Good day, and welcome to the Q1 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Michael O'Leary, CEO. Please go ahead, sir.

Okay. Thank you very much. Good afternoon, everybody. As you have seen this morning, we announced the Q1 profits we previously guided fell 21% as traffic grew 3% to 23.2 million. Average fares fell 4% during the quarter, principally due to Easter falling outside of the quarter and the impact of the June French ATC strikes. The revenue for passenger growth rose 1%, primarily due to strong ancillary growth. As we've previously guided, higher fuel costs and the timing of Easter led to Q1 profit falling EUR 21 million to EUR 78 million. Ancillary revenues grew strongly by 25% to EUR 357 million, principally due to the continued growth of reserve seating, priority boarding and higher admin credit card fees. Unit costs rose 4%, in line with the increase in sector length, fuel increased 6% to 47% of total operating costs. Excluding fuel, Q1 costs rose by 6%, slightly faster than sector length due to a 2% rise in flight crew pay on the 1st of April, and the increased Eurocontrol, Spanish airport and Italian ATC charges. And we're well-hedged for FY '14 at $98 -- at probably $98 per barrel, and 70% hedged for H1 FY '15 at $93 a barrel. We've also recently extended our H1 currency hedges on dollar weakness to deliver a 3% cut in our fuel cost per passenger for the 70% already hedged into H1 FY '15. New -- 7 new bases this summer: Eindhoven; Maastricht; Krakow; Zadar; Chania; Marrakesh; and Fez, performing well. We're currently working on plans to announce more new routes and new bases later this year as we continue to exploit significant growth opportunities in markets where competitors, including Air Berlin, Alitalia, Iberia, LOT and SAS, are cutting back. With ongoing negotiations with Maastricht Airport Group, who are the new…

Yes, I think I'll just go ahead and [indiscernible] through the summary, Michael. The detail is attached to the release we've made. Profit after-tax decreased by 21% to EUR 78.1 million compared to EUR 98.9 million in the quarter ended June 30, 2012, primarily due to a 4% reduction in average fare and an 8% increase in total operating expenses, offset by strong ancillary revenues. Total operating revenues increased by 5% to EUR 1.342 billion, primarily due to strong ancillary revenues, which grew by 25%, significantly faster than the 3% increase in passenger numbers to EUR 356.5 million, offset by a 4% reduction in average fare. Total revenue per passenger, as a result, increased by 1%, whilst load factor remained flat at 82% compared to the quarter ended June 30, 2012. Total operating expenses increased by 8% to EUR 1.238 billion due to an increase in fuel prices, a higher level of activity and operating costs associated with growth of the airline. Fuel, which now represents 47% of total operating costs in both the current and comparison period, increased by 6% to EUR 576 million due to the higher price per gallon paid and the increased activity in the period. Unit costs, excluding fuel, increased by 6%, wherever including fuel, unit costs only rose by 4%, the same stage length increase. Operating margin increased by 2% to 8%, whilst operating profit decreased by 22% to EUR 103.3 million. Net margin, as a result, was down 2 points to 6% compared to June 30, 2012. Basic earnings per share for the period were down 21% to EUR 5.42 compared to basic earnings of EUR 6.86 cents in the previous period. The balance sheet then. Gross cash increased by EUR 33.7 million since the end of March to EUR 3.592 billion and gross debt fell by EUR 97 million to EUR 3.401 billion. The group generated cash from operating activities of EUR 535 million, which funded net capital expenditure of EUR 237.3 million, a share buyback as Michael mentioned, of EUR 177 million, and debt repayments during the period. Other results. The group had a stronger net cash position, which amounted to EUR 191.2 million at the end of the period. With that, I'll hand you back to Michael.

Okay. Thanks, Howard. Okay, we'll now open up for questions and answers, please.

[Operator Instructions] We will now take our first question from Stephen Furlong of Davy Research.

I just like -- just, can you go to just a bit on the cost side and particularly airport costs? I know they're up in the quarter, but I think that spaced out as a constant [ph] as we go later on in the year, maybe talk about the Spanish airport costs. And then just about airports in general. I know you mentioned about maybe your ongoing negotiations with MAG and Stansted. Maybe if you just talk a bit about that. And also, I mean, Dublin isn't mentioned here so I'm assuming that's kind of down the pecking order in terms of opportunities? That would be great.

Okay. What's to add is, to be honest, what we've -- what's in the MD&A on airport cost. As you know, we and the other airlines have been persistently complaining about the crazy idea of the Spanish government to keep hiking airport fees. They're trying to dress up Aena for a privatization. That's destroyed traffic across many of the Spanish airports. Whereas total air passengers at Spanish Aena airports have fallen from 220 million to under 180 million over the past 5 years, plus -- and never underestimate the ability of governments to destroy an economy. And in a country where there's 50% youth unemployment, then they should be stimulating tourism, and they're taxing it. And in terms of negotiations, I mean, again, the flavor we tried to communicate at the full year and then at the investor day was we're a plague here, I can -- we can barely get into the office for crawling over the bodies of airport management here on a daily basis, in here, worried about their incumbent airlines causing traffic, taking up more routes, and will we grow there, will we add more aircraft and more capacity. We ourselves have the discipline for the remainder of this outcome until September of 2014, as we don't have any more aircraft additions. And therefore, it's hard for us to allocate more capacity to new airports unless we churn from airports at the bottom of our pile. As that process continues, but we won't have any developments down and I think until about September, when we start to finalize the end or the -- finalize the winter schedule, and also update on how the discussions with Stansted have gone. And the discussions with Dublin, unfortunately, have pretty much ended. We made them a proposal, they came back…

Yes, Michael, if I might add to that, one of the things we've seen in Q1 was that the Italian air traffic control charges had been front-loaded because -- that's because the increase happened in July of last year. So once we -- once that becomes annualized in Q2, the rate of increase in past -- in airport charges will start to slow down as we go through the remainder of the year. So quarter 1 is slightly distorted by the fact that the comparison of last year didn't include those quadrupling of air traffic control charges. Obviously, we have those higher unit charges as Michael as well mentioned, which will continue for the remainder of the year.

Our next question comes from Damian Brewer of RBC.

Two questions if I can. I just want to explore the interaction between your fuel costs and your staff costs if possible, please. I have noticed the flow now is up 9%. Obviously, the stage lengths don't seem to be up as much, nor do the amount of sector slowing. So could you explain what's going on there, are the aircraft, flying a little bit slower? Are you changing the way you're flying the aircraft? And what's that doing to your staff costs in terms of the staff hours used, and how would that develop going forward if you continue down that trend? How much of that efficiency have you got in place, and how much more to come? And then the second question, which is ancillary revenue. How much of the change in the ancillary revenue per passenger was from the reserved seating? How developed is that? And again, how much more of that process do you think there is to come once we get through to the second half of this calendar year when you're mapping its introduction?

Damian, I'll take the second one first. We don't break down the ancillary down the quarterly numbers, but I mean, I think we've given you the 3 highlighted areas, which was significant growth in priority boarding, the reserve seating, and also the main credit card fees. I think it's fair to say that we have continued, I guess, to see a drift of business-type passengers switching to us, particularly in those markets where we have decent frequencies, 2 or 3 flights daily. That's an increasing trend, I think, towards people becoming aware of the reserve seating facility. That, and then combine that with the reliability and the punctuality operation which has been phenomenal. Particularly in the last 2 quarters, we're running above 90% punctuality with the success of the 3 days of the French ATC strikes. They're running about -- around 94%. And that are like very low prices. It's a compelling business-type proposition, although we try not to fall over ourselves courting business passengers. You're not going to see us on GDSs. We're not going to be selling to travel agents or any of the other business-type products that just add to cost. But I think there is a -- we have been, I think, I'd say, for about the last 18 months now, pleasantly surprised by the uptake of reserve seating and also by the fact that reserve seating haven't cannibalized priority boarding. It's had some impacts to it, where originally, the concern was that it would simply eliminate all priority boarding. It hasn't. And you'd see us continue to develop that by one, increasing the number of reserve seats. Now it's now up to 8 rows of reserved seats, and also beginning to yield-manage that by using a degree of pricing on some of the longer --…

We'll now take our next question from Neil Glynn of Crédit Suisse. Neil Glynn - Crédit Suisse AG, Research Division: First of all, if I could ask a question with respect to May and June average fares. We'll be interested to know how they developed year-on-year. Then second question on the ancillary side, really leading towards your other costs. So other costs were only up 1% on a per passenger basis in the first quarter. At the same time, those ancillaries were up 21% or so. I know that's obviously a function of priority boarding and reserve seating not having a cost attached. But it leads me to the question in terms of, as you grow your ancillary revenues through in-flight improvements, et cetera, are there further cost savings to be gained, or can you grow that attractively without attaching costs?

Neil, as we're not going to be breaking down the yields by month yields. As you'll see from the results, the average fare fell 4% for the quarter. Most of that was due -- or a significant proportion of that was due to Easter falling outside the quarter, and like frankly, if you want monthly yields, you're on the wrong conference call. On ancillary revenues, I think, yes. A lot of the ancillary revenue comes from -- the growth in the quarter has been driven by -- we've highlighted the 3 significant areas, which was the payment admin fee, the priority boarding and the reserve seating. Obviously, whereas the admin fees do have a cost impact, much of the development on yield management on priority boarding and reserve seating has no commensurate cost increase, and so the margins have widened a little bit on the ancillary revenues. Neil Glynn - Crédit Suisse AG, Research Division: Understood. If I could just follow up with one more for Howard, just on the FX hedging. Howard, would it be possible to confirm exactly what U.S. dollar hedging there is in place at the moment?

Yes, we are fully hedged out to the end of this year. And we have extended our hedging into FY '15 H1. So we say we have 70% of our fuel hedge in H1, we also have 70% of the currency, which enables us to say on a cost per passenger basis, for what we've hedged will fall by 3%. Neil Glynn - Crédit Suisse AG, Research Division: And I trust that's at around 1 31, 1 32?

Yes, any time you see that 1 31, 1 32, yes, we're generally active. That will be a target number for us.

Our next question comes from Tim Marshall of Redburn.

Just a quick question. The second quarter yield guidance seems to be at least 5% compared to last year. Would that have been materially different without the recent weakness you're seeing for the heat wave on bookings, or really, there wouldn't have been a comment on that had it not recently happened?

If not, we don't expect -- sorry, we don't expect the recent close-in weakness to continue through the third -- second quarter. I mean, it's hard, I'd say, what weakness is at heart, I'd come up with a reason for it and has been relatively recent I mean, in closing last year in Q1, bookings in the year were strong. We think a lot of it has to do with the unusual heat wave here in Northern Europe, and where people postponing traveling abroad. We were blessed with rain and heavy ground conditions here last year. A lot of people pissed off and going away on a holiday. So it's not built in to the -- into the Q2. So we don't expect it to recur in the Q2. But, and again, I would temper everything we say with a degree of caution, if it does continue into Q2, then the 5 -- the kind of 5% yield guidance on Q2 may not be achieved. But at this point in time, we don't expect it to. It's started raining again in Ireland and U.K. 10 days ago and by the time we get into Q2, the kids are back in school anyway. So we would expect, based on what we see to date, certainly on the forward bookings, we're comfortable with the Q2, with the full year guidance. But we'll have to wait and see what the close-in bookings look like as we move through July, August and September. I say, put it the other way. If we thought there was a reason to be concerned, we would be taking down the Q2 guidance at this point in time. We don't see any reason to be concerned. But we would keep a weather eye out for yields and what airlines would generally doing about pricing in the next couple of weeks. You just have to watch yourselves, as we will.

I am surprised you haven't taken the guidance down slightly by reducing the fuel cost guidance by EUR 30 million and not changing the net profit guidance. Was there a discussion around that?

No. We -- I mean, I don't mean to be clever, Tim, but the guidance was EUR 670 million to EUR 700 million. The guidance is still 670 -- or EUR 570 million to EUR 600 million. What moves within that, frankly, at the end of Q -- We -- I mean, some of the analysts have been a bit kind of, I think -- feedback this morning, oh, easyJet were much more buoyant, snappy. Yes, easyJet are reporting on the weight of their fourth quarter. It's very easy if we were giving you numbers to the half year now, we'd be quite -- it would be very easy to give them to you. It's a difficulty for us at this time of the year. We're reporting on Q1s, we have good visibility on Q2s, and we haven't a bull's notion what's going to happen for the winter. So I think caution is the proper way to approach Q1 numbers. Don't waste too much time on them, it's much more important what we'll see in Q2. And the only trends we've really noticed in 2Q is we're doing a little bit better on the fuel, [indiscernible] is coming in a little bit lower, our fuel management is working very well, and the yields have been a little bit softer for the close-in stuff through the back end of June into July. No more than that, frankly, in the May to June.

Our next question comes from Andrew Light of Citi.

Just three questions. First of all, your thoughts on the potential -- potentially another aircraft order now that Boeing's gone firm on the specification and is it we're likely to see some kind of acceleration on there. Secondly, have you had a chance to set what might be the impact of these new European Commission-proposed guidelines on airport financing and the ability to provide startup up costs, the new routes and so forth? And thirdly, just a little one. This new aircraft advertising initiative you announced recently, can you put a kind of order of magnitude what that might mean in terms of revenue? For the 4 A303 aircraft for example?

Okay. Let me start with the middle, work my way back. The aircraft advertising initiative, I think it will be relatively small. We don't know how much kind of business it generates. It's an interesting product. It should be attractive to some people, particularly given that we have access to 80 million passengers, all of whom have to board the aircraft by passing the nose, which is where the advertising is, and it's certainly a lot cheaper for advertisers when we were previously pushing the tailfins. But the tailfins made it a very complicated process of painting and repainting with the leading edges of the rudders that have to be taken down and repainted. This is a much simpler panel but it's worth trying it. Again, it's a bit like priority boarding reserved seating, whatever it brings in would largely be straight to the bottom line. I would see how it grows. The EU guys have done airport financing, we think we welcome them. I think there's a bit of a misunderstanding as usual because a lot of these reports said this is the EU getting though on Ryanair's airport deals. And actually the fact is it's actually the opposite. If the EU reflects the new regulation, the findings of the European Court to the trial of our case, which throughout the EU's previous bizarre claims that this was some sort of state aid. What the new guidelines effectively say is that if an airport is operating in accordance with the MEIP, the market economy investor principal i.e. with a view towards making a profit over a 5 or 10-year period, then these guidelines effectively don't apply. If you're not operating on the market investor principal i.e. you could lose money for a number of years as long as you're…

Our next question comes from Edward Stanford of Oriel Securities.

Just 2 questions, please if I may. One is, I think, you touched on -- so you mentioned you're seeing perhaps a heightened level of discounting in the market at the moment. Perhaps you could provide a little bit more color on that, where are you seeing it and who's doing it? And secondly, I hesitate to talk about Aer Lingus, but you've made your comments about putting the stake up for sale if anyone bids for the airline. You appear to rule out bidding for the airline again. And I appreciate that this is going to get bogged down with lawyers for many years. But is there a point at which we should just try [indiscernible] stake?

Let's deal with the color on the weakness. I'm not sure how much color you want other than we know there's been a weakness for about the past 4 or 5 weeks on the remaining close-in bookings, which is usually where there's a degree of pricing strength. We see most of that emerging out of the Irish, U.K. and Scandinavian markets. It's particularly prevalent, we think, in the U.K., although we've also seen a lot of tour operators out there doing holiday deals at the last minute, et cetera, et cetera. easyJet are offering relatively cheap fares closed in with those airports like Gatwick, which are normally held out out as a paragon of high fares and lots of business class passengers. And we're doing the same thing. We have taken, off until about 2 weeks ago, our kind of promotional fare with 22 quid as we now take them down to 19.99 quid. Now we don't sell that promotional fare within 40 days, but again, it's an indication that there's a little bit of weakness there closing, so we'll build up the forward bookings a little bit stronger. As I've said, we are going to see, we've been kind of sacrificing yields to ensure, as is always the case, that we maintain our load factors [ph] and our passenger traffic targets. And the yields, we will always be a price taker, the yield will right itself whenever the yield rights itself. And most of our operation, this joy we have in line here is because we have such a unit cost advantage over every other airline. And that unit cost advantage is getting wider because the unit cost growth in most of our competitor airlines is actually running much faster than it is in Ryanair. A lot is being…

Michael, it's Howard here, on that note, I've got the exit stage left here, I've got to go get a flight. Talk to you soon.

By the way, I should say, the problem with asking that question now is everybody's going to raise, we're obsessed with f****** Aer Lingus yada, yada, yada. We're not.

We will now take our next question from Suzanne Todd of Morgan Stanley.

Michael, if we can just go back there to the 2Q guidance, if you don't mind. In terms of the guidance, we're under 5%, can you just clarify if that is passenger yields you're talking about? And maybe you can give us some color on stability of the ancillary yields? It's clearly very strong in the first quarter as what you're seeing in the second quarter?

It's a bit early yet in the second quarter. And again, I think, specifically, we don't see any changes, no alteration to guidelines. We expect the trend in the yields to be up approximately 5%, and February to continue their recent trend.

Great. And can I just ask on the sector length. You've been previously guiding for a 3% increase in the full year. I understand that might be coming down slightly now. Can you give us an idea of what you expect for the full year and also how it's been in the first half and the second?

No, don't change for [indiscernible] we still haven't finalized the winter schedule, which could be affected by the outcome discussions with MAG, whether there's some Stansted growth. Until we kind of finalize the winter schedule, I wouldn't want -- we shouldn't be making any changes on sector length for the full year.

Okay. Do we keep around 3% sector length and the x fuel unit cost grow in line with that?

Yes.

We will now take our next question from Jarrod Castle of UBS.

Just 2, quickly. One, can you say anything in terms of what you're seeing on the secondhand market, on the ability to sell claims? And secondly, you just gave an update in June about kind of potential funding, but since then, we've seen British Airways do a double ATC fundraising? Is that still something which is high up on the agenda when we're looking to fund the fleet?

Yes. I think, our secondhand market, I mean, we don't actively kind of watch the secondhand market, we're not buying second hand planes. But we haven't seen a lot of people coming towards looking to acquire secondhand aircraft. So we assume the secondhand market continues to be relatively quiet and weak, which has always been the kind of one of the issues we have with the aircraft order. The manufactures were saying that the order books were full to the gills but the secondhand market was weak. And I think it continues to be characterized by weakness but then you're coming in to the second half of the year. And a lot will depend on which other EU or certainly European airlines go bust between now and October and November, and we expect there will be some more close between now and November but I don't expect that there will be anything materially different. Our potential funding, we haven't done much on it at the moment yet, the EETC will be significant indeed. But as with the job post [ph], we're going -- we're doing a bit more marketing currently. Howard came back after the full year results after the week in Asia. I'm going out there with the half year results and to destroy our reputation out there in Asia as well. But I think we're conscious of the fact that certainly in the future, a lot of the funding and the funding available will be emerging from the Asian markets where, remarkably, Ryanair is quite well-known largely because of what every other airline in Asia is out there trying to persuade the investment that they're Asia's answer to the Ryanair.

[Operator Instructions] We will now take our next question from Donal O'Neill of Goodbody.

Two quick ones for me. First of all, can you give us any guideline to the timing of the share buyback, the EUR 230 million, EUR 240 million to be done at some point this year? And the second question, you touched on new bases, what are the new bases you're looking at for the remainder of the year?

Timing of share buyback, I think we can try to continue to be somewhat opportunistic. And as I've said, it's what we've done and I hope what's different about the last share buyback is that there was a blend of ADRs, as well as ordinaries, part of the problem for us though is that our ADRs are relatively tightly held that there isn't a lot of turnover in them. I think what we're going to continue to do is to talk to some of the -- as many of the larger ADR holders we have. And if at some point in time, one or more of them wants to sell a decent flow of ADRs, then that might be the trigger for a second share buyback. We don't have any timing imperative on it. We've given ourselves to the end of the year. And I'm surprised, although we saw yields, we've done EUR 177 million so far. And I think we'll try as best we can to balance it, sort of half ADR, half ordinaries going forward. But really, I think what we try not to do is to -- we don't want to kind of drive the market artificially forward. What we try to do is do call around where there's decent volumes of shares for sale, then I think that incentivizes us to begin another -- to start another buyback program. But there's not much point in us out there being -- buying 100 here or 0.5 million shares there. I think, that's the case, we're just artificially pushing the market forward, I think that's the wrong thing from a shareholder point of view because once you finish, it will come back down again. New bases, we have no comment on new bases. As you know, we are…

Our next question comes from Anand Date of Deutsche Bank.

Just going back to Q2 yields. I was just wondering, how elastic is the full year guidance to current bookings? So if we imagine that the current trends continue, does it take 2 weeks, is it 1 month or was it the whole of Q2 before you feel that you might have to comment on that number?

Honestly, I think that's a question that's nearly impossible to answer. Like how elastic is these 3 [ph]. We're giving you some visibility, some flavor at the moment, we have no reason to change the Q2 yields kind of outlook. Our comments on the yield generally will be a forecast of the yield to guidance. We have no reason to change the full year guidance. We have highlighted there's been weakness in recent weeks on the close-in summer bookings, we think it's a relatively short-term weather phenomenon. There's just no point in getting into it. I think the most compelling thing, if you take it in the -- today's kind of -- in relation to guidance is, we still expect in our Q2 yield numbers, despite the fact that the Q2 in the prior year have that big post-Olympic surge on yield. There's nothing untoward, so let's not waste a lot of time on giving more color on elasticity or anything else. It is what it is, read the numbers.

There are no further questions over the telephone at this time.

Fine. Okay, folks, thank you very much for coming on the call. Obviously, John and the rest of the team were here at Dublin all week. There's no roadshow on the Q1. Howard will be in London today just briefing media and analyst. If anybody has any follow-up questions, please feel free to come through back to us by phone and we'll be happy to take them. And if anybody wants to come visit during the month of August, please do, we're generally all around and we'll see you there. Thanks very much everybody. Bye-bye.

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.