Ryanair Holdings plc (RYAAY) Q2 2027 Earnings Report, Transcript and Summary

Welcome everyone to the Ryanair Holdings plc H1 FY27 earnings release. My name is Seb, and I will be coordinating the call today. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. I will now hand you over to Michael O'Leary, Group CEO of Ryanair Holdings, to begin. Michael, please go ahead when you are ready.

Okay, thank you. Ladies and gentlemen, good morning. Welcome to the Ryanair H1 analyst call. As you see this morning, we have released our half-year results. Profits have fallen 15% to EUR 2.15 billion for the half year, primarily due to the cost of unhedged oil, which has doubled over our hedge price of $67 per barrel. However, we delivered another strong operating performance. Traffic in the half year is up 6%, mainly by virtue of the fact that fares, though, have fallen 4% during the peak summer period. H1 fares fell, although some of that was also April didn't have a full Easter in it. Mainly we think we attribute that to the Middle East conflict, which in the early part of the summer led to consumer hesitancy, later bookings, and we did need to price down to stimulate the travel and volumes. Operating costs in the half year have risen 10% to EUR 7.7 billion, as the price of our 20% unhedged jet fuel doubled, and supplier compensations needs following the delivery of the final Gamechangers last year. Our FY27 jet fuel prices remain 80% hedged at $67 a barrel, so that has insulated both our earnings and our passengers from the alarming spike upwards in oil price. It has also significantly widened our cost advantage over other E.U. competitors, as well as boosting current year earnings. While oil prices remain volatile, we have taken advantage of recent dips to extend our FY28 cover, which has now risen from 15% to 25% at an average price of $95 per barrel, but that will still be a 50% increase in our this year's hedge. The balance sheet remains strong, industry-leading. It supports We paid down our bond debt. The balance sheet is supported by an unencumbered fleet of 620 Boeing 737 aircraft and strong liquidity. Gross cash at the half-year end was EUR 2.6 billion, even after paying down EUR 1.3 billion in debt, EUR 800 million of CapEx, and EUR 400 million of shareholder distributions. In September, you will have seen we completed our latest EUR 750 million buyback. We have now retired over 40% of Ryanair's issued share capital since 2008. The board remains committed, however, to shareholder returns. So, in addition to an interim dividend of EUR 0.273 per share payable in late February 2027, the board has decided to launch another EUR 800 million share buyback. That is timed to start next February, which is when our cash flows are strong. Cash flows are strongly positive from January onwards. We expect that this latest buyback will run for about a 10-month period, so from February to the end of December 2027. We see the current share price as a buying opportunity, and by extending the share buybacks, we think it will be accretive for shareholders over the medium to long term when the current oil disruption settles down. On fleet, we warmly welcome the FAA's recent certification of the MAX 8-10. We expect and hope that the EASA will certify this before the end of December, which will enable Ryanair to take delivery of the first of our 16 MAX 10s in spring 2027. The first aircraft is due to deliver at the end of January, with another 15 being delivered by the end of April. That will give us 16 new aircraft, or capacity for about 3% traffic growth in FY28, with the traffic rise from 214 million passengers this year to 220 million passengers next year. However, in the short term this winter, we have reduced the exposure to unhedged oil by cutting our current traffic target from 216 to 214 million passengers. It means that our winter traffic from November to March will be broadly flat year-on-year. Next year, with the 16 new MAX 10s, we will be at a growth to just over 220 million passengers. But that is only 3% traffic growth, which for us is very slow capacity growth historically. We think that gives us an opportunity though to price up meaningfully into the summer of next year. With that spare capacity, we are allocating that capacity and churning some of our existing capacity to those states, regions, and airports who are cutting aviation taxes and lowering fees. We highlight Albania, Italy, Morocco, Slovakia, and Sweden, who have abolished aviation taxes. The switches will move away from those countries like Austria, Belgium, Germany, and regional Spain, who are either maintaining high airport fees or raising taxes. Next summer 2027, the schedule is already on sale. We have 126 new routes and one new base in Rimini. The outlook for FY27 traffic, as I said, we expect to grow now slightly less, 3% to 214 million passengers, although our cost leadership continues to widen with all other E.U. airlines. With 80% of jet fuel hedged at $67 a barrel out to March, this year's earnings and our winter traffic are well insulated from the current oil price volatility. However, the final FY28 unit costs will depend on the final price of the unhedged jet fuel for the second half of the year. Interestingly, particularly if you look at this morning's numbers where traffic is up 6% for the half year, but summer fares were down 4%, pricing has turned around in recent weeks. Since about the start of August, we have seen prices move upwards year-on-year. Q3 demand, which runs out to December, is strong, and fares are trending modestly ahead of the same quarter last year, which is a pretty startling change in pricing from the peak summer period. I think that augurs well for price increases into the summer of 2027. All the airlines around Europe are not well hedged to summer 2027. They are all cutting capacity into the winter, and I think that will be a good platform for constrained capacity and higher prices into summer 2027. The booking window, however, remains close in. While we have reasonable visibility into Q3, we have almost zero Q4 visibility. Therefore, it is too early to provide meaningful FY28 profit guidance. I think it is appropriate, though, we should address the fuel cost for FY28. Based on what we see now, unless there is a swift resolution to the Middle East conflict, we expect jet fuel prices will remain elevated well into 2027. As our low-cost oil hedges roll off in March of next year, all E.U. airlines face significantly higher fuel bills. We believe European short-haul airfares will increase materially. We expect to see fuel surcharges from the legacy airlines on their short-haul operations next summer, which will drive up airfares on short-haul services across Europe next year. With a EUR 2 billion increase in our fuel bill next year, we need about a 20% increase in airfares, or about EUR 10 per passenger, to fund all of that. While I do think there will be a significant boost in airfares next year, I am not sure we will see 20%. Therefore, we do need to close that gap. We are going to have to address costs. We are reviewing costs all across our group airlines, particular focus on tax or persuading governments to abolish aviation taxes. We are accelerating the airport churn negotiations, particularly with the arrival of the fuel-efficient MAX 10 next year. Where there are maturing labor agreements in April next year, we are looking at temporary pay freezes. Unless those pay deals are done before the end of March next year, I am not sure we would be minded to agree any pay increases from April next year, apart from those that are already in place. We will see lower crewing ratios, but that is a function of having less aircraft deliveries for the next two years. We need to recruit and train fewer pilots. We are seeing almost zero churn in pilots or cabin crew at the moment. Therefore, we are stepping back pilot recruitment and training courses. We are postponing those this winter and I think into the summer of 2027. With no attrition, nobody leaving, there is not much reason for us to recruit more pilots, particularly where we are only taking 16 aircraft next year. Those lower crewing ratios, increased use of AI, which is driving further operational back office and support functions, will enable us to continue to deliver an exceptional performance on unit costs ex-fuel next year. That, allied to, I think, what will be a large bump in airfares, I am not sure we will be able to repeat. I think the current guidance are, the market expects us to deliver profits of about EUR 1.7 billion-EUR 1.8 billion this year. I think there is a reasonable chance we will maintain that into FY28, but it is all heavily dependent on where fares go and where oil prices go. Until we see the cloud, or until we see some certainty of that coming out of the U.S. midterms this week, we would like to see an early resolution of the situation in the Middle East that would at least allow crude oil shipments to restart. We'd maybe see crude oil trend back from Brent crude today at $117 a barrel. I think that's likely to drift downwards towards $80 a barrel into next year. The crack spreads, however, will remain elevated, and therefore, jet fuel, which is currently close to $170 a barrel, and I think at best that's going to trend down towards $120-$130 a barrel next year. I welcome that as a crisis point. I think it will put a lot more capacity discipline on airlines in Europe. There will be more failures in Europe. Already, airBaltic are in Chapter 11. I think you'll see more European airlines or flaky European airlines who are currently not profitable, but who have heavy debts, will struggle to survive the winter. The prospect of consolidation in Europe will accelerate if oil prices remain higher for longer. Into that market base, we have been here before. I would caution, we've been here before. We've gone through 9/11, Gulf War I, Gulf War II, Putin's invasion of Ukraine. There's been a big bump up in oil prices, pressure on airline pricing for 6-12 months, and then Ryanair emerges out of that period with greater market share, customers more focused on price, more price-sensitive customers trading down to Ryanair, which I think will happen next year. But the outcome will depend on where our pricing goes and where the final oil bill will be for FY28. I think this is a great time to do another share buyback, which is why the board has agreed and why we're launching another EUR 800 million share buyback from February next year. This is one of those historic buying opportunities, and we don't want to let that opportunity pass. Neil, do you want to take us through the MD&A, and then I will ask Eddie to give us a couple of words on current trading, and Tracey McCann on cost.

Okay. Thanks, Michael. I don't have a huge amount to add other than to, I suppose, focus again on the costs and the balance sheet. Costs, despite the fact that oil was, the unhedged oil was up at $130 a barrel, performed quite well, rising just 5%. I think that's a sign of the kind of airport deals and the cost discipline within the organization. Now, I would caution that ex-fuel costs will be a little bit higher into the second half of the year due to, one, we're now spreading the costs over 214 million passengers instead of the 216 million passengers previously targeted at the start of the year. We'll also see more of those CLA deals going through, which will have an impact on the cost into the second half of the year, and then the timing of maintenance. But I think the advantages that we have, particularly with the MAX 10 coming down the lines, these aircraft, 20% more fuel efficient, 20% more seats, which means we will be spreading more costs over more passengers and getting more economies and efficiencies. We will equally get the benefit of warranties. That will drive significant savings and widen the gap between ourselves and everybody else. Then further out, we have the engine shops coming online, which will again give us a material advantage over everybody else. The balance sheet, fortress balance sheet, at times like this, it comes into its own, effectively debt-free, with 620 fully unencumbered Boeing 737s and a BBB+ credit rating, which gives us huge flexibility and the confidence to be able to do that buyback that Michael talked about there, the EUR 800 million buyback, which will kick off in the spring timeframe. And that is it, Michael. Thank you.

Okay, thanks. Eddie, do you want to give us a couple of lines on current trading or markets that you are excited or pessimistic about?

Yeah. I mean, you have covered a lot of it off there, but I mean, it is really a function out there of our own capacity, the marginal capacity cuts which had us flat for this winter. We see the market capacity has come down. It is going to grow at the moment by just over 2.5%, but it has come back by 2% in the market itself. And I think more is going to come out of that, and our competitors pricing up, and that is reflecting in those stronger fares. But while the curve has moved in terms of more closely in bookings, we will still have to wait and see how things go, particularly with the peak Christmas period. But as you said there, it is strong, and it is a change that, as I say, is a function of capacity constraint and competitors pricing up. On the airport churn, you can see where we've opened new bases. We're growing strongly in Poland, growing strongly in Italy. We've got the also in Albania, Slovakia, we're new base in Rabat. On the opposite side of that, the Berlin base is closed, the Thessaloniki base is closed for the winter. In Austria, we've seen cutbacks there in Vienna. So, you are seeing a move amongst airports, like airports that wouldn't have previously arrived with solutions to their problems, because they are now seeing what tails of what aircraft are going to fill in for those capacity. Increasingly, the worry is that they are not going to be able to fill the capacity in their airports. We continue to lock away longer-term deals out to seven, eight, in some cases 10 years out. We know exactly what our cost base is going to be, a significant proportion as we grow. So, it's the biggest variable cost in the business, and a lot of good work done on the airport. So, it is a surprise the way the fares have charged, but again, a function of capacity constraint and competitors pricing up.

Tracey, anything you want to highlight on the top flight?

Just what Neil said, just to reiterate, cost for the winter, we do have to consider the 214 million passengers, and we are going into heavy maintenance season. Then just for next year, to somewhat offset that EUR 2 billion fuel increase, we will have to look, as Michael said, airport churn, maturing labor agreements. We may have to consider temporary pay freezes, look at crew and ratios. AI will help us back up support. Then as the MAX 10 delivers, we will see the benefits of 20 more seats at no additional fuel cost. The engine shops will come online, which will help somewhat widen the cost between us and our competitors on engine and maintenance costs.

Okay. Thanks, Tracey. Okay, so let's open it up for Q&A, please. So we'll give you two questions each.

Thank you. As a reminder, for any questions, please press star followed by 1. If you'd like to withdraw from the queue, please press star followed by 2. First question is from Jaime Rowbotham from Deutsche Bank. Please go ahead.

Jaime, hi.

Morning, gentlemen. Hi, Michael. So two from me. One investor concern seems to be that capacity that fails or gets cut this winter could simply come back again next summer, thus undermining a bit the idea of Ryanair having potentially improved pricing power to help pass on the higher fuels. So, I wondered how you see that, please, Michael. Then one for Neil. Is the EUR 2 billion fuel cost headwind something you now plan to lock in by hedging more at the forward curve, which is about 25% below spot? If that headwind is EUR 2 billion, how much do you anticipate being able to recover via fares, capacity reductions, and cost savings? I think Michael said there's a reasonable chance of possibly recovering almost all of it. I'd love to hear your thoughts. Thanks.

Thanks, Jaime. I will take the first and let Neil do the second. That competitive capacity, if it fails, if you take the ones currently, for example, in Chapter 11, you have Volotea with A319s, airBaltic with A220s. I do not think that capacity comes back into Europe. I do not see an operator there that will want to take that capacity and restart. Everybody wants to be out of the A319s. If you take Volotea, who are big in regional France and regional Spain, those are not growing marketplaces. I am not sure there is anybody. We took a lot of capacity out of regional Spain last year in the Brava / Girona. We moved that capacity into mainland Spain. So, we have added capacity in Madrid, Barcelona, Palma, Málaga. Nobody else came in to take up that capacity, despite the proclamations of the transport minister in Spain. They are way down in places like Valladolid, Santiago de Compostela, Jerez. I think the same will apply up in the Baltic states. We are adding four aircraft up in the Baltic market this winter. It is one of the few areas where we are growing this winter, but we are growing in response to significant airport incentives. I think it has dawned now on the Baltic airports that they are about to lose a lot of their existing traffic. Even if I think airBaltic reemerges out of Chapter 11, they will do so with a much smaller fleet. I do not think those aircraft will resurface. The aircraft that they do not operate will get leased, I think, to other markets elsewhere. The lessors will put them into Asia, Latin America, maybe even the Middle East as well. There is a lot of demand for those aircraft. Airlines are short aircraft in Asia, Africa, Middle East, and Latin America. That is where the demand is stronger. I do not see any of the airlines in Europe wanting to take those aircraft on secondary leases or releasing those aircraft back into Europe. The market in Europe is in. Most of the airlines are losing money. So I think there is almost no risk of seeing those aircraft reemerge into Europe. The big issue will be what happens if some of the larger locals, maybe Norwegian or Wizz, fail this winter. I think there is a real possibility they may. Again, I think the lessors will be forced to take those aircraft and redeploy them elsewhere outside of Europe. I do not see any other European airlines wanting to take those aircraft at short notice. Certainly not if you look at the very expensive lease rates that Norwegian and Wizz are paying. Many, we are having done sale and leasebacks. I think there is no risk of those aircraft reappearing in Europe next year. Certainly, if you look at the way the European airlines are managing this winter schedule, they all, including us, originally filed our winter schedules. We have since cut back that winter schedule in taking traffic down from 216 million to 214 million. Honestly, every other airline in Europe has followed us. They are all taking out capacity. I think not many of them are as well hedged as we are. Most of the European airlines are hedged up to the end of October, at the end of December. I think it is dawning on them that they are going to have to pay significantly higher prices for unhedged oil, and they are cutting capacity accordingly. I think that trend will continue. Neil, EUR 2 billion, if you want to give us your view on how much of that will be taken up in fares and how much will be cost savings?

Sure. I suppose first and foremost, the timing of when we are going to hedge, Jaime, it will very much depend on the opportunities in the market. It is a very volatile market at the moment, and it is not being driven really by supply and demand. It has been driven by events and news flow. So we will opportunistically, for the next couple of months, jump on dips as we already did to bring our cover from 15% up to 25%. We have to keep a very watchful eye on what is happening in the market as well with competitors who are relatively lightly hedged into next year. The key is that we are very well hedged out to the end of March, 81% cover at $670 a metric ton or $67 a barrel. If we look into next year, the average rate is somewhere close to $1,200 or $120 a barrel. We look for dips to get in there, but I think if we get into the spring or beyond Christmas, we will probably have to do a bit more meaningful hedging based on what we can get. How do we cover it? Well, I think I agree with Michael insofar as I believe there will be double-digit fare increases next year. How high they will be remains to be seen. There was a good conversation there a couple of minutes ago around the timing of capacity coming out of the market. I think we also have to look at the M&A that is going on at the moment, the likes of the Apollo, easyJet. I think we will see metal coming out on the back of that as well. So I think capacity is going to be well out of the market into the summer of next year and beyond. That gives more pricing power, whether that is 10% or 15% or higher in percentage terms, remains to be seen. What will help on the cost side? Well, we get the first 16 MAX 10s in in the spring. It is not going to make as big a dent as having more of those in the fleet as I would like, but it is still at the start, 20% more fuel efficient, 20% more passengers, and of course, all of the maintenance warranty. So we will have to look at what we are doing on churning the capacity around. You will have seen airports costs were already down on a per passenger basis. Jason and the team doing a good job there, but we will have to do more of that into next year. We are broadly flat in capacity this winter. We are only growing by 3% into the summer and beyond of next year. And then, of course, every other cost as we get into our budget process when we come back from the road will be looked at in minute detail to see where we can shave costs out across the business. Will we recover all of the EUR 2 billion? I do not think so, but it all very much hinges on where fares go.

Yeah, and I would be cautious. I mean, we ourselves, while we have added to our fuel hedge for next year, it has gone up from 15% to 25% on recent dips. We are waiting for the outcome of the midterms and see what effect that has on particularly the Middle East situation. But given the volatility, I think before we get to the end of the third quarter, December, or early in the fourth quarter, I think we would want to see our fuel cover next year probably up at around 50% or 50% for the first half of next year. We certainly would not, in the current volatile market, want to hedge 80%. I think the risk is that oil prices might roll off, and we catch ourselves, we would be out of the wrong side of the market. But I think if we had about 50% of oil hedged in the run into next summer, I think I would be happy enough to take a risk on the other 50% being unhedged, because I think there are still, on balance, it is more likely that oil crude prices will roll off from their current highs. And hopefully jet prices will follow them. But there is no way it is going back down to the $67 a barrel, which we were hedged this year. One way or another, we are facing a very significant rise in oil prices next year, which is why consumers in Europe next year are facing dramatically higher airfares. And I would encourage them all to book early, because the longer you wait, the higher fare you are going to pay. Next question, please. Thanks, Jaime.

Thank you. Next question is from Dudley Shanley with Goodbody. Please go ahead.

Dudley, hi.

Morning, Michael. Morning, everyone. Two questions from me, if I may. The first one is on the MAX 10. I think you said you are getting 16 now in the spring. That is one more than I had been expecting. Is there any ability, do you think, over the first two years of the contract to get more than the 30 that you originally were getting? The second question is related to net income per passenger. You sound increasingly confident on this in the videos about getting to 14 and 15. I guess, what is driving that increased confidence given where we are with fuel at the moment?

Okay, I will take two of those briefly. MAX 10, I think we will get the 16 aircraft. Boeing wanted to give us one extra aircraft. They do not have any additional spare capacity. We tried. Boeing are still struggling to get production up. I think they have challenges with wings and engines. That is about as good as we are going to get. We have tried to get more aircraft in the spring of 2028, and Boeing just do not have them. There is a big backlog in their own orders. They have committed to meet our contracted delivery dates for spring 2027, spring 2028, spring 2029, spring 2030. That is a pretty good position to be in, because I think others are going to have to take delays on their aircraft. So, there is no chance to get more than those 16 aircraft. How confident am I getting to 14 or 15 years from now? Very, I think. I still think by 2030, if oil prices stay higher for longer, you will accelerate the failures of the flaky Ponzi scheme airlines currently operating in Europe, who do not make any money, but cover it up by doing mad sale and leasebacks and recognizing these kind of money in the P&L. There will be more failures. I think if oil prices stay higher for longer, consolidation accelerates. You can see that with Lufthansa doing TAP and Air France-KLM taking majority ownership in SAS. Even the Apollo deal with easyJet, if you look at their public pronouncements, they are going to load debt onto the easyJet balance sheet. Private equity will want to see a quick return. I think the only way they can do that is by selling some of the easyJet fleet or parts of the easyJet operation. The more Europe consolidates, the more I think you're going to see pricing power, not unlike North America, that the airlines having some degree of pricing power in the system. I think this is, as we've been here before with oil price shocks, we come out of this usually typically after 12, 18 months. Ryanair comes out stronger than it went in. Our competitors come out weaker than they went in, if they come out at all. Ultimately, the industry is moving towards higher fares in Europe. It's remarkable in Europe, for all of the waffle that the Commission goes on about being competitive, the only industry where Europe is more competitive than North America is air travel. Yet, it's the industry that they're loading taxes, environmental taxes onto. This is a very competitive industry in Europe, but airfares are probably a little bit too low in Europe for the value that we are providing, certainly compared to North America. Air pricing has been trending up in North America for the last 10 years, and I think we're entering a period of five or 10 years when airfares are going to trend up in Europe as well. Next question, please.

Thank you. Next question is from Jarrod Castle with UBS. Please go ahead.

Jarrod, hi.

Hi. Good morning, everyone. Michael, if you can just give an update with the European Network Airlines Association and the legal issues around ownership and control, how you see it, and what this also might mean for other airlines in Europe, should they be successful, let's say. Secondly, just sizing of the buyback, if you want to give some color on how you sized it, and also, why you didn't decide to announce it with the 3Q update, given you're only launching it in February. Thanks very much.

Juliusz, that's maybe more appropriate. You give an update on the ENAA update, and what you think the likelihood of success is. Sizing of the buyback, look, we did a buyback last year, EUR 750 million. This year, we'd increase the size to EUR 800 million. The timing and the delayed timing is just, it matches our cash flows. We are cash negative from October through to December. We go strongly cash positive from January onwards. Therefore, it makes sense for us at this time of the year, announce the buyback, demonstrate our confidence. I think this is a real buying opportunity for us as a buyback. I think it will be significantly accretive for our shareholders. From a cash flow point of view, it makes sense to time it to run from February through to December next year. Juliusz, ENAA, or the Air France-KLM, Lufthansa attempt to limit competition and choice?

Hi, Michael. Thanks for the question, Jarrod. Yes, so it's Lufthansa and Air France are behind a case taken in the Irish High Court by one of their lobbying platforms called ENAA, or ENAA. The case has no merit, and I think everyone accepts that it will fail, even Lufthansa and Air France themselves. I think what is really interesting in this case, and concerning, is that two of our competitors decided that it was okay to get together and have conversations about our market capitalization relative to their own, our market position relative to their own, or our commercial strengths and weaknesses in the market. It's just not okay under competition law. That kind of coordination in order to undermine a competitor is simply not permitted. So we referred the matter to the European Commission about two weeks ago. We filed a formal complaint asking the Commission to investigate what exactly went on in those meetings between Lufthansa and Air France, and what information was exchanged, and if there is an infringement that is ongoing, to bring that infringement to an end. I do not think it means really anything for us or for other airlines in the market, simply because the case has to fail. I think if I were Lufthansa and Air France, I would be more worried about the competition law implications of their actions.

Thanks, Juliusz. I mean, I can, for my penny's worth, I think it is remarkable that you see two hyper airlines, Lufthansa and Air France, who have bought over Sabena, SWISS, Austrian, ITA, TAP, SAS, and KLM, have managed to kind of contort themselves to pretend that KLM is still a Dutch airline, so it maintains its third-party route rights. Lufthansa has retained the third-party route rights to non-E.U. points for Sabena, SWISS, Austrian, ITA, TAP, all by having this kind of notional sort of construct. Everybody knows these are not Belgian, Italian, Swiss, or Austrian airlines anymore. Yet, these are the guys who, when we get around the table in A4E, agree that actually the ownership rules should be not controlled, but the ownership rules should be amended by the Commission so that we ignore 1% and 2% holdings by U.K. or American pension, called passive pension funds, which really have no impact at all. In Ryanair, we disbar them from voting. They are not allowed to attend the AGM. They have no shareholder rights whatsoever. Yet, this is the platform that these two anti-competitive airlines want to fight on, while they pretend that Sabena is still a Belgian airline and therefore it can have it to maintain it by its, what do you call that, two country, or the route rights from Brussels to Africa, Brussels to Asia, and Brussels to America. The Germans and the French have always had a view that Europe exists to serve their best interests. They are not really interested in competition. They want less competition, higher fares. They are the ones who are pushing this European or the national champion agenda at the moment, having received massive billions of state aid during COVID from their government. As Juliusz says, we do not think this case has any merit, and we do not think it will succeed. Next question, please.

Thank you. Next question is from Stephen Furlong with Davy. Please go ahead.

Stephen, hi.

Hi, Michael. I just wonder what you think about the price elasticity of demand for European consumers if prices are going up next year. Do you think it's just a function of supply and demand, or do you think we might see also more trade down to Ryanair low fares? I mean, does it matter really if Ryanair's fares are 50 or 55, 60, et cetera?

Yeah, thanks, Stephen. I never waste too much time worrying about the price elasticity of demand because it's a question I can never answer. I think what has always been the case here is where capacity is constrained in Europe, fares rise. There is no doubt this winter and into next summer, capacity will be constrained. There's only one lunatic out there adding capacity, loss-making capacity in the marketplace. That's Wizz. They're all over the place. They withdrew out of the Middle East last year. They said they were going to expand in Central and Eastern Europe. They're now actually withdrawing from Poland, Romania, Budapest. They seem to be adding additional capacity into Italy and Spain, where they have to compete with Ryanair, an airline that they have proven time and time again that they can't compete with. Eventually, they run out of road, or at least run out of banks to finance their sale and leasebacks as the debt rises ever higher. I think there is going to be material capacity constraints in Europe next year. I think the big issue for us from a pricing point of view is will the legacies reimpose fuel surcharges on short haul? I think they will. Certainly, if jet remains up at $160-$170 a barrel. I do not think we will even need people to trade down to us. I think we will fail. We are only going to grow our own capacity by 3% next year, which historically for us is a very low figure. We are already turning a lot of that capacity into new markets in Sweden, Slovakia, Albania, regional Italy, where governments have realized that the way forward is to abolish aviation taxes, lower ATC fees, and lower airport fees. We will happily churn capacity away from countries like the U.K., France, Belgium, Germany, where governments are still raising taxes or have high taxes. Airports are not lowering their already high costs. They will see decline. I give you the example of Vienna in Austria. I mean, the Austrians have this mad EUR 12 aviation tax. It raises about EUR 150 million a year. This year, Vienna is going to see its traffic fall by about 10%. It is all going one hour up the road to Slovakia, Bratislava Airport, whose traffic is growing by more than 200%. Even the government party is now calling for the abolition of the aviation tax in Austria. It takes a lot of these politicians a long time before they actually work out what needs to be done. Andy Burnham here in the U.K. is talking about growth in every postcode, but he has just delivered a budget that will deliver no growth. If you are serious about growth in every postcode, the industry you should be incentivizing is aviation, which drives tourism, and tourism drives economic activity and growth in every postcode. What did they do? They just went out, they increased the APD. Rachel Reeves had already announced increase in APD from GBP 13 to GBP 15 per ticket on the 1st of April, and the budget has failed to roll that back. Until, unless or until he rolls back that APD in the U.K., which is a scandalous and regressive tax on poor people traveling, there will not be growth in every postcode. Thanks, Stephen. Next question, please.

Thank you. Next question is from Savi Syth from Raymond James. Please go ahead.

Savi, hi.

Hey, good morning. Just maybe on the first one, you have that idea of aircraft deliveries next year, and you are further along on the engine shop. Just curious if you had an update on where the potential CapEx for FY 2028 could go. And then secondly, could you just remind how much of your December quarter and March quarter tickets have been sold so far?

Okay. Neil, you want to take the CapEx out to 2028?

Yeah, sure. Savi, just I suppose somebody's going to ask about 2027 as well. So, FY27, we're expecting to be fairly close to about EUR 2 billion CapEx. There's been no real change from what I've said on some of these previous calls in relation to FY28. So we're still somewhere between about EUR 2.7 billion and EUR 3 billion into FY28.

Great, Savi. The second half of the question, the December quarter at the moment, we're about 50% sold for the December quarter. The March quarter at the moment, we're about 8% sold. So we have almost no visibility on the March quarter, reasonable visibility on the December quarter. I think the real change in this morning's commentary is the fact that pricing has turned around. We are now looking at fares modestly up in Q3, having been down 6% in Q1 and down 2% in Q2. Thanks, Savi. Next question, please.

Next question is from Conor Dwyer from Citi. Please go ahead.

Conor, hi.

Hey, morning, Michael. First question was just on the capacity guide itself. I am just kind of wondering how locked in is the 3% passenger growth? The MAX 10s give you the majority of that, but I am wondering, do you potentially manage capacity down by just utilizing the older 737NGs? My second question is just on opportunities in a market like this. On slide 9, you called out the financial distress in some regional operators. My question is around, firstly, are you having any conversations with airports on the back of any of this? Also, secondly, in terms of the opportunities around fleet, would you ever consider just buying up some older airplanes at a good price?

Thanks, Conor. Maybe Jason, you on the call, give us your kind of an update on the capacity guide, both this winter and 3% for next year. Then I might ask Eddie, give us a flavor of what is happening on the opportunities, the airport charge discussions where competitors are struggling or failing. Jason, over to you first on capacity.

Yeah. On the capacity guide, in terms of the market overall, as Eddie said earlier, it is about the market growing by just over 2%. We are flat. What is interesting, Conor, is when you look at the individual country markets that are behind. The likes of the Austrias, Belgians, all almost double digits down. You have then Germany, France, U.K., all capacity falling in all those markets. Where capacity is actually growing this winter is the markets Ryanair is growing in. The likes of Albania, Slovakia, Morocco, and Poland are all growing by double digits this winter. We are adding aircraft into all of those markets. It is the first winter of our Tirana base, and also we are adding additional aircraft into Poland. When you look into next summer, like no one knows where capacity will be for next summer. Our capacity, we will grow. We will add the 3% capacity into summer because we will use the MAX 10 aircraft. There is huge demand for those aircraft at the moment. In terms of the market capacity, I think my own view is I think next summer you are looking at broadly flat, maybe slightly down. Because I think, as we said earlier, a lot of the flaky airlines will fall over this winter. Just before I hand over to Eddie, in terms of the market opportunities, I think you will see us growing where we have grown over the last 12-18 months. The countries are engaging with us to reduce airport charges and reduce taxes. They, by and large, have been countries, the Central and Eastern European countries, and particularly the Italian regions working with us to reduce taxes. We have between 10, 12 airports every week coming to head office here to present growth plans.

I think I wish. Actually, Jason, maybe give a flavor of what is in Dublin, where I think the Irish aviation, the regulator deserves particular favorable commentary, given that they are talking about reducing the Dublin Airport fees, high fees by 15% next year. What is our response to that?

We are adding 2 million seats and three additional based aircraft into Dublin. You are right, the regulator came out with the interim decision two months ago. We expect the final decision within the next few weeks. We will, once that decision is confirmed, grow in Dublin next summer. It is a sensible decision, and we are going to grow into it.

Good. Okay, Eddie, maybe on opportunities or what is happening with the airport. Where do we see opportunities? Is there more growth at discounting airports, or are we going to go out and try and buy cheap secondhand aircraft and do something with aircraft?

I know where I'd like to place my bets. It's on the airports rather than buy more cheap aircraft. I mean, if you look, there's generally a combination of there are. They've got less options, a lot of these airports, and where to actually fill out the capacity they have. As I'm saying earlier, a place like Scandinavia, where Norwegian have substantially reduced and SAS have gone into Air France ownership out of Chapter 11, and you see that sort of migration out of Sweden in particular, and they've responded with lower taxes, and we would hope that they would keep that up. Some of that will obviously go into Copenhagen, but it won't be long before that migrates to Charles de Gaulle, and you have Scandinavian airports that are particularly challenged and are now waking up to the fact of it. Italy, where ITA have pulled out wholesale out of regional airports, and I think that's why you're seeing that sort of breaking wave of municipal tax that has spread right across the regions and may make its way, hopefully, to Rome at one stage, because that's what's driving the traffic growth there. You can see in Spain, with all of our PR down there on taxes, even though the regional airports are still hopelessly uncompetitive, there's been less of an increase down there, which, as you had alluded to earlier, Michael, that we're still growing at places like Málaga, Alicante, Palma, and even where we can pick up slots from places like Madrid and Barcelona. The U.K., where we've just completed a deal with Stansted. We're out there for the next eight years, and it's the only airport in the London area for a short haul that's going to be able to grow. Already off a low-cost base, the work has already started there. I'm really confident about what we can grow out of the London area. There's no possibility of anything coming from Gatwick in the short term. There's no possibility of anything in terms of capacity coming out of Luton and Heathrow. That's a long, long way away. Poland, we've locked out pretty much all the airports there. Morocco as well, we can see with the Rabat base opening, and there's 100 down there airport liners delivered. We're doing domestics down there, and they've got the whole 2030 World Cup coming up with Spain and Portugal as well, where they're anxious to grab additional traffic from the only airline that they can, not just in Morocco, but everywhere they can see an airline that has the capacity coming, has the business model, and keeps the promises that we make on capacity. It's right across the piece, and you are seeing airports going in that we haven't heard of or would not normally come to us first, and now have plans on, "Well, we're thinking of building this terminal. We're thinking of doing this for you," et cetera. Now, it generally falls over on price until we get there, but you are seeing a change out there in airports that know that there aren't enough, there aren't any options left out there except Ryanair.

Yeah. From my point of view, let me add in on the cheap secondhand aircraft. There aren't any cheap secondhand aircraft. If you take the airlines who are likely to fall over, the fleet of Volotea, largely A319s, they'll finish up outside Europe. We've no interest in those aircraft. airBaltic operates the Airbus, the A220. Again, it's a kind of a unique aircraft. No interest. I'm not sure any airline would have any significant interest in that aircraft going forward. We don't see any significant opportunity on cheap aircraft, partly because there's still unsatisfied demand for any of these secondhand aircraft in Asia, Latin America, Middle East, Turkey, or short aircraft. I think the chances are that secondhand aircraft are expensive and that they will reappear elsewhere outside of Europe. The opportunities come from and the reason we talk about other airlines failing is not because we don't wish them well. It's because their airports are coming to us now, offering us more and more aggressive firms to get us to commit to actually switching some aircraft into those airports, if or when they believe their incumbent airlines will fail. Next question, please.

Thank you. Next question is from James Hollins with BNP Paribas. Please go ahead.

James, hi.

Morning. Michael, maybe for you, maybe Tracey. Just on those expected pay freezes, do we expect much resistance to that? Is it something you can simply do without any resistance, particularly if you're doing a buyback, might be seen as slightly aggressive? Secondly, Michael, I do not know if your views have softened or changed on Starlink at all, clearly where easyJet pushing ahead. Maybe just give us your views on that. Thank you.

Yeah, pay freezes. Look, what we are warning this morning is that the situation is likely to get a lot worse. We have done pay deals that most of our pay agreements, almost all the pay agreements that came up for renewal this year have now been done. We have done multi-year pay deals. Those pay agreements will be honored. So, if they were paying an increase agreed for next April, that will go ahead. But we have a number of pay deals next April, Dublin pilots, U.K. pilots, Spanish and Portuguese pilots who are coming up for review. We have said now we are willing to do those pay deals early and go early. Some of them think they want to wait because the world is going to improve in their favor. I do not think it will. But if they go early and they get the deals done before March, April, they will not be subject to a pay freeze. If they wait until April, I am pretty certain they will be getting a pay freeze. If they were to go on strike, it would save us money in March, April next year. If oil is at $170 a barrel, it costs a Ryanair pilot typically a grand a day to go on strike. I would not want to encourage strikes, but we have shown that we are happy, perfectly willing to accept strikes. If somebody wants to go on strike when the world is falling apart around them and they have no alternative jobs in any other, our pilot attrition has fallen to almost zero at this point in time. That is entirely within their right to do so. But it would be helpful to us if there were strikes, I think, in next April, May of next year, certainly from a financial point of view. But we are in discussion with those groups. If they are serious and they want to get on and do pay deals, advantageous pay deals, such as the ones we have done recently in Italy, in Central Europe, in Sweden, in France as last week, then by all means do it. But if you want to wait and hang around, you risk getting caught, and we would not be in the least bit sorry, that is not fair. If they want to go on strike, they are perfectly free to do so, and we would be perfectly willing to accept strikes. In the short term, they would save us money. Starlink, look, again, my position on Starlink, we had a big row with Elon Musk 18 months ago. Starlink is a very good system, but the technology has a 1.5% fuel drag. With oil going to, what, jet oil at $170 a barrel, the last thing I want to do is to install any system that has a 1.5% fuel penalty. We know easyJet have announced they are going to fit Starlink. It is not clear to us whether they are going to give it away for free. I understand the briefing is that they are going to charge passengers for it, to which I say, "Well, good luck with that." We are pretty certain that if we ask Ryanair passengers to pay for Wi-Fi on board, they will not pay. The average flight time is an hour and 15 minutes. There is not a lot of transaction time to charge people for the Wi-Fi. It simply will not pay for its cost. We have had extensive discussions with Starlink. They were willing to pay for the installation on board our aircraft. Where the discussions broke down was they believe 60% of our passengers will pay for free Wi-Fi, to which we said, "You have obviously never met a Ryanair fucking passenger in your life." I believe if it is free, some of our passengers will use it. Most of them bring their laptops on board and they are watching Netflix or whatever it is, Disney Channel, da-da-di-da-di-da. I am not sure. I think the demand for Wi-Fi on board short-haul flights is there, but only if it is free. If it has to be paid for, there is no revenue model whatsoever. I think in the other cases, I think in the case of Wizz, they are talking about putting on Starlink, but that the provider gets the income. They are not getting anything out of it at all, apart from a kind of a gee-whiz, here is a passenger initiative. As always, we will be more disciplined. I do think the technology is continuing to innovate, and I think in the next year or two, there will not be areas on the outside of the fuselage. You will be fitting areas either in the nose cone or the baggage hold or the forward or the rear galley. Then we would be quite happy to put Wi-Fi on board our aircraft as long as we get it free and we can pass it on to our customers free. Next question, please. Sorry, Neal, anything you want to add on the pay freezes, or the risk of pay freeze? I am just saying, Neal McMahon here, the Director of Operations with me.

No, look, we have done deals with the groups that had their pay agreements ending at the end of March in 2026. We have now got a bunch of groups that we are meeting. We have been meeting for the last number of months. The message is quite clear. We are willing to do an agreement, but if they want to hold out into beyond April next year, with the deteriorating market conditions, with oil at $170 per jet fuel barrel, then we are not willing to. They want to take a chance on us, then we will let them go. There is a risk that somebody will take us on, and if that is the case, we will let them go on strike. There are deals available, but they will not be there forever.

Darrell Hughes, I know you are on the line there, Chief People Officer. Do you want to add anything on that on possible pay freezes? I mean, it is just one of a number of cost-saving things that we are going to be looking at. Darrell?

Yeah, no, Michael, look, it has been well covered there. As Neil said, we have got quite a few groups up next April, and by default, if they do not do a deal, then there is no pay increase. We will probably see a couple of groups go out on strike next summer, and we will just have to face that down.

Fine. Okay. Thanks very much. Next question, please.

Next question is from Duane Pfennigwerth from Evercore ISI. Please go ahead.

Duane, hi.

Hey, good morning. Thanks. You touched on a lot of this, but you are still well hedged out through March. We are starting to see short-haul industry capacity finally adjust in the December quarter. Just wondering if you could put a finer point on when you expect an inflection in fare growth. What quarter do you think will begin to prove out the pricing power that Ryanair has? Do we really need to wait until next fiscal year, or could it come sooner?

I think we have already seen the inflection point, Duane, in this morning's results. The Q1 this year, average fares were down 6%. Some of that was that the first half of April, of Easter, moved into March. Q2, which is the peak summer, lots of demand, 94% load factor, average fares were down 2%. The inflection point is, as we move into Q3, which is traditionally the time when fares come under pressure, winter capacity, we have seen fares since about the first week of August have started moving meaningfully upwards. So fares into Q3, as we said this morning, have turned around. They are now up modestly, but it is growing week on week, modestly ahead of the same quarter last year. That is the inflection point, and I think that is the start of it. It is driven by, on a daily basis, more of our competitors are taking out capacity in November, December, January, February, March. I think that will run into the fourth quarter. The fourth quarter this year, I should say, is going to be slightly distorted because you both have the Easter in March. So the fourth quarter is going to look like a bumper quarter on yields, only because Easter is in there. Then the following Q1 will look like it is weak because you have no Easter at all in Q1 compared to half Easter last year. But I think we have already hit the inflection point. We are seeing meaningful movements in airfares at a time of the year when normally we are pricing down and having to increase the amount of or stimulate price stimulation we do. We are having to do less price stimulation, and bookings are continuing to run strongly ahead. Jason, anything you want to add to that point?

Sorry, Michael O'Leary, myself. Yeah. Sorry, in terms of Q3, we are coming off the midterm. We had a good midterm. November is positive, and I think we have, as you said, 50% booked for Q3. A lot will depend on how Christmas, the final outturn for Christmas, but so far, it is looking strong. So, I am happy what I am seeing for Q3. Early indications, although very early for Q4, also strong. But I do think this is being driven by the capacity reductions that are coming out week on week from competitors across the market. As I say, we have seen probably close to 8, 9 million seats come out of the market over the last six, seven weeks, and I think that is likely to continue. And I think what you will see is probably lots of close-in cancellations from our competitors as well over the next number of weeks.

Okay. All right. Thanks, Jason. Next question. Thanks, Duane. Next question, please.

Next question is from Harry Gowers with J.P. Morgan. Please go ahead.

Harry, hi.

Hey. Morning, guys. Morning, Michael. First question, I think most people equate obviously fares to being the main lever to raise pricing to offset the higher fuel. Anything you can do in terms of raising ancillaries more aggressively to offset the fuel headwind, or is that just not feasible, and fares will be the main lever? Second question, just on those ex-fuel cost initiatives as well, you talk about airport staff, pay freezes, AI. Any numbers yet you can give in terms of quantifying the benefits there? Will all of this be March 2028 impact, or could some of it come sooner over the winter? Thanks a lot.

Thanks, Harry. I am going to ask Tracey McCann here to take the ancillaries question, and then Neil, I will give you the ex-fuel cost into FY28. Tracey, ancillaries.

Ancillaries, we have seen them last for the half year. We will probably see roughly 1% for the full year. We are probably really capped out. It is more about dynamically pricing now the PB and then seasons, trying to optimize the total revenue. A lot done with AI on the dynamic pricing front with Labs. Then we have Order to Seat, which is doing well on board. That is where you can order your food to your seat before you even get on the aircraft. Small little few things around the edges, but no big dramatic change, I do not think.

Okay. Neil, ex-fuel cost this year and next year?

Yeah, just to add on the ancillaries, Harry, as we've said before, just keep modeling with 1%-2% for passenger growth moving forward. We were up 1% in the quarter just ended. On ex-fuel, we're already seeing some of the benefits coming through just with the airport deals that we have in place into the winter and into the spring and summer of next year. That will feed into our numbers. We will get into more of the weeds when we come back from the road and start doing the budget process for next year. There's a bit to go at this stage. As I said, then we've got the first of the MAXs coming in as well.

Yeah. Okay. Thanks, Neil. Thanks, Harry. Next question, please.

Next question from Andrew Lobbenberg with Barclays. Please go ahead.

Andrew, hi.

Oh, hiya. Can I ask on the churn that you're doing so assertively to control costs, do you see any corresponding impact on the unit revenues? Because if you're churning capacity so aggressively, you have a higher share of immature routes, given relative to your growth rate, which is quite cautious. Sometimes you're moving into lower cost or lower revenue markets like Bratislava compared to Vienna. Just the churn, how does that play out on your unit revenues? Can I just come back previously to the fuel? You've added the fuel hedges. Are they spread evenly through the year, or are you weighted further out to get the cheaper fuel, or are they weighted closer in to give you more protection? How do you expect to build the hedges as you go forward? Evenly or perhaps more to protect for the summer?

Okay, maybe I'll do the churn. I'll ask Neil, maybe you can come back in on fuel. I think don't get distracted by the churn, Andrew. Yes, we're not churning out of mature routes into immature routes. In a lot of cases, we're churning into airports. Airports are doing deals with us to attract our growth incentive. But because they've either existing incumbents declining or cutting capacity or going bust. While we are moving our capacity into those markets, they're churning into markets like Sweden, for example, in Arlanda, like Slovakia, regional Italy. These are markets that were either previously underserved but are strong markets for us anyway. We're going into those markets. We're not taking any yield penalty, but we're getting a huge cost savings. Again, I go back to Sweden, where the new government there, really a very visionary transport minister has abolished the aviation taxes in the home of Greta Thunberg and flight shaming. That abolition, and we're going in on mature routes in Arlanda, but there's not a lot of growth in Arlanda other than what we're delivering. So we're seeing a yield benefit and a cost benefit. Also remember that where we churn out of an airport, we have less capacity at the existing airport. Say, for example, Charleroi this winter, we're going down from, I think we had 19 aircraft down to 12. Vienna, we went down from 20 aircraft this winter to 14. You see a big bump in fares on the remaining heavily constrained capacity in those markets as well. So there are significant compensatory effects of churning aircraft out of an existing airport where you're reducing capacity. Now, we're not Berlin, obviously, where we closed the base altogether. We're still operating about 50% of our capacity into Berlin, but without morning and evening services, and we're seeing a bump up in airfares. So, when you churn out into a lower-cost airport, you may at the moment, we don't have to take a pricing penalty, and we get a pricing benefit on those airports that we churn out of. Which is again why, I come back to I think that the point that jumps out to me in this morning's press release is not the obvious one. It is that pricing has turned around in the third quarter, and having been down in Q1, down in Q2, suddenly it's up in the shittiest quarter of the year. That is, I think, the one takeaway I would take from the press release this morning. The big question, will it go up by 20% next year for the whole year? I think that's a bit overly optimistic. But I think we have a reasonable shot that it could go up by some double-digit number, and we'll close off the rest with cost savings. Neil, do you want to touch the fuel hedging? Is this spread across the year, or confined into quarters? Anything you want to add on fuel hedging?

Sure. Andrew, I'm sure you've seen slide 13 of our presentation, where we're talking about 25% at $954 a ton. That's spread pretty evenly across all four quarters. We've a slightly higher rate in H1, where we're about $980, slightly lower rate in H2, we're about $920, giving the blended of $954. As Michael indicated earlier on, I think the next focus when we come back into the market will be on the first half of the year, where we'll probably, as indicated previously, try to get that up towards 50% before we get into the peak summer period. It's the same on the FX as well, so the euro-dollar spread across the year at 119, just over 20%.

Okay. Tom Fowler, you're on the call. Is there anything you want to add on fuel or fuel hedging?

No, I think Neil's covered it all off there, Michael. We evenly hedge across every quarter, typically. We do not tend to wait too much when we start our hedging.

Fine. But reasonable to say we are waiting for the outcome of the midterms before we make any further decisions, I think, between now and the end of the year on hedging cover.

Yeah, we have the team in Dublin primed to go if there is any dips this week.

Fine. Okay, next question, please. Thanks, Andrew.

Thank you. Next question is from Axel Stasse with Morgan Stanley. Please go ahead.

Yeah. Morning, everyone. Thanks for taking my questions. Two on my side. First on the fares. When you say double digits into 2028, and obviously the normal bridge to get there, is it fair to assume that when you say modestly up, it is mid-single digit in Q3 and then high single digit in Q4 because of Easter? Then my second question, and I know you said the budget still needs to be done for next year, but what should we expect in terms of unit cost inflation, excluding the fuel heading to next year because of the labor agreements and the high maintenance? Is low single digit a reasonable expectation for now, or would you say that is too low? Thank you.

Yeah. Okay, look, I would not want to add any more on fares. I think what we said this morning is that Q3 is now trending modestly up. Modestly would be, I think, mid-single digits. But we have only 50% of Q3 sold. Q3 is usually driven by the final bookings in the run-up to Christmas, but I think it augurs well for continuing strong fare performance in Q3. Q4 will be up double-digit percent, but Q4 is artificial because we get both halves of Easter in March next year, and therefore it is a slightly distorted figure. So I would not lose the run of ourselves on that. But I think that does give us a good basis going into next summer. We and all the other European airlines, I think there will be more failures in Europe this winter. Some of the Ponzi schemes will finally blow themselves up. I think there will be real capacity constraint next year, and I think real upward pressure on pricing. My advice to all passengers would be to book early for next summer and secure your pricing. Neil, do you want to take the fuel question?

Yeah. Axel, I would not normally give you guidance on next year at this time. We are just going to get stuck into our budgets. We will be looking on a line-by-line basis as to where costs may go, but it is too early to get into details on guidance for FY28 on unit costs.

But I think we are looking at FY27 unit costs, we are still looking at ex-fuel up maybe 2%-3% on the full year, despite having cut back the traffic. That widens the cost gap between us and every other European airline on an ex-fuel basis. That gap will get wider again in FY28. I am not sure, again, we have to wait until the outcome of the budget. But you see what some of the airlines or the other airlines are doing on wage settlements, airports, complaining about the airport cost inflation, handling cost inflation. They are struggling, and then they have, unlike Ryanair, they have huge increases in financing costs. The cost of debt is rising, the cost of aircraft leases are rising. The dollar is strong at the moment. That cost gap is widening materially at FY28, which puts almost further pressure on our competitors to get airfares up, and they will drag our fares up behind. I mean, I have seen some stupid analysis, I should say, when do you not see stupid analysis? But I have seen a lot of stupid analysis here that fuel cost rises for Ryanair will be Fuel is a higher percentage, therefore the rise in fuel will be a bigger impact on Ryanair. You do not seem to understand that if Lufthansa puts a EUR 10 fuel surcharge on next year, a EUR 10 increase in Lufthansa's average airfare is nothing. Whereas a EUR 10 increase in Ryanair's average airfare next year is a 20% increase in fares and yields. So, it is like for like. Yes, we have cost pressures, but we are under an awful lot less cost pressures given our margins than any other European airline is. They are under much more pressure to get pricing up, and to the extent they get pricing up, our price will move by a much bigger percentage, therefore maintaining or widening our margins. Next question, please.

Thank you. We have no further questions in the queue, so I will hand back to you for any closing comments.

Wonderful. Okay. Look, I think we have covered everything in some detail. Obviously, the big issue for the next 12 months is where fuel will be and where fares will be, and those are two moving variables that we cannot give you any particular guidance. Your view is as good as ours today. I think the key drivers will be the U.S. midterms this week and what is the outcome after the U.S. midterms. What impact does that have on the situation in Ukraine and the situation in the Middle East? Nevertheless, I go into, I think, calendar 2027 quite excited. We are really excited by the MAX 10 aircraft. These are going to be transformational. We only get the first 16, but any aircraft that has 20% more seats and burns 20% less fuel is going to transform our economics. We have much bigger margins than any other airline in Europe. We can afford to pay higher oil costs for longer than any other airline in Europe. Fares are already beginning to move upwards into the Q3, which is the worst quarter of the year. I think you are going to see more failures and more capacity reductions in Europe this winter, running through into next summer. As Jason said, he thinks at best capacity in Europe next summer will be flat. If some of the other loonies fail, it will be down year-on-year. Pricing will be strong. I think we will, as always, in a crisis, do better than any other airline because we have the lowest fares and the lowest cost. We are thinking now is an ideal opportune time to buy. Clearly, I apologize, the share price performance has not been good this year to date. We think that is the time we should announce another share buyback, and we lead in with another EUR 800 million share buyback next year. Personally, I hope prior the share price stays reasonably subdued until we complete that share buyback. But unfortunately, I am not in control of the share price, the markets are. But I look forward with some considerable optimism. Has anything in the last 12 months altered my view that we are moving towards a period of consolidation in Europe or that our profit per passenger will rise to EUR 14, EUR 15 per passenger? No. I think the current crisis will accelerate that trend, but we will just have to weather this crisis and come out the other end until people will see where the profitability falls. In the meantime, we will monitor capacity closely. We will certainly monitor our costs aggressively. I think you'll see us grow to 214 million passengers this year and 220 million passengers next year. I hope we'll do so profitably and in a manner that will deliver positive returns for our shareholders. We have a full roadshow of teams in every geography, Ireland, U.K., Europe, America, East, West Coast. If you want a meeting with us, please contact one of our brokers, Citi, Goodbody, or Davy. We'd be happy to set it up. If you can't make it this week, please feel free to come to Dublin at any stage between now and the end of the year. We'd be happy to see you in Dublin and show you the operation. Thank you very much, everybody. Look forward to either meeting you or just talking to you later on this week. Thank you, Seb. I think that's the end of the call.