Half Year 2021 Ryanair Holdings PLC Earnings Call
Just to remind you. This conference call is being recorded today, <unk>, Mike who or they recruit the goodies.
Please go ahead with your meeting.
Hey, good morning, ladies and gentlemen, welcome to the latter half year results conference call.
The scene. This morning that we have for at least the happier with open web site. There is a comprehensive slide presentation.
See you anyway.
Oh the website, so I would say that.
Oh that is right or theme and then I'll just give you some color on top of that so as you see the results. This morning coordinate the six month period.
For the fourth quarter, we were essentially grounded so tempting returned to service in the fourth of July we want but about 60% back into the summer season. Following all the E C D C and a yacht that measures.
That has now been successfully implemented.
Conscious of the need to prioritize the balance sheet and cash in September we raised 1.25 billion, a 400 million equity pacing, which was led by the management team.
We lost rate than 850 million Euro bond.
Is that.
Today, we've got the half year, we've got killed the cash you can jump in over 4.5 billion euros, we would need that because in the next 12 months to get more work being done the debt repayments do UK government 600 million loan is due for repayment in March and we have our 2014 fourth of our commercial bonds.
2014, 850 million issue is due for repayment in Q.
Some of the key challenges over the last six months the writer customer service team found that appeared in unprecedented that backlog all customer flight changes COVID-19 cancellation at refunds that I'm sure issues all of that backlog has now been eliminated and we have responded about churn of 1.5 billion board.
<unk>.
Oh bookings.
We have no backlog a refund now and if there are customers out there who still haven't received a refund because they haven't requested that or they wanted that small number that are still having new I mean bookings through screen scraper on license Green scrapers, where we have paid cost more contact details are paid payment details that we setup a procedure wherever they can.
Like Ricky to bypass the overcharging Skymark and Greens Creek present, a obtained their refund directly from.
Gold Nike quite Oh has really caused the closure of a number of you airline huge long term capacity reduction that many of your legacy carriers, who are receiving unbelievable quantum state aid air France, KLM PPACA, receiving over 10 billion euros, each italia that over three and a half.
Then you get similar so I'm sorry for itself at the U.S.T.H.E. and others and we believe there are indeed, the date when a store competition for many years to come in and out those.
Carrier spend by carriers to engage in low cost funding for many years.
We have already initiated the parts to legal cases in Europe against the state aid the French we bought the mediation taxes, but already to branch Airlines, we expect to receive decisions on both cases insight all right.
However, I think it's important and we don't get stuck in the details on the short term kind of.
Details all the current situation with Europe, moving back into second opt out everything.
There is a bright future ahead, we have taken advantage of the cobot or used to be COVID-19 crisis to radically restructure our cost base that we have now reached agreement that piece stay with almost all of our pilots and cabin crew.
Involve painful pay called on productivity pay reductions through the winter period, but it's a much better all the time that job losses.
We have minimized the number of jobs lost we have we can without further job losses, particularly at the bases in Spain, and Portugal, where I, Belgium, where the cameco unions frankly have their head in the sand and are still trying to insist on nine not taking pay cuts are opposing pay called Uh huh.
I will circle back you can ever have we would have jumped off that's somewhat goes in parallel smaller countries.
We're also looking to or in excess of negotiations with airports about growth incentives retarding or where we can return traffic quite quickly I think we took great I think called apart from the recent experience with the UK Canaries market. When do you get out of the canaries to their green it two weeks ago our daily.
And the 2000 bookings were 40 was exceeded by a 14 fold. We took 28000 bookings in the fourth day 25000 in the second day and I think if anything confirms our view that there will be a very strong snapback, there's huge pent up demand for air travel across Europe to be short on European aircraft, we need the long haul.
Operator, we'll take longer but the short haul snapback will be strong and it will be immediately and we are well placed to cater to that again. So for example tour outbreaks the charter aircraft being slow to respond that reopening of the Canaries, where we way without extras for Christmas and travel and almost immediately.
Im responding strongly to that comment about the p. deemed a we are carrying continuing dialogue with our partners Boeing.
We are now confident tops are they on the EPS in the asset that the Max age whether retard service probably sometime in late November early December that we believe will lead to our aircraft. The Max 200 game changer being certified probably in early Twentytwenty one.
We are hoping to take the parts delivery, though their aircraft at the end of sometime in February that would allow us to take a moment, where we have a limited capacity take new aircraft and then we've got about eight months that would allow us to take something of the order about 30 aircraft between February and early summer.
Bigger might fall to 25, or so but it depends when we get the parts one we have extensive max.
Simulators up and running and extensive training programs for our pilot. We certainly this is a great aircraft, although the pilot to a slowness on flow the same think you'd say terrific.
Aircraft operationally a they understand it when its line I'm, sorry, well app, but from a financial perspective, it gives us 4% more deep and a compelling 60% lower fuel consumption per seat as well in every 40% lower noise emissions, we think that they game changer aircraft will be a key component.
Most significantly lowering our aircraft ownership cost base for the next number of years I contrast that with many of our competitors who are engaging.
Engaging in a sale lease backs up their fleet at distressed prices I'm paying higher financing costs, which will significantly while the cost gap between us and all other airlines for the coming over the next I think five or 10 years widening the gap between Ryanair and our competitors across you.
We were therefore, I think respond to our reemerge as gold 90 Christ lower coffee when a compelling growth model with significant incentives in place for many airports. Many from one from a covered their loss coffee quickly and those that are come up with the best expenses will recover there will recover that traffic faster than others.
And in a market based in Europe, where structurally a huge amount of capacity has been taken out and will not retire I. We aim, particularly with the game changer aircraft order to be able to fill those gaps and deliver our restore traffic than many of your EPS airports and the rest of the Nokia break to remain tight.
And we hope before the end of the transition period that the UK and Europe with at least agree a trade you to covert AERCO and how to buy.
Collaborative arrangement agreed before the end of 2019.
Which was the first at Brexit, but we believe that there will be a great deal at least one that would cover air travel.
The pre moved to people and the deregulated aired on marketing to UK and Europe to continue.
Our outlook I know, we have off the price of the it is impossible and the current plan to give you any kind of outlook for the remainder of this year you have seen over the weekend UK returning to a second Lockdown Ireland has already entered the second locked down two weeks ago, we draw your attention to the fact that locked down to.
Completely ineffective.
And I would cope the W., Hey, Joe I was sad and governments should do everything possible to avoid group lockdown because it doesn't actually give me the virus.
Weve already turned out from the first ineffective locked down and we'll learn it again for the second defect locked up.
Nevertheless, I remain optimistic I do take my knee product approaching in the U.S., who has predicted but it will be more are more vaccines I probably approved by the parties decide to Christmas. The key issue. Then is when will there be commercially available are widespread availability of a vaccine that leads to cope with.
Hi, Mitch groups the over 70 people working in the house harvest time did nursing homes, and we would hope that that will be by the end of Q1. Our Q2 of next year I'm wondering how it's at least to rescue most but not all of the summer peak travel period, and hopefully that we see finally leave cold 19 Christ behind us.
But at this point in time as you know our last guidance, we gave out in October with PARP trapping to 38 million for the remainder of this year I think that we'll probably get paired backwards, but not by as a result of the second wave of outcomes Weve been asked frequently this morning, but we'd be capturing more pipe to from the UK the assets.
We don't expect too we had already done.
Severe surgery to our November and the first half of December five schedules is likely though that we will not be able to run at 70% low factors through that period, we might see the loan portfolio, 60% there might be some judicious.
Capacity, calling within that but you know we're talking maybe a couple of million passengers below the 38 million.
But yeah I mean, we will continue to manage that on a weekly basis.
Equity trading what will continue to be usually challenging and it's back for that reason, we can't provide any updated guidance. We do expect to see carry 38 million our psyche that the babies between 30 to 35 million passengers and fight which brought a lot depends on how strong the Christmas is and there is reasonable bookings there for Christmas.
Yes, but it depends on whether European countries are locked out at that point in time or not.
We do need to name to the to AD sales markdowns.
Calling on European governments to be much more aggressive or test. The tracing for example in our inquiry testing have a capacity test 100000 people a week, we should be testing a million people a week.
And that's what this government in our guidance you know dawn during the fourth locked down back in the spring, but Unfortunately, you hired were being road by a bunch of doctors and not by a government here and the doctors continue to mis manage everything from nursing homes to be factories to face masks as wed love to EPS, but nevertheless, we are.
Where we are and as an airline will have to continue to try and manage our way around our key objectives. During this period have been to conserve cash strengthened the balance sheet preserve as many jobs as possible even if the price does that job preservation will be pay cuts or management or our frontline be both net flying hours.
For our frontline people is better that they are less busy joined this winter with dig into job. So that together, we can all respond aggressively and grow strongly once we emerge over of the COVID-19 pandemic. The writer group well emerge from this period with a lower cost base, a stronger balance sheet, we will be able to fund.
Lower fares and add new lower cost aircraft at to capitalize on these growth opportunities at which would inevitably emerge once we emerge from the cold 19 pandemic.
We need to do anything you want to add on the Mdna along multiple like Florida that applies to the work we've done on the cost saving over top number of malls that came through in the half we saw operating cost them.
Albeit not multiple sessions have years reduction in revenue, we work very hard to improve what was already the those cost base of any airline in Europe to balance She's also underpinned by the equity raise on the you recall that we did last month's bookings and they'd rather be both disease.
As we go.
Right.
Our officers so Paul refinancing risk now we move on.
I would like to do some more hedging effectiveness.
During the quarter, we took a charge.
Charge of $214 million.
Primarily due to block that we pulled back our winter after the AD from 6% our years, 40% are your capacity as effectively moving and what would have been in charge in Q4 or Q3 into the second half of the year and we're probably coming near the end of the hedge ineffectiveness tickets.
Looking to next year I will rather be on their hedge that we wouldn't anticipate any hedge impact next year from a cash perspective, we've already thats about 70%.
Got we're hedging this year, so balance sheet in good shape cost base and again, our Max is hopefully coming next year, which improved cost base for okay.
Okay. Thanks, I will open up the acuity pleased we're going to restrict everybody just two questions and add the Lps want the parts ones, which will be one of the like of the topic be like next year is we don't know.
Go ahead please.
Thank you if you wish to ask an audio question dealing so my questions are one on your telephone keypad. If you wish to restore your question you might do site breakfast in search each account so once again there.
There are one on your telephone keypad, if you wish to Austin would your question there will be a brief for Sox, we wait for the question to be registered.
Our first question comes from John it's possible, but EPS. Please go ahead.
Thanks, and good morning Bose.
Just kind of slightly nuances on some of the stuff Youve already said on the Q and I on your web site, but.
We obviously had some good cash controlled over the summer.
And.
People, but its free cash that they will need to have the winter.
But can you potentially give some kind of range on what you're thinking the school will do to the balance sheet as they progress through winter I'm not asking for an exact number but just any color that you can give the nail Michael and then secondly, just again not asking on yield.
The lesson are you going to cost me, but in terms of your willingness to achieve 60% to 70% load factor as you said this pent up demand but.
Would you be prepared to go to a cut.
Lastly on yields to achieve that load factor or is it a case of.
Conservatives and the current environment at the moment that maybe some people you couldn't even motivate to fly given the current environment. Thanks.
Thanks, Chuck as to where the bulk of that is.
I mean, the difficulty cards, it's impossible to give you any guidance on cash flow as to this winter. The challenge there is normally I and enormous here, we would have a huge surge of bookings and cash coming through in January February March as people make their Easter holiday bookings are some holiday bookings for Christmas offers period, and we have just noise.
I think you will be strong, but we have no idea. If there is a third lost on going on in January or February when we see that normal storage of cash flow and summer bookings coming through.
There is no doubt that the moment that the booking profile is incredibly base, which is why we think there will be very minimal impact on us from the government's announcement over the weekend at Nov is already reasonably well booked but and I think it's a judgment issue there normally what we've done to describe thank reason, we successfully we said we were wrong, but 70% load factor.
And if we don't think we can achieve sectors that OPEC and we called that.
We went to use pricing to add you never know, but maybe not we don't were not giving away 99, when youre aware first we're not doing the free travel there's no point on the EPS synergies are strong so.
There's reasonable pricing and we think that a reasonable prospect of operating two aseptic said low factor women do selling back. This week, we announced our October traffic statistics the load factor in October was 73%, so going away and that is a reset and the reason we do that is one obviously to keep to the aircraft the pilots and the cabin crew fly, but two we know what that means.
Operating at those kind of load factors, we are about as close to breakeven and as close to kind of cash neutral as it is possible to gain in the current climate, mainly allowing for.
The fuel hedge ineffectiveness. So thats. The reason we to go forward, we have a decision to make in November which is why I think we would let the load factor probably declined to about 60% in November just because the bookings in November are so weak.
We don't want to collapse the business entirely we would like to keep that capital skeleton slight operating EPS, we aren't downcast skeleton flight levels across Europe, but there is demand for those flights people are moving far work reasons people are opting to work in the health services across Europe, who are traveling to commute use.
Ryanair as services and that we think that will continue so where we continue to always what we dumping prices to maintain a 70% low becca no. We are clearly below our push to do you still for the month of September October.
But we are.
They are reasonably center, but where we don't think we can get that 70% load factor, we would take a look back capacity. That's why we've already course, we've already announced Brody doing 40% our normal winter capacity that is less than November its a bit higher around the Christmas period, but he's a very boom, but based on the real challenges we.
No idea what will happen to the bookings over Christmas and into the January February which is normally one of the high points of the booking period, our busiest week for bookings. It annually is all with that second or third week in January and we just have no idea, yet but that looks like when we get there in January.
Hi, guys have made thanks Michael.
I'm sorry.
Our next question.
Yes, no we're not.
On your stuff from Bernstein. Please go ahead with your question.
Thanks, very much good morning.
In your comments. This morning, you highlighted the opportunity for growth of other airlines retreat over the next couple of years.
Why Havent, you announced any new basins or specific growth plan, you have to kind of compare to others.
And then staying on the topic of growth could you comment how you're currently thinking about deploying that growth in the upcoming years is it more strengthening existing bases.
Or new bases, and if it's new basins kind of which geographic focus do you think can yield the most attractive return for you.
Okay. Thanks, Daniel we Havent announced one new base Virgin Kobe outside power its opening in late January but it's all year.
It's only a two or three aircraft base I mean, the reason, we havent announced more is because we haven't concluded negotiations with airports yet I mean, there are extensive negotiations going on really across the piece across Europe.
Cases, those airports don't know how much capacity they are actually going to do something you'll be a European airlines are allowed to hold off their strong off.
They did they use them or lose them has been suspended for this winter it would probably be suspended the silver 2021 as well.
But if you look at some of the legacy Airlines like look at times.
KLM Air, France, who have retired a huge amount of their capacity.
25 targets that we think a lot more re emerge.
We won't be restored.
And that will be enormous growth opportunities for us now maturity those airports have already been most affected by closures. By example, beside the German wings level. They are already quite aggressive, but there's more to do and how we deploy the growth and the impact will be opportunistic weve and deploy the growth those airports who want to.
Grow our returned our restore their topic crap.
That will be from our largest airport that Dublin, and stansted down to our smallest airports and many new airports who.
Well, we probably don't fly at the more the airport works with us to have a return or a net effect of even in the short to medium term incentives. That's how we would deploy that capacity, we will be opportunistic and entirely flexible, but a whiz bike back pretty quick I think the experience we had with the canaries trapping two weeks ago and need to gauge now.
And level of pent up demand there is particularly for short haul European Air travel I think many people who have been locked out for the last our iOS App a lot over the last 912 months. There is an enormous and desire for them to gold happening again, the argument indicates the holidays come back to the beach and all of Europe, and I think that will.
And very strong travel patterns into next summer as long as areas.
A number of vaccines are announced and there is some reasonable availability all.
Vaccines by the end of Q1 Q2.
You talked about the hub and spoke carriers is.
In principle is the hub or the spoke more interesting for you.
In principle, Daniel what and what that but more interesting to us installed airports, who offer us the lowest cost base.
We don't really care I mean, we're at hub airports, and whereas Polk airports, but we are very minded to grow back Barry and I know I keep getting baffled breakup you takes benefit which is our largest airport I thought you know great compulsion to restore profit growing very rapidly asset. If for example, there's a unique opportunity in Spain.
Ignoring Pcr in Germany.
Particularly in the salary in the central and eastern European airports.
Where we return and reopened adopted yet of course, we will but rather we snap back from prior.
Prior to the chip on where nearly 30 billion close to 30 million passengers facet, whether we go back there I use it only as an example, it's not it's not the nature of a discussion with that but whether we go back to 25 million past the first year or just 15 million passes the parts you had time to depend on the nature of the discussions we have not just with Stan that but.
So with the other airports across the Pete and we're certainly seeing quite.
Quite aggressive.
Negotiations are offers on the table to us from a particularly central eastern European airports, who have been very badly devastated by much more autocratic cut backs and locked out by their tool to go.
Got it thanks very much thanks.
Thank you next question. Please our next question comes from sorry Spice from Raymond James. Please go ahead of your question.
Hey, good morning, two questions in line at two questions assuming you get that matches plan just curious what your capex for the second half, albeit maybe generally what the next couple of years might look like.
Then just given that near term lower cost and if you can assuming you get the maximum expected just curious what level of operation you need to get back to you in our securities. They connect.
And that 30, 31 pack costs and achieve prior prior to this crisis.
I am I correct that neither the Capex question not that I'm, not particularly worried about there isn't adaptive number on cost per passenger 31.
I think when we emerge out of this crisis, our cost from last year will be meaningfully lower than it has been historically, we would have lower paid lower wages you certainly have much lower fuel, we will lower aircraft cost lower airport costs.
I think we'll have higher yields.
Because there is no doubt that there will be constrained some capacity coming out of Cotwo back at me. If there is a backseat debate with Q1 Q2, there will be a very strong summer period next summer now I know that the biggest but there were very strong summer and weighed the airlines across it would not be able to respond or restore that capacity quickly again I go back.
For two weeks go into Canaries opened up.
We were back there I mean, it's incredible we fitted flights within I mean, we didn't even know before being able to go with that announced that the canaries was received huge spike up parts of bookings, we were adding extra flights into the canaries for the Christmas period within 24 hours tour operators charter Airlines on some of the legacy carriers with scrabbling around not able to add.
Like they've already cut their schedule. So I think you will see us respond very quickly, but I think pricing in a recovery environment would be much stronger than we have had historically because so much capacity has been taken out system.
But are we is it Turkey, one or 35 or 27 no idea. It would just be lower than we have in the past Nia Capex, yes savi.
I wont be huge capex in the second half of this year in fact, most of the capex of the routine maintenance.
In Asia is uneven bass pro what we're doing less volume so circling back on the main or it's too soon to give numbers on water and the Boeing capex might be because we haven't finalized the rescheduled so I'm not going to give.
Capex for the next few years and hopefully in the next few months, we will consider some continuity from a volume to start giving guidance to that base.
Thanks, Dan next question please.
So I spend comes from Mark since since from Goodbody. Please go ahead with your question.
Yes, good morning, two questions.
You will see not giving the guidance that you have tool to the Q and I about 50% to 80% of some in 19 capacity.
Potentially being your targets rule the semi sub 21, I'm just wondering what the variables between that.
Right and it is.
80% Max that we should assume.
And then talking about Max.
While the idea of you.
Taking Max 10 in the future to further drive down your unit cost can you maybe comment around your view of the Max 10, and what kind of ambitions you might have behind that and I'm sorry, just squeeze one last quick clarification, Neil CCF there you've got a data as of March repayments, but is it likely that the government will roll that out.
No not yet.
Okay.
That's a question maybe the first one.
We give you a very wide range, 50% to 80% the real bear that what price that is the availability of a widespread availability all effective multiple effective vaccines and how that might impact governments have been as your willingness to lock down economies are reopened economies theres tiering of European mainly the comp that Youre PD.
In security depended on travel and tourism.
Ireland, which is an island off the the Premiervue Orbitz you depend on travel and tourism, but that hasn't stopped our government pay TV shopping the entire causing the entire starting the entire island down.
As you can get out of the North Korea at the moment than it is off the island, Ireland and.
So it did that the wide range of 50% to 80%, which is so that's over the full year were talking like something like 75 million passengers to maybe under 120 million Pops is entirely dependent upon the timing and availability of widespread vaccines in Q1 or Q2 next year.
Is 80% Max we think so I mean, we think even if that was a a virus that they are not a buyer a vaccine available by the end of Q1, we would have to struggle I mean, theres just because of the obligation I'll nail tapped recruitment and training.
Promoting pilots having enough line playing this winter to complete training, we need to do.
We think that it would be tough to get honey higher than 80% of our Nordic 2019, Max now we could over the weekend that extra things like that but we don't think that does any prospect next year that we would add carry more than 120 million, maybe a 130 25 million passengers all being if there was a vaccine whitening.
In the first quarter, but clearly the earlier a vaccine is available to higher that number will scope and you know we're guessing we're stopping in the dock, but thats. The best we told we can give you on pulling on the Mac 10, we continue our intense discussions with Boeing around compensation pricing of our.
Good demand. However, we are looking at additional aircraft orders at most that would focus around they did the Mac to wanted to game changer, App, which will significantly lower our operating cost going forward for the next number of years App, but we are not in a position to engage in discussions on the back 10 at the moment they have pushed back the production deliveries.
Max 10 by anything up to two years, I think Neil but two years and so they're not really at a point, where they can give us any deliveries of Max 10 articles pricing.
We have a doe and we've agreed with Boeing that we will be forced into Q. When it comes to a discussion on Mac and availability of pricing and it certainly felt that we would be looking at going forward.
We were already the need to operate the lead customer for the back 200, we have incredibly favorable pricing from Boeing as a lead customer at the Max 200, and the fact that they give us for that more seats.
No extra cost at 16% lower fuel will transform our cost base for the next number of years competing has we have will be with Aerodyne's, we'll be doing fans and leasebacks setting aircraft at distressed prices and leasing them back out what are very disadvantageous financing costs in the current climate.
And Neal than on the.
Perhaps marker attention at the moment is that paid off back in March which your rice.
We don't make that decision until we get into on the back end of March and there is a possibility we wall at Roanoke or for the year.
Great great. Okay. Thanks, guys.
Next question please.
Next question comes from Stephen Fry them from Davy. Please go ahead.
Yes, good morning, guys.
I presume revenue management systems are pretty result at the moment, but I was just wondering.
How we report the writer labs and the work it's been doing up there.
During the crisis.
I talked about that and then maybe just go back on the competitive landscape into next year it seems that.
They'll be huge chunk of capacity permanently.
Out of the market and road that's your view.
I'd like to wait maybe growing we've got to wait core or domestic Norway, maybe book beyond staff would you agree to.
A lot of the capacity coming out will be permanent or do you think it's more or you think it would come back post crisis type work.
Okay any with the near the CEO of gas, so I'm going to ask him to give his view on the revenue management systems and pricey just on the competitive landscape I mean, if you look around the system, we think advanced we'd only be able to operate 80% of our capacity to next summer and air France, KLM already not 20% capacity cope.
Todd you are focusing strongly on long haul routes massive short haul capacity come out even a 51 less aircraft by September 21, no growth thereafter, 2020 pipe AG 68, less deliveries over the beauty 2020 do their winter capacity cost, 70% and it's all across the fleet.
If you look across who as the aircraft orders into next year. Most have been that you've heard out of 2021 in 2022 have with as far as we understand how about 19 aircraft. So its reasonably small compared to us we have taken delivery of something of the order of about 30 aircraft, we would be the airline with the largest.
Additionally, our spare capacity into 2021, we are certainly having the airline that most of the European airports are looking to to offer traffic Restoration Act pretty quickly and we will be delivering that topic restoration on meaningfully lower cost aircraft with much lower operating costs.
I am not some you know.
I'd go back almost to the.
The slides on our investor presentation on aircraft ownership costs, we keep hearing from Joe variety of ways that they'll have lower aircraft cost. The Ryanair hit every tammy at an aircraft the gap between ways and Ryanair gets wider and wider.
We will be taking lower cost aircraft, taking higher cost aircraft and the gap between its get bigger and bigger any yes.
Rick you mentioned that event.
For me in terms of pricing and bookings going forward, Yeah. I mean, I think if you look just as.
Steven you're told their bed last before I get into that I mean like we've had.
Our ability to leverage labs during this crisis has been.
Particularly on the customer service side, our business intelligence teams, they were able to start very flexible and actually coming up a managing that amount of and.
Reforms and the ability to get ventures, and things like that but here you see and we are the carbs on the revenue side.
Completely different now I mean, there's an awful lot more closer end bookings because people are concerned about whether thats going to be locked as whether they can travel are done.
We are working with our revenue management and people that labs that us as to how we're going to adopt that going forward, because it's going to be particularly with bookings start to come back again, having they are traditional sort of curves won't necessarily be uptake. It was a lot of work going on at the moment. The good news is that the synergies are still.
Our goals, particularly as compared to the board and less so on the.
Insight for you to.
Having that amazing people here and been able to use them has been a real benefit for us and where they're learning a lot from this as to how people are as the profiles of bookings.
Yes and to be fair to run their labs has done a remarkable job, but we had a backlog of nearly $1.5 billion of refunds and they have now eliminated that backlog, we've issued refunds vouchers to add all of the customers who are affected by COVID-19 cancellations.
They repeatedly year pullets on the BBC talking about when we eliminate the backfilled the adult ADHD.
The only people who are left out there are people, who haven't applied to us directly for refunds.
But it's been done at last on a remarkable job John Ernie is here and mining furious, we may add but they've done a terrific job and going forward and they said it is the nature of the Beast, we now have a very narrow booking window.
Typically about 28 30 days out.
But we are much more flexible in the way we can deploy the aircraft. We think we're going to be below 70% load factor more than two weeks that we take out like the challenge for us in most cases actually with the flights one of the world flank of the two like that we'll take we'll have a load factor of higher than 70%. So it needs to operate.
Next question. Our next question comes from James Collins from Exxon BNP. Please.
That's right.
Morning, just wondering on redundancies themselves I know you talked about maybe focusing on pay cuts and close to 20% of spending I think you'll see both places 18000, what we should be thinking about so I guess the end of this fiscal year, and secondly, 40 to Neil.
Boating side of things I know you know two P.M. out compensation books start to push this 250 million coming in already is the best way to think about Capex Nexgen same south West you basically said, if we net zero.
Okay.
On the Capex discussions are ongoing so without adding to the timing of cash flows going on who we're finished on that but it's very difficult to give you numbers, but we try to keep that was.
Cash the business for as long as we have Jane.
Jane.
I don't close more color I can give you this side of announcing what we finalize we following that.
Yes, and on the head count issue.
I think it's not hesitant to focused on job losses, Although you know a year is likely to be more jobs. All this winter at those number of bases of cabin crew bases in Portugal, Spain, and Belgium, where we have got agreement, where we have reached agreements with all of the pilot based across Europe with the vast majority cap two bases that we where we used to be comp there won't be any more job law.
We are participating in Florida, those schemes and where they're available in some cases in the UK. For example, the portal scheme is purely because the employer has to pay out on the fourth third all that out the salary we simply can't participate in those we both thought and those kind of salary.
At but we are keeping pilots and Tom accrue flying at media on the basis of a paying them today, but that better than you know.
Sitting at home on the Dole in the UK. This winter is more helpful. I think if you look at it in the ramp and that is that in the half year. The staff costs decreased by 60% at which was due to slight Howard's recruitment free some job losses that being more of the job losses have been in head office and in overhead functions.
Rather than tightest capital and engineers and participate in the government supports keep.
And I think that will continue to be case, we are very conscious.
Ending our what most priority here is to keep the air property line, even if there are that blades, we do one or two flights a day to the winter keep as many pilot the top two current as we can so that we can pounce on these growth opportunities and return quickly to more normal shapes, you have levels of flying as.
As the vaccine are they where we we emerge again this code 90 crisis and an awful lot of our competitors for example, who have grounded aircraft for six nine months their pilots would have gone out of hours, there cameco and above our aircraft will need a heavy maintenance shop visit before those planes can go back in the air.
Whereas we're keeping everything taking over at West is leveraged 60, 70% reduction in our total payroll cost. So James I got the question is don't focus on the head count for the Beaumont focused on the payroll cost savings, while still keeping up they are giving us a very flexible and keeping our pilots and cabin crew cart.
Right.
Next question please.
Our next question comes from Jamie versus let's say from Deutsche Bank. Please go ahead your question.
Jamie good morning, such.
Such as you've alluded to the UK government woman.
The Canary Islands on the site and you take a look at bookings. The next imposes a national Lockdown tells people not to travel unless the business purposes is there anything more you can just say in terms of what you're going to have to do now to manage this latest development in Q3.
Capacity and also things like refunds.
Second thing the most simple boring one in terms of the Brexit related risks you've highlighted could you just remind us what percentage of your current shareholder base is UK. Please thanks.
Okay, Let me add that if you the person parts.
Q3, when we manage day to day basis, yes, the Guy UK government.
His script lash from the numbers all you toward they're performing not just on coal would put on Brexit as well.
We think that the capacity we could go after to 40% to prior year. They close in bookings are reasonably strong, but anything out six to eight weeks or more than that is weak and that means we don't have a big refunds.
Energy out there it's not like we were back in March this year, where we had lost the bookings to silver different huge continued labor that we don't have that at the moment. There is a psychopath bookings at Christmas when they have the canaries at the least we saw a big surge in bookings to the canaries, but it would largely for people who would normally goes the canaries with their family to Christmas and new year, there isn't a lot.
But they are booking a trial with holidays booked in the basin November because schools are open there's.
There's not a so far only have both for Nov is largely business are essential travel anyway.
We would expect most of that to travel but I.
I would be perfectly open.
They said 48 million could fall 36, it could fall 30 by we don't know, but if we're down to pretty much rock bottom levels of traffic and capacity at this point in time, but it does any kind of any change there will be changes to the slight downside on repo, we have almost no refund liability.
Net because we have no forward bookings out there.
Here. This morning in the PR whatever price, we're operating with off rate people do not have a refund to tight mcdonalds fight. The fight is operating and you don't have and you don't get refunds. Although you can take advantage of our change. We you know we waived change fees for any of the bookings that have been made recently that robust data at the end up at January of this year.
Here, which is one of these where we might have a slightly lower load factor in November my phone they 60%, 70%. If it begins following that I will take notes of capacity. So we have a very flexible.
Cost base at the moment, we've a very flexible capacity base and I think if you look at everything we've done since we went back buying in the fourth of July Brian here is the only aired on that never to 70% load factor every month since the first of July we look at E jets load factor by 54% with load factor down around 64% last month.
We have delivered we deliver exactly what we say, we will and we have a very flexible capacity cost base going forward on Brexit who to have those I mean at the oil and the best thing. We can say is look there was a unilateral agreements to Cobra flying back announced between the European Union and the U.K. Goldman before.
Or December of last year.
The need to because it was a transition agreement we suspect there would be some kind of agreement that would be cobbled together because johnson than go would you turn again, having like changed on just about every aspect of their Brexit policy.
But if there is and I think we don't factor right now are they you UK or the unit to use did running at about 50 440 sake. We do have the provisions in place to do said to date are to remove the booking right from Nani you shareholders in a hard Brexit if there is the trade.
Recovering aviation and that probably would be spread to be well covered but we're not breaking out what our UK shareholder to use it's not because we haven't given out and nor would we start now I just because they do you think you want to add on the breakfast dimension Julius calm rank our group CFO I just want to think perhaps which is that if there was.
Do you.
Between the UK and the Eutwenty seven post January 21, we will activate our Brexit ownership and control solution, which Michael described.
So that amount of which is application, though voting rights.
For shareholders.
Shareholders not move protect our.
You licenses, which we have in Ireland.
Both Poland and the north to at the moment.
And we would hope its application will be a temporary solution on the number of Eutwenty seven shareholding exceeds 50% again.
Okay. Thanks that unit next question. Please our next question comes from Moneypak Kiani from Bank of America. Please go ahead your question Steve.
Hi can.
Can you talk a little bit about how you're thinking about hedging you said, 40% for fiscal year 2002 kind of what's the assumption base assumption for that.
40% and just a clarification on ticket on that.
<unk> 0.5, pending and with that large deal in.
Q.
Sorry, many of you broke up there again just repeat that question.
Looks like.
Yes, so the ticket tree on the web.
Five.
Almost all into Q or was there a portion in one Q as well.
You asked me about the second BOP hedging at the moment, we would be reluctant to do any more hedging into next year not because we don't fundamentally believe in hedging, but simply because the volatility in oil prices.
Means we should I think we should hold out and hope that low oil prices will remain reasonably low.
We are about 40% hedged into next year already two which would be the upper end of our tax forecast at army will be based on the upper end of our parks forecasts.
No.
Hedging.
Forecast is at 70 tens of 50% to 80% correct. So that's over.
No sorry.
Sorry.
We have a forward intend to do and hedging we don't see any circumstance in which we won't be operating about 40% of our capacity at through next year. We're already part of the operating about 40%. This winter. Despite the fact that there are more locked on to pay so we certainly don't see any for the fuel hedge ineffectiveness seats next year would we be willing at this.
Thanks to increased that hates position no add won't because we don't want to take a risk to the balance sheet is quite strong and we don't want to put any under any further strain by extending our hedge lines and three frankly, I think when some economic activity resumes we will see continue.
I think it's a continued supply heavy oil supply and hopefully that over the medium term oil prices will remain reasonably low we've allowed the airline industry as the sector to recover.
And on the segment at need on the hedging into Q2 being repurposed the region most levels into Q2, we got our people back in the office for the first June So we start processing the backlog at that point in time, and we've done a huge amount works, we already said with lots of books from service team and getting through that over the past three or.
Formal.
Great. Thanks, Good even next question please.
Hello.
Our next question comes from operating Sandra from Crackers Shapiro. Please go ahead of your question.
Yes.
Good morning, Good question, Steve just a follow up on the airport. Please.
The baby sit you close the strength of our primary airports thesis smaller airport we.
We could weaker balance sheet than before the crisis, but you continue to focus on prime money. It for Twitter that embed a competition Atlanta Peplinski Q state support what they expect a piece that we're guiding to focus again small again port.
And second.
I'm asking a lot of people that might be a clean cadence, but I do not know if you guys can get money that after beating dead from pillar, great feedback for Pennsaid Triumeq flights.
You mentioned in the press statement. This morning, almost all non opioid define Pickwick Mountain bank.
Please be more specific on what you mean lease or own and Germany.
Funding process has been slow what the direct the fuel and currency betting fee.
You have to put that on how high do you estimate the total cash at peak the team that the best can Jeff. Thank you very much.
Okay. Thank you let me touch on the airports first I mean again I don't get distracted by the primary or secondary spit on airports. We have so some airports I would hope temporarily for the winter call Shannon to news.
Hi, we bought those stood guard conducted so stood guard dosing, but they will be permanent close if they're not reopening we.
I would expect at Corsham, that's new to reopen for next summer, but that all depends on whether or not and has reopened did play connectivity to the rest of the world or whether we're still being strangled by a bunch of Dr. Smith managing the economy here for the next over the next period.
I again I go back to we are offered the indifferent as to whether our growth will be a primary or secondary airports. It would be at those airports, who need the growth most because there would be the airports, we'll come up with the best deals. We are all pretty indifferent as to what the competition is at any of those airports.
Because we have much lower cost based on all of them, even more pounds and aircraft can then yes that really engage in below cost setting, but we'll still be able to do under cope their prices because we have a.
I don't know a bad place be lower cost base that they have and eventually they run out of their 10 billion of state aid I think everyone out of that business pretty quickly anyway there.
There is no.
Honestly, all the German Siggi I have no idea, where you get that you'll need to get out more roxana our meet more people.
Refund.
All of the German all of the German customers, who fight for constant joined the call would have either received cash refunds that they requested more. They proceed bunkers there may be some there, but we're expecting the refunds fall into doors that but they have a boat sure it's up to them to either I can use the boat show our request the cash refunds there is no backlog at all.
Ill refunds in Germany, or any other do you come to be at the moment in fact, our current app.
People, who apply to us last week, our refunds our data Academy funds credit that came in last week have already been profit.
There is a small I would emphasize a small number of patents out there who both through OTI eight I think it's probably it's a single a bigger percentage of our total customer base.
John as we faced with those is because the screen scrapers, our scamming those customers by adding heat and managing fees are inflating the price of the Ryanair fair. They don't want the customer they tend to be in direct contact with the airtight. They don't want the airline to refund the money direct to the customer even though wonder utilities. One vessel we are obliged to do we have.
And based the procedure, where those customers can actually apply directly to us through the website and we will give them the refunds back into the the reason we havent done that so far is because we have a fake email address for that customer that you see that the med direct into the OTI eight who are we have a fake virtual credit card from the OTI eight and we mold.
Asia refunds to virtual OTI, a credit card, we have never been examples where we've already processed recalls people, we thought weren't odysseys and you have these screens papers have been sitting on that cash for two or three months keeping their business models going whereas otherwise they would have gone bankrupt, but there is a few assortment in Germany waiting for a refund.
I asked them to send us an E mail straight away.
Requested a refund and we get probably for the next four or five days, we have US do said processed over 1.5 billion in refunds and vouchers and there is nothing there is no backlog left in the system, I mean, Germany or any other you contract.
Okay next question please.
Our next question comes from coloring.
Really the doors from Morgan Stanley. Please go ahead with your question.
Hi.
Hi, good money.
So two questions. One if you feel you have to reduce quite significantly is the 60 million in cash burn guidance that you gave us in at year end results is to look good.
It's still a good estimate for for for plenty of fixed cost base and and my second question is how are you thinking about minimum liquidity.
4.5 billion at what point would you looking to raise more funds and in E. Initially you'll be chose a mix of up through the summer of equity can that would that be a preferred option you would look at lease hold so I guess, what do you think it would be most attractive at this point.
Sorry can you repeat the first question I want to hear you say you said I think 60 million thats, something but I get picking up 60 million euros per week of cash burn what the guidance during the first dropdown.
Sure capacity going down significantly is this is your fixed cost base, let's put it this way.
Okay. So if you come back on that point, So frankly, I mean, we have no idea I get the cash flows are impossible to forecast through the winter period, because we have generally speaking you are pretty weak bookings and dropped to Chris a very strong bookings we used the Africa, but we have no idea whether those strong bookings are going to a merger not clearly will be assisted I think strongly assisted if there's a.
Announcement of the vaccine licenses decides Christmas, but without some kind of insight into what the dead. The spring booking season would be like we can't we have no idea what the cash flows will be minimum liquidity I think youd uptake of thought about based on what we've already done we have 4.5 billion in cash at the moment or you've got a big inphi even.
Refund next year that gives us a minimum of 3 billion at the moment I mean, we certainly not going to go below a baby isn't it.
In fact cash but.
But it is very difficult to foresee that we would need to go back to the market for more equity or more debt given where we are at the moment, but clearly there is all sorts of scenarios.
There is no vaccine in coal would continues the next five years, we will have to go back to the marketplace.
We don't think thats likely and nor do any of the medical experts from that up to Fiveg do most of the European DC DC, there seems to be a reasonable because there are many number of vaccines already in phase three trials that looks like they will be a number would be like pre Christmas and the question is how widely available those vaccines will.
Recall that in Q1 or Q2 next year.
And there was a third element on part of aircraft financing no. We have generally been always very concerned aircraft financing. We as you know we'll have about 80% of our fleet is open Colbert. We would continue to believe that we'll use a mix of equity and bond to our low cost bond debt financing to fund our hair.
Craft orders and we have the backstop of eggs them out there as well and you know for a kind of a crisis and events reality and we also have some flexibility built into the order with Boeing to we can postpone deliveries kind of.
That COVID-19 continues.
But the price we're buying these aircraft that is whether backed into our cost base and as Neil said you know we have no cash outflows on capex between now and the end of March 2021, even despite that we have what 30 our ramp up.
Up to 30 aircraft deliveries in the first half of next year.
Next question please on.
Next question comes from Neil Glynn credit ceiling.
Sure.
Hi, there good morning, if I get off.
Two please so the first one just following on from your last answer there.
Based on aircraft financing I guess based on not given the.
Leased aircraft that are due to go back to last or am I right in thinking that you might actually get to a point over the next 12 months, where you don't actually have one operating lease at the moment are out of time I just wanted to just not quite interesting I remember second point.
I appreciate you don't have a crystal ball.
I understand your point with respect to the Canary Islands demand, which is insurance and in terms of how you think about the next few years on leisure travel just city.
The recovery of not segment of the market and how that might influence your network strategy over the next couple of years do you think there might be a structural change there where which may not happen for example in beach demand.
Okay, I mean, let me turn it up.
No I mean that we won't have felt in east aircraft, we do have aircraft coming off lease in the next year or two in all those cases, we're having discussions with that source.
If there is a significant reduction in the lease rates on a monthly lease rate. We are happy to extend those leases if there isn't any less or have some other use of the aircraft and we're happy that the aircraft pullback because we're not going to be our into the spring of next year when to the Max the 200 delivery. So we are again opportunistic where there's an opportunity to signal.
Turning to reduce these costs. These costs, then we would extend leases where the reasons, we would target we would end our levels at the end, but no I think is a we it's unlikely the knicks amounts of gifts that we we have no. These aircraft.
Over the next few years again getting into this guidance with respect and you're making the same mistake is that always be demand led where you are.
Our growth is never demand led our growth is always opportunistic its where we see opportunities to great. There's not growth incentives or whether it's big discount on all these charges that tobey place the capacity and then we still believe that the Matt.
Clearly, we think there would be a huge return I think to the beaches of Europe shoretel into silver of 2021, but if we are emerging out with over 90 crisis and we are there's that widespread vaccines available Sydney travel will continue to be strong one because that's where the business traveled with stock from adequately go.
And secondly, a huge amount of.
Kind of layout works when Asian travel people commuting to jobs commuting to work I mean lots of examples we do and have been dealt a new work in London that would return very quickly and then I think you do next to all of you will see a very strong return 80 to no small part efficiency Gulf of CD based hotel coating hotel room rates.
Lots of advertising and Christmas markets and reasons to go to Amsterdam augment radar Hill BCD.
These cities are hugely dependent on tourism breadth and need to see the restaurant. The hotels are there kind of leisure industries concert venues et cetera at recovered their business and I think you will see significant price stimulation outback retailers.
Tourism destinations.
I think as the city by city traffic will read to will return very strongly as well I mean I have no doubts.
I listen to all of this kind of stage Analysed idling stages in the UK, but these analysis, though we are going to take two years four years five years for travelers to recover the bullshit. It would recover very rapidly within the boat I suspect 12 month because of the huge price discounting that we go on by the hotels the error.
And that does the that the provider.
Next thing will stimulate a very rapid recovery. The question is how long it would take is it 234 years for pricing to recover to training to 1990 levels.
That is the much more I think that means that much more likely outcome that would be very rapid volume recovery very quickly, but it would be price driven the advanced to the gains of Ryanair is that price pricing will be driven by materially materially lower cost base across all the major cost.
Items at wages few aircraft cost airport costs, we will not materially lower cost going forward across the eight which will enable us to fund very aggressive pricing strategies and I and then in terms of the Citibank market off the beach market. The hotel the accommodation providers will actually also paid their rule because they would.
Don't prices quickly to get the business back.
All right great. Thanks.
Thanks, Paul next question comes from Alex Hutchison from show Hunts. Please go ahead.
On the coming week.
Hi.
I'm not asking for yield forecast just to be clear good how.
Is there any color you can give on the impact of late booking so does that have a negative impact or were actually given pent up demand.
Would it make a difference or is it too early to count on just secondly on the ineffectiveness charge I think it was $214 million.
70, 670%, which would be about 150 million, but on the cash flow, which I think is 90 cents are you, saying 53 was paid out in the quarter to date on when would you expect the rest repaid outbreaks.
Okay. Thanks.
Let me elaborate the ineffectiveness and the second question, let me see if delayed coking tissue I mean, what we're doing at the maturity we are pricing into I'm half price through September October November at lower than the budget and lower than we did in the previous up September October November, but we're not in desperation pricing like we take cost you take the stage, we don't price down.
So staying within 14 days if were getting a booking people have to trial.
Well, we've seen some of our competitors you know we've allowed them to all due to price below us in certain markets, where they're not where I know that with for example ways broke one euro airfares and easily last I think a week or two ago I made to measure the desperation of ways, who don't have much of a presence in the Italian market anyway, we didnt bother matches I normally we would always matching.
Because our competitors at least we're not matching it because frankly, we have 70% load factors dosing if somebody's booking tilting theres a reason they have to travel we are still being reasonably aggressive on pricing. We party presents off 50% dollar do 999 to 14 Thats. Good Thats all JBT beyond two three weeks out.
And we're not aggressive on pipe in multiple Christmas because there's too much uncertainty so.
The advantage of late bookings is you're generally deal with people who have to fly and therefore, we're not being aggressive on pricing. Although we are considerably below where we would be pricing. This time last year for those tosi bookings because it's done last year. The load factor was 90, 293% and car he gets that rose 70%.
So why I mean, what we need to do with close in booking is to maintain a very flexible in terms of capacity three and four weeks that we need to be certain you know if we if we're not going to get to that 70% or take out a rotation or take out a flight is generally a rotation because taking up wouldn't cyclotron passengers and we continue to manage that Judy.
Just again I want to get again come back they point, we have managed to 70% load factor every month from July through to October.
No other airline has never that at Neal the ineffectiveness charge to.
Through 14 infections charges as I said earlier, Alex the vessels front loading from Q4 and Q3.
In the first half of the year and we've already paid but 70% of our mark to market on hedges that have gone effective forward for the year to date and not putting the exact figure out there, but we're well through it.
Hi. Thanks next question. Please thank you.
Just as a quick reminder, if you wish to ask and what was your question Sir.
One set of thank you Pat.
Our next question comes from Chris James Good or from Redburn. Please go ahead Jay.
Hi, good morning, everyone.
Okay.
On the renegotiation with employees I'm.
I'm, just trying to get a gauge on how the share variable pay.
Hey shifted.
Able to give us again.
Percentage of staff costs and variable.
And then secondly on the company.
Yes.
From Boeing I mean, how how you thinking about you looking to reinvest all of that into lower price backdrop to potentially going to take some cash that Jim.
Okay. Thanks, I think the second half.
He just kindred jet our times, we're not going to give the specifics I will give you general terms about the employee compensation in terms of Maxim.
Obviously in discussions with Boeing about the Max aircraft at compensation is not at.
Our most in our minds we are.
More focused on the pricing of the aircraft order, we are talking to Boeing about additional orders.
And so but it is a complicated there are three elements to it there is clearly compensation for the delayed deliveries and we are now running 18 months behind there is also some of the pricing of the existing order and we're also looking at the possibility of adding to that order in the current environment.
Environment, but we need orders and we are we believe we have very strong growth prospects for the next two or three years. When there will be I think a very sizable snap back in that air travel post covert and not that many airlines in Europe, who can actually have the capacity to be able to deliver that.
Our carried out past that traffic, but radio postponed a lot of the discussion on Max until such time as at the Max returned to service that we have a accretive in a realistic delivery scheduled for Boeing we really cast compute those discussions which are pretty advanced but not concluded.
Eddie you want to give a flavor for that.
HR had I'll, let me the the key to this was that we were a very early and what our people.
As with unions, very clear message and and.
Those deals, whereas there.
And what we've got here is that we've got a 20% reduction for our pilots and we'll just 10% of our cabin crew at 100%. The pilots are covered than that I think he is where was that there was pay restoration over the next five years. So the simple message and our people I suppose at realized better to have and job as a hedged our bets on jobs.
In the long term I would take the pain of quality so.
It is a measure of the update.
They have had they went to bed days and took was the message to sink in both eventually it's a job security and reductions in pay pay restoration and have a very light lowers our pay rates are very low to our activity with the 20% reduction in the case of pilots.
So it's a it's a good deal for our people in the longer term I would say they have they have taken the pain of best credits contract.
If you take some of the legacy throughout Europe as a real problem building in some of those legacy Airlines, where you know they have all of their pads. The gap grew up on government verticals schemes, which saw a final tip. The Goldman fertile scheme on wine I think you know when they when the vaccine emerges and Goldman no longer lockdown.
The government took what had been under intense fiscal pressure to end fertile schemes.
And then you're going to happy to look past that the air France, KLM soy most shape. So we head fertile scheme has ended we now start paying these people, but we can't make the redundant because thats part of the terms of the state aid they get they are going to be very and nor would they have got 90, they've not negotiate any pay costs.
So we are in a very strong position going forward as it has been painful for our people. It has been painful for the entire management team, we've all taken deep pickup.
But we will be much more flexible and much rate much faster to reemerge from base with a restructured cost base at a time and will be completed within those times is that in the air France. KLM, then Deb the Spanish Airlines, all of whom are redeemed receiving these kind of jobs scheme forward or.
Dopey, but that's going to come to an end fairly quickly because you you a European governments can't afford to continue at that site.
And I think the challenge for those at that point time would be okay. Now we need pay cuts and used to going to go go go ahead with your Peco lets you know youve fertile support and a lot of these photos schemes are based on no peco, it's no job growth.
So we've restructured and most of our competition have.
The notable exception I would obviously be AG whoever kind of you've followed us, but we were out parse them faster and we have the deal so incredibly thanks, James and keep their.
There appears to be no further questions. So I will hand back to the speakers for any up or.
Okay, everybody. Thank you very much for your attendance on the call at year end, it's been very challenging six months far.
Ryanair instead of HIV six month for the industry and I think it's important to finish on a more positive note. The Corona Pirates. We then.
Vaccines will be found I hope it will be in time for a reasonably strong summer 2020 month.
But overall I would assure you is that in the meantime, we have taken a lot of the painful decisions. We have restructured the cost base. We have a strong balance sheet. We are engaged actively engaged with our partners Boeing in restructuring the aircraft order I think there has never been a more exciting period to our opportunity for growth certainly in the European.
Airline industry, and that's going to be the one market I think thats going to rebound very strongly with huge suppressed or pent up demand.
Ryanair will in my view be by far and away the best positioned airline with the lowest cost base with a new aircraft order coming through over the next couple of years to take up the challenge of that recovery and need will lead to superior returns over the coming years, but the next couple of months through up to Christmas then maybe aspect as would be difficult.
Challenging, but really as we continue to manage it as best we can thank you very much to everybody and we have an extensive road show taking place over the next two or three days, we are cramming everybody in Turkey. Our meeting minutes are reading at 30 minute meetings dollar, which means we can get some huge numbers of investors over the next two days.
If you would like a meeting or some consumer online video meeting I haven't dealt with before to Peter Davies, our to Citibank are to city and we will set something up view of the next I cover today. Thanks, very much everybody. Good to talk to you and I hope to see assume when we I will return to traveling on when hopefully the more appropriate.
North Korean people hired and will have been allowed on an off guidance more.
Thank you bye bye.
Okay. That's cool. Thank you for today you may now disconnect steroids.
[music].