Ryanair Holdings plc (RYAAY) Q4 2026 Earnings Report, Transcript and Summary

Hello, and welcome, everyone, to the Ryanair Holdings plc FY '26 Earnings Release. My name is Becky, and I will be coordinating your call today. [Operator Instructions] I will now hand you over to Michael O'Leary, Group CEO of Ryanair Holdings to begin. Michael, please go ahead when you're ready.

Okay. Good morning, ladies and gentlemen. Welcome to the full year results analyst conference. I'm joined by all the team on -- I'm speaking to you from New York. I'm joined by all the team from London, Dublin and various other sites around Europe. As you have seen earlier this morning, we reported a record full year profit of EUR 2.26 billion, which is a rise of 40% over our prior year profit after tax of EUR 1.6 billion. The highlights were traffic growth of 4% to a new record figure of 208.4 million. That was achieved despite delivery delays on 29 Boeing [indiscernible] and Boeing Gamechanger aircraft. During the year, incredible cost discipline, unit costs rose only 1%. For the -- looking forward for the next 12 months, we've covered 80% of our jet fuel at about $67 per barrel, $668 per metric tonne. We took delivery of the last 29 of our 210 Gamechanger orders. So we have 647 aircraft in the fleet at the 31st of March. And we declared a final dividend of EUR 0.195 per share. It's payable in September, subject to AGM approval. Obviously, we've had a record year, and we're delighted with these results, but they've been overtaken obviously, by the conflict in the Middle East. Like everybody else, we don't know when the Strait of Hormuz will reopen. But Europe remains very well supplied for jet fuel and significant -- almost all of Europe's jet fuel is now sourced from West Africa, the Americas and Norway. Our very conservative jet fuel hedging strategy, as I said. under which 80% for the next 12 months is hedged at $67 per barrel out to April 2027 will insulate the Ryanair Group earnings from the current very volatile oil market and will significantly widen the cost advantage we hold overall EU competitors for the remainder of FY 2027. As you will see, the balance sheet remains strong with a BBB+ credit rating, both Fitch and S&P with an unencumbered Boeing 737 fleet of 628 aircraft -- 620 aircraft. At the 31st of March, gross cash was EUR 3.6 billion, and this was after spending EUR 1.9 billion on CapEx, EUR 1.2 billion on debt repayments and over EUR 900 million in shareholder distributions over the last 12 months. And net cash was EUR 2.1 billion at year-end, which enables the group to repay our very last EUR 1.2 billion bond next week before the end of May, which leaves our group effectively debt-free, which is a stunning achievement by any nongovernment-owned airline. During FY '26, we purchased and canceled another 2% of our issued share capital. We've retired 38% of Ryanair's issued share capital since 2008. The final dividend of EUR 0.195 is payable in September and subject to AGM approval. Our priorities with our cash over the next 12 months are obviously, firstly, to fund the final bond repayment in May, then to fund our MAX-10 aircraft CapEx over the next 12 months to pay down dividends and continue to fund the balance of our EUR 750 million buyback program at favorable lower prices recently, while rebuilding internal cash flows, our -- the group's cash back to EUR 4 billion. I'm going to touch briefly on the fleet growth. As we said, at the year-end, we have 647 aircraft, which includes 210 Gamechangers, all of which are debt-free and unencumbered. Boeing are making very positive noises about the MAX-10 certification, which they now expect to take place at the end of Q3, early Q4 2026. They've also confirmed in writing that they expect to deliver Ryanair's first 15 MAX-10s in the spring of 2027, in line with the original contract dates. Once we take 300 of these fuel-efficient aircraft, all of which are due to deliver by March 2034, they will transform the economics, the operating costs of Ryanair as they enable us to offer 20% more seats to the market, but they burn 20% less fuel per flight. At this summer, Ryanair has 130 new routes on sale. They include 3 new bases in Rabat, Morocco, Tirana in Albania, and Trapani in Southern Italy. Our scarce FY '27 capacity growth or summer '26 capacity growth is allocated to those regions and airports who are actively cutting aviation taxes like Sweden, Slovakia, Albania and regional Italy and are also where airports are incentivizing traffic growth. And we're switching our scarce capacity away from uncompetitive high-tax markets like Austria, Belgium, Germany and regional Spain. The Board and myself commenced discussions on an extension of my employment contract, which currently runs to 2028. that runs out until April 2032. We've recently concluded an outline agreement, and the Board will commence engagement with our largest institutional shareholders in the coming days. The key feature of the contract extension is I will have purchase options over 10 million shares, but these will only vest if we achieve a very ambitious profit after tax and share price growth targets over the next 6 years, i.e., before 2030. If we do, we will create very substantial capital value for all shareholders. I want to turn briefly to the outlook. We expect full year FY '27 traffic to grow about 4% to 216 million passengers. The key feature of the next 12 months is that 80% of our jet fuel has been hedged at $67 per barrel, which is lower than last year's $76 per barrel price. However, the price of our unhedged 20% has spiked due to the Middle East conflict. Our EU enviro. taxes are also expected to rise by a further EUR 300 million this year to EUR 1.4 billion, which makes EU air travel even less competitive than it was before. Ryanair, like all of the European airlines are calling for either the abolition of ETS or bringing ETS taxes in line with CORSIA rates, which is what the non-EU airlines pay. It makes no sense that we tax ourselves that European airlines and passengers are taxed so indiscriminately compared to our non-EU competitors. Our maintenance costs will rise modestly due to an aging NG fleet and midlife hospital visits on the LEAP engines. There will also be some significant crew pay increases agreed this year. We've recently completed 5-year pay deals with our Italian pilots and cabin crew, and we're in active negotiations with a wide number of other national pilot and cabin crew unions, and we expect to agree follow-on deals with those over the coming weeks and months. If the unhedged fuel prices remain at current elevated levels throughout the remainder of FY '27, then unit costs could rise in Ryanair by a mid-single-digit percentage. That would still be -- demonstrate incredible unit cost discipline. To date, our summer 2026 travel demand remains robust, although bookings since the war in the Middle East are closer in than they were last year, which reduces visibility. Pricing in recent weeks has eased somewhat in response to economic uncertainty caused by higher oil prices, far too much media attention about the fear of fuel shortage, which we believe does not exist and the risk of inflation adversely impacting consumer spending. In fact, the trend we've been seeing is that further out into June, July and August, we're having to marginally discount pricing, maybe 1% or 2% to keep the forward curve rising, but the close-in bookings in early mid-May are strong and pricing is strong. With the first week of Easter falling into March, which benefited last year's Q4, we now expect Q1 fares to be behind Q1 FY '26 by mid-digit percentage. With constrained EU capacity short-haul capacity due to OEM delivery delays and the Pratt & Whitney engine repairs, we'd originally expected S26 fares to rise modestly. We thought we'd be in the low plus -- low single digits after a 10% fare increase in the prior year. However, Q2 pricing with limited visibility is now trending broadly flat, and the final outcome will be totally dependent on close-in peak summer '26 bookings and fares. With zero H2 visibility and significant fuel price potential supply volatility, it's far too early to provide any meaningful FY '27 profit guidance at this time. And with that, I'm going to ask Neil Sorahan, the Group CFO, to take us through the MD&A. Neil?

Thanks, Michael. I'm just going to maybe reiterate a couple of points that you already made. So first and foremost, looking at last year, very strong performance on unit costs, up 1%, so in line with the modest unit cost inflation that we previously guided. Balance sheet, as Michael has already said, finished the year rock solid quarter of balance sheet, BBB+ rated, EUR 3.6 billion gross cash. And as a CFO, very excited that we'll be debt-free this day next week, having paid off our final EUR 1.2 billion bonds and a very strong unencumbered lease available to us. Suppose looking beyond then into next year, again, very well hedged, as Michael has already said, $668 a metric ton. We hedge jet fuel. We don't hedge Brent or gas oil. We hedge exactly what goes into the tanks. That has always been the case. But equally, very well hedged on the euro-dollar as well, we don't generate any dollars in the business. So we've hedged 80% of our dollar requirements on fuel this year at $1.15. And indeed, we've put down a floor into the first half of next year with nearly 30% euro-dollar hedged at $1.20. So locking in dollar savings, but haven't got -- haven't moved on with our jet fuel yet, just waiting to see where the market steadies in the next number of weeks. The next big mover on the cost base, as Michael has alluded to, is going to be the MAX-10 aircraft coming in, in the spring of next year, 20% more fuel efficient, 20% more seats. So we'll be spreading the costs across 20% more traffic from then onwards. So business is in good shape. The balance sheet is rock solid, and we're managing things that are within our control well. Michael, I'll hand back over to you, please.

Okay. Thank you, Neil. And with that, we'll ask the moderator to open up for Q&A, please. And we're going to limit everybody obviously to two questions as normal so we get through this in about an hour.

[Operator Instructions] Our first question comes from Stephen Furlong from Davy.

Michael, I want to ask about aircraft actually and just generally capacity. So I saw in your presentation, you've kind of smoothed out the future growth plan, maybe it's just the timing of deliveries. It's 3% or so in the next 2 years. Do you think that as we go into the winter, it's likely that there'll be changes in the market capacity because presumably at these oil prices, a lot of competitors are stressed. And then even beyond that, obviously, you're working with Boeing to get the MAX-10s. With the balance sheet you have, do you think there could be a situation if Boeing came back for MAX-10s or even MAX 8s and you'd be interested in even more aircraft?

Thanks, Steve. there's 2 questions. Look, the thing that overrides these record results this morning, record profits, record growth is the war in the Middle East. And frankly, none of us know when that will finish or when that will wind up or when the Strait of Hormuz will reopen. It therefore makes sense for us to be very conservative. So we're saying this morning, if the war in the Middle East and the Strait of Hormuz remain closed until the end of March 2027 and oil remains at $150 a barrel, then our unit cost might rise about 5%. And if that happens, there will be about 3 or 4 airlines left flying in Europe. We are, by far and away, the best hedged airline in Europe. There's a lot of our competitors who are significantly poorly hedged. Most of them are hedged to the end of September, October with very little hedging in place through to the winter months. So look, I do not expect the Strait of Hormuz to remain closed until March of next year. The U.S. has midterm elections in November. I have been reliably advised by a number of senior U.S. politicians that Memorial Day at the end of May is when those midterms kick off and that there will need to be a resolution of the situation by the end of May. However, if it does continue over those 12 months, there will be significant airline failures in Europe this winter, mainly from some competitor airlines who are -- offer low fares, but don't have low costs, have very stressed gearing on their balance sheet and are not as well hedged as Ryanair. And you see already many of those airlines are cutting capacity. They've cut capacity up to 5%, 6% during April, May and into the June quarter. We are not cutting capacity. We are continuing with our own 4% traffic growth, and we will expect to continue that through the summer, again, taking advantage of our -- a very strategically strong fuel hedging position. And I would expect us to grow strongly. If oil remain -- unhedged oil remains higher for longer, there might be a slight dip in profitability this year. But we're talking slight dips, not anything that reflects the recent 20%, 25% decline in the share price. So we see this as an enormous buying opportunity. We continue to meet shareholders, I wish we bought the last time there was a dip. Well, here's the dip and here's your chance. And we are continuing to exercise our buyback, and we're getting tremendous value for shareholders by buying back stock in the market at these current prices. Do I think there'll be more aircraft? I'm not sure, Stephen. It was interesting, I was talking to one of the aircraft [indiscernible] lessors a week ago who had taken aircraft back from the Spirit failure in the U.S. One of the interesting thing was they had repossessed 25 aircraft. They've taken the 50 engines off the 25 aircraft and put them into the engine pool. They seem to be able to make more money out of spare engines than they are even re-leasing secondhand aircraft. We expect the current crisis to worsen the capacity situation in Europe and the capacity situation in Europe was already significantly muted this year. We had originally thought that would lead to higher pricing. I still believe that will lead to higher pricing, but only when there's a resolution of the war in Iran and the Strait of Hormuz reopened. And then I think our pricing will rebound strongly and our unhedged fuel will fall significantly. But we're not there yet, and we don't know when that will happen. Are Boeing likely to turn around and offers more MAX-10s? Sadly, no because they can't make them fast enough at the moment. They still have to get it certified at the end of this year. Will there be more MAX 8s available? Highly unlikely. I mean there's a huge backlog of demand out there for the 2 OEMs, Airbus and Boeing. None of many spare aircraft availability this side of 2031, 2032. But as Neil has said, we will always, in Ryanair, be opportunistic. If there was -- somebody was distressed and came to us offering us very low-cost A3 -- or sorry, 737-8 or 10, we would certainly look at it. And that's why we continue to maintain a very strong balance sheet. I should say we have had since the war in Iraq, we've commenced negotiations on reasonably modest lease extensions of the Airbus -- the 26 Airbus fleet in Lauda. Most of those aircraft leases end in '28, '29. We're extending them at the moment out to 2030, 2031, just so that we can match their retirements into the deliveries of 40 when we get up to the 40 or 50 aircraft deliveries at Boeing. You'll have seen this morning, we've pulled back the traffic growth through FY '28 and FY '29 because Boeing can only deliver us 15 aircraft each spring in those 2 years. By the time I get to FY '30, they're delivering us 40, 50 aircraft, and then I can resume strong capacity growth in Europe and take out the Airbus aircraft if we can't source some newer -- new or newer younger aircraft leases to replace the Lauda A321 fleet. So we see lots of opportunity out there in the current climate. Our guidance, I think, it is sensible to assume a worst case. And the worst case is that the war will continue and the Strait of Hormuz will remain closed until March of 2027. But frankly, none of us believe that to be the case. So I think there's nothing but upside at the moment in our trading outlook, and there's nothing but upside in our share price currently. Thank you, Stephen.

Our next question comes from Jaime Rowbotham from Deutsche Bank.

Michael, first, in terms of that best guess on flat pricing for Q2, it was a similar outlook this time 2 years ago and then in July downgraded to fares now seem materially lower. That was largely the OTA headwinds, which you recovered very well from in 2025. But I just wanted to get a sense if there's little change in the next 2 months in terms of jet fuel prices, the Middle East conflict, how worried are you that you might have to deliver a similar message in 2 months' time given the far more turbulent backdrop now? Then secondly, with the mid-single-digit guidance for increased full year unit costs, is it a similar increase for the fuel piece versus the nonfuel piece? And with regard to the latter, maybe some additional color on the magnitude of the crew pay increases in the new contract labor agreements.

Thanks, Jaime. I'll ask Neil to prefer it to the second half of the question, which is the unit cost increase, which is almost largely the unhedged fuel, but nevertheless, let me talk about pricing into Q2. Like we're reflecting what is a trend we've seen develop over the last, I would say, 6, 8 weeks. Previously, we were reasonably -- the pricing into Q2, which is the July, August, September quarter, we were seeing modest mid-single-digit increases. I think what has happened with the war in Iraq -- in the Middle East is there's been a degree of passenger hesitancy. You've lots of people who may already have made bookings to go long haul or across the Gulf carriers into the Middle East. They're holding off. Will it clear? Will it? What will happen? We think that will break very much in favor of European air travel. As we get to the school holidays now it will break in favor of European air travel. We believe -- and we think we're vindicated with the strength of the close-in bookings, both volumes and pricing during May. We had another very strong weekend of bookings. This weekend, we finished 50,000 bookings ahead of the target. And again, strong close-in pricing, strong close-in volumes. But we were a little bit off. I mean, you're talking maybe 1% or 2% of the forward bookings out into June, July -- end of June, July, August compared to this time last year. And we think people -- I mean, anecdotally, lots of people are just waiting to see what will happen? Will it be safe? Can I travel. Now I think 2 things come from that. One, people will travel. And they will -- families will go on holidays. The question is, will they go on holidays long haul or to the Middle East? Or will they stay at home and go on holidays in Europe? And we think they will stay at home and go on holidays in Europe. So I'm generally would have liked optimist. I think the war in the Middle East will get resolved in the next month or two. And then I think you will see both a decline in spot oil prices and a reasonable surge in bookings through to the mid into Q2. But I'm guessing that's not guidance. At the moment, it makes sense for us to guide based on what we presently see, which is flat pricing and unit cost if it continues like this for the full year, up 5%. But I think that is likely to be a worst-case scenario, and I think there's lots of -- there will be lots of upside in those numbers if the war -- if the Strait of Hormuz reopen and oil prices settle back. I mean they won't go all the way down to $67 a barrel immediately, but I do believe they will settle down well under $100 a barrel by the time we get to the back end of the summer. And Neil, on the unit cost inflation.

Yes, Jaime, I suppose the 2 key words in the outlook on the unit cost inflation are if and could. If fuel remains at current level on the unhedged, then we could be looking at unit cost increase in the mid-single digits. To put it in context, when we were doing our budgets back in February, March, we were actually looking at unit costs if the curve had remained where it was then being down on fuel on a per passenger basis. It's now nudging above mid-single digits at this point in time based on where the forward fuel curve is. So without giving away too many secrets, if fuel is ahead of mid-single digits, then obviously, ex fuel unit costs are marginally below. So we're continuing to perform very well on the ex-fuel unit cost, locking in good airport deals, locking in good long-term opportunities. We've got 29 more Gamechangers in the fleet this summer, 4% more passengers spreading the cost over those, 20% more fuel efficient. So we've got a lot of issues in there. I don't plan to go into too much detail on the crew pay, but I might ask Eddie if he wants to add any color on that.

Yes. I mean, if you look at what the CLAs, as they have ticked over from April, for renewal out the 5 years. And you have like -- I'm not going to go into percentages, but there's an element of front-loading on those 5-year deals and then more modest increases thereafter. But I mean, when you look at what pilots and cabin crew want, I mean, they want that longer-term certainty. They also want the favorable rosters back in the case of the pilots to keep continuing to roll the 5/4 rosters, which is an integral part of the whole scheduling process that everybody wins on. And then increasingly, things like job security are raising their heads out there. I mean, pilots and cabin crew know exactly what happens in situations like this. And even with the sort of recent closures that we've had in Berlin and Thessaloniki, at least there are jobs with the growth elsewhere within the network, and so we're going to continue to talk to the other pilot groups and cabin crew groups that are maturing on their deals at the moment, and we're working our way through those.

Our next question is from James Hollins from BNP Paribas.

A couple for you, Michael. Just wondering -- so regionally, I was wondering if you'd flag any regions showing particular hesitancy on bookings relative to others? And also regionally, whether you're worried about jet fuel shortages anywhere? You sound very confident on jet fuel. And then secondly, clearly, you're not a man to ever waste a crisis. I was wondering if you could just run us through your thoughts for the summer. Clearly, lots of chat about pricing. But would you maybe use this summer to pressure some competitors or just let the demand cycle play out?

Thanks very much. Let me run through those briefly. And there isn't much difference on the regional shape. I mean you take our size and scale, I think the real trend for us this summer is that we are switching capacity away from country. We're closing the base in Berlin in October. We're closing the base in Thessaloniki. We're closing -- taking aircraft away from regional Spain, France, Vienna, the base is reducing. So any of those countries who still have kind of environmental tax on air travel or high airport fees, we're switching capacity away for those. And their traffic is in decline. For example, Vienna last week reported April traffic down 8%. We're switching those aircraft in favor of that capacity -- in favor of those airports in places like Sweden. You remember the home of Greta Thunberg in fight shaming. A new transport minister has abolished aviation taxes up there. Orlando has introduced a very imagined growth incentive scheme, and we're growing like gangbusters up there. Similar situation in Slovakia, regional Italy where they're abolishing municipal tax. And Albania, where they've not alone abolished aviation tax, they've cut ATC fees and the airport has introduced a growth incentive available to all airlines, which we are gobbling up very rapidly. So -- but that doesn't mean there isn't -- even in those new markets where we're growing strongly, there is a degree of hesitancy out into June, July, August. And I think it's not any major downturn. But this time of the year, we're having to slightly open up a little bit on pricing just to keep that forward booking curve in line with our own internal targets. And we're running 0.2% ahead of our targets for May and June. We're bang on that target for July, August and September. So we're very comfortable where we are. But we're seeing this kind of trend for about the last 2 months. Further out, we're having to do a little bit of price discounting to keep the volumes going. And that's even while our competitors are taking out up to 4% or 5% of their own short-haul capacity. So there is a little bit of customer nervousness out there. We think that will break in favor of stronger close-in bookings and pricing as we move through June, July and August, but it very much depends on what and when the Strait of Hormuz and the conflict in Iran ends. Jet fuel shortages, I think there was a real concern there about a month, 2 months ago in Europe. At this point in time, and we do regular weekly meetings with our fuel team were in Paris at the conference last week. We now have almost 0 concerns over fuel supplies across Europe. The only area where there's a slight reservation is Q8, which is the oil subsidiary of the State of Kuwait, has about 25% market share in the U.K. even they are now switching their supplies or their imports to the Americas away from the Middle East. And so Europe is now essentially fully supplied with Jet A and Jet A1 coming from West Africa, Norway, the Middle East and some of the Central Eastern European countries are taking Jet A1 from Russia. So we do not now see any real risk to supplies. In the case of Kuwait in the U.K., our other large oil suppliers in the U.K. have said they will be able to supply us with fuel if there was any disruption with Kuwait. But we don't really -- the Kuwaties are reasonably confident that they will be able to meet our supply in full through the summer season. So I think our concern over the risk of jet fuel shortages has now receded. The challenge remains price and price will -- is very volatile, as you all know. And we think that will break meaningfully if there is some resolution of the conflicts around the Strait of Hormuz. And if it doesn't, I think you will see meaningful competitor failures or very dramatic capacity cuts from competitors who will be running out of cash as we move to the end of the summer through August, September, October. And then there was -- what was the last point on competition?

I mean I just called you're a man never to waste a crisis. wondering if you were sort of thinking about stamping your business, when some of your competitors...

Yes, no, no, I mean, the -- yes, we never ever, ever, I would say, expand our [indiscernible] take advantage of our competitors or do something or deploy capacity based on what competitors are doing. We couldn't care less. We deploy capacity based on where the airport incentives are at their greatest. And we have been struck with the extent to which, for example, Albania, Tirana, which was a -- it has a 12 aircraft with base are really very concerned, like a lot of European airports about some of their incumbent carriers viability or survivability and they are getting very aggressive with the incentives or the growth incentive schemes they're putting in place. We're seeing that play itself out across Europe. So we're also seeing it now very prominently in the Baltic states. So there are a number of -- I would characterize our expansion this summer as not one of can we put competitors or put pressure on competitors, but rather taking advantage of unique growth opportunities that are now being made available to us because a number of our competitors -- our airport partners are becoming increasingly concerned on either, a, their reliance on some of our flaky competitors; or b, and they said this to us themselves, are genuinely worried that some of our flaky competitors might not survive this winter. And my view would they be right in that. So but we deploy capacity based on those part of markets where aviation taxes are being cut and airport incentive schemes are being improved.

Our next question is from Muneeba Kayani from BofA.

Two questions, please. So firstly, just wanted to go back on share buybacks. Michael, you talked about the bond and the CapEx clearly, but you've also talked about the share price being attractive. So what are your thoughts right now on topping up the buyback? I know you have still a bit remaining in that. So that's the first question. And then secondly, just longer term, how are you thinking about that EUR 12 to EUR 14 profit per pax outlook if fuel prices remain elevated? Like could there be a scenario of this capacity cuts from other airlines kind of supporting that outlook even in a high fuel environment? Or is that not possible?

Yes. Sorry, you broke up -- what you were saying on the outlook on profit per pax. Was there a period -- did you say a year there or...

No. So if I -- correct me if I'm wrong, but I think previously, you had said you'd expect that to get to the EUR 12 to EUR 14 range in...

Oh, sorry, yes, yes...

Near term. And so...

Yes.

And so how are you thinking about that in this fuel environment, which could maybe take out capacity from others? So what are the moving parts in it given that it's a different fuel environment right now?

Yes, sure. Thanks, Muneeba. Okay. Let me deal with the 2 of those. On the share buybacks, we're about EUR 600 million through the existing -- or 80% of the way through the existing EUR 750 million buyback. We expect to complete that buyback. We're pretty much -- we are very fettered in the way we can manage buybacks. So it all has to be Board approved, announced to the market that we buy a certain percentage of the daily trades. And we continue to do that. Nevertheless, I think the war in the Middle East has been very helpful to us. It has brought the average cost of our buybacks in the earlier days from -- down from about EUR 28, EUR 28.50 a share. We're now down around EUR 26.40 average price per share. Would we step up and come up with a new buyback in the next 3 or a couple of quarters? I think it's highly unlikely. Remember, our big -- kind of the big deployment of cash currently was to fund the repayment of the final bond debt. And to put that in some context, so we're going to repay a EUR 1.2 billion bond, a bond we drew down during COVID. We pay only 0.85% on that. But if we were to try to refi that today, the cost would be about 4%. I think it is -- it demonstrates the strength of the Ryanair business model and our cash flows. We came out of COVID with EUR 4 billion of gross cash. And in the last 5 years, we have now paid down that EUR 4 billion of gross debt, sorry. We have gross debt of EUR 4 billion at the end of COVID. We have now paid down that EUR 4 billion of gross debt over the last 5 years while funding buybacks, while funding shareholder dividends and also funding growth CapEx on the remainder of the Gamechanger fleet. If I look forward over the next 4 years, so I don't think we'll do another share buyback in the next couple of quarters or certainly not before at the end of this calendar year. But we're then looking into a period of 3, 4, 5 years where I think we'll continue to be very strongly cash generative, but we have no debt to buy -- no bond debt to refinance or refund. We'll also have a 2-year kind of CapEx holiday through FY '28 and FY '29 because we're only taking 15 MAX-10. So you can take it that there will be a continuation of both dividends and very strong buybacks with spare cash through FY '28 and FY '29, but not this summer. This summer, we're using the buyback cash to pay down the last of our bond debt of EUR 1.2 billion, and that gets paid down next week. What do I think of the outlook of our EUR 12 to EUR 14 profit per passenger? Frankly, I think it remains unchanged. This is a short-term shock to the system. The war in Iran was somewhat unexpected by the market, certainly the closure of the Strait of Hormuz. This is no different to what we've seen before with 9/11, the Gulf War, the second Gulf war, the Russian -- Russia's illegal invasion of Ukraine. There's been a short-term fuel spike. What happens is a short-term fuel spike, Ryanair's hedging comes to the fore, which protects the vast majority of our earnings during that period of volatility. And then the situation resolves itself, oil prices refix and everybody goes back to normal again. Will there be a disruption this year? Again, it's too early to say, Muneeba because we don't know how long the Strait of Hormuz will remain closed. If, as I suspect it's likely to be the case, Trump will find some resolution or declare victory by the end of May when the midterm election hearing kicks off, then I think we will -- I would be more optimistic than our current guidance of unit costs going up by mid-single digits this year. I think we'll do better than that. And I think you'll see more confidence return to passengers bookings and pricing during the summer. But much depends also what happens this winter with our -- the flaky competitors around Europe, the ones who are not particularly well hedged, the ones who are hugely have very large net debt positions. I mean one of our airlines competitors recently borrowed EUR 30 million from its local government just to get it through the summer trading period. That loan is due to be repaid in August. There is no possibility of that loan being repaid in August. So I would expect there will be competitor failures in Europe. And then who knows, maybe the EUR 12 to EUR 14 profit per passenger will actually come forward because there will be even more constrained capacity in Europe and stronger pricing. But like everybody else, we're in a period -- a short-term period of uncertainty. We hunker down. We trade on the strength of our balance sheet. But I -- if you look at our record over the last 4 years or 5 years, Muneeba, when we have paid down EUR 4 billion of bond debt, and I look forward into the next 4 or 5 years, we have no bond debt to repay. And that kind of cash generation will be available. And the Board has been consistent over the last 5 years in saying if there is surplus cash, it will be deployed to pay down debt. We now have no more debt to pay and the balance will be returned to shareholders through dividends and share buybacks. But I would not expect another or a -- another short-term buyback. We're very content to finish out the current program, which we expect will happen by sometime mid to end August before the AGM and then pay down our bond debt. And then I would look forward into calendar 2027, calendar 2028, the resumption of reasonably strong buyback activity if profitability and cash flow, when -- profitability and cash flows return to some pre-Middle Eastern war norms.

Our next question is from Conor Dwyer from Citi.

First question is on that kind of CapEx point. I think consensus is roughly around EUR 2 billion for the coming year. And you're talking a little bit around the CapEx holiday in the years following that and presumably on slower MAX-10 deliveries. I was wondering if you could give any indication on where you expect CapEx to roughly end up for that kind of level? And then secondly, just around airport charges at the moment, in the last quarter, touched down low single digits, and you continue to kind of churn the network in that sense. I'm wondering how we should kind of expect airport charges to progress over the next kind of 2 to 3 years, if indeed you can continue to grow as you're selling the airports, you will do so.

Okay. That's an opportunity. Neil, will you take the CapEx question for the next couple of years? And then I might ask Eddie Wilson, the Ryanair DAC CEO, to comment on the airport charges. Maybe Eddie and Jason McGuinness for airport charges and our churn discussions for the next 2 or 3 years.

CapEx, as you said, yes, roughly about EUR 2 billion in FY '27, give or take, it could be slightly lower, or it could be slightly higher depending on the timing of CapEx on the engine shops. It will be fairly modest CapEx in there on the engine shops this year. The lion's share of the CapEx is maintenance with some deliveries in the spring of next year and some PDP starting to build up. Similarly, the following year, I haven't really gone into detail there. I think I've previously said somewhere between EUR 2.5 billion and EUR 3 billion. I wouldn't be moving usually away from that. Again, it would be more skewed towards maintenance than aircraft deliveries. And then we kind of get into the peak of the order and the engine shop CapEx after that, but I'm not going to go into too much detail there at this point in time.

Just on the airport, yes, just on airport costs, fairly aggressive targets with the new routes team on what we do in terms of airport costs because we just have this constant battle between regulated airports think they can do what the hell they like. And on the one side, you have Dublin out there with a EUR 5.6 billion CapEx out there with no extra capacity in it whatsoever. And then you've got the likes of the lien down there was like EUR 11 billion plus heading into this very difficult environment, whereby they think they can defy the laws of gravity in terms of attracting traffic. The same thing plays out with the Fraports and VINCIs of this world on that side of the house. And then on the other side of the house, as Michael has talked about there, you've got municipal tax in Asia. You've got the Swedish tourism tax. You've got all the deals whereby with the smaller airports that actually add up, you've got the long-term deal that we've completed with MAG in -- not just in London, where it's the only airport that can grow without any extra airport infrastructure or runway infrastructure in the next 10 years. And that's up against our competitors on a significantly higher cost base, and that's why the invest gap is only going to get wider in London. So it's a constant battle there. Like I try to keep that flat and nudge it down if I can, over the next number of years, but it's a difficult job to do, but nobody is getting any capacity of Ryanair unless our average costs go down. And our average costs go down by lowering charges and airports have to work with us to extract more money from parking or duty-free or whatever it is. But we've got to have sustainable commercial relationships with airports that have to work as hard as us in terms of investing on delivering more passengers and growth. Jason, is there anything you want to add on to that?

Yes. The other thing I would say, Eddie, is that increasingly, the conversations we're having with airports is they're increasingly worried about where the growth is going to come from. There's a huge amount of airport infrastructure coming into Europe over the next 5 to 10 years. And there's very few airlines or indeed, only one airline Ryanair that would deliver the growth into this new infrastructure. So increasingly, the conversations, they are worried about competitor capacity. And I think that's where you're seeing us growing this year. We're growing Polish capacity by plus 22% this year. We're adding 8 aircraft into Poland, open the base in Tirana, 4 aircraft growing capacity by close to 60%, and we will take it out of the likes of Germany and Austria where costs -- where they're not -- they are not being sensible on cost. So Berlin 7-based aircraft closure being a prime example of somewhere where we reduced capacity by 50% and that capacity is migrating to Poland, Albania and Slovakia, and we're going to continue to do so. But I think there's going to be lots of opportunities across this winter in terms of capacity -- competitor capacity coming out of the market.

Can I just add to that to give you a flavor? Even an airport like Sweden, which 4 or 5 years ago was nobody wants to fly anymore with all this Greta Thunberg, flight shaming, et cetera, et cetera. You've got really good new transport minister up there going, "This is stupid. We're losing business." He's abolished the environmental tax. In Arlanda, it introduced very imaginative traffic growth schemes. Panama, for example, not only have they abolished the tax, cut ATC fees, and growth incentive schemes. And you contrast that with somewhere like Dublin, just a bunch of idiots. They had a traffic cap that they've been sitting on for the last 20 years. Government promised 18 months ago to remove it as soon as possible, 18 months later, nothing done. And then the dumbos in Dublin have come up with a CapEx program of EUR 5.6 billion for the next 5 years. 25% of that or about 1.5 billion is an allowance for inflation and contingencies over the next 5 years. Now there is a risk that inflation might tick up from 2% to 3%, but it's not going to cost them an extra 1.5 billion. So that's the kind of messing that these regulated monopoly airports are still engaged with as we said last week, if that goes ahead, we typically will stop grow -- overnight, we will stop growing in Dublin. And if Ryanair stops growing in Dublin, Dublin doesn't grow. We have lots of other airports in Sweden and Albania. Slovakia, for example, again, the new government abolished the environmental taxes. They cut ATC fees by nearly 50% and the airport has significantly reduced its airport fees. We, as a result, have switched a load of aircraft out of high-cost, high-tax Vienna up the road in Slovakia. And in April, Vienna's traffic went down by 8%. And Slovakia recorded a record 170% growth in traffic April over April. So I would expect those churn discussions to continue to play out over the next couple of years, while more on in Dublin and the likes of them come up with -- gain the regulatory system by coming up with these absolutely stupid. For example, they want to spend nearly EUR 1 billion in Dublin putting air bridges on the Ryanair terminal despite the fact that we don't use air bridges. And we deliver 80% of the traffic through that terminal, but they have come up with this that want to use the majority of airlines using Tier 1 want air bridges. But I'm forgetting to mention the airports that the airline delivered 80% of the traffic won't use them and won't pay for them. But whatever those -- the great advantage we have is the strength of our churn negotiation. And as Eddie said, the strength of our pipeline of 300 aircraft deliveries. No airport in Europe it wants to grow, most of now recognize they need to encourage Ryanair to grow there because we're the ones that will be deploying 40, 50 aircrafts a year. And some of those aircraft deployments will involve taking aircraft out of Dublin and deploying them somewhere else unless somebody in the useless government eventually passed the legislation abolishing the tax and finally takes a stake to these morons in Dublin Airport, who think they just keep pitching away billions and the customer will pay, they won't.

Our next question is from Harry Gowers from JPMorgan.

First one, just for the Q1, I wanted to get a little bit more color on what you're seeing exactly in terms of the close-in bookings so far. I mean, clearly, there's some weakness or stimulation needed at some point in the curve. But have you seen more of a positive acceleration or sort of positive inflection in close-in pricing in recent weeks? Or has it been quite consistently strong since the start of the crisis? And then the second one, probably for Neil, just on the ex-fuel unit cost inflation this year. It feels like some of it is maybe just timing related around staff and maintenance, maybe seeing a bigger impact this year. But then in the LTAs. Is that kind of fair with the MAX 10s coming next year and that staff pay inflation being front-end loaded?

Thanks, Harry. I mean to give you a flavor of what's going on. If you take, say, for example, the month of April, April was weaker, was artificially weak this year because the first weekend of the April school holidays fell into March. We entered April about 0.2% ahead of where we were ahead of target. But despite the Easter was early in April. The close-in bookings were stronger and stronger. We finished up the month about 0.5% ahead of target. Now 0.5% is sort of like 100,000 passengers. So we finished almost 100,000 passengers ahead of our passenger target for the month of April, and that was all thanks to stronger -- very strong close-in near-term bookings and stronger pricing. However, if we are -- at the moment, if pricing remains weaker out through June, July, August, and we're having to marginally, and I keep emphasizing this, we're having to maybe take 1% or so off the pricing to keep the further out bookings building. And then the close-in is strong, and the pricing is strong. We still see that finishing up if that continues through those 3 months of June, July and August. And I don't think it will because I don't think the Strait of Hormuz, the uncertainty in the Middle East can continue into June, July, August or Trump will lose not just the House, but the Senate as well. But if it does continue, then we think pricing moves from being up mid-single digits in those peak summer months to be flattish in those peak summer months. We don't think it goes negative. But I can't rule it out either. If there was some untoward adverse development in the Middle East or the straight, you never say never. But I will be much more optimistic that I think we are being conservative in the guidance today and that the outcome will continue to improve and be better, partly because people will inevitably go on holidays one way or the other. I just think their holiday in Europe or European resorts in Portuguese, Italy and Greece this summer. Many more will fly with us to Turkey, Albania and Morocco because they can avoid Europe's mad, ETS, the taxation by simply flying to neighboring non-EU countries. And that will reflect itself by the time we get to the second -- first or second quarter numbers in slightly more optimistic tone on volume and pricing. Neil, on the ex-fuel unit cost?

Harry, yes, you're bang on the money there. Some of it is timing, absolutely. If I look at the maintenance side of things, which is we will be taking the MAX 10s in, which got full warranties, which will help offset some of the maintenance. Equally, that hospital visit that we referred to is purely a technical accounting thing where because there's a component that has to be overhauled the 10,000 cycles, we accelerated the depreciation on that, but we get that back on the back end. And then on the staffing side, as we said about 18 months ago, we're already recruiting for the MAX 10s coming in. So we're taking in more cadets at this point in time so that we're self-sufficient for first officers and indeed then command upgrades to captains when we get to the peak. And the deals that we're doing, as I said, on the prerecorded session on our website this morning, an element of front loading on some of the pay increases. But on the back end, the productivity from the MAX 10 will help offset. So yes, there's a fair element of timing in there on the numbers.

Our next question is from Savanthi Syth from Raymond James.

For the first question, I was just kind of curious if for any of the 15 MAX 10s that you expect by next spring, if any of those have -- if Boeing has started building them to kind of give you greater confidence of the delivery? And then just a second question, now that you've declared that multiyear engine materials agreement with CFM, curious if you have a better idea of how you expect maintenance costs to be stepping up versus your current contract and just how much of a competitive advantage that might be versus kind of market rates?

Again, I have to take the second half of that question, please. On Boeing, yes, they have started building the MAX 10. They expect by the end of this year, they'll have about 40 -- I think it's 30 or 40 MAX 10s built, some of which our first delivery is due in January of 2027. So some bars will actually be built before the end of this year. But it's all down to certification. Now Boeing has been making very positive noise on certification. We separately have also been in dialogue with EASA, the European Safety Agency who have to certify the aircraft for Europe. They've been very complimentary of the work that Boeing has done. They don't see that there will be any significant delays on the certification. But obviously, that depends on Boeing and the FAA. And we get a sense also from meeting with the FAA that there's a better relationship there under the stake, the current administration, a more supportive FAA. They want to see American manufacturers succeed, and they certainly appear to be more supportive of Boeing and certification. But there's always a risk of slip-ups. But I think we take great heart from the turnaround that the new team in Boeing, Kelly Ortberg and Stephanie Pope on our last 29 Gamechanger deliveries, which were delivered to us almost a year late. Each one of those aircraft were defect-free and were delivered on average 1 or 2 months earlier than the original delayed delivery date. So Boeing are doing a really good job on the shop floor in Seattle, also in Wichita taking clean hulls in Wichita Seattle, producing clean aircraft, no defects. We're actually pulling some of our engineers back out of Wichita and Seattle now because there's no reason for them. So I would be reasonably optimistic that we're going to get those first 15 aircrafts in the spring of 2027. That gives us capacity growth to get to about 223 million passengers by FY '28 and close to 230 million by FY '29. And then we start stepping it up growing at about 15 million passengers a year through '30, '31, '32, '33. The 300 million passenger target by 2024 is unchanged. And as I said, I see no reason to change my somewhat optimistic outlook that profit per passenger will rise towards EUR 12, EUR 14, EUR 15 per passenger over the next 4 or 5 years. And I believe the current price in the Middle East and the Strait of Hormuz will accelerate that profit growth, although it may take a hit this year, but it will be temporary and short-lived. Thanks, Savanthi. Neil, on the CFM engines and maintenance.?

Yes. Savanthi, I think we've discussed this a few times before. I mean the key benefit of the engine shop is, first and foremost, we will be able to put the engines through faster to our own shops than anywhere else. That obviously leads significant efficiencies and reduces the number of spare engines that we need to hold in the inventory. The key benefit of the in-housing update of the engine shop is compared to what we would pay if we replace what has been an outstanding power by the hour deal for almost 25 years with CFM. If we were to try and renegotiate that deal as is today, you'd be locking in 4 to 5x the rate that we've been paying. By doing it ourselves, and some of this will depend on the final grant aid and the labor support and everything else that we get, and we're not over the line on that yet, but you're probably looking at somewhere close to 2x by bringing it in-house as opposed to paying 4x to 5x by leaving it out with third parties. So I think that will massively increase the gap between ourselves and our competitors over the next number of years. It also means our competitors are going to be tied up in engine shops for significantly longer because they lease their fleet unlike Ryanair who don't and therefore, can get them through a lot quicker by just putting on new parts and moving an engine down the line. So it's the operational efficiency and the saving compared to going third party, which is the key benefit from this. And I think it's going to prove to be a very smart decision for Ryanair in years to come.

Yes. And as you're aware, about 85% of the cost of engine maintenance is the spare parts, it's not labor. You look at the 30 spare LEAP-1B deal we announced that we did during the last 12 months, we bought those aircraft from our partners in CFM at a deeply discounted price they wanted. And we think we'll be able to repeat that kind of success or buy during periods of distress, large quantities of spare parts at very advantageous discounts for both our engine maintenance and for our shareholders.

Our next question is from Dudley Shanley from Goodbody.

Just one question for me. Just in the context of the route churn that you've had over the last few years and the capacity constraints that we've discussed a few times, with the current short-term issues in fuel, do you think that slowing of growth in the European aviation space has any of the higher charging countries starting to think about reversing and I guess, following that Swedish model that you mentioned earlier?

Yes. The answer to the question is yes. I mean, for example, the Austrian government at the moment is considering a new budget cycle. They make a budget statement in June. We know already because they're looking at reducing the aviation tax, which is currently EUR 12 per passenger. Now we've been quite aggressive. Forget reducing it, either abolish it, or don't waste your time. We will not be going back with any growth to Vienna. All of Vienna's growth is moving up the road to Slovakia, where they are -- the new transport minister is delighted with himself and the record traffic growth at Bratislava Airport is enjoying. In fact, last week, the new imaginative bus company has now started running 5 daily bus services from the center of Vienna direct to Bratislava Airport, taking advantage of the enormous surge in demand from Viennese citizens and visitors who are now getting there via the much lower cost of Bratislava Airport. And we think that will -- that trend will continue. We will continue to move aircraft out of countries and airports where taxes or airport fees are high or where, as I said, in Dublin, you have these government-owned monopolies operating some 1,880 regulated monopoly, gaming the -- some dumb regulator looking to double airport fees over the next 5 years. You will simply -- the growth will come to a shuddering halt. But the problem is we have an incompetent government who can't even deliver on the 18 months later and still haven't delivered their election promise to abolish the cap of Dublin Airport "as soon as possible." Even for the snail-paced growth -- snail-paced delivery of the Irish government, 18 months does not consist of as soon as possible, particularly when you have a [ 20-seat ] majority. So we do expect there will be more regional regions in Italy will reduce taxes and the taxes now are coming down. The big issue here is whether we can persuade the European Commission led by that duller, Ursula von der Leyen, who has spent the last 2 years talking about the competitiveness of the European economy, but doing absolutely nothing about it. Can we finally persuade her and the other dumb Europeans that it's time to abolish ETS taxes, which are only applied on European citizens on intra-EU flights, while we exempt the Americans, the Gulf, the Asians and everybody else traveling to and from Europe. This makes no sense. This year alone, Ryanair passengers will pay EUR 1.4 billion in ETS taxes. It adds about EUR 7 to every ticket. Well, first of all, if von der Leyen is serious about competitiveness, and we don't think she is because, frankly, she all she does is talk about it and do nothing. Then start by abolishing ETS and -- which would reduce airfares in Europe by between EUR 7 and EUR 10 for every single European citizen. We'll keep pushing, but I wouldn't expect anything efficiently coming out of Ursula von der Leyen.

Our next question is from Ruairi Cullinane from RBC.

Firstly, on hedging, if the war drags on, how long do you expect to hold out for hedging fuel requirements in full year '28? And then secondly, just on the balance sheet, why is EUR 4 billion the right number for a targeted cash balance?

What we do is the hedging at the moment, obviously, we haven't started -- if you look forward out into -- we're 80% hedged for FY '27. The current rate -- the current forward rates over the quarter of FY '27, you could be hedging today at about EUR 120 a barrel. Spot last Friday was about on jet was about EUR 136 a barrel. Out of FY '28, you hedge today at about EUR 90, EUR 92 a barrel. So there's a very deep contango in the market where the further out to go the further prices fall away. I would be willing to -- I mean, certainly, we could remain unhedged into the summer of 2027 up until about September, October of this year. And you speak to any expert, nobody really believes that the war in Iran or the Strait of Hormuz will remain closed out to September, October of this year, but that doesn't rule out the possibility. There's must be always some possibility. I think the key pressure point as we move through this summer will be the U.S. midterm election and whether Trump can keep the House and the Senate. And so I think there will be a change of tone and strategy when it comes to the Middle East in particular gas prices in North America. But I would not expect us to start hedging into summer '27 if prices remain elevated like this until about September, October. And then I think we would still be in a position to do it at -- you'd be looking at going up from EUR 67 a barrel now to maybe a price at mid-90 -- but if that happens, there will be a number of very large airline failures in Europe this autumn. So what we would lose on the fuel hedging going forward into summer '27, we would more than gain on the likes of some of these airlines in Europe who are unprofitable and are bad -- poorly hedged. They will simply fail. And you look, obviously, Spirit is the most clear example of that here in North America recently. Why is EUR 4 billion the right number? EUR 4 billion was the number we went into. Where we went into COVID with EUR 4 billion gross cash and EUR 4 billion of gross debt, 0 net debt position. We do operate in a cyclical capital-intensive business. This is a really phenomenal business. It is very profitable. It churns out huge amounts of cash, and we have used that cash to repay EUR 4 billion in bond debt over the last 5 years. But it's also an industry that's very susceptible to external economic shocks like the Gulf War, Russia's invasion of Ukraine, and now you have the war in the Middle East and the closure of the Strait of Hormuz. So I think we're a brilliant airline. We're clearly very profitable, very cash productive airline. But we're also an airline that is the subject of external shocks that we can do nothing about. And we believe that EUR 4 billion is the right kind of number that we should be aiming for. That doesn't mean that if an opportunity came along, we wouldn't let that cash drop down to maybe EUR 2.5 billion, EUR 3 billion. We would if the right opportunity came along. And also that we wouldn't let it rise from EUR 4 billion to EUR 4.5 billion or EUR 5 billion. Now EUR 5 billion, we don't need. It's too much. So everything over EUR 4 billion, and we will build ourselves back up to that in the next 12 months. Everything over and above that, we would be deploying in dividends and shareholder buybacks. Neil, anything you want to add to that EUR 4 billion target?

No, I think as you said, COVID is hopefully as bad as it ever gets in here and EUR 4 billion served us very well through that crisis. But equally, a crisis turns up opportunities, and I'd hate to be left scrambling and a price paper in the market for a bond or something. So it's a good level to be at. And I would just add on the hedging side that while we haven't added to the jet, we have been something on dollar weakness, which is the other side of the hedging coin, and we've now got 30% of FY '28 H1 hedged at EUR 1.20 on the euro-dollar, which is better than the EUR 1.15 that we have this year. So we'll continue to lock in on dollar weakness. And as Michael said, we can get back to the jet in due course.

And should I -- when I update the shareholders where we are on the CapEx dollars, Neil on that particular spend firm orders?

Again, jumping on days where the dollar weakens, we've now got 60% of the 150 firm orders hedged at just over EUR 1.23 on the euro-dollar. So we're locking in significant savings there. This is a keenly priced aircraft deal. And in euro terms, we're now locking in cheaper seats, which is good for the CapEx, but also cheaper seats, which is good over a longer period of time for the P&L. So pretty pleased at that. And the treasury team remain ready and able to jump in every weakness that we see in the dollar to expand that further.

Yes. And you see that also reflected in the lease extensions we're doing on the A320 fleet in the current difficult environment, particularly post the Spirit failure in the U.S.

Our next question is from Antoine Madre from Bernstein.

So same is ongoing with A320 fleet, is it comfortable to say that the A320 fleet would need to think about future area of responsibility? And second, what is the relationship...

Antoine, sorry. You need to speak into the speaker. It's very hard to hear you there. I didn't hear any of the first half of that question, please. Can you repeat?

Can you hear me well now?

Yes, just about.

Okay. So no, I was wondering with higher fuel price, is it still profitable to fly the A320? Or do you need to think about retiring earlier? And second, what did your ancillary revenue per passenger in Q4? And what can we expect for full year '27 in ancillaries?

I'll ask you just a comment on maybe Tracey to the ancillary question. Can I just -- if I've understood the question, Antoine, it is would the higher oil price affect whether we would take the A320 or look for Neos? Is that the question?

No, just think of the A320 fleet...

He's asking should we keep flying the [ loudest ] in the current high fuel environment, the A320s that we have, and the answer is yes

I mean, the answer to that question is, yes, the lease rates are falling. And the great joy of the middle of the strike in the Middle East is again an opportunity we're extending these leases, which are coming to end of life with materially reduced monthly lease rates and the monthly lease rentals were already significantly below market. A lot of the lessors of these aircraft, they're coming to the end of life. They have Ryanair on their kind of -- as a customer and the risk of taking back these aircraft that are getting to end of life and trying to market them somewhere else in the world or just take a modest hit on the lease rentals and on the redelivery conditions and extend the deal with the Ryanair Group for another year or 2 seems to be attractive. So the answer to the question is those are not the most fuel-efficient aircraft. But if the lease rates are falling, we would always be happy to take advantage of those kinds of opportunities. And remember, Antoine, they really only account for 26 aircraft out of the 675-odd aircraft -- 650-odd aircraft fleet, where most of that -- a significant portion of that fleet now is the Gamechangers, which are offering us 4% more seat and burning 16% less fuel. So in actual fact, our fuel consumption on a per passenger basis will continue to modestly decline with the benefit of the Gamechangers will begin to significantly decline as we move into the MAX 10s in '27, '28, '29. And Neil, you take Tracey, maybe take the ancillary question, please?

Yes, we've just seen a slight dip of about 1% in Q4, but I think we have to look at the overall for the year, we were up 2%, and we would hope to see that continue into next year, kind of 1% to 2% range.

Yes. I mean, including the traffic growth. Yes. It's not unusual to see a dip in Q4 given that we had 1 week of Easter in there, which are pushing people in the dog days of January and the weeks outside of the midterm in February. So I wouldn't read anything into that. We guided 2% passenger growth last year. We came in exactly bang on 2% and FY '27 will be somewhere between 1% and 2% per passenger, again, above traffic.

Our next question comes from Axel Stasse from Morgan Stanley.

Two questions on my side, please, a bit more medium term and one a bit more short term on the medium-term one, it's going back on the commentary on the hedging in fiscal year '28. So if I understood correctly, you don't want to hedge anytime soon from fiscal year '28, but how do you plan to offset that you pick up in fuel then? And is it just fair going into next year? How should we look at this? And then short term, on the salary renegotiations, sorry to come back on this, but can you just confirm what percentage of the staff cost base is being renegotiated? And is it fair to assume mid-single-digit increase in year 1 and then low single digit from year onwards?

Thanks, Axel. Sorry, the first part I can give more color on maybe on the salary negotiation. Could you just explain the first part of the hedging. So if we -- you talk about if we hedge in FY '28 at higher prices, how do we think we would pay for that? Is that the question?

If you don't start to hedge in the coming months for 2028, even using the forward curve, for example, how do you plan to pass on the fuel cost inflation? Is it through pricing? Is it something else that we should be aware of?

Yes. I mean again, I come back to the point, if the oil prices remain higher for longer through into, for example, say, the third -- our fiscal third calendar, the December quarter or the December quarter, if oil prices remain higher into that quarter, then I think you would see us start to put down some hedging into the summer of 2027, so FY '28 at maybe take a number, EUR 90, EUR 95, EUR 85 per barrel, materially higher than this year's oil price. But there will at that point in time, be casualty here in Europe among the European airlines. There are people who are less -- I mean we're 80% hedged out to March 2027. Most of Europe's second-tier airlines are hedged kind of generally out to about October. And some of them, while they tend to be hedged aren't hedged at all, they have the dollars. So -- but what would happen? I think if there were higher oil prices out into 2020 -- into summer of 2028, it is inevitable that the legacy airlines will be bringing in fuel surcharges. I think it's inevitable that there will be far less capacity available in the system next summer, partly because of failures and partly because capacity simply will be grounded. And I would think there'd be a significant upward pressure on pricing. But I don't expect that to be the outcome. I expect by the time we get to the end of May or June, there will be -- Trump will be declaring victory in the Middle East. The Strait of Hormuz will be reopened. The focus will be over here on the midterm elections in November and that there will be a much more optimistic environment, political environment here and economic environment in relation to oil prices. Darrell or Eddie, do you want to take the salary negotiation question?

Yes, Darrell. Yes. Go ahead, Darrell. You go first, He's dropped off. Okay. Sorry. No, what you have -- like don't forget, in the existing deals that we have, there are already pay increases built in for April in any event. So you have there's only 3 or 4.

In for '26 and '27.

Yes. Like that's -- I mean, they'll go on for the next year. What we did see is that there is some appetite among some of the groups to go earlier. And we've facilitated that, like anything that brings having the long-term stability out there, the Italian pilots were one of those groups. And we're in active negotiations. So like the simple answer is 100% of the pilots are covered by pay increases because they either have new deals coming, which will be -- which will be higher because of the element of front loading or the existing ones which run out next April, still have had their pay increase in April. And that pertains for the cabin crew as well. So if that answers your question?

And remember, actually, what we're doing here, we're putting in place new 5-year pay deals, which will run upon a dramatic uptick in productivity, staff productivity coming from the delivery of MAX 10 aircraft, which starts in the spring of '27, runs out over the next 5 years out to 2030, 2021 after 5 years of these pay deals when our basically captains and cabin crew will be flying 20% more passengers on a per flight basis and burning 20% less oil. So it does make sense from an operating and from an efficiency point of view to share the upside of that with our people by putting in place new 5-year pay deals. Now where there's a benefit of front end, the incentive for the staff is you get the pay increase front ended. But we'll get the productivity gain over the lifetime of that 5-year deal.

Our next question is from Gerald Khoo from Panu Liberum.

Two for me, if I can. You talked a bit about airport charges earlier in the call. I was just wondering whether you could give an indication of the average duration of your airport charges deals? How long are you locking these favorable terms in for? And finally, Michael, in terms of your potential top contract extension, is there particular reason why you've landed on 4 years -- and should we expect this to be the final extension?

I mean, very difficult -- really the duration of these airport deals, it very much depends on an airport-by-airport basis. Some of them now run out into 2035, 2036, particularly, for an example, I use an example like London Stansted, where they're investing EUR 1 billion extending the terminal facility and growing the capacity from 30 million to about 45 million passengers per annum. And I would highlight that -- and they want the security with growth commitments that Ryanair will fill those facilities if they put in those extensions. Standstill are going to grow capacity from 30 million to 45 million passengers, 50% growth in capacity for a cost of EUR 1 billion. Meanwhile, Dublin proposed to spend EUR 5.6 billion with no increase in capacity. I mean, EUR 1.5 billion of inflation, EUR 600 million on vanity sustainability projects, including EUR 7 million planting bloody wildflowers, which could only come about with a kind of government-owned monopoly pitching away money. So the latency is typically when we're doing extensions or somebody wants growth, typically it's 4 to 5 years. And in some cases, where they're committing extensive CapEx on facility enhancement like in Stansted, like in Bergamo, for example, they run out longer, typically out to 2035 -- 2024, 2025, 2026. So it's horses for courses. What I would say, though, almost every airport in which we operate, where we have a 4- or 5-year deal, they're back to us within 2 years, so can we have another more growth? Can you extend again? And we are -- I mean, there's no exaggeration. Jason McGuinness and his team can barely get in the office doors at the moment with the numbers of airports that are sleeping in our reception areas, looking for meetings, looking for growth, partly because they're very worried that some of their existing incumbent carriers who are heavily incentivized or less well hedged or don't have fuel hedging in place will not survive or will dramatically cut back on their capacity growth. For example, Bratislava was given where we're growing very rapidly now. One of our competitors' airlines promised to grow their fleet from 2 to 5 aircraft. And apparently then a week later, they changed their minds. They told Bratislava the fifth aircraft isn't coming. Bratislava called us the same morning and said, "There's another spare tank here. Do you want to put another aircraft in here, we'll give you favorable terms." So don't tell anybody when I'm coming down to Bratislava next week to announce another aircraft that our base will go one more aircraft this year solely because one of our less competent competitors didn't honor their kind of 5 aircraft base deal. And on my contract -- sorry, why 2032, this is 2026. 2022 looks like a reasonable extension. I was offering 2030. The Board wants 2033. We set on 2032. They put in -- and I know we're not going to breach the confidentiality that the Board wants to discuss that with some of the -- our larger individual shareholders, but there are very aggressive, and I mean very aggressive profit and share price target on the purchase -- on the share option purchase agreement. And other than that, I get paid a very modest basic salary and bonus, no pension and no anything else. But it has always been my philosophy. I want my remuneration and rewards tied to very ambitious profit and share price kind of targets. At the last time around in 2019, I had to almost double the profit or almost double the share price. And I think shareholders would reasonably assume that the next set of targets are not dissimilar to that. But again, the Board wants to brief the main shareholders on that first.

We currently have no further questions. So I'll hand back over to Michael O'Leary for closing remarks.

Fantastic. Okay. Folks, thank you very much. Again, I conclude by just reminding everybody, we've had a record year, record traffic, record profit. We have been overtaken by events in the Middle East in the last 2 months, but I do not expect that, that will last very long, maybe another month or 2. And then I believe the Strait of Hormuz will reopen, oil prices will settle down. People will go back to booking with confidence during the peak summer months. And Ryanair is incredibly well positioned with 4% more seats this summer, well controlled remarkable unit cost discipline in a marketplace where none of our competitors, the cost gap between us and our competitors is widening. We are really well hedged out to March 2027. That gives us incredible financial strength. We will pay down the last of our bond debt next week, and we will be essentially debt-free. And that puts us in an enormously strong position to continue then to grow capacity in the next couple of years, take delivery of MAX 10 aircraft that will transform our operating economics because they are 20% more seats burn 20% less fuel. And you guys today can buy all this incredible advantage at, I don't know, EUR 22, EUR 23 a share. And so I don't want to hear anybody telling me for the next 2 or 3 years, oh, I wish we bought the last time there was a dip. Here's the dip. We're fine. We're very happy with our share buyback program. The average cost has dramatically come down over the last 2 or 3 months. And for that, we're extremely grateful. As we look forward, we have an extensive roadshow with all of the senior managers on the road across Ireland, the U.K., Europe, East Coast and West Coast America. I myself, I'm in New York for the next 2 days. Chicago on Wednesday, Boston on Thursday. If anybody wants a meeting, if anybody wants to be reminded of how strong Ryanair's fundamentals are and how profitable and cash generative we are, please ask as us either [indiscernible] for a meeting. We look forward to meeting you. And other than that, if anybody wants to come to Dublin and updates over the summer and visit us or see the operation, you're very more than welcome. I believe we're setting off on another 5-year period of very strong traffic growth on aircraft that have more seats that burn less fuel, and they will in turn deliver very strong profit and very strong share price appreciation. So with that, thank you very much for joining the call this morning. Look forward to seeing you all in the next couple of days. And if not, go visit us in Dublin during the summer. Thanks, everybody. Bye-bye.

This concludes today's call. Thank you all for joining. You may now disconnect your lines.