Ryanair Holdings plc (RYAAY) Q4 2023 Earnings Report, Transcript and Summary

Operator Welcome to the Ryanair FY '23 Earnings Call. My name is Maxine, and I'll be coordinating the call today. [Operator Instructions] I will now hand over to your host, Michael O'Leary, Group CEO of Ryanair Holdings plc to begin. Michael, please go ahead when you're ready.

Okay. Good morning, ladies and gentlemen. Welcome to the Ryanair full year results investor call. We have extensive numbers of teams all dialing in because we have an extensive - today and I think 12 teams on the road show this week. So anybody looking for a meeting, please call any of our brokers out of Davy, Citi or at Goodbody. I take the results as read. We have an extensive presentation, Q&A on the ryanair.com website. Go there. While you're there, buy - make some bookings. You'll need them this summer as prices are rising. To touch briefly on the last 12, we've sort of seen a very strong recovery. Traffic grew to 168.6 million passenger, which is up 13% in our pre-COVID capacity in a marketplace in Europe, which was operating last year at less than 90% pre-COVID capacity. So Ryanair has been taking enormous sways of market share in almost all markets across Europe. While our traffic has recovered last year ahead of COVID, profits are still marginally behind where they were pre-COVID at 100 – at €1.4 billion. Nevertheless, a very strong performance at a time when most of our certainly, the local competitors in Europe are losing - are still reporting losses for the last year. Underpinning that was a very strong fuel hedge performance last year, and that poses a challenge for it going forward over the next 12 months. Looking out a couple of broad themes which I'd like to explore, I think during the Q&A, in particular. We're looking out into a year where we have embedded an enormous cost advantage over almost every other airline in Europe. I think one of the very significant results of COVID has been two things. One, a huge amount of capacity has been weeded out of Europe. You've seen a huge number of airlines with quite a considerable capacity go above the Tomago, VEs, German Wings [ph] The other incumbents that survive that COVID have either, a, structurally reduce their capacity. Alitalia is operating at 60% pre-COVID capacity, TAP, about 3% pre-COVID capacity. Lufthansa, for example, this year in the German market is still only operating at 80% of its pre-COVID capacity in the short-haul market, and yet prices have doubled. So there is heavily constrained capacity. The other feature of COVID and particularly when we look back and rewrite the history - or write the history of COVID has been a seismic movement in the unit cost gap between Ryanair and every other airline Europe. We have worked extraordinarily hard during COVID to keep our ex-fuel unit cost down at around €30, €31 per passenger, but we've seen most of our competitors suffer very significant increases in their operating - their unit cost. Most of our local competitors had higher wages and labor before COVID. They're even higher now. Their airport and handling costs have materially moved upwards, while we, thanks to our growth, have been able to maintain low and stable airport and handling costs. But on the ownership and maintenance side, Ryanair had - thanks to the renegotiation with Boeing during the MAX grounding, we have seen a very substantial widening of our ownership and maintenance cost advantage over most of our competitors, almost all of whom are either are operating almost entirely leased fleet or went into COVID owning a significant proportion of the fleet that came out of COVID with most of their fleet refinanced on sales and leaseback. And as we move into an environment, in a world environment of significantly higher rates and financing costs, our competitors will be paying significantly higher aircraft and ownership most going forward for the next number of years, whereas our aircraft and ownership cost will be low and will keep low. And I think if you look at where we stand now as a widening cost advantage, the ability to enter into markets all over Europe, regardless of who the incumbents is where we can get closed [ph] at airport, I think that we're looking at a fundamental shift in European aviation towards Ryanair, large market share gain. Looking out over the next 12 months, we expect to grow our traffic to 185 million passengers. And to put that in context, that's 25% more than our pre-COVID traffic in a marketplace where short-haul capacity will be at best 90%, 95% of pre-COVID capacity. And it is that constrained capacity is, in my view, what is delivering what is sustaining this strong demand outlook. We, and all of our competitors, are seeing this summer. Capacity is still behind pre-COVID. Demand is significantly stronger. People who have been locked up for 2, 3 - 2.5 years are going back traveling. I think there's a very unusual scenario in Europe where essentially full employment. People are getting paid at the end of every month. And despite fears over energy, cost inflation, rising interest rates, they are spending money. And the travel, business travel, leisure travel, visiting friends and family is no longer a luxury. It appears to be kind of a necessity. And so we're looking out into this summer with, as we said, advance bookings stronger than they were pre-COVID. And forward airfares, slightly higher than they were pre last year. And again - and that's why we have to be a little bit cautious on guidance here. An awful lot of the strengthening of airfare is the last 10%, 15%, 20% of passengers. We have spent most of this year, earlier pass to book early because prices we think will rise. There would be no near-term short setoff in airfares. Prices are rising. Demand is strong. Europe is being welcomely - will be invaded by American visitors, is somewhat because the strength of the dollar, and we're also seeing Asian traffic recover. We're well hedged on fuel although this year would be about €1 billion higher than it was last year, thanks to the strength of our - last year. The Boeing delivery delays are getting resolved. I think we're now down to talking weeks instead of months for the remaining aircraft for this summer. We're now reasonably confident we're going to get all of the 51 aircraft by the end of July. There will be a disruption to - we've had to take out some capacity in June and July, but we don't expect it to cost us more than 600,000, 800,000 passengers, which in a year where we're forecasting to write to 185 million passes will be largely immaterial. With the benefit of our widening cost advantage, we'll roll out those 50 new aircraft across most markets across Europe, where competitors appear to be in retreat. Many of them are focusing on building up their capacity at their fortress airports or they're switching capacity away from competing Ryanair to the Middle East which I think is a good sensible strategy. Over the medium term, we see capacity being - that capacity constraint story being maintained. There is - the OEMs are challenged. Obviously, they have large backlog. Airbus is suffering significant delivery today as is Boeing. There was little prospect, I think, given the challenge in the supply chain that there would be a dramatic increase in monthly production for the next 2 or 3 years. It will creep upwards, but it creep up in 1s and 2s, not 10s and 15s. And as you've seen a surge of orders post - I mean, firstly, Airbus' order book is essentially full out to the early 2030s. Boeing have been doing great work in, I think, this year to date, signing up a number of very significant orders, with Tata in India. Our order for 300 new aircraft is more coming at the IATA conference in Istanbul in June and at the Paris Air Show. And I think we're looking at an environment where essentially the OEM order book are completely full out to the early 2030. The good news is in Ryanair, we have - we still have access to 50 aircraft a year for the next 3 summers. And we will continue to roll out growth. And I mean, it's astonishing to me that we're the largest airline in Europe by some considerable - 185 million passengers. Yet, we're still delivering 10% growth. And that is the strength of the Ryanair model. The huge cost advantage we have over every other airline. And our ability to go in with very low fares, stimulate growth. And I think the way all of our competitors, every time I listen to a competitor investor call when they're talking about very dramatic fare increases, fares rising by 20%, 30%, and that is driving traffic towards Ryanair. We don't expect our efforts to rise by those very, I think, irrationally exuberant numbers this year. We do expect our airfares this summer to be stronger than they were last summer. But we need that to pay for the full restoration of our people pay and the higher oil build. Looking out over the medium term in a constrained environment, I think one of the key features of the Ryanair story will now be the 300 -- recently announced 300 Boeing MAX order. This all secures our growth out to the mid-2030s in an environment where there will be very scarce aircraft availability. The pricing is exceptional. Yes, we are paying a higher price than we paid in our last order. But as I said previously, if you factor in the delivery today, compensation, the price per seat comes out as a little bit less than our last order in 2014. So I think our timing was fortuitous. We're very pleased to have a long order book with Boeing. And we think and look forward that, that will deliver very stable growth. The growth will slow down as we get to 2027 at the MAX-10 orders. We don't expect to be growing at 10% a year over 225 million passenger, but we do expect to be growing at mid-single digits, 5%, 6% a year. That means we'll still be able to offer our airport partners 10 million, 15 million passenger growth a year. We will be still the beneficiary of low-cost aircraft that we will be purchasing out of internally generated cash flow. So we're not going on some debt splurge. And it means we will be able to widen the unit cost gap between us and all of our competitors across Europe. So I think we will and hopefully be able to deliver a decade of sustained careful, slower profitable and remunerative growth. And I think it's critical that we've now established a new target of growing to 300 million passengers by 2034. And to put that in some context, that is 100% growth over our pre-COVID figure of 149 million passengers in our last year pre-COVID. It is astonishing, the demand that is out there across Europe. There are some lazy analysts out there who believe that Europe is tapped out for growth. It isn't. We are still growing strongly as news said this morning in Italy, in Spain and Portugal, even in mature markets like Ireland and the U.K., we're seeing very significant growth. Central and Eastern Europe, there is enormous demand for Ryanair. People are fed up paying high fares of our incumbent competitors. And we have more growth opportunities out there than we can handle, not just for the next 12 months, but certainly for the next 5 or 6 years. One parting cautionary note, and I know everybody will lose their -- themselves. Q1 is going to be very strong. Q1 is entirely distorted by the impact of the illegal Russian in Beijing in Ukraine last year, which collapsed either -- which badly damaged both traffic and fares into Q1 of FY '23. We had to go out and dump yields that stimulates travel into Q1. So I caution just a note that I wanted on the record, Q1 would be very strong. It would be distortedly strong because there's a weak prior year comparison. And when many of our competitors are out there telling you about the new paradigm on how ones -- unit is, be cautious Q1 would be very strong. We think the next -- FY '24 will not be driven by Q1. We are cautiously guiding but one we're confident will grow to 185 million passengers. That would be approximately 10% growth over next year. We cannot give guidance today. Too much of the yield story depends on the last 20% -- or 20% of our passenger bookings. It looks like Q2 will be strong, certainly, if there's nothing untoward. But at this point in time, we have less than 5% of the speed some for the second half of the year, which is the December and March quarters. We see no reason why they won't continue to wait -- demand won't continue to be strong. But we're cautious. We think we're right to be cautious and that we -- I think it's appropriate that we share -- caution everybody, we've seen too much, I think, irrationally exuberance from our competitors. But there's no doubt that there is a strong recovery underway in a market where Ryanair is taking huge market share, in a market where capacity will be constrained not just for the next 12 months, but for the next 4 or 5 years. And only Ryanair has a decade of aircraft or of aircraft deliveries and sustainable growth to deliver over that period of time. Neil, do you want to take us through the highlights of the Q&A, please?

Sure, Michael. Thanks very much for that. It's covered off very nicely on the unit cost performance that we had. I think it's important to call out the strength of the balance sheet. We've seen a good recovery in our balance sheet over the course of the past year. We finished with very strong liquidity of €4.7 billion, but importantly, moved into a net cash position of just under €600 million from debt of €1.45 billion at the same time last year We'll caution, however, that, that was flattered by the timing of aircraft deliveries, which meant that about €450 million of CapEx are now being time from FY '23 into FY '24. The balance sheet, however, remains extremely strong. And last week, S&P upgraded us to BBB+, which I think is in recognition of the fact that nearly all of the - balance sheet owned and unencumbered, which as Michael already said, greatly enhances the financing gap that we have between ourselves and everybody else. Interest rates are rising, but we're paying maturing bonds at our own [indiscernible]. We're not taking on expensive leases. And over the course of the next year, we'll judiciously use that cash having restored pay for our people. We'll now deal with the CapEx of €2.6 billion over the course of the next year and pay down €1.5 billion bonds, of which €850 million was already paid off in March that’s gone and another €750 million in August of this year. And then, of course, with the new MAX-10 order book coming, we will start to build up the war chest for that with CapEx starting to rise and thereon. But the balance sheet is in a good place, costs in a good place.

Okay. Thanks, Neil. Eddie, would you want to give us just some insight into the market trends in the summer and medium-term growth opportunities across Europe.

Yes. Again, as referred to earlier, I mean, fares are strong going into the summer. We continue to grow. We've got - our new bases are going well in Belfast and the Canaries. We've added aircraft to 11 bases, 2 aircraft to 11 bases. We’ve added one aircraft to 23 bases. The only base that was - that went backwards was [indiscernible] this year for cost reasons. So I mean, across all market segments, we've seen them all recover as traffic has recovered. We see very positive signs in places like Spain, where the government has taken a sensible decision there, which feeds into our cost base of lowering costs at airports, putting incentives in for secondary airports and freezing calls out to 2027. Likewise, seeing largely privately owned airports in Italy, many of the smaller ones dependent on Ryanair. And again, we've got to push down airfares into secondary airports where we're competing with ourselves. But as you look right across very weak markets and with incumbent reducing in places like the Baltics with SAS going into Chapter 11. TAP operating at 50%. easyJet [ph] operating at a fraction of itself and continuing to grow in markets where we have substantial market share like Ireland, for example, where we've got, again, the largest summer schedule ever. So like right across the peak U.K. as well. German regional airports and in French regional airports as well. So robust demand out there.

Good. Okay. I think then we'll open it up to Q&A, please.

Thank you. [Operator Instructions] Our first question today comes from Jaime Rowbotham from Deutsche Bank. Please go ahead. Your line is now open.

Good morning. Two from me. Michael, point taken on the dangers of looking at the yield on a year-on-year basis for the next quarter. But compared to the same quarter pre-COVID, your March quarter fares where I think about 26% above. Can we think about them being at a similar premium to pre-crisis levels in the upcoming June quarter? Second one's on the costs. Good to see the fuel largely locked in. In terms of the nonfuel unit costs, it sounds like it's mainly staff pay restoration and the on-route charges driving the expected increase. Are there any other cost actions you can take to offset other than getting the 737 MAX in to improve the fleet mix? Thanks.

Two good questions. Firstly, on the yields, clearly, we can't predict what's going to happen yield-wise I would be more cautious than that. I don't think we see 26% replicated - growth replicated in the first half of next year. There is no - all I can give you at the moment is with about 80% of seats sold for Q1 at this point in time of about 40% of seats sold in Q2. Average fares are running modestly ahead of where they were at this time last year and bookings are stronger. So I think the yields will be up modestly. We could have a very strong June - August. We're not used to these kind of environment. We haven't been in an environment for 25 years, but we have capacity down net-net over a 2-year period and demand surging with Transatlantic and the Asian traffic feeding into the mix of very strong Europe intra-European travel. So it could be better than that, but I would already caution the moment to let's see where we get to. Again, and I come back to Q1 would be distortedly strong because of the weak prior year. The Q2, the half year numbers in November will tell everything. We could have a very strong H1. I would be cautious at this time. I always get nervous in this industry when all my competitors are predicting huge booms and blue sky scenarios and - 20% and 30% increases, I get cautious. Nonfuel unit costs, I think, again, the only slide you need to look at in our presentation is in Slide 4. It is not so much what happen our absolute unit cost. It's that the gap is materially widening between us and every other airline in Europe. But you're right, I think we will have pay inflation over the next number of years. We've worked hard on pay restoration. We've restored the payable all of our pilot, cabin crew by agreement with the union. We built in pay increases each year over the next 3 or 4 years down - depending on - whichever country the deal is done. We have also increased headcount significantly this summer because of the experience of the airport security and staffing shortages last year. We're more crew - we have better crew ratios this summer, has nothing that translated into better on-time performance, better customer service, although being derailed every time there's a French ATC strike, and we've had 55 of those already this year. But the things I would point to, where there will continue to be a widening gap will be on the staff ratio by staff and our competitors. I think there'll be more inflation on the Airbus fleet across Europe where if you're a 737 employer, I think there will be less - marginally less paying - we will remain competitive. Airport and handling will continue to be a huge differentiator between us. As you look at our competitors and they're suffering far more airport and handling cost inflation, although a lot of that is a byproduct the fact that they're no longer growing with, for example, appears to be growing, but all the growth is taking place in the Middle East. It's not taking place in Europe. In fact, they're in retreat. And the ownership and maintenance cost, the aircraft deals we did during COVID in the aircraft, the new 300 aircraft order, particularly where our competitors will be taking delivery of much more expensive Airbus aircraft will - and having to use financing expenses by debt to fund those orders, will materially widen that gap between us and them. And then the kicker on all of this is we're still adding in new aircraft. We have 110 more game changers, where the performance of the operating - cost performance of these aircraft is stellar. 4% more seats, but the fuel saving is slightly more than 16%. And we're moving to a fleet of MAX-10 where we'll be carrying 20% more passengers, but burning 20% less fuel. It's staggering, not just cost efficiencies, but staggering environmental gains as well. And we are continuing to see a rising demand from the customers across Europe for greener travel. The way to your greener travel is just switch and fly Ryanair. It's the easy headlines across the media or Ryanair is your biggest polluter or they should remember is that the 185 million passengers we carry this year are reducing their environmental footprint by 50% by transferring off a high-fare legacy competitors who have older aircraft, much lower load factors, less fleet density. So the good news is that Ryanair ensures biggest airline, and we are reducing the environment been footprint by 50%. Thanks, Jamie, next question please.

Thank you. The next question comes from Savanthi Syth from Raymond James. Please go ahead. Your line is now open.

Hey, good morning. Just following up on Jamie's question a little bit. Just wondering, the nonfuel cost, you were expecting it to be down and now kind of expecting it to be up. Just is that all MAX delivery delays? And also, you usually don't take MAX year in July, August and if that's having an impact on that as well? And then for my second question, I was wondering if you could share what you're seeing on the business travel demand front, particularly if you're seeing any benefits from the Amadeus kind of agreement or if it's too soon for that?

Yes. The MAX delivery delays, I would be a little more optimistic. I think Boeing have it down through. The delays are really running in terms of weeks, well for months. The critical thing for us, particularly for the summer of 2023 was can we all 51 aircraft in by the end of in May? Then could we get them all in by the end of June? We're now reasonably confident we'll have them all by the end of July. Now we have had to take out some capacity in June and July. We think it will cost us about 800,000 fleet [ph] over the May, June, July period. We will have most of the - all the aircraft in for the August, September peak. So I wouldn't get too caught in MAX delivery delays. We've already and we're working through with Boeing, the delivery for next winter for the summer of 2024. And it looks at this point in time. Now absent a curveball that come on a left field such as the fastener issue, we will have all those aircraft in by probably the end of May. So there might be some slippage into June but have them all there, we have -- the fleet will expand by another 50-odd aircraft for the summer of 2024, allowing us to grow against 185 million passengers in FY '24 to breaking 200 million passengers in FY '25 again, in a market across Europe where capacity is constrained and I'll keep coming back to that enormous opportunity for Ryanair and our shareholders in this. Business travel, we've seen a huge surge in business travel over the last year. Post COVID, there seems to be a -- not just a desire for people to go back to the beaches, but business is going back to work. Again, people were locked up working from home for a 2-year period. We see a lot of demand into countries into Eastern Europe, Poland, Morocco. A lot of focus on businesses, smaller -- business fixing supply chain, switching supply chains away from Asia, China, which are now unreliable and repairing their supply chains or relocating their supply chains closer to Europe and close to home. And Ryanair is the airline that is the offer -- in many cases, we're the only airline operating into many of these regional destinations. So strong business travel. I think because we had delivered such exceptional recovery last summer, we had exceptional on-time performance, exceptional -- metrics, many of our competitors were struggling with -- to recruit and train people post-COVID. As I've long tried to espouse on short-haul European, premium traffic is over. No one will pay for business class on short haul inter European as they don't across North America either. People just want an efficient, affordable on-time service. I look to -- where I see some future growth -- Germany is a very interesting market at the moment. We reduced our capacity in Germany in the last 12 months. We're still the second largest airline operator in Germany. But because the airports have been increasing fees, we switched capacity out of Germany. The Germans now are beginning to realize the error of the - back in Lufthansa, the National Champion. Lufthansa have deliberately not returned their pre-COVID capacity. They're only operating about 80% of the German market. Airfares have more than doubled in the last 12 months. German businesses and consumers are going to be the victim of monopolistic pricing by Lufthansa in the German market. The German airports will suffer - will be unable to recover their pre-COVID traffic volumes, obviously, other than the two big hubs of Frankfurt and Munich. And I think German airports will become much more competitive the next 12, 24 months when they realize they're all getting screwed by Lufthansa. They want somebody to come in there with -- and provide competition choice and a much lower alternative for business and leisure travel, and I suspect that will be Ryanair. Eddie, anything you want to add on business travel?

Yes. Just in relation to the specific query on Amadeus, I mean it's too soon to say, but we are -- in terms of any sort of volume, we only launched it last week. What I mean it is encouraging and it's interesting that you call it the German market. I mean even in place like Nuremberg where we have a relatively small base, two aircraft base, large employers around their - the fumes, adidas, SAP, et cetera. We want to get access to direct connections and their only alternatives to get on the train or to drive to Frankfurt. And we have seen that in Germany where people want to get access to travel. They have a lot of intermediaries with travel management companies that manage their expenses and Amadeus will allow them to segue into that. So I think the -- I mean, one of the areas that you didn't call out there was -- Italy, where we see a surge in business traffic, particularly from small and medium-sized businesses there. So we're very encouraged. I think this channel will work for us. People want to get access to our lowest fares but find it more difficult to do it directly through ryanair.com when they've got the gap of travel management system to manage expenses and Amadeus will deliver that for us.

Yes. Although Amadeus volumes will remain reasonably small. Like still overwhelmingly will take all the bookings to the Ryanair.com platform, but a lot of businesses have the internal or travel in plants, and that led GPS like an Amadeus. Next question please.

The next question comes from Alex Irving from Bernstein. Please go ahead. Your line is now open, Alex.

Hi. Good morning, gentlemen. Two from me, please. First, on cash returns. So you've got a net cash balance sheet, CapEx and debt maturity that look fundable out of ongoing operations. What would you want to see before taking the decision to restart the buyback or the implement dividend? Second question around M&A. So a couple of deals coming in Europe - clearly not going to be appealing to you. But how significant do you think growth opportunities could be for potential antitrust remedies? And how many planes might you want to allocate to the opportunities arising here? Thank you.

Okay. Thanks, Alex. Again, two good question. I think we should be cautious. We finished the year with €500 million of net cash. But as Neil has said, €400 million of that was Boeing delivery delays. I think what we've tried to set out, we do expect to generate significant cash flows over the next 2 or 3 years, if profitability - if there's no curve balls, we don't get any more COVID or Ukraine wars. But we have a sequence of what we want to do. The first challenge was pay restoration. We brought forward the pay restoration, which was originally agreed over a 2-year period -- over -- it was originally done over medium-term period out to 2025. We brought it all forward to December 2022 because we saw it coming. So pay restoration is critical. Funding - and these are expensive pay increases we've already agreed with pilots and cabin crew over the next 4 years. When we're operating with higher - with increased crewing ratios, these built-in pay increases will be expensive or need to be managed. Secondly, is debt repayment. We've repaid an €850 million bond in March as it fell due. We have another €700 million bond repayment coming in August. So we have a very large burden of debt repayment. We then have two further bonds to be repaid in - in August 2025 and March, I think, of 2026 or something like that. I might get those dates - but they're in the numbers. So debt repayment is in to what that we pay down debt when interest rates are rising from 0, 1% towards medium term, 5%, 6%. And for risk industries like the airline industry. So with the recent bond being done by the lessors are at 8% to 9% per annum. Then we have a huge CapEx challenge. I mean we are spending $2 billion -- or €2 billion a year net on aircraft, and that will continue for the next 2.5 years. We take a funding gap for a year in 2026 before we start into the MAX-10 orders. And so if you take that statement, I think it's pay restoration and pay increases for our people first. Debt repayments - aggressive debt repayments, we want to get to 0 net debt by 2025. Capital expenditure, and we have ambitious CapEx challenges. And I'm afraid, and I say this as one of the largest shareholders, the shareholders will just have to wait in line. We need to be cautious and careful, and I think our shareholders understand that. We are conscious about that shareholders up €400 million in additional equity during COVID. We do want to return some cash to shareholders assumes it's safe to do so and that we generate some meaningful net cash. And I think it remains our business objective that when we have surplus net cash, we will return that to the shareholders. I don't foresee there being an opportunity to do big share buybacks anymore. But I think a modest and reasonable dividend program sometime over the next year or two if the net cash balances allow that, that would be fair and reasonable. The people who stood by us during COVID, the people who wrote put their hands in their pockets and help us during COVID with additional equity and additional debt should see some modest return on that investment. M&A, I think, will be an opportunity for us for growth for the next couple of years, as we strongly encourage. And I think it's logical that Europe continues to consolidate. There's been a lot of consolidation during COVID as a result of COVID. And what we're seeing post-COVID is the emergence of four very large airline or airline groups in Europe Lufthansa, Air France-KLM, IAG and Ryanair. I don't believe in the next 4 or 5 years there will be room for any significant fit to airline. Those that cannot grow will either perish or have to find a way into the M&A space. But -- and I think there will be further soft divestments. But soft divestments that big airports, busy airports, they're interesting to us, but they're not going to allow us to do to allocate 50 aircraft a year. We would expect to be involved in the IAG acquired a Europa in Madrid and Barcelona. I think there would be soft divestments there. I think that many of the incumbents, a bit like TAP and Lisbon are debt we're trying to find a way to give their soft to some other high-cost airlines like easyJet or it might be [ Volatia ] in Madrid. But I think the airport is increasingly recognize that with Ryanair, you get kind of guaranteed growth. We feel our -- you get very efficient operations. We arrived there with bigger aircraft with 93% and 94% load factors. So I think the airport is very keen to see us take up some of those divestments. But soft divestitures and M&A remedies will not be the kind of the driver of our growth to 225 million passengers - or 300 million passengers in the next 10 years. We are going to continue to allocate aircraft in large numbers to the Italian market, the Spanish market as we have in the last 2 years. The -- we're allocating a lot of aircraft in the U.K. market there, particularly on U.K. domestics where, again, the government has enlightened reduced APD on domestics by 50%. We've gone up a base in Belfast. We're adding capacity in Glasgow, Edinburgh. So -- and I go back to the same point, there's not much growth, I think, out there for airlines whose average airfare here in Europe is sort of €150 or €200. But if you're an average airfare in Europe is €40 and your average cost is €30, there's a lot of growth. Some of it will be market share capture. Some that will be continuing to grow the overall marketplace. And so we are very, I think, excited and very ambitious with the growth prospects for the next decade, and that is underpinned by the 110 additional game changer deliveries over the next 2.5 years and then the 300 MAX-10 order. Eddie or Neil, you want to add anything on the M&A? Or Neil on balance sheet?

I think on the cash returns, you covered it off well. With €2.6 billion to €2.7 billion more to CapEx in the current financial year, and we've got a big draw on debt to be paid down. So for the next 12 months, anyhow, the cash is well spoken for. M&A, again, there will be some room for us to play where there are remedies but equally, we'll continue just pushing capacity into core markets. And Eddie, probably add a bit more color to me.

Yes. I mean I just called it like what you said there about IAG. I mean, like a lot of the domestic routes with -- if that went ahead whether Europa in some cases, they'll have 100%, certainly 90% in a lot of those domestic routes. So we probably see more widespread divestments at Spanish airports, which will be welcomed. I mean I think that's the only near-term M&A that would crystallize into divestments for us. So we would welcome those and particularly with the cost break on cost in Spain for the next 4 years.

Yes. Okay. Just could -- so the bond repayment date, I just had in here. So we have a €750 million bond to pay in August '23, €850 million bond in September of '25 and then a €1.2 billion bond we raised during COVID is due for repayment in May '26. So retail about almost just under €3 billion in debt to repay over the next 3 years. So we are -- there are still significant funding challenges ahead of us. But no, we're confident we can deal with them. But that's why I say the shareholders will have to wait. And I think our shareholders understand that. Next question please.

Thank yo. The next question comes from Muneeba Kayani from Bank of America. Please go ahead your line is now open.

Hi. So you were mentioning kind of Asian demand being positive for the short haul this summer. I just wanted to get a sense of what you've seen so far on Asian demand, and you see it coming through in your bookings at this point? And have you seen basically a change in booking patterns this year paid to kind of pre-COVID terms of the booking window? And then secondly, Michael, your contract ends in 2028. The MAX-10 deliveries go on, well, beyond that. How should we be thinking about you staying on?

Thanks, Muneeba. I think I might ask Jason McGuinness to comment on the booking pattern, Jason. But just on the Asian demand. We see - I think what's Europe, there is unusually strong demand this year. I mean it is very difficult to get a hotel room or a golf course booking anywhere in Europe this summer with the number of Americans who are over here. The dollar has been strong now for over a year. Forward traffic, I mean, as someone who got scalped on a transatlantic airfare yesterday from Lisbon to New York, the strength of transatlantic business is astonishing. And Europe - the strength of the dollar means that people are and there is going to be an invasion of Americans across Europe all summer long. We had no Asian traffic across Europe for the last 2 years, 3 years. I don't - we don't - we carry a significant number of Asian. But for us, I think the real driver of the Asian traffic recovery is the transfer traffic on to short-haul legacy carriers. They fill up an awful lot of the short haul of Lufthansa, Air France, IAG and other. I think Carsten [ph] was previously quoted and said, upwards to 50% of their short-haul travel across Europe for the summer is long-haul transfers. And I think that's what is translating to there is that actually, it further constrains the available capacity in a marketplace where short-haul Europe is somewhere be operating at 90%, 95% capacity, extraordinary transatlantic transfer demand. You have a beginning of a medium-term recovery in Asia and filling up the short-haul capacity of our competitors, which leaves less seats for the, if you like, the European consumers who are turning to Ryanair because we are the ones offering not just the lower fares, new aircraft, fuel-efficient aircraft, but also we're the ones adding significant demand. in a marketplace that's operating at 90%, 95% pre-COVID capacity this summer, Ryanair is operating at 125% of capacity, and we're capturing large amount of market share. Jason, maybe just give us your thoughts on the booking patterns this summer over last -- or this summer against pre-COVID. And then we grant deal with my contract in 2028.

Yes. Just on bookings. As you said earlier, bookings are strong at the moment for the summer. We're not quite back to pre-COVID - the booking curve isn't fully recovered. But it's - so bookings are still happening closer to the date, but it's certainly trending more towards what it was in summer '19. It varies across - we have 47 different market segments across Europe, and it varies across them, but leisure is booking almost at a was pre-COVID. Some of your domestic and ethnic routes will be closing closer to the date. So that's why we're just a little bit cautious when we're giving our fares going out across the summer, particularly into Q2. Although bookings are strong, it's still happening closer to the travel date. But I'm very comfortable in terms of the rate that's happening at the moment, very comfortable with load factors. You're less -- in terms of our April load factor when we announced May and when we look into the peak as well, load factors are very strong, but they are happening just a little bit closer to the travel date, but very long in general.

And maybe just to finish briefly, thank you for your concern for my contract in 2028. But I would -- actually, it's 5 years away. Nobody is thinking about it. Firstly, it's a matter for the Board when we get to 2027 or 2028, whether the Board wants me to stay on after that period of time. I don't think it's all that important one way or the other. I think this business is no longer heavily dependent on me. I think particularly where we have a decade of aircraft deliveries that now run us out into the mid-2030s. And we have done a lot of really good work in the last, I think, during COVID and post COVID on succession planning. We now have five airlines in the group. We are growing individual airline CEOs. We have multiple Ops Directors, Multiple commercial Directors, very good and strong financial -- the CFOs across the group. So we have a kind of a training ground. And we have a very strong pipeline of management sufficient, not just for me, but for every other senior management within the group. But really our focus, I think, as a group now -- and I keep trying to urge everybody, there was the early days I used to make all the decisions in Ryanair. And increasingly, I make very few decisions in Ryanair because there's so many. It's such a big operation. I think the strength of the management team in Ryanair has been demonstrated to an extraordinary -- and by the way, we came through COVID. We've managed our way through COVID, I would say, spectacularly well. We were the only airline that was ready for the post-COVID recovery. We were the only airline across Europe that has cut -- cobot with the same cost base as we had going into COVID. And you look at -- we have a pipeline of aircraft deliveries now that allows us to grow from 149 million passengers pre-COVID to 225 million passengers in 2026 and now 300 million passengers in 2033 or 2034. And much as I would like to believe that is all due to my innate genius, I'm afraid it's not. We just have a very good management team. And so increasingly, whether the Board wants me to extend my contract in 2028 is -- or not is frankly immaterial. There's a really good management team in Ryanair taking this business forward. And we will be -- I think everybody is excited by the opportunity of executing this plan to grow to 300 million passengers by 2034. Remember, the next largest airline in Europe at the moment is Lufthansa at about 100 million passengers. And yes, they will engage in M&A, but we will certainly, I think, capture about 1/3 of the entire market for short-haul air travel across Europe. And that is good because if Ryanair doesn't capture 1/3 of the market in the next 10 years, Lufthansa, Air France, KLM, IAG, are going to screw everybody for ridiculously high airfares, will be the airline keeping them all honest, we'll be the airline offering lower fares, we'll be the airline delivering growth to airports, we'll be the airline delivering growth in not just traffic but also jobs in the regions of Europe. And so I think we're headed for a very exciting 5 years or 10 years, and it doesn't really matter whether I'm there after 2028. There's a really good management team. And we're -- and not just the senior team, but also the middle management team coming through as well. And you'll all get the opportunity to meet them over the next week as we're banging them all out on road shows, if you ask them what they think of my contract in 2028. I'd say mostly the -- about it. Next question please.

Thank you. The next question comes from Stephen Furlong from Davy. Please go ahead. Your line is now open.

Hi, Michael. Hi, Neil Yes. Just on the winter profitability, just more kind of generically, do you think that the business is a bit more -- obviously, it does summer peak there, but I mean it changes in the network, maybe something for Eddie, whether it's more weekend travel changes in labor contracts that make it at least when you're adding the Q3 and Q4, it's not like a massive kind of a loss-making period because I think the seasonality to some extent. And the second one, maybe for Neil. Maybe just talk a bit more about the -- what happened there in terms of the conversion of the syndicated term loan. And does that help in the deliberations with S&P for the upgrade? Thanks a lot.

Thanks, Stephen. Why don't we talk about winter schedules and profitability, maybe ask Eddie to take that and maybe Tracey McCann may comment on it as well. And then Neil, used the loan story, please.

Yes. We've been working over the last number of seasons on aircraft optimization or as we call it, our repacking the suit case in terms of getting better utilization out of the aircraft. And also within that, there is a sort of a pivot -- slight pivot away from midweek. Okay. We've got to do that within the constraints of the 5 4 roster analytics and a base network of over 90 bases. But yes, we are trying to fill out the weekends, and we've been more successful on that now in terms of how we've done that. We've sort of moved from a sort of a 65-35 split to about 70-30 now towards the weekends, which runs through from Thursday to Monday. So that has really helped. Also on a lot of city pairs, if you look back 10 years, where we weren't even daily on some of those major trunk routes where we've now got multiple frequencies and we continue to build them. And also the domestic networks in places like Italy and Spain, where we're continuing to grow, which are less seasonal covering long distances. So we are sort of hedging against that. We're working our way in, more frequencies, more domestic markets pivoting towards the weekend and strengthening up on city pairs. So it's working its way towards us.

Yes. Yes, what Eddie said, the fact that we've pivoted away from it, we can certainly help on the yield and helped on the ancillary much stronger fare to be got at the weekend. And I thought it helped a little bit on cost in that it's allowed us no flying at some basis at the weekend, but it helps with staff costs, it sounds for things like uploading onboard sales rate below some bond probably closed midweek and some of the smaller basis. So yes, it definitely helped on both sides for and costs.

Good. Maybe we turned on the debt and the syndicated term loan, maybe Neil, Thorn might good pressure to come in as well at the end of Neil.

John did all the heavy lifting on this. What I would say is that it was important to S&P, but more important was the 99% unencumbered balance sheet that we have and the strong liquidity within the group, and they did upgrade us last week to a BB+ but they like the fact that rather than having a term loan, which was going to mature next year, we've now termed that out to 2028, but have flexibility to a revolving credit facility to pay that down or draw needed. And they count that effectively as cash. And John did a great job getting the margin down significantly lower levels. So maybe, John, do you want to add a bit more color on that?

Yes. I think it also kind of ties into the message around the debt paydown on the basis of that. It was year out the facility in terms of May '24, it was due to mature. And we've obviously extended that out for 5 years. So if you look at -- it's a good piece of work. And I think, look, we're help them for the support of our banking group funds. Next question please.

Our next question comes from Mark Simpson from Goodbody. Please go ahead, Mark, your line is now open,

Good morning. Two questions, one for Neil. In terms of use of cash, obviously, significant inflows expected over the next couple of years. Is there an opportunity or potentially a benefit to accelerate PDP payments as we look into the, say, third year of forecasting? And then a kind of broader issue, probably if Juliusz [ph] kind of political competition issues. Two things there. Obviously, we've seen the ECJ ruling, which must be seen as a win regards to Lufthansa -- then what the kind of ramifications of those rulings are? And equally, are there kind of move by the EU Commission in terms of open skies and competition to actually act on issues around ATC?

Yes. So Mark, on PDPs and use of cash, we're getting to the stage now where we're more into delivery payments rather than PDP payments in relation to the remaining 110 game changers. So accelerating them doesn't make a huge amount of sense. We don't really - with the exception of having paid a signing deposit on the 300 maxed hands, we don't get into PDP discussions or obligations this side of kind of the back end of 2026. So we can look at that state depending on where interest rates are, et cetera, on whether we accelerate some of that or not. But the working assumption is that as before, you pay up to 25% of your PDP between '24 and 3 months of delivery of the aircraft with the balance on delivery.

Okay. I'd add to that is just before every Juliusz is, obviously, the only issue that we do have outstanding there, but we have a number of years, we haven't yet hedged the dollar, euro on the new aircraft order. The first deliveries aren't until 2027. We have extraordinary exceptional hedge position on the -- all of the remainder of the game changer delivery to $1.24 to the euro, which means that, again, it just underpins how exceptionally low-cost our aircraft additions will be kind of looking across our competitor space where the running aircraft are not dollar hedged and they're taking leases with significant cost inflation and interest rates rise.

I was just going to do an add on there, Michael. As Michael said, having hedged the MAX-10s, we wait to start that after AGM approval in September when we've got what is called a firm commitment for accounting purposes. The S&P upgrade last week will be very helpful in ensuring that we have the hedge lines in place. I wouldn't anticipate hedging 10 years out, but we may start looking at kind of shorter 3-, 4- possibly 5-year horizons on the dollar. I'm sorry, Juliusz, now hold yourself.

Look, obviously, the Commission - European Commission today, very poor job on the Lufthansa decision 3 years ago. And I think we all new that back then, the legal community could not believe that the commission could cut corners to that extent. So I think the decision from the court 2 weeks ago was welcomed by most, maybe not by some people based in Frankfurt, but generally, it was welcomed by most. And I think the focus now is on converting that court win into something tangible. Obviously, we don't want it to become a -- victory. Damage to competition has been done. It's being done because Lufthansa managed to hold on to all of its slots and all of its aircraft. And when you compare their situation to the situation of easyJet, for example, who have to -- and lease back on the majority of their fleet to survive, the damage to competition clearly has been done. So what can the EU Commission now do when reissuing their decision to repair some of that damage. And obviously, what obviously brings to mind is slots in places like Frankfurt, Munich, Dusseldorf or Vienna, where Lufthansa is in a very, very strong position, but didn't have to effectively surrender anything in return for this massive state bailout. On ATC, Mark, it's not a great story. There's a 5-year-old complaint with European Commission filed by Ryanair and several other airlines in relation to French legislation by -- ATC strikes. You see in France today when the ATC goes on strike, 50% of flights overflying the French territory are protected as compared to 80% of flights, which land or take-up in France. And that is at odds with the position in Italy or Spain or Greece, where 100% of Orbotech [ph] are protected. The EU Commission have been sitting on a complaint from airlines for 5 years since 2018 and nothing has been done. So it's hard to say whether anything will actually be done at European level. We're pushing very hard. It's our priority #1 in terms of our public affairs engagement in Brussels. But I think that we need a very, very bad summer, I think, some sort of calamitous events, but people not returning from holidays before anything will actually happen. I think it's worth mentioning on this occasion, the petition that we have launched a few weeks ago where we have been gathering signatures from customers to support our call on European Commission to act to do something. And I think we have been surprised by the strength of support. We have reached our target of 1 million signatures much earlier than planned. I think we're at 1.1 million or 1.2 million signatures now, adding over 100,000 every week. And we very much intend to submit it to the European Commission very soon, calling them publicly to finally do something in this area.

The next question comes from James Hollins from BNP Paribas. Please go ahead. Your line is now open.

Morning, One for Neil, just on fuel hedging. As you look at full year '25, you're 25% hedged. Just wondering how -- maybe update on your policy and whether you're tempted to uptick it given we're at $75 barrel? And then Michael, just as we look at ETS allowances stopping a start of 2026 OEM delivery delays, do you think full year fiscal '25 is your best shot at delivering EUR 2.2 billion of net income? Or would you not really think about it that way?

Neil, fuel hedging?

James, thanks. Yes, we're 25% hedging in place now for the first half of FY '25, locking in savings where we're hedging at $77 a barrel as opposed to $89 in the current financial year. I suppose one of the issues we have as we try to go out longer is that one, we're one of the only airlines that have the balance sheet to be able to hedge that far out, which means in a relatively illiquid market, which Jet is when we've into the market, they see us coming. And we run the risk that if we do large volumes, we move things against ourselves. So we're gradually layering that up, and I would hope over the next few months, that will start to trend up 30%, 40%, 50%, locking in savings. But we have to take baby steps on this because compared to pre-COVID, a lot of our competitors are sub-investment grade, got negative equity on their balance sheet and just can't play in this place. And equally, we had to start looking at something we hadn't done in the past in so far as we're now hedging out some of our capacity through caps or options. And again, this means that we get insurance against the worst-case scenario. So Goldman Sachs or [ Royce ], we go to $100 a barrel. We've locked in a ceiling on that. But equally, if the market drops, we get to participate with more variable options there. So 10% of our cover this year is true options and then we've got another 15% that's unhedged. So that has changed slightly the way we have to fuel our hedging into the future. The other side of the coin is the dollar. It's a more liquid market and we will absolutely pay for the fuel regardless of what happens in dollars. So we're slightly better hedged there. We're just under 40% hedging at 111 into the first half of next year as opposed to 90% at the moment on FY '24 at 108.

Okay. Thanks, Neil. ETF, look, I mean we are -- I think we will be a beneficiary of environmental taxation going forward. We have one of the most fuel-efficient fleets in Europe. We have a very wide margin over all of our competitor airlines. I think there's no doubt in my mind that environmental taxation will be a feature of air travel, particularly in Europe over the next 5 or 10 years. We are campaigning very hard, though, that there needs to be fair environmental taxation. And in my view, scandalous and intenable the short-haul intra-EU pays all of the environmental taxation. We exempt long-haul flights to and from Europe despite that they only deliver 6% of the traffic and yet account for 55% of the emissions -- Europe's emissions. That is unsustainable. Long haul has to pay its fair share and also as those transfer traffic. It is bizarre and that you can take two flights through a hub, whether it's Skip [ph] or Frankfurt or Munich or Paris to get your destination in Europe and you're exempt from ETS or environmental taxation, whereas if you take one direct low cost, like you pay all of ETFs. So I don't regard environmental taxation. It won't fundamentally alter the huge cost and price differential we have our advantage we have over all of our EU competitors. I am not going to get into any discussion on FY '25 profitability. It's far too far away. And as we've seen from COVID and the war in Ukraine, too many outside factors are curve ball can emerge out of nowhere. However, I will go back to the underlying, I think, themes at this morning's conference, that is capacity constraint in Europe. European short-haul capacity will be constrained for the next 5 years out to 2030. Traffic, I think, will continue to recover and be strong. People have more leisure time writing income. They are going to spend more money on travel and Ryanair is poised to be the beneficiary of that as we grow from probably 20% market share to 33% market share over the next decade. Sorry, just an opportunity to bring in Tracey McCann who's our Director of Sustainability. And Thomas, anything else you want to add on the environmental piece or ETF for the next couple of years? A – Unidentified Company Representative: No, look, I think you've covered off that we'd like to see as policy, both in Europe, in particular, given that long haul does amid the higher proportion...

Sorry, Thomas, you're getting a bit garbled there. I think- Yes, we can yet repeat it, if you would, please. Yes. Look, I kind of agree with what where we're saying, look, we need a -- policy and long haul couldn't be exempt and -- whole London new ETF form that is by the end of '26 if -- not fit for purpose, do you see them fall into the ETF taxes as well and everyone pays for CO2 emission.

The next question comes from Sathish Sivakumar from Citi. Please go ahead. Your line is now open.

I've got a few questions here. First is on the ancillaries. Where do you see it actually normalizing in the near term? And have you seen like sign of inflationary pressure on onboard spend? Or we actually benefit from inflation because of the price/mix impact? And the second one is actually more specifically Italian out consumers begin given now you're kind of not leisure [Technical Difficulty] How does you see the booking curve evolve there come back to the rest of the network? Thank you.

Neil, maybe take the ancillaries. I didn't quite - you broke up a little bit on the second part. There something -- booking curve in Italy and if it is, then maybe Eddie or Jason, you take that. Neil, ancillary?

Yes, sure. Ancillaries, as you know, had a good performance last year, just under €23 per passenger. We continue to see strong demand for priority boarding, reserve seating. And a lot of that's true. The various pricing models that we have in place where we're trying to hang on to the revenue while increasing the conversion on the product. Equally, onboard spend has come back well and we're working hard to grow that year-on-year. So I think you'll see modest year-on-year growth in ancillaries this year. It might be another €0.50, €0.60 per passenger on to what we had but you're not going to see the kind of €3, €4, €5, €6 increases that we had over the past 3 to 4 years. It will be at a more stabilized level, probably single-digit increases from here.

Okay. Sorry, just on the question line got a little bit jumbled there is question on Italian domestic.

Yes. So just like I want to understand how the Italian domestic consumers, like [indiscernible] how does that act booking and versus the rest of the network? Because now you're not just leisure carrier there. You're actually main flag carrier for the domestic market there.

Yes, you're right. easyJet, at the moment, is very strong for us. We're 40% market share. We're probably closer to 50% on the domestic market where we now have well over 100 routes. So in terms of what I think on the domestic market, Asia or Alitalia or whatever you call now have broadly halved on the domestic routes. We had some carriers who try to come into Italy, but subsequently closed. They've done more closing a base than opening a base. The domestic market at the moment, we're well over 100 routes. We launched 13 new routes during COVID and they're performing very strong. The Italian market for us is our largest market. We carry close to 60 million passengers in Italy this year, and I'm very happy with how it's -- at the moment. I think we're by far and away, is lease safer airline and it continues to work very strongly for us.

Our final question this morning comes from Harry Gowers from JPMorgan. Please go ahead. Harry, your line is open.

So if I can, two quick ones. First one, just on the ex-fuel unit costs, appreciate the guidance for this year for the increase and the widening gap versus peers. But then maybe how should we think about it more in to March '25, should it come down to the EUR 31 per pack set this year? So are you thinking more midterm? And then just secondly, on probably something about some of the markets where the incumbents are weaker or the build back has been slower, so Scandi or Germany in particular. Are you in active dialogue with airports to expand or put more aircraft in? Or are you waiting for airports to come to you over the next 12 to 24 months to drive traffic? Thanks.

Okay. Neil, why don't you take the first next unit cost out to March '25 and then maybe Eddie and Jason might give us some commentary on Germany and Scandinavian markets and discussions.

Okay. Harry, I suppose I would echo Michael's earlier comments in relation to Slide 4 of our presentation and the gaps that exist between ourselves and everybody else. Some of the drivers of the higher unit costs this year will be, as Savi rightly pointed out earlier on in call down to higher crewing ratios. We staffed up for a full complement of 52 Gamechangers for this summer at the back end of April. A lot of those will be in until the end of July into August. We've got a headwind on route charges with less airlines playing in that space. But you may see a euro or so uptick on our unit cost ex-fuel this year. I think we'll hold that into '25. And as we get more Gamechangers in and indeed as ATC hopefully improves over the next year or 2, we'll see those crewing ratios starting to come back down again. But the key focus point here is the gaps that exist between ourselves and everybody else. I think it would be shortsighted if we didn't invest in operational resilience this summer. We had a phenomenal performance last year. I think a lot of people are booking on the back of our reliability and having the higher crewing ratios as we go into the summer, particularly with 57 days of French ATC strikes is the right thing to do. And the key for us is to retain the massive gap that exists between ourselves and our competitors in Europe over the next decade.

Yes. And just on the German market, I mean, there's clearly dysfunction going on in the German market at the moment. There are rising costs there with security costs, and it's not unusual to have airport costs on a per passenger basis up in the sort of mid EUR 50 where you've got Europe's largest airline that can -- has got to scratch to where to allocate resources, then you're less likely to put aircraft there. I mean we have the -- you've got the largest economy in Europe, where Ryanair clocks its capacity by 25% and grows its market share by 2%. And easyJet cuts by more than 50% its based aircraft in Berlin, like there is something broken in the German market, particularly at the midterm airports. And that sort of dovetails what Juliusz had to say with the sort of state bailiffs they're protecting the incumbent carrier. But we still continue to grow in regional cities in Germany. And I think it's only a matter of time. And I think when the German economy bounces back that you will see the real lag in lack of capacity that must mirror sort of GDP growth, and you're going to get -- there's just going to be a serious loss of connectivity there. And I think it will eventually come around in the next 24 months or maybe it could be a couple up to 3 years. But in the meantime, we'll continue to grow strongly at German regional airports. In Scandinavia, it's sort of a different play there. You've got two very weak incumbent carriers but you also have, today, the governments up there seem to have an unending bottomless pitch for bailing out airlines. And that feeds into the sort of narrative from the airport, we think somebody is going to come and save today. And while we have five aircraft based in Orlando and are growing quite nicely there, having moved from the secondary airport in -- we have a small operation, no based aircraft in Helsinki at the moment. We've got bases in [ Riga ], and we have also a long-standing base in Gothenburg. So we have the bases there when we get a turn on cost there to grow that market. It has all the sort of short-term connections, which you need put in a serious amount of frequencies in there. Scandinavian leisure has been excellent for us over the last, like particularly as it picked up post COVID and we would hope to grow, and we will grow in those markets, particularly with two weak incumbent carriers. But I think the it's got a down on some of the airports up there that there's nobody else coming in terms of growth and we're essentially going to be the only show in town that can move the dial. So I'm pretty hopeful that we're going to grow in Scandinavia that's going to move first. And Germany will come in the major airports in time.

Yes. I don't take you much more to add, other than we're going aggressively in our core markets, Italy, Spain, U.K., George , which we've locked away long-term low-cost deals out to the end of the decade, places like Central and Eastern Europe, but we're by far in the way the largest carrier in Poland where we've closed 36% market share, 16 million passengers. We're probably going to double those passenger numbers over the next 10 years. So there's many more opportunities than we can deal with at the moment. And we'll come back to the Germany and Scandinavia is when the costs are at a level that we are willing to accept.

This does conclude the Q&A session for today. So I'll hand back over to Michael O'Leary for any additional or closing remarks.

Okay. Thank you very much, everybody. I said, reasonably strong numbers this morning, the summer looks strong, but we - I want to stand aside from the actual exuberance of all of our recent competitor commentary. I think there would be challenges. We are seeing forward bookings and average airfares into the summer are ahead of where they were last year. Whether that gets to the kind of 20% or 30% our competitors are talking about, I'm not sure. And I think now is an appropriate time for caution rather than irrationally exuberance. I think the good news this morning is that we have resolved the delivery delays with Boeing for this summer. We are increasingly confident that we'll take 50 aircraft for summer '24. We'll have another 25-, 30 aircraft into summer '25, FY '26. I would not underestimate the strength - of the Volumax order. The fact that we're able to set out an ambitious growth strategy for the next decade, taking 300 million passengers by FY '24 in a marketplace where we will be funding all of that CapEx largely from internally generated cash flow. The balance sheet is strong. We will pay down all of our debt by 2026. And -- but I think shareholders will just need to be patient with us for the next year or 2. While the cash generation is strong, we have -- still have significant challenges with this year. The fuel bill will jump by over EUR 1 billion. We have the full year of pay restoration and committed to pay increases with our pilots and our cabin crew over the next 4 years. Debt repayment is a commitment that -- where the Board is very strong on we are very ambitious, and CapEx financing costs for the next 2 or 3 years. But I think what underlies that is an enormous and widening gap between us and our competitors on the cost side. I thought it was interesting just to come back briefly on Harry's point. While we do focus, and I think everybody should focus on the ex-fuel unit cost slide on Page 4. Don't forget that in the next -- for the next 4 years and then for the next decade, we will, on top of that, be adding in new aircraft with more seats, but dramatically more efficient, dramatically lower fuel consumption on a per aircraft on a per seat basis. So we're not just talking about the ex-fuel unit cost advantage going forward. We're talking about an ever-widening inclusive fuel cost advantage going forward, and we will be trying to pass on those fuel savings in the form of lower fares to our competitors in a marketplace across Europe. With constrained capacity, our competitors are, I believe, pushing the pricing envelope or being too aggressive on pricing and that if you like underpins our role. And I think what would be strong growth during the next 4 to 5 years with reasonable prospects of strong profitability and strong cash flows as long as we don't see any more curveballs like COVID or Ukraine. Can I again, just caution the Q1 will be very strong. They will be artificially strong because the Q1 prior year comp last year was badly damaged by the Russian invasion of Ukraine, which disrupted Easter and meant we had to aggressively price to maintain high load factors on constrained -- up to the end of June last year. Q2 will be much more modest because Q2 last year was very strong for us. We didn't have the kind of disruptions we had our competitors had. But nevertheless, I think we're set for a year where we will see strong traffic growth to 185 million passengers, up 25% on our pre-COVID numbers. Modest profit growth this year. And again, I think the number we should focus on if traffic is growing by 10%. We aim to deliver that type of profit growth as well. But in a cautionary environment, it could be better than that if our competitors are right and if our competitors are correct and pricing remained close and remains very strong, we will obviously be the beneficiary of that. But I'm not sure we'll see that until we get to the half year numbers, which will be October, November, and then we'll have a much better feel for what's going on. I hope my competitors are right and the pricing will be ludicrously strong all summer long, but 30 years of pain in this industry has taught me to be cautious when my competitors are irrationally exuberant and maybe to be a bit more exuberant when our competitors are cautious. Okay. Everybody. Thank you very much. As I said, we are extensive road show teams on the road all week across North America and in New York for 2 days, Boston and Chicago, and we have teams on the West Coast, all across Europe. If anybody wants a meeting or hasn't got a meeting booked in, please ask one of the broker, Citi, Davy's, Goodbody's, and we'd be delighted to meet with you. If not, and you want to come visit us in Dublin at some stage during the summer, please do so, we'd be very pleased to give you a briefing and update. And other than that, thank you for participating in this morning's call, and we look forward to seeing you all at - during the week. Thanks very much, everybody. +