Finnair (Helsinki:FIA1S) Q3 2026 Earnings Call

0:00 Hello everybody and welcome to Finnair's Q3 webcast. My name is Sophie Jolly and I'm working as IR here at Finnair. First time for me this time so I'm very happy about that. With me here today is CEO Turkka Kuusisto and Pia Aaltonen-Forsell who will present today and I think that we will take the questions after the presentation. So in normal manner, first Turkka will start and Pia will continue, and after that questions. So without any further comments, please Turkka.

0:38 Thank you, Sophie. Very good afternoon and welcome to our Q3 result presentation. In line with the preliminary information that we submitted two weeks ago, we did report a very strong third quarter of 2026. Revenue grew by 14.2 percent and that actually stems from basically from all the traffic areas that we have. I will cover that in a bit in more detail and then of course the double digit growth on top line also resulted in very positive development when it comes to comparable operating result. 84 million euros is well above the compare quarter last year, even though the compare quarter was influenced by the industrial action at the time.

1:31 But all in all, if we factor back the 80 million euros to the 50.7 million euros that we reported, we can be very satisfied with the profitability development of Finnair during the third quarter. I'm especially happy Pia we discussed this in more detail but the operating cash flow was close to 180 million euros and also given the investment scheme and the fleet renewal programs that we are undergoing this is super important when it comes to financing the fleet investment and also preparing our capacity for the future. Load factors grew on average by 2% across the traffic regions, hitting close to 82%, which is a relatively good number when it comes to the historical performance of Finnair. Then of course something that we also want to discuss with you today in greater detail is the Hedging Strategy and Hedging Policy.

2:32 We did have 81% locked when it comes to jet fuel price for the third quarter, and we are somewhat north of 70% for the fourth quarter. And the current hedging ratio for the forthcoming fiscal year is 34%, but Pia will cover this in more detail in her section. And then just a reminder that based on the decisions made by AGM, Earlier this year the board of directors decided yesterday that the second installment of the capital repayment will be paid next week on Wednesday. So if we then take a deeper look into the network choices that we have made and the development of the traffic regions that we have.

3:17 If I start with the Middle East, we still continue to suspend or we have suspended all of our flights to Middle East because of the safety and security situation and this is valid until further notice and maybe just to Once again put it into a context when we started this fiscal year we had planned to allocate three percent of our capacity measured by ASK to the Middle East region so therefore the financial impact of the suspension is rather limited. But then we will take, for instance, Asia first. Very positive development, load factors close to 86%, so the flights have been literally full and also very happy with the yield development when it comes to that region, close to plus 8% when it comes to unit revenue.

4:08 And then also North Atlantic traffic, even though maybe one could argue that the compare quarter last year was maybe a bit soft, but then given the numbers that we are reporting today, very positive development both revenue and risk wise and also load factors developing positively and also the yield development close to plus 14% in year over year comparison. Also when it comes to Europe, the new destinations that we launched for the summer season, 12 new destinations in Europe also supported the ASK growth and also revenue growth by 15%. So we can be very satisfied with this balanced revenue development and also yield development across these three largest Domestic traffic in Finland is always somewhat seasonal depending on customers' preferences.

5:04 Shall they travel abroad during their summer holidays or not? Therefore, ASK was somewhat below last year, but at the same time revenue and risk developed favorably. Speaking of customers, we continue to provide improved customer experience to all of our customer groups. July is typically the most challenging when it comes to OTP, especially given the ATC restrictions in Europe, but also this summer season we did face quite a lot. Extraordinary weather conditions in form of thunderstorms for instance in Central Europe so therefore the NPS in July was a bit lower but very happy to report that in August and in September we are back on track and the average NPS for the third quarter was 38 and then again is it a good or bad number based on the benchmark that we have or peer group that we have composed we are trending well above the 33 which is the peer average.

6:08 And then if we take a deeper look into the core customers of ours, which are in the center of the strategy that we launched a year ago, Finnair frequent flyers are actually trending at 44, which is a very good result in my opinion. Speaking of the strategy, some highlights. We are adding capacity and new connections. We just launched the Melbourne connection from Helsinki via Bangkok. The first flight was flown starting from Sunday night and then plane landed 24 hours later in Melbourne and based on the reports that I have received the turnaround has been successful and the aircraft and the crews are already back at Helsinki or at least returning to Helsinki soon. We are expecting to receive the latest 350 in our fleet during this year, but the operations will be started only at the beginning of 2027.

7:07 And as previously communicated, we have signed letters of intent when it comes to sourcing second-hand Airbus 20 series aircraft to support the so-called bridge solution when it comes to fulfilling the capacity gaps that we have to support the strategic growth parallel with the entry into service project when it comes to Embraer E2s that we announced also late March this year. When it comes to operational stability, operational excellence, when we try to kind of analyze the good performance in addition to strong market demand, obviously, the market's capability to pass through the price, elevate the fuel cost price to the ticket prices, we can also be very satisfied with Finner's own operations and own actions. In addition to network management, capacity management, I argue that the operational platform of Finnair is functioning very well as we speak.

8:09 Regularity of the flights 99%, connection reliability 99% as well, and OTB at our target above 80%. In order to further enhance the customer experience and the digital journey of our customers, if you like, we are launching a new mobile application next week and the objective is to provide the new application to all of our customers by the end of November. Then going into the commercial strategy of ours, again very positive result when it comes to ancillary sales or revenue per passenger, 9% growth and all in all parallel with the passenger volume growth, the ancillary revenue grew by 16.3%, again supporting the commercial strategy and our ambition level towards 2029.

9:03 Also Finner Plus frequent flyer scheme or program is becoming more popular among the core customers and the total customer population of Finner and 2.6 million active Finner Plus members at the end of the quarter. But maybe with these highlights and kind of setting the scene, I leave it for Pia to discuss the kind of the nuances of the Q3 report.

9:31 Thank you so much Turkka and ladies and gentlemen it's of course a pleasure for me to present these strong figures for the quarter although when we look into the future fuel and the volatility and the war in Iran These all still have impact. So let's try to cover those in a few slides. So let me start with just the highlights, really sort of the high-level numbers, just to give that overview of the magnitude of where we are. Starting obviously with the revenue, I think Turkka has already described the various market areas, but I really think that we can see the strength of being a network airline of the long-haul destinations, and the strength not only towards Asia and the Atlantic but also within Europe.

10:21 I'd say the strength of the market combined with a good performance and also our strategy execution have certainly boosted here the revenue figures. Looking at the result, obviously I looked back in the history books and I did find one quarter three that was a little bit higher and that was back in 2023. But I think this is a very strong performance in a super volatile year, in a year where sort of from the start of the year we've had to tackle the war, the inflation, the impacts on fuel. And most importantly, of course, from our side, fuel has not been a supply issue as such. We have had all the fuel we have needed to fly. But of course, it's been a lot a cost issue.

11:08 And then, Turkka already boosted a bit the cash flow. I will come back with a few more words on that, but I do think we should put this into the perspective. We have almost 180 million in this quarter. However, we are on a strategic journey where we want to put 2 billion euros into capex by 2029 in cumulative terms. So, hey, it is also clear that to secure that strategic journey, we need the cash flow. And this is a good proof point of that capability. So next, I want to deep dive a little bit into the components of the result. And we've actually brought for you a traditional sort of variance bridge. So here we go, looking a bit at that. And I think it was well worth explaining it in this quarter, because when we compared with the quarter three a year ago, obviously there were still some impacts from industrial actions.

12:04 So if we would really sort of compare Kind of the true underlying operative performance a year ago. We would start from 69, we ended up at 84 in a year where fuel and the fuel cost pressure has been the big topic. Now, our hedging has protected us, and I'll come back to that separately. So you see here the higher effective fuel price clearly being the cost component that was growing the most. But you also can see that in this quarter we were overcompensating that with higher passenger yields. And I think it's good to understand a bit sort of the direction going forward. Hence, we will discuss also the fuel and the hedging in a few next slides. So I'll stop with that here.

12:50 Out of the cost items, I want to comment two more. We perhaps haven't discussed it so much this year because of the obvious sort of big topic being the fuel costs. But environmental regulation in Europe No more free emission allowances and treatment. The obligatory sustainable aviation fuel quotas, etc. All of this are also impacting our costs. So we want to be transparent with that. You may recall from last year that we had this approximately 10 million per quarter more cost and it sort of seems to continue here. And my final comment on the cost side relates to staff costs. You see that it has increased year on year.

13:36 There's a few elements I want to comment relating to that. The first one is that based on our growth strategy as well, we have had some increases in headcount. That's of course sort of a low-digit, one-digit figure in percentages, but we are gearing up to also being able to grow. We've had some inflation, but maybe half of this increase really is in the delta when it comes to various staff incentives, short-term incentives, etc. Because last year we were not in a position sort of very favorable for that, but this year also based on our guidance looks strong. And then a short comment on the more positive, the dark blue bars here. You really see this shift. In Q2, we spoke a lot about our planes being really full and the situation, especially geared towards Asia, really higher load factors. You see that that has continued, but at the same time, it's really the yield that has also supported in this quarter.

14:39 Another way to look at this is to compare the revenues per available seat kilometers and then also the cost. So I'll do that still quickly in the next slide. And also based on our strategy, this is a measurement that we've said we will follow up. And I think for two reasons. First of all, when we look at the revenues per available seat kilometers, we have important elements within our strategy. For example, the ancillary sales, you know, the choice that we are offering to our customers. And that should help us to grow this figure over time. At the same time obviously we've had a strong market and you see that revenues per available seat kilometers have increased by more than 12 percent. has increased more than the costs, but the costs have also increased by 9%. And that's obviously on the back of the fuel situation and the other items that I have just commented. So most importantly, of course, here is that we keep sort of a clear sort of benefit for the revenue growing more. And in this quarter, I think we were well succeeding with that.

15:54 I still want to pick on one thing from the cost that Turkka did actually mention, but I do think it's so important. And it is that we were operationally, we had a good quality of operations in the third quarter. And when we managed to do that, it also helps to stabilize the cost situation. So obviously we should think about these sort of from the context of the full Finnair system. Now on to a few comments about our fuel. The first picture may be familiar to you, as I'm sure that these are topics we are all following, but we still wanted to build into one graph the situation for the crude oil, so really sort of Brent. This is dollars per barrel.

16:40 Then we built in the diesel, because diesel is also an important refined product, and we all see that through the headlines all the time right now. And then on the top here you see the development in the sort of brownish color for the jet fuel. And you see how that has been the tightest market and really sort of the most constrained situation. Also really leading to elevated prices compared with sort of historical levels here. And I think this context is good to understand. We saw during the summer when there was this short window where peace seemed maybe a little bit making progress, that there was a pretty rapid drop in the Brent prices, the crude oil prices.

17:25 Now the refined products will also still need to digest any supply chain issues, any damage that may have been caused in the war that maybe is not so transparent right now. So there might always be delays. However, we have of course seen also in the summer the drop and now we see the elevated prices again. So on the back of this information, we should also consider what is our hedging position and sort of how we look at the situation going forward. And I would never dare to say that there is a perfect crystal ball that would tell us what will the price of jet fuel be for next year. And I think we need to take into account a number of considerations when we think about the impact for Finner.

18:12 But one important one obviously is hedging. And therefore, if you look at this still for Q4, even for Q1, you can see that our hedging ratios are fairly on a good level. And we've also brought you the detail of kind of what are the prices that we have locked in with these hedges. So you also see that those are on historically even I would say pretty reasonable prices. Now the challenge obviously being that in a market that is so volatile and with so high prices, How do you then lock in low prices again? Well, that is fairly difficult. So we are at the moment sort of, we have touched the lower limit of our hedging policy. We are a little bit below in some quarters.

18:58 And I think the direction going forward is that we would be looking for that right market opportunity to grow again the hedging levels. More towards sort of being on a somewhat higher level now next year is at 34%. But we also need to find sort of the right momentum for that. And I think we have a good understanding of what we want to do. and the direction is clear, but the situation right now at the market is very volatile. So this is of course something that will impact a lot our thinking, our planning and the way how we need to consider the agility for next year, the cost levels for next year, et cetera. But 34% is the hedged amount for next year as we speak.

19:45 Then my final slide. And with a balance sheet, I want to say a few words about the future. So the first one is unflown ticket liability. You can see and observe the strength of the market and the demand for Finnair's flight in the fact that the unflown ticket liability is up 22% compared with a year ago. And I think for a Q3 end, which still seasonally is much lower than compared with what we had at the end of June, this is a strong number. And I think that speaks to kind of the market strength at least for one quarter going forward and even into the winter season and into next year. Then for our future, Turkka has spoken about the investments.

20:33 Our thinking for this year is that we will spend 444 million for CAPEX. Well, we spent a bit north of 200 million so far. But as Turkka also said, we are still expecting one more Airbus 350 to be delivered this year and then to be taken into use to be flying next year. So I think that plan is pretty solid that we have right now. And our balance sheet is strong. Our leverage is currently at 0.6 times. So it means that we are well prepared for the investments ahead of us in the next years. So Turkka, I think this is a good time to hand over to you to talk a little bit about the fleet still.

21:15 Thank you Pia and maybe just as a reminder that as we have quite a few parallel fleet investment initiatives ongoing 350 mentioned already a few times and then this Embraer, a smaller narrowbody campaign kind of ended up when it comes to selecting Embraer as our next generation smaller narrowbody that we communicated late March earlier this year, kind of the key Point or core message being that we have a firm order of 18 E2s and then in conjunction with this E2 decision we communicated that we will source up to 12 second hand or used Airbus 321 family aircraft out of which six letters of intent have been signed and also we are strengthening our regional fleet in form of a few selected ATR 72 investments.

22:15 And then maybe referring back to the strategy launch late last year the investment range being from 2.0 to 2.5 billion euros and we have earlier communicated that with this composition of fleet sourcing and investments we will be towards the lower end of the range. And then the next slide, only repeating what we already communicated October 13th, two weeks ago. The outlook and guidance are now unchanged. We aim at increasing the capacity by ASK-wise by 1%. Number of passengers will grow approximately by 7%.

23:00 And we are repeating the financial guidance that we provided you with two weeks ago. Revenue is estimated to be from 3.5 to 3.6 billion euros, whereas the comparable operating result range is 175 to 220 million euros. So I guess, Sophie, that with these words, we are ready for the Q&A part.

23:23 Yes, we are ready for the Q&A. You have the possibility to ask via the phone line or via the chat. So let's take the first question from the lines. If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Andrew Lobenberg from Barclays. Please go ahead. Oh, hiya.

23:53 Can I ask the first question, which is pretty basic, I'm afraid. You're guiding for 1% capacity increase for the full year. What does that imply for the fourth quarter? Because by our calculations it implies a pretty high fourth quarter growth if you're going to get to 1% growth for the full year taking account of wet leases.

24:21 Yeah. Hi, Andrew. Pia here. Thanks for the question. Sorry that I don't have the figure top of my mind. But I think, you know, we have raised our guidance for the top line. We have also raised the range for the EBIT. And clearly, we spoke about the unfloat ticket liability, etc. So I think this all speaks to the fact that we have seen A stronger market momentum than maybe was expected earlier. But sorry, we'll provide that Q4 figure and I'll make a note of that. We'll provide that.

24:58 Okay, great. And then can you speak a little bit about what you expect to see with that Asian unit revenues? Because I think they were up 15% in Q2 and up 8% in Q3. What's the trajectory into the winter and especially with all those seats going to Bangkok and indeed down to lovely Melbourne?

25:24 Yeah, Andrew, if I can start and Turkka, of course, if you want to comment the market more, please feel free. But I think first of all, if you just sort of look at our position, both the capacity utilization, you know, if we look at the yields, we've had strong development. Obviously, Q2, there was even this sort of You know, massive disruption in the market and certainly almost a pressure from that, but that has continued strong into Q3. But then I don't think we have given specific guidance for the different market areas, but I don't think our situation or position in Asian traffic has changed in any way.

26:01 Yes and I would refer to the unflown ticket liability that you mentioned because the composition of the unflown ticket liability is in my opinion reflecting pretty well the current momentum that we have witnessed.

26:15 Okay, nice. Then can you talk a little bit about how you trade between economy and premium? Because most of the other airlines around the world are very confidently about premium and much more cautiously about economy class. But I think you guys don't have a very large premium cabin on your aircraft, no disrespect, and yet your numbers look really strong. So how are the trends between the front of the bus and the back of the bus?

26:45 Thank you, Andrea. I think that we have also seen this premiumization trend. Our business class and premium economy have been witnessing very good utilization of load factors, but at the same time, referring back to the overall load factors that we have reported, all important traffic areas not of 80%, so also the economy class has been well utilized.

27:13 Okay, cool. And if I may, just one more, and then I'll shut up and give other people a chance. Could, I mean, Pia, you spoke about hedging and how challenging it is, but you haven't really told us what you're going to do. I mean, you're locked in hedges at the moment. You show us sort of from 750 to sort of 800 per metric ton, but at the moment, you know, the price, you know, out to December is You know, it doesn't fall below 1100 and below 1200. So are you frozen? Are you not adding? Or are you considering adding but letting the effective price climb quite steeply? What's your policy or has the board set a defined limit, a price limit above which you won't add to the hedges?

28:02 How are you working that?

28:03 Yeah, thanks Andrew. I think you are touching sort of one of the most difficult decisions to take right now because it's clear that having more insurance Having more hedges in place in many ways would give, let's say, a bit more relief or a bit more space in the whole system. But nonetheless, I think the fact of the matter is just that we also need to understand that no one knows exactly what the prices will be going forward. And we will need to be very vigilant, as we have been now as well. We were on the market and we added hedges in July. But now we have taken a little bit of sort of a slower pace and not really adding hedges because of the very high volatility.

28:51 And also, as you alluded to, sort of what prices are there out there in the market. Of course, you know, we see the price curve in backwardation. You know, we see the prices coming down over time also in the futures market. But hey, let's... Let's try to be, let's say, just take this calmly, step by step. The direction clearly is that we would like to add hedges, but we will be, I would say, sort of carefully considering every step of doing that. And when doing that, sort of considering the situation, of course, in the jet fuel market, but also considering the broader picture of how we continue to see the demand. Today we have spoken about that we continue to see it strong. and kind of how we continue to see sort of the whole market developing.

29:39 So I would assume that this will lead to a gradual sort of hike in the portfolio of hedges. And if we add right now, they are more expensive. So that's why we probably need to add gradually. But we have a very active team working with this and sort of following the markets all the time. And I think that's the way we need to continue to work.

30:05 Okay, super. I'll be quiet and let others have a go. But if you could come back to us with 4Q capacity growth, that would be great.

30:12 We will. We will. Thank you, Andrew. Thank you.

30:14 Thanks. We have no questions in the chat, so let's continue on the lines. The next question comes from Jaakko Tijervainen from SEB. Please go ahead.

30:30 Good afternoon. Thanks for taking my questions. If I start with a bit of a broader one, and I know it's early day to comment on this one, but could you give any kind of an indicator for the 27 capacity projections that you are working right now? I mean, I could assume that the overall industry would start cutting from the lowest profitability routes as the fuel price comes through the hedges, as we are seeing now.

31:03 So if I start and maybe Pia you can then supplement. We are of course monitoring the root level profitability on daily basis and as already discussed at length this year the hedging policy and hedging strategy has given us time and protected our profitability very well but at the same time what we reported today 8.5 percent yield growth during the third quarter but without Going into the more detailed view on the 2027 outlook, I think that we should then focus on the strategy that we launched a year ago, that our objective is to grow by some 4% on Gagard level towards 2029, but of course we need to Institute and maintain the needed flexibility if the situation with the elevated fuel price continues. So a bit of an open-ended answer Jaakko to your question but the ambition is still to grow but of course keep our kind of sensors and radar screens alerted when it comes to root level profitability.

32:12 Turkka, thanks. I think you already said the most important thing is we have a strategy and we have a direction. And I think embedded in that strategy is also the increases in the fleet that Turkka has described in more detail earlier in the presentation. And that remains an important element. Then, of course, we all know that we have an aging fleet. And obviously that leaves us kind of some room to maneuver. It also means that we have lower capital costs on some of the more edging part. And in terms of sort of value of our fleet, obviously we have a little bit north of 40 percent in our own balance sheet, which sort of also gives us Some flexibility compared with then the rest obviously being leased. And number of aircrafts, it's even much higher what we have in our own.

32:59 So I think we have inbuilt certain flexibility elements and that probably remains a key question going forward that we continue to plan according to our strategy and we remain flexible for if the market situation would worsen or turn negative.

33:18 Good, thanks. Thank you. Then a bit of a more specific one and a short-sighted question on the ticket liability and the balance sheet, which is up 22%. Is your booking curve meaningfully longer versus the last year, or is it the shape pretty much similar that you saw last year? I'm just trying to understand whether this is just reflecting the executive price hikes and rising volumes.

33:51 I think there's sort of several elements impacting this and of course, you know, as we have seen the higher yields, you know, that's kind of the current market situation. That's sort of how the market sells right now. But we've also seen the higher capacity utilization and I do think, you know, looking into Q4, for example, well, certainly, you know, Christmas will be a busy time. It's a good time to book tickets now, by the way, if you still want to do that. And then it kind of follows the normal curve that obviously sort of further into the winter season and even into next season, there are some bookings. But, you know, I think there the curve is kind of quite normal. And, you know, so I don't see a dramatic shift in the curve in any way or form. But, you know, in terms of, hey, suddenly everyone books for Easter or something like that.

34:40 I mean that the curve sort of follows a similar form, but we clearly can see it. It's sort of engagement of customers who want to book their tickets already now.

34:53 Thanks. Perhaps I'm already too late for the Christmas bookings, but I will definitely book summer tickets.

34:59 Jaakko, you should still try.

35:04 Very well. My last one, also a bit more detailed one, on the ancillary per pack is nicely up in the past quarters as well as in Q3. Do you have any tools in the box to continue such trend that we have seen in 26, also in 27, or will the kind of comparison numbers be tough in that sense?

35:31 Of course it becomes more tough year after year because when you know the total volume of ancillary revenue increases but that's pretty much in the spotlight of our commercial strategy and we do have a kind of a pipeline a funnel of new ideas and I think that also we haven't fully utilized the potential that we have when it comes to selling the existing product portfolio, especially when it comes to seed selection, extra luggage, etc. So of course that is getting more difficult, but we are more than committed to kind of a continued growth and we do have a very solid pipeline of ideas and also mechanisms to improve the so-called conversion rate when it comes to the existing product portfolio.

36:16 and Turkka we have of course we are launching the new app and hopefully that makes it as well easier from a customer perspective.

36:26 Excellent. Thank you. That's all from us.

36:28 Thank you, Jaakko.

36:29 Thank you. Thank you. We will take a question from the chat. And this is Inderes and Rauli who is asking that given that the Finnish corporate tax will decrease from 27 and you have a large tax asset, will you book a decline in those assets in Q4? And does that have a P&L impact? And I think this is for Pia. Yeah, thanks.

36:48 A nice technical question, but of course, you know, it could impact EPS, so it's a very fair question. And, you know, we need to follow this development because if there's a decision really about this before the year end, then I think we should. I'm looking a bit at Jussi here as well in the room, in all fairness. But I mean, that's kind of how accounting laws are. So, you know, if we get this before year end, then we would see a booking. And sort of order of magnitude from where we stand right now, I do think it could be north of 10 million, maybe even up to 20 million. But this is just mathematics, you know, kind of based on the 2% decline. So I think we all need to kind of follow the news. If there's a decision, there should be a booking. If the decision for some reason is delayed, then it will be a topic for next year.

37:32 Good. So keep up following Finnair. And then we have, I think, still somebody on the teleconference. So let's jump over there. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Piri Mutu from MNI. Please go ahead.

37:57 Hey guys, it's Piri from MNI Credit. Congrats on the numbers. I just wanted to ask four questions. The first one was, it looked like a little deceleration in Asia. Is there any driver behind that?

38:11 For example, Ruth?

38:16 So if you're referring Q3 versus Q2, maybe there is some tailwind kind of decelerating when it comes to the situation in the Middle East. But then again, I think that the performance throughout Q3 in Asia was still super strong.

38:36 Go ahead. And on a related point, the yields were up 8.5%. Jet fuels continued rising. Are you seeing double digit increases so far into the fourth quarter?

38:53 Peri, if you are asking about sort of yield development into the fourth quarter, then I just think we need to sort of remain with our comments on, you know, looking at the unflown ticket liability, we see that the booking situation has remained really strong, but that's sort of about as far as we can kind of comment the prices going forward.

39:16 Okay. Is it fair to say here that it was an acceleration you're seeing so far?

39:22 Yeah, so if we really talk until kind of the end of the third quarter, then there really was this sort of shift that the Q2 result was driven a lot by higher load factors. In Q3, we also saw the better yield, so the better ticket prices contributing. So that's really what we saw sort of during the reporting period. And the unflown ticket liability also confirms that good momentum in the market has continued.

39:49 And then I guess it's a word of mentioning that the Middle East carriers are currently flying about, let's say, 95% of their pre-crisis capacity. So that's also a kind of evidencing that there is no more, let's say, tailwind from the closure of Dubai and Doha that we witnessed during the second quarter. So this is more or less a more normal market situation now.

40:17 Thanks, guys. The third question was OND versus transfer traffic. Can you disclose mix for that right now? Just looking at the Middle East disruptions and how that's impacted you last year's mix?

40:33 I don't think we have regularly updated on how big is the transfer share, but I do think we can say that it has continued strong. And I think that's also supporting the fact that we see strong Asia, we see strong America, North America, and with that we also have seen stronger Europe. You know, a part of the stronger Europe was our new destinations for the summer, which I think is just such a highlight and it's great mentioning it. But clearly a part was also just supporting kind of the full network. So with that being said, the transfer passengers remain important for Finnair.

41:12 OK, thanks, Pia. Is it fair to say it was over 50 percent this quarter or tracking above 50 percent?

41:19 More or less, I think that's what we have historically shared as well.

41:23 Okay, sure. Thank you. And the final question, guys, was on leverage. It's dropped towards half a turn. You flagged the two to two and a half bill count, but if I'm not wrong, that doesn't include the used A320s. Is there any total spend that's likely to come up a bit more given the leverage has fallen back either because of the A320s or lease buybacks?

41:53 I mean those are super important questions for the next year to consider and I think there's always the consideration you need to take almost for every aircraft that we are getting. Can we get it to our own balance sheet or should it rather be a lease? But the situation in the market is one where very often a lease is also the best alternative just from the kind of overall contemplation. So I think if we would have planned for lease buybacks, et cetera, that would be material, then we would talk about them at the point where they are more mature. So nothing really to report on that right now.

42:32 Yes. Thanks, Teo. Thanks, Turkka. Thank you.

42:37 Thanks. Thank you. We have no questions in the chat. Let's give the telephone conference one more chance, opportunity, if there's anybody wanting to put a question in. It's silent, so no more questions, but Turkka, I think you have somebody you want to introduce.

42:59 Yes, thank you, Sophie. Today is an important day. It's time to Thank Pia. We did agree that Pia will take care of this Q3 reporting and she will now pursue opportunities outside Finnair but we will be in great hands of Jussi Siitonen who will be our new CFO. So Jussi, floor is yours.

43:21 First of all, hello everyone, thank you Turkka. So what I can say here is that Pia has done an excellent job in her CFO position, leaving the whole team in excellent condition, so it's easy to start building on that one. Also when it comes to my role as CFO, I will continue where Pia left, supporting strategy, and therefore no change is there, so absolutely no drama in this change.

43:46 Thank you, Jussi. Thank you, Pia. And thank you all for joining us today. And I guess it's time to wish a great continuation of the day.

43:54 Yes. Thank you, everybody listening in. Let's see. I hope to see you all in February again when we have a full year 2026. And if you have questions before that, I surely want and hope that you have. Please put a comment to investors at finna.com. So have a great day. Thank you.

44:14 Thank you.

44:15 Thank you.