Hello, and welcome to the Ryanair Full Year Results Conference Call. Throughout the call all participants will be in a listen-only mode. Afterwards, there will be a question-and-answer session. And just to remind you, this conference call is being recorded. Today, I'm pleased to present Michael O'Leary, CEO. Please go ahead with your meeting.

Good morning, ladies and gentlemen, you're welcome to the full year results conference call. You'll have all seen this morning we released a result 7 AM together with a Q&A video with myself Neil Sorahan, the Group CFO. So we'll take a look at this way. I'm joined here in Dublin by the full team and pleased to welcome Tracey McCann, here who's also been appointed in recent weeks as the CFO of Ryanair Dac. Tracey, you are welcome and congratulations on the much deserved appointment. Couple of quick thoughts on this. You're seeing today or this morning's numbers, we were heading for terrific full year to the end of March 2020, had March had not been disrupted by the COVID-19, it's likely we would have seen traffic grow to about 154 million passengers. And full year net profits would be towards the upper end of the range somewhere between 1 billion and 1.5. As it was with COVID, as the government mandated groundings of the fleet through from essentially mid-March meant that we carried 149 million passengers or 4% of the previous year, and profits came in at the higher end of the current range a tad over €1 billion. However, what happened last year is obviously now historic, so I won't dwell on it. Couple of things on the COVID situation, just a couple of key thoughts. Clearly we're grounded and expect to be grounded fully through April, May and June. We're guiding that they -- [indiscernible] significant cost savings and cash preservation measures. We think there'll be a Q1 loss somewhere above 200 million, but under 300 million. We are already though have announced that we expect to go back to some level of flying from the 1st of July. We are pushed promoting at the moment…

Thanks, Michael. As you said, relative [indiscernible] last year, I'm not going to dwell too long on this 13% profit after tax before exceptionals and balance sheets in very good shape was 331 unencumbered Boeing 737, with a book value of just over 7 billion in the market value well in excess of that cash. Very strong at 4.1 billion and the work that we've been doing over the past number of months to get the cash burn down as seen us go from 200 million per week all expenses, including CapEx and everything else out the door down to 60 million per week. Currently going out the door on average, a slight clarification on the fuel figure, it's somewhere just under about 25 million a week going out based on the mark-to-market and depending on the spots on an individual day. Hedging effectiveness, because we hedge 90% of our fuel coming into FY'21 pre COVID a big chunk of that has now gone ineffective as we're not going to use that fuel. So we have a exceptional charge of about 390 million on jet fuel offset by currency -- favorable currency, primarily on delayed CapEx aircraft, offsetting that giving a net charge of about 353 million in the FY'20 accounts. There'll be a little bit of volatility on the P&L this year as in mark-to-market those ineffective hedges but that will run off over the next number of months as the hedges settle. And that's pretty much the key things I wanted to highlight Michael.

Okay, great. Thank you very much. And Juliusz, do you want to say anything on state aid before we open it and head off a lot of questions on.

Maybe just a word to add that we have been in touch with the European Commission for two months. We almost feel sorry them facing pressure from capitals, Berlin, Paris, Rome and so on to bend existing rules and allow significant amounts of state aid to flat carrier airlines. So we will be assisting the EU Commission with appeals of those decisions to European court and hoping that the court will accept our requests to deal with this matters in an expedited manner.

Thank you, Juliusz. It's just before we open to questions, any wisdom that [indiscernible] gives a quick couple of thoughts.

Yes. I mean, we've been working over the last number of -- last few months on minimizing the payroll cost with the payroll supports. And now we're starting the discussions with the unions so more realistic than others. And but we have to get ahead of this. We have we announced 250 job losses in our offices in Dublin, Bratislava and Madrid and in Stansted as well, Friday last. And we now get into the sort of formal processes with each of the unions. And we're going to have to deal with this. Some of them are already sticking their heads in the sand, as Michael said, like that. Some of the things is just going to pass and it's all going to be over by July, it's not going to be over and we're probably heading into a very, very deep winter in terms of costs, and we hope that we will. And I suppose use the backgrounds in negotiations that we had in locking away most of the CLAs. We're also working on the airport deals. And some airports haven't come back to us yet, but we are getting real savings there. So and we're working on those where the savings are not up to what we think.

Okay, thank you. Okay, we'll open it up for Q&Q. Can we please everybody, we zip through the questions we have to be gone around 11 o'clock. So, one or one and a half question each. Please don't ask me any questions on both traffic and yield plus P&L for the rest of the year we'll be disbarred because we don't know.

[Operator Instructions] Our first question comes from the line of Daniel Roeska from Bernstein. Please go ahead.

I hope everybody on the call and the families are safe and well. I'll limit myself to one then. I guess in principle, your commitment to buybacks is unchanged. And I'd like to ask under which circumstances you would consider reinstating the buyback program, kind of can that happen while you're still restructuring? And how are you thinking about that next year, if there's a trade off between possibly accelerating growth to capture that medium term opportunity highlighted, and the buyback program on the other side, kind of how you're thinking of capital allocation, if you're faced with that question -- couple of months when we're closer back to normal.

As you've seen, we cancelled the buy back in mid-March, we've done about what 580 million to 700 million buyback, we immediately cancelled the remainder of the buyback. We've already signaled to the market that there wouldn't be a buy back in the next 12 months because our next big issue was -- we have a one point with bond repayments coming up in June 21, whatever 850 million. So that was going to be our next uses of cash. So frankly, the issue of buybacks is off the table -- was off the table before we entered COVID-19. And we would be very determined to pay down debt next year, we still think even with the impact of COVID. We will be able to repay that you don't have 850 million bond in June of next year, assuming some returned to normality this winter and into the summer of 2021, cash flows is very strong. I would also to the second part of your question, always be in favor of accelerating growth and exploiting opportunities to lower costs over share buybacks or distributions to shareholders. Shareholders and I think I'm the fourth largest shareholder in the Group can wait in line while we work our way through what has been an unprecedented event in the industry. And to put in some context, the 911 -- attacks of 911 grounded flying for four days. COVID-19 has grounded flying for four months, so this has been unprecedented. Shareholders understand that that's why I think we've always generally favored fair share buybacks over dividends because we can always pull back ourselves suspend the share buyback program without annoying lot of shareholders. But this is an opportunity in the next year or two and I believe there will be -- we will be working closely with Boeing on the Max delivery. And I think certainly if you look around Europe as many of the other airlines who have announced very substantial aircraft deferrals, capacity, cutbacks, failures of Thomas Cook, Flybe and others. I think there is going to be significant opportunity into the summer of 2021 for Ryanair to grow strongly. In fact, if anything, I would try to accelerate our growth into 2021 because it's just going to be opportunities there with airports. There certainly going to be a huge surplus of available pilots and cabin crew all over Europe. And those pilots and cabin crew will be zero, we will be making redundant and whose jobs will be lost in Ryanair over the next number of months, we would want to at least be able to offer those people the chance of coming back to employment in Ryanair, maybe in the summer of 2020, want to get them back working as quickly as possible they want to come back to work. And it's not true as many other airlines will be offering people any new jobs for the next month or two or next year or two in Europe, Ryanair will.

The next question comes from the line of Savanthi Syth from Raymond James.

Hey, maybe two half questions just on the cash burn. I know, Neil, you mentioned everything. Can I include it in there, I'm guessing, including debt. I was kind of curious what you're seeing in terms of refunds in there. And then just a follow-up on Michael, I know, you mentioned that you were probably going to extend kind of some of the Boeing NG leases. We're kind of curious what the -- why that was given that you probably need less of a fleet at least in the near term and the Max will probably come and flying for next summer.

Neil, you take the cash portion, I will do the aircraft situation.

Great, Savi. As I said the cash burn includes everything from OpEx to debt repayments to critical CapEx, within the business, talking on payroll, software, et cetera. We have about 300 million of refunds included since the start of this financial year that will be a combination of refunds out the door, vouchers and free changes. So that's in the numbers that we have given there in the cash burn.

And on the aircraft, wouldn't we would need all of the fleet of aircraft we have at the moment remember, we expect to carry 150 million passengers probably in the last 12 months. And the growth opportunities that are out there at the moment are -- will be I think, almost once in a lifetime. We will need we're looking at extending those aircrafts are coming off lease but you're talking about lease rates now that are down at 150,000 or 175,000 a month these will be very cheap aircraft, if we decide to extend those leases. We are also looking in new aircraft. And I think, you take -- my view is that sadly the Vienna A320 base would be closed at the end of May. If that happens, I think it's inevitable, we advanced our planning over the next four years to take the Airbus aircraft out of Lauda moving it altogether and we will replace those aircraft as they come off lease with new Max aircraft, which will be much lower cost, more seats, lower cost. And I see nothing but opportunity here for accelerating fleet growth in the next year or two because there's going to be opportunities if you do get -- take a look around the marketplace. Norwegian is clearly going to reemerge as a tiny domestic carrier up in Norway. It has a large presence in Ireland, Spain, Italy, Gatwick that's just gone -- going to be gone. Easy shares have already confirmed that their chair differing huge numbers of aircraft deliveries. And Lufthansa has significantly cut back those to German wings. So and even Alitalia with the benefit of $3 billion of state aid, still cash cover serve the Italian market. So there's going to be opportunities there for an airline, those airlines that have the lowest costs. And I think it's going to be a race for growth in the next couple of years between that really low airlines which there's only one in Europe, Ryanair. And then the airlines who have received mostly billion dollars worth of state aid subsidies. But I think the problem with state subsidies is they all come with chemicals on them that will prevent those airlines from engaging in meaningful labor reform or productivity gains or efficiencies over the next number of years. So if you compare and contrast, what really was to the team in IAG are doing, taking out large numbers of jobs and driving efficiency gains, which is the right way forward, compared to what the subsidy junkies Air France and Lufthansa are doing, they just take billions of state aid, but there'll be no labor reform there be no productivity reform. And so but going forward, we at the lowest cost airline than in Europe, we'll need more aircraft if we are to get our pilots and cabin crew back into jobs and take advantage of these once -- I think obviously, once in a lifetime airport discounts.

The next question comes from the line of Duane Pfennigwerth from Evercore.

Can you talk a little bit, Michael about the sequence of reopening in Europe and your network planning lead times, which countries do you think will be the first to reopen aviation which will be the slower ones to reopen? And how much lead time do you need to relaunch a market including things like crew bidding lead times?

I mean, it's really hard to tell like I mean, I think what we're likely -- we see a lot of European countries over the last week, 10 days reopen in Germany, Austria, the Portuguese has been lifted Switzerland easily at the weekend. And it almost becomes like a domino effect, the Spanish and the Portuguese are looking at the Italian tourist destinations reopening. And the Spanish hotels and Portuguese hotels, Greek hotels, we lose our tourists if we don't do something similar. Also we look across those countries many ways the Italians and the Spanish were the first into the COVID crisis and therefore emerging faster than other countries. I think I would be reasonably optimistic that there will be significant movement in --passenger move in relaxation of citizen restrictions over the next two weeks or something about the middle of June. I think they're largely the Pan European and started Commission is pushing for Schengen wage, we have similar treatment across Schengen. Similar treatments on movement of passengers and it's so hard to come up with to restrict air travel when people can move by train, bus and car across Europe borders anyway. So we are kind of, off the view we announced we were going back on the 1st of July 10 days ago that was based, our predicate on the thought much of the movement restrictions will be eased across Europe early to mid-June. We think we can simulate an awful lot of bookings. But firstly, this huge pent-up demand in there already anyway, for particularly families who want to go on the kind of two week school holiday July, August. We think the business traffic might be a little bit slower to move and probably that's where these two week restrictions really meditate not just…

Just for a quick follow up, Michael. Obviously, the markets been totally focused on COVID. But is there any progress going on behind the scenes on Max return to service? Is there anything recently, from a technical or regulatory perspective that has increased your confidence? Thanks for taking the questions.

We've worked closely with Boeing and where the asset, the European Safety Agency, I think there is a much higher degree of confidence that they that the return to service will, I think take place in August, September of this year. As the information, the feedback we've had for the regulators has been much more positive. Boeing seem to address much as most of the software issues, the return to service issues. And that's not to say that it will be bumpy but I think there's a reasonable. And Boeing themselves I think now we're talking about going back into production. I think sometimes, again, at the end of the second quarter, maybe the early part of third quarter. We know we have about 20, 25 of those aircraft already made and produced and sitting on ramp. We are waiting for delivery to Ryanair. We want to take them and but I am much more hopeful or optimistic now that we will see that Boeing return to service in the third quarter. Certainly that we will have a meaningful number of additional new Boeing Max aircraft in advance of summer of 2021, which is obviously our next design anyway. So I think there's a reasonable prospect that we will see 20 or 30 of those aircraft flying for Ryanair in summer of 2021. And we will urgently need them both to replace Airbus aircraft that we're not taking or that we're not taking delivery of it to create that room for growth in the summer of 2021. When we think Europe will -- [indiscernible] will rebound strongly, as long as there isn't any second wave outbreaks. And, all the evidence in Asia at the moment suggests that there is much of a risk of a second wave outbreak and there will be certain that risk will be further diminish, if we can persuade government to introduce facemasks for people travelling in mass transport, whether that's underground, trains or planes.

Next question comes from the line of Mark Simpson from Goodbody.

Just want to clarify just comments you made, I think you said and I know it's pure guidance at the moment, 50% load factor in Q2, 55% load factor in the winter. Do I hear that correctly?

You didn't know. I think you, I don't want to be stuck on any numbers. And the number we're forecasting for the rest of the year is under 80 million. No, it's too early, we would be hopeful. Again, we would get 50% traffic in the month of July, which is the first month back, a month guiding you into August or September yet. Second half of the year, I think we will be holding, this load factor will be significantly higher than 75%. But the year will be weaker. So I'm not getting into a forecast today. I'm guessing you're getting we don't know. A reasonable number for the full year is going to be under 80 million, which we're looking at a 50% reduction in traffic over this year.

Again, just a follow on though, except the factories abroad, but you're indicating circa £20 million for Q2, 50% load factor, you're flying there for 40 million seats, which is only down 12% year-on-year and saying breakeven, possibly that can only come with much better pricing. So I'm not quite sure where your negative pricing commentary is coming from. Unless these are just throw the darts and put the numbers out there.

We are throwing darts.

Okay. Final question, exceptional restructuring charges, Neil is to come in the quarters coming down the pipeline is to go through right sizing the business.

The exceptional costs are really going to be, if there's any more in effectiveness, I wouldn't anticipate a huge amount of restructuring cost or maybe some redundancies but that's about the height of this. We would anticipate that we're going to see cost reduction on a unit labor basis going forward. Similarly, on the airports and handling charges we would anticipate unit savings coming in over the next 12 months as we negotiate new deals at our airports. And equally, you're going to see unit reductions coming in at the Max starts to deliver. So there won't be hugely significant restructuring costs Mark.

Remember too, I don't want to get into too much optimism as well, because the short-term is bleak. By the time we get to the second half of the year, you have the prior year competencies in March where, we can read only half of our past numbers this year, so that there is an upside in the back end of the year, with some return to normality. But, what I'm trying to kind of urge everybody away from the specifics now on pricing volumes, load factors of the rest of the year, we really don't have any idea. We would hope to have so much better sensitive by the time we get to the Q1 results, which would be the first week in August and then we'll have some sense of where we are. It's impossible to predict at the moment other than, I would be reasonably optimistic is that a lot of the kind of the lockdowns will have eased significantly over the next I'd say reasonably two weeks. By the end of the first week of June, I think you're going to see a lot of the European economy saying, the kids can go back to school, they've already been back in school in Denmark for weeks. Your kids are not the problem. They don't get it. They tend not to be the spreaders of this. But if the kids are allowed back to schools across Europe, retailers allowed to return, I think you're going to see, almost a huge pent-up demand for people who've been locked up at home for in their apartments and houses for the last 12 or 15 weeks going focus. We're heading -- we're going to Spain, Portugal, or wherever it's going to be, and all this non-sense, but vacations, you don't have the capacity in Bognor Regis, our south end of the [indiscernible] to be able to cope with the volumes of people who generally would be going to Spain, Italy, Portugal or elsewhere to get two weeks of sunshine. And the risk of the spread of COVID-19 on a beach in 30 degrees heat in Spain, Italy or Portugal is practically zero. And it would be zero if you're all wearing facemask, which might upset the tan line, but in fact, it isn't going to upset your health.

The next question comes from the line of Stephen Furlong from Davy.

Just questions on Boeing or comments on Boeing. Would you see your negotiations? Do you think the Boeing deal could be an even bigger number of aircraft? Given, we're talking about maybe taking out the Airbus. I'm assuming Airbus aren't at the races. So just let me, just talk about Boeing versus Airbus. And then, by just asking one of the things, we've got some questions, in terms of nothing that has been talked about would impede your ability to turn around the aircraft in 25 minutes. That's great, Michael. Thanks.

Okay. I will work back on that Stephen, 25 minutes or so. We see nothing impacting 25 minute turnarounds. In fact, if we're running at a 50%, 60% load factor through August, June, July, and the load factor might be less than 50%. But if it is, I think you'll see as we go back in mid-June and take out some of those flights that we moved from an empty flight, so we can avoid it. 25 minutes for us will be no problem. The challenge here and you're pushing hard for temperature checks at the entry to the airport terminal, and facemask, nobody would be getting on-board an aircraft without a facemask, certainly in July and August. And those measures are important in building customer confidence. On Boeing pricing. Look so there's an ongoing dialogue with Boeing and I've said this probably before it's a three phase discussion. There's clearly a negotiation, compensation for delivery, there is a negotiation around pricing on our Max order, and there's negotiation we're also talking about a possibility of the Boeing 10 -- an order for the Boeing 10 aircraft. Those negotiations continue, but, they can't be concluded, until we have some certainty when the Max will return to service or when we can get deliveries of our aircraft. And there's all in many respects all three conversations are kind of interlinked. But all I can say is, we are working closely with Boeing, we are very impressed with the new management team in Boeing and what they've done particularly on the return to service project over the last number of months, there's been a lot less blind optimism coming out of Boeing, and there is a much more frank dealing with challenges particularly with both customers and regulators. I think from Boeing…

The next question comes from the line of Jarrod Castle from UBS.

Two questions. One, I think you've got seven planes available for sale. So just interested in terms of, is it realistic that you can sell them in this market in the next 12 months? And then just secondly, just coming back to state aid and the legal action that you're taking? Would you hope to achieve a reversal of the aid that's been given penalties that you and others receive from these airlines or indeed governments, but what would success look like for Ryanair in terms of the legal action?

The seven aircraft per se that you're like all of our presale, so the practical pricing, we don't see a case for price setting now for the next 12 or 18 months. And I would be much happier to operate those aircraft, probably 7 more for sale. We've already sold those aircraft that were forward sold. And but I don't see, we would be selling any more aircraft for the next maybe 12, possibly 18 months because we want. And we'll need those aircraft ourselves. And our deliveries of the seven aircraft we sold are later on in the autumn of this year. So they're from October onwards anyway, which again emphasizes why we will need more aircraft from Boeing just to be able to even to stay in a steady state fleet into the summer 2021. On the state aid side, what we would hope for is to encourage the commission and I was heartened by [indiscernible] Tigers comments this morning where you know, she's seriously concerned that the extent to which the French and the German government, the richer, EU countries are massively distorting state aid. The German government alone accounts for 52% of approved state aid at the moment in Europe. So the richest governments are the ones who were engaging in the most state aid doping and what's ironic of that is, it's usually the Germans and the Dutch telling everybody else to obey comply with the rules, unless it applies to them. And, you're good to seriously distort not just the air transport market, but also many other industrial markets across Europe. If the Germans in a crisis can just allow late level state aid to their operators, whereas, the Spanish, the Irish, the U.K., and the other countries are playing by the rules and not participating in this illegal state aid. Again, you go back. again, the question is, why does Lufthansa need another 12 billion on top of the payroll support scheme, on top of the aviation tax refund schemes? Like really if the German government was interested in the industry, what we're hoping would happen is there will be transparent and non-discriminatory state aid to everybody, like by all means the German, why don't you just refund or waive the environmental taxes on it air travel for the next 12 months, 24 months which the vast majority that would go to Lufthansa. But it could also go equally to other airlines like EasyJet and Ryanair operating in Germany. If the French government want to refund aviation taxes, do it to all airlines equally in France. But don't just do it to the French registered airlines, give them payroll support scheme and then another 9 billion on state aid on top of it, and just because of Air France. Juliusz, if you want to add any more, hope to achieve on state aid, side?

No.

Just to eliminate illegal and discriminatory state aid, by all means, if you want to do something, European governments want to do something, do it on a transparent and non-discriminatory basis. Use your aviation taxes, your payroll support schemes or your environmental taxes on air travel. I mean, let's face it, there's no further morale of Europe. anything between ETS and APD in the U.K., and at least then you're applying the schemes equally to every airline and the first thing, we as airlines, we will pass it on to our customers in the form of lower fares and get the tourism industry unemployment back moving I guess.

The next question comes from the line of James Hollins from Exane.

Neil, just actually on the cash burn. As far as I'm hearing you're doing 60 million a week, of 25 million is fuel ineffective hedging cash going out the door. And then I think you said 300 million financial year to-date it's going to refund [indiscernible] nothing left on other cash burners, I was wondering if you could maybe give more detail on how you got it so low. Just wondering, how would you give Lauda existing in 2021, if they don't, don't sign up the deal this month.

On the cash burn as I said earlier, the 25 million on average related sorts of fuel with various other things going out like debt repayments, salaries and other operating costs on the refunds approximately 300 million settled so far that's a combination of vouchers that have been accepted by customers, cash refunds, and of course free flight changes across the business. So it wasn't all cash out the door.

And that's accepted vouchers that's not just accepted vouchers and free moves and I started to see a significant surge in free moves over the last seven days as people now realize that actually they can now travel in July and August a lot of them are taking the free move options. And we try to explain to the various consumer this way like which magazine in the U.K., we are, there is no restriction on if you want to cash refund for money, you get a cash refund. But you must understand we're dealing with a historic backlog of [indiscernible] that have been imposed upon us by European governments having basically three months of flying. Our refund team has been reduced by 75% because of social distancing in the office restrictions here in Madrid, Dublin and in Wroclaw. So you will get a cash refund but I'm afraid you'll have to be patient and wait for it, it's going to take some weeks and months to eliminate this backlog of refunds. Lauda existing in 2021, Lauda will exist in 2021. I don't think it will exist in Vienna. I think it's inevitable that the Austrian Airlines union will close the Vienna base with a loss over 300 pilots cabin crew jobs on Thursday, Lauda will still be operating and Stuttgart and Dusseldorf and Parma, and I see a future for Lauda into the future as probably an Boeing 737 operator, operating [indiscernible] services for Ryanair for both and Malta Air across different bases and countries. But I suspect the one country you were allowed will not be operating as a brand will be in Austria where frankly, if the employment, say if the employment regulations and the labor structure is that doubt, that people who want to vote for pay cuts, preserve their jobs are told by a competitor's union that they don't care, they're losing their jobs because the union won't sign the agreement then frankly, we don't want to operate in a country that has such a corrupt labor market or labor legislation as Austria has at the moment. It is beyond my comprehension why people can't vote for themselves to save their own jobs even if it means that the shorter taking a pay cut. And I'm I feel enormous sympathy for Lauda's pilots and cabin crew who were voted in their overwhelming majority in favor of these pay cuts. They recognize the crisis. And yet, the Austrian airline union consider, we have a stroke say no, we're not finding this disagreements, and condemned those pilots and those cabin crew to long-term unemployment because it's quite clear that Austrian Airlines won't be creating any job for pilots and cabin crew for the very foreseeable future, despite the fact they'd be getting 800 million of aid from an Austrian government to Lufthansa, it's owned and controlled subsidiary.

The next question comes from the line of Jaime Rowbotham from Deutsche Bank.

Just one for me, obviously, don't have a crystal ball. But it's helpful that you give a working scenario for your guests in the current fiscal year, but the sub 80 million, is there a working scenario for fiscal '22? And one of the reasons I asked is on Slide 11, you tell us that your 31% fuel hedged for fiscal 22, which implies there's a denominator to that calculation. So just any working assumption, so your planning would be helpful.

I think it's really -- at this point in time, we will be operating on a return to normal traffic volume now that's less than, say the aircraft that we sell, or that it depends on how many aircraft that come off lease that we can extend to the end of this year at reasonable terms. It depends how many aircraft Boeing can, but on the assumption that we take between 20 and 30, Boeing Max next year, I mean, I think that our numbers will return next year to kind of normality I mean, it would be north of 150 million passengers. And now that clearly assumes that COVID has been tested by the time you get to April of next year, I think next summer of 2020 will be incredibly strong for holiday traffic for people who this year have cancelled their holidays or weren't able to get to go on holidays. I think it would be incredibly strong. There will be a dramatic rebound in volumes, but I call it again all of that volume growth will be at lower or discounted prices. Yes. I think I have seen various numbers, but our projections here that we will return to traffic volumes normality in our year at March 22, summer of 2021. And then I think that by summer of 22, you'll be returned to kind of normal pricing, as long as [indiscernible] no further return or second waiver, thirdly to COVID-19. And, but that doesn't have to be a huge existential shock the industry has suffered in 2020. We're in discussion with unions where they say, yes, but your numbers will return to normal in 2021. So we're going to say, yes, they will, but they're not going to return to normal, summer 2020 or the…

The next question comes from the line of Muneeba Kayani from Bank of America.

So, for the July to September schedule, how should we be thinking about unit cost based on your capacity plans? Yes, if you could talk about that and the cash burn.

Yes. Impossible to talk about. And we've no idea what our unit cost would be until we know what the volumes will be. If we were -- as we demonstrated in the last three months, we were incredibly flexible cost base here. We basically with the exception of fuel hedging collapse, the cost base and almost nothing are now actually there, along with those backup payroll support schemes, and we're very grateful for. And we're able to continue through July and August and the question is, how much volumes can we restore and how pricing. But the volumes will be -- the unit cost would be what the unit costs will be. But we can't give you any forecast prediction on that. I'm afraid whatever gets you big on your model will be actuals wherever we come up with.

Can I ask one more on cash refund, the 300 million that you had cash refund of vouchers. So what about the rest?

We're working our way through the rest. I mean, the challenge we face -- we know on a normal month we will refund about 10,000 tickets. So, we're geared up. We're staffing for over 10,000 tickets. At the moment, three quarter of our staff can't even come to the office and they must come to the office. These are cash refunds. It can't be automated. We get about 25%, 30% of bookings come through OTAs and third parties, don't know who will not be in. We cannot issue refunds unless we get in direct correspondence with the individual passenger. So we're geared about 10,000 refunds a month. Currently, we're trying to process something of the order of 25 million or 30 million refunds over the next couple of months. So the 300 million that Neil has talked about, effectively about a quarter of the backlog of refunds we have at the moment from March, April, May into the first half of June. And we will continue to process that if we're allowed and we are hoping that the offices will return to full staff here from the 1st of June onwards in Dublin, that will significantly increase our ability to process refunds. And I think going forward [indiscernible] the 60 million. As we move through the summer and the fuel hedge kind of the fuel cash outflow decline, the refunds cash outflow will increase. And one will substitute for the other, but if we get back to some kind of normal flying in July, even if it's only 40%, the cash flow then will begin to be very positive because the forward book is into July, August, September, October. And we can handle cash refunds. But we're trying to communicate with our customer base just please be patient with us we're not denying you a cash refund or trying to sit on it. We just can't process these numbers automatically. We can automate vouchers that easy because not cash out the door. We can automate free moves, we can't automate the payment or the cash refunds because most of -- a lot of cash refunds will disappear into somebody else's bank account, like a travel agent and not the end customers account.

The next question comes from the line of Gerald Khoo From Liberum.

Two questions from me. Firstly, on the Max deliveries, whenever they're due to arrive. I'm just wondering whether you can clarify what's finance you've arranged for those? And secondly in terms of refunds to accept that they are being fulfilled. Can you give us a rough indication of the split by sort of method cash versus vouchers versus rebooking? I know that's probably a dynamic issue. But if you can give us a rough indication, please.

No. I wouldn't give any indication on the refund, at the moment it's 300 million and include cash refund vouchers, et cetera, carries a lot more vouchers, and there's a cash refund. But as the cash refund increased, the number of -- I think vouchers will decline. But as we move back to flying, there'll be a much greater up tick. We think of three moves anyway. But we can't break it up, we can't predict where it's going to go. On the Max delivery instantly, we haven't paid any PDP since about the middle of last year. So we still have quite significant volume of PDP is already in place with Boeing. And so, we would expect to fund certainly if there's 20 or 30 aircraft delivered, but this side of next summer along with that funding is already in place with the PDP that we've already paid. We have the cash reserves to be able to fill in the balance of those deliveries. But obviously financing and the speed and rate of PDP is one of the key elements of our ongoing negotiation with Boeing. And Boeing to be fair have been very sympathetic -- have been understanding of the need. I say Ryanair is one of the few airlines in the world talking to manufacturers about taking aircraft deliveries and it needs to be ordering new aircraft at the moment. And so it's a reasonably easy discussion to have with Boeing. Boeing themselves have done a stellar job in the last couple of months, they've raised more than 25 billion in the bond market without the need for government intervention, which would again mark them out against Airbus, when we're fairly sure would be on the French government and grist in the not too distant future. At Boeing has to catch and we are in the easiest part of this because Boeing actually is the financing and funding for the next -- for the summer 21 deliveries. What we're really focused more on at the moment is their return to service days and then how many aircraft can they deliver to us? And remember what the [indiscernible] Max simulators in place that we can manage the return to service with an in house ourselves on our own Max simulators.

The only thing I'd add t that, Gerald, that we are BBB rated high investment grade, the bond markets remain open albeit at elevated levels. We've received a number of sales and leased back proposals and indeed we've received a number of them come into this proposals for security. We've got lots of options on how we finance ourselves going forward, if not from cash.

And, we don't take the profit from data at leased back through page a P&L or other costs. We also, but at the moment, we have more than sufficient internal resources, cash agitated reserve those aircraft without the need for external financing, but if we needed external financing and new deliveries of Max, I think we would find it very easy in the current marketplace, although these elevated financing rate.

The next question comes from the line of [Carol Dorris] [ph] from Morgan Stanley.

I have two questions. The first one is even though you can -- you may still be able to do quick turnaround, this probably higher hygienization and cleaning standards which will probably slow down overnight and around the fleet. So do you think you can still operate or transport 150 million passengers with the same number of aircraft or do you need to increase the number? And the second question is how much of your short-term payables is due to Boeing's?

I will let Neil answer the second half. There is no effect on quick turnarounds at the moment, we've put in place extensive health measures but the return is on the 1st of July. We're disinfecting all the aircraft, all aircraft, 90 disinfectant is good or bad for more than 24 hours. We're not going to disinfect on turnaround. It's not possible. You don't have the cleaning staff on supplies at airports we anticipate on turnaround. None of it required where aircraft or where your aircraft and where passengers and crews are wearing facemasks. Because you've eliminated 98.5% of the risk of droplets occurring anywhere on board the aircraft. The aircraft will not be operating at 95% load factors, we think 50% to 60% load factor in the first month or two was the best we will do. And we've already explained where we will not get to 150 million passengers in the next 12 months within the number so we're under 80 million passengers. By the time we get to the summer of 2021. We do think it's reasonable to go back to 150 million passengers. But at that point in time, we think your vaccine will have been found. Vaccine will be found, treatments will be in place or the COVID-19 pandemic will have disappeared altogether. We have two months of experience now in Asia, there has been no second wave of COVID-19, this mythical second wave at the moment doesn't hasn't yet occurred anywhere. And so it seems to be you and medics and scientists trying to frighten the local populace into believing they should isolate somewhere for a two week period. So caution, I think is the right approach at the moment. And but there will be no effect on turnarounds particular we're operating with 50% to 60% load factor. Neil?

On payables, the 1.4 billion figure just over 1 billion of that is accrued on PDPs to Boeing.

The next question comes from the line of Neil Glynn from Credit Suisse.

Just one quick one for me just on the airport and network strategy. You obviously highlighted a once in a lifetime opportunity, just interested in your take, are you likely best served going big at larger hungry airports like a Gatwick for example, where there's a whole opening up or by dispersing freed up aircraft more thinly around the network?

May I have David O'Brien just say it -- to take that [indiscernible]. David?

Yes. That's going to depend on what those airports do. We've more than enough solicitations from around from over 200 airports to distribute them are to concentrate them. But and we've demonstrated with the flexibility to do both. In the case of Lauda, it's going to be a 15 aircraft fleet out of the Vienna, available either in small increments at smaller airports or indeed of the opportunities you described. So, no, we'll be opportunistic on this.

But I think it's fair to say that we're seeing the same kind of offers, in fact, if anything, better offers coming from the bigger airports who are facing a much more catastrophic loss of traffic, necessarily the smaller airport CSR, we're in dialogue, [indiscernible] opportunities are going to come with the bigger airports. I'm not sure if it necessarily emerged with Gatwick, I don't really believe that IAG will close their Gatwick operation. I think it may well close SBA, but it might reemerge as [indiscernible] or lower cost operation. Our Norwegian operation will go from most of the airports in which they operate. You look across Germany, in most of the German airports except the German wings is going to disappear in the tangible cut back traffic, but and some of them are panic and some of them are remarkably complacent. They just believe that the German state will provide, Lufthansa will be ordered to go back to their previous volumes. We don't think that's realistic. And certainly in the other bigger market Italy and Spain, there's a very open dialogue with the airports there and but lots of airports are also in the same situation. They don't quite know what they are going to lose, what's going to come back what they're going to lose. Until we see that emerge over the next two or three months and certainly into winter this year, it will be difficult to finalize those agreements. Certainly if you look at, I've been looking at EasyJet as an obvious candidate where there's that ridiculous kind of dialogue with their largest shareholder about cutting back aircraft orders, that can only result in significant cutbacks at certain of the EasyJet bases across Europe, in favor of, I would presume Gatwick, maybe Berlin but and I feel sorry for the EasyJet management, dealing with COVID-19, it's hard to deal without dealing with unreasonable demands from shareholders who recently received quite ginormous dividends. If they were that concerned about the future of EasyJet, they could hand back -- they would return to dividends and stop annoying the management. But annoying shareholders is just one of the factors of life we all do [indiscernible].

The next question comes from the line of Malte Schulz from Commerzbank.

I have a two question for my side. First of all, I would like to know, you mentioned the 60% for a break even operation, is it just on variable cost based or on a cash cost basis or on a general cost basis. And my second question would be if you use your unencumbered fleet as a collateral, how much discount does the bank currently ask for, given that Europe -- the fleet at the moment is not sellable at the book value?

Don't confuse the numbers. Like I'm saying we're hoping to run with maybe 50%, 60% load factor in the second half -- in the Q2, based on a reasonable assumption, we think that at the moment, those numbers would suggest we would run into breakeven or a small loss. It's not going to be $200 million plus loss in Q1. All the three moving variables and so we can't give you any guidance into Q2, so it isn't 60% will deliver a breakeven or 65% or 55%. At the moment we think, if the restrictions are lifted, there's no 40 day isolation, we think there will be a reasonable prospect to get into 50%, 60% load factor through July and August. The years will be lower than we previously predicted for that peak season yield. The cost would certainly be materially lower than we have -- would have been normally purchasing in July and August. But if we get 20% pay cuts don't -- they will all take effect from the 1st of July or we will have a lot less labor. So there's no number here that the forecast or prediction, we can't give you one into the second quarter. The unencumbered fees, actually, we wouldn't have been the proposal we've had at the moment are reasonably most of them are close to above our book value because of our aggressive depreciation policy and low purchase price on the fleet anyway. Most of the offers don't come with as Neil said elevated financing costs. So it's not that someone would ask us to take a pass on the aircraft or the book value of the aircraft. But what we've seen offers coming in at 4%, 5% or 6% rate of interest. And they are frankly, where we've been able…

The last question comes from the line of Alex Paterson from Peel Hunt.

Can I ask you two quick clarifications, please. Firstly, on the pay cut, is that temporary or is that permanently basement and secondly, on cash refunds, did you say passengers need to contact me directly that you are not refunding through intermediaries like [indiscernible]?

First on the pay cut, look, there is a dialogue going on with the union. Now, let's be clear of it. What we said is, we will need up to 20% pay cuts and obviously that there is a variable number in there is 20% of the higher pay people like the captain, of he is down at around 10% for the lower paid cabin crew, et cetera, et cetera. So, it's variable. And but if we don't get those pay cuts, we will be back for considerably more than 3000 job losses at the end of June. We're not messing, everybody knows there's an existential crisis going on the industry. And we know the obvious number, unions coming back as though we need further information. If you don't need further information than we originally planning to carry 150 million passengers a year. We will not be looking to carry 80 million passenger this year. There's your further information, get on with it. And so I think the pay cut will be between 10% and 20%. It's also our objective to try to restore those pay cuts over a kind of three or four year period as the industry recovers. We need lower pay through the remainder of FY'21, if we're doing well in summer of '21, FY'22 and FY'23. The first people who will be sharing in this recovery will be our people. So the pay cuts will be restored over three or four year period, the job losses we would hope to restore, some or if not all of those job losses. Now, it won't be the individual people, but we're not going to give anybody the rights that you could be the -- you would the first one back. But clearly, we will favor rehiring those pilots…

There are no further questions.

Okay. Gentlemen, thank you very much. I'm sorry, the conference is over and I'm excited but I think is important given the COVID-19 crisis to be translated as real as well as best we can. I'm sorry that we can't give you any more material guidance into the second quarter of the full year. But, we're all in this same situation together, we're flying blind. But I think there's a reasonable prospect of us returning to a reasonable level of flying in July, August into September. And I think once people begin to fly, even if it's wearing facemasks, confidence will be restored reasonably quickly. And then I think you'll see a very dramatic restoration of passenger volumes, but on the back of discounted pricing and very aggressive pricing, both from the airlines and also from the holiday hotel and tourism providers. And that said, hopefully, by the time we get to the first quarter results call in early August, we'll have a much better handle on the situation. And we'll be able to give you something like more tangible kinds of directions for the second half of the year. And thank you for your patience. We sincerely appreciate the support you've all shown in the business over the last three months. I know it's been extraordinary difficult time for investors as well. It's not crazy to see the share price go from wherever it was €15 down to €9 or whatever it is, but rest assured, we are here on a daily basis making sensible decisions on cost, making very sensible decision on cash, protection and trying to make sensible decisions on an early return to flying in a -- at the healthiest fashion we can deliver for both our people and for our customers. Thank you very much, ladies and gentlemen, we have an extensive roadshow -- virtual roadshow going on this week. We're now all going on into Investor calls here. And if you'd like to have an individual meeting with Neil, myself, or any anybody else in the team, please route the request back through [indiscernible] to Shane O'Toole our Head of Investor Relations. And I'm sure we'll have a call with you later on the way. Thanks very everybody. Good to talk to you and look forward to seeing you again soon. Remember keep flying, fly Ryanair. Safest and the cheapest airline in Europe.

Thanks everybody. Bye-bye.

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.