Ryanair Holdings plc (RYAAY) Q1 2024 Earnings Report, Transcript and Summary

Hello. Welcome to the Ryanair Holdings plc Q1 FY'24 Earnings Release 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, to begin. Michael, please go ahead when you are ready. Michael O’Leary: Okay. Good morning, ladies and gentlemen. You're welcome to the Q1 results conference call. As usual, this morning, we posted the results release, an extensive MD&A and a video Q&A with myself and Neil Sorahan and that went up on the ryanair.com website at 7 O' Clock this morning. So I refer you to that, and I'll take it as read. I'll give you a couple of comments on the results and a few thoughts and then we'll open it up -- I'll ask Neil just to give his couple of comments on the MD&A and then we'll open it up for Q&A. So you've seen this morning, we reported a Q1 profit of EUR663 million. The number is materially distorted because of -- it's compared to Ukraine affected prior year Q1 PAT of EUR170 million last year. Last year, you'll all recollect Russia invaded Ukraine on the 24th of February, it caused a significant collapse in traffic through March and into Easter. And it also meant if you recollect, we aggressively dumped prices in the Q1 of last year. Prices we reported this time last year, average fares this time last year were down 4% on pre-COVID, as we were aggressively kind of trying to restore load factors through Q1 so that we could kind of underpin Q2. And I think that's important, and it's something I want to stress a couple of times today. So we had a very -- we very aggressively dumped prices in Q1 last year. And so the kind of the growth of EUR170 million to EUR663 million is a function of the very weak prior year comps. This year's Q1 was helped by a very strong Easter, strong demand, good pricing. We had a second UK bank holiday in May, so we were the beneficiary of that. So over the quarter one, traffic rose 11% to 50 million passengers. Revenue per passenger was up 27%, as again, that kind of average fares were up 42%, but that's distorted by the fact that average fares were down 4% in the prior year Q1. Ancillary revenues were up 4% on a per passenger basis. We took, at the end of the quarter, we're operating 119 Boeing 737-8200 Gamechangers. The total fleet at June was 558 aircraft. We've opened three new bases and 190 new routes for the summer '23, three new bases in Belfast, Lanzarote, and Tenerife all of them performing well. We've extended our fuel hedging. We're 75% hedged for FY'24 at $89 per barrel, a little bit above current spot rates. We're 27% hedged for FY'25 at $74 a barrel. If we were able or willing to extend that hedges, if we could hedge all of FY'25 at $74 a barrel that would be a saving of almost EUR1 billion into next year's earnings FY'25 earnings. Net cash at the quarter end was strong at just under EUR1 billion, up from the EUR0.5 billion at 31st of March and again, thanks to the excellent work that Neil and the team have been doing, our rating has been upgraded by both Standard & Poor's and Fitch to -- from BBB to BBB+. The big development in the quarter was obviously the 300 MAX 10 aircraft order, which we signed with Boeing in May. This order gives us a decade of further growth in Europe in a marketplace where capacity is constrained. The industry is consolidating, Ryanair has access to another 400 very low-cost aircraft. Another 100 MAX or Gamechangers to then 300 MAX 10 which will enable us to renew the fleet, but also grow traffic at a more controlled rate at 300 million passengers by FY'34. Just in terms of growth, again, I think we and the rest of our competitors continue to be a beneficiary of structural EU capacity reductions following COVID. There was numerous EU airline failures or fleet reductions during COVID. We continue this summer to see volatile oil prices and higher interest rates, which is discouraging weaker unhedged airlines from adding capacity. There is a shortage of aircraft, both new and lease that I think will run on until the end of this decade out to 2030. This summer in Europe, there's no doubt we're seeing the benefit of a very strong influx of American visitors to Europe helped by the strong dollar. We're starting to see a meaningful return of the Asian traffic to Europe, which means that European short-haul capacity remains constrained, but demand is high. And so through H1 this year, we're seeing strong demand, load factors high, airfares which were very strong in Q1. They would be modestly up in Q2, but not by what we had and what we saw in Q1. Remember, Q2 last year, we had a very strong Q2. We reported after -- profit after tax in Q2 last year of EUR1.2 billion. And we expect average fares will be up, but it will be a small double-digit percent, something in the mid-teens. European airlines will continue to consolidate over the next two or three years. Lufthansa are moving to take over ITA in Italy. The sale of TAP in Portugal is now actively underway. There's a large backlog of aircraft manufacturer, OEM aircraft delivery. And we believe that's going to continue to constrain capacity growth in Europe for at least the next three or four years and will assist us as we continue to expand our fleet. I think will mean we'll see growth with strong traffic demand. And I would hope to see modest airfare rises over the next two or three years. But I suspect they'll be modest compared to the very strong pricing we saw in Q1. The critical thing here is in Ryanair, our unit cost advantage over all EU competitors, our fuel hedging, our strong balance sheet and our low-cost aircraft orders, which now will run out to 2020 -- 2033, a decade coupled with our industry-leading operational resilience will create very significant growth opportunities, and I think there will be profitable growth opportunities for Ryanair over the coming years as we grow to 300 million passengers by FY'34. In terms of fleet, the Gamechanger fleet stood at 119 aircraft at the quarter end. It will rise to 124 at the end of July. We've already taken the first four of those July deliveries. Boeing hope to deliver the last aircraft either on the -- we think Friday, the 27th or Monday, the 31st of July, so we will just have all 51 aircraft in for the peak August travel period. Boeing has suffered multiple supply chain challenges, which has caused repeated delivery delays. We had hoped to be out of these at the end of July. But already, we're seeing, they've notified us of delivery delays in the autumn deliveries, which have been hit by the strike in Spirits in Wichita, the collapse of the bridge over the Yellowstone River. We already have agreed to Boeing that some deliveries will be delayed. Our last delivery for FY'24 -- for summer '24, which were to have been in April '24 will now be delayed to June 2024. But hopefully, we can take all those aircraft by the end of June '24 and therefore benefit with that continuing growth through the peak months of July and August. In May, we signed the order with Boeing to purchase 300 Boeing MAX 10 aircraft. These aircraft are astonishingly efficient. The order is subject to shareholder approval at our September AGM, but these aircraft offer us 39 more seats, 228 seats versus the 189 on the 737 NG fleet, but delivered 20% lower fuel consumption, 20% less CO2 emissions and they're 50% quieter. These aircraft will transform Ryanair's operating cost, will further widen our already considerable unit cost advantage over all competitor airlines in Europe and will materially, I think, incent will materially improve our growth for the next decade. We think about half of this order will be used to replace older NGs, which will start hitting 24, 25 in 2028 and 2029. But half of the order will allow us to sustain controlled, although more modest growth into the early 2030s than we have delivered over the past 10 or 15 years. Just in terms of outlook. Therefore, we expect FY'24 traffic to grow to approximately 183.5 million passengers. We've had to step that down 1 million from the original 185 million forecast because of these Boeing delivery delays through May and June. And what it also looks like we're going to suffer some delivery delays in September and October as we start gearing up for maintenance, we'll be short some aircraft, and we'll have to pare back some schedules. However, having said that, the cost gap between Ryanair and all of our competitors continues to widen materially in Europe. As previously guided, we expect to see a modest increase in our ex-fuel unit cost this year of about EUR2. This is due to the full year impact of annualized crew pay restoration, higher crew ratios, which is material this summer, where we're suffering the challenge of really lamentable ATC provision across Europe. We know that some competitors have already been canceling flights through the peak travel months of July and August. We're not canceling flights. We expect to complete our entire operation, but we need more standby crews to be able to make up the amount of ATC delays we're suffering. The route charges and the impact of the Gamechanger delivery delays will also impact unit costs this year. Q2 bookings are strong. We expect to run through Q2 with load factors at 95%, 96%. The fare increase in Q2 will be much lower than it was in Q1. The average fare in Q1 was up just over 40%. We expect in Q2 that, it will be more modest because of a much tougher prior year Q2 pricing, we think low double-digits, something in the low teens, and again, that's partly because peak summer travel snapped back very strongly in Q2 last year following the Ukraine invasion. We have noticed in the recent couple of weeks, a slight softening in the closed-in fares in late June and early July, nothing that I would be overly worried about at the moment, but I think there's either a degree of customer resistance to the higher fares but we are filling our aircraft fares that are marginally higher than they were in Q2 last year. But the final H1 outcome, therefore, is highly dependent on these -- the trends in close-in bookings for the remaining seats in August and September. As is usual this time of the year, we have no Q3 or Q4 visibility. We are cautious though that we enjoyed a bumper Christmas and New Year travel period last year. That was the first kind of full Christmas period for that wasn't affected by COVID for three years. And we're conscious that this winter, we are looking to grow. We're operating at 125% of our pre-COVID capacity and I would allow for the fact that we may have to engage in some price stimulation as we move into October, November, but we're not seeing that this summer, but we are expecting it later on this year. So I think we're right to be cautious. We've had a very strong Q1. We think Q2 will be modestly ahead of where Q2 was last year. Therefore, we'll have a strong H1, but I would be cautious into the second half of the year. Consumers are facing challenges out there across Europe, higher interest rates, highest -- higher mortgage payments, consumer price inflation is high, you won't have the benefit of the Asian and the American traffic in the second half of the year. And we are pushing 25% capacity growth in a market which this summer in Europe is operating at only 93% of pre-COVID capacity. We think that gets closer to a 100% of pre-COVID capacity into the second half of the year. So I think we're right to be cautious. We are well crewed. We're getting through the summer well. Load factors are high, but pricing might just be at that kind of inflection point where it begins to soften a little bit. I would welcome a softening in pricing. We've had a very strong recovery over the last two summers, but with Ryanair's much lower cost base, I think you're going to see us continue to take market share from competitors. We may need to do that this winter based on price. However, given the uncertainty we have over the H2 Boeing delivery that have been accentuated by the collapse the Yellowstone River bridge in Montana. Our significantly higher fuel bill this year, our fuel bill will be up EUR1 billion over last year. The continued volatility of unhedged oil prices, very limited H2 visibility and our expectation that the risk of tighter consumer spending in the second half of the year, we still remain cautiously optimistic that full year profit after tax will be modestly ahead of last year. It is, however, still too early to provide any meaningful FY'24 -- guidance. And we don't think that will change until we get to the H1 results in November. I would -- two other -- couple of other closing points. We look at the very strong growth profile we have here. We're very excited by our entry into the Albanian market this winter. Albania is a market that is, I think, ripe for exploitation. It's been hampered in recent years by only having one high fare carrier in the market and I think our arrival into Tirana in Albania, with very low, materially lower fares than the incumbent carrier will mean a pretty dramatic growth in that marketplace. We were pleased and delighted last week. Eddie Wilson, Jason McGuinness, our Director of Commercial and myself. We spent Wednesday, Thursday in Ukraine where we met with all the main airports Boryspil and Kyiv, Lviv, Odessa. We have -- we're, I think, inspired was the right word by the state of readiness of those airports. They really have -- they've kept their people employed. The airports are ready to rock and roll the minute it is safe to do so. They're hoping to reopen some air routes into the main airports in Lviv and Kyiv. Maybe by the end of this year, they're looking at a kind of Israeli type Iron Dome solution over Lviv and Kyiv and if they could achieve that, we'd be hopeful that the European authorities would allow a limited flight resumption. I think it's important for Ukraine and the people of Ukraine, I mean, we endured a 10-hour train journey from Poland into Ukraine in and out. The one thing that's missing in Ukraine Kyiv is remarkably normal, but what they're missing is air travel. And we -- I think it's incumbent on all of us in Europe to support Ukraine as best we can. And I think the best way we can support Ukraine is by leading the return to air travel. So we continue to work closely with the IASA, the FAA to encourage them to reopen at least even if it's only on a limited basis, the return of fights into Kyiv and Lviv. Once the war ends, and we all hope it will be sooner rather than later, we will charge back into Ukraine. We've committed to basing up to 30 aircraft in Kyiv, Lviv and Odessa. Kherson, Kharkiv will be later because those airports have suffered significant damage, but we intend to return back in there within four to six weeks of being allowed to do so. We expect to be connecting Kyiv and Lviv with up to 25 or 30 European cities. Ukraine was a big and growing market for Ryanair prior to the invasion. And after they have successfully repulsed the Russians, we expect to be -- Ryanair will be the number one airline in Ukraine. And in reasonably short order, we'll be the number one airline in Albania as well. I think this underscores the strength of the growth that is still ahead of us -- in front of us in Ryanair, not just in Western Europe, but in Central and Eastern Europe, where the more we push into those markets, the more we take market share from our high-fare competitors. One last thought, there is, I think, a slightly over optimistic. We are looking forward to we're holding a Capital Markets Day on the first week of September. The purpose of that day is to take everybody through the MAX 10 aircraft order, a detailed drill down into the very exciting growth opportunities we have all over Europe for the next and in those countries close to Europe for the next decade. We will not be updating profitability. We will not be discussing dividends or anything else. We really want to have a drill down into just the growth, the MAX 10 and what it will do for our costs. We will be sometime before the middle end of August, issuing the Class 1 document together with the AGM notice for the MAX 10 order. And that will -- so that will limit what we are any commentary we will have between it and the AGM when we hope shareholders will back our vision and support the order for the MAX 10 aircraft. So I just want to make sure that we have punctured any irrational expectation that the Capital Markets Day would be some dramatic reveal, it won't, but there will be very exciting, I think, news and communications on our decade of growth which rolls out before us in a marketplace in Europe where capacity is constrained and where all of our incumbent competitors have seen are emerging out of COVID with materially higher unit costs than Ryanair is. I'm astonished, never cease to be amazed. I looked at the numbers last week. Our PE multiple currently is 11. The PE multiples of Wizz and easyJet who are -- can either match our profitability, our growth, our unit costs are also 10 and 11. So either they're materially overvalued or we're materially undervalued, but I'm sure the market will work it out in due course. We look forward to seeing you all here at the Capital Markets Day in September. I think we have a very exciting story to tell on our new aircraft order on growth for the next decade, but that would be the height of it on that date. Neil, you want to take us through the MD&A or any point you want to raise on costs that I haven't heard.

I'll very briefly just run through within fairness, you covered off everything quite comprehensively. I think it's clear that we will continue to have the unit cost advantage over everybody else, although there is a bit of price inflation coming through in the first quarter as we annualize the pay restoration and the pay increases that we've awarded our people. And as Michael said, we've invested very heavily in crewing ratios. This summer, we were operating up to about 5.8 set of crews per aircraft, up from 5.4 sets of crews last year. So you're seeing that coming through, an increase in local ATC charges also coming through in the airport and handling line. So I think that, that's apparent in the numbers this morning. The balance sheet's in very good shape. We finished with EUR4.84 billion gross cash. And as Michael said, just under EUR1 billion in net cash, and that was after EUR1 billion in CapEx, including a $250 million signing fee on the MAX 10, which we signed back in May. So we've got another EUR1.8 billion to go for the balance of this year. Our balance sheets became fully unencumbered last Friday when we paid off our final Exim loan. So all of the 737, 800s now fully unencumbered, which I think is unique, and that's reflected in the ratings that we got from Fitch and S&P up to BBB+. Hedging, again, as Michael said, very well hedged for the year, just under 85% hedging of which 75% is through swaps and the balance through options. So we've got about 25% of our fuel floating. And then as we look into next year, we've got about 40% of the first half of the year hedged out at approximately $75 a barrel and then some modest hedging into the second half of the year. Just some other bits and pieces, the Class 1 circular will be issued in the next couple of weeks. And this morning, we published our annual report for 2023 and our 2023 sustainability report on our website, which sets out our ambitious targets for the next decade there as well. And that's pretty much it for me, Michael. Michael O’Leary: Okay. Thanks, Neil. We'll open up to Q&A. Now I'm joined here, we're in Dublin, where Eddie Wilson, the DAC CEO; Tracy Malloy ; Tom Fowler, Peter Larkin; Juliusz Komorek and Neil is obviously joining us from London where he's doing the media. So we're going to open it up to Q&A, and I'll front-pass the questions around, so we get everybody involved in the call. Thank you.

Thank you. [Operator Instructions] Our first question today from Savanthi Syth from Raymond James. Please go ahead. Your line is now open. Michael O’Leary: Savanthi, Hi.

Hey, good morning. If I might, on the fleet plan, it looks like there were some changes there, a little bit of MAX 10 shifting around. I was wondering if that was kind of based on what Boeing is telling you or you're making some assumptions given what you're seeing today? And then just for my second question, I was kind of curious with the investments in the operational resilience, does that get baked into the base and then we see kind of more of a normalized growth on top of that? Or how should we think about some of the investments that are being made there? And the impact on cost?

Yeah, I think -- thank you. You broke up once or twice there, but if I picked it up, the only change in the fleet plan is just delayed deliveries from Boeing. We've had to continue to be reasonably adaptive there. At one stage, we thought we might only get 35 aircrafts for the peak summer this year. It's now like and I think, credit to Boeing, they delivered all 51, but the last one will arrive on the 31st of July. So we are -- that's cost us about 300,000, 400,000 passengers through June, July. We've had to take about 200,000 passengers out of August and we are moving back. We're going to be seven or eight aircraft short in September, October because we start all the maintenance on the fleet. But Other than that, there isn't any -- and then we are moving some of the deliveries into summer of 2024 are moving back from February, March, April, they're moving into April, May, June. We are working closely with Spirit in Wichita and with Boeing to try to give us the most accurate figure we have on the fleet. Investment operational resilience.

It looks like Michael, your MAX 10 deliveries were a little bit delayed too like different than what you had in May.

No, no. There's no change.

There were some slight changes just sadly from the final aspiration from the draft to the release you now not major between the first two.

Yes. The numbers are still the same per year. The investment operational resilience like again I'll give you the good. There's good news and bad news. The good news is that the airport handling generally across Europe has been materially better this year than it was last year. Most airports, most handling companies are reasonably well staffed this summer. And so we're not seeing any significant changes or there's significant improvement over last year. The bad news is that ATC is a shambles. They are short staffed, particularly at weekends. We have long complained about the 60 days of French ATC strikes. And the European Commission continues to sit on its hands doing nothing. I keep writing to Ursula von der Leyen. She keeps fabbing the correspondent after DG move, which is a misdescription in terms of DG no move. Nothing is being done for Europe. We are calling the minimum. We're calling forest protection of overflights during French ATC strikes. That hasn't been delivered. Most of the ATC providers, the German, the French are short staffed inexplicably and are incapable of providing the staffing that's necessary. Remember, Europe this year is only operating at 93% of its pre-COVID capacity. And yet ATCs have less staffing than they had in 2019 and 2020. It is a mismanagement shambles but it's exactly what you expect from anything run by European government and by the European Commission. But the continuing failure of the European Commission to take some action on this is inexplicable. I think it's inevitable that we will have to maintain that, I think, improved operational resilience for the next year or two until we see Europe take some action on air traffic control. And we're still -- we would expect it to be as bad this time next year. I expect next summer Europe to be operating at about 100% of its pre-COVID short-haul capacity and ATC will still be giving us capacity restrictions at weekend, short staffing, excuses, piled upon excuses and nothing being done. So I think it is for additional -- while we've doubled up the operations capacity in Dublin and in Warsaw. But the additional crewing, I think it will be with us here for the next summer or two. I don't think it's long term. I think ultimately, something will be done about European ATC and the mismanagement of ATC but I wouldn't hold out any great hope that Ursula von der Leyen is going to do anything useful other than sit in her hands doing nothing. Eddie, you want to add to that?

Yes. I mean I think the important thing is that what's within our control we are significantly better in terms of solving those issues. So the two main call that Michael touched on there was the increased crewing ratios, which you've got to be ahead of the curve of like six, 12 months ago to bring those people through. We're still training over 1,000 cadets a year, and we have significantly increased our cabin crew ratios. And quite rightly, like as ATC is hopefully solved over the next number of years, and we're growing, we can get growing ratios. We can sort of lean into that. But more importantly, at the operations control center level, both here and in Bratislava, labs has been particularly important to us in designing systems that allow us in this environment where you've got, what would have been five, six years ago, meltdown days versus we're able to manage that in real time in optimizing the allocation of crews. And that has been critical not just piling extra bodies in but the support and systems that we have here that are homegrown systems and are working very effectively this summer. I mean it just -- it makes you -- you're able to get through without cancellations unlike many of our competitors.

Thanks, Eddie. Thanks, Savi. Next question please.

Thank you. The next question comes from Muneeba Kayani from Bank of America. Michael O’Leary: Muneeba, Hi.

Please go ahead. Your line is now open.

Good morning, Michael and Neil. So just on your comments on the softening in closing fares, is there anything you would call out in terms of specific geographies? Would you say there's a change in customer booking behavior maybe and kind of what portion of the second quarter -- fiscal second quarter is booked currently? And then the second question just on uses of cash. And in the video, you talked about a potential cash return to shareholders. What are you thinking at this point within -- across like dividend or buyback? And any metrics that we should think about in terms of a potential size in March this year fiscal year?

Okay. Thanks, Muneeba. Again, I would draw your attention, I think it's important we say it. Partly this is, I think, is a function of the weak prior year comps in Q1 and the strong prior comps in Q2. As we went through April, May and June, the close-in fares, we were seeing continuously kind of booking up -- your fares were significantly up ahead of budget expectations. As we move into Q2, close-in fares are closer to our budget expectations. There's a kind of a leveling out. We're still running marginally ahead of our budget expectations and low to mid-double-digit ahead of Q2 last year. But I think -- what we're trying to communicate here is in the last number of weeks, the close-in stuff has softened. In some cases, we're now looking at very few seats left available to travel. We may have oversold Q2 a little bit ahead of schedule. But we're not seeing the same kind of jump up in close-in bookings that we saw in Q1. But I think that's more a factor in Q1. Our budget was kind of predicated on last year's weak prior year comps versus Q2 it's not. And again, I just -- I don't think that to be worried about here. But I do want to communicate we've had a very, very strong Q1. Q2 will not be very strong. It would be good, but not this good. And I don't want any kind of irrational exuberance building up out there. No more than that. Uses of cash, we try to be as transparent as we can. The Board has set us kind of four in sequentially, the priorities in terms of cash and profitability. One, restored the pay cuts. We did that 24 months early in December of last year. We're agreeing pay increases with the pilots, cabin crews, our ground handlers across Europe. We've done deals with almost all the cabin crews. Most of the pilot groups are now largely done, and we're working our way through the ground handlers as well. It's an ongoing process, but the Board is committed. I think the first use of funds was repay restoration and rewarding the people who stood loyally with us through COVID with pay increases. The pay increase will be modest. We are already significantly adding to the headcount here. The crewing ratios are higher. But the pilots, cabin crews and ground handlers, the people are delivering the service deserve pay increases first. Second is debt reduction. We have bonds, which -- we're looking at bonds, we're repaying bonds here where we're paying an interest rate of 1%, 1.25%. The refinancing cost of those bonds today would even for us with a BBB+ would be 4.5%, 5%. So we are committed to paying down that debt. As Neil said, we paid down the last of our Exim debt last week. We have another bond of EUR750 million to pay in August of this year. And then we have two more bonds of about EUR2 billion, one of which is due in September '25 and one in May '26. And then we will be completely debt free at that point in time. The third use of funds is going to be CapEx. As Neil said, we're in peak CapEx this year. The CapEx does begin to run off as we run through the next two years, and we have that a two-year gap between the last of the Gamechanger deliveries and the first of MAX 10 deliveries. And only and after we're confident that we can fund all of those commitments can we look at returning cash to shareholders. I think it's something we'll be focusing on at the end of this year. Maybe we'll see some light at the tunnel when we get to the half year numbers in November, but it certainly won't be before that date. I think we've communicated clearly that it's more likely to be dividends than share buybacks. And if you read the press release, I mean, in terms of scale, I think we're conscious of the fact that during the worst of the COVID crisis, the shareholders invested EUR400 million in the company. That enabled us to access the bond markets. We raised EUR1.2 billion at the time during COVID at an annual interest rate of under 1%. So I think our kind of starting position looking -- if we're looking at a dividend would be try to return as much, if not all, of that EUR400 million as we can, but we won't make any decisions on that. I think until the half year numbers in November or maybe in Q1 are in -- at the end of this year or early next year.

Thank you. Michael O’Leary: Thanks, Muneeba. Next question please.

The next question comes from Harry Gowers from JPMorgan. Please go ahead. Your line is now open. Michael O’Leary: Harry, Hi.

Yeah, good morning, gents. Just two questions, if I can. So the first one, just on the ex-fuel costs, I think up EUR2 in March '24. And I think, Neil, you indicated previously you don't want to keep it flat in March '25 year-on-year. So is that still the case? And then, Michael, just on the trimming of the full year pax guidance, do you think there's a possibility you can actually make up the EUR1.5 million over the rest of the year? Or is there probably a heightened risk further today is actually lower than the back guidance further? Thanks.

Okay, Neil, you can take the ex-fuel cost costs, and I'll ask Tracey if she has any comments on that, and then I'll deal with the full year pax guidance.

Okay, Harry, thanks for the question. On FY'25, we would be hopeful that we'll be up at about just over 33-year-old passenger at the end of this year on an ex-fuel basis, we would be hopeful that we would maintain something along those lines, into the following year. We're a 5.8 sets of crews per aircraft. We would hope we wouldn't have to go any higher than that for operational resilience into the following year. We do have some modest pay increase coming through, but we can observe that in the numbers that we have. So, yes, I mean the hope and the plan is that we will be broadly in line with the 33 into FY'25.

Tracey, do you want to add anything on the cost?

Yes. Probably what Neil has said the two main drivers of the staff and then we see airports and handling and staff is increased growing rate, pay restoration and modest pay increases and the airport and handling as we previously indicated it increased local ATC, and then we're seeing some wage inflation on the self-handling and handling side of things there. They are really the two main drivers in the EUR2 cost increase.

Okay. And on the trimming of FY, we could -- if we were in the old days, I think we would have gone balls out it's 185 million, and we're just going to dump lots of capacity into the winter. I don't think the marketplace requires that now and nor would we. I think we operated quite successfully last winter by trimming out a lot of loss-making midweek capacity. We're running the full schedule of weekends. That's the way the winter profile looks except in those new markets like Albania and/or Ukraine, if we can get in there this winter. But generally speaking, no, I would not be minded in current markets, particularly where there is capacity is still constrained in Europe to be artificially dumping prices or artificially growing mid-week capacity during the winter season, just to hit some target of 185 million. If as a result of the Boeing delivery delays, we only have capacity for 183.5 million, then I think we will aim for the 183.5 million. We'll try to manage the yields as best we can during the winter. The yields in the winter will be lower than they were in the summer. The narrative that the era of low fares is over and is never coming back is not a correct one. There is still lots of low-fare availability. Our average fare in the first quarter was EUR49, which I think by any measure of means is a low fare in Europe. It's certainly far lower than any other airline in Europe can provide but no, we will not run additional midweek capacities with just scraping another 1.5 million additional passengers. Eddie, anything else you would have on that commercial.

Yes. I mean, I would agree there. I mean as we look through to the winter, we've gone back again like compared with winter '22 in terms of mid-week capacity of 30% and we're up to 70% for weekend. So that's evidence of that sort of trimming that's going on midweek. In terms of the review of what happened last winter, also looking at, I mean, Easter will be slightly earlier this year as well. And putting in Christmas extras and looking at sort of those troughs and activity beyond the 10th of January as well. So we continue to do that as evidenced by the numbers. We've got to look at the basis that we opened this summer to make sure that they go through into the wintertime, given support in the Canaries again, are particularly strong. So and leisure routes began in spaces like from Winter soon into or Morocco, Jordan, places like us, so it's -- that's where we'll be concentrating the efforts rather than chasing passenger numbers. So you'd ask me unlikely to make that as we would have done in the old days. Michael O’Leary: Okay, Thanks, Eddie. Next question please.

Thank you. The next question comes from James Hollins from Exane BNP Paribas. Please go ahead. Your line is now open. Michael O’Leary: James, Hi.

Hi, Mike. You're going to hate this question, but I'm going to come back on the pricing. You talked about low double-digit, then you talked about mid-teens and then low double to mid-teens. If you were lucky enough to be an analyst, would you be thinking about mid-teens is what you currently sold at, but the management of Ryanair have been quite cautious on that close-in. And then the second one is just on your pilots. Are you seeing any sort of -- I think everywhere except for Belgians, they're done on contracts. Are you seeing any of them sort of coming back and saying that performance is good, sum is good, we want a higher pay increase? Thanks.

I'll ask Eddie to come back on the pilot negotiate. Sorry, if I may, I mean I would have guarded mid-teens as low to low double-digits like we expect that the yield number -- the average fare in Q1 was up 42%. We expect the -- at the moment, our best guess is that the yield performance in Q2 is going to be somewhere in the -- between, I would say, 10% and 15%. At the moment, it's running at the upper end of that range. But we're -- I'm a little bit cautious just in the closing stuff has been a little bit weaker for the last four or five weeks. I don't see a reason why at the back end of August or the September bookings at the moment will be dramatically different. So I would be picking if I was lucky enough to be an analyst, if I'd only worked harder in school and got a job as an analyst, I would be pitching it very much at the -- in that 10% to 15% range. It still will demonstrate a reasonably strong Q2. The H1 numbers will be strong for the year, given that last year's H2 was EUR1.2 billion PAT, but this is a long winter. And I'm slightly cautious in that there is still significant pent-up demand for holiday bookings this summer. There's still constrained capacity supply. You still have lots of competitors who have much higher unit cost who will then drive up pricing. But into the winter, the higher interest rate, higher mortgage rates, consumer price inflation, has to feed back into air travel at some point in time. And I would be expecting that this winter. So I'd be a little bit more bearish in the second half of the year, but we still do -- I mean, we're heading for a very strong and very profitable year overall. I would just be cautious into the second half of the year. And then we're looking at next year where if oil prices continue as they are, we could pick up anything up to EUR1 billion in terms of additional savings on our numbers. So the medium-term outlook here is very strong. The aircraft order means we can grow 300 million passengers within Europe over the next decade. I would just be cautious on -- we've had a very strong Q1. Q2 is not going to be that strong, but then with a much tougher prior year comp. And I would be cautious into the winter. And that's a message we're communicating with our unions as well. There's lots of silly wage demands out there from ground handlers and airports, it's not that good out there. People are -- I think, there was still a lot of pent-up travel demand this summer, I think capacity will rise again into next summer, mainly because Ryanair will add another 50 aircraft for next summer as well. I would just be cautious. Strong Q1 reasonably good Q2, and then I would hold my breath to see what happens in the second half of the year. Eddie, do you want to give us an update on where we are with the kind of the pilots or wage settlements into our rising kind of profits.

Yes. I mean I'll just add just on to the fare side there that like don't forget like last year, there are like after the Ukraine invasion by Russia like when we came into the summer into Q2, there were exceptional close-in fares last year as well, which are not going to be repeated. Just on the pilots, yes. I mean, our commitment was to stick with our people who were with us all the way through COVID when we were doing zero flying. And we put in emergency agreements at that stage. And we had pay reductions. Those pay reductions were restored earlier. You'll recall, towards the end of calendar year '22. In the case of pilots, what we get with other groups, there was -- with those extension of those deals, there was no pay increase in April and we had revisited that with a number of our pilot groups, and those agreements are now, in some cases, extended with a pay increase this April, obviously, which is feeding into the restoration where a year was brought forward. So like look at those. I'd echo what Michael said there outside of the sort of the pilot groups, particularly with third-party handlers and particularly in the UK where you've got inflation is at much higher rates and hitting people on those lower salaries, so there has been some good news on inflation recently. But again, we're growing, and we will always look to our competitive position in the market, and we've reacted twice by doing restoration early and also that flowed into April this year where we reengaged with unions in the major markets and have come to agreements with them.

I should say as well, we did have a strike by, I'd say, about 60% of our -- the Belgian pilots last weekend. We still run about 60% of our Belgian operations through both days. Now we would have preferred not, if they hadn't gone on strike, but if they want to go on strike, they're free to go and strike, it's important, I think, too, that they understand that we can still run about 60% of our Belgian operations about -- on aircraft that are based outside of Belgium. We were heartened by the fact that about 1/3 of the Belgian pilots turned up for work, and we ran a significant proportion of the Belgian base schedule. There was no strike this weekend, they called another strike for next weekend. But as we said to them all, look, you can have exactly the same kind of increase that we've agreed with the Italian pilots, the Spanish pilot unions, but you can't have something stupid. And they seem to have a kind of a view of life that Belgium and Belgium is somehow different. It isn't. We will and are doing our best to be fair and work with our union partners and our people, both pilots, cabin crew, engineers, ground handlers. But we're not minded and nor are we going to fall over and concede some ludicrous pay increases just because we've had a strong Q1. Q2 is okay, and this winter could well be tough and challenging. So as we have always done, if we have to take strikes, we'll take them. We'll try to avoid them as best we can, but again a disproportion amount to kind of PR coverage. I mean, the Belgian pilot strike is far less impactful to us than a French ATC strike. We cancelled more flights on the day of a French ATC strike that we do on a Belgian pilot strike. So we are meeting with the Belgian pilot union again this week. We would hope to make some progress with them. But if they want to go on strike again next weekend, they can go on strike next weekend. We will work our way and manage our way around it. As we are with the -- I should also say the -- with the fires enrolled in Greece this weekend, it's important again to put that in some context, there have been forest fires that they were in the Algarve this time last year. Forest fires are a known phenomenon. They do appear to be getting worse. But in the case of Rhodes, there to the south of the island, most of the resorts and the airports are in the north of the island. We've seen no demand for passengers over the weekend seeking to cancel the flights to Rhodes. In fact, all of the passengers that were on Rhodes have return flights scheduled today, tomorrow, Tuesday, Wednesday, Thursday. So the kind of stupidity you get out of some of the media this weekend, are you cancelling your fight to Rhodes? No, of course, we're not. A, because Rhodes Airport is open and B, because we have a lots of passengers who are in Rhodes who wants to return from their holidays and there are more passengers who're still going out of the Rhodes. So it is the silly season the media tend to latch on to pictures of forest fires. But when you're flying to 260 airports across Europe, are we seeing any changes in demand patterns, no. In fact, if anything, over the last two or three weeks, we've seen stronger demand ex-Ireland than ex-UK. People trying to get the hell away from the unseasonably high rainfall we've had in Ireland and the UK, which if anything, gives me even more confidence for sustained growth in Mediterranean holidays over the next decades as we grow into 300 million passengers a year. And James, I hope that answered the question. Next question please.

Thank you. The next question comes from Jarrod Castle from UBS. Michael O’Leary: Jarrod, Hi.

Please go ahead. Your line is now open.

Hi, everyone. Good morning. I just want to question firstly on ancillaries. They were up 4% per pax. Obviously, inflation is running higher than that. So are you sacrificing volume? Is there a mix impact or you're just not pricing as aggressively as maybe you can at the moment? And I guess linked on to that, you've said something about fair pricing during the current quarter, anything on ancillary pricing? And then just looking a little bit further ahead, you've got a number of environmental headwinds coming under that for 55. You've obviously got the ETS step down in free credit next year. And then you've got SAF of which I'd probably say you must be best of breed at 12.5% versus what the EU saying by 2030. But I guess, looking at that, are you worried about the cost advantage, especially given that you've also committed so much more than EU is asking under SAF even if it is the right thing to do for the environment. Thanks.

Thanks, Jarrod. I'm going to ask Tracey to take the ancillary question. Neil, you might come in with some comments after. And then I'm going to ask Tom Fowler, our Director of Sustainability to deal with the environmental measures. So Tracey, over to you on ancillaries.

Yes. We've seen ancillaries increased by 4% from as you look over '23 Europe pretty much as we thought. We have done a lot -- but the two main drivers is on seats and priority boarding, where we've done a lot of work with labs, where we've introduced dynamic pricing. So I think we're very happy with what we see at the moment. So roughly that's 32% of total revenue. So pretty much obviously EUR0.50, EUR0.60 increase in ancillaries on the year.

And Neil, anything you want to add to that?

No, just Jarrod, we were quite clear. We made a big jump from 19-year-old passenger to just on the 23-year-old passenger. We'd indicated EUR0.50, EUR0.60 increase, as Tracey just said there, we're pleased that we're achieving that some areas where we'd like to make a bit more. We're working further with Labs on the pricing models around seating and priority boarding, sees more we can do there. We're looking at a more detailed level on the onboard spend to see if there's more we can do on that. But we're pleased with how we're developing. It's in line with what we had indicated we would do. And this is growth on top of a significant step-up over the past couple of years. And there's another year or two to go in the growth in ancillaries.

And Thomas, do you want to touch on environmental measures and their impact over the next two to three years?

Yeah, look, obviously the ETF is available little than the free allowances, but it will impact everyone the same deployed into EU will lose their allowance in tariff. But what we are doing honestly, we've taken in the current Gamechanger aircraft, which is 16% more fuel efficient. And we've also locked in the MAX 10 deal, which will replace some of the 800 NGs will be 20% more fuel efficient. So I think on ETF soil, we'll obviously still give any cost advantage around fleet because revenue will be hit the same with that exposure into you. And then on the SAF soil, we set the 12.5% target, it is aggressive at twice the European mandate book, but the cost isn't on all at the moment. We need to see production rise and at what front half of the field floor as we won't see the premium we see today as we see production have to increase. So I don't think that the cost disadvantage will be that significant, as you may look at it today. So it's just going to be as we see a follow-up and production ramp up.

Yes. And I would add to that, just if you take the environmental measure impact or James, over the -- Jarrod, over the next five years, we'll take delivery of another 100 Gamechangers, 4% more seats, 20% less -- 16% less fuel. And in that period, we'll take in the first two years of deliveries of the MAX 10, 28% more seats and 20% less fuel. Like, the technological revolution that's going on with the engines and their fuel consumption will more than fund any kind of environmental costs, the fuel savings here at gargantuan, particularly in marketplace in Europe where capacity will continue to be constrained over that four or five year period. I think the real underlying story here that we should keep tacking back to is that the market in Europe has changed. Capacity is now constrained. It will remain constrained for another four or five years, if not out to 2030. The reason I wouldn't be quite as -- if there will be another crisis between now and 2030. I just don't know where -- when -- what it will be and where it will come from, but capacity is going to be meaningfully constrained. Europe is consolidating. Remember, that consolidation is being led by airlines like Lufthansa, IAG, whose average air fare is north of short-haul airfare is EUR200. We're still continuing to expand our capacity in a marketplace that's constrained with aircraft that burn between 16% to 20% less fuel per seat with an average fare that in Q1 this year was only EUR49. So I think we will -- fares will continue, I think, to modestly rise for the next two or three years in a constrained capacity environment. Our competitors will be under considerably more cost pressure than we are. They will drive fares up harder and faster. You only need to look at the German market this year where Germany is the market that has recovered least post-COVID. It's only operating at about 75% to 80% of pre-COVID capacity and airfares have almost doubled in the German domestic marketplace, which is largely now a Lufthansa monopoly. So I think what we're seeing in North America, which has been five, 10 years of consolidated airlines with a reasonable pricing power and upward trend in fares is about to be repeated in Europe for the next decade. Next question please.

Thank you. The next question comes from Sathish Sivakumar from Citi. Please go ahead. Your line is now open. Michael O’Leary: Sathish, Hi. Sathish, go ahead.

Yeah, I'm sorry. I was on mute. Yeah, thanks, Michael. I've got two questions here. So first is on the operational resilience. Obviously, you have invested in the resilience into this summer. So out of the KPL sector per day compared to this year versus last year? And do you see further scope for improvement as we go into the rest of the summer? And then the second one is on the winter schedule. If I say you did flag that last year, you optimized your winter schedule with more weekends or taking some of the week day booking out and would you expect a similar profile to be followed this year in terms of your winter schedule, excluding the new markets that you're likely to launch? Thank you.

You broke up slightly on the words, so you want a commentary on scope for improvement? Is it our long time performance is it?

No, it's more about the operational resilience. Do you see more like do you see further need to invest to improve like in terms of sector per day term?

You are asking, do we need to invest further in ops resilience. Is that the question? Question

Yes, yes, that's right. Yeah, sorry.

Yes. Okay. I mean no, I don't. Like we have doubled up the ops control capacity and the 2 ops centers in Dublin and Warsaw. We now think we have ops capacity here for close to 300 million passengers a year. That has been significantly helpful, particularly on those weekends when we suffered significant French ATC strikes or disruptions we're able to recover much faster. We manage the crews much better. We call in the sand much better. So that has been significantly improved. I don't see any further requirement for operating in that, although I would come back to what I said in an earlier question, I think that those heightened crew ratios will remain with us certainly for the next two or three years until we see European -- the European Commission take some action on improving ATC performance around Europe. And I would -- instead of that complete 20-year shambles of the single European Sky, we need more competition between ATC providers. We should let the efficient ones provide services where the inefficient ones can't. I think maybe I'll ask Eddie to comment on the optimization of the winter schedule in our plan for this year vis-a-vis last year, Eddie.

Yes. I mean if you look at the sort of proportion of what we did midweek, back in winter '19, it was 37% 35% winter '22, it will be 30% this winter. So that's probably as far as we're going to go on that. But that can -- and we're still growing sort of capacity just short of 10% there. But like we continue to sort of shake out that mid-week capacity as we continuously review route profitability. And there's only so much which you can optimize where you can't go much below 30% given the five, four roster that we have for pilot. So -- but like that's continuous dropping from 37% to 30% this winter.

I think the only exception that would be obviously Albania where we're going to be very aggressive on pricing and capacity additions there. We're working closely with the Albanian government and the Albanian airports who I think feel a bit less down by the high fare incumbent who hasn't delivered any growth until we showed up and then obviously, if there's any opportunity or opportunity to return or reopen some air travel into Ukraine that we would add that capacity to the width. So that's not in our current plans, but we would add that almost regardless of the airfares. We are determined to be first and back into Ukraine, and we will invest heavily in the recovery of Ukrainian air travel once it's safe to do so, we're declared safe to do so. Next question please

Thanks, Michael.

Thank you. The next question comes from Mark Simpson from Goodbody. Please go ahead Mark. Michael O’Leary: Mark, Hi.

Yes, good morning. Two questions. One for Neil on the balance sheet and managing the cash accumulation. I'm just wondering if you can take us through your thinking in terms of how you maximize returns or maybe match cash flow for future CapEx. And that's obviously going to be an increasing feature in the next couple of years. And then the other question for Tom, just on sustainability. You mentioned the sustainability report, the retrofitting of the 409 NG fleet. I'm just wondering how that is going in terms of the completion of that program.

Yes. Well, Mark, as you rightly pointed out there for the first time in a long time, our treasurer has now become a cost, sorry, a profit center for us. We're operating net interest positive at the moment and likely to do so on a full year basis. So last year, I think we were negative about EUR34 million on interest this year we will be positive, possibly up as high as EUR30 million on interest this year. So we're managing our cash in a very conservative basis. We don't put it anywhere where we're not going to have sleepless nights in relation to it. So very conservatively managed. We obviously found a home for EUR750 million of our cash in the middle of August, where we're paying down a maturing bond and that will obviously go ahead in the next couple of weeks. CapEx with another EUR1.8 billion to go this year. And again, the assumption is that we will finance that out of our cash resources. Thereafter, it depends really on what's the cheapest form of financing for the group. I think for the next couple of years, cash will remain the cheapest form of financing, but we'll remain flexible whether that's going back to the bond markets, whether it's doing some job codes, which we haven't done for a number of years or visiting our friends in the unsecured or secured banking market. But cash is clearly the cheapest form of funding ourselves at the moment, and we're making a turn on the cash in the meantime as well. Michael O’Leary: Thanks, Neil. Thomas? Sorry, go ahead, Mark.

So I was saying I think you had to go back to December 2002 for it to be a profit center.

Yes. That was before I joined, Mark.

Tom. Sorry,

And just on December covering this track, so we were 1,230 aircraft to install with yearend and the plan is we will install another 70 this winter during our maintenance program. So but hopefully by the end of this year, 100 aircraft will have the scimitar winglets on them and we'll improve that again next winter as we roll through the main season.

The year-end or quarter-end?

30 at year-end March-April. We do it through -- we do it through maintenance season, Mark, take a few days just to take it off and get a retrofitted reinstall, so the final chapter is winter. Michael O’Leary: Okay. Thanks, Mark. Next question please. Sorry, go on. Mark?

No, he's gone. Michael O’Leary: Okay. Maxine. Next question please.

The next question comes from Stephen Furlong from Davy. Please go ahead. Your line is now open. Michael O’Leary: Steven, Hi.

Hi, Michael. Most of my questions have been answered, but I just want to add two things quick. On SAF, which just kind of seems to be important. I saw overnight like IAG were investing in making an equity investment in the company. Would you consider vertically integrating or is it more just do deals or just work with your suppliers? That's the first question. Yes, I'll ask that one first.

Okay. Honestly, the answer is no, but look, we would never say never. I mean the problem with investing with one supplier in via one geography is you've got to get the SAF to the airport. And ultimately, that's why I'm still of the view that it will be the oil majors will be the ones who will be the only ones who actually have the capacity to produce SAF in meaningful volume and then get it to the airport. There's no point in producing SAF in Tralee or SAF in New Castle. If we need it as 27 UK airports. But we would support IAG investing in somebody producing SAFs. But ultimately, we think the people who will supply SAF in the appropriate volumes we need quickly and at the airports where we need it, will be the oil companies, which is why we've signed up SAF supply agreement now with Shell, Nestle, ONG and Repsol to cover specific geographies across Spain, Austria, Germany where else Thomas? Holland

Holland, UK, with Shell and France, right? So I think that Michael's point going to see here when we look at the investments, they're doing it close, close to Heathrow, the main home whereas we've got 91 bases around Europe, trying to build supply chain there to keep the SAF save and just prove the challenge is on the volume book. So the MOUs are more important for us rather than an investment in the facility.

Yes. But we would endorse and support IAG strategy doing it. Whatever accelerates and maximizes, A, the production of SAF and B, getting it to the airports, which is where we -- the only base we can uplift it is at airport, we would very much support and endorse. Second question, Stephen.

Yes. I was just wondering in EU are they doing anything in the context. It's more kind of regulatory stuff. But for example, I know you talked about overflight but things like either ownership rules or another thing would be the imbalance in terms of long-haul, short-haul, which obviously long-haul's not part of ETFs. I know they have of course here, but I mean -- do you see any chance that over the next couple of years? Is there any movement in those two items?

Juliusz, do you want to take this give us an update on the regulatory developments, please?

Yes. Thanks, Stephen. Hi, everyone. Stephen on ownership and control, my sense today is that we are not going to see a significant improvement in that area for the next 12 to 18 months. I think we need to wait for the new commission in Brussels in the autumn of '24 and then a further improvement in the relationship between the EU and the UK On overflight, I see increased appetite for action in this area. You may have seen in the media that Michael personally delivered over 1 million signatures under our petition to President of European Commission Ms. von der Leyen and she unfortunately wasn't able to be in her office at morning, but maybe next time when we bring her, the next million signatures, perhaps she will be there. But on the first of June, the day after the petition was delivered, there was a transport counsel in Brussels and transport ministers from Italy, Spain and a few other countries spoke very strongly about the need to protect the overflights. And clearly, those comments were addressed at the representative of France. We didn't have much to say on the day but that to me was a significant milestone in terms of that particular difficult issue. When it comes to other regulatory issues, I mean, obviously, on the environment, you have actually highlighted the significant imbalance in the treatment of short-haul versus long-haul operations. But it is important to remember that ETF is only restricted to intra-European flights until 2026. And after that, it would automatically extend to flights that go outside of Europe, and a specific decision will be required of the European Parliament and the Council to continue the restriction to intra EU and I just can't imagine in the context of the incremental debate that's ongoing in Brussels that the parliament, the same parliament, which wants to be seen to be greener and greener every year, will continue to vote for the restriction of the ETF to enter Ukraine flights only. My sense is that ETFs will have to, in the next few years be extended to apply to extra EU flights also.

Thanks, Juliusz. Next question please.

Thanks, Juliusz

Thank you. The next question comes from Ruairi Cullinane from RBC Capital Markets. Please go ahead. Your line is now open. Michael O’Leary: Ruairi, Hi.

Good morning. Yes, I was wondering if there's anything you could share about your limited Q3 visibility in terms of how well you're booked in terms of load factors or fares? And then secondly, you made some interesting comments about potential impact of consolidation earlier in the call and clearly some parts of Europe become more consolidated over the pandemic. Are you seeing any better pricing power or anything like that in those markets now?

Okay, thanks. Your line wasn't great, but I'll try. Q3 visibility. Look, we have very little. At the moment, our forward books in Q3 are between 10% and 15%. So it's nothing. And that's through October, November, December. Q4 is less than 4%. So we are where we are. We're at this stage every year. It's a bit unfortunate that our year-end runs to the end of the winter season, but it is what it is that we have effectively zero Q3 visibility. And as I've said repeated before, I would expect some -- the impact of rising interest rates, consumer price inflation to be hitting consumer spending and the kind of discretionaries of the city break, the Christmas market might be a little bit weaker this winter. And again, that feeds back to why we won't blindly chase only 185 million passengers. We're going to cut the midweek capacities, we'll run the weekend, stuff through the winter. And in fact, we finished up at 183 million passengers or we finished up at 183.2 million passengers, it will be what it will be. The impact of consolidation, I think you're seeing pricing power around the piece, generally. If you look at all of the reporting from the airlines from Lufthansa to Air France to easyJet last to us today we're all seeing -- reporting a similar situation, strong Q1 pricing, all I would highlighted in our case, it was due to a very weak Q1 pricing last year. Q2 is well booked. We think Q2 fares are up by a double-digit percentage, although in my case, it will be low double-digits. That is the reflection of pricing power. Now I think it's -- that's not so much consolidation. I would drive -- a lot of that is down to that Alitalia emerged out of COVID were only 50% of the capacity they had going into it. GAP of only 60% of the capacity they had pre-COVID. Lufthansa are still only operating at about 85% of their pre-COVID capacity. So you have all of the legacy guys across Europe constraining short-haul capacity. And there is no doubt this summer that the transatlantic inbound has been very strong, and you're seeing the Asian traffic begin to recover. I think next summer, but in S '24, we'll be closer to 100% of the pre-COVID short-haul capacity, but you'll still have another year of recovery of the Asian inbound. Maybe the transatlantic will be quite as strong in S '24 as it was in S '23. But generally speaking, it is very difficult must to foresee there continue to be constrained short-haul capacity in Europe and meaningfully -- some degree of meaningful pricing power in the system, particularly during the two peak -- during the two summer quarters. I think the winter quarters will always be a bit more difficult and a bit harder to predict. But that consolidation will continue. I think when they've taken out Alitalia, what's left of ITA when TAP has been consolidated somebody will turn to, I think there's -- easyJet is key -- clearly a target for, I would say consolidation. The Scandinavian Airlines which are loss making, heroically loss making SAS and Norwegian may well be a target for consolidation and ultimately then somebody will have a look at Wizz, if it's not Lufthansa reestablishing some eastward east -- about eastward operations, their expansion into the Middle East may well encourage an investment from Middle East ownership who are all talking a big story about growth -- an airline growth but constrained by capacity where Wizz at least has access to aircraft. They're not very cheap and the pricing is very expensive, but at least it does have access to aircraft and they will be far better deployed in the Middle East where at least they're competing with similar high fare airlines rather than employing their brains out trying to compete here in Europe or in Central and Eastern Europe with a really low-fare airline like Ryanair whereas they only masqueraded the low-fare airline. Next question please.

Thanks Michael.

Thank you. The next question comes from Conor Dwyer from Morgan Stanley. Please go ahead. Your line is now open, Conor. Michael O’Leary: Conor, Hi.

Hi, guys, thanks very much. And so the first question, just back to the passenger numbers, could you give some color maybe on phasing of the seat growth that gets you back down to that 183.5, so scheduled date, as you're going to see in Q2 at around 11% but that seems a bit high now maybe closer to high single digits in the September quarter? And then maybe down to mid -- mid to high single digits in H2. Interesting to get your thoughts on how you're planning to grow that there. And then, secondly, lots of talk about M&A and obviously your own growing cash balance. So I just wondering, would you ever consider doing large M&A in the space, you obviously always talk about growing organically. But it's quite a significant cash balance building up there over the next few years. Michael O’Leary: Thanks, Conor. I can't really help you like, look, we're going to take down the full-year numbers from 185 to 183.5, you will take a bit half every month for the next six or seven or to the end of the year, most of that did -- we lost 300,000, 400,000 passengers in April or in April, May and June. 300,000 in July and then there we will have to shave a bit off September and October. But I'm not getting down to the monthly traffic numbers here. It's not a significant movement, but it is a movement. Large scale M&A, I would say it's highly unlikely. We tend to avoid large scale M&A, you're generally inheriting somebody else's problems, I can't foresee. And also I think given our size, it is very easy for the legacy carriers like Lufthansa, Air France and BAA to mobilize or to lobby against Ryanair M&A. And given that we -- with the aircraft orders we have in place now, we can grow organically to 300 million passengers a year. Frankly, I don't really see why we would want to engage in M&A. We have in the past done two deals. We did Buzz originally back in Stansted in the early 90s, where they had access to about 10% or 15% of the slots in Stansted that we thought they were -- we wanted access to the slots. And then we did a little bit with Lauda, three or four years ago pre-COVID in Vienna, both of them were painful bloody experiences, although they been validated over the longer term by building up very strong positions in Stansted and in Vienna Airport. But when you run a very efficient, highly profitable low cost operation, we don't have management resources to deploy into large scale M&A. We might do some smaller stuff kind of add-on, but they will be very small and I will say insignificant. Eddie or Neil, Eddie anything you want to give your personal opinions on that going forward.

I would echo that more compared to on a personal level grow at organically for lots of reasons both, yeah, I mean, I remember the Buzz integration, the original sort of KLM offshoot back in 2003 and now they are obviously to a lesser extent but it take significant management time with the large aircraft order we have two years or 18 months to sort of fill a gap between there to gear up for the next and it's just better from a management perspective to be doing that in a linear fashion rather than deploying resources. Michael O’Leary: But we would ultimately encourage competitors throughout key consolidating because of POS. I mean, I think the real challenge and they will all deny it, but the real challenge for easyJet and Wizz and some of these others is actually as Ryanair continues to expand into those marketplaces, there is less and less of an ability for those guys to compete with us. And if you're not going to grow, you're going to have to find M&A is the only way forward. I mean, I continue to believe that in the medium to longer term, Europe would consolidate into four very large airline groups, which will Lufthansa, Air France-KLM, IAG, and us and Neil, sorry, to cut across you. I don't know if Tracey has got anything on the phasing of the half number, Neil?

I was just going to say that on the M&A, where we play a role, Conor is -- is actually on the remedies. So as that consolidation that Mike was talking about, takes place, we will be in there where the competition overlaps and we will operate on that basis. As long as we can continue to buy aircraft at very attractive levels and we've locked away a decade of growth with our latest aircraft order. I think that's the best way for Ryanair to deliver value to our shareholders. Michael O’Leary: Tracey, anything on passenger numbers or?

Yes on the passenger numbers, that question is probably more weighted towards the second half of the year because we had significant growth in H2 last year as well. Michael O’Leary: Okay, thanks. Okay. Next question please.

Thanks very much all.

Thanks, Conor.

The next question comes from Alex Patterson from Peel Hunt. Please go ahead Alex. Your line is now open. Michael O’Leary: Alex, Hi.

Hi, good morning, everyone. You won a lawsuit last week in Ireland against on the beach, if I remember correctly, your objection to OTA selling seats has been running for many years. I think the legal cases date back to 2010, at least, but they continue to sell your seats. So I don't know if you can say what -- what's your sort of objective, is it to stop them selling seats. Is it to only let them do so through a commercial agreement and what are the financial implications for you of achieving that? Michael O’Leary: Eddie, and again Eddie maybe you can answer this, we might give a historical couple of examples of why we object to the non-licensed screen scrapers and we already licensed screen scrapers.

I mean you have to sort of complete disconnect out there that you -- screen scrappers are out there saying they are providing a service. All right they are not providing any service and what they do is that in the vast majority of cases, scraper website does fares and a lot of cases like huge mark ups not just on the fares but on ancillary. And flip that payment methods and then flip the contact addresses, meaning that we're not able to contact us, not able to process refunds and then the OTAs disappear over the horizon, no customer service whatsoever and people cut in the middle and they cut in the middle because they're not able to access our bookings because nowadays, you need to have even access your booking, you need your email address, you need your reference number. So like this is just like highway robbery abandonment of customers and the difficulty in trying to actually provide the service to them particularly in times of disruption and of course it's the sharp end when it comes to the disruption. So they don't provide the service at all. And then sort of dump all the customer service fulfillment on without the customer having any information in order to access their booking, so we continuously from a technological point of view, try to find a way to identify these bookings in advance, so that they take it through. But like there is no agreement with them, so we're not running a charity anytime soon. And the only way that these companies remain in business is by putting on supplemental charges and then abandoning those customers. Michael O’Leary: I mean is the only still -- seems to be the only form of Internet piracy that hasn't yet contracted by the consumer agencies and we are astonished that the failure of the Italian consumer agency, the Spanish consumer agency, the UK consumer agencies will not tackle this issue. Their business models can only survive if they somehow scam a consumer for either a hidden charge or to persuade them into buying a handling fee or some sort of fees, other than that just scraping our inventory and we have a very good example the last week, with passengers now calling us up, asking about what's the rules. We don't know who they are, they have a booking made through some screen scraper, you people enrolled that are calling the airline what the -- we don't have any of your details. We've a fake -- we have a fake email address, we have a fake payment account. And the only reason we have a fake payment address and our email address and a fake payment account is because these Internet pirates don't want us to communicate with the passenger because the passenger will find out that they've been overcharge will be overcharged, but it is extraordinary that the consumer agencies continue to sit on their asses and fail to deal with it. If any airline behaved or priced or behave the way these OTAs or the consumer agencies be all over them like a rash and we continue -- go on

So you want to stop them selling your seats entirely. Michael O’Leary: No, no, no. No. We want them to stop with miss selling our seats entirety. We already licenses that -- we licensed a significant number of OTAs on our travel agents where they sign up an agreement in which they've promised that they will only quote out their fares, that known fares will be quoted will have the correct account of customer email, the booking will be made directly on ryanair.com and will have direct access, but we're trying to stop is the misselling the anti-consumer pricing and the abandonment of the consumers, which is what happens with all these guys when the shit hits the fan like it does in Rhodes or during COVID.

Understood. And does this lawsuit win help you to do that? Michael O’Leary: Yes. Juliusz, you want to add.

Yeah. Look, this win last week was on a procedural issue on appeal. So the case is -- it's not open, the case will continue for another two years maybe three with appeals, it was an important win, but it's not over. Michael O’Leary: I mean we have numbers of case here where we get, we have an injunction on probably get described, but I won't name them. But we have an injunction to get our -- our core feature against one OTA. And they stop selling through say a Swedish kind of website and next day they open up an Austrian website and then we go up against the Austrian website and they open up a Polish website and claim that it's something different. That was that the injunctions only get -- like they are bunch of tuck-in pirates. It wouldn't be tolerated in any other consumer-facing industry. And yet the useless consumer agencies all across Europe and the European Commission and we brought it, we have submitted a dossier of overcharging of missselling, of mismanagement and nothing happens. So we will keep fighting. And Ryanair is the poster child for this because in most cases, we have the lowest fares in every marketplace. So the reason they want to scrape our fares is that actually while they are levying a kind of a hit and hand be or flipping the passenger at the point of payment for a higher fares than they've quoted. The package still looks reasonably cheap compared to the higher fares of other airline. So it's also until we can get the consumer agencies to wake up and stop this Internet piracy. These guys provide absolutely no service whatsoever except misselling are charging people inflated air fares and hidden handling fees.

Understood, thanks. Michael O’Leary: Next question please Maxine.

Sorry, Mike. So I'm just going to cut in there. Neil, here, I need to drop off at this STAGE. Okay, thanks very much everybody. Michael O’Leary: We'll keep going for another say 10, 15 minutes. I would just -- with only three more questions. So let's take all those. Next question please Maxine. Thanks, Neil.

Thank you. The next question comes from Neil Glynn from Air Control tower. Please go ahead Neil. Your line is now open.

Good morning, everybody. If I could ask firstly on Ryanair Labs. I understand the head count has been growing strongly. I'm just interested in your take Michael on how you expect Lab and contribution to evolve and helping ancillaries as well as operational performance over the next few years as you continue to grow. And then a second question. Pre-pandemic, you obviously launched the multi-AOC, the multi-airlines strategy. We're obviously quite some way along, since then now. And I'm just interested in your take in terms of how that multi-AOC strategy is actually contributing today? And what more we could expect from it in the future, because I don't think there has been too much mention of it over the recent quarters at least. Michael O’Leary: Okay. Maybe Eddie, as is you are kind of leading the Labs contribution, you may take us through what you see with the Labs, their contribution to date. And what the headcounts were right. So and then, I'll deal with the multi-AOC strategy.

Yeah, I think we'll be heading towards headcount of just short of a thousand in Labs and if you look at just very broad brush figures, and the most important part of what Labs assume is on infrastructure and security -- cyber security and when you take those people out on the what's left of there in my mind is broadly broken into 50% of those working on scheduled revenue development and ancillary revenue development. And then you've got the other part of the business projecting is going to come more in focus as we grow with the MAX-10 order because we're not going to be able to add people under the head office level to support that in a linear fashion and what you have is that you've got labs are developing all sorts of support systems for pilots, cabin crew and engineers like things like E-Tech Logs, where, you take all that paper off the aircraft, where you've got flight planning iPads for pilots and devices for cabin crew where you're communicating things that are happening during the day. So on an operational level, like they would have been supporting the Operations Control Center here as well in running resilience on rosters so that when you do hit -- when you do hit really bad days, they can do that in real time and it takes that sort of China Syndrome out of it where pilots and cabin crew and it didn't go out for the 15,000 people trying to contact the call center, you can never have better advanced people there, so you got to solve the problems before they happen and that's about 50% are really going to be focused on over the next three to four years. So we won't have to do that and then added on to the top of that, you've got sort of things like that are going to happen on generative AI which will just be really under sort of -- primarily under the sort of them the contact centers that we have. And there are obvious upsides on that but it's -- it's infrastructure and security first, then it's supporting a scheduled and ancillary revenue and then supporting our staff on the front line with better comps, better technology, so we don't have to hire a large amount of people as we grow to 300 million passengers. Michael O’Leary: Yeah, I think that's the key point with Labs like we bought a lot of kind of in the past, you'd buy bespoke systems for these big airlines like Lufthansa or Swiss Air or who at the time we were carrying 4 or 5 million passengers. They were doing 30 or 40 million passengers. The challenge for us going forward is the biggest airline in Europe -- Group in Europe, other than us is Lufthansa, it's only about 100 million passengers but nobody has developed systems for an airline that now is nearly 200 million passengers with a plan to launch 300 million passengers. So we have to do it ourselves. And Labs, you look at the successful way they've exploited ancillary revenues in recent years has been a -- really a visionary bringing that in-house and developing those systems ourselves has been I think, one of the great sea changes in our development over the last decade. If we were trying to do this now would be with the providers. They know all these tuck-in IT consultants be in here taking your watch and charge you billions to tell you what the time was. We look at some of our competitors who struggle with matching all these, tacked on systems that don't talk to each other, it creates very significant challenges for our airline groupings whereas in ours, the systems are much simpler. Multi-AOC strategy. You're right, it hasn't developed much, remember you go back to where we were in 2017. The reason for the multi AOC strategy was originally to get people off the Irish AOC. The Irish government had this ridiculous taxing claim on all pilots, all cabin crew operating on Irish registered aircraft. They were all paying high personal taxes here in Ireland, as we recognize the EU in 2017, the unions and our people wanted local taxation, local employment contracts and the AOCs facilitated that. Lauda was simply one that we have bought, an Austrian AOC, it was an air -- an Airbus operation. We did move it to Malta but it's an -- it's a separate more AOC. Buzz was set up as a charter airline in Poland, it needed the ability therefore, the benefit of a Polish AOC, so it could fly outside of the European Union to places like Egypt and Turkey, places like that, which and so, the really the only significant development in that in the last number of years has been post Brexit, the setup of Ryanair UK. So we today operate with five AOC to Ryanair DAC on the Irish AOC, Malta Air on the Maltese AOC, Lauda on the Maltese AOC, Buzz on the Polish AOC and Ryanair UK with the UK AOC. It is -- it has a little bit of complexity, particularly at the management side, but I think, it's a sensible way forward. We run a similar type -- well not a similar, but we run a group of airlines in most the same way that Lufthansa operators a group of airlines that has a Germany AOC, an Austria AOC, a Swiss AOC, a Belgian AOC and shortly, I presume an italian AOC, and IAG likewise has a UK AOC, Spanish AOC, a couple of Spanish AOCs within the Group. So -- but it's not something that we would advocate, but I think, if you're going to grow to 200, 300 million passengers and increasingly, I think we will want to fly to certain countries, third party countries like for example, Morocco from the UK, you need to have those AOCs because they're not hard in open skies well the UK is not yet an open sky. But it's not something, I think we would have done by choice. But I think, it was a practical response to a number of issues and challenges we were facing primarily post unionization in 2017. Next question please, Maxine.

Thank you. The next question comes from Johannes Braun from Stifel. Please go ahead, your line is now open. Michael O’Leary: Johannes, hi. Johannes, go ahead please. No. Next question please Maxine. Do we have another one?

Our final question today comes from, Duane Pfennigwerth from Evercore ISI. Please go ahead your line is now open. Michael O’Leary: Duane, Hi.

Hey, good morning, thanks for the extensive call here. Just on -- Michael O’Leary: Thanks for waiting.

Seasonal -- no problem. Just on seasonality. Europe has always had a more exaggerated peak leisure period than the US. I'm curious if there are any behavioral changes you guys are observing post COVID, any changes you see in the underlying seasonality going forward. And then certainly appreciate Ryanair is primarily a leisure airline, but how would you characterize the level of corporate recovery in Europe versus the 80%, 85% recovered in the US. Thank you. Michael O’Leary: Eddie, you want to the seasonality and I'll come back on the leisure airline business travel.

Yeah, I mean as we've expanded into markets, we opened two bases in the Canaries, Spain continues to grow, Italy continues to grow, Greece continues to grow, Portugal, these are all I suppose leisure countries that extend -- we've been particularly successful in extending the seasonal lot of those countries. We now added on Morocco is growing strongly, Jordan is growing strongly. So that sort of leisure sort of characteristic is extending itself out as you get away from them, normal perception of the sort of bucket and spade type holiday as opposed to sort of specialist interest of people going traveling to those countries. It's not all about just going to the -- going to the coast. So like, we've been very judicious as they say in how we -- which I've referred to two previous questions which was in cutting back some of that midweek capacity, it's in towards the weekends. But I've been very encouraged by what we can see on -- we are looking at this time last year, where city -- cities have recovered, domestics have recovered, ethnic traffic has recovered as well, but the standard is still same -- are still the leisure which Mike will talk about now in the Canaries. Michael O’Leary: Yeah, I just, I mean, I would -- don't overestimate these entries -- we are a leisure airline. We've seen a very strong recovery in our business travel historically where 40% of our passengers were traveling for leisure reasons, about 30% with business and 30% with VFR visiting friends and relatives. Business has recovered very strongly in our -- we see business they already are very short stay outback, same day or next day. We ascribe that to two things. One, the very significant push we've made into the domestic markets in those big countries like Spain, Portugal, Italy, and as you have a bigger percentage in the domestic market, you tend to see more business travel. We've seen a lot of business travel into Central and Eastern Europe, Morocco, Portugal people repairing kind of supply chain, there's been a lot of small and medium-sized businesses repairing supply chains, or they are replacing their Asian supply chain that were badly disrupted during COVID with supply chains that are based in lower cost economies but closer to Europe, so Morocco, Portugal and Central Eastern Europe. We think that will be accentuated too if there's a reopening in Ukraine, there'll be a lot of business travel in and out of Ukraine as that economy recovers. So don't get too distracted by we're all bucket and spade operation it's a chartered, it isn't. We do have a large leisure component, but a very strong visiting friends and relative piece and a very strong and growing business piece as well. Michael O’Leary: Okay. I think that's the end of all the questions we had today. Thank you everybody for participating in the call. Thanks to all the team here for what has been a strong Q1. I said, our focus is on continuing to deliver excellent on-time performance during what is a challenging Q2, we're going to continue to mobilize some campaign for ATs -- effective action on the ATC front, we expect shortly, that our passenger protection will hit 1.5 million signatories. We'll be going back out to Brussels to represent that to Mrs. von der Leyen. I'm sure, she will be absent or missing on the day we manage to present the updated petition, but we're not stopping until we get some action out of the useless European Commission on ATC reform and protecting overflights. And then we will continue to campaign heavily for improved staffing at the National ATC providers so that hopefully next year, we'll have a more reliable or at least a -- an ATC service that's more fit for the capacity that Europe requires. I have nothing else to add other than we will keep you updated with monthly traffic load factors that our next sort of big day will be the Capital Markets Day here in the first week of September, we'll have the AGM in the third week of September where hopefully our shareholders will approve our MAX-10 order and then I think our minds will focus on the half-year results, which will be accompanied by an extensive roadshow. I think it's in the middle of November, end of November. Second week of November. Okay, everybody, thank you very much. Thanks, Maxine. Bye-bye.

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