Q1 2027 Ryanair Holdings PLC Earnings Call

Speaker #1: Good morning, everybody. Welcome to the Q1 results call. You'll have seen the results issued this morning: Q1 profit after tax of $538 million, that's a 34% decline.

Speaker #1: Last year's Q1 of $820 million. Primarily due to the impact of the large spike on oil prices, on our 20% unhedged, and also the fact that the first half of Easter moved in—well, Easter holiday—fell into the prior year year Q4.

Speaker #1: Q1 highlights include traffic growth on track, grew 6% to 61.3 million, revenue per passenger fell 5%, average fares were down 6%, and salary revenues were flat.

Speaker #1: Hello, and welcome, everyone, to the Ryanair Holdings PLC Q1 FY27 earnings release. My name is Drew, and I'll be the coordinator for the call today.

Speaker #1: Unit cost rose 5%, which is an impressive number as the unhedged Q1 jet fuel prices doubled to $151 per barrel. FY27 jet fuel remains 80% hedged at $67 a barrel, development in recent weeks as we took advantage of some price weakness on the forward rates, and we're now 15% hedged for the entirety of FY28 at about $85 a barrel.

Speaker #1: If you would like to ask a question, you may do so by pressing Start, followed by 1 on your telephone keypad. Please limit yourself to two questions.

Speaker #1: I will now hand you over to Michael O'Leary, Group CEO of Ryanair Holdings, to begin. Michael, please go ahead when you are ready.

Speaker #2: Okay, good morning, everybody. Welcome to the Q1 results call. You'll have seen the results issued this morning: Q1 profit after tax of $538 million—that's a 34% decline on last year's Q1 of $820 million.

Speaker #1: The underlying growth into the summer continues. We're operating 3 new bases this summer: Rabat in Morocco, Tirana, in Albania, Trapani, and southern Italy, and in total over 130 new routes.

Speaker #2: Primarily due to the impact of.

Speaker #1: And we're pleased that the final $1.2 billion bond was repaid in full out of internally generated cash flow. Leaving the group essentially debt-free. Touching briefly on a couple of points and then before I hand over to Neil, scheduled revenue dipped 1% in Q1 to 2.91 billion as traffic grew 6%, but at 6% lower fares.

Speaker #1: Q1 fares—which benefited from a full Easter during April 2025—required stimulation as the Middle East conflict led to consumer hesitancy concerns about EU jet fuel shortages, economic uncertainty, and later bookings.

Speaker #1: $1 per barrel, FY27. Jet fuel remains 80%. $67 per barrel, a development in recent weeks as we took advantage of some price weakness on the forward rate. We're now 15% hedged for the entirety of FY28 at about $85 a barrel.

Speaker #1: However, our conservative hedging policy means with 80% of our fuel hedged at $67 a barrel, the group's earnings are largely insulated from periods of extreme volatile oil prices as currently.

Speaker #1: The underlying growth into the summer continues; we're up. Operating three new bases this summer—Rabat in Morocco, Tirana in Albania, and Trapani in southern Italy—and in total, over 130 new routes.

Speaker #1: And this will materially widen our cost advantage over all of our other EU competitors. As I said, we've recently extended those fuel hedges for the first time into FY28, now 15% hedged at $85 a barrel.

Speaker #1: And we're pleased that the final €1.2 billion bond was repaid in full out of internally generated cash flow, leaving the Group essentially debt-free. Touching briefly on a couple of points before I hand over to Neil: scheduled revenue dipped 1% in Q1 to €2.91 billion as traffic grew 6%, but at 6% lower fares.

Speaker #1: Having repaid the $1.2 billion bond in May, at the quarter-end gross cash was just over $2.8 billion, again an impressive figure after $1.3 billion of debt repayments and half a billion in capex.

Speaker #1: Liquidity is further boosted by the group's $1.1 billion revolving credit facilities, which is mostly undrawn a sensible strategy at this time of the year when we're generally—when cash flows are strong.

Speaker #1: Q1 fares, which benefited from a full Easter during April 2025, required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet fuel shortages, economic uncertainty, and late bookings.

Speaker #1: We're now 90% through the $750 million share buyback program. The average price is $26.35 per share. However, over the coming year, following the May repayment of our last bond, our funding priorities are: (1) the max 10 aircraft capex and the first 15 of those aircraft are coming in the spring of 2027; shareholder dividends: the completion of the current buyback program, which we think will run out until around the AGM in September; while rebuilding gross cash back to $4 billion, which is where we were when we entered the COVID and we believe that's a sensible number to help us cope with unforeseen eventualities such as COVID or the current war in the Middle East.

Speaker #1: However, our conservative hedging policy means that with 80% of our fuel hedged at $67 a barrel, the group's earnings are largely insulated from periods of extremely volatile oil prices, as currently.

Speaker #1: And this will materially widen our cost advantage over all of our other EU competitors. As I said, we've recently extended those fuel hedges for the first time into FY28, now 15% hedged at $85 a barrel.

Speaker #1: Having repaid the $1.2 billion bond in May, at the quarter-end gross cash was just over $2.8 billion—again, an impressive figure after $1.3 billion of debt repayments and half a billion in capex.

Speaker #1: Liquidity is further boosted by the group's €1.1 billion revolving credit facility, which is mostly undrawn—a sensible strategy at this time of the year when cash flows are generally strong.

Speaker #1: In terms of touching on fleets, Boeing continues to expect the max 10 certification in late summer 2026. I spoke to them about 2 weeks ago, and they expect the max 7 to be certified in the coming weeks, and they're reasonably confident that the max 10 will be certified either in late September or mid-October.

Speaker #1: We're now 90% through the 750 million share buyback program. The average price is $26.35 per share. However, over the coming year, following the May repayment of our last bond, our funding priorities are: (1) max payments for capex in the first 15 of those aircraft coming spring of 2027; (2) shareholder dividends; (3) the completion of the current buyback program, which we think will run out around the AGM in September; while rebuilding gross cash back to $4 billion, which is where we were when we entered COVID—and we believe that's a sensible number to help us cope with unforeseen eventualities such as COVID or the current war in the Middle East.

Speaker #1: They have protected our first 15 delivery slots in the spring of 2027, so we are growing increasingly confident that we will have the first of those aircraft in advance of summer 2027.

Speaker #1: And with 300 of these super fuel-efficient aircraft—remember, 20% less fuel, but offering 20% more seats per flight—due to deliver by March 2034, it leaves us in very good shape long term for cost, efficiency, or cost-efficient growth, and we believe profitable growth.

Speaker #1: As I said, this summer we're growing top-line growth is strong: 3 new bases in Rabat, Tirana, and Trapani. But with only 4% of FY27 traffic growth, our scarce capacity is being switched away to those states, regions, and airports, cutting aviation taxes, lowering fees to incentivize growth.

Speaker #1: In terms of touching on fleets, Boeing continues to expect the MAX 10 certification in late summer 2026. I spoke to them about two weeks ago, and they expect the MAX 7 to be certified in the coming weeks.

Speaker #1: And they're reasonably confident that the MAX 10 will be certified either in late September or mid-October. They have protected our delivery slots in the spring of 2027, so we are growing increasingly confident that we will have the first of those aircraft in advance of summer 2027.

Speaker #1: The example we've given are Albania, Morocco, regional Italy, Slovakia, and Sweden, and we are withdrawing material capacity, flights, and traffic away from high-tax, high-cost markets like Vienna, in Austria, Dublin here in Ireland where costs have gone up 10% this year, Germany we're closing the Berlin base at the end of the summer, and regional Spain.

Speaker #1: And with 300 of these super fuel-efficient aircraft, remember, 20% less fuel offering 20% more fleets per flight, due to deliver by March 30, 2034, it leaves us in very good shape long term for cost, efficiency, or cost-efficient growth, and we believe profitable growth.

Speaker #1: Over the medium term, we expect European short-haul capacity to remain constrained until at least 2030, particularly as the two main manufacturers remain well behind on aircraft delivery.

Speaker #1: As I said, this summer we're growing—top-line growth is strong: three new bases in Rabat, Tirana, and Trapani. But with only 4% of FY27 traffic growth, our scarce capacity is being switched away to those states, regions, and airports cutting aviation taxes, lowering fees to incentivize growth.

Speaker #1: Those industry capacity constraints combined with our very widening cost advantage are strong balance sheet, low-cost fuel-efficient aircraft order book, and industry-leading ops resilience will, we believe, facilitate Ryanair's sustainable, profitable growth over 300 million passengers.

Speaker #1: By 2034. In terms of outlook, FY27 traffic remains on track to grow 4% to 216 million passengers. Much of that growth is front-ended, so in H1 we expect to grow by 6%.

Speaker #1: The examples we've given are Albania, Morocco, regional Italy, Slovakia, and Sweden, and we are withdrawing material capacity, flights, and traffic away from high-tax, high-cost markets like Vienna in Austria, Dublin here in Ireland where costs are up 10% this year, Germany—we're closing the Berlin base at the end of the summer—and regional Spain.

Speaker #1: We will cut back our schedules into the winter, and we expect to deliver only 2% traffic growth in the second half of the year.

Speaker #1: Our unit cost leadership continues to widen. We've seen the results reported by many competitors in recent weeks, who have seen unit cost increases of high single-digit, low double-digit; we're this morning reporting low single-digit cost inflation.

Speaker #1: Over the medium term, we expect European short-haul capacity to remain constrained until at least 2030, principally as the two main manufacturers remain well behind on aircraft delivery.

Speaker #1: Those industry capacity constraints, combined with our very widening cost advantage, our strong balance sheet, low-cost fuel-efficient aircraft order book, and industry-leading ops resilience will, we believe, facilitate Ryanair's sustainable, profitable growth to over 300 million passengers by 2034.

Speaker #1: Jet fuel remains 80% hedged to March 2027 at $67 a barrel. And that helps us to offset a $300 million increase this year in EU and barrow taxes, significant crew pay increases under new multi-year CLAs, and higher maintenance costs.

Speaker #1: In terms of outlook, FY27 traffic remains on track to grow 4%, to 216 million passengers. Much of that growth is front-ended, so in H1 we expect to grow by 6%.

Speaker #1: While summer 2026 volumes are strong, the booking window remains closer in than last year, which further reduces visibility. Despite a recent slight uptick in volumes and less price stimulation, Q2 pricing is trending modestly down year on year.

Speaker #1: We will cut back our schedules into the winter, and we expect to deliver only 2% traffic growth in the second half of the year.

Speaker #1: Our unit cost leadership continues to widen. We've seen the results reported by many competitors in recent weeks, who have seen unit cost increases of high single digits, low double digits. We're, this morning, reporting low single-digit cost inflation.

Speaker #1: That is a decline from where we were on the full year results when we were hoping that Q2 pricing would be flattish year on year.

Speaker #1: They're now trending modestly down, low to mid single digits. And the final H1 fare outcome remains heavily dependent on the strength of close-in bookings in August and September, but they will not be sufficient to make up for what will now be a fair decline in the second quarter.

Speaker #1: Jet fuel remains 80% hedged to March at $67 a barrel, and that helps us to offset a €300 million increase this year in EU and euro taxes, significant crew pay increases under new multi-year CLAs, and higher maintenance costs.

Speaker #1: As is normal this year, we've zeroed H2 visibility, and so there's no point in trying to provide any meaningful guidance for full year profit after tax guidance at this time.

Speaker #1: While summer 2026 volumes are strong, the booking window remains closer in than last year, which further reduces visibility. Despite a recent slight uptick in volumes and less price stimulation, Q2 pricing is trending modestly down year-on-year.

Speaker #1: And with that, I'm going to hand over to Neil Soran, CFO. Neil, take us through the key points of the MD&A, please.

Speaker #2: Okay. Thanks, Michael. Not a huge amount to add to what you've already said. They're other than to guide people back to the fortress balance sheet that we have, quite uniquely $620 fully unencumbered Boeing 737s on the balance sheet, very pleased.

Speaker #1: That is a decline from where we were on the full-year results, and we were hoping that Q2 pricing would be generative, would—would be flat-ish year on year.

Speaker #1: We're now trending modestly down, low to mid-single digits. And the final H1 fare outcome remains heavily dependent on the strength of close-in bookings in August and September, but they will not be sufficient to make up for what will now be a fare decline in the second quarter.

Speaker #2: At going debt-free, back in May, so rock-solid balance sheet would put us in a very strong position over the next number of years to capitalize on every opportunity.

Speaker #2: That comes to us hedging again well insulated for the current financial year, 80% hedging at $67 a barrel. The key swing factor, as was the case in Q1 for the rest of the year, is going to be where the 20% unhedged fuel goes.

Speaker #1: As is normal this year, we've zeroed H2 visibility, and so there's no point in trying to provide any meaningful full-year profit after tax guidance at this time.

Speaker #1: And with that, I'm going to hand over to Neil Sorahan, CFO. Neil, take us through the key points of the MD&A, please.

Speaker #2: Otherwise, unit cost strong, and I would guide people to slide 4 in our presentation. You can see the gap between ourselves with EasyJet and everybody else is only getting wider and I would expect that to continue to be the case, particularly as we start to take in the max 10 aircraft, 20% more seats, 20% more fuel efficient, from next year.

Speaker #2: Okay, thanks, Michael. Not a huge amount to add to what you've already said. Other than to guide people back to the fortress balance sheet that we have, quite uniquely, 620 fully unencumbered Boeing 737s on the balance sheet.

Speaker #2: Very pleased at going debt-free back in May, so a rock-solid balance sheet would put us in a very strong position over the next number of years to capitalize on every opportunity.

Speaker #2: So good cost control. In the business, some of that was down to having the extra aircraft you recall we were left short last summer, so we'd better productivity as a result of having all those aircraft in there equally grew by 6%, so we were spreading the costs over more passengers.

Speaker #2: That comes to us hedging again, well insulated for the current financial year—80% hedging at $67 a barrel. The key swing factor, as was the case in Q1 for the rest of the year, is going to be where the 20% unhedged fuel goes.

Speaker #2: So it might take up slightly into the second half where we're only growing by 2%, but expect very strong cost controls on a full year basis.

Speaker #2: Otherwise, unit costs are strong, and I would guide people to slide 4 in our presentation. You can see the gap between ourselves with these jets and everybody else is only getting wider, and I would expect that to continue to be the case, particularly as we start to take in the MAX 10 aircraft—20% more seats, 20% more fuel-efficient—from next year.

Speaker #2: And silly solid, grew pretty much in line with traffic, so 24 euro per passenger, delivered in the quarter. And the buyback, as Michael said, progressing very well.

Speaker #2: Thanks, Michael.

Speaker #1: Thanks, Neil. Just before we open up to Q&A, I want to touch on a couple of sort of more recent news events which I want to touch on.

Speaker #2: So, good cost control in the business. Some of that was down to having the extra aircraft—you recall we were left short last summer—so we had better productivity as a result of having all those aircraft in there. Equally, grew by 6%, so we were spreading the costs over more passengers.

Speaker #1: The Tessaloniki aircraft where we had the event last Friday, 10 days ago, we welcomed the NTSB is now in charge of the investigation. They have released the aircraft to us yesterday.

Speaker #2: So, my take-up, slightly into the second half, we're only growing by 2%, but expect very strong cost control on a full-year basis. And similarly, solid grew pretty much in line with traffic, so €24 per passenger, delivered in the quarter.

Speaker #1: So we're now engaged in repairing the or replacing the engine and repairing the skin of the aircraft. That was a dramatic event, particularly for passengers on board.

Speaker #1: A depressurization is always a frightening event, particularly when all the masks come down. However, it took place in the climb of the aircraft; all passengers and cabin crew were belted in at the time.

Speaker #2: And the buyback, as Michael said, is progressing very well. Thanks, Michael.

Speaker #1: Thanks, Neil. Just before we open up to Q&A, I want to touch on a couple more recent news events that I want to address.

Speaker #1: So some of the more salacious reports that somebody one passenger was halfway out the window, out the window, head out the window, nobody was out any window.

Speaker #1: The Thessaloniki aircraft, where we had the fan blade issue and a depressurization event last Friday, ten days ago. We welcome that the NTSB is now in charge of the investigation.

Speaker #1: They were all belted in. One passenger did suffer minor injuries. One pregnant lady was taken to hospital. They both since been released. And we are actively supporting the NTSB investigation into what happened to that aircraft.

Speaker #1: They have released the aircraft to us yesterday. So we're now engaged in repairing or replacing the engine and repairing the skin of the aircraft.

Speaker #1: Initial indication would suggest it looks like a foreign object damage to the engine on takeoff out of Tessaloniki. But we don't have that. I can't say that definitively.

Speaker #1: That was a dramatic event, particularly for passengers on board. Depressurization is always a frightening event, particularly when all the masks come down. However, it took place during the climb of the aircraft; all passengers and cabin crew were belted in at the time.

Speaker #1: There will be a draft report issued in about 28 days, and then a more detailed report. The US NTSB has done a couple of these before.

Speaker #1: So some of the more salacious reports that somebody one passenger was halfway out the window, out the window, head out the window, nobody was out any window.

Speaker #1: They're two of them took place in Southwest. And we think they're the best people to investigate and report on the issue. The aircraft was 18 years old.

Speaker #1: They were all belted in. One passenger did suffer minor injuries. One pregnant lady was taken to hospital. They have both since been released. And we are actively supporting the NTSB investigation into what happened to that aircraft.

Speaker #1: There's nothing to do with aging aircraft. The engine had been fully serviced and overhauled, I think, within the last two years. So there's nothing to do with either age of aircraft or engines.

Speaker #1: The initial indication was suggesting it looks like a foreign object damage to the engine on takeoff to Tessaloniki, but we don't have — I can't say that definitively.

Speaker #1: We welcome in the last week the Irish government has finally 18 months after the program for government has passed the legislation enabling the Minister for Transport to lift the Dublin Airport cap.

Speaker #1: There will be a draft report issued in about 28 days, and then a more detailed report. The US NTSB has done a couple of these before.

Speaker #1: We're now we welcome that. It is badly needed given that the cap was $32 million and traffic at Dublin Airport this year is heading for $37 million.

Speaker #1: Two of them took place in Southwest, and we think they're the best people to investigate and report on the issue. The aircraft was 18 years old.

Speaker #1: We now call on the minister to actually lift the cap, abolish the cap. We do not want it raised to $40 million or $42 million or $40 and have to go back through all this nonsense again abolish the cap.

Speaker #1: There's nothing to do with aging aircraft. The engine had been fully serviced and overhauled—I think it was in the last two years. So, there's nothing to do with either the age of the aircraft or the engines.

Speaker #1: There is a physical limit on traffic at Dublin Airport, two runways gives you capacity for about 60 million passengers. That should be what the cap is at 60 million passengers.

Speaker #1: We welcomed, in the last week, that the Irish government has finally, 18 months after the Program for Government, passed the legislation enabling the Minister for Transport to lift the Dublin Airport cap.

Speaker #1: And we should now get on with growing traffic at Dublin Airport, growing tourism and economic activity on and off the island of Ireland using its main gateway.

Speaker #1: We warmly welcomed that. It is badly needed, given that the cap was 32 million and traffic at Dublin Airport this year is heading for 37 million.

Speaker #1: We also welcome the IAEA's provisional recommendations, last week they recommended that Dublin Airport fees be cut. From summer '27 onwards, on the basis that traffic is ahead of the DAEA's projections, surprise, surprise, their capital expenditure is way behind what they had included in the previous projections.

Speaker #1: We now call on the minister to actually lift the cap, abolish the cap. We do not want it raised to $40 million or $42 million or $40 million and have to go back through all this nonsense again. Abolish the cap.

Speaker #1: There is a physical limit on traffic at Dublin Airport. Two runways give you capacity for about 60 million passengers. That should be what the cap is—at 60 million passengers.

Speaker #1: And we believe that all airlines will commit to growing at Dublin Airport if the high fees at Dublin are reduced. We've already stepped forward with our commitment.

Speaker #1: And we should now get on with growing traffic at Dublin Airport, growing tourism, and economic activity on and off the island of Ireland using its main gateway.

Speaker #1: We will add $2 million seats at Dublin next year. Some of those aircraft will be churned away from higher cost airports like Vienna, like Berlin, but there's no doubt in our mind that Dublin and Ireland is set for a period of rapid new routes and traffic growth led by Ryanair.

Speaker #1: We also welcomed the IAA's provisional recommendations last week. They recommended that Dublin Airport fees be cut from summer '27 onwards, on the basis that traffic is ahead of the DAA's projections. Surprise, surprise, their capital expenditure is way behind what they had included in the previous projections.

Speaker #1: If the IAEA recommendations are implemented in their final report, which we think is due in September, October. Pricing this summer, is softer than we had hoped for.

Speaker #1: And we believe that all airlines will commit to growing at Dublin Airport if the high fees at Dublin are reduced. We've already stepped forward with our commitment.

Speaker #1: We had hoped that the closed-in bookings would dramatically recover. Closed-in bookings remain strong, but they're not sufficient to make up for the amount of price discounting we've done through we've had to do in the first half of the year.

Speaker #1: We will add 2 million seats at Dublin next year. Some of those aircraft will be churned away from higher-cost airports like Vienna, like Berlin, but there's no doubt in our mind that Dublin and Ireland are set for a period of rapid new route and traffic growth led by Ryanair.

Speaker #1: So we think pricing will continue to be soft. If I were guiding you, I'd be moving to low to middle, mid-single digit decline, certainly through in the second quarter.

Speaker #1: It is we don't see any significant fall-off, but the resumption of hostilities in the Middle East don't help the situation. Clearly, oil prices have taken off again.

Speaker #1: If the IAEA recommendations are implemented in their final report, which we think is due in September or October, pricing this summer is softer than we had hoped for.

Speaker #1: We had hoped that the closed-in bookings would dramatically recover. Closed-in bookings remain strong, but they're not sufficient to make up for the amount of price discounting we've done—through what we've had to do in the first half of the year.

Speaker #1: But it also creates that consumer hesitancy that nervousness about people traveling and booking. We think the rest of Q2 will be strong. But the second half of the year will need more discounting although we expect a lot of capacity to be taken out of the system in the European system in the second half of this year, particularly by our competitors who are losing money handover faced our copiously losing money and can't compete with us at these low prices.

Speaker #1: So, we think pricing will continue to be soft. If I were guiding you, I'd be moving to low to mid-single-digit declines, certainly through in the second quarter.

Speaker #1: We don't see any significant fall-off, but the resumption of hostilities in the Middle East doesn't help the situation. Clearly, oil prices have taken off again.

Speaker #1: But nevertheless, it would be what it would be. The one little bit of upside I would give you on second half pricing is both halves of Easter will fall into March.

Speaker #1: But it also creates that consumer hesitancy, that nervousness about people traveling and booking. We think the rest of Q2 will be strong, but the second half of the year will need more discounting, although we expect a lot of capacity to be taken out of the system in the European market in the second half of this year, particularly by our competitors, who are losing money hand over fist—are copiously losing money—and can't compete with us at these low prices.

Speaker #1: Easter is very early next year, so we'll have almost all of Easter in March in. So Easter will come into this year's Q4, which should be positive for pricing in the second half of the year.

Speaker #1: And lastly, it wouldn't be a quarterly set of results without some more utterly useless regulation out of the European Union. The European Parliament is now or the European Union last week are considering amendments to the ETS legislation, which will bizarrely extend the damaging harmful and discriminatory ETS to places like Morocco, Turkey, and Greece.

Speaker #1: But nevertheless, it will be what it will be. The one little bit of upside I would give you on second half pricing is both halves of Easter will fall into March.

Speaker #1: Easter is very early next year, so we'll have almost all of Easter in March. So Easter will come into this year's Q4, which should be positive for pricing in the second half of the year.

Speaker #1: But not to the Middle or sorry, Morocco, Turkey, and Albania. Which currently are exempt. Of course, they don't have the bottle to exempt. It's extended out to American Asian and other carriers landing and taking off in Europe, who still account for the majority of Europe's CO2 emissions.

Speaker #1: And lastly, it wouldn't be a quarterly set of results without some more utterly useless regulation out of the European Union. The European Parliament is now, or the European Union last week, are considering amendments to the ETS legislation, which will bizarrely extend the damaging, harmful, and discriminatory ETS to places like Morocco, Turkey, and Greece.

Speaker #1: The win way to fix this utter discrimination of Europeans is to abolish ETS or at least move it into line with CORSEA. But no, that would be that would improve the competitiveness of European aviation and the European economy.

Speaker #1: And useless von der Leyen couldn't come up with anything that would actually improve the competitiveness of European of the European economy other than giving speeches about it.

Speaker #1: But not to the Middle—oh, sorry—Morocco, Turkey, and Albania, which currently are exempt. Of course, they don't have the bottle to extend it out to American, Asian, and other carriers landing and taking off in Europe.

Speaker #1: And there's also a mis-sell by the European Parliament. They are introducing new legislation again, which makes European airlines less competitive. In order to eliminate the or to bring into the family seat a family seating and family pricing they now want or sorry, not the family seating, the carry-on bags.

Speaker #1: We still account for the majority of Europe's CO2 emissions. The one way to fix this utter discrimination against Europeans is to abolish ETS, or at least move it in line with CORSIA. But no, that would improve the competitiveness of European aviation and the European economy.

Speaker #1: And useless von der Leyen couldn't come up with anything that would actually improve the competitiveness of the European economy, other than giving speeches about it.

Speaker #1: So you've had the lunatics in the European Parliament running around trying to assert the right of passengers to carry two free carry-on bags despite that they don't the minor quiver that they don't there isn't enough space on board the aircraft for them.

Speaker #1: There's also a mis-sell by the European Parliament. They are introducing new legislation again, which makes European airlines less competitive. In order to eliminate or to bring in the family seating and family pricing, they now want—sorry, not family seating.

Speaker #1: The solution to these geniuses is to change we'll now change the advertising so that airlines in Europe in about the next 12 or 18 months will now have to advertise a price that includes the two free carry-on bags.

Speaker #1: Despite the fact that more than 50% of our passengers don't pay and don't want two free carry-on bags. But Europe's airlines will now have to advertise a higher fare than the lowest available airfares.

Speaker #1: Carry-on bags. So you've had the lunatics in the European Parliament running around trying to assert the right of passengers to carry two free carry-on bags despite that they don't in fact, the minor quibble that they don't there isn't enough space on board the aircraft for them.

Speaker #1: And more than 50% of passengers we know will opt out of those higher airfares by opting out of the second or the free carry-on bag.

Speaker #1: The solution to these geniuses is to change—we'll now change the advertising so that airlines in Europe, in about the next 12 or 18 months, will now have to advertise a price that includes the two free carry-on bags, despite the fact that more than 50% of our passengers don't pay and don't want two free carry-on bags.

Speaker #1: So we have yet more bullshit useless regulation coming out of Europe. Instead of making Europe more competitive, they now have a required airlines to advertise fares that are higher than the lowest available fares in the system.

Speaker #1: And we will be extending ETS instead of abolishing it or bringing it into line with CORSEA. The Parliament are overselling this as everybody will be entitled to bring two free cab bags on board.

Speaker #1: But Europe's airlines will now have to advertise a higher fare than the lowest available airfares. And more than 50% of passengers, we know, will opt out of those higher airfares by opting out of the second or the free carry-on bag.

Speaker #1: You won't. You will airlines if we're advertising fares will have to advertise fares that include the second free or the second carry-on bag. But we believe continuatively that more than 50% of passengers will still opt out of the free second carry-on bag because they want the lowest airfares, which is we will no longer be allowed to advertise because those geniuses in the European Parliament would prefer that we advertise higher fares than are available in the system.

Speaker #1: So, we have yet more useless regulation coming out of Europe. Instead of making Europe more competitive, they now require airlines to advertise fares that are higher than the lowest available fares in the system.

Speaker #1: And we will be extending ETS instead of abolishing it or bringing it into line with CORSIA. The Parliament are overselling this as everybody will be entitled to bring two free bags on board.

Speaker #1: Welcome to Europe where things never get more competitive. They just get further more regulated and more bullshit regulation getting in the way of actually offering people the lowest available airfares.

Speaker #1: You won't. You will—the airlines, if we're advertising fares, will have to advertise fares that include the second free, or the second carry-on bag.

Speaker #1: But we believe, continuously, that more than 50% of passengers will still opt out of the free second carry-on bag because they want the lowest airfares—which we will no longer be allowed to advertise, because those geniuses in the European Parliament would prefer that we advertise higher fares than are available in the system.

Speaker #1: This is a solution to a problem that doesn't exist. More than 50% of 99% of passengers want the lowest airfare. And there's been no complaints from passengers who want to pay for a if they wish to bring a second carry-on bag, they're happy to pay for us.

Speaker #1: But that wouldn't stop the clowns in the European Parliament from inventing a regulation. Anyway, that's my quarterly rant over. We'll now move on to the Q&A session.

Speaker #1: Welcome to Europe, where things never get more competitive. They just get further, more regulated, and more bullshit regulation getting in the way of actually offering people the lowest available airfares.

Speaker #1: And as everybody says, we have already said limited set of two questions that we've dipped through this as quickly as possible. Back to the moderator, please, with the Q&A.

Speaker #1: This is a solution to a problem that doesn't exist. More than 50% of 99% of passengers want the lowest airfare. And there's been no complaints from passengers who want to pay if they wish to bring a second carry-on bag—they're happy to pay for it.

Speaker #2: Thank you. If you would like to ask a question, you may do so by pressing start, followed by one on your telephone keypad now.

Speaker #2: If you do change your mind, please press start, followed by two. When preparing to ask your question, please ensure your line is unmuted locally and please limit yourself to two questions.

Speaker #1: But that would stop the clowns in the European Parliament from inventing a regulation. Anyway, that's my quarterly rant over. Now, let's move on to the Q&A session.

Speaker #2: Our first question today comes from Jamie Robotham from Deutsche Bank. Your line's now open. Please go ahead.

Speaker #1: And as everybody says, we have already said, limit yourself to two questions. We'll zip through this as quickly as possible. Back to the moderator, please, with the Q&A.

Speaker #1: Jamie, hi.

Speaker #3: Hi, Michael. Two from me. So just coming back on the unit revenues for the September quarter. When I read that you've seen an uptick in vols and less price.

Speaker #2: Thank you. If you would like to ask a question, you may do so by pressing 'Start,' followed by '1' on your telephone keypad now.

Speaker #3: Simulation, I thought the guide for some affairs might be nudging up. You've seen the need to downgrade it from broadly flat to modestly down.

Speaker #2: If you do change your mind, press Start followed by two. When preparing to ask your question, please ensure your line is unmuted locally, and please limit yourself to two questions.

Speaker #3: Can you just explain the apparent disconnect there? What's changed exactly? It seems like better trends, but inferior guidance. And then on the unit costs in the June quarter, maybe for Neil, obviously fuel is what it is.

Speaker #2: Our first question today comes from Jamie Robotham from Deutsche Bank. Your line is now open. Please go ahead.

Speaker #1: Jamie, hi.

Speaker #3: Hi Michael. Two from me. Just coming back on the unit revenues for the September quarter, I read that you've seen an uptick in vols and less price stimulation after.

Speaker #3: Airport and handling and staff look very well controlled. Maintenance is up. That's bless you. That's partly the non-repeat of the supply compensation. But I wanted to ask about.

Speaker #3: The guidance for some of it might be nudging up. You've seen the need to downgrade it from broadly flat to modestly down. Can you just explain the apparent disconnect there?

Speaker #3: Ownership's up about 15% on a per passenger basis. Are there any material one-offs in the DNA that you'd care to pull out? I saw there was a comment about increased NG maintenance and a provision for midlife leap engine shop visits.

Speaker #3: What's changed exactly? It seems like better trends, but inferior guidance. And then costs in the June quarter—maybe for Neil—obviously fuel is what it is.

Speaker #3: Airport and handling staff look very well controlled. Maintenance is up. That's, bless you. That's partly the non-repeat of the supply compensation, but I want to talk about ownership.

Speaker #3: Thank you.

Speaker #1: Okay. Thanks, Jamie. I'll deal with the revenues the last day. Neil then to deal with the cost. Couple of things on the revenue side.

Speaker #1: Yeah. Look, we have been saying all from the start of the year, we started before the war kicked off in Iran at the end of February, pricing into the summer looked like it was going to be up mid-single digits.

Speaker #3: It's up about 15% on a per-passenger basis. Are there any material one-offs in the DNA that you'd care to pull out? I saw there was a comment about increased NG maintenance and a provision for midlife lease engine shop visits.

Speaker #1: Pricing in Q1 was always going to be slightly down, partly because the first half of Easter moving out. But prices weakened once the war in Iran started in February, March.

Speaker #3: Thank you.

Speaker #1: Okay, thanks, Jamie. I'll deal with the revenues on the last day. Neil will then deal with the costs. A couple of things on the revenue side.

Speaker #1: Yeah. Look, we have been saying all from the start of the year—we started before the war kicked off in Iran at the end of February—pricing into the summer looked like it was going to be up mid-single digits.

Speaker #1: Nothing significant, but we've had to open up or keep stimulating forward bookings. Closing bookings and the booking pattern is moving later. The people are making up their mind to travel slightly later.

Speaker #1: Pricing in Q1 was always going to be slightly down, partly because it's the first half of Easter moving out. But prices weakened once the war in Iran started in February–March.

Speaker #1: And then paying slightly higher fares. But it's not sufficient to make up the discounting we've had to do or the discounting we do well in advance.

Speaker #1: Nothing significant. But we've had to open up or keep stimulating forward bookings. Closing bookings, and the booking pattern is moving later, so people are making up their minds to travel slightly later.

Speaker #1: We go into every month typically with about between 75 or 80% of the seats sold on the first day of the month. Therefore, we have only 20% of the seats left to sell during the month.

Speaker #1: When we came out when we had the 60-day ceasefire about a month ago, we did notice and now that part of that has also we're moving into the summer schedule.

Speaker #1: And then paying slightly higher fares, but it's not sufficient to make up the discounting we've had to do, or the discounting we do well in advance.

Speaker #1: We did notice a little bit stronger on the closing bookings. The pricing is a little bit better on the closing bookings, but it's not sufficient to make up for the high or the volume of discounting we've done well in advance.

Speaker #1: We go into every month, typically with about 75% or 80% of the seats sold on the first day of the month. Therefore, we have only 20% of the seats left to sell during the month.

Speaker #1: When we came out, when we had the 60-day ceasefire about a month ago, we did notice now that, as part of that, we're also moving into the summer schedule.

Speaker #1: We did say and at the end of the full year results in May, we were hopeful that Q2 would be flattish. It's now moving down low to mid-single digits.

Speaker #1: We did notice a little bit stronger on the closing bookings. The pricing is a little bit better on the closing bookings, but it's not sufficient to make up for the high, or the volume of discounting we've done well in advance.

Speaker #1: I would personally think it's moving closer to mid-single digits than low single digits. I would if it's going to be weak, it's going to be weak.

Speaker #1: We're now well into the peak period of July and August. And I think it is trending weaker rather than stronger. The ceasefire has broken down.

Speaker #1: We did say at the end of the full year results in May, we were hopeful that Q2 would be flattish. It's now moving down to low to mid-single digits.

Speaker #1: The US has run what is seven or eight nights of bombing in Iran. We are where we are. I think the people largely the decisions on summer holidays have been made.

Speaker #1: I would personally think it's moving closer to mid-single digits than low single digits. I would say if it's going to be weak, it's going to be weak.

Speaker #1: We're now well into the peak period of July and August, and I think it is trending weaker rather than stronger. The ceasefire has broken down.

Speaker #1: The one other one that runs across that is the World Cup does have an influence on things. As it has had before. And I think there will probably be an uptick now that it's over.

Speaker #1: The US has gone about seven or eight nights of bombing in Iran. We are where we are. I think, largely, the decisions on summer holidays have been made.

Speaker #1: People do tend to slightly postpone their travel arrangements until those competitions are done and out of the way. But again, I don't see any recovery in Q2 pricing now.

Speaker #1: The one other one that runs across that is the World Cup does have an influence on things, as it has had before. And I think there will probably be an uptick now that it's over.

Speaker #1: I think it is heading for down mid-single digits on last year. And if it is, it is. And we just get on with it.

Speaker #1: I would not be optimistic for the second half of the year. With the I think pricing is going to be weak. It's going to need more price stimulation.

Speaker #1: People do tend to slightly postpone their travel arrangements until those competitions are done and out of the way. But again, I don't see any recovery in Q2 pricing now.

Speaker #1: The only two things that change that are there are going to be meaningful capacity cuts coming out of competitors. Aer Lingus, for example, last week announced significant fleet reductions that they're going to take their capacity down by 6% from the winter.

Speaker #1: I think it is heading for down mid-single digits on last year, and if it is, it is, and we just get on with it.

Speaker #1: I would not be optimistic for the second half of the year. I think pricing is going to be weak, and we'll need more price stimulation.

Speaker #1: You have the EasyJet M&A situation going on. And at the valuations that they're currently talking about there, there will have to be some meaningful I always said capacity cuts in EasyJet.

Speaker #1: The only two things that changed are that there are going to be meaningful capacity cuts coming out of competitors. Aer Lingus, for example, last week announced significant fleet reductions—they're going to take their capacity down by 6% for the winter.

Speaker #1: If whoever acquires it at those kind of valuations, and then we are waiting to see what wins do. Apart from losing money heroically. But given that neither EasyJet nor Waze have any are not particularly well hedged once you get into the third and our third and fourth quarters of the year.

Speaker #1: You have the EasyJet M&A situation going on. And at the valuations that they're currently talking about, there will have to be some meaningful, I would say, capacity costs at EasyJet if whoever acquires it at those kind of valuations.

Speaker #1: Again, we expect meaningful. And then you have all of Easter at the end of Q4, which will give Q4 at the back end of the year a little bit of a lift.

Speaker #1: And then we are waiting to see what Wizz do, apart from losing money heroically. But given that neither easyJet nor Wizz have any—or are not particularly well hedged—once you get into the third and fourth quarters of the year.

Speaker #1: But I would be bearish now on pricing. And we will simply revert back. There's a war going on in the world. There's a lot of uncertainty.

Speaker #1: Again, we expect meaningful capacity cutbacks. And then you have all of Easter at the end of Q4, which will give Q4 at the back end of the year a little bit of a lift.

Speaker #1: And therefore, it's going to be price passive, load factor active. We will hit the traffic targets of 4% on the year. And the pricing would be whatever the pricing will be.

Speaker #1: But I would be bearish now on pricing, and we will simply revert back. There's a war going on in the world; there's a lot of uncertainty.

Speaker #1: We are much more focused during these periods on taking out more costs. The airport churn negotiations are going particularly well. We're looking forward to the delivery of the max tens, which now we are more optimistic about in the spring of next year.

Speaker #1: Price is passive, load factor is active. We will hit the traffic targets of 4% for the year. And the pricing will be whatever the pricing will be.

Speaker #1: And those aircraft will give us some capacity additions in the summer of '27. But on aircraft at a 20% more seats than for a 20% less fuel.

Speaker #1: We are much more focused during these periods on taking up more costs. The airport churn negotiations are going particularly well. We're looking forward to delivery of the MAX 10s, which now we're more optimistic about in the spring of next year.

Speaker #1: Neil, you want to take the unit cost, please?

Speaker #2: Yes. Good morning, Jamie. I think you're happy enough with the staff and the airports and all of those costs we've performed. Particularly well over the first quarter.

Speaker #1: And those aircraft will give us some capacity additions. But an aircraft at a 20% more seat count and 20% less fuel. Neil, you want to take the unit cost, please?

Speaker #2: The unit cost x fuel just up 2%. On the ownership, nothing that we didn't flag with the full year numbers in May. We'd flagged at that stage that we're starting to accrue up through the amortization for the leap on the A200 midlife hospital visits.

Speaker #2: Yeah, sure. Good morning, Jamie. I think you're happy enough with the staff and the airport and all those costs you performed, particularly well over the first quarter.

Speaker #2: The unit cost, ex-fuel, just up 2%. On the ownership, nothing that we didn't flag with the full-year numbers in May. We'd flagged at that stage that we're starting to accrue up through the amortization for the LEAP on the A200 mid-life hospital kits.

Speaker #2: So you're seeing the start of that coming true. Equally, just given that the NGs are a bit older, the duration between checks is more frequent.

Speaker #2: So just reflective of that. And then, of course, we've 29 additional aircraft in the fleet this summer that we didn't have at the same time.

Speaker #2: So, you're seeing the start coming true. Given that the NGs are a bit older, the duration between checks is more frequent, so it's just reflective of that.

Speaker #2: Last year. Do I expect it to continue with this pace for the rest of the year? No. It'll slow down a bit. As we go out over the balance of the year.

Speaker #2: And then, of course, we have 29 additional aircraft in the fleet this summer that we didn't have at the same time last year. Do I expect it to continue at this pace for the rest of the year?

Speaker #1: Okay. Thanks, Neil. Thanks, Jamie. Next question, please.

Speaker #2: No, it'll slow down as we go out over the balance of the year.

Speaker #3: Our next question comes from James Hollins from BNB Paraba. Your line's now open. Please go ahead.

Speaker #1: Okay, thanks, Neil. Thanks, Jamie. Next question.

Speaker #1: James, hi.

Speaker #4: Hi. Thanks very much. Michael, just giving you an opportunity for another rent. We didn't have much comment on the airport queues. I think you've been quite widely published in the media on that.

Speaker #3: Next question comes from James Holland from BMB Paraba. Your line's open. Please go ahead.

Speaker #1: James, hi.

Speaker #4: Hi, thanks very much. Michael, just giving you an opportunity for another rant. We didn't have much comment on the airport queues. I think you're quite widely published in the media on that.

Speaker #4: Do you think there's any sign that we might be okay for the rest of the summer? Is there any countries lifting or pausing the EES regulations which might help?

Speaker #4: And I guess I'm asking, do you surmise there's some weakness around that in terms of the bookings as well? And then on Neil, just to follow Jaime's question, do I mean, you did less than around about 2% x fuel cost per passenger in Q1.

Speaker #4: Do you think there's any sign that we might be okay for the rest of the summer? Are there any countries lifting or pausing the EES regulations, which might help?

Speaker #4: And I guess I'm asking, do you surmise there's some weakness around that in terms of the bookings as well? And on Neil, just to follow Jaime's question, I mean, you did less than or about 2% ex-fuel cost per passenger in Q1.

Speaker #4: You say it's upticking a little bit in H2. Is around 2 to 3% a sensible number for the full year? Thank you.

Speaker #1: Thanks, James. I don't think airport queues are really that significant, certainly in the second quarter. We have identified about 15 airports, mainly in Portugal, Spain, and some Italy where the border control are understaffed.

Speaker #4: You say it's upticking a little bit. Around 2% to 3% is a sensible number for the full year. Thank you.

Speaker #1: Thanks, James. I don't think airport queues are really that significant, certainly in the second quarter. We have identified about 15 airports, mainly in Portugal, Spain, and some in Italy, where the border control is understaffed.

Speaker #1: And there are significant queues. All of the European countries have the power to derogate or to suspend these EES requirements until October, which is a more sensible time to implement them.

Speaker #1: And there are significant queues. All of the European countries have the power to derogate or to suspend these EES until October, which is a more sensible time to implement them.

Speaker #1: The Europeans misdesigned this system. It should have been done online. We're processing all this online. Only the Europeans would invent shit like this, where you need border guards doing one finger typing into systems at airports coming into the summer period.

Speaker #1: The Europeans misdesigned this system. It should have been done online. We're processing all this online. Only the Europeans would invent stuff like this where you need border guards doing one-finger typing into systems at airports, coming into the summer period.

Speaker #1: So it's another European screw-up. But is it going to stop people traveling through the peak summer? No, it isn't. And then will the queues ease off once you get out into the third and fourth quarter?

Speaker #1: So it's another European screw-up. But is it going to stop people traveling through the peak summer? No, it isn't. And then, will the queues ease off once you get out into the third and fourth quarter?

Speaker #1: Yes, they will. But the EES, if they really want to control this, this is a system should be moved online. The airlines have all the passport details.

Speaker #1: Yes, they will. But the EES—if they really want to control this line—the airlines have details. We have all that information, and it should be something that is not beyond the weight of man or mankind.

Speaker #1: We have all that information. And it should be something that not beyond the weight of man or mankind. But again, it's just another example of where Europe under useless von der Leyen can't organize a piece up in a brewery.

Speaker #1: But again, it's just another example of where Europe, under useless von der Leyen, can't organize a piss-up in a brewery. Are hopelessly inefficient, and we'll talk all day and all night about being competitive while really introducing more regulations that make us less competitive.

Speaker #1: Our hopelessly inefficient and we'll talk all day and all night about being competitive while really introducing more regulations that make us less competitive. But no.

Speaker #1: So airport queues are a frustration. It's not something that is unheard of. In Europe, at this time of the year. And the alternative means you're just stuck in Dover for longer isn't going to make any difference either.

Speaker #1: But no, airport queues are a frustration. It's not something that is unheard of in Europe at this time of year. And the alternative means you're just stuck in Dover for longer, which isn't going to make any difference either.

Speaker #1: Second half of the question, Neil.

Speaker #2: Yeah. James, good morning. Yes, it will tick up a bit in the second half of the year, particularly as we get towards the back end and we're getting ready for the summer of 2028.

Speaker #1: Second half of the question, Neil.

Speaker #2: Yeah, James, good morning. Yes, it will tick up a bit in the second half of the year, particularly as we get towards the back end and we're getting ready for the summer of 2028.

Speaker #2: We didn't give a guide other than I said at the May numbers. It should be marginally below mid-single digits. If you want to be prudent in your numbers, probably three, four is a better guide than two, three.

Speaker #2: We didn't give a guide, other than I said at the May numbers, it should be marginally below mid-single digits. If you want to be prudent in your numbers, probably 3, 4 is a better guide than 2, 3.

Speaker #2: But it won't be above mid-single digits.

Speaker #1: Thanks, Neil. Thanks, James. Next question, please.

Speaker #2: But it won't be above mid-single digits.

Speaker #3: Our next question comes from Alex Irving from Bernstein. Your line's now open. Please proceed.

Speaker #1: Thanks, Neil. Thanks, James. Next question, please.

Speaker #1: Alex, hi.

Speaker #3: The next question comes from Alex Irving from Bernstein. Your line is now open. Please proceed.

Speaker #4: Hi, good morning too from me, please. First is on winter capacity. How do you see that evolving for the sector? And how do you see the probability that we get a meaningful capacity reduction at competitors?

Speaker #1: Alex, hi.

Speaker #5: Hi, good morning. My first question is on winter capacity. How do you see that evolving for the sector, and how do you assess the probability that we see a meaningful capacity reduction among competitors?

Speaker #4: Second one, I want to come back on EasyJet, where you talked about the likelihood of capacity cuts. If there were any parts of EasyJet that were to become available for sale, would there be any elements, say, slots for an Airbus subfleet that might be of interest to Ryanair?

Speaker #5: Second one, I want to come back on EasyJet, where you talked about the likelihood of capacity cuts. If there were any parts of EasyJet that were to become available for sale, would there be any elements—like slots or an Airbus subfleet—that might be of interest to Ryanair?

Speaker #4: Thank you.

Speaker #1: Okay. I think it's an opportunity to ask Eddie Wilson. Ryanair DAC CEO. Eddie, do you want to give us an overview on winter capacity and likely competitor cuts?

Speaker #5: Thank you.

Speaker #1: Okay, I think it's an opportunity to ask Eddie Wilson, Ryanair DAC CEO. Eddie, do you want to give us an overview on winter capacity and likely competitor costs?

Speaker #4: Yeah. I mean, you're looking at the moment there of. If you look at the market. It'll just be winter capacity would be about 5%.

Speaker #5: Yeah. I mean, you're looking at the moment there, if you look at the market, that it'll just be winter capacity would be about 5%.

Speaker #4: But we don't think that's realistic. I think that's likely to be pared back significantly. Ryanair, we will be growing by around 2% this winter.

Speaker #5: We don't think that's realistic. I think that's likely to be pared back significantly. Ryanair—we will be growing by around 2% this winter. Some of that has been driven by the fact we'll have two aircraft, just due to timing, that will still be in maintenance.

Speaker #4: And some of that has been driven by the fact we have two aircraft just due to timing that will still be in maintenance. We'll have two less aircraft, actually, this winter.

Speaker #5: We'll have two fewer aircraft, actually, this winter. So what we do expect to see are competitors pull back, and we can't see any way that the market is going to grow by 5%.

Speaker #4: So what we do expect to see are competitors pull back that we can't see anyway that the market is going to grow by 5%.

Speaker #4: We will continue how we allocate capacity during the winter as we've had in previous years as we have pared back capacity. In the shoulders in November and in late January.

Speaker #5: We will continue to allocate capacity during the winter as we have in previous years, as we have pared back capacity in the shoulders—in November and in late January.

Speaker #4: And then sort of micromanage the capacity growth in close to Christmas and the October bank holiday.

Speaker #5: And then sort of micromanage the capacity growth close to Christmas and the October bank holiday.

Speaker #1: Yeah. So I mean, we are flexing our capacity expanded this winter. I mean, some of that is because 20% of our fuel is unhedged anyway.

Speaker #1: Yeah, so I mean, we are flexing our capacity expense this winter. I mean, some of that is 20% of our fuel is on hedge anyway, but we're still going to deliver 4% traffic growth for the full year.

Speaker #1: But we're still going to deliver 4% traffic growth for the full year just to touch on. The EasyJet valuation is a fairly I think the board, the management of EasyJet has done a good job with the valuations that are currently on offer.

Speaker #1: The EasyJet valuation is fairly—I think the board, the management of EasyJet, has done a good job with the valuations that are currently on offer.

Speaker #1: But if VC money comes in and pays that kind of money for easyJet, I think it's inevitable that they will want to do something to monetize some of the fleet on the order book, or they'll certainly want to be, they'll have to be, getting airfares up at their fortress airport.

Speaker #1: But if VC money comes in and pays that kind of money for EasyJet, I think it's inevitable that they will want to do something to monetize some of the fleet or the order book or they'll certainly want to be they'll have to be getting airfares up at their fortress airports.

Speaker #1: If they're going to get any kind of VC or return on, currently the market cap is about £5.5 billion sterling. Waze will continue, Waze will just blow their brains out this winter.

Speaker #1: If they're going to get any kind of VC or return on currently the market cap, it's about 5.5 billion sterling. Wizz will continue. Wizz will just blow their brains out this winter.

Speaker #1: They don't have any significant fuel hedging in place. They have expanded capacity far too much this summer. Some of that is driven by the fact that the only way you can keep the Ponzi scheme afloat is to keep taking aircraft and then doing sale and leasebacks, and recognizing that through the P&L.

Speaker #1: They don't have any significant fuel hedging in place. They have expanded capacity far too much this summer. Some of that is driven by the only way you can keep the Ponzi scheme afloat is to keep taking aircraft and then doing sale and lease back and recognizing that through the P&L.

Speaker #1: In the full-year results, they reported a profit of €1 million, but with €630 or €640 million of sale and leaseback profits, supplier compensation, and forex gains.

Speaker #1: In the full year results, they reported a profit of a million, but with 630 or 640 million of sale and lease back profits, supplier compensation, and Forex gains.

Speaker #1: Anything else you can think of? The underlying business therefore lost $640 million for the full year when oil prices were $70 a barrel. God bless them when oil is up at $130 or $140 a barrel.

Speaker #1: Anything else you could think of? The underlying business therefore lost 640 million. The full year, when oil prices were $70 a barrel, God bless them, when oil is up at 130 or 140 dollars a barrel.

Speaker #1: So, we think it is inevitable. Air Baltic are floundering around in Eastern Europe—may or may not survive. We think the government will keep them alive.

Speaker #1: So we think it is inevitable. Air Baltic are floundering around in Eastern Europe. May or may not survive. We think the government will keep them alive.

Speaker #1: There’s elections coming up in Latvia in October-November. I think they were out this morning saying that they’re talking to a number of investors. We do think Air Baltic will probably be acquired by Lufthansa, who already own 10% of it.

Speaker #1: There's elections coming up in Latvia in October-November. I think they were out this morning saying that they're talking to a number of investors. We do think Air Baltic will probably be acquired by Lufthansa, who already own 10% of it.

Speaker #1: But the consolidation process will play itself out, and I think we have to look today at the quarter numbers. The immediate short-term outlook is weak.

Speaker #1: But the consolidation process will play itself out. And I think we have to look today on the quarter numbers. The immediate short-term outlook is weak.

Speaker #1: Pricing is weak. We see that as an opportunity to take out unit costs and to materially widen the unit gap between us and competitors on unit costs.

Speaker #1: Pricing is weak. We see that as an opportunity to take out unit costs and to materially widen the unit gap between us and competitors on unit costs.

Speaker #1: But over the medium term, our growth and our market share gains are accelerating. And that growth will take place on aircraft that will be materially more profitable for us.

Speaker #1: But over the medium term, our growth and our market share gains are accelerating. And that growth will take place on aircraft that will be materially more profitable for us.

Speaker #1: What would be of any interest if any bits of easyJet came up for sale? No, would be the simple answer. If you take the various bits—easyJet aircraft orders—no.

Speaker #1: What bits would be of any interest to any bits of EasyJet came up for sale? No. It would be the simple answer. If you take the various bits, EasyJet aircraft orders, no, their Airbuses wouldn't be they wouldn't be particularly cheap either.

Speaker #1: Airbuses wouldn't be, they wouldn't be particularly cheap either, so it wouldn't be attractive to us. EasyJet Holidays came up for sale—no. We're not believers in that holiday model, but really the holiday model is just stuck onto EasyJet's fortress bases.

Speaker #1: So it wouldn't be attractive to us. EasyJet holidays came up for sale, no. We're not believers in that holiday model. But really, the holiday model is just stuck onto EasyJet's fortress basis.

Speaker #1: What else is there? I ultimately believe if EasyJet is bought by a VC entity, the only way they will finance over time would be to sell off the order books.

Speaker #1: What else is there? I ultimately believe if EasyJet is bought by kind of a VC, by a VC entity, the only way they will finance over time will be to sell off the order books.

Speaker #1: Monetize the fleet. There'll be more sale and lease-back, and then, in time, I believe the easyJet business will be sold off to legacy carriers in Europe.

Speaker #1: Monetize the fleet. There'll be more sale and lease back. And then in time, I believe the EasyJet business will be sold off to legacy carriers in Europe.

Speaker #1: Certainly, Air France-KLM would be very interested in the EasyJet base operations in Paris, Schiphol, and Switzerland. And I think the Gatwick operation would be of great interest to the likes of IAG, Jet2, or somebody else.

Speaker #1: Certainly Air France-KLM would be very interested in the EasyJet base operations in Paris. Schiphol and Switzerland. And I think the Gatwick operation would be of great interest to the likes of IAG or Jet2 or somebody else.

Speaker #1: I think if EasyJet does get done, it will kick off another round. I think the M&A will bring people like Jet2 and Wizz more clearly into view for the M&A business.

Speaker #1: I think if EasyJet does get done, it will kick off another round of I think the M&A will bring people like Jet2 and Wizz more clearly into view.

Speaker #1: And ultimately, it will speed up the inevitable consolidation of European airlines into more large carriers: the Lufthansa family, the BA family, the Air France family, and Ryanair.

Speaker #1: For the M&A businesses. And ultimately, it will speed up the inevitable consolidation of European airlines into four large carriers: Lufthansa family, the BA family, Air France family, and Ryanair.

Speaker #1: And we intend to grow organically, not by M&A. Next question, please.

Speaker #2: On it. The question comes from Zivanthi Sith from Raymond James. The line is now open. Please go ahead.

Speaker #1: And we intend to grow organically, not by M&A. Thanks, Alex. Next question, please.

Speaker #1: Zivanthi, hi.

Speaker #2: Hey, good morning. Just two questions—maybe on the EU passenger rights update you mentioned. I'm just curious if there are any technology changes that you need to make to be able to show both fares on your webpage, and if you're expecting any kind of demand impact from having to show the higher fare.

Speaker #2: Our next question comes from Zavanthi Seth from Raymond James. Your line's now open. Please go ahead.

Speaker #1: Zavanthi, hi.

Speaker #5: Hey, good morning. Just two questions. Maybe on the EU passenger rights update, you mentioned just curious if there are any technology changes that you kind of need to make to be able to show maybe both fares on your web page and just if you're expecting any kind of demand impact from having to show the higher fare.

Speaker #2: And then, on the EU ETS changes, I'm curious—if it were to be in place this year, how much more of a step up would you see versus the €200 million you were expecting?

Speaker #2: Thanks.

Speaker #5: And then on the EU ETS changes, just curious if it was to be in place this year, how much more of a step-up would you see versus the 200 million you were expecting?

Speaker #1: Okay. On the passenger rights—I mean, at the moment, the way the legislation is framed, there's nothing we could do about it.

Speaker #1: The airlines now have to advertise fares that include two carry-on bags, even though that's a fare that will apply to less than 50% of passengers booking onboard our flight.

Speaker #5: Thanks.

Speaker #1: Okay. On the passenger rights, I mean, at the moment, the way the legislation is framed, there's nothing we could do about it. The airlines now have to advertise a fare that includes two carry-on bags.

Speaker #1: Passengers—99.9%—will still get on, go on our website, ask, "What's the cheapest airfare?" They'll see, and we will put lots of banners up on those airfares.

Speaker #1: Even though that's a fare that will apply to less than 50% of passengers booking on board our flights. Passengers, 99.9%, will still get on, go on our website.

Speaker #1: So, we'll advertise a fare that has two free checked-in bags, but click here and you can take €60 off your fare by opting out of the checked-in bag.

Speaker #1: What's the cheapest airfare? They'll see we will put lots of banners up on those airfares. So we'll advertise a fare that has two free check-in bags but click here and you can take 60 euros off your fare by opting out of the check-in bag.

Speaker #1: The idea that those morons in the EU Parliament would have Europe's airlines advertising, but not advertising our lowest available airfares, is just the kind of stupidity that you get in Europe.

Speaker #1: But that is what the regulation says. Of course, it's being mis-sold by idiot parliamentarians out there: "Oh, you're all allowed to bring two free sandbags on board"—pay now.

Speaker #1: The idea that those morons in the EU Parliament would have Europe's airlines advertising, not advertising our lowest available airfares, is just the kind of stupidity that you get in Europe.

Speaker #1: Two free sandbags do not fit on board today. And certainly not a 737 or an A320. And never mind the turboprops around Europe. So it's just, again, more idiot regulation that makes Europe less competitive.

Speaker #1: But that is what the regulation says. Of course, it's being mis-sold by idiot parliamentarians out there. Oh, you're all allowed to bring two free cab bags on board a plane now.

Speaker #1: And you want an example of what makes European air travel less competitive? ETS is right up there. We are the only economic bloc in the world where we are penalizing our own citizens with these ridiculous environmental taxes.

Speaker #1: Two free cab bags do not fit on board a plane. And certainly not a 737 or an 8320. And never mind the turboprops around Europe.

Speaker #1: So it's just, again, more idiot regulation that makes Europe less competitive. And you want an example of what makes European air travel less competitive?

Speaker #1: The Americans don't do it. The Asians don't do it. The Gulf carriers don't do it. The Africans don't do it. The Latin Americans don't do it.

Speaker #1: But the Europeans do. And while you respond to Lane, who is wandering around the world giving speeches about making Europe more competitive, the Draghi report continues to gather dust two years after its publication, with not one recommendation implemented. The only thing they've managed to do now is to consider that they don't like the idea that Albania, Turkey, Morocco, and neighboring countries don't charge ETS.

Speaker #1: ETS is right up there. We are the only economic block in the world where we are penalizing our own citizens with these ridiculous environmental taxes the Americans don't do it.

Speaker #1: The Asians don't do it. The gold carriers don't do it. The Africans don't do it. Latin Americans don't do it. But the Europeans do.

Speaker #1: And while useless von der Leyen is wandering around the world giving speeches about making Europe more competitive, while the Draghi report continues to gather dust two years after its publication, we'd not want recommendation implemented.

Speaker #1: So they'll extend ETS to Albania and Morocco. I suspect they'll have trouble extending it to Turkey, particularly with NATO. So I think even this mightn't get off the ground.

Speaker #1: The only thing they've managed to do now is to consider they don't like the idea that Albania, Turkey, or Morocco and neighboring countries don't charge ETS.

Speaker #1: The real way to fix both this stupidity of only taxing the Europeans—if you're not going to extend those taxes to the Americans and the Gulf—and, by the way, I have no difficulty with that. We should extend it to them.

Speaker #1: So they'll extend ETS. To Albania, Morocco, I expect they'll have trouble extending it to Turkey. Particularly with NATO. So I think even this mightn't get off the ground.

Speaker #1: If you want to be really concerned about climate change and flying, everybody who lands and takes off in Europe should pay their fair share.

Speaker #1: The really way to fix both of this, this stupidity of only tagging the Europeans, if you're not going to extend those taxes to the Americans and the and by the way, I have no difficulty with we should extend it to them.

Speaker #1: But of course, the Europeans design a system with Europeans paying an unfair share, and the Americans, the Gulf, and the Asians pay nothing at all.

Speaker #1: We exempt them. But if you're going to exempt them, then you should also exempt Europeans. We believe the better way is to move everybody onto CORSIA.

Speaker #1: If you want to, if you're really concerned about climate change and flying, everybody who lands and takes off in Europe should pay their fair share.

Speaker #1: CORSIA is about 85% cheaper than ETS. And then at least you wouldn't be reducing the cost of air travel for Europe's citizens, for families going on holidays in Europe.

Speaker #1: But of course, the Europeans design a system that only the Europeans pay an unfair share. And the Americans and the Asians pay nothing at all.

Speaker #1: And you'd have a more level playing field in Europe. But that would confuse the European Commission, who'd be too busy giving speeches about competitiveness while doing absolutely nothing. They go the opposite way and make Europe less competitive with these bullshit changes on now what airlines can advertise as their lowest fares, and the bullshit extension of ETS to neighboring countries as well.

Speaker #1: We exempt them. But if you're going to exempt them, then you should also exempt the Europeans. We believe the better way is to move everybody onto Corsia.

Speaker #1: Corsia is about 85% cheaper than ETS. And then at least you wouldn't be reducing the cost of air travel for Europe's citizens, for families going on holidays in Europe.

Speaker #1: And you'd have a more level playing field in Europe. But that would confuse the European Commission who'd be too busy giving speeches about competitiveness while doing absolutely no in fact, they go the opposite way and make Europe less competitive.

Speaker #1: They've drawn a line within 5,000 square kilometers from Frankfurt, which conveniently excludes Asia, America, and everywhere else, but catches poor Morocco, and maybe Egypt as well.

Speaker #1: With these bullshit changes. Now what airlines can advertise at their lowest fares. And the bullshit extension of ETS to neighboring countries as well. They've drawn a line where in 5,000 square 5,000 kilometers from Frankfurt, which is conveniently excludes Asia, America, everywhere else, but catches poor old Turkey, Albania, Morocco, and maybe Egypt as well.

Speaker #1: So, congratulations—another complete fuck-up by the European Union. When Mrs. von der Leyen is promising competitiveness, all we get is more idiot regulation. Next question, please.

Speaker #2: Thank you. Our next question comes from Harry Gauer from JP Morgan. Your line's now open. Please go ahead.

Speaker #3: Yeah. Morning, Michael. Morning, Ron. First question, maybe you could just give us a little bit of an update on the CLAs with the unions, and how to think about modeling that.

Speaker #1: So congratulations. Another complete fuck-up by the European Union. When Mrs. von der Leyen is promising competitiveness, all we get is more idiot regulation. Next question, please.

Speaker #3: On the staff cost line, was there already some impact on that in Q1, or does it not really hit the P&L staff cost yet?

Speaker #2: Thank you. Our next question comes from Harry Gowers from JPMorgan. Your line's now open.

Speaker #3: And then, second question—just coming back on those baggage rules coming into place from the EU on the carry-ons, which Michael, you covered quite eloquently already—but just from your perspective, could you expect to see any financial impact on Ryanair after that, whether it's on the revenue line or more kind of operational drag from, yeah, trying to sort the bags out?

Speaker #1: Harry.

Speaker #2: Please go ahead.

Speaker #3: Yeah. I'm on a mic. Good morning, everyone. First question, maybe you could just give us a little bit of an update on the CLAs with the unions, how to think about modeling that on the staff cost line.

Speaker #3: And was there already some impact from that in the Q1, or it doesn't really hit the P&L staff cost yet? And then second question, just coming back on those baggage rules, coming into place from the EU on the carry-ons, which Michael, you covered quite eloquently already.

Speaker #3: Thanks a lot.

Speaker #1: Okay, I'm going to ask Eddie maybe to give an update on the CLA, and then Tracy McCann with the impact—the likely impact—of the baggage rule.

Speaker #4: Yeah, good morning, Harry. On the CLA negotiations, we're almost through the summer now, and the largest markets—like Italy, for example—were completed earlier this year, both for pilots and cabin crew.

Speaker #3: But just from your perspective, do you expect actually any financial impact on Ryanair from that, whether it's on the revenue line or more kind of operational drag from, yeah, trying to sort the bags out?

Speaker #3: Thanks a lot.

Speaker #4: And subsequently, the other there's a number of other jurisdictions where their deals expired in April. So two of those were completed with in Romania and also in Denmark.

Speaker #1: Okay. I'm going to ask Eddie, maybe give you an update on the CLA, and then Tracy McCann, the likely impact of the baggage rules.

Speaker #4: Yeah. Good morning, Harry. Yeah. On the CLA, negotiations, we're almost through the summer now. And the largest markets like Italy, for example, was completed earlier this year, both for pilots and cabin crew.

Speaker #4: And they extended both the pilots and cabin crew. And there are two then that are still in negotiations, but are reasonably well advanced. One on the pilot side and one on the unions or one on the cabin crew side.

Speaker #4: And subsequently, the other there's a number of other jurisdictions where their deals expired in April. So two of those were completed with in Romania, and also in Denmark.

Speaker #4: One of those is currently under ballot at the moment. The vast majority of the CLAs will mature next April, April 27.

Speaker #4: And they extended both the pilots and cabin crew. And there are two then that are still in negotiations, but are reasonably well advanced. One on the pilot side and one on the unions or one on the cabin crew side.

Speaker #4: But there's already a number of unions that are looking at feeling out as to whether they could potentially go early, and we would be minded to engage in negotiations on that.

Speaker #4: One of those is currently under pilot at the moment. So there are other the vast majority of the CLAs will mature next April, April 27.

Speaker #4: So it's gone—you can never say never in terms of industrial action—but, I mean, we're almost into August now and we're still in negotiations for the last.

Speaker #4: So, as I said, the cabin crew one has gone. I don't want to comment on the individual one—it has gone to ballot, and the other one, on the pilot side, is still involved in negotiations.

Speaker #4: But there's already a number of unions that are looking at feeling out as to whether they could potentially go early. And we would be minded to engage in negotiations on that.

Speaker #4: And so, we will—so, the cost of those have actually come through. And earlier this year as well, we would have done the Spanish cabin crew as well, but that was from a previous round as well.

Speaker #4: So it's gone you can never say never in terms of industrial. Action. But I mean, we're almost into August now. And we're still in negotiations for the last two as I said, the cabin crew one has got that one.

Speaker #4: So I think there's a lot of realism out there as well at the moment. There are pretty much no opportunities in places like the Middle East. Mind you, there are a small number in Riyadh Air, where they don't actually have aircraft.

Speaker #4: I don't want to comment on the individual one has gone to pilot and the other one is still on the pilot side is still involved in negotiations.

Speaker #4: And so we will so the cost of those have actually come through. And earlier this year as well, we would have done the Spanish cabin crew as well.

Speaker #4: So that's particularly attractive for a small group of people who want to be paid and don't fly. And so—but there is, when you see the M&A activity that's going on in places like easyJet as well and what's likely to emerge this winter, there's probably more of a focus on people really valuing what they have here in terms of promotional opportunities and also the sort of security of employment on a well-capitalized airline. And people know exactly what's happening in terms of deliveries that are coming over the next number of years.

Speaker #4: But that was from a previous round as well. So I think there's a lot of realism out there as well at the moment. There are pretty much no opportunities in places like the Middle East, mind you.

Speaker #4: There are a small number in Riyadh Air where they don't actually have aircraft. So that's particularly attractive for a small group of people who want to be paid and don't fly.

Speaker #4: And so but there is when you see the M&A activity that's going on in places like easyJet as well and what's likely to emerge this winter, there's probably more of a focus on people really valuing what they have here in terms of promotional opportunities and also the sort of the security of employment on a well-capitalized airline.

Speaker #1: Okay, thanks, Eddie. Tracy, we've hit the new baggage rules. How will it impact revenues?

Speaker #2: So, pretty much, I think it's going to be revenue neutral. We've already seen it in Italy, and it's had no impact. So, revenue neutral for us.

Speaker #2: And just to add, probably on Eddie, on the staff cost, as Neil said earlier, we will see some of the CLAs coming through later in the year.

Speaker #2: What's already been done is in costs, and furthermore, as we do the CLAs for the remainder of the year, we will see some staff cost increase.

Speaker #4: And people know exactly what's happened in terms of deliveries. That are coming over the next number of years.

Speaker #1: I should say that, with some of the discussion, there have been some delays in some of those CLAs, with unions looking for backdated to the 1st of April.

Speaker #1: Okay. Thanks, Eddie. Tracy, we think the new baggage rules, how will it impact revenues?

Speaker #1: We will update nothing. Our principle is always: you do the deal. Whenever you do the deal, we'll implement it. But you're not getting backdating—we close the accounts for the first quarter.

Speaker #2: So we pretty much think it's going to be revenue-neutral. We've already seen in Italy, and it's had no impact. So revenue-neutral for us. And just to add, probably on Eddie on the staff cost, as Neil said earlier, we will see some of the CLAs coming through later in the year.

Speaker #1: That's it. Just on the baggage rules, I think it will change part of the way we advertise. We probably won't do as much price advertising because it's not much point in having a what will now be our kind of 29 euro seat sale if thanks to the idiots in the European part, we have to include the second checked-in bag.

Speaker #2: What's already been done is in the costs and furthermore, as we do the CLAs for the remainder of the year, we will see some staff cost increase.

Speaker #1: I should say on that, we are some of the discussion, there has been some delays in some of those CLAs. With unions looking for backdates to the 1st of April.

Speaker #1: Our €29 seat sale would now become an €89 seat sale, which doesn't sound particularly cheap by European terms. So I think you'll see us doing much more advertising, not focusing on price but finding other ways to deliver value.

Speaker #1: We will backdate nothing. Our principle is always, you do the deal. Whenever you do the deal, we'll implement it. But you're not getting backdating we've closed the accounts for the first quarter.

Speaker #1: That's it. Just on the baggage rules, I think it will change probably the way we advertise. We probably won't do as much price advertising because it's not much point in having a what would now be our kind of 29 euro seat sale if thanks to the idiots in the European part, we now have to include the second checked-in bag.

Speaker #1: And the website, with all the website displays, will show this mad pricing with the second carry-on bag. But with big banners, you can view, you can opt out of €60 of this fare, and you can say, feel free to opt out.

Speaker #1: Actually, we think more and more people will opt out of it. But the same numbers are more likely to opt out when they can save €60, and therefore, we think there's no impact whatsoever.

Speaker #1: Our 29 seat sale would now become an 89 euro seat sale. Which doesn't sound particularly cheap by an European terms. So I think you'll see us doing much more advertising, not focusing on price.

Speaker #1: There will be some disappointment among consumers there. In some cases, they've been promised by parliamentarians or some of the more misguided consumer journalists that, oh, you're going to be allowed to bring two free bags on board.

Speaker #1: But finding other ways to deliver value. And the website will all the website displays will show this mad pricing with the second carry-on bag.

Speaker #1: You're not, because they won't fit. There is an interesting—what happens actually when the plane is now more than half full? Do we still advertise price?

Speaker #1: But with big banners, you can if you can opt out of 60 euros of this fare, you can feel free to opt out. Actually, we think more and more people will opt out of it.

Speaker #1: The answer is probably no, because if, in theory, the first 50% of people had booked the fare that included the free second carry-on bag, then the last 50% of people couldn't get on that plane with a free second carry-on bag because there isn't room for them.

Speaker #1: But the same numbers are more will opt out when they think they can save 60 euros. And therefore, we think there's no impact whatsoever.

Speaker #1: There will be some disappointment among consumers where in some cases, they've been promised by parliamentarians or some of the more misguided consumer journalists that, oh, you're going to allow to bring two free bags on board.

Speaker #1: But detail, or factual detail, has never bothered parliamentarians when they're reviewing EU261. It's always, "Here, just invent some new, bullshit regulation that passengers don't need and are not interested in."

Speaker #1: You're not. Because they won't fit. There is an interesting what happens actually when the plane is now more than half full. Do we still advertise price?

Speaker #1: But which put up the advertised cost of air travel around Europe. Congratulations to the European Parliament—another messed-up regulation making Europe less competitive instead of more.

Speaker #1: The answer is probably no. Because if in theory, the first 50% of people had booked the fare that had included the last 50% of people couldn't get on that plane with the bringing a free second carry-on bag.

Speaker #1: Julius, anything you want to add to that on the insightful presentation or friends and colleagues in Europe in the Parliament or the Commission?

Speaker #3: It's hard to top this, but I think that advertising true prices is going to become the norm in the industry. So, I think as we go through the booking process and you see your flight, you'll be shown two prices.

Speaker #1: Because there isn't room for them. But detail or factual detail like that has never bothered parliamentarians when they're reviewing EU261. It's always here just invent some new bullshit regulation that passengers don't need and are not interested in.

Speaker #3: One with the bag, the other one without the bag. And then, when the airline settles the space in the overhead lockers on a particular flight, it's going to have to be the lowest fare that's going to be advertised.

Speaker #1: But which put up the advertised cost of air travel around Europe. Congratulations to the European Parliament. Another fucked up regulation. Making Europe less competitive instead of more.

Speaker #3: So there'll be no impact, as Tracy said.

Speaker #1: Julius, anything you want to add to that on the insightful presentation of our friends and colleagues in Europe in the Parliament and the Commission?

Speaker #1: Okay, thanks. Thanks, Juliusz. Next question, please.

Speaker #2: Our next question comes from Stephen Furlong from Davy. Your line is now open, please proceed.

Speaker #3: It's hard to top this. But I think that advertising true prices is going to become the norm in the industry. So I think as you go through the booking process and you see your flight, I think you'll be shown two prices.

Speaker #5: Hi, Michael. Maybe it's Farnborough, just the day of the 10th. Just comments about Boeing and Airbus talking about looking by 2030 to fund a new jet program.

Speaker #3: One with the bag, the other one without the bag. And then when the airline sells all the space in the overhead lockers on a particular flight, it's going to have to be the lowest fare that's going to be advertised.

Speaker #5: I know you talked about the MAX 10. Just general comments about that, or, I’m seconding, then just when I’m talking about the supply chain, maybe just talk about the engine shops and where we’re at on that.

Speaker #3: So there'll be no impact as Tracy said.

Speaker #5: Thank you.

Speaker #1: Okay, Tracy. Briefly, new jet program. Look, it's all nonsense. But that's what they talk—a lot of nonsense gets talked, a lot of rubbish gets talked at air shows.

Speaker #1: Okay. Thanks, Eddie. Thanks, Julius. Next question, please.

Speaker #2: Our next question comes from Stephen Furlong from Davey. Your line's now open. Please proceed.

Speaker #5: Hi, Michael. Maybe it's Farnborough, just the day that's in it. But just comments about Boeing and Airbus talking about looking by 2030 to fund the new Jet program.

Speaker #1: Boeing and Airbus have basically—they're at the, in the foothills of delivering the A321 NEOs. Boeing haven't even certified the MAX 7 and the MAX 10.

Speaker #5: Just I know you talked about the MAX 10. Just general comments about that or and second thing then, just while I'm talking about the supply chain, maybe just talk about the engine shops and where we're at on that.

Speaker #1: These are dramatic technological revolutions in air travel. I mean, these are aircraft that carry 20% more seats onboard and burn 20% less fuel. So, from a climate, environmental, and operating efficiency standpoint, these are brilliant aircraft.

Speaker #5: Thank you.

Speaker #1: Okay. Tracy, briefly, new Jet program. Look, it's all nonsense. But that's what they talk a lot of nonsense gets talked at rubbish gets talked at air shows.

Speaker #1: These are the aircraft that are going to fund the next 20 years of air travel. There will not be a need for a new jet program for probably another—I think, probably the end of the 2040s.

Speaker #1: Boeing and Airbus have basically they're at the in the foothills of delivering the A3, the 2321neos, Boeing haven't even certified the MAX 7 and the MAX 10.

Speaker #1: You might be heading for 2050, and Boeing and Airbus need to actually monetize these—they put a huge amount of R&D into these. Boeing's balance sheet has suffered from the years of the MAX grounding.

Speaker #1: These are dramatic technological revolutions in air travel. I mean, these are aircraft that carry 20% more seats than board and 20% less fuel. So from a climate environmental operating efficiency, everything there these are brilliant aircraft.

Speaker #1: Et cetera, et cetera. They need to rebuild their balance sheets—both Boeing and Airbus. The technology now, I think, is what we will have for the next 15 or 20 years.

Speaker #1: And the challenge is going to be the engines, not the airframe. So all this nonsense about hydrogen aircraft and electric fucking propulsion systems and all that, it is just air show rubbish.

Speaker #1: These are the aircraft that are going to fund the next 20 years of air travel. There will not be a need for new Jet program for probably another I think probably the end of the 2040s.

Speaker #1: It will not be there in my lifetime, and I expect to live well beyond 2050. But I think what we should be very happy with is that the next generation of aircraft—the Airbus 320, the Airbus Neos, and the Boeing Maxes—will, I think, make those surviving or consolidated airlines that are still standing in the early 2030s very profitable for the next 15 or 20 years.

Speaker #1: You might be heading for 2050. And Boeing and Airbus need to actually monetize these they put a huge amount of R&D into these. Boeing's balance sheet has suffered from the years of the MAX grounding.

Speaker #1: Etc., etc. They need to rebuild their balance sheets both Boeing and Airbus. The technology now, I think, is what we will have for the next 15 or 20 years.

Speaker #1: And the last thing we need is Boeing and Airbus blowing their brains out developing new engine or new aircraft, new jet programs. Make money for the next 15 or 20 years, repair your balance sheet, improve the quality of production, certainly invest and improve the engine technology.

Speaker #1: And the challenge is going to be the engines, not the airframe. So all this nonsense about hydrogen aircraft and electric fucking propulsion systems and all that, it is just airshow rubbish.

Speaker #1: It will not be there in my lifetime. And I expect to live well beyond 2050. But I think what we should be very happy with is that the next generation of aircraft, the Airbusneos and the Boeing Maxes, will, I think, make those surviving or consolidated airlines that are still standing in the early 2030s very profitable for the next 15 or 20 years.

Speaker #1: Because as an industry, we do need to decarbonize. But we don't have any alternative to jet kerosene. So but let's have more engines that carry that more propulsion systems that will enable us to carry more batteries while burning less carbon.

Speaker #1: Engines are going to be a real challenge, or certainly engine maintenance and engine costs are going to be a real challenge for the next 5 to 10 years.

Speaker #1: So, using bumper results again over the weekend, margins rising into the mid-20% in Q1. I think about $2.5 billion of net profit, net profits.

Speaker #1: And the last thing we need is Boeing and Airbus blowing their brains out developing new engine or new aircraft, new Jet programs. Make money for the next 15 or 20 years.

Speaker #1: Repair your balance sheet. Improve the quality of production. Certainly invested and improve the engine technology. Because as an industry, we do need to decarbonize.

Speaker #1: Engines are also going to be a real area of competitive advantage or disadvantage within the year and industry. Those airlines like Ryanair, who will in the next few years have our own in-house MROs, will have a significant advantage over the rapidly escalating cost of third-party engine maintenance and third-party engine spares and parts.

Speaker #1: But we don't have any alternative to Jet kerosene. But let's have more engines that carry that more propulsion systems that will enable us to carry more passengers while burning less carbon.

Speaker #1: And again, it's one of the reasons why we don't need a new engine, new aircraft, or new jet programs. The cost of engine maintenance and engine overhaul is escalating rapidly.

Speaker #1: Engines are going to be a real challenge or certainly engine maintenance engine costs are going to be a real challenge for the next 5 or 10 years.

Speaker #1: So GE producing bumper results again over the weekend. Margins rising into the mid 20% in Q1. I think about 2.5 billion of net profits.

Speaker #1: There is a worldwide shortage of capacity in that sector, partly to do with the repairs, but also because both the manufacturers are not willing to spoon up MRO capacity to meet demand.

Speaker #1: Engines are also going to be a real area of competitive advantage or disadvantage within the airline industry. Those airlines like Ryanair who will in the next two years have our own in-house MROs.

Speaker #1: They want to increase prices on that MRO capacity. We're very happy where we are. We are making significant progress on our two engine MRO shops.

Speaker #1: Will have a significant advantage over the rapidly escalating cost of third-party engine maintenance and third-party engine spares and parts. And again, it's one of the reasons why we don't need a new engine, new aircraft, or a new Jet programs.

Speaker #1: We've put in place the supply contract with CFM, who we are essentially partnering with on our two MROs. They want us to set up these two MROs.

Speaker #1: They know we won't compete with them. We're not going to do third-party engine maintenance for anybody else, but we will have a material cost advantage by doing our engine maintenance in-house, in the same way that we've had a material cost advantage by doing all our airframes in-house for the last 10 or 15 years.

Speaker #1: Engine cost of engine maintenance and engine overalls is escalating rapidly. There is a worldwide shortage of capacity in that sector. Partly to do with the repairs, but just because both the manufacturers are not willing to spool up MRO capacity to meet demand, they want to increase prices of that MRO capacity.

Speaker #1: And that will continue. So I realize it is Farnborough this week. I realize everybody will be talking a lot of shite about new propulsion systems, this, that, and the other.

Speaker #1: Until somebody gets to Star Trek travel and starts beaming people around the world—beaming people instead of flying them—I think we're dealing with 737 MAXes and A320 or Airbus NEOs for the next 10 or 15 years.

Speaker #1: We're very happy where we are. We are making significant progress on our two engine MRO shops. We've put in place the supply contract with CFM.

Speaker #1: Who we are essentially partnering with on our two MROs. They want us to set up these two MROs. They know we won't compete with them.

Speaker #1: And these are going to have to be transformative for Ryanair's P&L and our balance sheet. Next question, please.

Speaker #1: We're not going to do third-party engine maintenance for anybody else. But we will have a material cost advantage by doing our engine maintenance in-house in the same way that we've had a material cost advantage by doing all our airframes in-house for the last 10 or 15 years.

Speaker #2: Our next question comes from Jared Castle from UBS. Your line's now open. Please proceed.

Speaker #5: Jared, hi. Morning, everyone. Michael, you've hedged 15% of folio 28 now. So I gather it's not a stop process anymore for 28, or is it still a little bit of a start-stop depending on what fuel's doing?

Speaker #1: And that will continue. So I realize it is Farnborough this week. I realize everybody will be talking a lot of shite about new propulsion systems, that and the other and the other.

Speaker #1: Until somebody gets to Star Trek travel and you start beaming people around the world, beaming people instead of flying them, I think we're dealing with 737 Maxes and A3 or Airbusneos for the next 10 or 15 years.

Speaker #5: If you could give any color in terms of maybe the 28 view on hedging. And then another potentially contentious topic, but Michael, have you changed your views on Wi-Fi on board and Starlink, given another low-cost airline, Wizz, has decided to put it on board? And I guess the way they've looked at things from an economic perspective?

Speaker #1: And these are going to have be transformative certainly of Ryanair's P&L and our balance sheet. Next question, please.

Speaker #5: Thanks.

Speaker #2: Our next question comes from Jared Castle from UBS. Your line's now away from him. Please proceed.

Speaker #1: Jared, we could be here for a very long time agreeing or discussing whether, frankly, Wizz is a low-cost airline. There aren't any other low-cost airlines in Europe.

Speaker #5: Thank you. Morning, everyone. Michael Neal, you've hedged 15% of folio 28 now. So I gather it's not a stop process anymore for 28 or is it still a little bit of a start-stop depending what fuel's doing?

Speaker #1: There's only Ryanair. Nevertheless, I'll come on to that. Fuel—look, fuel prices are going to be very volatile for the next, I think, right up to the November midterms.

Speaker #5: If you could give any color in terms of maybe the 28 view on hedging. And then another potentially contentious topic, but Michael, have you changed your views on Wi-Fi on board and Starlink given another low-cost airline was decided to put it on board and I guess the way they've looked at things from an economic perspective?

Speaker #1: We are going to—my view is we'll dip in and out. We thought, when it got down, fuel rates got down to $85 a barrel.

Speaker #1: It was a sensible place to start. We hoped we would see it drift further down below $80 a barrel, obviously. No great surprise the ceasefire broke down, and forward rates into FY28 this morning are above about $91, $92 a barrel.

Speaker #5: Thanks.

Speaker #1: So I think we would expect us to be opportunistic, dip in and out. I don't expect into FY28 we'll be able to get down to $67 a barrel, which is where we are this year.

Speaker #1: Jared, we could be here for a very long time. Agreeing or discussing whether fucking Waze is a low-cost airline. There aren't any other low-cost airlines in Europe.

Speaker #1: But we'll be opportunistic. I'm going to ask Tom Fowler, our Director of Fuel and Sustainability, to give you some of his views on that.

Speaker #1: There's only Ryanair. Nevertheless, I'll come on to that. Fuel, look, fuel price are going to be very volatile for the next I think right up to the November midterms.

Speaker #1: And then just Wi-Fi onboard, Jared. Again, we believe Wi-Fi onboard will be a significant benefit for consumers, but only when it's free.

Speaker #1: We are going to my view is we'll dip in and out. We thought when it got down, fall rates got down to 85 dollars a barrel.

Speaker #1: It was a sensible place to start. We hope we would see it drift further down below 80 dollars a barrel. But obviously, to no great surprise, the ceasefire broke down.

Speaker #1: And we are—the current technology militates against it being free. You have to kind of put—there's a 1 or 2% fuel drag. It comes as no surprise to us that someone like Wizz would be offering free Wi-Fi on board.

Speaker #1: And fall rates into FY28 this morning are about 91, 92 dollars a barrel. So I think we would expect us to be opportunistic dip in and out.

Speaker #1: It'll just be another loss-making. And by the way, part of the deal is they've given away all the revenue to the supplier of the Wi-Fi.

Speaker #1: I don't expect it to FY28 we'll be able to get down to 67 dollars a barrel, which is where we are this year. But we'll be opportunistic.

Speaker #1: So it's just another stupid PR kind of stunt by them, but people—drowning people—going down on the fucking Titanic were still playing violin as well.

Speaker #1: I'm going to ask Tom Fowler just to give you a director of fuel and sustainability give you some his view on that. And then just Wi-Fi on board, Jared, again, we believe Wi-Fi on board will be a significant benefit for consumers, but only when it's free.

Speaker #1: I wouldn't—we would not be rushing to copy anything Whizz do. In fact, we'd probably do exactly the opposite. We do think the Starlink system is very good.

Speaker #1: I would also think the Vodafone system—there are a number of very good systems out there. But I would wait until the technology can fit the area, either in the nose cone, the baggage hold, or the forward galley, or the rear galley, or something, where there is a fuel penalty. Then I think we will be honest, and we will be keeping the revenue, or the revenue opportunity, that will arise from Wi-Fi. And there will be revenue opportunities even when it's free.

Speaker #1: And we are the current technology militates against it being free. You have to kind of put there's a 1 or 2% fuel drag. It comes as no surprise to us that someone like Waze would be offering free Wi-Fi on board.

Speaker #1: It'll just be another loss-making. And by the way, and part of the deal is they've given away all the revenue to the supplier of the Wi-Fi.

Speaker #1: So it's just another stupid PR kind of stunt by them. But people in drowning people going down on the fucking Titanic were still playing violin as well.

Speaker #1: But would we be copying some of our competitors who can't shoot or walk straight and chew gum? No. Thomas, fuel—give us a view on your general outlook and…

Speaker #1: I wouldn't we would not be rushing to copy anything Waze do. In fact, we'd probably do exactly the opposite. We do think Starlink system is very good.

Speaker #3: Yeah, look, I tend to agree with Michael. I think we'll be more opportunistic in the hedging, Jared—like, we'll go in when we think the price makes sense.

Speaker #3: Like when we see talk of a ceasefire, I think it is going to be volatile over the next few months. There's going to be a deal or there's not going to be a deal, and we just will be ready to go in and do the hedging as we see fit, as we did in the last few weeks by doing 15% of each quarter for FY28.

Speaker #1: I would also think the Vodafone system there are a number of very good systems out there. But I would wait until the technology they can fit the area either in the nose cone, the baggage hold, or the forward galley, or the rear galley, or something where there is the fuel penalty, then I think we will be honest and we will be keeping the revenue that will or the revenue opportunity that will arise from Wi-Fi and there will be revenue opportunities even when it's free.

Speaker #3: So, I think that's the way we're going to manage it for the next couple of months, until we see some normality in the oil market.

Speaker #3: It's just a very volatile market at the moment.

Speaker #1: Okay. Tracy, do you want to add anything to that?

Speaker #4: No, probably the only other thing is to say we have hedged some of the OPEC forward to cover ourselves as well. So we've about 18% of FY28 OPEC hedged as well at $120.

Speaker #1: But would we be copying some of our competitors who can't shoot or walk straight and chew gum? No. Thomas, fuel, give us a view on your general outlook and.

Speaker #1: Okay. Thanks, Jared. Thanks, Tracy. Next question, please.

Speaker #3: Yeah, look, I tend to agree with Michael. I think we'll be more opportunistic in the hedging. Jared, like we'll go in when we think the price makes sense.

Speaker #2: Our next question comes from Maneeba Khayani from Bank of America. Your line is now open.

Speaker #1: Maneeba, hi.

Speaker #4: Yes, I wanted to ask firstly about jet fuel supply. I think Neil was on TV saying that there's no shortage, but given the re-escalation in the conflict, how are you thinking about jet fuel supply, and are there any learnings from the last couple of months here on that?

Speaker #3: Like when we see talks of ceasefire, I think it is going to be volatile over the next few months because there are going to be a dealers are not going to be a deal and we just we'll be ready to go in and do the hedging as we see fit as we did in the last few weeks by doing 15% of each quarter for FY28.

Speaker #3: So I think that's the way we're going to manage it for the next couple of months that we see some normality in the oil market.

Speaker #4: And then, just wanted to go back on your comments earlier, Michael, around bookings. Could you give us a sense of what portion of August and September is booked right now, to understand the visibility on your guidance of this modest decline year-on-year on fares for the second quarter?

Speaker #3: It's just a very volatile market at the moment, so.

Speaker #1: Okay. Tracy, you want to add anything on that?

Speaker #4: No, probably the only other thing is to say we have hedged some of the upex or to cover ourselves as well. So we've about 18% of FY28 upex hedged as well at 120.

Speaker #4: And into the second half, why are you expecting pricing and price stimulation if airlines start cutting capacity? Wouldn't that be good from a pricing perspective?

Speaker #1: Okay. Thanks, Jared. Thanks, Tracy. Next question, please.

Speaker #2: Our next question comes from Muneeba Khayani from Bank of America. Your line's now open.

Speaker #1: Muneeba, hi.

Speaker #4: Thank you.

Speaker #4: Yes. I wanted to ask firstly around jet fuel supply. I think Neil was on TV saying that there's no shortage, but given the re-escalation in the conflict, how are you thinking around jet fuel supply and any learnings from the last couple of months here on that?

Speaker #1: Thanks, Maneeba. I’m going to hand the first section to Tom Fowler, and then I was dealing with the bookings. Tom, jet fuel supply—do we think there’s any issues?

Speaker #3: No, look, we haven't seen any issues today. I think, as Neil would have said this morning, we have good visibility now out to the end of August in most locations, and in some other countries out to the end of the year.

Speaker #4: And then just wanted to go back on your comments earlier, Michael, around bookings. Could you give us a sense of what portion of August and September is booked right now to understand the visibility on your guidance of this modest decline year on year on fares for the second quarter?

Speaker #3: And I think that supply situation, okay, what's escalated for supply, starts to fall off towards the end of September. Our demand starts to fall off towards the end of September as we go into the winter program.

Speaker #3: So we'd be hopeful to see reserves fill back up, provided it doesn't escalate any further in the Middle East. But at the moment, we don't see any issues, Maneeba, coming our way in most locations.

Speaker #4: And into the second half, why are you expecting pricing to decline and price stimulation if airlines start cutting capacity? Wouldn't that be good from a pricing perspective?

Speaker #3: Our usual pockets of stuff we see that hasn't impacted anyone.

Speaker #1: And if you remember, Maneeba, on the previous conference call, remember the vast majority of Europe’s jet fuel doesn’t come through the Gulf. That supplies Asia—it supplies the Asian markets.

Speaker #4: Thank you.

Speaker #1: Thanks, Muneeba. I'm going to hand over the first section to Tom Fowler and then we'll deal with the bookings. Tom, jet fuel supply, do we think there's any issues?

Speaker #1: All of Europe's jet fuel is coming from the Americas, West Africa, and Norway—and even Russian imports as well. So, we've seen no disruption to supplies.

Speaker #3: No, look, we haven't seen any issues today. I think as Neil would have said this morning, like we have good visibility now out into the end of August in most locations and in some of our countries out to the end of the year.

Speaker #1: Bookings—look, for August, today we're at about 75% already, or 75% of our final number is already in the system. For September, we're running at about 40%.

Speaker #3: And I think that supply situation, okay, was escalated for supply starts to fall off towards the end of September. Our demand starts to fall off towards the end of September as we get into the winter program.

Speaker #1: And I expect fares will continue to decline, but there will be upside. That's because we haven't yet seen what competitors are going to take out of the system into the second half of the year.

Speaker #3: So we'd be hopeful to see reserves fill back up, providing it doesn't escalate any further in the Middle East. But at the moment, we don't see any issues with neither coming our way in most locations.

Speaker #1: If spot oil remains up at around $130 a barrel, they're going to be taking out significantly more. So, I think it is unrealistic not to expect, at this point in time, if everybody maintains the capacity they're maintaining—and we will be growing our capacity by 2% in the second half of the year—I think pricing will fall.

Speaker #3: Our usual pockets of stuff we see that hasn't impacted anyone.

Speaker #1: And if you remember, Muneeba, the previous conference call, remember the vast majority of Europe's jet fuel doesn't come through the Gulf. That supplies Asian it supplies the Asian markets.

Speaker #1: All of Europe's jet fuel is coming from the Americas, West Africa, and Norway. And even Russian imports as well. So we've seen no disruption on supplies.

Speaker #1: With the one caveat that we have, Easter comes into Q4, and the Q4 prior year comps are weak. So that will give us a kicker there anyway.

Speaker #1: Bookings, look, August today, we're at about 75% already or 75% of our final number is already in the system. September, we're only about 40%.

Speaker #1: But I think there could well be meaningful upgrades on that kind of pricing outlook, depending on how much capacity is taken out of the system.

Speaker #1: Depending on if an airBaltic or a Wizz Air fail going into this winter, they would clearly be very significant alternatives. As I—we've given you the examples there.

Speaker #1: And I expect fares will continue to decline, but there will be upside. That's because we haven't yet seen what competitors are going to take out of the system into the second half of the year.

Speaker #1: England, for example, is already talking now about a 6% capacity reduction. Some of that is long-haul, some is short-haul, going into the winter.

Speaker #1: If spot oil remains up at around 130 dollars a barrel, they're going to be taking out significantly more. So I think it is unrealistic not to expect at this point in time, if everybody maintains the capacity they're maintaining and we will be growing our capacity by 2% in the second half of the year, I think pricing will fall.

Speaker #1: So, it's too early to give you any definitive outlook, Maneeba, for winter pricing, except I think we should expect it to be down low to mid-single digits with prospects as.

Speaker #1: Longer term, that pricing will move back towards flat, or maybe even up a little bit—certainly if you get a boost from Eastern Q4. But there's too much uncertainty over capacity.

Speaker #1: With the one caveat that we have Easter comes into Q4, which we give and the Q4 prior year comps are weak. So that'll give us a kicker there anyway.

Speaker #1: Next question, please.

Speaker #1: But I think there could well be meaningful upgrades on that kind of pricing outlook depending on how much capacity is taken out of the system.

Speaker #2: Our next question is from Connor Dwyer at Citi. Your line is now open. Please go ahead.

Speaker #1: All right.

Speaker #5: Hey, Michael. First question is just around a bit more medium term. Just thinking about growth this year is at 4%, and obviously fares are a touch soft.

Speaker #1: Depending on if an Air Baltic or a Wizz Air fail going into this winter, they would clearly be very significant alternatives. And we've given you the example there.

Speaker #5: So far this year, I guess the concern for investors, coming back and thinking about €14 per passenger net profit, is that it needs pricing strength.

Speaker #1: Lingus, for example, already talking now about a 6% capacity reduction. Some of that is long haul, some is short haul going into the winter.

Speaker #5: But obviously, you're going to hit about 6% to 7% by the end of the decade. And I'm kind of thinking about what gives you the confidence that fares can be strong into that, while that growth is accelerating.

Speaker #1: So it's too early to give you any definitive outlook, Muneeba, for winter pricing. Except I think we should expect it to be down low to mid single digits with the prospect that as capacity comes out, if oil prices remain higher for longer, that pricing will move back towards flat or maybe even up a little bit, certainly if you get a boost from Eastern Q4.

Speaker #5: And then, second question is primarily for Neil, just around, obviously, the staffing costs were quite strong in the quarter just gone. And that was somewhat helped by potentially more planes in the fleet.

Speaker #5: But one of the features of the last few years has been elevated carrying ratios. And I'm just wondering how much more there is to go on that over the next few years, in terms of that coming down, given obviously disruption costs are doing quite well.

Speaker #1: But there's too much uncertainty over capacity. Next question, please.

Speaker #2: Our next question is from Connor Dwyer from Citi. Your line's now open. Please go ahead.

Speaker #5: It feels like the overall system is somewhat better set up for flying, so thank you very much.

Speaker #1: All right.

Speaker #5: Hey, Michael. First question is just around a bit more medium-term just thinking about growth this year is at 4% and obviously fares are a touch soft.

Speaker #1: Thanks, Connor. I'll take the first half. Look, medium term, I don't see any change in our outlook. And in fact, what drives that medium-term outlook is every time our competitors produce a set of half-year or quarterly numbers and their unit costs are up 8%, 10%, 12%.

Speaker #5: So far in the year. And I guess the concern for investors stepping back and thinking about 14-year-old per passenger, net profit is that it needs pricing strength.

Speaker #5: But obviously your growth is going to hit about 6% to 7% by the end of the decade. And I'm kind of thinking about what gives you the confidence that fares can be strong into that while that growth is accelerating.

Speaker #1: And this is ex-fuel. They can't control their costs. Their costs are escalating wildly, and the cost gap between us—our slide 4—is getting wider and wider.

Speaker #5: And then the second question is primarily for Neil, just around obviously the staff unit costs were quite strong in the quarter just gone. And that was somewhat helped by potentially more planes in the fleet.

Speaker #1: Now, there's only one thing they can do, and that is, A, cut capacity to get airfares up to pay for the higher unit costs.

Speaker #5: But one of the features over the last few years has been elevated carrying ratios. And I'm just wondering how much more is there to go on that over the next few years in terms of that coming down given obviously disruption costs or obviously doing quite well.

Speaker #1: Or, B, materially take a lot of capacity out or go bust—which I think is inevitable in the case of a couple of our competitors.

Speaker #1: And then you have the consolidation play itself out. If somebody comes over the hill and pays £5.5 billion sterling for easyJet, they're going to want a return on that, and they're going to take, I think, much more structural action on it.

Speaker #5: It feels like the overall system is somewhat better set up for flying. So thank you very much.

Speaker #1: Thanks, Connor. I'll take the first. Look, medium-term, I don't see any change in our outlook. And in fact, what drives that medium-term outlook is every time our competitors produce a set of half-year or quarterly numbers and their unit costs are up 8%, 10%, 12%.

Speaker #1: And, like, what you can't do with easyJet is move it out of Gatwick, or move it out of Charles de Gaulle, or move it out of Schiphol, to where?

Speaker #1: Like Stansted—full, loot, and full. So, it is inevitable, to my mind, you're going to see very significant capacity constraints imposed on the likes of an easyJet going forward.

Speaker #1: And this is X fuel. They can't control their costs. Their costs are escalating wildly. And the gap cost gap between us, our slide four is getting wider and wider.

Speaker #1: I think they will. If you look at the two candidates looking at easyJet, they're both experienced in the aircraft leasing market. I think they would see certain—and there's no doubt—the easyJet order book and the easyJet fleet is an attractive asset.

Speaker #1: Now, there's only one thing they can do in that is A, cut capacity to get airfares up to pay for the air higher unit costs, or B, materially take a lot of capacity out or go bust, which I think is inevitable in a case of a couple of our competitors.

Speaker #1: But that asset will get monetized. And so I think what's going to happen is, the biggest upside on our side is not that consolidation will take place in Europe in the next four or five years, which it will.

Speaker #1: And then you have the consolidation place itself out. If somebody comes over the hill and pays 5.5 billion sterling for easyJet, they're going to want to return on that and they're going to take I think much more sort of dramatic action or structural action on and what you can't do with easyJet is move it out of Gatwick or move it out of Charles de Gaulle or move it out of Schiphol too.

Speaker #1: It is that our competitors are struggling with unit costs, and the only way, therefore, they can manage those unit costs is to pass it on in the form of higher airfares. We are much better at managing unit costs, but our fares will trend upwards, behind price competitors.

Speaker #1: And therefore, I think that gets us over the medium term. Take this year as one of those aberrations: there's a war in the Middle East, from the White House, oil spot prices are all over the place, and there's a bit of consumer hesitancy.

Speaker #1: Where? Like Stansted full, Luton full. So it is inevitable to my mind you're going to see very significant capacity constraints imposed on the likes of an easyJet going forward.

Speaker #1: That will dissipate, the Middle East will get resolved, people will go back to some degree of normality, and we will accept and we will take another 5 or 10 points of market share off everybody else in the middle of all that.

Speaker #1: I think they will if you look at the two candidates looking at easyJet, they're both experienced in the aircraft leasing market. I think they would see and there's no doubt the easyJet order book and the easyJet fleet is an attractive asset.

Speaker #1: And then add to that, if something happens to an airBaltic or a Wizz, or the people who can't shoot straight, it'll be nothing but upside in terms of capacity restriction and better pricing in Europe.

Speaker #1: But that asset will get monetized. And so I think what's going to happen is the biggest upside on our is not that consolidation will take place in Europe in the next four or five years, which it will.

Speaker #1: Neil, do you want to take on the cost question or the staff cost question? Connor Rees?

Speaker #1: It is that our competitors are struggling with unit costs. And the only way therefore they can manage those unit costs is to pass it on the form of higher airfares, we are much better managing unit costs, but our fares will trend upwards behind price increases by our competitors.

Speaker #6: Yes, sir. Connor, good morning. Firstly, as you rightly said, we were carrying too many staff last summer as a result of being left over 25 aircraft.

Speaker #6: So we're getting better productivity this year from those staff. We've got the full complement of the MAX A200s in the fleet. We have front-loaded some of the pay in the CLAs this year.

Speaker #1: And therefore, I think that gets us over the medium term. Take this year as one of those aberrations, as a war in the Middle East, Trump in the White House, oil spot oil prices are low over the place and there's a bit of consumer hesitancy.

Speaker #6: So there'll be slower growth into next year. Importantly, with the MAX 10 starting to come, that will obviously drive even more productivity, with 20% more passengers on board.

Speaker #1: That will dissipate the Middle East will get resolved. People will go back to some degree of normality. And we will accept that we'll have taken another 5 or 10 points of market share off everybody else in the middle of all of that.

Speaker #6: But in the near term, as we flagged some time ago, we'll continue to take in high levels of debt and apprentice engineers. We've spooled up for when peak delivery starts to come along.

Speaker #1: And then add to that, if there's something happens to an Air Baltic or a Wizz or the people who can't shoot straight, it'll be nothing but upside in terms of capacity restriction and better pricing in Europe.

Speaker #6: We'll be self-sufficient for first officers and captains, but I don't expect anything much beyond that. So, we'll be slightly elevated on the crewing ratios.

Speaker #1: Neil, you want to take on the cost question or the staff cost question, Connor?

Speaker #6: ATC continues to be a problem, so you wouldn't want to cut back too severely heading forward. But I think staff costs are relatively under control, and the productivity from the MAX 10 is going to have a big impact.

Speaker #4: Yeah, sure. Connor, good morning. Firstly, as you're rightly said, we were carrying too many staff last summer as a result of being left short 25 aircraft.

Speaker #4: So we're getting better productivity this year from those staff. Now that we've got the full complement of the max A200s in the fleet. We have front loaders some of the pay in the CLAs this year.

Speaker #1: Okay, thanks. Thanks, Connor. Next question, please.

Speaker #2: Our next question comes from Dudley Shanley from Goodbuddy. Your line is now open. Please proceed.

Speaker #4: So there'll be slower into next year. Importantly, with the max 10 starting to come, that will obviously drive even more productivity with 20% more passengers on board.

Speaker #5: Good morning, Michael. Just a couple of questions. First of all, on airport deals, I'm just wondering, in the current environment where you're talking about capacity being cut in the winter, whether you're starting to see any airports come to you with better deals, or is it just too early for that?

Speaker #4: But in the near term, as we flag some time ago, we'll continue to take in high levels of cadets and apprentice engineers so that we've spooled up for when peak delivery starts to come along.

Speaker #5: And then the second question, just to follow up on Connor's question: are you still as confident that you can reach the €12 to €14 net income per passenger range over the medium term?

Speaker #4: We'll be self-sufficient for first officers and captains. But I don't expect anything much beyond that. So we'll be slightly elevated on the crewing ratios.

Speaker #5: Thanks.

Speaker #1: Okay, I've got maybe an ask for Eddie to deal with the airport deals. Are they getting better? Well, obviously, without naming names, but in general terms, what's happening?

Speaker #4: ATC continues to be a problem. So you wouldn't want to cut back too severely heading forward. But I think staff costs are relatively under control and the productivity from the max 10 is going to have a big impact.

Speaker #7: Yeah. Like Dudley, I don't think you need to have to wait until the wintertime. I mean, because we've seen a sort of a marked change over particularly over the last number of months where a lot of airports are getting very nervous about some of their anchor tenants as to what's going to happen and they can see little prospects they can see little prospects for growth.

Speaker #1: Okay. Thanks, Neil. Thanks, Connor. Next question, please.

Speaker #7: And when things happen like when we make announcements like the closure of Berlin or the five aircraft that are going to come out this winter out of Charleroi because taxes are going up, you can see you can see airports that the board lights up here for the commercial department with others saying, well, we can take those.

Speaker #2: Our next question comes from Dudley Shanley from Goodbody. Your line's now open. Please proceed.

Speaker #5: Good morning.

Speaker #1: Dudley, hi.

Speaker #5: Just a couple of questions. First of all, on airport deals, I'm just wondering in the current environment where you're talking about capacity being caught in the winter, whether you're starting to see any airports come to you with better deals or is it just too early for that?

Speaker #7: We can do an improvement on the deal that we have, all volume related. And you can see things happening that we haven't seen for a long time, where Dublin Airport costs are actually going back this year.

Speaker #5: And then the second question, just to follow up on Connor's question, are you still as confident that you can reach the 12 to 14 euros net income per passenger range over the medium term?

Speaker #7: You can see in Spain where there's growing momentum, particularly at regional airports where there's nobody coming to save those airports. And those airports that are nimble and know that they have to attract traffic don't just do these are always back onto us about improving deals, continuously especially when you see those when they see those aircraft when they see aircraft coming up free from other bases.

Speaker #5: Thanks.

Speaker #1: Okay. I've got maybe an ask Eddie to deal with it. The airport deals, are they getting better? Well, obviously, without naming names, but in general terms, what's happening?

Speaker #3: Yeah. Like Dudley, I don't think you even have to wait until the wintertime. I mean, because we've seen a sort of a marked change over, particularly over the last number of months where a lot of airports are getting very nervous about some of their anchor tenants as to what's going to happen and they can see little prospects.

Speaker #3: They can see little prospects for growth. And when things happen like when we make announcements like the closure of Berlin or the five aircraft that are going to come out this winter out of Charleroi because taxes are going up, you can see you can see airports that the board lights up here for the commercial department with others saying, well, we can take those.

Speaker #7: So, it's a different place to be, where airports are competing that aggressively. I haven't seen this in a number of years.

Speaker #1: I mean, Johnny, just on this—there’s a number of the easyJet airports that have been onto us recently.

Speaker #7: Yeah. I mean, you have places that are overexposed there, where you've got, say, Luton, you've got airports—particularly if you look at this sort of in a macro level, like easyJet have been gradually retreating from southern Italy up into northern Italy. And understandably, a lot of the airports there are wondering: when are they going to go back over the Alps or not, or are they going to stay there in some of those key airports?

Speaker #3: We can do an improvement on the deal that we have. All volume related. And you can see things happening that we haven't seen for a long time where Dublin airport costs are actually going back this year.

Speaker #3: You can see in Spain where there's growing momentum, particularly at regional airports where there's nobody coming to save those airports. And those airports that are nimble and know that they have to attract traffic don't just do these are always back onto us about improving deals continuously, especially when you see those when they see those aircraft when they see aircraft coming up free from other bases.

Speaker #7: But also, you see as well with Wizz as well, where a number of airports are, where they see themselves being overexposed and that there's uncertainty. And you have Ryanair that's got the 300 aircraft every coming—they just have to do it on our terms.

Speaker #1: I'll give you one example. In the month of June, Vienna—where we reduced our capacity by some 10% in the last two years due to high costs and a mad €12 or €14 aviation tax in Austria.

Speaker #3: So it's a different place to be where airports are competing that aggressively. I haven't seen this in a number of years.

Speaker #1: That €12 aviation tax rate is less than €140 million for the Austrian government. Meanwhile, over the border in Slovakia, the government has eliminated the aviation tax, cut ATC fees by 50%, and Bratislava, the capital city airport in Slovakia, has introduced very imaginative growth incentive schemes.

Speaker #1: I mean, Jordan, just hold on. There's a number of the easyJet airports that have been onto us recently.

Speaker #3: Yeah. I mean, like you have places that are overexposed there where you've got, say, Luton you've got airports, particularly if you look at this sort of in a macro level, like easyJet have been gradually retreating from southern Italy up into northern Italy and understandably a lot of the airports there are wondering when are they going to go back over the Alps or not, or are they going to stay there in some of those key airports.

Speaker #1: In the month of June, Vienna's traffic fell by 6%. Bratislava's traffic was up over 120% year on year—huge growth at low cost. And we are moving, switching aircraft around.

Speaker #1: We've taken away from Berlin. This year, for example, we'd originally planned to grow traffic in Dublin by 10%. We abandoned that plan. We moved three aircraft out of Dublin.

Speaker #3: But also you see as well with Wizz as well where a number of airports are where they see themselves being overexposed and that there's uncertainty.

Speaker #1: Our traffic this year is flat-ish. I think it is in Dublin. But because Dublin put fees up by 10%—because they're a regulated monopoly in good.

Speaker #3: And you have Ryanair that's got the 300 aircraft delivery coming. They just have to do it on our terms.

Speaker #1: If the IAA draft proposal, which is to cut Dublin Airport fees by 15% in December '27, goes ahead, we will charge in there with another 2 million seats.

Speaker #1: I'll give you one example. In the month of June, Vienna, where we reduced our capacity by some 10% in the last two years, due to high cost and this AMAD 14 or 12 euro aviation tax in Austria, that 12 euro aviation tax raises less than 140 million euros for the Austrian government.

Speaker #1: That would be 10% growth delivered just by Ryanair. This is in an airport that has a capacity cap. But while Aer Lingus are talking about reducing capacity by 6%, we'd be charging there next year with 2 million more seats.

Speaker #1: So, delivery—very dramatic growth. So, don't underestimate the extent to which we can churn those aircraft, where a number of our competitors are stuck at fortress airports like Gatwick or Charles de Gaulle.

Speaker #1: Meanwhile, over the border in Slovakia, the government has eliminated the aviation tax, cut ATC fees by 50%, and Bratislava, the capital city airport in Slovakia, has introduced very imaginative growth incentive schemes.

Speaker #1: They can't because if they did, they'd lose the slots. They can't move aircraft out of those. Whereas most of our airports, we don't have slots, so we don't need to worry about them.

Speaker #1: In the month of June, Vienna's traffic fell by 6%. Bratislava's traffic was up over 120% year on year. Huge growth at low cost. And we are moving, switching aircraft around.

Speaker #1: We up and churn all over the place. The idea is to encourage—and that's not to penalize high-cost airports—but it's to encourage those other airports who want to grow aggressively.

Speaker #1: If you've taken away from Berlin, this year, for example, we'd originally planned to grow traffic in Dublin by 10%. We abandoned that plan. We moved three aircraft out of Dublin.

Speaker #1: To be aggressive with growth incentives. And towards the second part, which is getting the 12 to 14. Look, I've given you my view in relation to the second half or answering Connor's question.

Speaker #1: Dublin, our traffic this year is flat-ish. I think it is in Dublin. But because Dublin put fees up by 10% because there are regulated monopoly in good.

Speaker #1: I'm going to ask Tracy maybe to give you a more independent or rational view of how things might actually develop over the next five years. Tracy, do you think we'll get to 12 or 14 euros profit per passenger?

Speaker #1: If the IAA is proposals draft proposal, which is to cut Dublin airport fees by 15% in the summer of '27, we will charge in there with another 2 million seats.

Speaker #3: Yeah, I think if you look at last year, of course, we were just under 11, and a lot of this has come down to the deals we've secured on cost.

Speaker #1: That would be 10% growth delivered just by Ryanair. And this is in an airport that has a fucking capacity cap. But while Air Lingus are talking about reducing capacity by 6%, we'd be charging in there next year with 2 million more seats.

Speaker #3: Eddie just spoke about the airport deals that are available out there. We're ready to open our engine shops in 2029, which again will give us a cost advantage.

Speaker #3: And we've got the deal with CSM. Cost advantage is a max of 10. So we'll have 20% more seats, so again, 20% upsell on ancillaries—revenue opportunities.

Speaker #1: So delivery very dramatic growth. So don't underestimate the extent to which we can churn those aircraft where a number of our competitors are stuck at Fortress airports like Gatwick or Charles de Gaulle.

Speaker #3: No real incremental cost. We'll have the fuel benefit of the Max-10 order—20% more fuel efficiency. And it's how we finance them aircraft.

Speaker #1: They can't because they lose the slots. They can't kind of move aircraft out of those. Whereas most of our airports, we don't have slots not to worry about them.

Speaker #3: So probably finance them out of cash or take low-cost opportunities to finance them if we get them. And CLA deals that are ongoing at the moment have improved productivity on growing.

Speaker #1: We chop and churn all over the place. To encourage and that's not the kind of penalized high-cost airports, but it's to encourage those other airports who want to grow aggressively.

Speaker #3: And I think that all the steps are in place to actually get us there. So, I think it's a cost story, a cost advantage story, as well as the opportunities we'll get with capacity coming out of the market.

Speaker #1: To be aggressive with growth incentives. And towards the second part, which is getting to 12 to 14. Look, I've given you my view in relation to second half or answering Connor's question.

Speaker #1: Yeah. And remember, we're competing across Europe mainly with legacy airlines whose unit costs are four or five times higher than ours. You have the likes of Wizz, for example, doing more sale and leaseback of their fleet, which is the only profit that they recognize in their P&L.

Speaker #1: I'm going to ask Tracy maybe to give you a more independent or rational view of how actually develop over the next five years. Tracy, do you think we'll get to 12 or 14 euros profit per passenger?

Speaker #4: Yeah. I think if you look at last year, I suppose we were just under 11. And a lot of this has come down to the deals we've secured on cost.

Speaker #1: But that means they have much more expensive aircraft and ownership costs going forward for the next number of years, if they survive that long. And then I think if easyJet are the subject of M&A, the financing cost of that M&A will be passed on to easyJet.

Speaker #4: Eddie's just spoke about the airport deals that are available out there. We're ready to open our engine shops in 2029, which again will give us cost advantage.

Speaker #4: And we've that deal with CFM. Cost advantage of the max 10. So we'll have 20% more seats. So again, 20% upsell on ancillaries, revenue opportunities with no real incremental cost.

Speaker #1: They will have to get airfares up. And our strategy, or our kind of contention, the last year of profit movement—€12 to €14 to €15 a passenger—is that most of it will take place on the yield/pricing line.

Speaker #4: We'll have the fuel benefit of the max 10 order 20% more fuel efficient. And it's how we finance them aircraft. So probably finance them out of cash or take low-cost opportunities to finance them if we get them.

Speaker #1: And I would still be confident that would be the case. But as Tracy identified, there’s also significant and widening cost advantages on the cost line as well.

Speaker #1: Next question, please. Thanks, Johnny.

Speaker #4: And CLA deals that are ongoing at the moment improve productivity on growing. And I think that's all the steps are in place to actually get us there.

Speaker #2: Our next question comes from Ruari Kalanen from LBC. Your line's now open. Please proceed.

Speaker #1: Ruari, how are you?

Speaker #7: Yeah, good morning. First question on ancillaries. It's been quite flat on a revenue per passenger basis for a few quarters now. Are you seeing less take-up for some of your ancillary products?

Speaker #4: So I think it's a cost story cost advantage story as well as the opportunities we'll get with capacity coming out of the market.

Speaker #1: Yeah. And remember, we're competing across Europe, mainly with legacy airlines whose unit costs are four and five times higher than ours. You have the likes of Wiz, for example, doing more sale and lease back of their fleet, which is the only profit that they recognize in their P&L.

Speaker #7: And then secondly, on fare trends, have there been any notable areas of weakness across markets in H1? Thank you.

Speaker #1: But that means they have much more expensive aircraft and ownership costs going forward for the next number of years if they survive that long.

Speaker #1: Okay. Maybe I'll do ancillaries. Tracy, do you want to take it? And Eddie, maybe do the fare trend.

Speaker #3: Yeah, so ancillary, pretty much as we said, was flat in this quarter, but some of that is the Easter impact. We saw significant growth in the same quarter last year.

Speaker #1: And then I think if of M&A, there's no doubt in my mind that the financing cost of that M&A will be passed on to easyJet.

Speaker #3: We were up 3% to 2,308. We're still on track to see ancillaries grow about 1% to 2% for the remainder of the year and continue to do what we said.

Speaker #1: They will have to get airfares up. And our strategy or our kind of contention the last year of profit movement 12 towards 14 to 15 euros per passenger is that most of it will take place on the yield pricing line.

Speaker #3: It's about growing the total revenue now, at the moment, and starting to price between bag seats and bags. So it's optimizing the price dynamically across all the products that we're in control of.

Speaker #1: And I would still be confident that would be the case. But as Tracy identified, there's also significant and widening cost advantage or advantages on the cost line as well.

Speaker #1: Thanks, Tracy. Eddie, on fare trends—obviously, we're not naming anything in particular.

Speaker #7: Yeah. I mean, the only—I mean, if you look at it, I mean, it is a general story of, I suppose, what's happening in the Gulf at the moment.

Speaker #1: Next question, please. Thanks, Jordan.

Speaker #2: Our next question comes from Rueri Kalanain from LBC. Your line's now open. Please proceed.

Speaker #7: The consumer sort of sentiment and mapped up in uncertainty which we saw earlier in the sort of in the booking season, which was around fuel supply concerns.

Speaker #1: Rueri, how are you?

Speaker #3: Yeah. Good morning. Yeah. First question on ancillaries. It's been quite flat-ish on a revenue per passenger basis for a few quarters. Now are you seeing less take-up from some of your ancillary products?

Speaker #7: And then we could see the whole uncertainty, as there's a war going on, and the World Cup, and that. But there's no real callouts, except obviously you'll have places that you've got a lot more capacity going into, which would be into Central and Eastern Europe, and to a lesser extent into the UK, where some of that may be driven by capacity.

Speaker #3: And then secondly, on fare trends, have there been any sort of notable areas of weakness across markets in H1? Thank you.

Speaker #1: Okay. Maybe I'll do ancillaries. Tracy, you want to take it and Eddie maybe do the fare trends.

Speaker #4: Yeah. So ancillary pretty much as we said, so flat in this quarter, but some of that is the Easter impact. So we've seen significant growth in the same quarter last year.

Speaker #7: But there's no real call-outs on a geographic basis.

Speaker #4: We were up 3% to 2308. We're still on track to see ancillaries grow about 1 to 2% for the remainder of the year. And continue to do what we said.

Speaker #1: Kate, thanks. Eddie, next question, please.

Speaker #2: Our next question comes from Andrew Lobenberg from Barclays. The line is now open. Please proceed.

Speaker #4: It's about growing the total revenue now at the moment and starting to price between bag seats and bags. So it's optimizing the price and dynamically across all their products that we're in control of.

Speaker #1: Andrew, hi.

Speaker #4: Hi, I'm on. Thanks. Classic call, this one. Can you tell us what's going on with the EU ownership stake? And I think the ADR premium's been rising of late.

Speaker #1: Thanks, Tracy. Eddie, fare trends obviously we're not naming particular.

Speaker #4: So, is there anything to say on the ownership and control situation? And there's another short civil question. You mentioned that the RCF is mostly undrawn.

Speaker #3: Yeah. I know. I mean, the only I mean, if you look at it, I mean, it is a general story of, I suppose, the what's happening in the gulf at the moment and consumer sort of sentiment and mapped up in uncertainty, which we saw earlier in the sort of in the booking season, which was around fuel supply concerns and then we could see the whole uncertainty as to there's a war going on and then World Cup and that.

Speaker #4: Which suggests it is a little bit undrawn. But given that you've got pots and pots of money, why have you needed to draw it at all?

Speaker #4: Thanks.

Speaker #1: Okay, thanks, Andrew. I'm going to ask Julius to maybe take the ADR question—EU ownership and ADR—and give you the update. Then maybe, Neil, I'll go back to you.

Speaker #1: Why is the RCF mostly undrawn in the middle of the summer?

Speaker #5: Hi, Andrew. So our EU ownership, last reported, is 30%. The next report, which will be as at the end of September, will be given in November with the H1 results.

Speaker #3: But there's no real callouts except obviously you'll have places that you've got a lot more capacity going into, which would be into Central and Eastern Europe and to a lesser extent into the UK.

Speaker #5: We have seen Europeans buying ADRs over the last few months, and this is a new development, quite welcome. That could be behind the rising premium.

Speaker #3: Where some of that may be driven by capacity. But there's no real callouts on a geographic basis.

Speaker #1: Okay. Thanks, Eddie. Next question, please.

Speaker #1: Okay. Anything else on ownership and control? No?

Speaker #2: Our next question comes from Andrew Lobbenberg from Barclays. Your line's now open. Please proceed.

Speaker #5: Not much. I mean, there will be a revision of the law in Europe that deals with ownership and control rules, which is due to start later this year.

Speaker #1: Andrew, hi.

Speaker #5: Hi. Michael thanks. Classic call this one. Can you tell us what's going on with the EU ownership stake? And I think the ADR premium's been rising of late.

Speaker #5: And it will take about two years to go through the EU Parliament and the Council. It is still expected that EU261, that ownership and control, will be dealt with in that revision.

Speaker #5: So is there anything to say on the ownership and control situation? And then just another short, simple question. You mentioned that the RCF is mostly undrawn.

Speaker #5: So, some changes will be proposed to modernize the rules and make them more suitable for the capital markets as we know them today.

Speaker #5: Which suggested it is a little bit undrawn. But given that you've got pots and pots of money, why do you need to draw it at all?

Speaker #5: European money may well be managed by someone in the United States or the United Kingdom, and vice versa. But we just have to wait and see what comes out of the European Commission.

Speaker #5: Thanks.

Speaker #1: Okay. Thanks, Andrew. I'm going to ask Julius maybe take the ADR question. EU ownership and ADR give you the update and then. Maybe Neil, I'll go back to you.

Speaker #5: And then, when it goes through the Parliament and the Council, as we've seen with EU261, anything might happen. So we just watch that closely and keep pushing for a more sensible set of rules than we have today.

Speaker #1: Why is the RCF mostly undrawn in the middle of the summer?

Speaker #6: Hi, Andrew. So our EU ownership last reported is 30% next report will be as that at the end of September will give that in November with the H1 results.

Speaker #1: Kate, thanks. Juliusz. Neil, the RCF—why is it undrawn?

Speaker #7: Yeah. Andrew, good morning. Yeah, we have about 40 million undrawn under the or sorry, drawn under the RCF. We have a big pool of banks and we like to let them leave a little bit of money on the table just to feel involved.

Speaker #6: We have seen Europeans buying ADRs over the last few months. And this is a new development quite welcome. And that could be behind the rising premium.

Speaker #7: No other reason that we could have paid it off; we decided to leave that sliver there for the banks.

Speaker #1: Okay. Any else on ownership and control? No?

Speaker #6: Not much. I mean, there will be a revision of the law in Europe that deals with ownership and control rules that is due to start later this year.

Speaker #1: Well, and I would add to that, we do expect that as we move into the September–December quarter, we will draw down on the RCF.

Speaker #1: Now, certainly we won't need all of it. But bear in mind, we think the kind of comfort base we should have in terms of cash on the balance sheet is around $4 billion.

Speaker #6: And it will take about two years to go through the EU Parliament and the Council. It is still expected that EU261 that ownership and control will be dealt with in that revision.

Speaker #1: As of today, we have gross cash ourselves of about €2.7, €2.8 billion. The RCF, if we were to draw it all down, would take us up to €3.8 billion.

Speaker #6: So that some changes will be proposed to modernize the rules to make them more suitable to the capital markets as we know them today.

Speaker #1: But there's no point. We don't need the cash during the bumper summer period when cash flow is strong. But once you get towards September, the inbound cash is the winter bookings, but you still have a rump of the summer payments.

Speaker #6: Where European money may well be managed by someone in the United States or the United Kingdom and the other way around. But we just have to wait and see what comes out of the European Commission.

Speaker #1: We owe cash negative in the September and December quarter. We will draw down the RCF. I would not want us to go down to, kind of, €2 billion or below €2 billion gross cash and then have something untoward happen.

Speaker #6: And then when it goes to the Parliament and the Council, as we've seen with EU261, anything might happen. So we just watch that closely and keep pushing for more sensible set of rules that we have today.

Speaker #1: This is a capital-intensive, technical business that is subject to extreme shocks, such as war in the Middle East. Oh, oil prices go mad and bookings weaken.

Speaker #1: Okay. Thanks, Julius. Neil, the RCF, why is it undrawn?

Speaker #7: Yeah. Andrew, good morning. Yeah, we were about 40 million undrawn under the or sorry, drawn under the RCF. We have a big pool of banks and we like to let them leave a little bit of money on the table just to feel involved.

Speaker #1: Putin invades Ukraine. COVID, da da da da. So it is a sensible strategy, I think, to have a reasonably sizable RCF there in place. As we've said, in terms of our funding objectives for the next 12 months, it is to fund the max-10 PDF capex out of internally generated cash flow.

Speaker #7: No other reason that we could have paid it off. We decided just to leave that sliver. Therefore the banks and.

Speaker #1: Fund the engine shops. Fund the balance of the share buybacks. Fund another share of dividend coming in September. And then rebuild gross cash back up towards about $4 billion a year.

Speaker #1: Add to that. We do expect we will as we move into the September, December quarter, we will draw down on the RCF. Now, no.

Speaker #1: Certainly we won't need all of it. But bear in mind, we think the kind of comfort base we should be in terms of cash on the balance sheet is around 4 billion.

Speaker #1: That will take us at least another year or so, but with our discipline, with the RCF, it's brought down during the winter period when you go cash negative, pay it back as you get into the summer period when we're cash flow positive.

Speaker #1: As of today, we have gross cash ourselves about 2.7, 2.8. The RCF would take us if we were to draw it all, that would take us up to 3.8.

Speaker #1: But there's no point we don't need the cash during the bumper summer period when cash flow is strong. But once you get towards September and your the cash, the inbound cash is the winter bookings, but you still have a rump of the summer payments.

Speaker #1: Next question, please.

Speaker #2: Our next question comes from Mark Zeck from Le Chevreux. Your line is now open. Please go ahead.

Speaker #1: Okay.

Speaker #6: Thank you for taking my questions. I've got two, if I may. And just maybe some quick shop talk on the ETS—do you mind sharing what percentage of revenues or passengers is now newly affected by the 5,000 km radius from Frankfurt that wasn’t before?

Speaker #1: We go cash negative in the September and December quarter. We will draw down the RCF. I would not want us to go down to kind of 2 billion or below 2 billion gross cash and then have something on toward happen.

Speaker #6: Second question would be on the recent heat waves. The directness was unusual due to Iran. But do you feel the extended heat period has also weighed maybe somewhat on yields?

Speaker #1: This is a capital-intensive signal business that is subject to extreme shocks such as war in the Middle East. Oh, oil price could go mad and bookings weaken.

Speaker #1: Putin invades Ukraine. COVID, da da da da da. So it is a sensible strategy. I think to have a reasonably sizable RCF there in place.

Speaker #6: So you needed to stimulate? And what would you expect your impact from, let's say, more often, more heat, or heat waves in the future?

Speaker #1: As we've said in terms of our funding objectives for the next 12 months is to fund the max 10 PDR capex out of internally generated cash flow.

Speaker #6: Say the UK becomes a beach destination. Yeah, what's the impact on your operation? Thank you.

Speaker #1: You can do the first one, and I invite Neil or Trade to come in. I mean, look, the extension of the ETS would now mean we'd be charging ETS on traffic that implemented this way.

Speaker #1: Fund the engine shops. Fund the balance of the share buybacks. Fund another share of dividend coming in September. And then rebuild gross cash back up towards about 4 billion a year.

Speaker #1: We'd be charging ETS on EU traffic to Albania and Morocco. We have very little or almost nothing going to Turkey, apart from where there's some charter bus, charter, or stuff.

Speaker #1: That will take us at least another year and so but when our discipline with the RCF is draw it down during the winter period when you go cash negative, pay it back as you get into the summer period when we're cash flow positive.

Speaker #1: But the tour operation will be paying that, so it would have minor impacts on us. The fundamental impact on us and all the rest of European aviation is Europe has this MAD system where we're taxing the shit out of European citizens starting within Europe.

Speaker #1: Next question, please.

Speaker #2: Our next question comes from Mark Zeck from Kepler Chevreux. Your line's now open. Please go ahead.

Speaker #1: Then exempting all the Americans, Gulf, and Asians arriving in Europe and leaving Europe, despite the fact they generate more than 50% of European aviation CO2 emissions.

Speaker #1: Okay.

Speaker #3: Good morning. Thank you for taking my questions. I've got two if I may. And just maybe just short one on the ETS. Do you mind sharing what percentage of kind of revenues of passengers is now newly affected by the 5,000-kilometer radius from Frankfurt and wasn't before?

Speaker #1: It is a mad, discriminatory, indefensible system. And the Europeans should grow some vertebrae and either have a fair system that taxes everybody arriving in or leaving Europe, or stop taxing the Europeans altogether.

Speaker #3: The second question, would be on the recent heat waves. And I recognize that the quarter was unusual due to Iran. But do you feel the extended heat period has also weighted maybe somewhat on maybe yields?

Speaker #1: But expecting von der Leyen to come up with anything that would improve the competition to European aviation is a—we’d be around for a long time.

Speaker #1: She's useless. And there would be nothing to drag you, report gatherers, even further in Europe. There's been no reform on ATC. There's been no reform on ETS.

Speaker #3: So you need to stimulate. And what would you expect your impact from, let's say, more often, more heat or heat waves in the future?

Speaker #1: And because Europe continues to be a hopelessly uncompetitive market, despite the fact that air travel is one of the few areas where Europe wipes the floor with the Americans.

Speaker #3: Say UK becomes a beach destination. What's yeah. What's the impact on your operations? Thank you.

Speaker #1: They're ahead of us in AI. They're ahead of us in energy security areas. We wipe the floor with America when it comes to air travel.

Speaker #1: Okay. I do. The first one, and I invite Neil or Tracy to come in. I mean, look, the extension of the ETS would now mean we'd be charging ETS on if it is implemented this way, we'd be charging ETS on EU traffic to Albania, Morocco.

Speaker #1: And yet Europe keeps inventing new regulations to make us either less competitive with ETS, or make us look less competitive with the new MAD advertising regulations.

Speaker #1: Has the heat wave had any impact on us? Not really. As someone who put his wife and children onto flights to Portugal yesterday, despite a prolonged heat wave here in Ireland, the Europeans are all still going to the beaches of Portugal, Spain, Italy, Greece, etc.

Speaker #1: We have very little or almost nothing going to Turkey apart where there's some charge buzz charge or stuff. But the tour operators will be paying that.

Speaker #1: So it would have minor impacts on us. The fundamental impact on us and all the rest of European aviation is Europe has this mad system where we're taxing the shit out of European citizens traveling within Europe.

Speaker #1: I don't see that changing. You hear occasional stuff that the French and all the others are going to come and keep coming to Ireland to get away from it. No sign of it.

Speaker #1: And then exempting all the Americans, Gulf, Asians, arriving in Europe, leaving Europe despite the fact they generate more than 50% of European aviation CO2 emissions.

Speaker #1: I don't think—look, one summer is not going to make any huge difference. I don't think that it makes any significant impact at all.

Speaker #1: It is a mad discriminatory indefensible system. And the Europeans should grow some vertebrae. And either have a fair system, the taxes, everybody arriving in or leaving Europe or stop taxing the Europeans altogether.

Speaker #1: It allows newspapers to fill up rubbish during the quiet, during this kind of—when the parliaments are all closed. They'll all start writing shite.

Speaker #1: And I'm sure Sky and all the others will be doing features, daily features now, on global climate change and all the rest, most of which will be nonsense.

Speaker #1: But expecting von der Leyen to come up with anything that would improve the competitiveness of European aviation is a we'd be around for a long time.

Speaker #1: But no, we don't see any change in travel patterns. On the heat wave, travel patterns?

Speaker #3: No. No, I haven't. We haven't. We haven't seen anything. I mean, obviously, things like the World Cup and that—I think you will see some, you'll see a bump, all right.

Speaker #1: She's useless. And there would be nothing as the Draghi report gathers even further dust in Europe. There's been no reform on ATC. There's been no reform on ETS.

Speaker #3: I've seen that in previous tournaments as well, Portugal. I don't think there's any systemic change in booking patterns.

Speaker #1: And we could Europe continues to be a hopelessly uncompetitive market despite the fact that air travel is one of the few areas where Europe wipes the floor with the Americans.

Speaker #1: And Julius, Lee, are the Poles going to stay at home during the summer or keep heading for the beach in Bulgaria, Greece, and God knows where else?

Speaker #1: They're ahead of us on AI. They're ahead of us in energy security areas. We wipe the floor with America when it comes to air travel.

Speaker #4: Keep going to Denmark.

Speaker #1: Okay, thanks, Mark. Next question, please.

Speaker #1: And yet Europe keeps inventing new regulations to make us either less competitive with ETS or make us look less competitive with the new mad advertising regulations.

Speaker #2: Our final question comes from Axel Stasi from Morgan Stanley. Your line is now open. Please proceed.

Speaker #1: Axel, hi.

Speaker #7: Hey, thanks for taking my question too. On my side, please, could you maybe just reiterate how much we should look at for CapEx for '28 and '29, considering the maintenance shop and the delivery of the Boeings?

Speaker #1: As the heat wave had any impact on us, not really. As someone who put his wife and children onto flights to Portugal. Yesterday, despite a prolonged heat wave here in Ireland, the Europeans are all still going to the beaches of Portugal, Spain, Italy, Greece, et cetera.

Speaker #7: And second question. On the buyback, beyond the €750 million that's almost done, I'm conscious you said you wanted to focus on aircraft capex, dividends, and the €4 billion gross cash level.

Speaker #1: I don't see that changing. You hear occasional stuff that the French and all the others are going to come and keep coming to Ireland to get away from it.

Speaker #7: But what kind of gearing should we look at to understand leeway here on the potential buyback? Is it 0.5 times, 1 time, just to have an understanding?

Speaker #1: No sign of it. I don't think look. One summer is not going to make any huge difference. I don't see that it makes any significant impact at all.

Speaker #7: Thank you.

Speaker #1: Okay, thanks, Axel. Neil, you want to take the capex, and I'll do the buyback.

Speaker #1: It allows newspapers to fill up rubbish during the quiet during this kind of when the parliaments are all closed. They'll all start writing shite.

Speaker #7: Yeah, sure. No problem. Good morning, Axel. Capex for the current year, FY27, is unchanged from what we'd previously guided—somewhere close to $2 billion. If I look into the next year, we're probably somewhere in a range of $2.7 billion to $3 billion.

Speaker #1: And I'm sure Sky and all the others will be doing features, daily features now on global climate change and all the rest. But most of which will be nonsense.

Speaker #1: But no, we don't see any change in travel patterns. Any heat wave travel patterns?

Speaker #7: And I wouldn't go beyond that in any kind of guide at this stage.

Speaker #3: No. No, I haven't. We haven't seen anything. I mean, obviously, things like the World Cup and that, I think you will see some you'll see a bump all right.

Speaker #1: Thanks, Neil. On buybacks, Axel, look, we've been quite upfront. We've said there won't be a buyback this year. We'll finish the buyback probably around the time of the AGM in September.

Speaker #3: I've seen that in previous tournaments as well. I don't think there's any systemic change in booking patterns.

Speaker #1: The AGM will get approval to continue buybacks. But we will not look at another buyback, I'd say, until the spring of 2027. We do go cash negative in the September and December quarters this year.

Speaker #1: And Julius Lee, the polls are going to stay at home during the summer or keep heading for the beaches of Bulgaria, Greece, and God knows where else?

Speaker #1: We've already paid back a bond of €1.2 billion. We'll have funded dividends of €400 million this year, and we'll have completed the €750 million buyback.

Speaker #4: Keep going to Denmark.

Speaker #1: Okay. Thanks, Mark. Next question, please.

Speaker #2: Our final question comes from Axel Stasi from Morgan Stanley. Your line's now open. Please proceed.

Speaker #1: So, shareholders have done well this year. They'll just have to wait. I think we will look at it again once we get a better handle on what the capex looks like through the middle of 2027.

Speaker #1: Go ahead.

Speaker #5: Hey. Thanks for taking my question too. On my side, please. Could you maybe just retweet how much we should look at capex for 28 and 29 considering the maintenance shop and the delivery of the Boeings?

Speaker #1: And that is when we'll be into the heavy engine shop capex. Then I think we will reassess. I would be—I think we will continue to do buybacks.

Speaker #5: And second question, on the buyback beyond the 750 million almost done, conscious you said you wanted to focus on aircraft capex, DVs, and the 4 billion gross cash level.

Speaker #1: There just won't be another, there won't be a follow-on order, or there won't be a follow-on on this in 2026, when we complete the 750.

Speaker #1: You'll have to wait, I think, until either March or the full-year results next year in May. And then we'll have a more definitive position.

Speaker #5: But what kind of gearing should we look at to understand the leeway here on the potential buyback? Is it 0.5 times, 1 times, just to have an understanding?

Speaker #7: Can I just add to that, Michael, just on the specific gearing question? Look, we keep it very simple. We're going to build a cash back up towards €4 billion.

Speaker #5: Thank you.

Speaker #1: Okay. Thanks, Axel. Neil, you want to take the capex and I'll do the buyback.

Speaker #7: Then, to the extent there is surplus cash, that'll likely go back to the shareholders. Whether we take on debt or not will principally be driven by the cost of that debt.

Speaker #5: Yeah, sure. No problem. Good morning, Axel. Capex, current year, FY27, unchanged from what we'd previously guided. So somewhere close to 2 billion. If I look into the next year, we're probably somewhere in a range of 2.7 billion to 3 billion.

Speaker #7: And we don't have any targets one way or another as to whether it's 2, 3, 4, 5, or 6 times gearing on the balance sheet.

Speaker #7: We'll keep it very simple.

Speaker #5: And I wouldn't go beyond that in any kind of guidance at this stage.

Speaker #1: And opportunistic. Okay, thanks, Axel. Ladies and gentlemen, thank you very much for participating in the conference call. Again, I think I wouldn't get too upset over the weaker near-term outlook—it is what it is.

Speaker #1: Thanks, Neil. On buybacks, Axel, look, we've been quite upfront. We've said there won't be another buyback this year. We'll finish the buyback probably around the time of the AGM in September.

Speaker #1: There’s a war in the Middle East. We see there’s a period of opportunity. We are aggressively churning airports. There are a number of airports out there that are very concerned by the financial challenges faced by some of their incumbent carriers.

Speaker #1: The AGM will get approval to continue buybacks. But we will not look at another buyback, I'd say, until the spring of 2027. We do go cash negative in the September and December quarter this year.

Speaker #1: And are doing more of it to deal with us. There is a lot of upside in the system over the next year or two.

Speaker #1: We've already paid back a bond of 1.2 billion. We'll have funded dividends of 400 million this year. And we'll have completed the 750 million buyback.

Speaker #1: Things like the Dublin Airport cap being lifted, the IAA bringing in price reductions here at Dublin. We think pricing will be a little bit weaker than we had originally hoped this year.

Speaker #1: So shareholders have done well this year. They'll just have to wait I think we will look at it again once we get a better handle on what the capex looks like through the middle of 2027.

Speaker #1: Fine, if it is, it is. We think the pricing will recover strongly in '27 and '28 onwards, because the underlying fundamentals is our competitors' unit costs are rising.

Speaker #1: And that is when we'll be into the heavy engine shop capex. Then I think we will reassess. I would be I think we will continue to do buybacks.

Speaker #1: Rapidly. And they have no choice but to either constrain capacity or leave certain markets where they're unable to compete with us if they're going to get their airfares up.

Speaker #1: There just won't be another there won't be a follow-on on or there won't be a follow on one this in 2026 when we complete the 750.

Speaker #1: And in the meantime, what we'll have to do then is manage nonsensical or idiotic EU regulation, where they'll continue to invent new regulations that make air travel in Europe either less competitive, or make it look like it's less competitive. But Ryanair will continue to find its way around those regulations and continue to take significant market share from our competitors.

Speaker #1: You'll have to wait, I think, until either March or the full year results next year in May. And then we'll have a more definitive position.

Speaker #5: Can I just add to that, Michael, just on the specific gearing question? Look, we keep it very simple. We're going to build a cash backup towards 4 billion.

Speaker #5: Then to the extent the surplus cash, that'll likely go back to the shareholders. Whether we take debt on or not will principally be driven by the cost of that debt.

Speaker #1: As we move into a winter period, we expect a number of failures among those competitors. Okay, we're not obviously Q1 results. We don't do a roadshow.

Speaker #1: Neil is—we have investors in London. I think he's going to Switzerland tomorrow to try and drum up some more European interest. And if anybody wants to do a follow-up meeting or come to Dublin and see us at any stage over the next couple of weeks, our head of IR will be happy to set something up.

Speaker #5: And we don't have any targets one way or another as to whether it's 2, 3, 4, 5, or 6 times gearing on the balance sheet.

Speaker #5: We'll keep it very simple.

Speaker #1: And opportunistic. Okay. Thanks, Axel. Ladies and gentlemen, thank you very much for participating in the conference call. Again, I think I wouldn't get too upset over the weaker the weak near-term outlook.

Speaker #1: Thank you very much, everybody. I look forward to seeing you in the afternoon, in the future. Have a good remainder of the summer. Enjoy yourselves.

Speaker #1: It is what it is. There's a war in the Middle East. We see this as a period of opportunity. We are. Aggressively churning airports.

Speaker #1: God bless. Bye-bye.

Speaker #1: There are a number of airports who are very concerned out there by the financial challenges faced by some of their incumbent carriers. And are doing more aggressive deals with us.

Speaker #1: There is a lot of upside in the system over the next year or two. Things like the Dublin Airport capping lifted, the IAA bringing in price reductions here at Dublin.

Speaker #1: We pricing will be a little bit weaker than we had originally hoped this year. Fine, if it is, it is. We think the pricing will recover strongly in '27, '28 onwards because the underlying fundamentals is our competitors' unit costs are rising.

Speaker #1: Rapidly. And they have no choice but to either to constrain capacity or leave certain markets where they're unable to compete with us if they're going to get their airfares up.

Speaker #1: And in the meantime, well, we'll have to do then is manage nonsensical or idiotic EU regulation where they'll continue to invent new regulations that make air travel in Europe either less competitive or make it look like it's less competitive but Ryanair will continue to find its way around those regulations and continue to take significant market share from our competitors.

Speaker #1: As we move into a winter period where we expect a number of failures among those competitors. Okay. We're not obviously Q1 results. We don't do a roadshow.

Speaker #1: Neil is meeting some investors in London. I think he's going to Switzerland tomorrow to try and throw up some more European interest. And if anybody wants to do a follow-up meeting or come to Dublin and see us at any stage over the next couple of weeks, please feel free Jamie, who's head of our IR, will be happy to set something up.

Speaker #1: Thank you very much, everybody. We look forward to seeing you now too in the future. Have a good the remainder of the summer. Enjoy yourselves.