Q1 2025 Ryanair Holdings PLC Earnings Call

Okay.

Dana: Hello, and welcome everyone to Devine Holdings plc, Q1, FY 'twenty earnings release, My name is Dana and I will be coordinating the call today.

If you would like to ask a question you may do stay professionals led by Bonnie Thank you Pat.

Unknown Attendee: Now how did you see Michael O'leary grip Seattle Vine at holdings to begin Michael. Please go ahead.

Michael: Okay, good morning, ladies and gentlemen, welcome to the Ryanair Q1 results conference call. As you will have seen this morning, we released our Q1 results, together with an MD&A and a slide presentation, on the Ryanair.com website. I therefore won't read the press release, but I'll touch on a couple of key themes. We reported Q1 profit of £360 million, that's 46% down on last year's Q1 profit of £663 million. Despite strong traffic, we get the consumers' correct email and payment details.

Michael O'Leary: Okay. Good morning, <unk> and gentlemen, welcome to the Ryanair Q1.

Michael: We've continued to extend our fuel hedges at attractive prices. We're now 75% hedged for FY25 at about $79 a barrel, saving ourselves over €450 million in the current year. And we've now extended our fuel hedges for FY26 to 45% of our needs at about $78 a barrel. And as of Friday, we have completed just over half of the 700 million share buyback. Touching briefly on our continuing environmental commitment, during Q1, we took delivery of 10 Boeing game-changer aircraft.

Results Conference call you will have seen this morning, we released our Q1 results together with an aim DNA and a slide presentation is on the Ryanair Com website.

Speaker Change: I won't read the press release, Brad touched on a couple of key themes. We reported Q1 profit of $360 million, that's 46% down on last year's Q1 $663 million.

Speaker Change: Despite strong traffic growth traffic is up 10% in the quarter to 55 5 million customers, but this has been offset by weaker than expected airfares some of which is impacted by the <unk>.

The first half of Easter falling into the prior year Q4.

Speaker Change: <unk> traffic growth is strong up 10% to $55 million, but its only stronger price and we're having to repeatedly stimulate.

Speaker Change: Sales and bookings the App and.

Speaker Change: The closer in.

Speaker Change: Fair said performance at close in bookings has been disappointing and materially weaker than we expected, particularly on the way into the peak months of July August and September.

Speaker Change: We have 156 game changers into feed at the end of June that is 20 aircraft less than we had originally budgeted.

Speaker Change: We are seeing record summer schedule and bookings, but at lower prices. We are continuing to sign up multiple approved otas partnerships, which will protect consumers and ensure that consumers get the lowest ryanair ryanair lowest airfares, while we get the consumers at correct email and payment details.

Speaker Change: We've continued to extend our fuel hedges at attractive prices, we're now 75% hedged for FY 'twenty five at about $79, a barrel saving ourselves over 450 million viewers in the current year and we are now extended our fuel hedged for FY 'twenty, 6% to 48% of our needs at about $78, a barrel and as of Friday, we are complete.

Speaker Change: Just over half of the $700 million share buyback.

Speaker Change: Touching briefly on our continuing environmental commitment during Q1, we took delivery of 10 Boeing.

Michael: These offer 4% more seats but burn 16% less fuel and have less CO2 emissions as well. And the retrofitting winglet retrofit program on the NGs continues. We're on schedule to achieve our target of retrofitting the entire fleet of 409 NGs by 2026. These winglets reduce fuel burn by 1.5% and noise by 6%.

Speaker Change: <unk> game changer aircraft. These are first 4% more seats, but burn 16% less fuel and have less cotwo emissions as well and the retrofitting. We can retrofit program on the <unk> continues we're on schedule to achieve our target of every.

Speaker Change: Retrofitting the entire fleet of 490 <unk> by 2026, these winglets reduce fuel burn by one 5% and noise by 6%. However, much of this exit environmental work has been ongoing.

Michael: However, much of this excellent environmental work is being undone by the deteriorating performance of European ATC. Eurocontrol's old numbers this morning show that while flights in July or up to July are 4% higher year on year than they were in 2023, it's still 3% less than 2019 levels. Year to date, the number of flights across Europe is 5% below 2019 levels. And yet, we are suffering, as are all other airlines, repeated, inexplicable ATC capacity restrictions.

Speaker Change: The deteriorating performance of European ATC.

Speaker Change: Eurocontrol numbers this morning shows that flight.

Speaker Change: In July are up to July or 4% higher year on year as they were in 2023.

Speaker Change: 3% less than 2000 2019 level year to date, the number of sites across Europe is 5% below 2019 levels and yet we are suffering as our all other airlines repeated inexplicable hec capacity restrictions. These can only arise from material under staffing our short staffing.

Michael: These can only arise from material understaffing or short staffing, mainly in the French, German, and Hungarian ATC areas. And we are suffering horrendous ATC delays, particularly which are inexplicable on the first wave of morning flight departures. This is, they're blaming all sorts of things like adverse weather, etc, etc. But it is down to understaffing.

Speaker Change: And the French German and Hungarian ATC areas, and we are suffering horrendous ATC delays, particularly which is inexplicable. The first wave of morning flight departures.

Speaker Change: They are claiming also things like adverse weather et cetera, et cetera, but it is down to understaffing.

Michael: And we are having our worst summer ever in terms of ATC delays and flight cancellations because, as the delays roll through the day, we're having to cancel late evening flights at curfew airports. We're continuing to call on the EU Commission President, Ursula von der Leyen, and the EU Parliament to deliver their long-delayed reform of Europe's hopelessly inefficient ATC services. In terms of fleet and growth, this summer, we're operating our largest ever schedule.

Speaker Change: And we are having our worst summer ever in terms of ATC delays and flight cancellations because as the delays rolled through the day and we're having to cancel late evening curfew airports, we're continuing to call on the EU Commission, President <unk> and the EU Parliament to deliver their long delayed reform of Europe.

Speaker Change: Hope to see inefficient ATC services in.

Speaker Change: In terms of freezing growth somewhere we're operating our largest ever schedule. We have over 200, new routes and five new basis as we deliver as much low fare growth is possible for our passengers and our airport partners in FY 'twenty five.

Michael: We've got over 200 new routes and five new bases as we deliver as much low fare growth as possible for passengers and our airport partners in FY25. To that end, Lauda has extended operating leases on three of its A320s out to 2028.

Speaker Change: To that end Lauder has extended operating leases on three of its <unk> hundred <unk> out to 2028, and we have agreed with Boeing we will continue to take delivery of 737 game changers through the peak months of August and September all of these aircraft will arrive too late to be able to schedule them for peak summer flights will use them as backups at this barrier.

Michael: And we have agreed with Boeing that we'll continue to take delivery of 737 game changers through the peak months of August and September. Although these aircraft will arrive too late to be able to schedule them for peak summer flights, we'll use them as backups and as spare aircraft through the remainder of August and September. We expect, and it is real that European short haul capacity will remain constrained for some years. As I said, Eurocontrol's own figures suggest that, year to date, we're 5% behind where we were in 2019.

Speaker Change: Aircrafts through the remainder of August and September we expect to and it is real that European short haul capacity will remain constrained for some years as I said eurocontrol on figures suggest that year to date were 5% behind where we were in 2019 in terms of EU intra EU capacity <unk> hundred 20 operators of grounding.

Michael: In terms of EU capacity, A320 operators are grounding aircraft for Pratt & Whitney engine repairs. The manufacturers are continuing to struggle with delivery backlogs more pronounced in Boeing, but Airbus is failing to hit its delivery commitments, and airline consolidation continues. More recently, the European Union approved the Lufthansa takeover of ETA in Italy.

Speaker Change: Aircraft for a patent with the engine repairs. The manufacturers are continuing to struggle with delivery backlog is more pronounced in Boeing but also Airbus sustaining too.

Speaker Change: Is it delivery commitments and airline consolidation continues most recently the Lufthansa.

Speaker Change: You approved the Lufthansa takeover of Vita in Italy.

Michael: We believe IAG's takeover of Air Europa should also be accelerated. These capacity constraints, combined with our significant unit cost advantage and a strong balance sheet, low-cost aircraft orders, and industry-leading on-time performance will, we believe, underpin a decade of profitable growth to 300 million passengers by FY34. To touch on shareholder returns, as I said, to date, we've completed just over 50% of the program. When it's complete, Ryanair will have returned over $7.8 billion to shareholders.

Speaker Change: We believe IAG today takeover area robust should also be accelerated these.

Speaker Change: These capacity constraints combined with our significant unit cost advantage and a strong balance sheet low cost aircraft orders and industry, leading on time performance will we believe under pain. The decade of profitable go to 300 million passengers by FY <unk> 34.

Speaker Change: <unk> touch on shareholder returns as I said today, we have completed just over 50% of the program. When it is complete Brian I will have returned over $7 8 billion to shareholders. We also expect a final dividend of 200 million to be paid to shareholders in September which will take the total shareholder returns to just over 8 billion since 2008.

Michael: We also expect a final dividend of $200 million to be paid to shareholders in September, which will take the total shareholder returns to just over $8 billion since 2008. Ryanair ADSs. Following a recent board review, the board has approved a change in the ADS ratio so that one ADS would equal two ordinary shares compared to the current one to five ratio.

Speaker Change: Ryanair ADSL is following our recent board reviewed the board has approved a change of the ABS ratio. So that one ABS would equal two ordinary shares compared to currently a one to five ratio and we hope and expect that this will make the aes is more attractive to new investors and will potentially increase aes liquidity.

Michael: We hope and expect that this will make the ADSs more attractive to new investors and will potentially increase ADS liquidity. Turning to the more important issue, which is the outlook, FY25 traffic is expected to grow 8%, but somewhere between 198 and 200 million passengers, we think we're edging closer to 200 million than 198 million, subject to no worsening of Boeing delivery delays. We were supposed to take seven aircraft from Boeing in July, but that is now only going to be five.

Speaker Change: Turning to the more important issue, which is the outlook FY 'twenty five traffic is expected to grow 8%.

Speaker Change: But somewhere between 198 to 200 million passengers, we think we're edging closer towards $200 million and 198 subject to no worsening of Boeing delivery delays.

Michael: Two of those have slipped into August. And we were supposed to get 10 aircraft in August. That's now down to eight and probably heading towards seven.

Speaker Change: We're supposed to take seven aircraft from Boeing in July.

Speaker Change: Now, it's only going to be five two of those have slipped into August and we're supposed to get 10 aircrafts in August that's now down to Asia, and probably heading towards seven so we're still strongly.

Michael: So we're still struggling even to get our delay in Boeing delivery in on time. As previously guided, we expect unit costs to rise modestly this year, as our ex-fuel unit costs, most notably pay and productivity increases, higher landing and ATC fees, and the impact of multiple 737 delivery delays on our unit costs are substantially offset by our attractive fuel hedge savings and rising net interest income. These gains will significantly widen Ryanair's cost advantage over its competitors and allow us to continue to grow strongly, albeit at lower fares than we'd expected this summer.

Speaker Change: EBIT to get delayed.

Speaker Change: Delayed to Boeing delivery as tight.

Speaker Change: As previously guided we expect unit cost to rise modestly this year as our ex fuel unit costs, most notably pay and productivity increases higher landing at ATC fees and the impact of multiple 737 delivery delays on our unit costs are substantially offset by our attractive fuel hedge savings and rising net.

Speaker Change: Interest income.

Speaker Change: These gains will significantly widen ryanair as cost advantage over its competitors and allow us to continue to grow as strongly and albeit at lower fares than we'd expected. This summer. While Q2 demand is strong pricing remains softer than we expected, particularly the toasting airfares. It is not pricing up the way it has for the last number.

Michael: While Q2 demand is strong, pricing remains softer than we expected, particularly for close-in airfares. It is not going up the way it has for the last number of summers, and we are repeatedly seeing price resistance as we try to close off cheaper seats, and we're having to open them up again close-in in July and in August. We have only 34% of September already booked, but we expect this trend will continue. As a result, we now expect Q2 fares will be materially lower than last summer. We had previously expected them to be flat to modestly up.

Speaker Change: Of summers and we are repeatedly seen price resistance as we try to close off cheap received and we're having to open up again at close in July and in August we have only 34% of our sorry.

Speaker Change: 34% of September already booked, but we expect this trend will continue.

Speaker Change: As a result, we now expect Q2 periods will be materially lower than last summer. We had previously expected them to be flat to modestly up the final hedge when alkermes. However.

Michael: The final H1 outcome is, however, completely dependent on these close-in bookings and yields in August and September, and we think the trend is downwards, not upwards. As is normal at this time of the year, we have zero visibility into Q3 and Q4, but we see no reason why Q3 and Q4 pricing won't be soft as well, and we will have to continue to simulate through the second half of the year. Q4 will not benefit from last year's early Easter, and therefore it's too early to provide meaningful full-year profit-after-tax guidance, although we would hope to be able to give you some headlines at our H1 results in November.

Speaker Change: Clearly dependent on the close in bookings and yields in August and September and we think the trend is downward not upward.

Speaker Change: As is normally this time of the year, we have zero visibility in Q3 and Q4, but we see no reason why Q3, and Q4 pricing won't be soft as well and we will have to continue to stimulate through the second half of the year Q3, Q4 will not benefit from last year's early Easter and therefore, it's too early to provide meaningful.

Speaker Change: Full year profit after tax guidance, although we would hope to be able to give you some headlines at our haynesville and results in November.

Michael: The final FY25 outcome remains so as to avoid adverse developments during FY25, particularly given the continuing conflicts in Ukraine and the Middle East, repeated ATC, short-staffing, and capacity restrictions, which are leading to a spike upwards in cancellations or further Boeing delivery to date. And with that, Neil, I turn over to you for a quick run through the MD&A, or highlights from the MD&A, please. Yeah, no problem.

Speaker Change: Turning to FY 'twenty five outcome remains subject to avoiding adverse developments during FY 'twenty five, particularly given the continuing conflict in Ukraine, the middle East repeated ATC short staffed short staffing and capacity restrictions, which is leading to a spike upwards in cancellations are further Boeing delivery to date with.

Speaker Change: And with that let turn it over to you for a quick run through the MD&A are highlighted in the MD&A. Please.

Speaker Change: Yes, no problem. Thanks, Michael I think I'll start and first to costs in the quarter.

Neil: Thanks, Michael. I think I'll turn first to costs in the quarter. As previously guided, we saw costs modestly higher, as we saw the benefits of our fuel hedging offset much of the non-fuel inflation coming through, and the likes of the annualization of productivity pay increases, and, of course, the impact of the Boeing delivery delays. The balance sheet is in very good shape. We finished the quarter with $4.5 billion in gross cash.

Speaker Change: As previously guided we saw cost modestly as we saw the benefits of our fuel hedging of SaaS more shelf the non fuel inflation coming through as a licensee on utilization offset productivity pay increases and of course, the impact of the Boeing delivery delays back.

Speaker Change: <unk> in very good shape, and we finished the quarter with $4 5 billion in gross cash that was after half a billion of Capex and we spent about $250 million on the buyback, which we all know started in may during the quarter net cash improved from $1 4 billion, one 7 billion.

Neil: That was after half a billion in CapEx, and we'd spent about $250 million on the buyback, which we all know started in May. Now, cash improved from $1.4 billion to $1.7 billion. And just on the buyback, as Michael said, we're now over halfway through the program at this stage. It's going very well, a little bit ahead of expectations on that. And Michael, I'll hand over to you.

Speaker Change: And just on the buyback as Michael said, we are now over halfway through the program at this stage.

Speaker Change: Going very well and are ahead of expectations on that.

Speaker Change: And Michael I'll hand over scarce asset.

Michael: Okay, thank you. With that, before I open up to questions, I'm going to deal with the first question: What does material mean?

Michael O'Leary: Okay. Thank you.

Michael O'Leary: Before I open up to questions I've had to deal with the first question what is material.

Michael: We don't know what material means, although clearly, we think the pricing at the minimum floor on price falls into Q2 is going to be above 5%. Could it get to double digits? It could, but it doesn't look that way at the moment. But pricing on close-in bookings is getting weaker as we have moved through July, and we see no reason why that will change in August and certainly no reason why it will change in September. We are now going on the front foot aggressively, and we will continue to aggressively advertise low fare availability. We will maintain our targeted 95-96% load factor.

Speaker Change: We don't know what material means although clearly we think the pricing.

The minimum floor on price falls into Q2 is going to be above 5%.

Speaker Change: Could it get to double digits. It could it is it doesn't look that way at the moment, but pricing on close in bookings is getting weaker as we have moved through July we see no reason why that would change in August and certainly no reason why it would change in September.

Michael O'Leary: We are now going on a front foot.

Michael O'Leary: Aggressively and we will continue to aggressively.

Michael O'Leary: Advertise low fare availability, we will maintain our targeted 90, 596% load factors, we have a much lower cost base than any other airline and if the fares are going to be materially lower this year than thats, what its going to be.

Michael: We have a much lower cost base than any other airline, and if the fares are going to be materially lower this year, then that's what it's going to be. We repeatedly tell everyone that our fare guidance, to the extent that we give fare guidance, is always dependent upon close-in bookings.

Speaker Change: <unk> repeatedly guide everyone that are fair guidance to the extent that we gave fair guidance is always.

Speaker Change: Pendant upon close in bookings and the reality is that during June and also now into July and August which is surprising given the capacity constraints toasted pricing is materially weaker is down on where it was prior year why I, we don't know.

Michael: And the reality is that during June and also now into July and August, which is surprising given the capacity constraints, close-in pricing is materially weaker. It is down on where it was a year ago. Why?

Michael: We don't know. We look around, and we see that consumer spending is under pressure all over Europe. There's no one market where we're seeing any material strength or weakness. We think the consumer is under significant pressure across Europe. Interest rates are materially higher. Mortgage loans, etc., are materially higher.

Speaker Change: Look around and we see that consumer spending under pressure all over Europe.

Speaker Change: There is no one market, where we're seeing any material any material strength or weakness and we think the consumer is under significant pressure across Europe interest rates are materially higher mortgage loans et cetera, our maturity higher most consumer facing operators are under pressure and we believe that is being translated into air travel people.

Michael: Most consumer-facing operators are under pressure, and we believe that is being translated into air travel. People are traveling.

Speaker Change: Our traveling.

Speaker Change: Growing strongly although we're growing at a slower pace than we had originally budgeted to because of the Boeing aircraft deliveries, but we are having to increasingly discount.

Michael: We are growing strongly, although we're growing at a slower pace than we had originally budgeted for because of the Boeing aircraft deliveries. But we are having to increasingly discount to fill our flights. We think that's good news for passengers, even if it means short-term pain for shareholders. I share your pain, obviously, but we're better off at the moment.

Speaker Change: To fit our fight we think thats good news for passengers, even if it means short term pain for shareholders.

Speaker Change: I share your pain, obviously, but we're better off at the moment.

Michael: If the consumer is under pressure and there has to be price discounting, then we will lead that price discounting. And we're going to continue to lead that price discounting through July, August, and September. I will now open it up for questions. Excuse me. Hello.

Speaker Change: The consumer is under pressure and there has to be price discounting that we will lead the price discounting and we're going to continue to lead that price discounting through July August and September.

I will now open it up for questions.

Speaker Change: Okay.

Speaker Change: Hello.

Unknown Executive: Thank you. If you would like to ask a question, you may do so by pressing star flow by one on your telephone keypad now. If you do change your mind, please press star flow by two.

Speaker Change: If you would like to ask a question you may do so.

Speaker Change: Thank you Pat now if you change your mind. Please press star followed by team.

Speaker Change: Your question. Please ensure your line is I need to be opening our first question today comes from Stephen furlong from Davy Pizza Hut Steven Your line is now open.

Unknown Executive: When preparing to ask your question, please ensure your line is unmuted locally. Our first question today comes from Stephen Furlong from Davie. Please go ahead, Stephen. Stephen, hi.

Speaker Change: Steven.

Michael: Yeah, hi, Michael. You talked about ATC there firstly. I seem to remember that they were recruiting or investing in Carltru, and I was just wondering if you heard anything from Eurocontrol that maybe... By next summer things will have normalized or will not be, not optimistic about that. And then the second thing I was just wondering about cost inflation in the industry. Do you think that, whether it's staffing or operations... It's sticky, and if it is and the pricing isn't, do you think that, The Industry, and here we could have lower margins post-pandemic than pre? Thank you.

Steven: Yeah, Hi, Michael.

Steven: Looked about ATC there firstly.

Steven: Seem to remember that they were recruiting are investing Carl through and I was just wondering have you heard anything from Eurocontrol that maybe.

Speaker Change: By next summer things will normalize or would you be now optimistic about that.

Speaker Change: Then secondly, I was just wondering about cost deflation in the industry.

Speaker Change: Do you think that.

Speaker Change: Whether it's staffing or operations.

Speaker Change: And if it is on the pricing isn't.

Speaker Change: I think that.

Speaker Change: The industry in theory could have lower margins post pandemic than pre thank you.

Michael: Thanks Stephen. Eurocontrol is a mess. And I think even Eurocontrol is in denial. The figures they're producing show that year-to-date European flights are 5% below 2019, they're 3% below in the month of July, they're 3% below 2019. And yet we rail against Eurocontrol about their performance and the performance of the NSPs; they keep their capacities up 10, 20%. We've got record levels; we're not at record levels. We are putting a lot of pressure on them as our other airlines are, by the way, but when you really drill down into it, you know there is a marked increase in storms and thunderstorms over Europe this summer. But that would affect punctuality through the day.

David: Thanks, David Eurocontrol is unmatched.

Speaker Change: And I think David Eurocontrol are in denial.

Speaker Change: Figure as Theyre producing shows that Europe mid year to date Europe Europe European flights are 5% below 2019.

There are 3% below in the month of July there were 3% below 2019, and yet remain against Eurocontrol about their performance at the performance of the NSP. They keeps us all flow capacities obtained 20% we've got a record levels were not at record levels.

Speaker Change: Putting a lot of pressure as our other airlines by the way.

When you really drill down into it.

Speaker Change: There are there is a marked increase in <unk>.

Speaker Change: Storms thunderstorms over Europe, this summer, but that would affect our pump strategy through the date, where we are.

Michael: Where we are highly critical of Eurocontrol and the NSPs is that we're typically having about one in four or one in three of our first wave departure flights early in the morning being delayed by capacity restrictions when there are no aircraft up in the air. There's no reason why; the only reason why first wave flights are being delayed is because they don't have enough staff deployed for the summer schedules. I talked over the weekend to other competing airlines, and they're seeing exactly the same thing, in fact worse.

Speaker Change: Highly critical of Eurocontrol MBA, NSP is where typically having about one in four or one in three of our first wave departure place early in the morning being delayed by capacity restrictions.

When there is no aircraft up in the air There's no reason why the only reason why first wave flights or be delayed just because they don't have enough staff deployed.

Speaker Change: They shed the summer schedules I talked over the weekend to other.

Speaker Change: Petitor Airlines and they're seeing exactly the same thing in fact worse.

Michael: And so if the first wave of flights are delayed, it is because, and we are aware that the French are materially understaffed on the first wave. Adjourned, because of Eurocontrol covering up this massive underperformance by the French, the Germans, and the Hungarians, in particular.

Speaker Change: If the first wave of flights are delayed it is because and we are aware that the freight insured materially after the first phase.

Jeremy.

Speaker Change: Cup of Eurocontrol covering up this massive underperformance by the French the Germans and.

Michael: In actual fact, air traffic control this summer is much worse than it was last year. Last year we had 53 days of French ATC strikes. In many respects, that was easier to manage.

<unk> in particular and add to provide air traffic control that somebody is much worse than it was last year last year. We had 53 days of French ATC strikes in many respects that was easier to manage your just cancer device everybody knows that differentiate <unk>, okay, and you can see the pricing or re accommodate passengers. The problem. We're having at the moment at all airlines are suffering this is <unk>.

Michael: You just cancel the flights; everybody knows there's a French ATC strike, okay, and you cancel the flights, and you re-accommodate passengers. The problem we're having at the moment, and all airlines are suffering this across Europe, we're having massive candidate delays on the first wave of flights, no way of picking that up during the day. And then you're running into cancellations on later flights that evening, either because crews are running out of hours or curfew airports won't let us in late, which we understand. I'll give you just an example of that this weekend.

Speaker Change: <unk> Europe.

Speaker Change: Having massive Canada or delays on the first wave of flight no way of picking that up jewelry today, and then you are running into cancellations.

Speaker Change: Laser face that evening, either because crews are running out of hours or curfew airports won't let us say in late at which we understand.

Speaker Change: Just as an example of that over this weekend, though it was compromised by Friday as computer failure.

Michael: Now, it was compromised by Friday's computer failure; our ATC, ATC delayed more than one in three of every Ryanair flight this weekend. So ATC delayed 37% of our flights on Friday, 35% of our flights on Saturday, and 35% of our flights on Sunday. And we're the largest airline in Europe. It is a shambles of understaffing and mismanagement.

Speaker Change: The ATC delayed more than one in three of every Ryanair flight. This weekend, so AT&T today, Turkey, 7% of our flights on Friday, 35% of our fight on Saturday and 35% of our place on Sunday and we're the largest airline in Europe. It is a shambles of Understaffing mismanagement, and I would point to the fact that ATC.

Michael: And I would point to the fact that ATC fees have increased by 15% over the past three years since 2019, so we're being scammed for significantly higher ATC fees by these government monopoly ANSPs, who then don't properly staff and recruit and staff for the schedules that we've already filed some six months ago. So it's getting worse.

Fees have increased by 15% over the past three years since 2019, so we're being scammed far significantly higher ATC fees by these government monopoly and Isps, who then dope.

Speaker Change: The staff and recruit and staff for the schedules that we've already filed some six months ago. So it is getting worse cost inflation look.

Michael: Cost inflation. Look, I think there are areas where, I mean, we're seeing some material cost inflation among our competitors. Labour is obviously one where a number of our competitors are out there now conceding significant pay increases.

Speaker Change: There are areas I mean, we are seeing.

Speaker Change: Our competitors are seeing some material cost inflation labor is obviously one where.

Speaker Change: Number of our competitors.

Ryan Erick: Out there now can see the significant pay increases most of that has to catch up with the pay increases that Ryan Erick negotiated with our unions and our pilot two three years ago. The earliest pilots have had an increase in 2019, whereas the ryanair pilots have had increases in that.

Michael: Much of that is to catch up with the pay increases that Ryanair had negotiated with our unions and our pilots two, three years ago. The Aer Lingus pilots haven't had an increase since 2019, whereas the Ryanair pilots have had increases in. We also have been seeing pay increases in 2025 and 2026. However, our pilots are flying larger aircraft, and these aircraft are burning materially less fuel.

Speaker Change: <unk> to 'twenty four we also had PNC and pay increases in 25 years 'twenty stake. However, our pilots are flying larger aircraft. These aircrafts are burdening materially less fuel. So I would think on the labor side, while it's challenging out there are pilots are materially more productive.

Michael: So I would think on the labor side, while it's challenging out there, our pilots are materially more productive. We are seeing some airports where we operate where, you know, particularly in Portugal, where you have airport monopolies like Vinci, who own ANA in Portugal, are significantly increasing airport fees because they have a monopoly down there. We are negotiating, though, a lot of growth incentives and discounts for growth. I would point to Italy in particular, where a number of the Italian regions have scrapped the municipal tax, something that we certainly applaud and would welcome.

Speaker Change: We are seeing some airports, where we operate where particularly in Portugal, where you've airport monopoly like Beachy, who own Ana in Portugal, I E. R. Riddick significantly increasing airport fees because they have a monopoly down there. We are negotiating there were a lot of growth incentives.

Speaker Change: Discounts for growth I would point to easily in particular, where a number of the regions in Italy have scrap the municipal tax something that we certainly applaud and would welcome.

Michael: So there's a balance. I mean, I think as capacity will be constrained for the next two or three years, I think we are facing a period of cost inflation generally within the airline industry. But as capacity is constrained, I think that will be reflected in higher airfares, particularly among our high-fare competitor airlines across Europe. It's just we're not seeing it this summer because the consumer, I think, is under pressure from higher interest rates, and certainly average airfares are lower than they were in summer 2024.

Speaker Change: So theres a balance I mean, I think there is as capacity will be constrained for the next two or three years.

Speaker Change: We are facing a period of cost inflation generally within the airline industry.

Speaker Change: Capacity is constrained I think that will be reflected in higher air fares, particularly among our hyper competitor airlines across Europe. It's just we're not seeing at this summer because the consumer I think is under pressure with higher interest rates and consumer and certainly average airfares.

Speaker Change: Lower than they were in summer of 2024 now we did <unk>, we did benefit from two years to December 'twenty, two and cyber training trading three of double digit fare increases maybe this year is just a rebalancing, but ultimately over the medium term I think airfares will be higher in Europe. They are materially lower in Europe than they are in North America and we.

Michael: Now, we did in 2023, we did benefit from two years in summer 22 and summer 2023 of double-digit fare increases. Maybe this year is just the rebalancing. But ultimately, over the medium term, I think airfares will be higher in Europe. They're materially lower in Europe than they are in North America, and we do tend to trend up behind North America. ADN, do you want to speak on air first?

Speaker Change: Do trend tended to trend up behind North America.

Speaker Change: <unk> you want to see on <unk> no.

Eddie: No, I mean, like, nothing more than what you've said already, in terms of that, the demand is there, but the consumer is reacting to pricing. And that is generally across the board, generally across markets throughout Europe. So it's a question of you trying to ratchet up fares, but the consumer has reacted to this, generally a softness at the moment. Nothing else really.

Speaker Change: No more than what you've said already in terms of the demand is there.

Speaker Change: The.

Speaker Change: Consumer is reacting to pricing that is generally across the piece across them.

Speaker Change: It closed January across markets throughout Europe. So it's a question of.

Speaker Change: You are trying to.

Speaker Change: And to ratchet up spares.

Speaker Change: The consumer has.

Speaker Change: No.

Andy: As reactive does generate yourself that's out there nothing else really thanks, Andy next question. Please.

Michael: Thanks Eddie. Next question, please. The next question comes from Jarrod Castle from UBS. Please go ahead, your line is now open. Jarrod, hi.

Josh <unk>: The next question comes from Josh <unk> from UBS. Please go ahead. Your line is now.

Michael: Hi, thank you. Good morning, everyone. I mean, just on fares, I don't want to spend too much time on it because I think a lot gets said. But I mean, you say demand is there, but you're having to stimulate it, which does suggest that, you know, not everything is well on the demand front. And I mean, I guess you've acknowledged that, you know, the consumer is feeling some pain at the moment as well. But I mean, I guess, has it surprised you just how quickly things have deteriorated?

Hi.

Josh: Hi, Thank you good morning, everyone.

Speaker Change: I mean, it's just first I was wondering.

Thanks, so much time on that.

Speaker Change: Yes.

Speaker Change: But I mean, you say demand is there, but you're having to stimulate which does suggest that.

Speaker Change: Not everything is well on demand in France, and I guess, you have acknowledged that the consumer is feeling some some pain at the moment as well.

Speaker Change: But I guess have surprised you just how quickly things have deteriorated because it because it seemed like in June things.

Michael: Because it seems still like in June things might be OK. So, you know, has there been a step change? I guess that's the question around that. And then just coming back to costs as well, I mean, you know, by far, you're the industry leader, I don't think. This is the second year of x2 unit costs going up. When we look out to March 26, do you see inflation abating, and x2 unit costs being much more stable from here on out? Thanks.

Speaker Change: Okay.

Speaker Change: It hasn't been a step change I guess is the question.

Speaker Change: Around that.

Speaker Change: And then just coming back to costs as well.

Speaker Change: If I follow the industry leader.

Steven: Steven a question but.

Speaker Change: This is the second year of ex fuel unit cost going up.

Speaker Change: When we look out I guess to March 26.

Steven: Do you see kind of inflation abating.

Speaker Change: I guess ex <unk>.

Speaker Change: <unk> been much more stable from here on out thanks.

Speaker Change: Thanks, and I'll be surprised that pricing yes.

Michael: Are we surprised at pricing? You know, we did see a weaker Q1, partly that was the move of the first half of Easter into Q4. But you know, at that point in time, we had about 30-40% of the Q2 bookings in, and we were on target. But I mean, Q2 was certainly softening, like we were moving that way. If you go back to our original sort of expectations rather than guidance on pricing, we started off the year, we'd be up maybe five to 10.

Speaker Change: We did see a weaker Q1, partly that was the move of the first time visitor into Q4.

Speaker Change: But at that point in time.

Speaker Change: We had about 30, 40% of the Q2 bookings in we were on target, but I mean Q2 was certainly softening like we were moving that way. If you go back to our original excited.

Speaker Change: Expectations, rather than guidance on pricing, we started off the year will be up maybe five to 10 that was an attempt on our part to walk back from up 20% last year, it will be a third year, 20%.

Michael: That was an attempt on our part to walk back from up 20% last year; it won't be a third year of 20%. In Q1, we're now saying no, it won't be five to 10, it'll be maybe nought to five. It's getting weaker.

Speaker Change: In Q1, we're now seeing no it won't be five to 10, it would be maybe notify whats getting weaker.

Michael: And I think we might have been, so yeah, I think there were reasons to believe that the peak would be that the price would be strong into the peak. It hasn't been, you know, and everything here is dependent upon the close in bookings. And the close in bookings, we are having to continue to stimulate close in bookings. So volume is there.

Speaker Change: And I think we might have been.

Speaker Change: I think there is reasons to believe that the peak would be that the price will be strong into the peak it hasnt been.

Speaker Change: And everything here is dependent upon the close in bookings and the close in bookings we are having to continue to stimulate close in bookings. So volume is there I mean, we are growing by far and away the largest area in Europe. We are growing at 8%, 10% above this time last year June was the first month for example, where we've ever carried more than 19 million.

Michael: I mean, we are growing, you know, by far the largest area in Europe, growing at about 8-10% above this time last year. June was the first month, for example, where we've ever carried more than 19 million scheduled passengers. We didn't even do that in August of last year.

Speaker Change: Scheduled passengers, we didn't even do that in August of last year.

Michael: But the close-in bookings are materially weaker. We have attempted to close off some of the cheaper seats and drive people up as we come in. And each weekend, we've been running 50-100,000 bookings less than target, and we're opening up again on Monday and Tuesday. So it's not that we're not trying, but ultimately, the consumer is king.

But the closer in bookings are materially weaker we have for each of the last four weekends attempts to close off some of the cheaper seats and drive people up as we come in and each weekend, we've been running 50 to 100000 bookings less than target and we're opening up again on Monday Tuesday, so its not that were not trying but ultimately the consumer is king and if the consumer votes Pedro.

Michael: And if the consumer won't pay those higher fares, we simply will accept that that's the way the market is going to be this year. I look around at the marketplace generally, there's carnage all over any of the consumer-facing stocks, Ocado, carpet right, going into liquidation, all the luxury goods, we're not necessarily luxury goods, but the consumer is under pressure. And we have had two years of very strong price growth. I thought we would have modest price growth this year. I mean, what has surprised me is how weak pricing has been despite the fact that capacity still hasn't recovered by 2019. And that, I think, is the greatest surprise.

Speaker Change: Higher fares, we simply will accept that that's the way the market is going to be this year I look around the marketplace. Generally there is carnage all over any of the consumer facing stocks ocado cockpit right going into liquidation all the luxury goods were not necessarily luxury good but the consumer is under pressure and we have had two years.

Speaker Change: Very strong price growth, we're not I thought we would have modest price growth. This year I mean, what has surprised me is how weak pricing has been despite the fact that that capacity is still hasn't recovered to 2019.

Speaker Change: And that I think is is the greatest surprise, but if close in close in pricing is weaker than we expected. We live with that we will have responded and are responding immediately by opening up some cheaper seats close in which is why we are hitting our kind of target 95% load factors during the summer months, but we act now accepted Q2 is going to be.

Michael: But if close-in pricing is weaker than we expected, we live with that. We will respond and are responding immediately by opening up some cheaper seats close-in, which is why we're hitting our kind of target 95% load backers during the summer months. But we now accept that Q2 is going to be materially weaker on pricing. It is going to be above 5%. It could be into a double-digit number.

Speaker Change: Early weaker on pricing.

Speaker Change: It is going to be above 5% it could be temporary could be into a double digit number at the moment. It doesn't look like it but the trend is downwards and weaker so I would rule looking out and it could well be a double digit decline in pricing in Q2 and then.

Michael: At the moment, it doesn't look like it, but the trend is downwards and weaker. So I would rule nothing out, and it could well be a double-digit decline in pricing in Q2. And then if there is a double-digit decline in pricing in Q2, all bets are off in Q3 and Q4. We will simply go into Q3 and Q4, load factor active, price passive, and that is the way it will be. In terms of cost, again, yes, there is a cost increase, but our cost increase is modest.

Speaker Change: If it's double digit planned pricing in Q2, all bets are off in Q3 and Q4, we will simply go into Q3 and Q4 load factor active price passive.

Speaker Change: Is the way it will be in terms of cough.

Speaker Change: Again, yes, there is I mean, our cost increase is modest.

Michael: The unit cost increase would have been better if we had gotten all the aircraft deliveries from Boeing. You know, we are 20 aircraft short of what Boeing had contracted to deliver. We have recruited the pilots.

Speaker Change: Unit cost decrease it would've been better if we had got all of the aircraft deliveries from Boeing we are 20 aircraft short of what Boeing and contracts to deliver we have recruited the pilots. We have recruit we are over accrued on pilots and cabin crew.

Michael: We are over-crewed with pilots and cabin crew. Mind you, given the amount of ATC disruption, we're in a reasonably fortunate position that we have a significantly better on-time performance than almost any other airline in Europe. But we are burning through huge amounts of crew hours, both pilots and cabin crew, trying to deliver schedules where ATC is delivering them. Yesterday, for example, we were looking at two- and three-hour slot delays through the middle of a Sunday on the second last Sunday in July. So will unit cost be setting up? Yes,

Speaker Change: Mind, you given the rate the amount of ATC disruption. We're in a reasonably fortunate position is that we have significantly better on time performance in almost any other airline in Europe, but we are burning through huge amounts of crew hours, both pilots and cabin crew trying to deliver schedules, where ATC or delivery yesterday. For example, we were looking at two and three are soft.

Speaker Change: Delays through the middle of a Sunday in the second last Sunday July.

Speaker Change: So well unit cost me slightly up yes.

Michael: Do I believe that will continue out into 2026? I think it will moderate itself, but a lot of that depends on Boeing delivering us aircraft. And we're already focused on our spring 2025 deliveries, and as of our last conversation with Boeing on Friday, some of our spring 2025 deliveries are going to be delayed into the peak summer of 2025 again. Now, the numbers will be a lot less. We will certainly have the benefit of the 20 delayed aircraft deliveries this summer, which we would get before the end of the year.

Speaker Change: Do I believe that will continue out into 2026, I think it will moderate but a lot of that depends.

Speaker Change: Boeing delivering those aircrafts and we're.

Speaker Change: We're already now focused on our 2025 deliveries and as of our last conversation with Boeing on Friday some of our.

Speaker Change: During 2025 deliveries are going to be delayed into the peak summer of 2025 again now the numbers will be a lot less we will certainly have the benefit of the <unk> delayed aircraft deliveries this summer, which we would get before the end of the year.

Michael: But we will have less capacity in the summer of 25 than we are originally scheduled to have with our Boeing delivery. And then we're into two years of essentially no capacity growth at all. And if the consumer is going to be under pressure for the next year, 18 months, that might not be the worst place to be. But at this point in time, all we can see, and I caution here, as of today's date, we have 95% of July already sold. We've only 74% of August sold.

Speaker Change: But we will be we will have less capacity in December 'twenty five that were originally scheduled to have with our Boeing delivery and then bridge two years essentially no capacity growth at all.

And if the consumer is going to be under pressure for the next year 18 months that might not be the worst place to be.

Speaker Change: But at this point in time are all we can see.

Speaker Change: I caution here.

Speaker Change: As of today's date, we have 90, 595% of July already sold.

Michael: So we've another 20, 21% of the bookies to take in August. We've only 40% of September sold. So we have, you know, when we go back here, we don't have visibility.

Speaker Change: We've only 74% of August sold so we have another <unk>, 21% of the bookings to take in August we've only 40% of September sold.

Speaker Change: So we have when we go back here, we say well, we don't have visibility, we really don't have visibility.

Michael: We really don't have visibility. Numbers are heavily dependent on the close-in bookings, and whereas, as is currently the case, close-in bookings are materially weaker in terms of price. That's what it will be. And that's where we're going. Thanks, Jarrod.

Speaker Change: Our numbers are heavily dependent on the close in bookings and whereas as is currently the case Towson bookings are materially weaker in terms of price that's what it will be and that's where we're going.

Speaker Change: Thanks, Sarah next question please.

Michael: Next question, please. The next question comes from Alex Irving from Bernstein. Please go ahead, Alex.

Alexander Irving: The next question comes from Alex <unk> from Bernstein. Please go ahead, Alex Your line is now open.

Michael: Your line is now open. Thanks. Good morning, gentlemen, and two from me, please.

Michael: First of all, think about whether the demand change is structural or cyclical. I don't ask what the fare is going to be next summer, but do recent demands and fare trends change your own internal steady state expectations of where net income of passengers is likely to be as they go out into F26, F27, and beyond? And then second, on ancillaries, right? Broadly flat per passenger year over year this quarter, or is that basically just Easter moving?

Alex: Thanks, Good morning, gentlemen, and two from me. Please first of all.

Alex: Hi, thinking what the demand changes structural or cyclical and told us what the SaaS is going to be next summer, but due to recent demands and fad trends change your own internal studies to expectation of wet income passenger we'd like to see.

Speaker Change: As it got into F 'twenty, six 'twenty seven and beyond.

Speaker Change: Then second on ancillary right broadly flat per passenger year over year. This quarter is that basically just Easter moving we think that is slowing down to how should we think about the path of ancillary per passenger going forward. Thank you.

Michael: Or do you think that is slowing down too? How should we think about the path of ancillaries per passenger going forward? Thank you.

Michael: Neil, I might ask you to deal with ancillaries. Is demand structural or cyclical? Look, I think the price, there's nothing wrong with demand. The price is cyclical. The consumer is under, I mean, our guess is the consumer is under pressure out there. And you know, they're simply not willing to pay up even for close in bookings.

Speaker Change: Yes, Neil I might ask you Richie Whitt and salaries as demand structured our six ago look I think the price there is nothing wrong with demand and the pricing is cyclical as the consumers under pressure I mean, our cases, the consumer is under pressure out there and they're simply not willing to pay up even for close in bookings, where do we try to close off.

Speaker Change: Off cheap said that some of the cheaper seats at the moment bookings died when we open up again bookings recover.

Michael: When we try to close off some of the cheaper seats at the moment, bookings die. When we open them up again, bookings recover. And you know, we are still, we'll grow this year from 183.5 million passengers last year to 200 million. Do we think there's any longer-term change in the trend of people traveling across Europe? No, we don't.

And we are still will grow this year from $183 5 million passengers last year towards $200 million do we think there is any longer term change in the trend of people traveling across Europe, no we don't.

Michael: But it may, if they're, but I certainly am of the view they're going to be price sensitive for the remainder of this year and maybe into summer 2025, unless there's a material change in interest rates or, you know, consumer disposable income. And it seems to us that the consumer across Europe is under pressure at the moment. And that's a, they're going to be more price sensitive. That's good for our model

Speaker Change: Hi.

Speaker Change: But it may if there but I.

Speaker Change: I certainly am of the view theyre going to be price sensitive for the remainder of this year and maybe into some of our trading at 75, unless theres a material change in interest rates, our consumer disposable income and it seems to us that the consumer across Europe is under pressure at the moment.

Speaker Change: Yes.

Speaker Change: They're going to be more price sensitive that's good for our model. We do have in a wider cost gap between us and every other airline in Europe, we are adding more aircrafts, if and when Boeing deliver them, we're adding more aircraft with more seats. It burned materially less view. So not alone are we hedging better into FY 'twenty five in FY 'twenty.

Michael: We do have a wider cost gap between us and every other airline in Europe. We are adding more aircraft, if and when Boeing delivers them, we're adding more aircraft with more seats that burn materially less fuel. So not alone are we hedging better into FY25 and FY26.

Michael: But we'll also have a higher proportion of the fleet will be burning materially less oil and carrying more passengers. And we believe that the Max 10s, if and when they get certified and delivered in 2027 onwards, will structurally lower our unit cost base. And so we believe we have material cost advantages going forward. Over the medium term, I see no alteration to the supply dynamics in the European sector; there will be fewer airlines operating in Europe, they will be offering less capacity, nobody, and the A320 groundings will continue for summer 24, summer 25.

Speaker Change: But we'll also have a higher proportion of the fleet will be burning materially less oil in carrying more passengers.

Speaker Change: And we believe that the Max tens, if and when they get certified and delivered in 2027 onwards with structurally lower our <unk>.

Speaker Change: <unk> cost base and so we believe we have material cost advantages going forward over the medium term I see no alteration.

Speaker Change: Two the supply dynamics in the European sector, there will be less airlines operating in Europe, there will be offering less capacity.

Speaker Change: Nobody.

Speaker Change: <unk> hundred 20, Groundings will continue for summer 'twenty for summer 'twenty five.

Michael: But at the moment, until consumer spending begins to improve, I think we should be bearish on pricing and expect pricing to continue to be down year on year. Neil Ancillary, Sure, Alex, how are you doing?

Speaker Change: But at the moment until the consumer the consumer spending begins to improve.

Speaker Change: We should be bearish on pricing.

Speaker Change: Uh huh.

Speaker Change: Do you expect pricing will continue to be down year on year.

Neil: Neil ancillary.

Neil: On the ancillary side, as you saw, we were flat on a per passenger basis. Different products doing different things. Seats are running ahead of budget and ahead of last year, as is onboard spend, the teas, the coffees, the duty-free. Priority boarding is a little bit tougher this year, so it's not rising to the same extent. So I think now, at this stage into Q2, we're probably looking at flattish ancillary again, and beyond that, it's too hard to call, but you're probably looking flattish with a fair wind marginally up, but no better than that. Thank you very much.

Neil: Sure Alex how are you doing on the ancillary side as you saw we were flat on a per passenger basis.

Different products doing different paying seats are running ahead of budget and ahead of last year as is onboard spend ts to coffees, Judy free priority boarding is a little bit tougher. This year. So it's not rising at the same extent. So I think now this stage into Q2, we're probably looking at flattish ancillary again.

Speaker Change: And beyond that.

Speaker Change: It's too hard to call, but youre, probably looking flattish.

Speaker Change: With a fair wind marginally off plan, but know better than us.

Speaker Change: Thank you very much.

Speaker Change: Right.

Michael: The next question comes from Harry Gowers from J.P. Morgan. Please go ahead, Harry. Your line is now open. Harry, hi.

Speaker Change: The next question comes from Hanmi gallons from J P. Morgan. Please go ahead Harry your line is now.

Michael: Hey morning, Michael, Neil. First one, just on the weakness in Q2 fares. I mean, is this completely network-wide in terms of the weakness? Or are there any particular pockets, geographies, or any particular passenger cohorts that you might be able to call out? And then the second one, I mean, the buybacks are obviously running well ahead of schedule, 50% done. Is it a base case for you guys that we might get another announcement or an extension in a few months' time? Thanks a lot.

Harry: Hey, good morning, Michael.

Harry: First one just on the weakness in Q2 Fabs I mean is this completely network wide in terms of the weakness.

Is there any particular pockets geographies or any particular passenger cohorts that you might be able to call out and then second one on the buybacks, obviously, you're running well ahead of schedule, 50% done.

Speaker Change: The base case for you guys that we might get another announcement over an extension in a few months' time, thanks a lot.

Michael: Thanks, Harry. No, there's a network-wide, you know, given our scale, you know, and I think we're such as authors of that, wherever we're pricing, if we're pricing aggressively, we tend to be pricing aggressively across the piece. There's no one market where if we're doing lots of 1999 seed sales or 20% off seed sales, there's no one market where we're suddenly pricing upwards. So it is across the piece, it seems to be system-wide, and there are no unique markets there.

Speaker Change: Thanks, Eric No there is a network wide given our scale.

Speaker Change: We are aware.

Speaker Change: All of that wherever we're a pricing if we're pricing aggressively we tend to be priced aggressively across Pete there is no one market, where if we are doing lots of 1999, Cts as 20% of Ccs noteworthy market where were suddenly pricing upwards. So it is across the piece it seems to be system wide.

Speaker Change: And no unique markets. There are the buybacks as I said, we've indicated previously that the buyback we expect to complete the 700 million buyback by September <unk>.

Michael: On the buybacks, as I said, you know, we've indicated previously that the buyback we expect to complete the 700 million buyback by the September AGM. It is no secret that the board is looking at a, you know, maybe a top-up buyback. But that would be a decision that would be taken, probably at the board meeting at the AGM. And if we have something to announce, it'll be announced either at the AGM or the second quarter or the half-year results in November. Thanks, Harry.

Speaker Change: It is no secret that the board is looking at.

Speaker Change: May be it pop up buyback.

Speaker Change: But that would be a decision that will be taken at probably at the board meeting at the AGM and if we have something to announce that we announce either at the AGM or the second quarter, our debt half year results in November.

Thanks, Larry next question please.

Michael: Next question, please. The next question comes from Dudley Shanley from Goodboy. Please go ahead; your line is now open. Dudley, hi.

Speaker Change: The next question comes from Alicia from Goodbody. Please go ahead. Your line is now open.

Speaker Change: Hi.

Michael: Good morning, Michael. I had two questions for you, if I could. First of all, on Boeing. I was wondering if you could give us an update on what's going on there, because the last thing we heard from a lot of customers was that things were improving slowly, but they seem to have taken a little step back for you guys, based on what you said earlier. And then, second of all...

Alicia: Good morning, Michael and two questions from me if I may 1st of all just on Boeing I was wondering if you could give us an update on what's going on there because the last thing we heard from a lot of customers was that things are improving slowly, but they seem to have taken a little step back for you guys based on what you said earlier and then second of all.

Michael: If we take a step back and think about the medium term, as the current order comes to an end, and there will be a gap before the maximum terms arrive, how should we start thinking about network optimisation in that scenario? Okay, thanks, Dudley. I think it's fair to say we believe the situation at Boeing has improved, but you know, we're still running into glitches. We had thought we were going to get seven aircraft in July, but that's now five.

Speaker Change: If we take a step back and think about the medium term as the current order comes to an end in the vehicle before the Max tens or how should we start thinking about network optimization in that scenario.

Speaker Change: Okay. Thanks, Julie I think it is.

Speaker Change: It's fair to say, we believe the situation at Boeing has improved.

Speaker Change #100: But we're still running into glitches, we had thought we were going to get seven aircraft. In July. It is now five we were going to get 10 aircraft in August that's now eight so cumulatively over those kind of two key months, we're going to be five aircraft short.

Michael: We were going to get 10 aircraft in August, but that's now eight. So you know, cumulatively over those kind of two key months, we're going to be five aircraft short. The greater concern at the moment, but it was developed as recently as last Friday, is our deliveries in 2025. We're originally supposed to get 29 deliveries between the end of February and the end of May. They're now moving towards March to the end of July, and we don't yet have a handle on them. So we've sent Boeing back on Friday. Please explain why these are moving. There's no reason why they should move.

Speaker Change #100: The greater concern at the moment, but it is developed as recently as Friday is our deliveries in 2025, we originally supposed to get 29 deliveries between the end of February.

Speaker Change #100: We've reached the end of May.

Speaker Change #100: May they are now moving towards March to the end of July and we don't yet have a heightened so we've sent pulling back on Friday. Please explain why these are moving there's no reason why we should move I think there is a risk of labor disruption and Boeing in.

Toby: Toby when the contracts come up for a new but we were getting a little concerned I don't want we can't have a second submarine twenty-five what we got this summer, where we're constantly chopping and changing schedules because of that.

Michael: I think there is a risk of labor disruption in Boeing in October when the contracts come up for a new, but we were getting a little concerned. I don't want, we can't have a second summer like we had this summer, where we're constantly jumping and changing schedules because of, you know, Boeing aircraft delivering a week or two weeks later than they had originally promised. But overall, I think Stephanie Pope is doing a good job.

Speaker Change #102: Boeing aircrafts delivering a week or two weeks later that they had originally promised.

Michael: There is, at least, management on the ground in Seattle where there's someone we can talk to. It's just the schedules are moving slightly backwards. The bigger issue there, you know, if they leave us, if we're 10 aircraft short for summer 25, it's not the end of the world, particularly in this softer pricing environment. We will still have probably the guts of 30 or 40 additional aircraft of capacity growth for summer 25 or summer 24.

Stephanie Pope: But overall I think Stephanie Pope is doing a good job. There is at least manage we've done the grounded theatrical or someone we can talk to it just the schedule is set and moving slightly backwards at the bigger issue there.

Stephanie Pope: If they leave US 10 aircraft short for some of our 25 is not the end of the world, particularly in the softer pricing environment.

Stephanie Pope: We will still have probably that goes to the FERC or 40 additional <unk> capacity growth for summer 2000.

Michael: The bigger issue now is getting the Boeing, the MAX 7 certified in the first half of 2025, and the MAX 10 certified in the second half of 2025, which would then mean we would not expect any delays in our first 17. We have our first 17 MAX 10 deliveries in the spring of 2027. But it is important that Boeing hit those MAX certification dates and also that their plans step up in production.

Stephanie Pope: 24.

Stephanie Pope: The bigger issue now is good.

Speaker Change #104: The boat with the Max seven certified in the first half of 2025, the Max 10 certified in the second half of 2025, which would then mean, we would not expect any delays in our.

Speaker Change #104: The first 17 with our first 17, Max 10 deliveries in the spring of 2027, but it is important that Bowie hit those Max certification date and also that their planned step up in production at.

Michael: Both they and Airbus are planning steps up in production. Boeing has to recover back towards 36, 40 aircraft a month so that they achieve those dates. Otherwise, we run into delays on our spring 2027 deliveries. That's not really relevant at the moment.

Speaker Change #104: Both <unk> and Airbus are planning steps up in production at Boeing has to recover back towards 36 40 aircraft per month that they achieved those dates otherwise we run into delays.

Speaker Change #104: Our spring <unk> hundred seven deliveries, but.

Michael: I think where we are at the moment, particularly in this softer consumer spend environment, I think we'd be reasonably relaxed to take the remaining 49 aircraft deliveries were due from the end of July this year, up to the end of July next year, and then no capacity, very little capacity, no capacity growth in FY in summer 26, and very little in summer 27. That's probably the right place to be with no capacity growth in Europe, as we would hope consumer spending will recover over the next two or three years in a marketplace where capacity remains constrained.

Speaker Change #105: That's not really germane at the moment I think where we are at the moment, we particularly in the.

The softer consumer spend environment, I think we'd be reasonably relaxed to take the remaining 49 aircraft deliveries were due from the end of July this year up to the end of July next year, and then no capacity very neutral capacity no capacity growth in FY in summer 'twenty six very little in summer 2007.

Speaker Change #105: That's probably the right place to be with no capacity growth.

Speaker Change #105: In Europe, as we would hope consumer spending will recover over the next two or three years in a marketplace where capacity remains constrained.

Michael: Over the medium term, you know, we are already engaged in network optimization; we are constantly churning aircraft routes. I mean, we've had the example this week of Bordeaux, where we have a two or three aircraft base in Bordeaux. They materially changed what they basically wedged into our agreement; the cost dramatically escalated. So we announced the closure of Bordeaux.

Speaker Change #105: Over the medium term.

Speaker Change #106: We are already we have always been engaged in network optimization, we are constantly churning aircrafts routes I mean, we've had the example, this week our Bordeaux.

Speaker Change #106: Who we are or through our three aircraft based in Bordeaux they materially.

Speaker Change #106: They basically west on our agreement at the cost dramatically escalators, So we announced the closure of Bordeaux within a week of the announced that closure, we had six other French airports on looking for those aircrafts now it's likely those aircrafts, which are outside of France elsewhere, because we have better growth at better cost elsewhere, we have.

Michael: Within a week of the announcement of that closure, we had six other French airports on looking for those aircraft. Now, it's likely those aircraft will churn outside of France elsewhere because we have better growth at a better cost elsewhere. We had planned to put three aircraft into Dublin this summer. Again, we have this mad capacity cap at Dublin Airport, and an incompetent green transport minister won't do anything about it. So those three aircraft, two of them went into Italy, where they're scrapping the municipal tax, and one aircraft went to Poland.

Speaker Change #107: Plans for three aircraft into Dublin. This summer again, we have this mad capacity cap at Dublin Airport, and incompetent Green Transport Minister, who won't do anything about it.

Speaker Change #107: So the those three aircraft two of them went into agency, where theyre scrapping diminish the tanks from one aircraft went to Poland.

Speaker Change #108: So we are continuously journey, but there will be and we are having more aggressive more kind of aggressive discussions with a number of airport partners into the winter of 'twenty four 'twenty five because there is going to be a greater range of churn, particularly have underperformed either underperforming airports are those airports or our <unk>.

Michael: So, you know, we are continuously churning, but there will be, and we are having more aggressive, more kind of aggressive discussions with a number of airport partners into the winter 24 summer 25. Because there is going to be a greater rate of churn, particularly among underperformers, or those airports where costs are increasing. Portugal is likely to be an area of focus there.

Speaker Change #108: Costs are increasing.

Speaker Change #108: Portugal is likely to be an area of focus there. We've already chose the PON today has got a base I think it's likely given the cost increases the Madeira base will close.

Eddie: We've already closed the Ponta Delgada base, and I think it's likely, given the cost increases, the Madeira base will close. And whereas Italy, for example, where municipal tax is being rolled back and costs are falling, we'll see a greater allocation of aircraft. Eddie, anything you want to add to that in terms of... Yeah, I mean, it's really sort of, I suppose, two phases.

Speaker Change #108: And they.

Whereas the agency for example, where the municipal tax being rolled back end costs are falling we'll see a greater allocation of aircrafts <unk> you want to add to that in terms of.

Speaker Change #109: It's really sort of I suppose two phases like we've done a huge amount of work over the last two to three seasons.

Eddie: I mean, like we've done a huge amount of work over the last two to three seasons on utilisation. Now, it's looking at the quality of the frequencies we have on it, but that also feeds into cost. You've called out most of them there. And if you look in places like Morocco, where we still have some element of utilisation that goes, we tag on domestics.

Speaker Change #110: Utilization now is looking at the quality then of the.

Speaker Change #111: While frequencies, we have all of it but that also feeds of the cost you've called out most of them there.

Speaker Change #111: If you look at places like Morocco, where we still have some out of it the utilization that goes which HEICO domestic sports.

Michael: But the one other call out I would give that has a structural cost problem is Germany. And so you're now having taxes or charges per passenger there, north of 55 euros, close to 60 euros, you know, as what you would see as secondary major airports in Germany. And, you know, they will be front and center along with Portugal, as you say, and other high-cost countries and regions in this churn. So the churn will be greater than it has been in previous seasons because we're not growing as much.

Speaker Change #111: One other call as I would give that has a structural cost problem there is Germany.

Speaker Change #112: And so you are now having taxes are charges per passenger.

Speaker Change #113: North of 55 close to 60 euros as they are what.

Speaker Change #113: What you would see as a secondary major airports in Germany.

Speaker Change #114: They will be front and center, along with with Portugal as you say.

Speaker Change #114: All of our high cost countries and regions in this churn. So the churn will be will be more than it has been in previous seasons, because we're not growing as much.

Michael: And that there are fewer alternatives out there for airports. So there will be a big focus on that now, particularly over the next number of weeks for summer 25 and then beyond. Thanks, Eddie. Next question. Thanks, Dudley.

Speaker Change #114: And that there are less alternatives out there for airports so there will be.

Speaker Change #114: There will be a big focus on that narrow over particularly over the next number of weeks for summer 'twenty five and then beyond.

Speaker Change #114: Thanks, Andy next question. Thanks early next question please.

Michael: Next question, please. Thank you. The next question comes from Jaime Rowbotham from Deutsche Bank. Please go ahead, your line is now open. Hi Michael, two from me.

Speaker Change #114: Thank you. The next question comes from Jamie Ray Boston from Deutsche Bank. Please go ahead. Your line is Jamie Heidi.

Michael: First of all, obviously, you've talked again today about the constrained intra-European supply. But obviously, one could argue stubbornly that last year's price point was actually now oversupply rather than undersupply, which is why you're having to lower the fares to fill the planes. You touched on this earlier; how bad would it have to get to start practically moderating down the capacity growth for summer 25 rather than it coming organically via the Boeing delays? Or do you think the consumer just comes roaring back from whatever's weighing them? Because you just mentioned, you know, growth in 25, then none in 26, 27.

Speaker Change #115: Hi, Michael.

Speaker Change #116: For my first one.

Speaker Change #117: Obviously, you've talked again today about the constrained into European supply, but obviously one could argue.

Speaker Change #118: Finally, the last year's price point that is actually now oversupply rather than under supply, which is why youre, having to lower the fed to fill the plane you touched on this earlier, how bad would it have to get the stock price at the.

Speaker Change #118: The moderating down the capacity guidance for summer 'twenty, five rather than coming organically.

Speaker Change #121: The timing delays or do you think the consumer just comes Roaring back from what I have is way because you just mentioned growth in 'twenty five that known in 'twenty six 'twenty seven I, just wonder whether there may come a point, where the other way round starting to like about the plan to allow the consumer some breathing space.

Michael: I just wonder whether there may come a point where the other way around starts to look like a better plan to allow the consumer some breathing space. Second one for Neil, maybe on the non-fuel unit cost in Q1. The maintenance line came in lower than I expected.

Speaker Change #121: Second one for Neil maybe on the non fuel unit costs in Q1.

Neil: Maintenance line came in lower certainly than I expected and you mentioned on page six of the release of supplier credit in that presumably from Boeing have you as I suspect you might have a fair bit of credit stood up allowing that line to be lower than normal for the rest of the year or would that need to be further delays.

Michael: And you mentioned on page six the release of supplier credit in there, presumably from Boeing. Have you, as I suspect you might, a fair bit of credit stored up, allowing that line to be lower than normal for the rest of the year? Or would there indeed need to be further delays for this not to go back to being higher maintenance costs in the coming quarters? Thanks, guys. Thanks. You broke up in the middle of that?

Speaker Change #122: So there is not to go back to paying higher maintenance costs in the coming quarters. Thanks, guys.

Michael: But I mean, if I understand the gist of the question is, you know, would we, if in a softer pricing environment, would we not, I don't know, take delivery of or not deploy those aircraft for summer 2025? If that's the question, the answer's no. In a softer pricing environment, we will take the capacity, and we will fly it more if we can. We will take more market share from competitors. Given that we have a much lower unit cost base, we will accept lower margins and lower prices.

Speaker Change #120: Thanks, you broke up in the middle of that but if I understand the gist of the question is would we.

Speaker Change #125: In a softer pricing environment would be not.

Speaker Change #123: I don't know take delivery of our novel deploy those aircraft for summer 2025.

Speaker Change #119: If that's the question and answer is no in a softer pricing environment, we will take the capacity and we will fly it more if we can we would.

Speaker Change #119: Take more market share from competitors.

Speaker Change #119: Given that we have a much lower unit cost base, we will accept lower margins and lower pricing and if that means we push some more competitors out of our markets and thats the way it will operate.

Michael: And if that means we push some more competitors out of our market, then that's the way it will operate. We prefer periods of recession or where consumers are under pressure because that's when we grow best and lay down the kind of market shares for improved medium-term profitability, etc.

Speaker Change #119: We prefer periods of recession are where consumers are under pressure because thats when we grow best.

Speaker Change #119: And lay down the kind of market shares for improved medium term kind of profitability et cetera.

Speaker Change #119: So we will take those aircraft I would take them as earlier as early as I can in fact, we've already said.

Michael: So we will take those aircraft; I would take them as early as I can. In fact, we've already said to Boeing, you know, United Airlines that were talking about walking away from max 10s in 2025 or 2026, that they did, that we would take them at our prices. So no, if there's a consumer price is soft, that's our marketplace, we will grow and try to grow faster in those markets.

Speaker Change #124: Boeing United of ones that you were totally walking away from Max tens and $25 26 to the data that we take them.

Speaker Change #119: At our pricing.

Speaker Change #119: No.

Speaker Change #126: Consumer pricing is that as our marketplace, we will grow and tried to grow faster in those markets at lower margins, we have a much lower cost base as a unit cost basis, if we grow faster, we'll be slightly enhanced or improved but at the moment to Boeing delivery delays are constraining our ability to grow.

Michael: At lower margins, we have a much lower cost base; the unit cost base, if we grow faster, will be slightly enhanced or improved. But at the moment, the Boeing delivery delays are constraining our ability to grow and are also at the edges damaging our unit cost performance. But overall, our cost base is cost advantages widening over all of our competitors, and they'll have to decide for themselves what they want to do in response to our lower pricing. And Neil, do you want to take the second half of that question? I will do it.

Speaker Change #126: And also at the edges, damaging our unit cost performance, but overall our cost base.

Speaker Change #126: GAAP cost advantages widening over all of our competitors and they'll have to decide for themselves what they want to do in response to our lower pricing.

Speaker Change #119: And.

Neil: Neil you want to see the second half of that question, Yes, I will do Jamie Yes, you refer to the maintenance line. There. There is a modest credits from from Boeing into Q1, not material, we have an agreement with them in relation to compensation again confidential, they're very heavily most of Asia to get the aircraft on time so of aircraft.

Neil: Jaime, yeah, you refer to the maintenance line there. There is a modest credit from Boeing in Q1, not material. We have an agreement with them in relation to compensation, again, confidential.

Neil: They're very heavily motivated to get the aircraft in on time. So if aircraft start coming in on time, then it won't really be a particularly material number. If there are significant delays, then that number could get bigger. But for the Q1s, it was totally immaterial. Thanks, guys. Thanks, Jaime.

Speaker Change #127: <unk> are coming in on time, then it will really be a particularly material number.

Speaker Change #127: If there are significant delays then that number could get bigger for Q1 was totally immaterial.

Speaker Change #128: Thanks Scott.

Speaker Change #130: Thanks Jami next question please.

Michael: Next question, please. The next question comes from James Hollins from BNP Paribas. Please go ahead, James.

Speaker Change #129: The next question comes from James Hollins from BNP Paribas. Please go ahead James Your line is now at the same time.

Michael: Your line is now open. Thank you. Hi, how are you doing?

Michael: Yeah, just on the revenue side, clearly you have flowed the consumer problems very well. I'm guessing five new bases, and see some roots of maturity in there as well. I was wondering if we could lay any blame on your revenue management systems and maybe not building the load through the booking cycle as well as it should, and if that's something you need to might put a number on what you've actually sold at and whether the guidance is all down to an assumption of late bookings weakness.

James: How are you doing.

James Edward Brazier Hollins: Yes, just on the on the revenue clearly very well side the consumer problems I'm guessing.

James Edward Brazier Hollins: As new basis see some reaching maturity in there as well I was wondering if we could lay any blame on your revenue management systems, and maybe not building with low through the booking softness as well as it should and questions to address the second 174%. So for August. Thank you for that number I'm wondering if you might put a number on what you've actually sold that whether the <unk>.

Guidance is all down to an assumption of late bookings weakness. Thank you.

Michael: Thank you. Yeah, okay. On revenue management, no, I wouldn't put any blame on them. In actual fact, they've done a terrific job in a, you know, they noticed that we pick up faster than almost anybody else, and that pricing is getting softer. You know, when we were the first ones out in March and April talking about pricing being softer than we had expected, we were the only ones. Everybody else said, oh, no, we're not seeing any, we're not seeing any. And then two or three months later, they're all seeing pretty much the same thing. But I don't worry about what they generally say.

Speaker Change #133: Yes, Okay on the revenue management, no I wouldn't put any blame on them.

Speaker Change #135: In naturals.

Speaker Change #134: Generally a terrific job.

Speaker Change #136: They noticed that we pick up faster than almost anybody is that pricing is getting softer.

Speaker Change #136: When we were the first ones out in March April talking about pricing being softer than we had expected we really only once every arizona were not seeing any we're not seeing any and then two or three months data. They're all seeing most of the same date and but I don't worry about what they generally they say we at the moment in July we went into July about one 5% ahead of target, where we were on target.

Michael: At the moment, in July, we went into July about one and a half percent ahead of target where we were in target bookings, which is why we thought now, okay, let's turn off some of the cheaper seats and prices up into July. Every time we've attempted to turn it off, we have struggled to make sales, or we failed to hit our either daily or our weekend volume targets, and we've had to open up again.

Speaker Change #136: <unk>, which is why we thought now okay, let's turn off some of the cheaper seats and price up into July every time, we've attempted to turn off.

Speaker Change #136: We have struggled to make sales that we pay is anytime or either daily or a weekend volume targets that we've had to open up again. So we went into July but one 5% ahead of target.

Michael: So we went into July about one and a half percent ahead of target. As of this morning, we're still 0.5 percent ahead of target. So we'll finish July just at or marginally ahead of targets. Now, we have had a shed load of cancellations during July, over 400 this weekend, mainly due to the computer system and ATC delays over the last three days. But you will see us hit impressive load factors and traffic volumes in July. But at the moment, we're half a percent behind the target for August, and we're about half a percent behind for September. We need to get that back towards, you know, being half a percent ahead.

This morning, we're still 0.5% ahead of target. So we'll finished July just marginally ahead of targets now we have had a shed load of cancellations during a.

Speaker Change #136: July.

Speaker Change #137: Over 400, this weekend, mainly due to the computer system and ATC delays over the last three days.

Speaker Change #137: But you will see us hit.

Speaker Change #137: Impressive load factors that traffic volumes in July.

Speaker Change #137: At the moment, we're about 5% behind the target for August and we're about half a percent behind for September we need to get that back towards being half a percent ahead, we want to go into each of these months slightly ahead of targets. So that we have the availability to open up our close off our open up as we need.

Michael: We want to go into each of these months slightly ahead of target so that we have the availability to open up or close off or open up as we need. So no, the revenue management system is bang on where it needs to be. They have done everything they can to try to price up into the peak summer month. In fact, we've fallen 1 percent against target as we've moved through July, but we're still half a percent ahead of target. They protested in August and September, but we're half a percent behind in August and September.

Speaker Change #137: So no the revenue management system is bang on where it needs to be they are doing everything they can to try to price up into the peak summer months and in fact, we fall in 1% against target as we've moved through July, but we're still half a percent ahead of target. They protest at August and September, but what percent behind <unk>.

Michael: We will close that up over the next couple of weeks. So no, I think the revenue management team is doing an excellent job. Our philosophy here is to be load factor active, yield passive.

Speaker Change #137: September we will at close that hope over the next couple of weeks. So yes, no I think the revenue management team are doing an excellent job.

Speaker Change #137: Our philosophy here is to be load factor active yield assets now.

Michael: Now, we have tried in the last couple of summers to be more yield active because we had such strong demand during the post-COVID recovery. I am surprised at the weakness of pricing, given that Eurocontrol's own numbers confirmed this year. Yeah, while capacity is up in July, it's 4 percent higher year on year, but it's 3 percent behind where it was in 2019. But there is no doubt that the consumer is more price sensitive.

Speaker Change #137: Now we acquired in the last couple of stores to be more active because we had such strong demand into the post COVID-19 recovery.

Speaker Change #138: I'm surprised at the weakness of pricing given that Eurocontrol is all numbers confirmed this year, yes, well capacity is up in July is 4% higher year on year, it's 3% behind where it was in 2019.

Michael: I talked to one of the long haul carriers a week ago and they told me the transatlantic is softer this year than it was last year. Everything just points to consumer spending being a little bit softer than we had expected. And I thought we'd originally been cautious in guiding this year that summer pricing fares would be, you know, they'd be up 5 to 10 percent after two years of up 20 percent. We weren't half as cautious enough, but we have zero visibility. What was the second part of the question? It was the revenue management system. Oh yeah.

Speaker Change #139: There is no doubt that the consumer is more price since I've talked to one of the better the long haul carriers.

Speaker Change #140: We can go into them in the transplant to get softer this year than it was last year everything just points to the consumer spending being a little bit softer than we had expected and we I thought we'd originally been cautious.

Speaker Change #141: In guidance this year that similar pricing fares to be it would be 5% to 10%. After two years of up 20%. We werent have caused the note, but we have zero visibility.

Speaker Change #140: Okay.

The second part of the question that was the revenue management system can I give any indication of what that pricing is.

Michael: Can I give any indication of what that pricing will be in July and August? We've given it to you this morning. It's in the price will be materially lower than it was in 2023. And I'm not willing to define what material ore means.

Speaker Change #140: July and August we've given it to you. This morning at the end of the pricing will be materially lower than it was in 2023.

Michael: I've just said it's above five, and it could be double digits. It's not double digits yet, but I think the way it's trending, it could well be double digits by the time we get to the end of September for Q2. Thanks, James.

Speaker Change #140: And I'm not willing to defining what materially lower means I've, just said, it's above five and it could be double digit if not double digit yet, but I think the way it's trending it could well be double digit by the time, we get to the end of September for Q2.

Speaker Change #140: Okay. Thanks, James next question please.

Michael: Next question, please. The next question comes from Sathish Sivakumar from City. Please go ahead; your line is open. Hi, Michael.

Speaker Change #140: The next question comes from City City Kumar from Citi. Please go ahead your line is China.

Michael: Yeah, I've got two questions here. First, the fleet to crewing ratio. So obviously, ATCs are impacting right now. But as we go into the winter, how should we think about that ratio? Will you see that trending back to 2019? And if at all, when do you get back to that level?

City Kumar: Yes, I've got two questions here.

City Kumar: On the fleet to accruing ratio so obviously.

City Kumar: <unk> impacting right now, but as we go into the winter how should we think about that ratio will you see that trending back to 2019.

City Kumar: When do we get back to that level and the second one.

Speaker Change #143: Given that you've got to do some place to Malaysian now what does it mean for.

The capacity do you see some.

Speaker Change #143: Scope to optimize their capacity.

Speaker Change #144: Again, both because as we can thank.

Speaker Change #145: Thank you.

Michael: And the second one is, given that you go to do some flight stimulation now, what does it mean for winter capacity? Do you see any, Okay, thank you. So I'm going to ask Eddie to deal with the first half, which is the crew ratio, and then I'll deal with the winter capacity. Yeah, I mean, the crewing ratios are very strong. I mean, both pilots and cabin crew, in particular pilots, you've got to plan a full 18 months out.

Speaker Change #145: Okay. Thanks is there going to ask Eddie to deal with the first half, which the crew ratio and then I'll deal with the winter capacity yes.

Michael: And we would have been like in previous years, we would have been down, you know, five, 5.2 crews for aircraft. We're now around 5.8 crews, and cabin crew are probably in a more healthy state. And, and, you know, we have needed them for the disruption that we've had to, to run standby crews, particularly on days when you've got delays, and you have to call in standby crews in the late evening to do the final sector sometimes.

Eddie: The Crewing ratios are very strong with both with pilots and cabin crew in particular pilots.

Speaker Change #147: <unk> got a plan a full 18 months now.

Speaker Change #147: We would have been like in previous years, we would have been down $2 five to $5. Two crews for aircraft are now around five eight cruise cabin crew are probably in a more healthy stage.

Speaker Change #147: <unk>.

Speaker Change #147: And.

Speaker Change #147: We have needed those for the <unk>.

Speaker Change #147: Disruption that we've had to Ron standby crews, particularly as the days.

Speaker Change #147: <unk> got delays and you have to call in standby crews in the late evening to do the final sector sometimes.

Speaker Change #147: Many of our competitors just don't have that resilience built in.

Speaker Change #147: Into their crewing, which means that there are substantial.

Eddie: And many of our competitors just don't have that resilience built in to their crewing, which means that there are substantially or significantly more cancellations. But are we going to pare it back? We've always said that we would pare it back, but not until, you know, ATC is fixed, we've gone through all the other areas of resilience that we've bolstered over the last number of seasons, both in our operations control center here, by doubling the capacity there and the sort of physical footprint of it, along with a lot of new systems that are now critical for us. In planning disaster days like last Friday, and I think we're significantly better at that. Yes, we would like to get the crew levels back. But now is not the time to do that.

Speaker Change #147: Significantly more at cancellations, but how are we going to pair it back we've always said that we will pare it back but not until <unk>.

Speaker Change #147: <unk>.

Speaker Change #147: Fixed we've we've gone through all the other areas of resilience that we have bolstered up over the last number of seasons voted.

Speaker Change #147: Operations control center here by doubling the capacity, there and the sort of physical footprint of it along with a lot of new systems that are critical for us in planning.

Speaker Change #147: Disaster days like last Friday, and I think we're significantly better yes, we would like to get crew levels back, but now is the time to do that we need those crews.

Speaker Change #147: But over time, yes. There is some there is some headroom there for us to pull them.

Michael: We need those crews. But over time, yes, there's some headroom there for us to pull down. In terms of winter capacity, Sathish, no, there's no change. As you know, we're on track, we think, to get very close to 200 million passengers this year. That would be up about 8-9% year-on-year. Q1 traffic is up 10%. Q2 traffic, we think there might be a fraction below that. It could be 9-10%.

Speaker Change #147: And in terms of winter capacity to <unk> no there's no change.

We have as you know we are on track, we think to get very close to 200 million passengers. This year that would be up about 8%, 9% year on year.

Speaker Change #148: Q1 traffic is up 10% Q2 traffic, we think there might be a fraction below that it could be 910 second half of the year, we expect it to be up.

Speaker Change #147: Kind of 8% to 10% as well.

Michael: Second half of the year, we expect it to be up 8-10% as well. We are; there are some pinch points there. Dublin, for example, because of the cap, we may well not get a slot for the extra flights we normally do at Christmas, but we will redeploy those aircraft to do Christmas extras elsewhere. Our response to weaker pricing will be, if it's going to be a weaker price this winter, we will accept weaker pricing, but we will deliver the traffic.

Speaker Change #147: We are so there are some pinch points there Dublin for example, because of the cap, we may well not get.

Speaker Change #147: Soft for the extra flights, we normally do at Christmas, but we will redeploy those aircraft to doing Christmas extras elsewhere.

Speaker Change #147: Our response to weaker pricing would be if it's going to be a weaker pricing. This winter, we will accept weaker pricing, but we will deliver the traffic we wouldn't.

Michael: We wouldn't cut back on capacity growth, but we wouldn't add it either. I mean, if you take the 20 aircraft we're expecting to get from Boeing this winter, we don't plan to deploy those aircraft. But we will need them for next summer's schedule, April, May, and June. But it will be steady as she goes, and we will take the pain on the pricing. Tracey, anything you want to add in terms of winter capacity?

Dave: The cutback of the capacity growth, we wouldnt added either I mean, if you take 20 aircrafts were expected to get from Boeing This winter and Dave We don't plan to deploy those aircrafts.

Dave: We will need them for next summer schedule April May and June.

Dave: But it will be steady as she goes and we will take the pain on the pricing Tracey you want to add in there in terms of winter capacity.

Tracey: We will just continue to do what we always do, network optimisation. We will reduce capacity and stop the trading period to mid-week in Jan, Feb, and March. We have three new bases for the winter, Reggio, Tangier, and Trieste.

Tracey: The network optimization, we will land, which is the.

It's midweek and Jonathan is unmatched and leap <unk> basis.

Michael: And then we continue with Wintersun and expansion in Central and Eastern European countries. Okay, and Morocco, I think, would also be a mark where we will grow meaningfully in Morocco this winter where you have winter sun but also a growing domestic presence in the Moroccan market. Thanks, Sathish.

Tracey: 10 year unsecured debt and then we continue to sell on an expansion.

Speaker Change #152: Okay in Morocco, I think would also be a malware we will grow meaningfully in Morocco. This winter weather winter sonar, but also a growing domestic presence in the Moroccan market.

Speaker Change #151: Thanks next question please.

Michael: Next question, please. The next question comes from Savanthi Sy from Raymond James. Please go ahead; your line is now open. Hey, good morning. How are you doing?

Speaker Change #151: Our next question will come from Simona.

Speaker Change #153: Raymond James. Please go ahead. Your line is now open.

Simona: Hey, good morning.

Speaker Change #153: Yes.

Michael: That's just a question on another question about just the fair booking environment. You know, some of your competitors have talked about maybe the summer booking season extending a bit further out. I wonder if you're seeing anything on that front. I know you mentioned September is only 34 percent booked, so maybe too early. But and then on the second question, I was kind of curious what the significance of the win against Booking.com on Friday was. Okay, so you broke it down, but what was the first question?

Simona: Just a question on another question on just the fer booking environment in some of your competitors have talked about maybe the kind of booking season, extending a bit further out I wonder if you're seeing anything on that front. I know you mentioned September was only 34% that's maybe too early but.

Speaker Change #155: And then on the second question that I was kind of curious what the significance of the win against the bookings that come on Friday was.

Okay, sorry, you broke up a little bit what was the first question somewhere bookings is are they likely to extend.

Michael: The summer bookings, are they likely to extend longer? You've had some competitors talk about maybe summer bookings extending longer than normal, so the peak maybe being a little bit longer. I'm wondering if you're seeing any of that.

Speaker Change #156: Is it just the season extension.

Speaker Change #157: Had some competitors talk about maybe some bookings extending longer than normal so the peak, maybe being a little bit longer I am wondering if youre seeing any of that.

Michael: I mean, you know, our monthly traffic stats are, you know, our monthly traffic, our summer schedule runs through to the end of October; the traffic does dip down in September and October, but we would expect to see strong load factors. I would kind of slightly counter that by saying that we're in a weaker pricing environment. So, you know, I think we will see strong bookings through September and October.

Speaker Change #158: Our monthly traffic.

Speaker Change #159: Monthly traffic, we have our summer schedule runs through to the end of October as the traffic does dip down in September and October, but we would expect to see strong load factors.

Speaker Change #160: I would kind of slightly counter to that is that we're in a weaker pricing environment.

Michael: What we don't yet know is what the pricing mechanism will be for October. As we stand today, we have less than 20% of the seats sold for October. So, I wouldn't hold too much, I mean, I spoke with some of the summer travel periods extending, you know, we're a short haul year-round operator; we do cut back, as Tracy said, capacity meaningfully in the winter, but during the summer, which will be due in September and October, we keep going.

Speaker Change #160: I think we will see strong bookings through September and October what we don't yet know is what the pricing mechanism will be.

Speaker Change #160: October as we stand today.

Speaker Change #161: We have less than 20% of the seats sold for October so.

Speaker Change #162: I wouldnt hold to maturity.

Speaker Change #162: So there's still more travel period is extending.

Speaker Change #163: So our total year round operator.

Speaker Change #163: We do cut back as Tracy said capacity meaningfully in the winter, but joined this summer, which will reduce <unk>, we keep going but we keep going at weaker pricing currently the pricing and margins materially weaker.

Michael: But we keep going at weaker pricing; currently, the pricing environment is materially weaker. The win over Booking.com last week, I think it's seismic. You know, we had seven days or five days in front of a jury and courts in Delaware.

Speaker Change #164: When overbooking Dot com.

I think as seismic.

We had seven days or five days in front of a jewelry into airports in Delaware.

Michael: We were, you know, and the verdict of the jury is comprehensive. We won on almost every, we lost on only one of 12 points in our suit against Booking.com, which means we have now, our jury has now established that Booking.com was in breach of the U.S. Computer Fraud and Abuse Act. They also found that that abuse, that they were, the deceptive trade, that they had, knowingly and with an intention to defraud, been illegally screen scraping our website.

Speaker Change #165: And the.

Speaker Change #165: The divergence of the jewelry as comprehensive we want on almost every we lost only one of 12 points on our suit against.

Speaker Change #166: <unk> Dot com, which means we have now a jewelry has now established that booking dot com were in breach of the the U S.

Speaker Change #166: Computer fraud and abuse Act.

Speaker Change #166: <unk> also found that they that that abuse than they were.

Speaker Change #166: <unk> trade.

Speaker Change #166: <unk>.

Speaker Change #166: Had.

And knowingly and with intention to an intent to defraud have been illegally screen scraping our web site.

Michael: We had so much evidence of Booking.com scamming consumers by overcharging them for Ryanair airfares and Ryanair ancillaries. But Booking.com, with a battery of lawyers, arrived at the courthouse saying, no, we don't do that, we don't do that, we don't do that. It was kind of a Trumpian defense, and the jury just shot it down.

Speaker Change #167: We had so much evidence of booking dot com scamming consumers by overcharging them for Ryanair Airfares and Ryan Air ancillary is booking a battery of lawyers arrived at and say no. We don't do that maybe we don't do that we don't do that it was kind of Trump in defense.

Speaker Change #167: And the jewelry just shut it down.

Michael: I thought it was also quite significant that the jury found in our favor on all of Booking.com's counter suits against us, which were that we had defamed Booking.com by calling them overcharging pirates, that we had somehow engaged in unfair competition against a 130 million billion traveled behemoth, and that we were engaged in deceptive trade practices. I was surprised that Booking.com allowed this to go into court, given that the evidence against them of the scamming that had been going on, them illegally scraping our website and using it to overcharge customers, and then trying to cover it up by giving us fake email addresses and fake payment details.

Speaker Change #167: Yes.

Speaker Change #167: I thought also.

Speaker Change #167: Quite significant that the jury found in our favor on all of our bookings counter.

Speaker Change #167: Suits against US, which is that we had to famed bulky dot com by calling them.

Speaker Change #167: We're charging pirates that we have somehow engaged an unfair competition again say 130 million billion travel behemoth.

Speaker Change #167: And that we were engaged and deceptive trade practices.

Speaker Change #167: Surprised at <unk> Dot Com allows us to go into cohort given that the evidence against them of what the scamming that had been going on.

Speaker Change #167: <unk> spray are illegally scraping, our websites and using it to overcharge customers far overcharge customers and then tried to cover it up with the by giving US speak E mail addresses that big payment details.

Michael: They claim not to, and I think what was notable is that Booking.com took us off sale about four or five months ago in the run-up to this case, and they're kind of defensive: we don't sell Ryanair anymore. No, but when you did, you were scamming them.

Speaker Change #167: Okay not to add.

Speaker Change #168: I think what was notable is that booking dot com took us off sale about four or five months ago in the run up to this case.

Speaker Change #169: They are kind of defensive we don't sell Ryanair anymore, no, but when you did.

Speaker Change #170: Our scanning them.

Michael: I think it is what's interesting is now, whether they appeal or not, we don't know. I'm not sure they have any grounds for appeal, but that might not stop them anyway. I think it will now be materially difficult for Booking.com to scrape any airline's website. Now, other airlines who have higher fares may not mind working with Booking.com. We object to working with Booking.com on the basis that they are going to overcharge our customers for our airfares.

Speaker Change #170: I think it is.

Speaker Change #170: What's interesting is now whether they appeal or not we don't know I'm not sure there's any grounds for appeal, but that might not stop them anyway.

Speaker Change #171: But I think it will now be materially difficult for booking dot com to scrape any airlines websites now other airlines drove higher fares may not mind are working with <unk> dot com, we object to working with bulky dot com on the basis that they are going to overcharge, our customers for our airfares.

Michael: Booking.com has the same opportunity as all the other now approved OTAs. If you want direct access to the Ryanair.com website, you can have it, but only if you agree that you will not scam and overcharge our passengers, and you must show and display our real airfares and our real ancillary prices, and you must give us the genuine customer emails and payment details.

Speaker Change #172: Booking dot com has the same opportunity as all of the other now approved Otas. If you want a direct access to their own dot com. So you can have it but only if you agree that you will not scammon overcharged passengers and you must show in display are re <unk> and our real ancillary prices and you must give us the genuine customer E mails and.

Speaker Change #172: Payment detail almost every other OTA has now signed up for that with two notable exceptions polka dot com kayak.

Michael: Almost every other OTA has now signed up for that, with two notable exceptions, Booking.com, who also have Kayak in the States, and eDreams, a Spanish pirate in Europe. We think their models are now ultimately flawed. It's fine for Booking.com, who do deliver meaningful distribution for hotels and accommodation, but they charge those hotels and accommodations 16%, or 20% for their services. It is not fine for them to try to insert themselves into the relationship between Ryanair and our customers in what is clearly an attempt by them to grab a huge volume of our business and turn around and try to overcharge us or the consumer.

Speaker Change #173: <unk> and <unk> in the state and E Dreams, a Spanish piracy in Europe, but we think ultimately their modules are now ultimately flawed, it's fine for booking com, who do deliver meaningful distribution for hotel and accommodation, but they charge those hotels accommodation $60 20 <unk>.

Speaker Change #172: <unk>.

Speaker Change #174: Their services it is not flying for them to try to insert themselves into the relationship between Ryanair and our customer in what is clearly an attempt by them to grab a huge volume of our book is in turnaround and tried to over charge offs or the consumer at the region <unk> been overcharged consumers Orion efforts, because ryanair won't agree to pay demand.

Michael: The reason they've been overcharging consumers for Ryanair airfares is because Ryanair won't agree to pay them a fee for their non-existent services. We don't need Booking.com to sell Ryanair fares across Europe, and we have the lowest airfares.

Our fee per their nonexistent services, we don't need booking dot comp spell Ryan airfares across Europe, and we have the lowest airfares.

Michael: We're surprised that other airlines do, but that's a matter for them. But I think it means that the Booking.com ruling is now, I think, the death knell for OTAs illegally scraping the Ryanair website, and therefore, they will not be able to insert themselves into the relationship between us and our customers and then turn around and either charge the customer a fee or turn around and charge Ryanair a fee. I think it is pretty seismic.

Speaker Change #175: The northern airline too, but that's a matter for them, but I think it means I think the de booking dot com ruling is now I think the test now for Otas illegally scraping.

Speaker Change #176: Ryanair Ryanair website, and therefore, they will not be able to insert themselves into the relationship between us and our customer and then turnaround and either charge the customer fee or turnaround charge Ryanair fee. So I think it is pretty seismic where it'd be interesting to see what other airlines do in North America.

Michael: We'd be interested to see what other airlines do in North America, when, in our view, they should turn around and tell Booking.com to stop overcharging their customers, but that's a matter for them. But we think the Booking.com model, insofar as it relates to accommodation, is valid. They've made huge, multi-billion fortunes out of it, but scamming customers for overcharged airfares is not going to work going forward after the Delaware ruling. Thanks, Harvey.

Speaker Change #176: When in our view they should turnaround Intel booking com stop overcharging their customers, but that's a matter for that but we think the booking dot com model and so far as it relates to accommodation is valid if they've made huge multibillion fortunes elwood, but scamming customers far overcharged airfares is not going to work going forward after the Delaware.

Speaker Change #176: Ruling.

Robbie: Thanks, Robbie next question please.

Michael: Next question, please. The next question comes from Duane Pfennigwerth from Evercore ISI. Please go ahead; your line is now open. Hey, hey, good morning.

Duane Thomas Pfennigwerth: Our next question comes from Duane <unk> from Evercore ISI. Please go ahead. Your line is now.

<unk>.

Michael: Can you expand on the board's decision to change the exchange ratio on the ADS, you know, how ADR holders will navigate around the foreign ownership restrictions. And do you think this will help the ADS trade closer to parity with the locals from a valuation perspective? Thanks, Duane.

Duane Thomas Pfennigwerth: Hey, good morning can you expand on the boards decision to change the exchange ratio on the ABS.

Speaker Change #179: How to ADR holders.

Duane: Navigate around the foreign ownership restrictions and do you think this will help.

Speaker Change #181: The Etfs trade closer to parity with the locals from evaluation perspective.

Michael: I mean, look, we're trying, I've always been, the challenge we have even in our own present buyback is that the ADSs have always been reasonably illiquid. They're closely held by a number of very large shareholders. And what we're trying to do is to make them a little bit more or create a bit more liquidity in the ADS program. We do believe if we can do that, it may help ADS liquidity. I'm not sure it will until we resolve the ownership and control restrictions here in Europe, where we are pushing hard together with a number of other airlines that there should be control restrictions but not ownership restrictions.

Duane: Thanks Duane.

Speaker Change #182: I mean look we're trying I have always been the challenge we have even in our own president buyback because the assets have always been a reasonably illiquid there closely held by a number of very large shareholders.

Speaker Change #182: And so what we're trying to do is to make them a little bit more.

Speaker Change #182: Or create a bit more liquidity in the ABS program.

Speaker Change #182: We do believe if we can do that it may have.

Speaker Change #182: Liquidity I'm not sure it will until we resolve the ownership and control restrictions here in Europe, where we're pushing hard to get to a number of other areas that there should be controlled restrictions, but not ownership restrictions.

Michael: I'm not sure that the gap between the European Ordinaries and the ADSs will close, and maybe I might ask Neil for a comment on that, and I might ask Julius from a legal point of view to comment on it as well.

Speaker Change #182: I'm not sure that the gap between the European Ordinaries, and the Avs will close.

Speaker Change #183: Maybe I might ask Neil for a comment to that and I might ask Julia from a legal point of view to comment on this as well.

Neil: Yeah, I think that's a fair comment in relation to the premium. There's quite a large premium at the moment on the ADS compared to the ordinary shares. We did look, Duane, at where our ADSs are trading in absolute terms versus other airlines and travel industry stocks, and it's a head-off, but with some considerable distance. So it makes sense to effectively realign, to bring the price down close to 50 or 60, and the ADS, which is where it kind of will get to following the split.

Neil: Yes, I think I think that's fair comment in relation to the premium.

Neil: They are just quite a large premium at the moment on the Ats compare it to the ordinary shares.

Neil: We did look Duane asked where our assets are trading in absolute terms versus older Airlines and travel industry stocks and it's a head off.

Speaker Change #184: Some considerable distance so it makes sense to effectively realigned to bring the price down close to 50 or 60, and Aes is where it is which is where it kind of will get two following the split and that may hopefully increase liquidity, because we need that liquidity to not only finish the current buyback, which will also add fewer.

Neil: And that may, hopefully, increase liquidity because we need that liquidity to not only finish the current buyback but also to do future buybacks so that we can get closer to 50% EU ownership and control and then see where we go from there. And I'm sure Juliusz may have some color on that.

Julius: <unk>, so that we can get closer to 50% EU ownership and control and then see where we go from there and I am sure Julius May have some color on that.

Juliusz: Julius, I don't know if you want to add anything on the ADS issue, and maybe I might also ask you, since it was your team, if you have any commentary on the Booking.com ruling in Delaware? Sorry, I should have asked you to comment on that in response to Savi's question. So, firstly, the ADS, and secondly, the Booking.com ruling. Thanks, Michael. Hi, everyone.

Neil: Julian.

Julian: Anything on the <unk> issue and maybe I might also ask you since it was your team.

Julian: Commentary on the booking dot com ruling in Delaware sort of extra divestiture to comment on that.

Julian: Savidge question, so firstly, the eds and secondly, the booking dot com ruling thanks, Michael Hi, everyone.

Juliusz: The change in the ratio in ADS won't immediately have an impact on our ONC situation. We are still over 48% EU owned at the moment and trending up slowly at this stage, but we think it is within sight that we will get over 50%, at which stage the board will be in a position to restore voting rights for Non-EU shareholders. So it's helpful in that context.

Speaker Change #186: The change of the ratio.

Speaker Change #188: Won't immediately have an impact on our own and see situations, where still over 48% EU owned at the moment and trending up.

Julian: Slowly at this stage, but we think it is within sight that we will get over 50% at which stage the board will be in a position to risk.

Julian: Restore voting rights.

Juliusz: And in relation to Booking.com, I think one thing I would like to add to what Michael said before was that this is the fourth significant ruling in the last two years in our struggle against screen scraping. The first of those was against Last Minute in the Paris Court of Appeal in 2022, when the court said that screen scraping of our website is equivalent to free riding on our investment. This was a case against last minute.

Julian: For non EU shareholders.

Julian: It's helpful in that context.

Speaker Change #187: And in relation to booking does come I think one the only thing I would like to add to what Michael said before was that this is the fourth significant ruling in the last two years.

Speaker Change #191: In our struggle against screen scraping. The first of those was against last minute and the Paris Court of appeal in 2022, when the court said that screen scraping of our web site.

Speaker Change #187: Equivalent to free riding on our investment.

Juliusz: We then had a ruling in Ireland against Flightbox, a Polish provider of software for screen scraping, which essentially said the same thing that screen scraping is unlawful. And then the Court of Appeal of Milan, again, in the case taken against us at the last minute earlier this year, said that our objection to screen scraping does not amount to an abuse of dominance position.

This was a case against last minute.

Speaker Change #190: We don't have a ruling in island against flight box a Polish.

Speaker Change #190: Provider of software for screen scraping.

Speaker Change #190: Which essentially.

So at the same thing that's been scraping is unlawful and then the court of appeal of Milan again in the case taken against US by last minute earlier this year set up.

Speaker Change #192: Our objection to screen scraping does not amount to an abuse of dominance position. So it would remove that hurdle. So now with the booking com ruling in the U S.

Juliusz: So it removed that hurdle. Now, with the Booking.com ruling in the US, I think it is fairly clear, and it should be fairly clear to all that screen scraping is unlawful and must not continue. So it really puts eDreams in a very difficult position as pretty much the last OTA that still continues to scrape our website. Thanks Julius. Thanks Duane.

Speaker Change #193: It is fairly clear it should be fairly clear to all that the screen scraping is unlawful must not continue so it really puts <unk> in a very difficult position as pretty much. The last OTH still continues to scrape our website.

Judy: Thanks Judy.

Speaker Change #195: Thanks next question please.

Michael: Next question, please. The next question comes from Muneeba Kayani from Bank of America. Please go ahead; your line is now open.

Neil Sorahan: The next question comes from Neil <unk> from Bank of America. Please go ahead. Your line is now.

Michael: I just wanted to ask, now that ETA and Lufthansa have the green light, what's your view on the Italian market and any comments on the remedies that have been proposed, especially at Lenata? And then, secondly, for Neil, just if you could remind us of the CAPEX outlook for this year and next year. And I know you're expecting the MAX 10 certification next year, but if there are delays in that, how should we be thinking about the CAPEX profile? When are you scheduled to start pre-delivery payments on the MAX 10s for now? Thank you. Thanks, Muneeba.

Yes.

Neil Sorahan: Just wanted to ask on E.

Speaker Change #197: He kind of conduct the green light.

Speaker Change #198: Our view on the Italian market and any comments on the remedies that have been postponed.

Speaker Change #199: Those two especially at <unk>.

Speaker Change #200: And then secondly for me just if you could remind us on the Capex outlook for this year next year and I know you're expecting the Max 10 certification next year, but if there are delays on that how should we be thinking about that capex profile like when would you when you schedule just.

Speaker Change #200: <unk>.

Our pre delivery payments on the Max 10, right now.

Speaker Change #200: Yes.

Michael: I'll touch on the Lufthansa ETA takeover. You know, we welcome the ruling out of Europe. I think it's slightly depressing that Europe is so slow to approve what is the inevitable consolidation of the airline industry in Europe. We believe in and have long supported Lufthansa purchasing ETA. The alternative is that the Italian taxpayer keeps bailing out ETA every time it loses money, which is an annual event at ETA. So we think it is long overdue. Obviously, we don't think the remedies go far enough, although they are handing over slots in Linate. However, we are not interested in slots in Linate.

Speaker Change #201: Thanks, Vinnie I'll touch on the Lufthansa Asia takeover, we welcomed the ruling out of Europe, I think it's essentially to pricing in Europe is still slow to approve at what is the inevitable consolidation of the airline industry in Europe.

Speaker Change #200: Yes.

Speaker Change #200: We believe and have long supported Lufthansa purchasing.

Keith: The alternative is that the Italian taxpayer, Keith bailing out everytime it loses money.

Speaker Change #203: Is an annual event in Asia.

Speaker Change #203: So we think it was long overdue.

Speaker Change #204: Obviously, we don't think the remedies go far enough.

They are handing over slots.

Speaker Change #205: No not a.

Speaker Change #205: We are not interested is often an assay, we do the ECJ or somebody will take up those thoughts, but ultimately it seems towards that the only way to likes of ETA.

Michael: We do think EasyJet or somebody will take up those slots. But ultimately, it seems to us that the only way the likes of ETA, TAP in Portugal, and SAS up in Scandinavia are going to survive over the medium term is going to be some process of consolidation whereby the high-fare legacy carriers gather or coalesce together. We will continue to expand across Europe with a much lower cost base than any other airline. And therefore, we think that that consolidation process is ultimately good for our growth. We are seeing strong growth in the Italian market.

Speaker Change #206: In Portugal.

Speaker Change #207: Yes up in Scandinavia are going to survive over the medium term is going to be some process of consolidation whereby the high fare legacy carriers gather our coalesce together.

Speaker Change #208: We will continue to expand across Europe, with a much lower cost base than any other airline and therefore, we think that that consolidation process is ultimately good for our.

Speaker Change #209: The growth, we see strong growth in the Italian market, we do believe that Asia will do as they have done in every other mergers that would be pivot it has capacity into feeding from Italy into the two big hopes in Germany, Munich, and Frankfurt there'll be less capacity deployed.

Michael: We do believe that ETA will do as they have done in every other merger. That would be pivot ETA's capacity into feeding from Italy into the two big hubs in Germany, Munich and Frankfurt. There'll be less capacity deployed doing O&D markets from Italy to Europe or Italy domestically, and we will certainly be adding more capacity into those marketplaces to ensure that Italians do not become the victim of Lufthansa's very high airfares, as German consumers are currently struggling with. The German market is the least recovered market in Europe.

Speaker Change #209: OLED markets regionally to Europe are easily domestic and we will certainly be adding more capacity into those marketplaces to insure.

Speaker Change #209: That the Italians do not become the victim of lufthansa's.

Hi, Airfares as German consumers are currently struggling with.

Speaker Change #209: The German market is the least recovered market in Europe, it's operating at about 80, 283% of its 2019 capacity and the Germans are now paying among the highest airfares in Europe as a result, but it is inevitable I think that the consolidation process should continue and we think there should be a much faster clearance process.

Michael: It's operating at about 82 or 83% of its 2019 capacity, and Germans are now paying among the highest airfares in Europe as a result.

Michael: I think that the consolidation process should continue, and we think there should be a much faster clearance process that should consist of handover slots at congested airports and get on with it, and Neil, do you want to touch on capacity and also what will happen now if the max 10 certification slips? Yeah, well, on the CapEx, Muneeba, no change from the guidance that I gave back in May. So we're looking at about 2.3 billion in CapEx this year, although that's predicated on all of the aircraft coming in this side of 31 March. Next year, we're looking at somewhere between 1.1 and 1.2.

Speaker Change #209: That should consist of handovers offset congested airports and get on with it.

Speaker Change #210: And maybe even touch on capacity and also what will happen if the Max 10 certification slips.

Speaker Change #211: Yeah, well on the Capex minivan no change from the.

Speaker Change #212: The guidance that I gave back in May So we're looking at about $2 3 billion Capex. This year, although that's predicated on all of the aircraft coming in.

Speaker Change #212: <unk> of 31 March net.

Speaker Change #212: Next year, we're looking at somewhere between one one and one two so there could be a little bit of timing between this year and next year, depending on Boeing deliveries. The Max 10 doesn't really become meaningful from a PDP perspective or from a delivery perspective, our black Sea 2027.

Neil: So there could be a little bit of timing between this year and next year, depending on Boeing deliveries. The Max 10 doesn't really become meaningful from a PDP perspective or from a delivery perspective until 2027. There will be the first PDPs due within the next kind of 12 to 18 months. We'd be hopeful, as Michael said in his opening comments, that the certification process will have moved on and that we'll be taking our first aircraft as planned in the first half of 2027. So it wouldn't have an impact.

Speaker Change #212: There will be the first PDP is due within the next kind of 12 to 18 months.

Speaker Change #212: We'd be hopeful as Michael said in his opening comments that the certification process will have moved on.

Speaker Change #213: And that will be taken our first aircraft as planned.

Neil: But if there was to be a move out, the first couple of years of PDPs are not that meaningful in any event. Okay. Thanks, Muneeba.

Speaker Change #214: In the first half of 2027, so it wouldn't have an impact, but if there was to be move outs and the first couple of years at ADP are not that meaningful in any event.

Michael: Thanks, Neil. Next question, please. The next question comes from Gerald Khoo from Liberum. Please go ahead; your line is now open. Muneeba, run through for me if I can.

Speaker Change #215: Okay. Thanks, Ben Thanks, Nick next question please.

Speaker Change #215: The next question comes from Gerald <unk> from Liberum. Please go ahead. Your line is now Eric.

Michael: You talked at great length about the air traffic control delays. I was just wondering whether you might be able to quantify the cost in any way. And secondly, I think you mentioned that you extended leases on some of the now A320. How much more scope is there to extend further leases, or have you extended everything that you can already?

101 thing from me if I can you talk at great length about the air traffic control delays.

Gerald: Just wondering whether you might be able to quantify the cost it anyway.

Speaker Change #217: Secondly, I think you mentioned that you extend the Dcs on some of the now with the <unk> hundred <unk>.

Gerald: Yes.

Speaker Change #218: How much is how much more scope is there too.

Speaker Change #218: <unk> for the maintenance of all have you extended everything that we can already.

Speaker Change #218: Yes.

Michael: Okay, thanks Gerald. It's impossible to quantify the cost of these ATC delays. You know, we're coming into, we're now in the peak travel period. This time last year, you know, we had 53 days of French ATC strikes. The strikes are easier in many ways to handle because you cancel the flights, and while we have right to care obligations, we don't have compensation obligations.

Speaker Change #219: Okay. Thanks, guys.

Speaker Change #220: Impossible to quantify the cost of these ATC delays were coming into that where we are now in the peak.

Speaker Change #220: Travel period. This time last year, we had 53 days of French ATC strikes.

Speaker Change #221: The strikes are easier in many way to handle it because you cancel the flight.

Speaker Change #221: While we have to care obligations, we don't have compensation obligations, we are struggling over the past two to three weeks.

Michael: We have been struggling over the last two, three weeks with materially lower on-time performance. I mean, historically, our on-time performance this time last year was over 80%. At the moment, we're struggling to get to 65, 66%. So one third of our flights are being delayed. It is leading to some higher modest rates of cancellations of flights because of airport curfews.

Speaker Change #221: With materially lower on time performance I mean, historically, our on time performance at <unk> last year was over 80% at the moment, we're struggling to get to 65, 66%.

Speaker Change #221: So one third of our prior therapy late it is leading to some higher.

Speaker Change #221: Modest rates of cancellations because of airport curfews.

Michael: And we are therefore responsible for more compensation. So I think there's likely to be a modest uptick in our EU261 cost this year, but we haven't quantified it.

Speaker Change #221: And we are therefore responsible for.

Speaker Change #221: More compensation, so I think theres likely to be a modest uptake in our <unk> one comps this year, but we haven't quantified. It we don't know how long this is going to last and whether the situation will improve.

Michael: We don't know how long this is going to last and whether the situation will improve. I've spoken to a number of the other airlines in the A4E group, and they're all equally frustrated as we are with the lamentable performance of ATC. And it will encourage us to lobby harder for some more effective ATC reform when Europe has delivered nothing. Or Savander Lane got reappointed president last week, promising competitiveness and improved competitiveness.

Speaker Change #222: I spoke to a number of the other airlines in the April regroup, but they're all equally as equally frustrated as we are with the birth lamentable performance of ATC and encourages the lobby harder for some more effective ATC reform in Europe has delivered noting.

Speaker Change #223: Or some underlay and got reappointed president last week, promising competitiveness and improved competitiveness. Despite five years of Citi Anorak doing nothing about air traffic control. So maybe this might inspire.

Speaker Change #223: The more if a few commissioners and parliamentarians have their flights delayed this summer because of ATC delays, we might see some action. The problem is most consumers just made the airlines it's powerful.

Michael: So they blame the airlines for the delays, they get compensated for the delays, and yet we're not allowed to recover our EU261 costs from ANSP or ATC providers because they're generally immune from prosecution across Europe. So it's just another lamentable failure in Europe's ATC infrastructure. We need real, effective reform.

Speaker Change #224: So they played the airlines for the delays they get compensated for the delay and yet we're not allowed to recover are you two six foot cost per me NSP or APC providers, because they're generally immune from prosecution across Europe.

Speaker Change #224: So it's just another lamentable failure in Europe to ATC infrastructure.

Speaker Change #224: We need real effective reform prioritization would be far and away that basically you could do with that loss, ensuring that theyre actually properly staffed.

Michael: Privatization would be far and away the best thing you could do with that lot, ensuring that they're actually properly staffed and protecting overflights during national strikes. And on the A3, we have extended three of the leases out to 2028, so we've allowed 25 or 26 to be allowed at A3, 20's run out to 2038. We are not minded to extend the leases beyond that date, although the aircraft are getting old. I'm sure we could if we wanted to.

And protecting over criteria national strike.

Speaker Change #225: The <unk> hundred <unk>, we have we have extended three of the Liza trades radiate that we have about 25% or <unk> six is allowed to 83.

Speaker Change #226: He has gone out to <unk>.

Speaker Change #231: We are not minded to extend leases beyond that date, although the effort to getting all of that I'm sure. We could if we wanted to but it was very much part of our vision that the Max 10 deliveries are alternative <unk> III <unk> deliveries.

Michael: But it was very much part of our vision that the MAX 10 deliveries, our alternative A320 deliveries, would replace those aircraft in 2028. And that continues to be the case unless there was a material change in the outlook.

Speaker Change #225: We would replace those aircraft at <unk>.

Speaker Change #225: Continues to be the case.

Speaker Change #224: There's a material change in the outlook I mean, the reason that I should say, we extended those three as we were able to extend those three aircraft without any increase in the lease rate.

Michael: I mean, the reason I should say we extended those three is we were able to extend those three aircraft without any increase in the lease rate, which was a significant gain for Lauda and for our shareholders. You know, lease rates have doubled in the last 12 months over the rates we're paying for in Lauda. But you know, where that kind of value is available, we were happy to take it. I think in all cases, the lessors want to keep Ryanair as a customer and see value in having Ryanair as a customer there. But aircraft leasing is not a big part of our operation.

Speaker Change #224: Which was a significant gain far allow the add for our shareholders.

Speaker Change #224: Lease rates have doubled in.

Speaker Change #224: In the last 12 months over the rates, we're paying for it.

Speaker Change #224: But we're at that kind of value is available we were happy to take it I think in all cases, the lessors wants to keep Brian areas, the customer and see value in having Brian there is the customer there with aircraft leasing is that a big part of our operation we own almost all of the Boeing 737. Please.

Michael: We own almost all of the Boeing 737 fleet. We have very little leasing left in place, and it's mainly on the Lauda A320 fleet. And we wouldn't see leasing as the way forward.

Speaker Change #228: We are very disciplined at leasing left in place.

Speaker Change #228: Mainly on the <unk> hundred 20 fleet.

Speaker Change #230: And we wouldn't see leasing as a way forward leasing has been the <unk> that we see both wandering earth.

Michael: Leasing has been, you know, the lessors that we see most of us wanting around Dublin in their overpriced offices and overpriced automobiles. The world has moved in their favor, you know, and the cost of engine leases, aircraft leases is now, I would say, at a record high. And because I think that will widen or significantly increase the cost inflation many of our competitors are suffering for the next number of years, whereas we own all our aircraft, we're paying down the debt of those aircraft aggressively, and all we have is a depreciation chart. Thanks for the question, Jarrod.

Speaker Change #227: And they are overpriced offices and overprice automobiles.

Speaker Change #236: The world has moved to their favor.

Speaker Change #227: Cost of engine leases aircraft leases now I would say at record high.

Speaker Change #227: <unk>.

Speaker Change #229: And because I think that will widen our significantly increased cost inflation in many of our competitors are suffering for the next number of years, whereas we own all of our aircraft.

Speaker Change #229: We're paying down the debt of those aircrafts aggressively and all we have is the depreciation charge.

Speaker Change #229: Thanks for the question Gerrick next question please.

Michael: Next question, please. The next question comes from Alex Patterson from Peel Hunt. Please go ahead, your line is not open. Hello, everybody. I have two questions for you, please.

Speaker Change #233: The next question comes from Alex Paterson from Peel.

Speaker Change #232: And they go ahead Shannon.

Michael: Firstly, I just wondered if there's any regional variation in terms of the fare declines, is it perhaps stronger? No, no, no, it's all a puzzle piece, we've already answered that question already. Oh, sorry.

Alexander Paterson: Hello, everybody two questions for me please firstly on <unk>.

Alexander Paterson: Just wondering if there's any regional variation in terms of the fed declines is it.

Speaker Change #232: Strong.

Speaker Change #237: No. It's all about pace, we've answered that question already.

Speaker Change #232: I'm, sorry, and then on the.

The load factors you said that you were half a percent behind for August and September that was behind plan was planned flat on last year bookings moving later.

Michael: And then on the load factors, you said that you were half a percent behind for August and September. That was behind plan. Was the plan flat on last year, i.e., are bookings moving late? Yeah, the plan is flat on last year. We set the time, sorry, the plan is flat on last year, but with, you know, nine or 10% additional seats this year. So the plan is flat.

Speaker Change #236: Yes. The plan is flat from last year, we set the time inside the plant is down on last year, but 9% or 10% additional seats. This year. So the plan is flat we had aggressively priced into July. So we went to one 5% ahead of the target by the time it moves on a daily basis, but we're running one 5% ahead in July.

Michael: We had aggressively priced into July. So we went into July, I said, one and a half percent ahead of the target. The target moves on a daily basis, but we're running one and a half percent ahead in July. And that's where we thought, right, we can now price it up into July. But every time we tried to price it up, we met resistance; we ended up opening up again. And as we've gone through July, we've moved from being one and a half percent ahead of target.

Speaker Change #236: What we saw it right. We can now price up into July and every time, we tried to price up we've met resistance. We finished up opening up again and as we've gone through July we've moved from being one 5% ahead of target today, where half a percent target now we're getting very close to the end of the month. So it is likely we finished modestly ahead of target, but we're half a percent behind.

Michael: Today, we're half a percent ahead of target. Now, we're getting very close to the end of the month, so it's like we've finished modestly ahead of target. But we're half a percent behind for August and September.

Speaker Change #236: For August and September so our efforts to price upwards of failed.

Michael: So our efforts to price upwards have failed. The close-in bookings, we're meeting significant pricing resistance on close-in bookings, and we're having to open up again. And I think that's reflected this morning in our commentary, which I accept comes as a surprise. We've been surprised as well.

Speaker Change #236: The close in bookings there were meeting significant pricing resistance on close in bookings that were having to open up again.

Speaker Change #238: And that's reflected this morning in our commentary, which I, except he has come as a surprise I mean, we've been surprised as well.

Michael: But we're not seeing any material, we're not seeing the same kind of aggressive load factor build and pricing that we have seen in both of the last two summers, in summer 22 and summer 23, when we were repeatedly closing off cheap seats close in and, you know, and bookings were running ahead of our daily target, but it is against this time last year. So we would expect to hit the same load factors as last year.

Speaker Change #238: But we're not seeing any material, we're not seeing the same kind of.

Speaker Change #238: Aggressive load factor build and pricing that we have seen in both of the last two summers in December 'twenty, two and <unk> 23.

Speaker Change #238: We were repeatedly closing off.

Speaker Change #239: Cheap seat costain and.

Speaker Change #239: Bookings were running ahead of our daily targets.

Speaker Change #239: But it is against this time last year. So we would expect to hit the same load factors as last year.

Michael: The traffic will be up about 9-10%, but the material yields and the average fares will be materially lower in Q2, July, August, and September. Thank you. Next question, please. Our final question today comes from Johannes Bourne from Stiefel. Please go ahead, your line is now open. Anna, hi. Yes, hi. Actually, there is just one left for me.

Speaker Change #239: It would be up about 9% and 10%, but the material yields at the average fares will be materially lower in Q2 July August September.

Speaker Change #240: Thank you.

Alexander Paterson: Thanks, Alex.

Speaker Change #241: Next question please.

Speaker Change #242: Our final question today comes from Johannes Braun from Stifel. Please go ahead. Your line is now open.

Johannes Braun: China site.

Johannes Braun: Hi.

Johannes Braun: Just one left for me.

Michael: And that would be on the free cash flow, which looks, for Q1, actually pretty good, despite the profits being down. I can see that it's largely because of lower capex, given the delivery delays for Boeing. But there's also cash inflow from ticket prepayments, which are much stronger than last year, above 600 million. And I just wonder how this fits with your warning of significantly lower yields in the summer. Is it just the volume growth that I can see there, or is there anything else that I missed?

Speaker Change #244: And <unk> on the on the free cash flow.

Speaker Change #245: Which looks for Q1 actually pretty good despite the profits being down.

Speaker Change #245: See that it's not.

Speaker Change #245: Largely because of lower capex, given the delivery delays with Boeing.

Speaker Change #245: There is also.

Speaker Change #245: Cash inflow from ticket prepayments, which are much stronger than last year above $600 million.

Speaker Change #246: Just wonder how this fits with your.

Speaker Change #247: Wanting of significantly lower yields in the summer.

Speaker Change #248: Is it just the volume growth that I can see there is there anything else that I missed.

Neil: Do you want to take that as a free cash flow? Yeah, Johannes, bookings, traffic is strong. We're taking in about half a million or more bookings a night at this point in time.

Speaker Change #249: You want to take that on the free cash flow.

Speaker Change #250: Honest bookings traffic is strong were taken in the half a million or more bookings analysis at this point in time. So the cash continues to flow very strong youre always have liquidity and capex are slightly lower.

Neil: So the cash continues to flow very strong. You're right, half a billion in capex is slightly lower in the first quarter, but I expect the cash to continue to remain strong over the course of the year. I think that's a factor of the volumes that are coming in and what they're paying for the FERS. FERS are down, as Michael said, but they're up on where they were on a pre-COVID basis.

Speaker Change #251: In the first quarter both.

Speaker Change #251: <unk> the cash to continue to remain strong.

Speaker Change #251: Over the course of the year.

Speaker Change #252: That's a factor of the volumes that are coming in.

And what they are paying for the <unk> as far as our down as Michael said, which at the ROFO, where they were on a pre COVID-19.

Neil: And that's coming through in the numbers on the cash flow, four and a half billion in gross cash, 1.7 billion in net cash at the end of the quarter. Alright, so it's largely the volume element compensating for the price element. Yeah, there's a steady flow of cash in every day. Alright, thank you. Okay. Johannes, thank you very much.

Speaker Change #253: Basis, and Thats coming through in the numbers on the cash flow $4 5 billion in gross cash $1 7 billion net cash at the end of the quarter.

Speaker Change #254: Alright, so it's largely the volume element compensate price element, yes, there's a steady flow of cash and every day.

Speaker Change #255: Alright, Thank you okay.

Michael: Okay, ladies and gentlemen, if we have no other questions, we'll wrap it up there. As I said, you know, we were surprised by the weakness of pricing in the second quarter. It is heavily driven by close-in bookings, and the close-in bookings we're having to open up rather than close off as we move into the peak summer period. We think that will continue. Nevertheless, traffic growth will be strong, and cash flow generation will be strong. We will continue to focus on returning cash and surplus cash to shareholders. The Booking.com win last week was a momentous win.

Speaker Change #255: Thank you very much Jimmy with no other questions.

Speaker Change #255: Wrap it up there as I said.

Speaker Change #256: B, we are surprised by the weakness of pricing into the second quarter. It is heavily driven by close in bookings as it close in bookings were having to open up rather than throws off as we move into the peak summer period, we think that will continue nevertheless traffic growth will be strong cash flow generation will be strong we will continue to focus on.

Speaker Change #256: Turning cash surplus cash to shareholders.

Michael: We think that is structurally significant for us going forward and for us and for the industry going forward. Therefore, we will continue to deploy capacity. We'll continue to be low-factor active, and price passive. We will still have strong profitability this year, although clearly, profitability will not be as strong as we had originally hoped for the full year.

Booking dot com when last week was a momentous when we think that is structurally significant for us going forward and for us and for the industry going forward and therefore, we will continue to deploy capacity will continue to be load factor active price passive.

Speaker Change #256: We still have strong profitability this year, although clearly profitability will not be as strong as we had originally hoped for the full year, but a pricing.

Speaker Change #256: Pricing is where it is and we will continue to aggressively price in all markets. So that we hit our peak load factor assumptions.

Speaker Change #257: If anybody has any follow up questions. They want Peter Larkin is here head of IR is here in Dublin, Neil is doing some investor meetings in.

Speaker Change #257: And I think in Frankfurt to the next day or two.

Speaker Change #257: But other than that we will see you all either here for the AGM in September or on the half year results Roadshow in November.

Speaker Change #257: Thank you very much everybody good to talk to you.

Michael: Thank you, everyone. This concludes today's call. Thank you for joining us. You may now disconnect your lines. Thank you for watching!

Speaker Change #258: Thank you everyone. This concludes today's call. Thank you for joining you may now disconnect your lines.

Speaker Change #258: Yes.

Speaker Change #258: Okay.

Speaker Change #258: Yes.

Speaker Change #258: Yes.