Ryanair Holdings plc

Good morning ladies and gentlemen and welcome to the Ryanair Q1 results release conference. My name is Michael O'Leary, the Group CEO and I'm joined this morning by Neil Sorna, our Group CFO.

Good morning.

We'll open as usual with some opening remarks from me and then going to ask Neil to take you through the slide presentation and then we'll mix and match during a Q&A session. This morning, Randall reported a Q1 profit after tax of €170 million as traffic recovered strongly post-COVID but at lower fares. That €170 million PAT is before pre-exceptionals but is well below the 223 million PAT we reported in the Q1 of FY20, which was the last year pre-COVID, just to put it in some context. Highlights of the quarter. During Q1, traffic recovered very strongly to 45.5 million passengers from 8.1 million in the previous year. That recovery would have been stronger, but for the significant damage that April and Easter suffered, both bookings and fares as a result of the Russian invasion of Ukraine at the end of February. Prior to this summer peak, we've taken delivery of 73 737 8200 game changers. That summer 22 capacity is on sale at about 115% of summer 2019. In other words, the pre-COVID capacity. We've also this morning announced that our hedging for FY24, so next year, has been increased to 30%. Currently, in the current year, we're hedged at 80%. Net debt has significantly reduced to just 400 million euros at the end of the quarter. That's down from 1.4 billion on the 31st of March, thanks to very strong and positive cash flows from bookings and trading. And we're also pleased this morning to announce that the majority of the 29 A320 leases in our subsidiary Lauda Europe have been extended by up to four years to now to 2028 at advantageous rates. Just a couple of quick themes. This summer we are very proud to be operating 73 of the new Boeing 737 Game Changer aircraft. carry 4% more passengers but they burn 16% less fuel and also reduce our noise emissions by up to 40%. We're continuing to invest in our partnership with Trinity College Dublin's Sustainable Aviation Research Centre and in April We're very pleased to have announced a partnership with Neste to power up to one-third of all of our flights from Schiphol Airport in Amsterdam with a 40% SAF blend. In April, Sustainalytics ranked Ryanair as the number one airline in Europe, the number two globally for our ESG performance. Following the beginning of the post-COVID recovery in air travel this spring, Ryanair moved quickly with our trade unions to negotiate accelerated pay restoration agreements so that we could restore previously agreed pay cuts with all of our people as soon as our business returns to pre-COVID levels. To date, I'm pleased to say that accelerated pay restoration agreements have been agreed with unions representing over 80% of our pilots and more than 70% of our cabin crew. and significant progress is being made to close out the remainder of those pay restoration agreements. Our decision to work with the unions and to agree pay cuts to minimise job losses during COVID, during which we kept our pilots and cabin crew current and employed, And those decisions have been vindicated in recent months as many European airlines, airports and other third party providers have struggled to restore jobs that were cut during the pandemic. Reiner seems to be unusual among the major EU airlines this summer insofar as we are fully crewed for both pilots, cabin crew, engineers and handling staff at those airports where we do our own handling. despite operating at 115% of our pre-COVID capacity. And I think that reflects very well both on the team at Ryanair and on the difficult decisions we took during the COVID pandemic. Over the past two years, numerous airlines went bankrupt and many legacy airlines, including Alitalia, TAP, SAS and LOT, only survived by significantly reducing their fleets and their passenger capacity, despite receiving multi-billion euro state-age packages. These structural capacity reductions have created enormous growth opportunities for Ryanair in summer 2022 to deploy our new fuel-efficient 737 Game Changers. With Boeing scheduled to deliver over 50 more of these game changers ahead of summer 2023, we continue to recruit and train substantial numbers of pilots, cabin crew and engineers. Already, approximately 50% of our summer 23 capacity is now on sale, and we recently announced new bases and new growth in Belfast International for summer 23, a fourth based aircraft in Venice for winter 22, and the commencement of flights from Bologna Forli Airport in winter 22. Thanks to our 210.737 order book and available fleet capacity, the Ryanair Group expects to grow from 149 million passengers pre-COVID to over 225 million passengers by FY26. And in so doing, we will capture very significant market shares in most of our major markets across Europe. Just to touch briefly on outlook, our outlook remains cautious. We remain hopeful and optimistic that the high rate of vaccinations in Europe means that the airline and tourism industry will fully recover and put COVID behind us through the remainder of 2022. But we cannot ignore or eliminate the risk that there may be new COVID variants in the autumn of this year. And our experience with Omicron last November, which really devastated our Christmas traffic and yields, and the Ukraine invasion at the end of February, which devastated our April bookings and yields, shows just how fragile the air travel market remains in Europe. While our recovery and certainly Ryanair's recovery during the summer of 2022 has been strong, we believe that recovery remains fragile and hugely dependent on there being no adverse or unexpected developments, either from Ukraine or COVID, for the remainder of FY23. If we don't have negative developments, we'll perform very strongly, but if there are negative developments, we'll have to act appropriately. There are clear signs, as we had barely, as we've previously guided, of a huge pent-up demand for air travel, particularly for short haul in Europe through the summer of 2022. However, while bookings are recovering strongly, they still remain closer in than was the norm pre-COVID. At this stage, while we have limited visibility into the second half of Q2, we still have almost zero visibility into the second half of this year, the two winter quarters, which are typically loss making. At this time, though, I'm pleased to say that Q2 average fares are tracking ahead of peak summer 19, the pre-COVID period, by a low double-digit percentage. That's moved up from a high single-digit percentage in Q1. Ryanair plans to, at the time of the full year results announcement, at this time Q2, sorry, Ryanair plans to grow our FY23 scheduled traffic to about 165 million passengers. That's up 11%. On FY20, the pre-COVID figures, it would have been higher, but for the damage that was inflicted on April and Easter by the Russian invasion of Ukraine. Despite being one of the best hedged airlines in Europe, high oil prices will lead to increased costs for the 20% of our unhedged fuel for the remainder of FY23, but that's a much stronger fuel hedge position than any other airline. But given this later booking profile, the lack of visibility in the second half of the year, volatility in oil prices for the 20% that's unhedged, and the potential risk for adverse COVID and Ukraine developments, it's still too soon to provide meaningful FY23 profit after-tax guidance at this time. We hope to be in a better position to do so at the half-year results in November, but as our experience again with Omicron last November and Ukraine in February shows, any such guidance will be subject to very rapid changes from unexpected events which are well beyond our control during what remains a very strong but a very fragile recovery. Neil, do you want to take us through the Q&A or the slide presentation?