into a few key areas. The first, most obvious area is our fleet. Here we have already committed 105 aircraft. These are new orders, which will be delivered in the next few years. I presume you should be quite familiar because we mentioned them almost every time in our briefings. Just to refresh your memory, starting with the ones which will be delivered first, the narrow body A320, A321neo. The first of this dispatch of orders will arrive later this month. Going down chronologically, next year, in the second half of next year, we will be expecting our first 777-9 aircraft. That will be our new flagship fleet, complete with first class and three other cabins as well. Going to the other side, from 2028, we'll start receiving our Airbus A350 freighters. As I just mentioned now, including the two new orders that we made this year, we'll be expecting a total of eight very efficient new-generation cargo aircraft. Last but not least, we have also placed orders for the CX regional wide-body fleet. These 30 A330neos will also start coming into our fleet in 2028. These are the existing 105 orders that we are expecting. Like I've said, in 10 years' time, our expectation is that we'll bring in a total of 150 new aircraft. Apart from the airframe or the aircraft itself, we also made a lot of investment in the customer experience, both in the air and on the ground. I think you should be quite familiar with some of these cabin programs because we have been mentioning them in the past couple of years. Starting with our long-haul fleet, our Boeing 777-300ER, I hope some of you might have the chance to try out Aria Suite already. It has been very welcome by our passengers. Glad to say that we are now halfway through the program. We are going to retrofit a total of 35 of our 777-300ER with this new product and also new premium economy. Currently, we have just passed the 18 mark, we now have 18 of them flying the skies, and we expect to complete the whole program within 2027. Next up, the hero or star product of this year, sort of like the sister or sibling of Aria Suite, Aria Studio. This will be the new business cabin or business class product that we'll be installing on our Airbus A330 regional aircraft. This will be coming end of this year. What we are expecting is that in the business class, there will also be a lie-flat bed and there will be direct aisle access, and also a brand-new economy cabin. This is something which is really something to look forward to towards the end of this year. 777-9, I've mentioned, second half of next year. New first class, we are all very excited about it. Apart from new first class, it will be a brand-new aircraft, complete with new cabins in the other three cabins as well, new products. Last but not least, the narrow body A321neo. As I mentioned, the first new one will be coming within this month. We are also retrofitting our first 16 aircraft. For some of you who have traveled on that aircraft, you might find that, well, the economy class cabin may be a little bit less spacious than you want. We heard you. What we are going to do is to remove one whole row of economy seats so as to create more legroom, more space for our economy class passengers. All of these are a very important part of our HKD 150 billion investment committed already. Cabin improvement will also continue to be our focus. Why? Because Cathay Pacific is a premium carrier. We need to charge really premium pricing in order to, I mean, justify our investments. How can we charge premium pricing is really to provide value to our customers, and all these investments will help to increase our customers' willingness to pay. As I mentioned, the investment is not just in the air, but on the ground as well. Earlier this year, we have already reopened The Wing, First at HKIA. These are the upcoming new launches in the pipeline. New York JFK, we have mentioned before, we are still looking forward to have it within this year. Next year, well, for those who are familiar with HKIA, again, after The Wing, First, we have already closed down The Wing, Business for renovation. Also, in Tokyo Narita, that lounge is also closed currently because we are going to expect a brand-new lounge in the first half of next year. Again, all these ground and air new products are there so that we can delight our customers more so as to increase their willingness to pay on us. Apart from all these hardware cabin ground products, which will all help us to generate bigger customer satisfaction and hopefully more revenue, of course, we'll continue to invest in making our business more effective, more efficient, more resilient. These are our areas of excellence. I just want to particularly call out digital. This is an area that we really are putting our bets on. We invest over HKD 3 billion in IT every year, and quite a lot of that budget will be going into AI related, agentic AI, et cetera. Because all these, we think, will not only elevate the customer experience, but also help us in the back in increasing our effectiveness and productivity. These are all areas that we will focus on. At the end of the day, our vision is very clear. We want to be the best in all the four lines of business that we are part of. We believe that, well, I think Ronald, in the March briefing, he has talked about this formula. We firmly believe that once we have happy team internally, happy teammates, we'll have happy customers. Happy customers will generate happy shareholders because it will mean a more profitable business. This is what we firmly believe in and which we will continue to work towards. Of course, the other thing is that we also believe that, as the home carrier of Hong Kong, we are there to grow with the Hong Kong aviation hub. The Three-Runway System is a golden opportunity for us, we'll continue to invest, like what I mentioned, because at the end, we think that what is good for Cathay will be good for Hong Kong and vice versa. I guess that's what I want to talk about. This just final slide summarizes what Rebecca has mentioned about the financials and what I briefly talk about our long-term strategy and investment. I'll stop here and let's start the Q&A session. Thank you, Lavinia. Thank you, Rebecca, for your presentations. We're now open to the floor for questions. If you'd like to ask a question, please raise your hand. I will call on you, and our colleagues will pass you a microphone. Please state your name and the organization that you are working on before asking your questions. After taking a few questions from the floor, we'll go to the online as well. Thank you. Shall we start with the floor? Of course. Lady in between. Yes. Thank you. Thank you. Thank you. I am very honored to ask the opening questions. I am [Xenia Chen] from GF Securities. I have two questions. The first one is that we noticed that the passenger and freight revenue recorded in the first half are quite strong. How does management expect the air passenger fares and freight rates to trend in the latter half of the year and next year amid changing macroeconomic environments? Could you please kindly explain the outlook by different regions? This is my first question. Thank you. Freight rates and Thank you. Do you want to do the Okay. Well, thank you for the question. I think AFS is really a product of demand and supply, right? The market determines what AFS we can charge. In Hong Kong, it's a very competitive market. We compete with over 140 airlines in here, so we need to provide competitive fares. Actually, I'll start on the travel side. On the passenger side, actually, in the first quarter of this year, we saw very strong underlying demand. That's actually an extension of the strong demand we already saw back in quarter four of 2025. That extended into the first quarter. Even into the second quarter, if we strip out the Middle East situation, the global underlying travel demand is still very strong. We definitely benefited from that. In the second half, when the Middle East situation occurred, we definitely saw that there are passengers who will consciously avoid the Middle East hubs and choose to travel via other Asian hubs as well. We and Hong Kong benefited from that. On top of the already strong underlying demand, we do grab additional traffic because of this hub shifting. That's on the demand side. On the supply side, yes, we added a lot of capacity ourselves, 12%, but I guess, still, demand is pretty strong. That's why that will naturally lead to an increase in AFS. I think a similar story on the cargo side. Again, the underlying demand is pretty strong, driven by the whole AI boom. This is really the main reason. The Middle East situation in quarter two also had some impact, but maybe not as pronounced as on the passenger side. Still, yes, Middle East, because there are still some shippers who might avoid going past the Middle East. We do also benefit from that. I think on both passenger and cargo side, again, I want to stress that it's because of our comprehensive network and capacity in place, which allow us to capture all these opportunities. Again, it's because of the very strong demand, which drove up the prices. As to the second half and looking forward to next year, just like I mentioned, I think, obviously, we do believe the underlying demand is still strong for both passenger and cargo, but of course, we also need to watch out for any developments in the Middle East. Thank you. Are there any questions? Oh, the lady in the middle, please. Thank you, management, for taking my question. This is Cheng Lei from Morgan Stanley, congratulations on the very strong first half results. I have two questions. The first question is about HK Express. I think in the earnings results, management mentioned that it is on track to a profitable year. If the fuel price stay elevated at the current level, do you think the second half could be profitable, or we still see some uncertainties? The second question is about cargo. I think in the monthly results, management mentioned that there are some small uncertainties from the e-commerce demand in Europe. My question is: Is there any initial impacts you have seen from the regulatory changes regarding the cross-border e-commerce cargo in Europe area? As a percentage of your cargo demand, how large is that e-commerce cargo to Europe? Thanks. Maybe I'll take the HK Express question first. Thank you for the question. Just to clarify, HK Express lost HKD 73 million at the EBIT level, which, yes, as you say, was a smaller loss than last year, a better position. They were affected by the high fuel prices in Q2. As to their progress for the second half of the year, as Lavinia talked about outlook, we're cautiously optimistic. I think they are, if we look at their fundamentals, so their on-time performance, their cost discipline, their operating efficiency, and if we also look at some of the routes that they opened last year, or destinations rather, they opened last year, we can see those are improving. As to what their actual result will be in the second half, I can't comment specifically. I would wrap it into being cautiously optimistic for the overall passenger business. In some ways, because they don't have the network that Cathay Pacific has, as you'll have seen for other carriers globally, they are more vulnerable, I would say, to the high fuel prices. Can I add? Yes HK Express, they did make a lot of strategic changes then, to make them more resilient. If you recall, I think maybe one year or two years before, they are very concentrated on the Hong Kong, Japan makes up a big part of the network, and they relied a lot of Hong Kong as the point of sales. I think over the past couple of years, or especially during the past year, they have really tried to diversify, expanding into other parts in Asia, into Chinese mainland, into Southeast Asia, and also not just solely rely on Hong Kong as the point of sales. Doing a lot of marketing and further expanding the distribution, particularly in the Greater Bay Area. I think they have been doing a lot to diversify their strategy, which will also help them withstand some of these external pressures. Cargo. On the cargo side, yes. The question is about the tax, which was newly imposed on these small parcels going to Europe. I think we have been watching that, it's still a little bit early. Usually July and August are the slightly slower months on the European route because everyone is going for summer holidays and all that. We didn't see any particular impact on our European routes as yet because of the introduction of this new tax. I think it's still early days, we'll keep a close watch on whether there's any impact. Great. Thank you. Any questions from floor, please? The gentleman in the middle. Good afternoon. I'm [inaudible] Chen from Sinolink Security, first of all, congratulate to your team on a very strong set of first half results. I have two questions. The first is on the quality of earnings. Could you help us to rank the main driver of underlying year-over-year improvement across Passenger, Cargo, HK Express, and so on? The first is the Passenger business. We see that you get around 10% passenger capacity growth for 2026, in the first half, the RPK grows about 15% and the ASK grows about 11%. How you think about the balance between the capacity load factor and the yield on the second half year? Thank you. I can start, and you can add if you like. As I was explaining earlier, in terms of the first half result. The underlying numbers before associates or non-recurring items, we went from the HKD 3.8 billion profit to HKD 4.8 billion. Yes, the underlying numbers there are very much driven by the higher load factors, the strong demand on the passenger business, and also on the cargo business. As to how they'll play out in the second half, I think as Lavinia explained earlier, we're cautiously optimistic, but there's possible opportunities, there's possible risks. It's hard to judge. Overall, for the second half, we're talking about the underlying numbers when we talk about our outlook comments. Overall, I would say cautiously optimistic, but you- Yes. I think you will notice that, yes, our RPK growth exceeds ASK growth. Yes. That's why our load factors went up quite a lot. Yes. 87.5%, like Rebecca mentioned, well, that is actually our record since 2025. I think that is really a pretty high load factor, and if we actually look at the front back end, I think even the premium cabin is, the load factors are pretty strong as well. I think that is one of the reason why we have very strong results. Okay. Thank you. I think we have time for one more question from floor, and then we can go to the questions from online audience. The lady at the back, please. Thank you for giving me the opportunity to ask questions. I'm Amy from BofA. I have two questions. One question is related to cost. For the ex-fuel cost, we can see some of the changes in the first half, like the maintenance cost. For the second half of this year, what is the trend for the ex-fuel cost, and do we have any items we need to pay attention to for the ex-fuel cost? Second question is more related to the capacity, because we know the 10% target for the capacity growth for this year. For this year, we also have T2 open, and the Three-Runway System. Do we have any roughly sense on the capacity growth in next year and going forwards? Especially for the slots addition under the Three-Runway System. Thank you. Thank you for your question. Yes, cost was, as I elaborated earlier, an area of focus. In terms of the variances, as you note, maintenance is one of the ones that has been higher in the first half. A sort of phenomenon we typically see is the first half, because it's slightly lower capacity than the second half typically, will mean that when we spread the costs over the full-year, it's typically a wider base we're spreading over, and therefore you see potentially a slight benefit, but you can't guarantee that. I think also, as I mentioned, we tend to, particularly on cargo, do more maintenance in the first half to avoid the cargo peak. As to how they'll all play out through the course of the year, I think there are inflationary pressures in the supply chain, in landing, parking, overflying, et cetera. I can't give a prediction specifically, but I think it's an area that needs a bit of attention when you're doing your models. Well, in terms of capacity growth, we actually had gone through a couple of years of pretty rapid capacity growth, particular when we rebuilt out of COVID. In those three years, we actually, year-on-year, the increase was quite big. Even after last year, after we returned to 100% pre-COVID level already, this year we are still adding around 10%. That's, again, is a pretty big base. We have been growing quite rapidly in the past couple of years. Going forward, do we want to continue to grow? Of course. Like I said, I think the Three-Runway System is a golden opportunity for us, and where slots are actually available. We do want to add as many flights as possible. Having said that, I think, or I've shown in the fleet slide just now that whilst we have 105 aircraft on order, we need to wait for them to be delivered. This year, we'll have eight narrow bodies being delivered between CX and UO. Those are narrow bodies. For Cathay, I think the main wide body aircraft to be delivered next is the 777-9, which I've mentioned will join us in the second half of next year. It's only when we have more aircraft, then we can add more capacity. Next year may be, we're slightly constrained by new aircraft, yes, but our intention to grow will not falter. We'll continue to grow next year, but maybe at a slightly slower pace than this year whilst we are waiting for our new aircraft, especially the wide bodies to be delivered. Now turning to the online question. The first one is about Middle East. How's the current situation of spillover connecting traffic from Middle East is like? Do you see bookings picking when conflict escalates? Yes. I say that we, and Hong Kong, similar to some of the other Asian hubs, we definitely have benefited, or, well, I shouldn't use the word benefit because it's a war. We do see some passengers changing their travel patterns and try to avoid Middle East hubs and go for other hubs, in particular. Actually, in quarter two, apart from, well, you might naturally expect that, say, a lot of the Asia-Europe traffic which used to go via Middle East hubs will now be diverted to other hubs. Yes, definitely, we get more of that traffic. On top, for example, we also see quite visible growth in some of the major traffic flows, like the Kangaroo Route going from Australia to Europe and U.K., and say, on the other direction, also from India to U.S. These are big traffic flows, which the Middle East carriers played a significant part during normal times. Again, during the last quarter or even currently, I think because of some change in travel behavior, we do get a bigger share, and we see more numbers coming from these major traffic flows. Yes, we are definitely seeing some increase in connecting traffic because of the Middle East situation. Thank you. The second question from online audience is about fuel cost. How much in percentage terms has Cathay been able to recapture from the higher fuel cost, from surcharges and higher ticket price? Maybe just to talk a little bit about fuel costs. If I look at the fuel costs in the second quarter compared to the first quarter, the cost at a gross level is double in Q2 versus what it was in Q1. In terms of, as Lavinia touched on, I think the ways we mitigate that cost is through our hedging program and also through the levying of surcharges. If I look specifically at Q2, the surcharges plus the hedging has probably covered about 50% of that increase in fuel cost. It's some way off the full increase, but it is mitigating about half of it. Thank you. Can I ask if there are any further questions from the floor? Oh, yeah. There's one. Gentleman at the front. Yes. Thank you. Thank you for the opportunity. This is Bruce from HSBC. I have two questions. The first one is about financials. Could you help us understand, apart from the HKD 1.4 billion disposal gain, what are others non-recurring items that is accounted in the first half? The second one is, we're seeing very strong yield performance in the first half, and we're wondering how much of this is structural because of the improvement in product mix, how much of this is cyclical due to the increase in fuel price, and what is our outlook for the second half? Thank you. Okay. I can do non-recurring, you can do the other one. In the non-recurring line, I don't know whether you've seen the actual announcement. We have two lines, the HKD 1.4 billion, as you say, and then another non-recurring item. There's a gain on disposal in there, and there's provisions for a historical matter in there as well. A few one-offs. In terms of the yield, well, we are talking about yield, not just fares, right? Yield is, of course, influenced by a number of factors, but most important is still the fares. As I've explained, the underlying airfares, they are really a product of supply and demand. Given the very strong underlying demand, which as I explained, which we expect to continue to the second half. I think that part, the strong underlying demand should still be there. I also mentioned that in quarter two and even up to now, we do see a shift in hub traffic. We do see more connecting traffic. Whether that part will continue to stay with us or whether it will gradually normalize when the situation stabilizes, we have to watch. Overall, demand is still strong. Like I mentioned, there are also some other positive factors. For example, when we look at the front, back-end mix, we are still seeing a lot of good corporate traffic flow and premium leisure and MICE traffic coming into Hong Kong. Our front end has been doing pretty robust, so that will help in the mix as well. I think these are factors which will affect the ongoing yield developments. Thank you. That's all the time we have. Thank you to our speakers, and thank you for all your questions. That concludes the briefing today, and if you have any further questions, please email them to ir@cathaypacific.com. Thank you very much for joining us, and have a good day.