Aegean Airlines Aktie

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the first half 2026 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman of the Board of Directors. Mr. Vassilakis, you may now proceed.

Yes. Good afternoon, everybody. And just to say, I'm joined here by our Deputy CEO, Michael Kouveliotis; our Deputy CFO, Stella Dimaraki, and our Investor Relations Manager, Anthi. So welcome again to our 6 months presentation. Clearly, this year has shown for our industry and indeed the world many more challenges than anticipated, both in terms of geopolitical stability and particularly its translation to energy costs and jet fuel costs in our case. Within that context, Aegean had what we believe is a reasonably successful second quarter of the year, where despite these challenges, we have managed to retain for the quarter positive profitability despite the disruption of having to forgo part of our network in the Middle East and more importantly, of course, or even more importantly, the dramatic increase in the jet fuel cost.

I'll give you some of the basics, and then we can come back to questions. So in the second quarter, our activity was increased in terms of revenue by 3%, with ASKs basically remaining stable. This comes from the imbalance of the cancellations of a significant number of the routes in the Middle East that is well known to the market. And due to the flatness of the ASKs, the passenger number was only up by 1%. So EUR 496 million of revenue, 3% increase relative to last year, and EBITDA of EUR 99 million, down 12% for the year, an EBIT of EUR 44 million, down 29% for the year and a pretax level for the quarter of EUR 23 million, down almost 70% for the year. This latter part is also materially affected by the valuation effects, which were heavy this year on the negative side as opposed to quite positive on last year's side, so on the quarter that had a significant effect.

Nevertheless, the quarter was positive. And also what's significant for us is that the RASK managed to stay on positive territory relative to the year before, something which seems to be reasonably good in comparison to short-haul carriers that we have seen published results in the industry. So despite our relative, I would say, proximity to the Middle East where a significant part of our network was affected and a lot of our connectivity was affected as well as we lost part of the network that contributes to East to West for the period, still, we managed to pull out a retention essentially of the RASK level with a marginal improvement which seems to be better than market for short-haul carriers for the period.

Including the quarter itself for the whole 6 months, we carried 7.8 million passengers. This is a 3% higher number than the year before, which is just about the same increase that we had in ASKs as well for the 6 months. In the 6 months, due to the imbalance of the second quarter, domestic traffic growth was higher than international, but this is momentary. This has been restored after Q2 once these routes were reconnected. And of course, with the inclusion of the second quarter with a positive but significantly reduced profitability to the total of the 6 months, we arrived to -- sorry, EUR 817 million of revenue, 4% increase of revenue relative to last year, EUR 145 million of EBITDA, which is 7% lower than last year, but a 35% reduction in operating profitability or EBIT and a marginal loss after tax of EUR 3.3 million relative to the EUR 48 million of profit after tax of last year. Once again, part of that delta has to do with the financial valuation effect, which last year was quite positive during the period and this year negative.

During this first 6 months of the year, we have taken delivery of 5 new A321neos. We have gone through the peak of the disruption in terms of grounded aircraft, which was around about between February and April, where we reached actually 14 to 15 aircraft grounded at the time. I remind you, last year in the summer, we were at 10. But between the April -- March, April peak of 14, 15 aircraft and the peak of this summer, we again were back down to 10 aircraft, and now we're clearly on the 10 aircraft being grounded. And now we're clearly on the declining side of this whole disruption. We're still in negotiation with Pratt & Whitney for some items, but our conviction is that we will have a substantially lower level for next summer and by the end of the year of '27, we will be down to no further aircraft being grounded.

It's already the case that we have accepted 43 aircraft, including the 5 that were accepted in the summer. And indeed, in this summer, 33 aircraft were flying, which is a significant increase relative to last year, 33 neo aircraft were flying, a significant increase relative to the 26 that were flying the year before due to the number of groundings and a lower number of deliveries. So our schedule of accepting aircraft is moving forward with the planned pace. There's been no change with that. We're also quite gratified that the majority of the aircraft that we have accepted this year, 4 out of 5, we did sale-leasebacks for, we did a JOLCO for. Difference is that sale-leaseback is 100% fixed. JOLCO is part fixed, part floating. And so given the volatility and the upward trend in the interest environment, it's important to note that the vast majority of our fleet, we can give you precise numbers later, is on a fixed rate basis and not open to rate variation.

In terms of liquidity, it's very important to note that the group has stayed very much on a very strong position. We have, as we note in the press release, EUR 100 million more than last year at the same time or the same amount as we did on the end of 2025, which is circa EUR 950 million, EUR 956 million cash and cash equivalents, having repaid our bond, our first EUR 200 million issue -- 7-year issued EUR 200 million bond in March of 2026 and also having paid a little bit over EUR 80 million to our shareholders in dividends. So despite the EUR 200 million prepayment of the bond loan and the EUR 80 million of dividend payment to our shareholders in May, the cash position of the company remains at EUR 950 million as at the end of last year, which shows that, once again, Aegean is in a significantly robust, let's say, capacity of absorbing volatility and risks as they may come from our environment.

A couple of words for the summer, meaning Q3. In the summer, we've managed to increase again our ASKs after recovering, as I said earlier, our capacity from the Middle East. However, it should be noted that we have never recovered the full plan of 2026 as it was estimated. We had guided you before the year started and very much at the beginning of the year to a 7% to 9% ASK growth overall for the year and something like a 6% for the summer. Clearly, due to the circumstances, both in terms of the Middle East, but also in terms of jet fuel and fears about demand, we have reduced that significantly, not only in the first half, but also in the second half. So in Q3, we were flying at an average of 2%, 2.5% increase of ASKs. However, by the end of August, we have achieved a little bit shy of 5% in terms of passenger count, which means that we're able to take advantage of the larger capacity of our A321neos, which are now more numerous in our fleet.

And also, again, we have a pretty decent indication, which is not a certitude today, but at least an indication -- a strong indication that our revenue per ASK for the quarter will not be lower than last year. It will be somewhat a little bit marginally higher than last year, including September. And this is, I think, again, a positive indication of how successfully we have managed to balance our network in reaction to what's going on vis-a-vis what we're reading and hearing about around the market and also different, let's say, fare trackers that we have used also to see what's happening around us. So the summer quarter is -- has been reasonably resilient in terms of demand. Of course, we did not expect the jet fuel situation to rebuild in terms of a level of where it stands today at 100% higher where it was at the beginning of the year.

We had all hoped in June after that initial cease-fire agreement that there would be an abatement. This was only temporary. And now we're looking at a situation where it's clear to all of the markets that at least for the next, I would say, 2, 3 quarters, it's likely that we'll be faced with a significant delta in the price of fuel to what we're accustomed to, possibly even twice what we used to pay a year or 1.5 years before. Clearly, this means that our attitude towards capacity has to be completely different going forward, especially after Q3, where traditionally, especially in Greece, the revenue quality or the fare level begins to be significantly weaker than it is during Q3. So for sure, the maximum you should expect our capacity to range for Q4 is around about flat. It could be between minus 1% and plus 1% in ASK, but certainly no higher than that.

And this is something that's going to be checked and rechecked every week with a much faster adjustment pattern than in the past, treating this situation very much as very special cost situation-wise, in which depending on the particular demand and cost structure of every route, we might need to make adjustments, particularly during the winter where DOC, direct operating cost, or variable cost becomes a much higher percentage of overall revenue.

And we have to try to ensure that the great majority of what we fly continues to contribute towards our fixed expenses even in winter. So looking at what we aim to do in the next 4, 6, 8 months because I think by necessity, the planning horizon becomes shorter in situations similar to this one. As I said, we do plan to have much more frequent revisions of the network to ensure that we're balancing our commercial requirements with the financial situation and costs as well as possible.

We will continue to work with Pratt & Whitney and other entities in the market, lessors and whatnot to accelerate the -- to the degree possible, the employment of our already delivered and partially idled fleet in neos. We will refrain from extending any of the expiring jet aircraft. These are older aircraft. And in this particular situation with the costs that we have today, it is important to let them go because the delta between using neos and older generation becomes much higher. And we are glad that we have the opportunity to receive early -- starting first, second quarter of next year, the LRs in our fleet, not only because they are longer range, but more specifically because they will offer us an opportunity to upgrade the quality of service we offer to some of the routes we are already flying.

And if I were to say 2, 3 years ago, when we took the decision to get into the LRs that I would have expected that a more comfortable business class, a more true business class product would be as important as it seems to be today, I would not be telling the truth. It seems to me that around the world and in Europe, airlines are actually pretty much heading in the way of upgrading the product offering because what they see is that the demand of the more demanding, more frequently flying customer is more resilient to basically macroeconomic shortfalls. And therefore, travel is getting more expensive no matter what we do on the choices of airlines, unlike what was happening in the 10 years or 20 years that preceded COVID. And therefore, we're very happy that we have the opportunity to offer to our customers as of next year in some of the routes that we will select to fly this aircraft an upgraded product.

We're also moving in the direction of upgrading our services in other areas. We're building a couple of new lounges. We are deepening the product offering of our mileage program. And we think that these things will become more relevant for customers going forward, as I said 2 minutes ago. We do think that whether it is by necessity or by choice, the next year, 2027, is going to be a year where all of us will have to concentrate much more in consolidating efficiency, consolidating quality, removing elements from our activity that don't make sense, reevaluating where we should invest more and make sure that we are doing it right because -- and at the same time, give us a chance to catch our breath and improve the training level, the performance level, the cooperation level and the culture of our people.

Because in any situation where the market is challenged like the year we're having and possibly the year ahead, we know that what's very important is to be able to stay on track on your long-term direction and to ensure with your loyalty to your people and taking care of your customers that whenever the crisis abates, there'll be strength enough and momentum enough and capacity enough, whether it is financial, human or otherwise in the company to keep going forward once again in a more dynamic pace.

But there's no mistake, we are definitely -- whether because of the energy crisis, the disruption in the relationships and the geopolitics in our wider region towards the Middle East or because of the yield environment, not in fares, but rather in bonds and interest rates and government debt, we are definitely in an environment where consumer capacity to spend and confidence to spend could be challenged.

And that, together with a higher jet fuel cost is a very difficult mix, which an airline like us with a tradition of being prudent and being able to navigate through crises have to sail through very carefully. So that's what I want to say as an opening statement and glad to take questions by any of you, either me or my colleagues. I would ask only that things that are very granular be addressed, if possible, after the call directly to our Investor Relations or our treasury. So we don't sort of get away from the larger picture, which I think is more relevant in this particular time. Thank you.

[Operator Instructions] The first question comes from the line of Natalia Svyriadi with Eurobank Equities.

Well, I was thinking on how we should think on capacity growth, but you already answered this. I don't know if you could give us some color on how competition treated capacity in the summer period, obviously, not what is going ahead. And I also had a question on the fleet that you mentioned. How many JOLCOs have we got in the fleet at this point? And you also mentioned that you're going to let go some older ceos. Do you have maybe an indication on how many are expiring in the next like a couple -- 1 or 2 years so we can get how this could affect that?

Yes. Thank you. Let's start from the fleet because it was the last and that way, I can try to remember the first part as well. Ceos, we're always going to let go. Actually, we have delayed ceos from going away, if you would recall, because of the grounding of the Pratt & Whitney engines for checks. So we have been forced looking 3 years back to make extensions on aircraft that we would have wanted to have redelivered. So what is happening now is one problem is abating, basically gradually the problem with the increased checks of the GTF engines. So the requirement to extend ceos is gradually going away. But at the same time, of course, adopting a more cautious approach towards capacity means that other than getting more neos to fly, we don't want to get any further capacity by retaining some of the ceos.

Now having said that, I believe there are 7 ceos that expire in the next year and probably another 5 to 7 in the year after that. So that -- you have to put that against the fact that we intend to reactivate 10 aircraft that are now idled. We are accepting 2 more aircraft next year, and we have 7 aircraft to accept as new jets in 2027 and '28. So 2 more to go this year, 7 to come in the next 2 years that makes it 9 that are not today in our fleet. So that plus the 10 that are idled and will come back to work by the end of 2027 gradually makes up 20 aircraft, which means that actually, we will have a higher number of aircraft by the end of 2028, even if we allow all our ceos to expire.

So there is no challenge in our current capacity, neither in the qualitative nor in the total, let's say, availability sense. In order for us to actually get back to the number of aircraft we're flying today without increase, that would be the end of '28, beginning of '29 as per expirations, I think, so mid-'29 as per expirations, I think. So that's for the fleet.

In terms of how many JOLCOs we have altogether, we have 5 JOLCOs altogether. And so -- but I think what's more important is to note the following. In total, we have EUR 1.6 billion liabilities in euros either in leases for aircraft or in borrowings, loans, JOLCOs for aircraft or in our mark traded public bonds. So we have a total of EUR 1.6 billion of liabilities for aircraft, for the bonds -- for loans and for leases. Out of those, 87% are fixed interest rate and 13.5% are floating interest rate.

So basically, EUR 1,400 million or EUR 1.4 billion fixed rate and circa EUR 200 million floating rate. The fixed rate is fully in dollars and the floating rate is largely in euros. The only fixed euro rate liability that we have, main one is the EUR 250 million bond. I think that should answer the fleet-related financing and availability questions. And then I forgot your first question, I'm sorry, does you start -- capacity of competition, right?

Well, I think what we have discussed in previous meetings and previous calls was there were no -- I mean, maybe people took 1.5%, 2% away from their peak summer capacity this year relative to what they were planning at the beginning of the year or the end of the year. Why? Well, first of all, if we're looking at European carriers, we are among those closer to the Middle East, right? So we have a relatively larger part of our short-haul network that gets affected.

But the second reason is that for everybody, the summer is a time where the revenue per flight is significantly higher for all carriers than the variable cost per flight. In other words, the cost that you save from not flying the aircraft, but of course, keeping the aircraft and the crews, the staff. So in an environment of a summer operation, it's actually much more difficult to improve your results given you have a given level of fleet and staff costs by reducing flights. So the degree to what you can do that -- to what you can do that and improve your results is usually 1%, 2%, 3%. And that's what people did. They moved basically 1.5%, 2%, something like that out of their respective systems.

Now going into winter, it's an entirely different situation. We've already had 2 or 3 major carriers making statements that they intend to go to flat capacity relative to the year before in winter when they were looking at 4% or 5% or 6% growth on an annual basis and as an overall policy in the beginning of the year. So there's already been a movement. And I expect -- and it shows to be next to -- I mean, if we're looking at the capacity degrees, as it shows today for the last quarter of the year, it looks like a 2% increase, whereas last year was a 10% increase when we're looking at the same point in time.

And I don't think you will see that 2% plus materialize. I think even that will go away because people have a short horizon. And when we look at the beginning of next year, it's going to be even lower than that because the weakest part of the year is for every airline in the Northern Hemisphere and in Europe, in particular, is the first quarter.

Okay. Great. That was very, very clear.

But to be clear also and this is the main challenge for all of us, we have not seen evidence yet of short-haul carriers being able to collect more per flight or per available seat kilometer to recover the part or full of the fuel cost. So that has been more effective in the long-haul market, where, yes, fuel is even more important than in the short-haul market, but also where the competitors are fewer and in some cases, like over the Atlantic, aligned between themselves, between the 3 joint ventures. So this is what needs to be addressed in the short-haul market.

And this can only be addressed by a gradual reduction of capacity, which will allow the carriers to get the confidence and the evidence that the revenue per flight can be different because -- as we have also discussed in the past, you can change your rates, but then we know that in every flight, you've got 20 different prices and what you sell depends on the propensity of people to buy your tickets. So if the capacity doesn't get reduced so that people gradually get used to higher fares, it's not going to happen. And when fuel is 20% to 22% of an airline's cost and when it is staying double what it used to be, there is no other way to deal with it if we're talking about a level that's going to be retained for some time.

So we're off to a tough winter. Let's see.

Yes, I read in the paper that it's going to be tough this morning.

The next question comes from the line of [ Lynn Nguyen ] with Wood & Co.

I just wanted to ask, if fuel prices remain very high also in 2027 as the curve currently indicates, what behavior do you expect to see from competition as you already previously said? And what else do you judge could be like the best course for Aegean in such environment? That's my first question.

I'm sorry, could you repeat the first part, what would we expect from competition and in which direction? Sorry, I missed it. If fuel stays high for most of '27, then what was the question?

Yes. So what do you judge would be the best course for Aegean in the next year with the high jet fuel prices? You said that the winter will be tough and that you will -- probably the capacity will be up, but what else do you see there? Is there any?

No, I think -- I mean, I believe I sort of referred to all that. I believe it seems to me now that there is evidence indicating -- and again, I'm not a specialist in the energy market, right? But from what I read about what happens and the reasons that particularly jet fuel is higher, which is not only related to the supply of fuel -- of petrol -- I mean, sorry, of Brent, but has particularly to do with the refining capacity that has been affected by attacks in different areas of the world, whether it is in the Middle East or between Russia and Ukraine. This means that full recovery of capacity to produce the products that are needed for different areas is going to take a while. Therefore, that makes us all more cautious. If you ask me today, I would say I would not expect Aegean to grow in terms of ASK in 2027. And if we believe that we have -- we see evidence that we need to reduce frequencies here and there, whether it is in international, domestic to get where we need to be in terms of fare adjustment, we will look into that as well.

Of course, that I say without knowing what the competition will do. I am assuming that carriers all need to cover the same more or less cost base. Therefore, I expect them to be very cautious as well. And hopefully, this will support the market. If it does not, well, Aegean does have the capacity to defend whatever strategic priorities or commercial priorities, not to use big words, we need to do, whether it is in market share and slot retention and customer relevance. So Aegean has the capacity to defend its area in case our competitors do not show the cautiousness that we expect them to show. So all that would mean is that it will be more costly for us and for them. But you cannot take that possibility out of the question.

What really matters in those situations is that you retain enough resources, particularly financial resources and relatively efficiency level, which for us is important because assuming what we expect will be flying next year will be flying, we will be one of the highest airlines in Europe in terms of penetration of new generation aircraft. So between having a high number of new generation aircraft in proportion to others overall in Europe in our short haul and having, I think, really strong financial capacity for our size, I think that puts us in a good place to go past this crisis, being cautious, not wanting to expand capacity and even being -- considering even reducing capacity if we feel the market demand versus supply balance -- sorry, demand versus cost balance requires it, but also definitely being able to step up in particular cases and defend our routes, defend our share where we think our strategic position might get affected.

So we are going to do what we can to have as low cost as possible from these circumstances that we find ourselves. But if challenged, we will defend our ground because, of course, we do think we're strong enough to go past it and be around the corner on the next day. And in previous crises, we have shown that we end up coming out stronger than before because we are so prudent and because, as an example, we only need to finance 7 aircraft over the next 2 years, whereas we have financed basically 14 aircraft in the last 2 years.

So we're not overburdened by incoming liabilities. We're not overburdened by the absolute requirement to fly more to utilize aircraft that have been already committed to. And we've got a cost base which is competitive, a high penetration of new generation aircraft and significant cash relative to our size. Therefore, we will try to be cautious. But if attacked, we will defend ourselves because we know that the profit does not come during the crisis, it comes the day after the crisis.

Can I ask then, do you see any evidence of the ticket prices moving upwards for the winter now? Or is it from that fuel pressure or anything like that?

Yes, we do see some evidence of forward pricing being higher than the past. But unfortunately, the percent of tickets that have been sold typically in winter is lower, the presales period gets shorter. And therefore, I cannot use it as a really convincing argument. If the trend that we have seen in the last few months of how winter is sold continues as we get closer to winter, so second half of September, October and early November, then I would be more convinced. But today, the indication is there, but not the conviction.

Okay. And the last question only. Can you share some color or magnitude into the Pratt & Whitney compensation payment?

We're not supposed to, I think. Everybody around is waving their hands and heads and making noises. I don't say anything. But I think what I can tell you is that the discussion on Pratt & Whitney has got different sides. One is compensation about idle aircraft, other is availability of additional spare engines, prices that you buy additional spare engines at, shorter or long-term leases that they can provide either for free or special terms. So it's a whole variety of things. I don't think we can say we are any different than other carriers.

We are a, I would say, let's say, midsized Pratt & Whitney customer. I don't think we've got the best deal in the world. But what I do think that is very relevant is that we have a comprehensive usage agreement or cost agreement in terms of what we pay for the maintenance of the engines or the reconditioning of the engines, which supports us going forward. So I feel reasonably confident in that direction that, again, we will not be on the short end of the stick relative to market. But I can't say it has been fun for the last 3 years, and we have another year to go.

[Operator Instructions] There are no further questions at this time. Apologies, we do have one last question. The next question comes from the line of Rahul Singh with Barclays.

I have a quick question on jet fuel hedging levels for this year and into next year, the hedging levels and pricing. And also, if I may, please could you highlight how volatile the situation is in terms of current escalated fuel prices and if we are at risk of our investment or in case Volotea seems in trouble or something?

Right. So in terms of this year, we are around about 65% at the levels that we have indicated earlier during the year, which is basically more or less the level that fuel was at the beginning of this year. This is what our average hedging had been at, and it's still there for 65% of what we need until the end of the year. For the next year, we are around about 15% at a level about 20% -- sorry, 15% at a level about 20% higher than the level we had hedged this year. So materially, there is a significant need for additional buying, gradually doing for next year, of course, trying to take advantage of the backwardation so we're buying further out.

In terms of what you said about Volotea, I didn't exactly understand your question. We -- in our last call, we highlighted -- we repeated the amounts that have been invested to the company, which are basically EUR 32 million in terms of convertible debt and EUR 5 million in equity, in shares, in common equity. We are -- never been Board members or involved in managing the company. The company had improved its results the last 2 years, '24 and '25, materially for '24 and marginally for '25. And certainly, it is still a significantly undercapitalized company, which has been hurt a lot by the jet fuel costs of this year and the effects of demand of the war.

But I cannot say anything beyond that because we are not managing the company. It is a private company. So therefore, the -- whatever it publicizes in terms of its current performance, what I did was I only just repeated other than our investment side, what size, just what they have publicized, made public for the last 2 years' performance. In terms of what they're doing now and what it might do in the future that you have to ask Volotea for that. But certainly, one cannot say that the company has not been affected and is not being challenged by the situation of the jet, being that they already have a difficult starting point in terms of capitalization.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.

Thank you all for attending. Obviously, we'll all be a little bit happier when the world is a little bit calmer. But either way, Aegean will manage to find the way through this. And at the other side, and as always, during crises, there will be, I believe, some opportunities one way or another to find a way to improve your position before the crisis is over, whether it is in fleet, whether it is in route, whether it's by acquisitions, whether by any manner of different things. Sometimes it helps. In any case, we're used to this kind of thing in the aviation industry. Every 5 years, we'll get one of those. This one doesn't seem to be as bad as COVID. So we're a little bit more certain about navigating it.

Thank you very much. And as I said before, our Investor Relations people are available should you need anything more granular than what's been granted to you here. If you take one thing out of this meeting, make sure that we'll try to divert our creativity in improving our customers' experience as best we can because the more difficult things to come, the more important it is to be closer to your customers and take care of all of them and especially those that will retain the capacity to travel repeatedly within a difficult market and a difficult economy. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling. Good afternoon.

Ladies and gentlemen, thank you for standing by. I'm Costantino, your Chorus Call operator. Welcome, and thank you for joining the Aegean Airlines conference call to present and discuss the full year 2025 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Eftichios Vassilakis, Chairman of the Board of Directors. Mr. Vassilakis, you may now proceed.

Yes. Good afternoon, everybody, and welcome to our annual results call. It's been another very positive year for Aegean and normally would be in a great mood right now presenting these results and the proposed dividend to the market. Obviously, our mood is mitigated or adversely impacted by what's going on in the Middle East, which is now 2 weeks old and where all of us, of course, are dependent in terms of both activity and cost structure by what happens there. Nevertheless, I will go through some comments confirming issues we have discussed in the past with regards to '25, and we'll give you also some limited input on certain things that are going on for '26 that will affect us going forward in regard to what we're planning to do.

So starting again from '25, the company registered a EUR 1.86 billion revenue, a 5% increase relative to the year before, which actually goes pretty much in line with the increase of the number of passengers, which is just about 6% as well to EUR 17.3 million and a 5% increase also in ASKs, which means that our RASK for the year remained roughly constant and so did our load factor. Our results were improved by 5% in terms of -- sorry, 4% in terms of EBITDA, reaching EUR 421 million, 17% in terms of pretax profit, reaching EUR 192 million and 14% in terms of the net profit after taxes at EUR 147 million or EUR 148 million altogether. So as I said earlier on, another strong year for the company with very balanced growth in terms of the domestic and international, presenting an equal amount of increase in terms of passenger traffic, 6% on both of those areas.

So a successful year behind us despite 2 elements that were negative for the year and 2 elements that were positive for the year, balancing each other out. The 2 elements that were negative were basically the first year of implementation of the 2% SAF mandatory intake, which added costs, regulatory costs to our operation. And of course, the gradual abolition of the grandfathering of the EPS of the CO2 allowances, which dropped another 25% in 2025, going down to 1/4 of what we had in like 4 years ago, and therefore, bringing another EUR 20 million in terms of cost. So the regulatory costs between those 2 increased by EUR 43 million -- circa EUR 43 million for the year. So those were the 2 negative effects.

Another negative effect would have been the -- was the continuation of having significant air traffic-related issues in our country, which contributed to building out disruption costs, whether it is in compensation or whether it is in actually additional fuel burn or overnight stays in hotels for passengers. So those were the elements that weighed negatively on the cost structure. And on the positive, of course, we had a better fuel rate for last year by about 10%, which, however, translates to a benefit that is a little bit lower by about 20% than the regulatory cost increase that we have and also a lower dollar, an improvement in the euro, which actually provides some valuation effects which differentiates to a great degree between 2025 and '24, where we had the reverse effect.

So if we adjust, if you like, for these different results, I consider the results of 2025 equivalent in terms of operating quality to those of 2024, neither better nor worse, even though the after-tax result is better. However, both years were, of course, impacted by the GTF issue, the grounding of the aircraft that we have, the new aircraft that we have because of mandatory checks on the engines. And in that aspect, again, '25 was burdened by a higher amount of aircraft ground. There were on average 10 aircraft grounded on average in 2025 versus 8 aircraft grounded on the average for 2024.

And the end of 2025 is essentially the peak of the disruption and the cost coming from this area with around about 13 or 14 aircraft grounded at the end of the year and decreasing from now on with several actions being taken by the company and with some partial support from Pratt & Whitney. So the result, once again, quite positive. Of course, this is supported also by how Greece has continued to develop in its incoming traffic and the spending of Greece also for travel. In both areas, we have continued to see improving numbers, the strength of the Greek economy contributing to Greece being able to travel more frequently and the continued attractiveness of the country, bringing in some additional tourism every year, albeit at lower rates of increase relative to the year before.

And here, we're continuing to see something which we expect to continue in the future, again, a rather more pronounced increase in the visitation in winter in terms of percentages rather than in the summer. And there, part of the reason is seasonal extension and part of the reason is the capacity of Greek Airport and Greek ATC in the peak doesn't allow for very much more from different sources. So that's kind of a negative positive in the sense that it fears the growth to take place in the winter, which especially as our neo aircraft fleet increases and recovers is going to help us both with utilization and costs.

So in a nutshell, that's the outlook -- that's not just the outlook. That's the actual condition of the year. We ended the year with EUR 955 million of cash and cash equivalents. We had an additional of EUR 155 million, how do you call them, prepaid -- predelivery payments to Airbus for upcoming aircraft. That number was increased from the year before because some orders we did the year before that. Actually, today, as we also wrote on the release, we actually repaid the first bond that we issued back in 2019, pre-COVID of EUR 200 million. It was a 7-year bond issued at the time and the first publicly listed bond the company has issued. It has now been repaid as of today. And I would like to also thank the public for participating in that.

As you know, last summer, we issued another bond for EUR 250 million. And we, of course, intend to continue being part of the capital markets because we believe that's a very positive plus for the company. In terms of what we were expecting to see from Aegean in 2026, we had guided in previous discussions, and I believe our Investor Relations department must have been more granular on that to an expected growth for the company for 2026 that would range between 6% and 8%, centered both in Athens, out of Athens, but also out of our regional bases in Greece, Thessaloniki and Larnaca. This is how we started, and this is how our network has been published, and this is the direction that the network has moved for the first 2 months of the year.

Of course, within the last 12 days and looking forward, we do have now a significant level of uncertainty with regards to our network. That has to do with the Middle East. Middle Eastern destinations that we don't fly to today are actually 7 in different countries in the Middle East in Israel, Jordan, Lebanon, Saudi, Iraq and UAE. These destinations and these routes represent roughly at peak -- between 7 and 11, at peak, they reach 7 flights a day from Athens, 7 rotations a day from Athens plus another 3 to 4 from our other regional bases.

So all these together constitute around about 4.5% to 5% of our seats and about 6.2%, 6.5% of our ASKs. So as one can imagine, if one takes these away, then we are looking at a year that in terms of activity would be flat. This is how the activity is shaping these days when we don't fly them. How long these destinations will not be flown, of course, is not known because that depends on what happens in the Middle East and the war that has erupted down there. In terms of another -- a couple of other important elements that I think we should highlight looking forward. One is fleet. In terms of fleet, the overall number of aircraft that we have committed with, with Airbus directly or through lessors has stayed constant at 60 aircraft, 60 neos, out of which 38 have been delivered to date.

From -- in these aircraft, however, we had counted as we had announced last year, 2 XLRs, 321 XLRs that we were going to get from another airline that wish to cancel them. With those aircraft, there has been a problem in terms of some certification issues in the seats. The deadline to receive them was pushed back by around 7 to 8 months. That created a situation where the arrival of these aircraft basically by the end of the summer and later in autumn would have made them rather redundant for us because they were meant to accelerate our entry in longer distance markets like India mainly.

And therefore, because we have already aircraft LRs of our own order coming in early '27, we took the decision around 2.5 weeks ago to walk out of that contract where we had, of course, the right to do so due to the extreme delay that had been experienced where the other contracting party had the liability. Therefore, these 2 aircraft have been canceled. They are no longer going to be received. On the other hand, we have replaced the overall capacity with 2 regular 321neos coming from another opportunity available towards the end of the year to keep the number of aircraft on the neo fleet steady. And we're looking at converting 2 more of our regular order 321s into LRs so that the subfleet of LR is able to fly longer distances and also have a very different product specification for the company to remain at 6 as it would have been if we had indeed received the XLRs.

Again, I don't want to confuse you with too much information with that. The bottom line out of all this is we remain committed with 60 neos. Out of the 60 neos, 39 will be of the higher derivatives, the 321 -- the larger derivative 321. There will continue to be 6 aircraft in total within those that will be able to fly longer distances. There will be LRs, and those will be also configured in a different way in the cabin with 178 seats and 16 sleeper seats. And actually, the removal of the XLR from the mix has 1 plus and 1 minus. The plus is that we will have a homogeneous subfleet of 6 aircraft as opposed to 2 subfleets, which would have made things a little bit more confusing. On the other hand, we pushed back our launch to the Indian market effectively by 1 year between the delay and the arrival of the new aircraft. So that's the fleet issue.

This year, we will receive actually 7 321s. All the aircraft that we're receiving from now on are all 321s. There are no 320s coming into the fleet. Obviously, this is the more efficient level -- efficient -- sorry, size derivative of the 320 family. And also, the significant delta this year relative to last year is that while there will be, at the peak, the same number of aircraft grounded as last year, 10 expected in July, August to be grounded with 10 also last year due to the number of aircraft received and certain other actions with regards to leased engines, we will have 33 instead of 26 neos flying. But even more importantly, we will have 22 out of 12 321neos flying.

So the average size of our seat capacity per flight and our fuel efficiency will be significantly improved. And of course, especially within an environment like the one we're looking at now on a relative basis to performance to other airlines, this is very important. Now looking at our hedging because I'm sure you would all like to know something about that. The company is 60% hedged from now until the end of the year, assuming the budgeted network, which encompasses all the destinations, including the 7 that are now not flown. Without the activity at those destinations, so long as we don't have the activity to those destinations, however long that might last, that takes us to 65% or 66% of actual fuel needs hedged.

So basically, while this is going on, roughly 1/3 of our activity is not covered by attractive fuel hedges. In terms of what we have seen in terms of initial reaction in terms of our booking flow since the beginning of the war, I would like to say that it's been rather similar to what happened when -- 4 years ago when Russia invaded Ukraine. There has been a reduction of flow around about 8% to 10% relative to the weeks before. And we see it beginning to normalize. But of course, it really will depend with what will happen in the next few days. Now keep in mind that, of course, we have now also taken out of our network for the few forward weeks that part of the Middle East.

Therefore, it's natural to have some shortfall, but there is also a holdback from people concerned about travel in general during this time. This is not at a very high level, but 8% to 10% is not insignificant, and therefore, we have to report it. Obviously, quite some people will wait to see how this evolves or whether it will become either to be resolved or whether it will become part of the "People's routine" like the war in Russia and Ukraine has become. The cycle -- the initial cycle, I think, in terms of reactions by people typically last 2 to 3 weeks. So I think by the end of the month, we'll have a better feel about what the customer reaction is, especially as we get closer to Easter and the summer period.

One more note with regards to the fleet. We, as I said, have 7 aircraft to be received this year. 5 or 6 of those will be financed by sale leasebacks or leases. 1 or 2 will be financed by JOLCOs or finance leases. We are well progressed in covering the agreements for all that. The AGM continues to be very attractive in terms of lessors and financial capacity suppliers in general. And we are very happy with the evolution of the offers and the cost we are receiving from that side. Having said that, just one more comment to make with regards to something that's a little bit longer term and slower moving, but where there have been some developments.

As you know, we have been operating for the last 2.5 years, our MRO facility, our new MRO facility. We do see a gradual evolution of its activity. We know it's going to be slow because it depends on the numbers of people that we train and include within that, but it is performing reasonably well. And it's nice to report that already 2 subsidiaries of 2 of the 3 largest airline groups in Europe are already our customers in that MRO. And also in the effort to develop what we have referred to as the maintenance support ecosystem, we have made an investment in a small Greek company that has a significant history in providing services to airlines in our area. It's called APELLA. They have around about EUR 15 million of annual revenue. We bought a 45%, sorry, stake in the company early in the year.

The owner and manager of the company will stay in place. And the idea is to develop the synergies between the activity that they have, which is supporting basically wheels and brakes for commercial aircraft, and they do some also work for the foreign subcontractors of major suppliers to the Greek Air Force. So both those areas are quite interesting. The synergies and the depth of what we're trying to develop are gradually moving forward. And so we are hopeful that with the years that come, we will indeed develop a significant facility with significant capacity to serve in different areas that were actually underrepresented and underdeveloped in our country.

So in a nutshell, that's what I wanted to say. I will left the reference to the dividend for the end. It's obviously there. We will increase the dividend. We will propose to the AGM that will take place in April to increase the dividend to EUR 0.9 per share. This is a significant increase from last year, and it's consistent with our payout policy, the same amount of the net after tax than the previous number for last year. And it's another year where Aegean will be able to return a good number to its shareholders. I believe the overall payout is -- will be EUR 81 million, 82 million if this is approved by the AGM. So that's where we are. Obviously, many of you will need to contact our Investor Relations department over the next weeks to get updates of how the situation is evolving.

I, in many ways, of course, -- the situation is visible to everybody. So things as regards to the cost of fuel and what's happening in the Middle East, you don't need a brief for us -- from us. The way that it reflects back to us and how we will make adjustments, whether it will be adjustments in fuel surcharges, whether it will be further adjustments to the network, how we might redirect some of the capacity and what our overall outlook for the year will be are all things that will be shaped over the next 2, 3 months. I do not believe that we will have immediate answers in the weeks to come. I would like to say that I am hopeful that this will be resolved in a week or so, but I don't really believe that. I think Aegean will have to, as usual, be conservative and flexible.

We have built the capacity to adjust and make sure that whatever happens in the short term does not compromise our ability to serve our customers. It doesn't compromise our ability to develop in the future. And that while short-term results might be affected, what remains mostly relevant is how competitive we are and how the efforts that we are gradually unfolding to develop the capacity and the skills of our people and our company continue to evolve even within patches of instability that unfortunately, for all of us have become rather more frequent in the last few years.

So thank you for attending our call. I'm happy to ask -- to answer whatever questions you have so long as they're not really about outlook because I think all of us have about the same information on that to the degree that it is relevant to what is happening in the Middle East. Thank you.

[Operator Instructions] The first question comes from the line of Svyriadi, Natalia with Eurobank Equities.

Congratulations on the results, and I hope you keep up the good work. I have 2 questions. One is regarding your investment in Volotea. How has this been evolving? If you could give us some insights on this investment and if you went through on investing further there? And also, I wanted one clarification on the fleet deliveries, the 7 aircraft we're expecting this year. Are they all coming before summer? And how has the owned versus leased mix evolved, okay, before the new aircraft coming probably? These 2 questions for me.

Thank you. I'll start from the second part, which is the fleet because it's faster to answer it. There -- the 7 aircraft out of the 7, 5 come before the summer and 2 after the summer. So yes, it's March, April, May for the 5, and I believe effectively September, October or October, November for the last 2. The last 2 are the ones which again come from another airlines cancellation diversion, release, call it whatever you want to call it. As I said, out of the 7, 5 or 6 will be leases and 1 or 2 will be funded with JOLCOs or finance leases. Where does that take the mix, Stella, for owned and...

18%.

It's 18% according to Ms. Dimaraki, if she's wrong, you can blame her. So 18% and 82% sounds pretty specific to me. So yes, so that's that part. In terms of Volotea, we have invested EUR 31 million in 2024, EUR 6 million in 2025 in a small top-up. Basically, let me explain what's different from the initial plan. The initial plan was that there would be a total capital increase of around about EUR 90 million, EUR 95 million by the different shareholders, of which we would have taken roughly 55% in 2 tranches, one which occurred when we started in '24 and another one in '25. Basically, what happened is the first part happened as planned. We had a small -- we had an opportunity to buy some additional shares from a shareholder that wanted to sell. So we bought at a lower valuation.

So that's how the EUR 26 million became EUR 31 million in '24. And then the shareholders of the company last year decided the company did not require cash-wise, the initial injection that had been budgeted, the EUR 45 million. So only a EUR 10 million increase took place in the summer of '25, out of which we took EUR 6 million. But with this second participation, our total participation reached EUR 37 million in terms of investment and our holding of the company reached 20%. And there is an active discussion close to conclusion right now for another tranche of EUR 16 million, where we are likely to undertake EUR 10 million, and that's our expectation for investment to Volotea this year. The company continues to improve its EBITDA every year.

However, it also continues to have on a net basis, a negative result due to the high financial burden that it has from the past. So I would say it still has significant challenges going forward. But on the other hand, it is the case that it hasn't required the amounts that were initially budgeted as a whole, which means that they are managing their cash needs and their performance in a rather positive way with a difficult start, of course, which was the weakness of the company even before we entered it. The good thing, I think, for Volotea is that the part of their activity is centered in basically France, Italy and Spain. And of course, they don't have any activity towards the Middle East.

So there is no demand related or rather operational challenge related effect from what's happening in the Middle East. The challenge for any low-cost company like Volotea, of course, is whether by the necessary increases of fares, whether done through surcharges, fuel surcharges or just simple increase of fares that will be needed to cover the delta in fuel costs. What will be the elasticity, will it be high, will it be low. But at least what's good for them is that they operate in a part of the market that's probably going to benefit a little bit from the, I would say, reduction of options for Europeans in terms of going towards the Middle East, towards potentially Muslim countries and also the higher difficulty of crossing over to Asia.

So I think a mixed bag in terms of what this means for them. For us, a potential investment of up to an additional EUR 10 million this year. And overall, as I said, an improving EBITDA performance year-on-year '24 -- '23 to '24, '24 to '25, but still a bottom line that's negative in the company. And we have not yet as a whole, as shareholders, invested even including the EUR 10 million that we expect to invest this year, the amount that we had initially budgeted in that direction.

The next question comes from the line of Caithaml, Jakub with Wood & Co.

Three from my side, please. On hedges, could you share a little bit more color on how the coverage is spread throughout the year? And second question, are you already seeing any signs of your competitors redeploying the capacity that they were using in the Middle East elsewhere in their network? And if so, how are they going about it? And has there been any impact so far on the routes in the markets that you fly? And third and maybe partly related to this, could you share what is your current expectation on summer capacity growth on routes to and from Greece?

You mean overall capacity market growth?

Yes, that's correct.

Okay. All right. So I'll try to answer to the degree that I can. I think it's too early to say what are people redeploying capacity in because people have not -- airlines have not yet, let's say, what's the right word, fully digested or decided or estimated in a decent enough way how long this would last and therefore, whether they are just discontinuing operations to the Middle East for a couple of weeks or whether they're doing it for the whole summer period being the 2 extremes. So up till now, redeployments that we have seen have been relatively limited, although in the last couple of days, we have started to see, for instance, some airlines saying, well, we have taken out Israel from our summer program.

But it's still quite early. I think 2, 3 weeks down the line, the translation in changes from initial planning to -- from the market will have taken more shape. Now as far as what is affected in our markets, other than the parts that we don't fly, there is a higher effect with regards to traffic to and from Cyprus due to proximity and the -- some of the discussions about the U.K. base there and whatnot. And I would say that's probably higher than the 10% that I gave you overall. There will be a higher number than that, the apparent shortfall in bookings or traffic. And we are, of course, quite eager to see that go away. And I think I'm hopeful that, that will go away regardless of the duration of the war because I think people will soon realize that the -- whether it continues or not, the damage is going to be significant, but probably more localized around the Middle East area or the Gulf area, I would say, more precisely. What else did you ask for? Sorry, because I -- sorry?

Hedging.

Hedging. Hedging is pretty much flat around the year. We don't have 80% in the first month and in the first quarter and then 60% and then 40%. There is a little bit of a higher hedging percentage in the summer months where you might have in Q3, 3%, 4% higher than the rest. But otherwise, it's pretty much flat at 60% around the year. And the way it works, as I said, 60%, if you think about it in what was budgeted as activity, 65%, 66% if you think that we're not going to be flying -- there's the activity now not being flown -- will continue not be flown and not be replaced. That's pretty flat around the year. So no big deviations about that. Anything that was -- did I miss something else?

This is super helpful. I appreciate it. Maybe on the summer capacity growth [indiscernible] Greece, keeping in mind the uncertainty.

Yes. Sorry, on the market, we had seen something that looked like more or less on the Greek market, 6% in Q2 and I think 3% or 4% in Q3 was the overall market expectation. But I don't know that -- how that will change. I don't expect it to increase with -- I would not expect significant redirection to our country, but that's just a guess.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Vassilakis for any closing comments. Thank you.

Thank you overall. Thank you all for attending. Happy that we have another successful year behind us. We know that the start of this one will be more adventurous. And I hope that soon, we'll be able to be more specific about things quieting down, even though as we all know, it's not certain at all. So I hope that this year will be -- I'm certain that this year we'll be able to adjust in a way that will be at least as efficient as our competitors and probably more. How that will translate forward will, of course, depend on the world around us as well. So thank you. What I want to say is that AGM will definitely not pull back on any of its plans or capacities under development because of this.

Our longer-term, medium-term direction remains the same. We will continue to try to be an airline that offers in short haul something a little bit more than the others. We will continue to develop our MRO capacity, and we will continue to seek to fly to somewhat longer destinations and to offer as of next year, a product with a part of our subfleet that will be addressing the gradual shift of the market back to premium, which we think is both relevant for our company and actually very close to our hearts in terms of what we want to present as an image to our customers. So thank you, and we'll catch up to you on the next call. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.