NWARF (NWARF) Q3 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to the third quarter presentation for the Norwegian Group. My name is Jesper Hatletveit, and I am the VP of Investor Relations here at Norwegian. Today's presentation will be held by our CEO, Geir Karlsen; and our CFO, Hans-Joergen Wibstad. The presentation will be followed by a Q&A from the audience and the web. Please go ahead.

Thank you very much, Jesper. Good morning, everyone. Good to see you. Beautiful day in October in Oslo. Let's start with -- and also good morning to everyone following online. So let's start with the highlights for the quarter. It turned out to be a strong third quarter for the Norwegian with an EBT of NOK 2.5 billion, that translates into NOK 2.7 billion in EBIT, divided on NOK 2.5 billion close to for Norwegian and Wideroe with an EBIT of NOK 242 million. That translates into an EBIT margin of 21.4%. If you look at the third quarter results for 2026, it's more or less in line with the underlying result in the third quarter in 2025 because in the third quarter last year, it included gains from aircraft acquisitions as well as compensations due to delays of deliveries of aircraft. We are continuing to focus on the cost side of the business and very happy to still keep the guiding on a flat CASK for the full year compared to 2025. Operational excellence, as you all know, is extremely important for Norwegian and for Wideroe, and we have a punctuality of 80.7% in Norwegian and very impressive by Wideroe. I'll come back to more details on it of 93.5%. We have close to 0 cancellations in Norwegian and also a massive reduction in cancellations in Wideroe, although we had an impact of the ATC strike in August here in Norway. I'll talk a little bit about Wideroe later as they are doing very well operationally. As we always say, "Why connect when you can fly direct?" That is a slogan. And we do have the most direct routes from the Nordics to Europe as per today, flying more than 500 routes in together with Wideroe. NPS score is very important for both companies. We are doing well. We have seen an increase in NPS scores on a 12-month rolling basis with a result over 50. That is a very good result regardless of who you compare us to. We are continuing the bet into the corporate market, and we do plan also to come with a better product offering for these corporate travelers in the weeks and months to come. Also happy to see that Norwegian Reward is surpassing 10 million members. And we have also launched the tiers, as you have seen during the last couple of months. We are continuing to work on the balance sheet. We have a liquidity position today of NOK 11.2 billion at the end of the quarter. That's up NOK 700 million, and that is after we have repaid the so-called retained claim bonds to the investors. Most of them, let's say, the majority part of that is the Norwegian government. Equity ratio up to 20.6%. And we have a balance sheet today and a liquidity position that makes us able to do investments like the NLTG investments, and I'll come back to the details on that as well. Talking about NLTG. This is an acquisition that we did during the summer. It is a complementary acquisition where we are going to add a product offering to the passengers that we are already flying, now also entering the package tour segment as well as hotels. We are in the process with the EU competition authorities, I mean -- and we have a target to close and have an approval by the end of this year. So traffic figures. 8.8 million passengers in the quarter in -- together with Wideroe, 4% up. We are 5% up in Norwegian. Wideroe is 2% up on CASK. Load factors at good levels, I would say, 88.5% in Norwegian, Wideroe at 76.1%. But punctuality is normally lower in the very busy summer season, but still, it's up 3 percentage points in Norwegian to 80.7%. And again, very impressive by Wideroe 93.5%. Regularity is continuing to stay very high. It is very important. We don't cancel much, and that is going to be the fact also for the weeks and months to come. Passenger growth. This is a graph that we are showing every quarter. It shows the number of passengers. It shows load factor and yield. And as you can see, when we entered into the second quarter this year, we saw a softening in the market. That was after the Taiwan situation, and we had a lot of speculations in the media when it comes to availability of fuel. We had -- we entered into June when Norway did quite well in the World Cup in football. People were not -- was not traveling. I think that had a huge effect. And we were quite concerned going into the third quarter. But then when we entered July and into July, August and September, we saw an aggressive rebound, I would say, and the demand really came back. And that's why you can see the increase both in load and in yield during the third quarter. So I think the third quarter turned out to be actually better than how it looked when we entered into July this summer. We had a capacity growth of 5% in Norwegian load factor, again, up 0.2% marginally. We have had a little pressure on yield. The yield compared to the last quarter, the same quarter last year is down 1%. But have in mind that we have seen a strengthening of the Norwegian kroner that accounts for a negative yield effect of 3%. So underlying, I would say that the yield is pretty okay. Looking at Wideroe, you are seeing that the load factors are coming off a little bit into the third quarter. That is normally what's happened in Wideroe. That said, I think we are a little bit disappointed, especially about the corporate market in Wideroe after the summer into August, but we are seeing these days that this is picking up. again. Capacity is up 2% year-on-year. But again, we are marginally down both on load factor and the number of passengers. However, Wideroe is contributing with NOK 242 million in EBIT for the quarter. And we are seeing a continuous increase on the transfer traffic between Wideroe and Norwegian, and we are taking market share as we go, and we have actually taken market share since we took over Wideroe a few years back. We have also continued to work on the synergies between Norwegian and Wideroe, and we have -- and a lot of portion of that is obviously to try to optimize the 2 networks and Wideroe is actually going to fly part of the capacity for Norwegian next summer, where we are using the E2s in our own Norwegian network and thereby freeing up 737s to fly to other destinations. But Wideroe is, in general, doing very well. It's going to be another very good year and operational excellence, I will come back to you. I promised Tore to give him a big hand on his operational excellence work, and it's really starting to give results. This is how Wideroe has been doing on on-time performance. And as you can see, it has increased from 84.4% in the fourth quarter last year to 93.5% in this quarter. That is really, really impressive, I have to say. If you look at airlines flying more than 1,500 flights a month, Wideroe has been a global lead, I mean, global lead 4 out of the 6 in last months. And that's the level that Wideroe is at during the last 6 months. Also, when you're looking at the number of cancellations in Wideroe, it's massively down. That has been an issue, but it's much better performance as per today. And why is it important with what we call operational excellence? Well, it's very important for the customers. If you look at the drivers for the NPS score, on-time performance is one of the absolute most important ones. Also for the transfer traffic, knowing that 50% of the passengers in Wideroe is in transfer and going to another airline, mostly now going to Norwegian. And as well, it is very expensive to be -- to not be on time, and we are also seeing a massive reduction in the so-called EU 261 costs in Wideroe. So it makes sense on all levels to be very good on operations. Norwegian is also doing well operationally. We are top 5 on on-time performance in Europe in August and September. And that is a result I'm very happy about, at least -- and also if you see it in combination with the high efficiency we have both on aircraft and on crew and the market-leading turnaround times that we have on different airports throughout the network we are flying. So a big hand to Wideroe again. All right. So booking momentum. As you can see on the top left graph, that is a 7-day rolling sales on number of passengers. As you can see, we had a relatively weak second quarter. But then heading into July, you can see the red curve is moving away from 2025. And that has actually stayed throughout the fall and all the way into what we are seeing today. That means that there is nothing wrong with demand as we see it, and that applies also for the periods or the months going forward. We are, however, doing some adjustments to the winter production. Winter production for us is November to March. And we are during the next months flying somewhere between 25% and 40% less than what we are flying in October. Also in the first quarter of 2027, we have reduced the capacity with approximately 5% to 6%. Part of that is the Dubai production that we have canceled by obvious reasons, but we have also done some other changes and some other reductions throughout the network. And that is because of the high fuel prices we are seeing in today's market. But the momentum in booking is still very solid, I would say. And looking at the next months, we are ahead on load on all months for the winter production compared to the same period last year. Today, we have sold approximately 290,000 tickets more than the same day last year. That is on a capacity increase of 3%, but we have sold 15% more tickets. If you look at the load factors for the next 12 months, we are above on all months compared to the same period last year. So you could say that we have somewhat front-loading the sales, and then the aim is then to yield up closer departure for every month going forward. Norwegian Reward, I told you that we will come with some news during the third quarter, and this is the news. We have implemented and launched tiers. I think Norwegian Reward, even if we have surpassed 10 million members and the levels that we previously had, especially on the top level, I think it has been, say, undercommunicated, undersold. I think by implementing these levels, it's going to be much more easy to understand for our customers, while we are still going to be very generous when it comes to giving our passengers the benefits you deserve. So the 5 tiers are member, traveler, bronze, silver and gold. And as well on Wideroe is, of course, now onboarded into Norwegian Reward. The spend community is developing very nicely. We had a successful launch when REMO 1000 came into the community during August and September. We are also seeing that when we are looking at the frequent travelers traveling with either Wideroe or Norwegian, more and more of these travelers are now deciding to stay at Strawberry Hotels. That is kind of evidenced by the fact that now we are actually creating what I call real loyalty. And that has been the aim for establishing Spenn all the way. Now we are starting to see the results. We're also planning to do some status match processes with other programs, and we will share news on that as soon as absolutely possible. Also very happy to say that we are going to do the Christmas calendar this year in Norwegian Reward, and that's going to be good.

Thank you, Geir. Good morning, everyone. Really great to see you here. I will go through the third quarter results for Norwegian in some more detail in a quarter, which turned out to be a really good quarter for the business. As Geir said, delivering an EBIT of NOK 2.7 billion and a net result before tax of NOK 2.5 billion. Group revenues came in at NOK 12.7 billion, which is up a healthy 4% versus last year with Wideroe contributing NOK 2.1 billion. As Geir mentioned, the group -- the -- there was a capacity increase, but we're very happy to see that the customers are there. We're seeing that load factors is picking -- has been picking up and is better than it was in the same period last year. So after a challenging Q2 without a doubt, Q3 also from a traffic point of view, also looking at our traffic reports every month turned out to be a good quarter result, which is -- which has a huge impact on the bottom line. The EBIT, NOK 2.7 billion with Wideroe contributing NOK 242 million. There is a one-off positive impact on the FX repricing on the maintenance reserves, but I'll come back to that in a minute. But if you look at the underlying -- as Geir said, if you look at the underlying EBIT for the quarter, it's pretty close to where we were at the same time last year. And looking at the kind of overall rather challenging macro environment, in particular relating to fuel, we think that is quite good. It's to a large extent driven by good hedging positions, not only on the percentage-wise, but also we had very attractive pricing on our hedges going into the quarter and this kind of challenging macro environment when it comes to the fuel price, which is continuing. Also on the cost side, I think we have now consecutive quarters of very strong cost performance. We have our costs under control. And we're seeing that the underlying cost increase on the CASK versus last year is up 4%. So comparing with inflation and other factors, that is a good result. And as Geir was alluding to, we are guiding flat CASK year-over-year based on an underlying performance. So we think, again, another strong quarter for the group in terms of cost performance and cost discipline. Very happy to see that. Also coming out of the quarter, we have a very strong balance sheet, another quarter with a good balance sheet. We're seeing a good liquidity position, up year-over-year despite having repaid bonds as well as paid dividend. I'll come back to that in a minute. We have gotten 3 new aircraft this quarter. We're seeing that the deliveries from Boeing is going according to plan. Happy to see that. And we're gradually eating into our backlog of 80 aircraft, which is on order -- which originally were on order. Also, as Geir said, NLTG, we have a strong balance sheet to support the acquisition. We're planning for a bond issue of about NOK 2.5 billion in the coming months. And I think our balance sheet is well placed for that, also taking into account that we have recently, over the last 18 months, retired NOK 3.9 billion. So in some sense, the bond issue that we will go forward with over the next few months is really a refinancing of existing bonds. So we're well placed to have a successful execution of that bond placement. A little bit more on the revenue side. It's quite easy to understand. Top line is up by 4%. We're seeing that the volume is contributing NOK 540 million. Yields a little bit down NOK 108 million. Load factor, happy to see again. Load factor is coming up despite the increase in capacity. And then with Norwegian coming in at NOK 10.7 billion and Wideroe contributing a nice NOK 2 billion to NOK 12.7 billion in total. Operating profit, I think quite easy to understand. Kind of the bridge between this quarter and last quarter for Norwegian, NOK 310 million down, but I'll come back to that also a little bit later. There are a couple of adjustments there, which are important to understand. One is the one-offs in the third quarter last year where we acquired a couple of aircraft out of leases and also got compensation from Boeing. NOK 269 million of the NOK 432 million is purely relating to the acquisition of aircraft as again, plus the Boeing compensation. And then you have the reclassification of translation effect of the maintenance reserves at NOK 244 million and other gains and losses coming there. Then you have somewhat higher operating costs, NOK 347 million. And then on top of that, of course, the net impact of revenue increase and also a rather limited impact of the fuel taking into account how much the fuel has really gone up over the last -- compared with last year. Again, why is that? 2 main reasons, the hedges that have been very attractive and has a huge impact in the third quarter. Second thing going in the other direction is the strengthening of the NOK, which is obviously makes a U.S. dollar -- fuel is paid in U.S. dollar. So that makes the bill in NOK lower. So overall, a good position to be in. In summary, on the P&L side, we recognize the 4% that we talked about a few times. Fuel price only going up by 7%, again, fuel and also the FX having a positive impact, fuel price massively negative. But then again, our hedges. And then looking at the underlying earnings, the EBITDA is only NOK 127 million behind last year. And then you have -- on the one side, we have a positive impact on the translation effect of the maintenance reserves having a positive effect and then also the negative effect that relates to the one-offs in Q3 2025 on the purchase of the aircraft and delay compensation. On this particular line, this is kind of the normalized level. This is not a normalized level, obviously, based on kind of one-off impact of that. Which then leaves an EBIT of NOK 2.5 billion, as we talked, NOK 2.7 billion and EBT of NOK 2.5 billion and a net profit after tax of NOK 1.8 billion. Coming out of the quarter, again, with a robust balance sheet, a few things has happened there. We talked about that. We have made our final repayment of the bond. So essentially now, Norwegian is -- has only debt related to aircraft financing, which is quite a big difference from where we were only 18 months ago when we still had NOK 3 billion of retained claim bonds outstanding as well as we hadn't retired the convertible bond that we partially repurchased in 2025. So that's a massive -- or not a massive, but quite a significant change. And we're very happy to see that we're coming out of the quarter finally with a clean balance sheet with no kind of unusual items in there or, let's say, legacy debt. So that's really good. The other thing to make note of is that our air traffic liabilities is -- has a seasonal reduction, but kind of underlying that we have had good presales, sales during the quarter, it's up 8% year-over-year. So that's kind of a proof of the pudding that we have sold quite a lot more tickets than we did at the same time last year. And equity ratio going up from 14.2% to 20.6% at the end of the quarter, partially because of the good results, but also that equity ratio takes into account the net value of our remaining hedges, so which has also had an increase in its value in the quarter. Net interest-bearing debt up just a little bit, NOK 800 million. We can see that there is the retained claim bond finally in 0. We've been waiting for that quite a long time, and I'm very happy to -- that we actually executed on this plan that we started to work on basically 3 years ago on the total kind of review and cleanup of the balance sheet. And we're coming out with a healthy cash position and with the retirement of the NOK 3.9 billion, out of which NOK 1.5 billion in this quarter totaled NOK 3.9 billion in the last 18 months. I think that sets the ground for a successful bond offering in the next few months. And again, 3 aircraft delivered in the quarter, impacting the balance sheet. Obviously, 2 has been on sale leaseback. The other one has -- is aircraft we owned. So kind of holding on to our strategy to partially have sale-leaseback deals as well as own deals. and the terms that we have received both on the financing of the owned aircraft as well as on the sale leaseback are the best we've ever seen in the group, which is a fantastic starting point for what's ahead for Norwegian. To summarize the cash flow and also the cash balance going from NOK 11 billion to NOK 11.2 billion in the quarter. Ticket prepayment, obviously, seasonally down, but higher than it was last year -- sorry, yes, at the same time last year. Strong underlying cash flow. We have investment activities. We repaid the bond. And so, again, a healthy position to be in coming out of the quarter. We have placed the excess liquidity at attractive returns. So we have a combination of bank deposits as well as money market instruments that has been a good balance for us. And it's also important looking out, we have already prepaid NOK 3.6 billion into the order, and we -- the remaining prepayments before 2028 is limited to less than NOK 0.5 billion. All right. Thank you. Over to you, Geir.

Let's have a look at Nordic Leisure Travel Group. That is an acquisition, as I said, we did through the summer. The holiday market, the tour operator market is a market we have been looking at for the last, I would say, a couple of years. And then this opportunity came up, and we took it. And we have been trying to develop our own value proposition in this market over the last years in something we call Norwegian Holiday. It is a part of Norwegian that translates into approximately NOK 100 million in revenues. And by doing this transaction, we are overnight, more or less overnight turning into, by far, the biggest tour operator in the Nordics. And that's why we have done it. NLTG is, I would say, well-run company, and that applies to the hotel side of the company as well as the airline, Sunclass. That's a long track record with profitability. And this is a complementary acquisition where we are going to offer passengers, customers in Norwegian and Wideroe something in addition. We're not only going to fly them to a destination. We're going to offer more and thereby taking a chunk a part of this market. This is a market that has been growing over the last years, and we anticipate that this will continue to be the case also for the periods ahead. NLTG is having approximately 1.3 million guests a year and with a turnover or a revenue of approximately SEK 17 billion. The most interesting part of NLTG as we see it is the so-called concept hotels. They have 26 hotels as per today. The picture to the left is one of them, which is the Ocean Beach Club at Canary Islands. I visited actually the hotels a few weeks back. I was not able to stay at hotel because it was full, and that is always a good sign. The strategy in NLTG is to expand on the concept hotels. And we would like to do that on destinations where Norwegian is already flying a lot today. One example is Spain, where we are flying close to 5 million passengers each year. That's a huge opportunity for the periods in front of us. The concept hotels stands for 25% of the volume, but 60% of the gross profitability. NLTG includes many well-known brands in the Nordics, Spies in Denmark, Ving in Sweden and Norway, Tjareborg in Finland, and then of course also Sunclass, which is an airline with 12 aircraft. We are paying SEK 3.5 billion for the company in addition to 300 million shares. The owners of NLTG, which is Alto, Strawberry and TDR will become significant shareholders in Norwegian. I think that is a very positive thing that will also be presented at the Board of Directors, and we are very much looking forward to that. We have, of course, done all the analysis when it comes to synergies, and we do expect to take up synergies already in 2027 on the basis that we can get an approval from the EU competition authorities. where the process has been ongoing since the summer. So this is something we are really looking forward to, and we are very excited to get going, working on the synergies and in order to take out the value from this acquisition. Fleet, not so much to update you on. I mean we have taken delivery of 5 out of the 80 firm aircraft that we have on order from Boeing. Boeing is delivering on schedule, and the quality of the aircraft is absolutely amazing. The aircraft is very much liked by our cabin crew and our pilots, and it's also a better product for the customers with massively less noise, both in the cabin and in the cockpit as well as the fuel burn is 15%, 16%, 70% less than on the 737-800 NG. We have financed 25 of the aircraft already in addition to the engines that we also bought spare engines. We just came back from a couple of days in China, where we met 10 to 15 banks and the appetite to finance these aircraft and engines are absolutely amazing. It's a wide open capital market out there, and we are able to finance these assets at terms we have not seen in Norwegian, I would say, ever. So that is very, very promising. We have -- even if we are having an order of 80 aircraft, we're not really growing that much. As you can see, we have 98 737s today. That increases to 203 in the summer of 2028. So the aircraft order of 80 aircraft is mostly a fleet renewal process where we are going to have newer and newer assets burning less and less fuel. And should we wish to grow more than what it looks like here, we can always extend the leases that we have on the engines and thereby having a more aggressive growth, and that's the optionality we love to have. And we can then decide based on how the market is evolving, how to grow for the years to come. But very happy with Boeing these days. We are still planning to own 50% of these aircraft. and then we will do operating leases on the rest. That's at least the idea for now. Program X, not much to -- news to share, but the program has, in my opinion, delivered based on the targets that we set, at least almost. The reds are the recurring effects. We took out NOK 400 million last year -- sorry, yes, last year, another NOK 600 million with recurring effects in 2026. And I think when we come to the end of 2026, we will deliver more than NOK 1.25 billion. Hopefully, we will -- Program X is coming to an end by the end of the year. That's what -- how we have communicated it all the way. And I think we can kind of finalize the program with a slightly higher figure than NOK 1.2 billion. We will come back to that next quarter. So the areas where we have focused on, we have been working through the whole company over these last couple of years. Ownership cost is part of it where we have been buying out operating leases and thereby, we will have a lower ownership cost for the years to come. We have done the synergies, first of all, with Wideroe, 20% and then general cost reductions throughout the company, 24%. And then we also took the so-called new sales distribution platform live during the summer or spring, and we're also seeing effects from that. Going into 2027, Program X is coming to an end, but we will most likely start the new program with a high focus on the integration process with NLTG and a continuous performance improvement project for the next couple of years. We will also work towards a strategy that is now in place for both companies, Wideroe and Norwegian that will take us into '29 and 2030. Guiding, we are -- capacity for the full year is 2% up, I would say, only. That is down 1% compared to what we said last quarter. Most of that is due to Dubai capacity that we have taken out by obvious reasons and some other smaller changes. Q4 is 2% up. Again, that was 4% up last quarter. So we have taken it down by reasons I've already explained. '27, it's 5% on average for the full year. And then again, happy to say that on CASK, we are guiding a flat CASK 2026 compared to 2025. And then on something completely different. We are -- in addition to running the airlines hardcore, we are also supporting children around. UNICEF is a cooperationship that we have had for, I think, 15, 16, 17 years, started by Bjorn Kjos. And we are continuing that relationship. We are very proud of it. We are doing activities throughout the years, as you can see. And we are also, as part of the contract with UNICEF doing something we call Fill a Plane, where we have done that quite a few times, and we are going to do it again this year. This is helping children around the world, and we are flying to destinations decided by UNICEF. And this is a process where we are filling up a 737, both in the luggage area and in the cabin with what you call crucial life-saving equipment, supplies. That could be medicines, it could be clothes, toys, et cetera. This year, we're going to Malawi in Africa. It's actually happening next year. Wideroe as well is doing something they call a Dream Flight, where they are taking children with cancer out of the hospital routines and making a special day for these children. So looking forward to going to Africa next week with some what we call UNICEF ambassadors, which is then crew flying on the free time and supporting then UNICEF. All in all, if you look at the markets ahead of us, yes, we have a fuel environment that is challenging. We are sitting in a position now where we are 53%, 54% hedged at approximately $660 per ton for the rest of this year. We are approximately 30% hedged for the first quarter next year at similar levels. And then the hedging process -- percents are going down to 20%, 25% for the remaining part of the year. So we are sitting in a -- in a good position, I would say, also when you compare us to the competitors. And then we will all see how this market is developing and how the situation in the Hormuz Strait is developing and thereby how the fuel prices are evolving. There's also a very widening crack spread when it comes to the difference between, let's say, fuel or oil and Jet A. that has been widening over the last few months. And obviously, this is something that we are following very closely. But there's nothing wrong with the bookings, that is 100% sure. Thank you.

Thank you, Geir. Let me get Hans-Joergen as well. We'll then go on to some Q&A. We'll start with the audience. Any questions from the audience today? Hans Jorgen?

Congratulation with very good Q3. Questions for you. The elevated jet fuel price is expected to continue next year. Will the improved yield be more important than to achieve the highest load factor for the Norwegian group airlines. And also premiumization demand rise up in many airlines. We have seen that this year. We will see more new type of perks for the corporate market. You mentioned it in your presentation, Geir, like middle seat blocked lounges and maybe even starting projects on Norwegian Group airlines going forward. And finally, about the top 5 revenue markets in financial 2026 is Norway, Spain, Sweden, Denmark and U.K. Which markets do you foresee the largest revenue growth next year? And what would be the triggers for this?

It's a lot of questions, Hans Jorgen. I mean, obviously, since the Iran situation happened, right, you saw ticket prices coming up. It worked for a while, and then you saw the ticket prices coming down again. So the customers were not willing to pay what they asked for at the time. And that's why we are seeing the yield development over the last months. Even if we -- so we are -- and you have a competitive landscape, as you very well know, Hans-Jorgen, that is what it is, and we have to rely on that. We have to adapt to the competition. And you have had players during the last months that has been very aggressive on pricing, maybe especially here in Norway. And that's just the reality. The fuel price is what it is. It is hitting us, obviously, but it's hitting all everybody else as well. So we have been in a good position in 2025, in my opinion, with 55% hedging ongoing. And then we will just have to see how this develops over the winter. I think that we are doing more or less the same as the other airlines around us, meaning reducing the capacity, especially for the next 2 to 3 to 4 months. And then we will just follow the market. When it comes to the product offering, I think what you are seeing is -- it's both the kind of the legacy players are, to an extent, moving into the position that Norwegian is in, meaning in between the ultra-low-cost companies and the legacy companies. You're also seeing the low-cost companies, maybe especially in the U.S., is also moving towards the position that we have offering a more premium product, trying to attract the premium leisure market. I think that we are in a perfect position today, at least until now. And then we will see whether we're going to move to the left or to the right. I think if anything, it will most likely move to the right. What's the third one?

The third one was your top 5 markets 2026, how do you see the development in markets. Do you see anyone that will outperform and what will be the triggers for that?

I think if you look at the 3 Scandinavian markets, Norway, Sweden and Denmark, they are -- it's no doubt that Norway for us is where we have the most capacity. But looking at the margin on the margin, meaning EBIT margin, for example, it's not very different to Denmark and Sweden. And obviously, as you mentioned, Sweden is probably the market that is developing the best on the relative today. But that's also mainly because that domestic market in Sweden is maybe only 60%, 70% back compared to the pre-pandemic levels, while Norway and Denmark has surpassed 2019.

Other questions from the audience? We'll then move to some questions from the web. We'll start with Petter Nystrom, ABG. In your presentation, you flagged some fare pressures in the winter. How do you see fares/yields developing from here on? And are you surprised of any, call it, aggressiveness among our competitors?

As we have said, there's nothing wrong with the demand. We are ahead for all the coming months compared to the same period last year. and in some -- on some of these months, significantly above as well. And then the aim is to try to yield up closer to departure. But there is a pressure on yields as we have also communicated during the third quarter. That is also the case going forward. And yes, there is a tough competition, as always. And are we surprised? Well, I think I should be a little bit careful.

Moving on to a question from Sondre Snersrud from Nordea. Fuel hedging. Any reflections on your hedging profile, 25% around for 2027, given the fuel -- current fuel price environment and also the, call it, hedge ratio among our peers.

Well, we have a policy in Norwegian saying that we would like to be 50% hedged 12 months going forward on a rolling basis. This year, we have had a higher percentage. And I think, obviously, we can say today that I would like to be 100% hedged for 2027 at $500 a ton. So that's not the case. So -- and to do hedging today on a price, let's say, $1,500, $1,600 a ton is, as I see it, not very attractive. But we would probably put on more hedges going forward compared to what we have done in the last years.

Okay. Moving on to a question from -- a few questions from Ole Martin Westgaard, DNB Carnegie. ASKs for next year. You guide on a 5% ASK growth. How does that play out between the quarters?

We are planning as it looks today for quite an increase in the fourth quarter next year. And other than that, it will be between 3% and 4% for the first 3 quarters.

I guess the winter capacity next year is also dependent on Dubai normalizing and so on.

Absolutely.

Okay. A question from him on unit cost. With Program X ending and the new capacity cuts that you announced for Q1, what is your early view on 2027 unit cost, excluding fuel? Should we expect the new cost program?

Not a cost program as such, but performance program will definitely be still in place, and we will also, of course, focusing a lot on the synergy project with NLTG. And we'll come back to the guiding for 2027 later on CASK.

Okay. Then we'll move on to some questions from Andrew Lobbenberg, Barclays. Labor relations, SAS Link is currently on strike. Can you benefit from this? And how do you view your own labor situation? Is it stable? Or is it at risk?

I think we have a good relationship with our unions, and we have quite a few unions in Norwegian. We are currently in negotiations with the majority of our pilots, both in Denmark and in Norway. It's a constructive dialogue. And then the aim is to find a good solution for the period in front of us.

Okay. Another question from Andrew on NLTG. Any concern with regards to regulatory approval? Or is that plain sailing as we see it?

We believe that we will get it approved, but there's no -- there's absolutely no guarantee on these processes. It has been a challenging process with a lot of documentation, a lot of questions from the commission. And -- but we are getting close to clarity.

And finally, on NLTG. Can we say anything on how it trades through the summer?

We don't know.

I'll ask if there's any more questions from the audience, Tomas?

Thank you. On yield, I know you guided on -- you tell us now that reported or booked yield was flat for Q3 last quarter. Can you say anything about Q4 on booked yields for now?

The only thing we are saying is that there is a pressure on yield, but the demand, the load is higher than the same period last year. And then the aim, obviously, is to try to yield up. I think if you look at, for example, October, yields are now actually in a decent area, if I can say it like that. And that was not how it looked a month, 2 months ago. So it is kind of at least for October, working.

I think that's the final question. I'd like to say thank you, Hans-Joergen, who has his last presentation for us today. And other than that, I'd just like to say thank you for all of you for attending today. We'll conclude the session then. Thank you very much.

Thank you.