Ryanair Holdings plc

Okay, good morning, ladies and gentlemen. You're all very welcome to the Q3 results call. As you see, early this morning on the Reiner.com website, we published our Q3 results together with an MD&A and a Q&A session with myself and CFO Neil Sauron. A couple of quick themes. As you see, we reported a Q3 profit after tax of 15 million. Traffic and fares were ahead of the prior year, but close-in Christmas and New Year loads and yields were softer than previously expected. as we had to lower prices somewhat in response to the very sudden but surprising but very welcome removal of flights from most of the major OTA pirate websites in early December. Profit after tax, however, for the nine months ended 31 December was up 39% at 2.19 billion. Prior year, it was 1.58 billion. Just to touch on some brief Q3 highlights, the traffic grew 7% to 41 million. Revenue per passenger was up 9%. Average fares were up 13%, mainly due to a very strong Christmas and the October bank holiday weekend, and ancillary revenues up 2%. MSCI raised their ESG rating on Ryanair from a triple B to an A in December. Our fuel bill rose 320 million in the quarter, up 35% to 1.2 billion. At the quarter end, we had 136 B737 Game Changers in the total fleet. That was significantly behind the original deliveries due to Boeing delays. Most more importantly, going forward, our fuel hedging, we've extended fuel hedging. We have 65% of our FY25 fuel now hedged at $79 per barrel. This year, we're hedged at $89 per barrel. So we've already banked a saving of €450 million into FY25. And as you will all be aware, we have the first interim dividend of 17.5 cents per share is payable on the 28th of February. I think just to touch on growth and fleet, at the end of Q3, we'd taken delivery of 136 737 Game Changers. We now expect to have up to 174 of these aircraft in our fleet by the end of June in time for peak summer 2024. That's up 50 aircraft from summer 2023. That would still be seven aircraft short of our contracted deliveries due to Boeing delivery delays. However, those new aircraft means we have a bumper summer 2024 schedule now on sale. It includes 169 new routes, our first 11 domestic routes in Morocco, and our first summer with 23 routes in Albania, to and from Tirana, the capital city of Albania. While travel demand remains high, we expect summer 2024 EU short-haul capacity to be behind where it was in summer 2023. as a considerable number of our competitors ground the A320 aircraft in Europe due to the Pratt & Whitney engine issues, and Boeing delivery delays constrain our growth from 57 to 50 aircraft. We are continuing to work closely with Boeing to minimise delivery delays, and we're investing in additional engineering oversight to improve the quality control in both Wichita and Seattle. The recent MAX 9 grounding was a disappointing setback, but we welcome the ungrounding of the MAX 9s last week. Reiner do not operate any MAX 9 variant. There are no MAX 9 aircraft in Europe, and therefore it is largely a US issue. However, Neil visited in Seattle in January, met with Boeing senior management, and we urged them, and they have agreed, to increase their quality assurance resources on the ground in Wichita and Seattle. We are putting more engineers into Wichita and Seattle to run extra checks on our deliveries. But also on our recent 737 deliveries, we've noted improvements in the quality with fewer delivery defects on the 12 aircraft we got in the fourth quarter before Christmas. However, we do believe Boeing have more work to do to improve quality and reduce delivery delays. But, and I want to stress this, we are fully supportive of the initiatives that David Calhoun and Brian West are taking to improve Boeing's performance and production. It is critical, we believe, to Boeing's continued performance that we support Calhoun and West. I think they're a good team. I have concerns about the management in Seattle, but I have a lot of confidence in Calhoun and Brian West. I think they're on the right track. The Max 9 grounding was an unfortunate event, and it does indicate that quality does need to be improved in Boeing. But we are very supportive and a lot of confidence in what Calhoun is doing under his leadership. We welcome on the OTAs. This was a significant event in December. The timing of the OTA taking us off sale was a bit unfortunate because it was the first week in December. With Christmas coming, you can't just go in and open up and dump seats to counteract that. We think historically these OTA pirates generally account for between 10% and 15% of our volumes. So a sudden removal of that meant we saw a sudden or a very short-term dip in our bookings. We would normally respond to that by opening up price promotions, but we didn't want to do that in the run into Christmas. We therefore think we'll take a hit of 1% or 2% on load factor in December and January. We will take a hit on yield during December and January, but we think it'll be short-lived. And we are happy with forward bookings, particularly out into February and March, although March is artificially enhanced by having the first half of Easter in that. Much more important for Ryanair and our passengers is to convert these OTA pirates into what we now would call kind of approved OTA partners. The partnership agreement we signed last week with Love Holidays, who are our fourth largest OTA, and Kiwi.com this morning, who are our largest OTA, where our largest OTA pirates are critical, we think, to protecting customers from OTA overcharges and scams. As part of this agreement, we now give these two approved OTAs a direct feed of inventory from the Ryanair.com website. And they agree as part of the deal. No overcharging of passengers for either airfares or for any of our ancillaries. The bookings are made directly in the Ryanair.com website with the customer's actual and real email address and real payment details. So that if we need to send a customer an email or some flight information, it goes directly to the customer. It doesn't get lost in some OTA pirate. fake email address. And whenever we have to refund to passengers, we can now make the bookings directly to the passengers. We think this is the way forward. And we will continue to campaign to outlaw the illegal screen scraping and the customer overcharging and scamming being undertaken by so many others of these OTA pirates. and converting them to the same system or the same mechanism that we've now agreed with Love Holidays and Kiwi. Looking forward into summer 2024, we expect airlines will continue to consolidate. We expect capacity will be constrained by both the consolidation, by the lack of aircraft deliveries post-COVID across Europe, and I think the A320 fleet groundings this summer also. We expect about 10% of Europe's A320 fleet to be grounded while they address the Pratt & Whitney engine issues, and that this will mean tight supply for summer 2024. And while we have 50 additional aircraft into that marketplace, we don't have the original 57 we had hoped for. So we think there's going to be a reasonably strong summer of pricing. Already today, our bookings are running about 5% ahead of where they were. Forward bookings into the summer are about 5% ahead of where they were this time last year. Pricing is up by a low single-digit percentage. Again, some of that, I think, is a factor of the fact that the first half of Easter has moved into March. So Q4 is strong, but therefore there's less of an impact of Easter pricing in April. But much work remains to be done. But we're very pleased with where we are for summer 2024. In terms of outlook, we're targeting 183.5 million passengers in the current year. That will still be a monumental achievement. The original budget was 185 million passengers. But if you take the ATC, there's been over 60 days of ATC strikes, that's cost us over a million seats. The Tel Aviv cancellations, which have been running since the end of November, that's cost us about another 600,000 seats. And the Boeing delivery delays have meant we've had to truncate both the summer 2023 schedule and our winter 24 schedule. So it would still be a very strong performance. However, as a result of these lower load factors, particularly in Q3, and the kicking in of some higher productivity pay agreements with pilot unions across Belgium, Italy, and in the UK, these are productivity enhances that we intend to roll out to most of the other, by agreement with the other pilot unions and groups between now and summer 2024, which will significantly improve our operational resilience and reduce pilot attrition. We now expect full-year 24x fuel unit costs to rise by about €2.50. That would still leave a dramatically wider cost gap between Ryanair and our main European competitor airlines, two of whom reported last week. Q4, which is traditionally the weakest quarter, will also be impacted by the partial unwind of free ETS carbon credits from 1 January, but we will benefit from a strong first half of Easter traffic falling into late March. although this is unlikely to offset the weaker than previously expected load factors and yields in late Q3 and early Q4. We're therefore this morning narrowing our full year FY24 profit after tax guidance to a range between 1.85 billion to 1.95 billion. It was previously 1.85 billion to 2.05 billion. So we think the number will come in just under 2 billion for the full year. However, this guidance and the full year results still remains heavily dependent upon avoiding unforeseen adverse events in Q4. such as the Ukraine war, the Israel-Hamas conflict, and any further Boeing delivery delays which might damage us in the run-in to Easter. We've also given you a full update, or we've attached to the release a full update on the OTA pirate situation. I think this has been one of the most dramatic events victories for Ryanair in recent years. And I would always be happy to take a short-term pain if it's getting rid of OTA pirates scamming and overcharging our customers and moving those into a more cooperative working with us. It also, I think the new agreements this morning with Love Holidays and with Kiwis exposes the falsehood of some of these OTA claims that Ryanair is just trying to eliminate OTAs. We're not. We have for many years worked with OTAs like Google Flight, who are an honest price transparency website, but who send passes directly to Ryanair to make the booking. The reason we have a problem with the OTA pirates is the illegal screen scraping of our data, and then using that to scam customers for excessive airfares, inflated ancillary services, and in some cases, charging them for non-existent services such as refund insurance and or change fees for non-changeable tickets. But I think it's been a very good month or two months work and is long-term very much in Ryanair's interest and in the interest of our consumers that they can get access to our low fares, our low-cost ancillary services without being scammed by some intermediaries. Neil, I'm finished there. Anything you want to highlight in terms of the finances, the balance sheet and or the dividend?

Yeah, I suppose just on the balance sheet, ended the quarter very strongly with just over 2.9 billion in gross cash and importantly net cash balance, 150 million. We continue to be the most highly rated airline in the world with a triple B plus rating from Fitch and S&P and a big advantage that we have in these markets is our unencumbered Boeing 77 fleet, 546 unencumbered aircraft. And so we're generating net interest income in the business at a time when our competitors are refinancing or taking on expensive leases. So that's a big competitive advantage that we have. You touched on the hedging, but I think we shouldn't underestimate the benefit of the certainty that we have now in our hedging out to the end of March 2025, $450 million worth of savings being locked in in one of our very volatile markets at this point in time. And then, of course, we've got our first interim dividend at the end of next month, 17.5 cents per share. And we'll have something similar again after AGM approval in September. And that's pretty much all I wanted to add, Michael.

Okay.

All right. In the interest of speed, then we'll open it up to Q&A, please.

Thank you. If you would like to ask a question, you may do so by pressing star followed by one on the telephone keypad now. If you do change your mind, please press star followed by two. When preparing to ask your question, please ensure that your line is unmuted locally. Our first question today comes from Harry Goers from JP Morgan. Please go ahead, Harry. Your line is now open.

Morning, Jen. Hi. Yeah, two questions if I can. First one's just on the ex-fuel unit costs. Maybe you could talk through... the increase in the crew productivity part and what impact we might see into 2025 and to any latest force direction, the Onyx fuel costs for March 25. And then the second one, we saw some comments from United, I think, last week saying they were making plans that doesn't include the MAX 10 going forwards, potentially. I guess if other airlines start to cancel plans, or deferred orders, would you happily take on some of those slots over the next few years, or are you quite content with your current plans? Thanks a lot.

Okay, Neil, I'll ask you, do you have the extra unit costs? It's a bit early yet for FY25. We haven't yet finalised the budgets, but I'll ask Neil to give more detail. United, I thought this comment out of United last week was stupid. You know, if they want to hand over or they want to cancel some of their Max 10 deliveries, frankly, Ryanair will take them. We'd be very happy to take aircraft early. The MAX 10 is a very good aircraft. We can't wait to get it. It offers us 20% more seats. It burns 20% less fuel. The MAX aircraft has now, in Ryanair alone, we completed over a million flights last year. More than 20% of those on MAX aircraft. Great operation reliability. This is a great aircraft. The Mach 9, the plug, was an unfortunate incident. It does highlight the need for improved quality control in Boeing, but they're still making great aircraft. As, by the way, our Airbus were making great aircraft, despite the fact that they have a, you know, the Pratt & Whitney engine is a major issue for Airbus operators going forward. But I think we have two large manufacturers. They're both making great aircraft. The stupidity of the United comments last week is that their order books are full out to 2030. So if United isn't going to take the MAX aircraft, they're not going to replace them or substitute them with Airbus aircraft. But if they want to delay or cancel any of those MAX 10 aircrafts, Ryanair would be the first people into Seattle to talk to Boeing about taking those aircraft, although I suspect there'd be a queue of customers waiting to take those aircraft, given how tight the OEM supply is between now and 2030. So I thought the United Comments were unhelpful, stupid, but if they want to do something stupid like cancel some of the Max 10 orders, Ryanair will be very happy to take them. Neil, do you want to talk?

Yeah, sure. Harry, thanks for the question. In the quarter itself and for this year, as you've seen from the commentary this morning, we're looking at about another 50 cents on unit cost ex-fuel. So 250 ahead of prior year. Some of that's down to the lower load factor in Q3 and early January. The balance is kind of down to the productivity pay improvements that we're putting through. for our people, those pay improvements will obviously have to then annualise into next year. So you will see a little bit of cost increase as a result of that next year. But our fuel savings are going to more than offset any unit costs, ex-fuel increases that we have coming through on a year-on-year basis.

And I think people will over-obsess too on a quarterly basis, Harry, on unit costs. Actually, the key issue here is still slide four in the presentation. While we're not in any way kind of relaxed about unit cost or cost control, the gap between us and other competitors with EasyJet in Europe, and in particular the other airlines in the US, is widening dramatically. But we do have to keep our pay competitive. We have pay agreements in place that cover basic pay and productivity pay with pilots and cabin crew that run for the next three, four years. But if our earnings are rising dramatically and there is some pressure on competitive pay, particularly for pilots, it's up to us to work with our unions and our pilots and keep their pay competitive, which is what we will do.

Okay. Thanks, Mike.

Thanks, Harry. Next question, please.

Next question that comes from Stephen Furlong from Davie. Please go ahead. Your line is now open. Stephen, hi.

Hi, Michael. Yeah, two questions. I noticed maybe one for Neil, just maybe talk about the headwinds or tailwinds and costs into the next year or two. I saw there at the EU, we're talking about ETS reform and the rebasing of current airline announces, for example. Maybe that's a minor thing, but you might just talk about that and anything else on just big positives or headwinds for costs. And on pricing, Michael, I know on the pre-record you said pricing is strong, demand very, very strong. Anything in terms of markets where it's, I mean, I guess it's a function of capacity, where it's better than other places, that'd be great. Thank you.

Thanks, Stephen. Neil, do you want to take the first one?

Yeah, I will. Yeah, okay, Stephen. The rebasing of ETS against 2023. We're studying that at the moment, but we think it will be modestly positive for us. I haven't got the final numbers on it yet. As you know, we're very well hedged on carbon in any event. We've got all of our credits hedged next year at about €76 in EUA, which is down from €81 in EUA in the current financial year. But I do think that ETS reform will be modestly positive for Ryanair.

And I think the pricing situation has an opportunity. Eddie Wilson here, CEO of DAC. Eddie, what are you seeing generally by market or in general terms for summer 24?

I think it's very early to say, but I mean, you look at our three largest markets, you know, Italy, Spain and the UK, where we have the largest proportion of our growth. So nothing unusual there or anything different across those markets at all. And then we've got a lot of growth coming out of places like Albania, Morocco and Croatia. But you're still in very small numbers for the summer season. The place where we put in a larger amount of growth in places like Albania, obviously, it's only a small proportion of what we do.

But I think it's fair to say we've been very surprised at the strength of both the load factors and the fares in our new entry into Tirana, which is a market that was dominated by one of the other so-called low-fare airlines. We're running 90% load factors, having launched in November in the middle of the winter. I mean, from my point of view in terms of growth, it's a disappointment that we're going to be Some were seven aircraft short, maybe 10 aircraft short for summer 2024. It really is constraining our growth. We have many more airports out there who were looking for these aircraft. And that doesn't even factor in things like returning to Ukraine if or when they defeat the Russians. We see very strong growth across almost all our airport customers for additional Ryanair aircraft, particularly in markets where they're struggling to recover their pre-COVID volumes. Next question, please. Thanks, Stephen.

The next question comes from Dudley from GoodBody. Please go ahead Dudley. Dudley, hi.

Morning Michael, morning everyone. Two questions for me as well. First of all, on the higher productivity pay for pilots, you mentioned in the statement that that brings increased operational resilience. Can you just talk us through what it actually brings for you? And then the second question is to do with the capacity dynamics in Europe at the moment. Obviously the GTF engine is the kind of biggest new thing this year. How long do you see that market staying as tight as it is and below kind of pre-COVID levels? Thank you.

So just give me the second half of that again, then doing the GTF engines.

Just in terms of the capacity dynamics being tight in Europe, obviously it's going to be tight this summer, but do you see that rolling into next year and beyond?

Yeah, I'll do the engine and maybe I'll give Eddie, Eddie, you can talk about the productivity phase. Yes, if you take capacity generally, like Eurocontrol have confirmed last year European shortfall was about 93% of pre-COVID. The question for summer 24, is it going to grow or is it going to decline? We think it's not going to grow. We're not sure yet whether it declines. It depends on which markets the A320 operators ground aircraft or don't grow. For example, if you take the likes of Wizz, are they going to kind of constrain their growth in the Middle East or are they going to constrain their growth in Europe? I suspect we're going to see more constraints on growth in Europe where they're struggling to compete with us. And we're still waiting to see where those final kind of scheduled decisions haven't yet been made or schedules haven't yet been altered. With the backlog, though, in engine shops around the world, I mean, it seems clear to me that the Brant Whitney engine issue is going to run on through summer 24 and again in summer 25, may even stretch into summer 26. The OEMs are not going to deliver meaningful aircraft numbers between now and then. Ryanair is very fortunate. Okay, we may get left short the aircraft this summer by Boeing. We'll pick them up for the summer of 2025. We're scheduled 30 aircraft in advance of summer 2025, plus whatever they leave us short this year. But really, other than that, there are very few new aircraft deliveries going into short-haul Europe. We do expect the Asian market will recover more or reopen more for summer 2024, and that that will enhance demand across short-haul Europe, particularly if it fills up transfer traffic on the legacy short-haul flight. So all the indications are at this point in time is that demand or capacity is going to be constrained in European short-haul for summer 2024. I see no reason why demand won't be strong. We're just not sure where that's going to fall in terms of pricing. I do believe pricing in summer 24 will be ahead of summer 23. It won't be up, though. I mean, I think it won't be up the 15, 17 percent we saw last summer. I think kind of mid to high single digits, maybe low double digits is a reasonable expectation at this point in time. But, you know, that's capable of being derailed if there's geopolitical issues or, you know, some adverse developments in Ukraine, et cetera, things like that. But certainly all the indications are at the moment is that Trump 24, particularly during the school holidays, Easter break, et cetera, is strong and pricing is slightly upwards at this point in time. Eddie, just give a flavor of productivity pay, why that feels resilient.

Yeah, I mean, like if you go back to when we came out of COVID, like Ryanair was the best prepared of all airlines in Europe, if not in the world, for having sufficient crews, more than sufficient crews to run the schedule when many of our competitors were floundering. And it's not a lesson that we have forgotten. And as we continue to grow, we will lean into having not just the sufficient crews, but we should build in extra resilience. Because the reason we need extra resilience is primarily driven by poor ATC performance. And we don't want to be caught out by that. And that means that if we've got to... we have to remain competitive with our crews to attract and retain people. And we'll continue to do that. If that means that we have to adjust pay like we have, then that's what we will do. And it gives us the comfort in the medium term as that when ATC, if it's ever ultimately resolved to get back to the sort of operational efficiencies that we, that means that we can pair back crews in time. But at the moment, we're not going to take any risk on that whatsoever. So it's about having the right crewing ratios in place to run the schedule against the backstop of a really shoddy ATC environment.

Yeah, and I should just say as well, just in terms of capacity, like the Boeing, being short of those aircraft from Boeing, we're finalizing our budget at the moment, but we're walking back our full year traffic figure for FY25. It's going to come back from 205 million. Probably 200 million would be the working assumption. So, you know, we're going to have two and a half percent less capacity out there through certainly the summer of 2024 than we would wish to have at this point in time. So as I said previously, United want to walk away from any MaxPen aircraft deliveries, we'd be very happy to step into the breach in advance. Thanks for the question, Dudley. Next question, please.

Thank you. The next question comes from Jamie Robotton from Deutsche Bank. Please go ahead. Your line is now open.

Jamie, hi. Morning. First one for Neil, maybe. I don't want to obsess too much on these actual unit costs, but back in November, I asked whether there were any risks on the unit cost guide and Neil, you helpfully mentioned the route charges, which I thought looked a bit higher this morning. Presumably you've now got visibility on the higher Euro control rates for the next 12 months. I just wondered whether these were also a little bit responsible for the extra 50 cents on the cost per tax guide in 24 and how much of a headwind there is on route charges into 25. At least I guess this will be the same for everyone. And secondly, Michael, given the focus on Boeing, you mentioned earlier, fewer delivery defects on receipt of recent maxes. Could you expand a bit on that, describe the sorts of issues you were encountering before the recent improvement? Thanks. Okay, thanks.

Okay, go ahead.

On route charges, Jamie, yeah, they are going to track up a bit year on year. We're just getting the final numbers in at this stage, running the budget, and I'll give you a bit more color when we come out in May, but yeah, the working assumption in the budget is that we're seeing root charges tracking up slightly year on year.

Yeah.

And again, I wouldn't obsess with your unit charges in the third quarter, like the bigger driver of it on a quarterly basis was the slight slippage in load factor. You know, we would have expected originally to grow that load factor by maybe 1%, you know, down 1%, that will continue into January as well. So on a quarterly basis, it moves to die a little bit more. On an annualized basis, it doesn't have that much effect. Boeing delivery defects, I mean, we've been jumping up and down with Boeing for about the last 18 months on the number, rate and number of defects that we're picking up. We now do about a 48-hour inspection of each aircraft on delivery here in Dublin, which again is kind of a painful process. We pick up lots of little things. You know, I don't want to go into the detail, but you know, like... spanners under a floorboard, stuff in the cockpit that shouldn't be there. Those are the kind of small quality assurance things we pick up. The bigger issues were kind of, you know, over the last 12 months are the known issues. You know, you've kind of issues coming out of Wichita where bolts into the tail fin were put in the wrong way, holes in the forward pressure seal or whatever the hell, I don't even know what it is. drilled the wrong way. You know, stuff that shouldn't be happening on a $100 million piece of kit. You know, you wouldn't expect them if you were buying cars from Mercedes or Audi, and we don't expect them when you're taking aircraft from Boeing or from Airbus. And, you know, some people would say this is a consequence of the two-year grounding of production during COVID. I think there may be a little bit in that. but it means that Boeing and Airbus both need to significantly improve quality control, both the oversight of the engines and on the airframe during production. Boeing are aware of this. I think they have significantly increased the numbers of engineers doing quality assurance as the aircraft goes through the shop. And the 12 aircraft we got in the fourth quarter, in the December quarter, we found less sort of little silly things on those aircraft on delivery than we had on any of the previous game changers over the previous two years. So we think quality is going the right way. It is very unfortunate, but, you know, that they had the MAX 9 door panel stuff. Boeing are getting an awful lot of unfair kind of coverage as a result. I mean, there was an Air Canada aircraft took off last week and one of the nose wheels fell off. That's nothing to do with Boeing. I mean, that's a maintenance issue within Air Canada. But it's, oh, there's a pilot on 737s. You know, there are two large volume aircraft, the A320 family and the 737 family. They carry 90% of the world's passengers on a daily basis. They are terrific aircraft. They are very safe. We are big supporters of the 737 and particularly the new variants. the Game Changer, which is carrying 4% more passengers and burning 16% less fuel, and especially the MAX 10, which will carry 20% more passengers, burn 20% less fuel. As Neil said, we expect the MAX 10s to be certified. We believe in the Q4 of 2024, first delivery to the American Airlines in early 2025. We're not pleased to get the first MAX 10 until 2027. So we are... well down the list of deliveries, but we can't wait to take them and pass on the value, the incredible value that those are, the cost reductions, those aircraft efficiencies, those aircraft will deliver for us and pass it on in the form of lower fares to customers. Thanks, Jamie. Next question, please.

The next question comes from Satish Sivikumar from City. Please go ahead, Janelle.

Satish, hi. Hi, Michael. Yeah, thank you. I've got two questions here. So firstly, on the capital allocation, obviously you have started the interim dividend today. And what does it mean in terms of share buyback and given the balance sheet strength as we go into full year results or into 2025? So that's my first one. And then the second one, obviously we flagged about the pilots being in terms of – labor as such is being under pressure in the UK. But are you seeing anywhere else in continental Europe where the pilots are actually under pressure, like in terms of availability is being under pressure? Yeah, thank you.

Thanks, Satish. So quick ones on that. Capital allocation, you know, we will continue to pay down debt. We'll continue to fund all of our CapEx from internally generated cash flow. However, CapEx falls deeply in the next two years from, you know, almost $3 billion down to just under $1 billion a year. That should, if profitability maintains where it is, spring out, throw off about $2 billion a year in free cash for the next two years. A quarter of that will be allocated to dividend payments. And then I think the board, subject to all being well with the balance sheet and the rest of the world, will be looking to return the additional, any spare cash to shareholders it will be a case-by-case basis. There'll be special dividends or buybacks. And I think that the driver of that will be generally P multiples whenever we come to do it. But we won't promise, you know, we're not going to borrow to do it. Once we generate the cash, you know, if we have more than... three and a half, three, four billion in cash on the balance sheet, then anything surplus to that will be returned. We have two more big debt payments, but one is in FY26 and the other is in FY27. So I think shareholders should expect more returns. But what format they will be, we don't know yet. That'll be a matter of the board. Pilots, we're not seeing huge pressure on pilots across Europe. There is some pressure in the UK. There was, you know, some of the other UK airlines were kind of paying out, panicked pay increases last year because they came out of COVID short of pilots. That does seem to have settled down. We are not seeing significant pilot attrition, but I think we did have a gap between our pilot pay and that of competitors for the last year, again, as a result of these kind of panicked pay increases that some other, particularly 737 airlines in Europe and in the UK, were paying. We intend and plan to keep our pilot pay competitive We will never be the best payer, but we certainly will keep it competitive. And the rapidity of Ryanair's growth and the rate of promotion, like you'll go from being a cadet here to a captain on the 737, typically within a period of four or five years if you're up to the job. And that is what drives very rapid increases in pilot pay. UK, we think we're okay at this point in time. The market is tight because of the inflexibility of UK Labour post-Brexit. And we have some growth in the UK, but not a lot. But we believe that the pay deals we've now agreed with the unions, pilot unions, and we're extending out to cabin crew unions as well, leaves us well positioned with ample pilot and cabin crew resources for summer 2024. But that's heavily dependent upon, you know, there not being another meltdown in European ATC. And the things like, you know, a repeat of the 60 days of ATC strikes, which we suffered in summer 2023, they really do eat up an awful lot of crew hours at peak periods. And it's something that... we're building in slightly higher crewing ratios to improve our resilience, and that in turn reduces some of the productivity elements of pilot pay. Eddie wants to come in on that point.

Yeah, I mean, if you look at the UK, it's primarily really a licensing issue and, as Michael says, a particular tightness in that market that you don't have the fluidity of moving pilots around from different parts of Europe that you had pre-Brexit. But what we've done over the last number of years, because we don't take people from other airlines, we've been growing our input of cadets into the UK system. So that coupled with the pay issues that we have dealt with there, that should sort that out. It's the same for engineers as well, because it is primarily driven by Brexit until the supply issues are sorted.

Okay, thanks, Eddie. Thanks, Satish. Next question, please.

The next question comes from Alex Irving from Bernstein. Please go ahead, Alex. Alex, hi.

Hi, good morning, gentlemen. Two from me, please. First on the OTAs, could you please tell me what your typical level of ancillary spend per passenger is on an OTA booking versus direct booking? Is there a revenue opportunity here from the new deals or a greater share of direct bookings? Also, is there any cost-saving opportunity from the OTA change with a reduction in the level of manual post-sale servicing? Second question is on unit costs. If it be maintenance, we saw maintenance costs up 40%, capacity up 89% year on year. What's driving that, please? And are there any one-offs we should be aware of?

Thanks. Okay, I'm going to have Tracy Lloyd here. We're going to get her to do that maintenance cost question, Neil. And then just so on the OTAs, look, I don't think there's any particular upside on ancillaries. There's a lot of kind of misguided coverage here. We want to take these bookings direct so we can maximize our ancillaries. The big issue with the OTAs is, one, we don't want anybody illegally scraping our website. That is digital piracy. It's our data, and, you know, we are – A bit like music piracy or film piracy should be outlawed. We wouldn't have such a big issue with it if they weren't scamming customers. And so we have, for a number of years, been chasing down some of these pirates to stop them overcharging. And what they don't do, we would have less of an issue with them if they suddenly said to each customer, We are the OTA and here's an OTA fee of €5 per the OTA. At least then the customer could decide whether they want to make the booking through that OTA and pay the fiver or come directly to Ryanair instead. They've been scamming and inflating our airfares. They're scamming and inflating the ancillaries. I think there might be a slightly better conversion of ancillaries if we're able to communicate directly with a passenger. The booking is made directly in the website. And in some cases, we release this on a monthly basis, our OTA pirate service. You know, some of these OTAs are inflating our ancillaries, the bag charges, the fee charge, by 300% and 400%. So I think there might be a slightly better conversion of ancillaries if every customer has access to our ancillaries at the published prices on our website. But there's no big jump in ancillaries as a result of getting rid of the OTAs. I think there may be what we're trying to do is to protect consumers from being overcharged by these intermediaries. And over the longer term, we don't want a booking.com or some other third party to be able to insert themselves between us and our customer, capture a huge amount of customers as they have done, for example, in hotel distribution, and then turn around to us and reimpose on us. what we had 30 years ago when we had to pay 20% for distribution through travel agents and global GDSs. We do not want, we cannot afford to pay extravagant commissions for distribution, particularly when there's no cost of distribution through the internet, because that would simply inflate airfares, which would be not in the consumer interest. So we will continue to battle intermediaries particularly those who are engaged in digital piracy, who want to insert themselves between us and our consumer, overcharge the consumer, or at some point in time in the future, turn around and try and overcharge us in a manner that would inflate the cost of aircraft for consumers. But I don't foresee, Alex, that there's any immediate upside in ancillaries, although probably a little bit of a jump in conversion by not overcharging consumers for ancillaries. Tracy, maintenance costs?

The maintenance cost is really the timing of the checks. So we've brought forward more checks from Q4 into Q3. So we won't see that. We'll see it drop down in Q4. We also have labour increases in our third-party maintenance facilities, driving that as well. And we had some A320 handbacks. And again, we brought forward some of the maintenance of the A320, just in anticipation that the MRO shops may get full with the GTF issues that will be based within the next few months.

Thanks, Tracey. Well done. Next question, please.

The next question comes from James Hollins from B&P Paribas. Please go ahead, James.

James, hi. Yeah, cheers, thanks. Two for me on the OTAs. The first one is, would you expect to do deals with all the OTAs or be some off limits like Booking.com given your history of trying to sue them? And are they coming to you for deals? And secondly, thank you for quantifying 10% to 15% of tickets historically sold through Booking. ota pirates your words not mine i was wondering how that normalizes so quickly and that's a higher than i thought it'd be and you seem to be implying that this is kind of a december january issue well than anything longer than that to be enlightening as to why that would be thanks

Okay, I'm not sure. I mean, look, there's about seven or eight OTAs account for, we think, more than 50% of OTA-powered bookings. We're never quite sure what the number is. So, you know, I give you 10% to 15%. Because the only way we can track these is where we think there's a fake credit card or there's a fake email address, that's how we chase them down. So we're not entirely sure ourselves. Okay. A number of them have come to us since December. In fact, Love Holidays were the first ones to come to us. We have offered them, in essence, and the same offers on the table, we've given them the same terms that were on offer through the GDSs. We'd signed up deals with the GDSs last year so the travel agents had visibility on our fares. And the critical thing, again, was that we would have... The booking made directly in Ryanair.com and no overcharging, no scamming of consumers, either for airfares or ancillary. I think that gives these business models, OTA business models, a lot of flexibility. But what we're not willing to countenance is that people taking our, you know, digitally, sorry, they also agree not to screen scrape our website because we give them a direct feed. There's no need to screen scrape our website. Do I think all of them will come on board? Frankly, I don't know, and I don't particularly care. I do think the majority will. We have a number of others who we're in active discussions with. Almost all, I would say, of the top eight, top ten, Booking are not in our top eight or top ten. They're reasonably small. But I do expect, I don't know whether Julius asked if he wants that. We do expect the case with Booking.com to roll on. We're not particularly minded to settle with them. And I think, but, you know, we have so many examples of egregious overcharges by Booking. on airfares and on ancillaries, we believe it would be very difficult for bookie.com to go into court in the States eventually. We're going to drive it that way. We thought it was remarkable that they wanted all of the Ryanair management deposed, and we've all been deposed, and yet none of the bookie management want to be deposed. They're kind of contorting and wriggling every which way they can to avoid being deposed, because the first question you're going to ask them, of course, is, Why are you overcharging? Why are you illegally screen scraping and overcharging customers? But they're reasonably small in terms of volumes, but we're not about to allow any of these people to try and engage in digital piracy or to overcharge consumers. If they all want to have approved partnership deals where we give them direct access to our inventory and they agree not to screen scrape, not to overcharge, then we'd be very happy to work with them. Why do we think it's a December, January issue? Well, one, because once they come off sale, you know, there is an immediate drop off in our bookings. And it took us a number of a week or two in December to spot this. But passengers suddenly find a way, but they find other ways on the Internet back to the Ryanair low fares. You know, an awful lot of passengers still mistakenly believe that they're booking in Ryanair, whether they're actually booking through eDreams or eDreams or Booking or Opodo or Kiwi or these people. They don't really realize that they're not making a booking in the Ryanair website. They don't realize they're getting scammed and overcharged. And if Ryanair comes off sale on some of these OTA pirate websites, people simply find a way around or go back to Google Flights or somebody else or some of the other price comparison websites to find the Ryanair prices. And then, of course, we always have the ability to open up a bit more cheap seats or a bit more price stimulus, which we're happy to do during January and February. We weren't happy to do it in December because we thought we would trash the close-in bookings over the Christmas, New Year period. And I have always been of the view that if we can eliminate these guys or at least remove the overcharging and the scamming and at least protect ourselves from the long-term risk that these guys would try to become or would have so much of our volume that they try to become a new GDS or a new intermediary charging either us or customers. a percentage of revenues, then that's a fight that's well worth taking on. We're much more vocal about this because we have the cheapest airfares in every market. Therefore, we're much more of a target for these guys than the other higher fare airlines. I think the other higher fare airlines are grateful for whatever bookings they get from these OTAs, whereas in our case, because we have such a price advantage, it gives them more latitude for scamming or overcharging passengers. Julie, thank you. Would you add on the booking.com side or the OTA side?

On booking.com, maybe only the bookings themselves are in trouble with competition authorities throughout the world. They're likely to be added as a gatekeeper under the EU Digital Markets Act. this year, and I think they should consider seriously where they stand in respect to consumers and transparency and the extent of charges that they impose. I think ultimately they will have to come to terms with the fact that the age of overcharging consumers with hidden fees is over, and they'll have to work with us.

Okay, thanks for that. Thanks, James. Next question, please.

The next question comes from Savanthi Thais from Raymond James. Please go ahead.

Savi, hi.

Hey, good morning.

Just first question for me. On the GDS side of things, you've been adding, you know, more kind of corporate relationships there. I was wondering if you can kind of give an update on where, you know, there's a lot more opportunity there and if you're seeing any an improvement in either the kind of mix of business travel or just any kind of color on how business is recovering. And just secondly, just with the aircraft delivery delays, is there a use needing to change and just given how constrained the environment is, are you changing anything in the way you kind of load schedules and in the way you book up schedules given kind of your historical kind of yield passive load factor active strategy.

Okay, Eddie, maybe you take the GDS point and I'll do the aircraft deliveries and loading schedules.

Yeah, I think the GDSs came back, but primarily driven by business travelers, you know, like as we've grown our base network in particular, we, you know, particularly post-COVID, we're corporates became much more price sensitive that we weren't available on a lot of the platforms but we've done a recent deal with Concur which was a staff based product for people to manage or for corporates to manage their expense management and we fit naturally into that and that will go live I think probably from when we sign the deal it will go live and the APIs and all will be working from from early April. So it's just another channel. GDS is growing, not spectacularly. People still go from the, you know, naturally gravitate towards our lowest fares. You look at the recent OTAs that have come through, you know, you can argue they're a channel. One of them is a channel for those who want to have a package holiday. Not material in what we do. But we will continue to develop those channels, but it's not necessarily going to move the dial. But the one that I really, I suppose, I'm excited about is Concur, because that will get those small and medium-sized businesses and Ryanair will be presented and obviously will have the lowest fares.

And I think it's fair to say we're also, I mean, I wouldn't underplay, I mean, you know, never would I underplay, I would underplay the significance of the OTA deals last week with Love Holidays and with Kiwi this morning. I mean, these deals now give them direct access into Ryanair's inventory. They are capable of moving a, you know, a significant volume of seats And the fact that they're now doing that without screen scraping, but giving their customers the Ryanair airfares and the real Ryanair ancillary prices, I think could result in a significant boost in their volumes or that volume of bookings. Turning to aircraft delivery today, it's very frustrating. We have been very slow to launch the summer 2024 schedule. I think it's fair to say, typically at Christmas, we would have about 85% of the summer schedule launched. This Christmas, we've only about 75% of it launched. And most of that is uncertainty over airports. We're still negotiating with some airports as well. Eddie, Jason and the team made a major breakthrough last weekend with a new base in northern Italy where the Trieste region scrapped the municipal tax, which is the first time one of the big Italian regions has scrapped the municipal tax, 650 per departing passenger. These are major advances on behalf of consumers and in terms of our comp. So it's fair to say that summer 24, our summer schedule launch has been delayed. We are still at this point in time. We have only launched the core summer... We're also late with some of the summer schedules that we would have ideally have launched in April and May don't get launched until June and July because of the Boeing delivery delays. We were supposed to have 57 aircraft from Boeing at the end of April. We will be lucky to get 50 aircraft by the end of June. And that in itself means a lot of the summer business that we would want to do in May and June has been delayed. And even today... We are still holding back about 15 aircraft. What's on sale at the moment is about 35 of the 50 aircraft that we have from Boeing. We need more certainty and more confidence that Boeing will deliver those aircraft to us. And there are still a number of announcements to be made on some new routes and maybe one or two bases. We're in the final part of the negotiation. And overall, Savvy, to answer your question, the aircraft delivery delays is delaying the summer schedule. It is constraining our growth. I mean, it would add another million or two million passengers if we were able to launch these summer routes in May and June, as opposed to launching them only at the end of June or in July. That's still enough to hit the summer peak, but it is very frustrating, which is why I think the next year, instead of 205 million pastures we'll probably be running around 200 million will be the the number for the full year next question please thank you thanks sammy thank you the next question comes from duane benigua from evercore is now open good morning just just a couple quick ones um on the ets credits that are expiring

can you just help us think about the magnitude of that relative to the $450 million in fuel savings, F25 over F24? In other words, that $450, what should we subtract from that for the sort of change in the ETS credit recognition?

Yes, Dwayne, it's on the tier. So we'll lose about 20% of the free allowances during next year. So like, you know, we had about just under $4 million free allowances. So About 20% will unwind into FY25.

What's that in financial terms over the years?

It's about 65 euro a ton today, so it's probably about 50, 60 million.

So the fuel hedging savings are about 450 and the ETS panel unwinders cost about 60, 70 million, is it?

Yes.

Okay.

And the second question, Dwayne? Yeah, just with respect to a tighter OEM market and these lingering constraints, Where would you estimate the value of your unencumbered fleet today? Thanks for taking the questions.

Oh, that's a big question above my pay grade. I mean, the value of our existing unencumbered fleet is dramatically higher than anything. I think it's a big difference in us and some of our competitors in Europe. Remember, we add all of our aircraft at the net purchase price to the balance sheet. And so you get the benefit in lower depreciation, significantly lower depreciation charges over the next 20 years. I heard one of our competitors last week contorting themselves, trying to explain how they're doing sailing leasebacks, recognising a profit up front, but it doesn't make a lot of difference over time between us and Ryanair, when in actual fact the aircraft ownership costs for that airline are more than double that of Ryanair on a per-passenger basis. Like, just complete and utter horseshit. The fact is, and I would say also, by the way, our delivery book of aircraft, which we priced, I mean, the last of the, we still have more than 60 or just over 60 game changers to take delivery of over the next two years. We could, they are worth, I would say, probably not far off double what we'll be paying for them over the next two years. And even the MAX 10 game changers, I would say, you know, the market is so constrained. I read a story this morning that Airbus are out trying to buy back some of the delivery slots from some of their A320s from lessors and some of their customers, ostensibly to provide aircraft to United in the States. So I hope they're very successful. And I hope therefore, as a result, United walk away from a load of MAX 10s. Because we'll be the first ones out there looking for additional MAX 10s for delivery in 26 or 27, if we could get them. But I think it's the reality for all airlines is that, you know, we're all short of aircraft. The OEMs cannot, I mean, the more significant thing, while we welcomed the MAX 9s going back into the air last week, just so that you just take that as an issue up there, I thought that the most significant intervention by the FAA was ordering Boeing not to increase monthly production. That does represent a challenge for Boeing. It will leave some dissatisfied customers going forward for deliveries in 2020, remainder 24, 25, and 26. We will still get our 30 aircraft next winter. But I think it is inevitable, given the quality challenges facing both Boeing and Airbus, that some of this capacity ramp-up needs to be slowed down. And we still haven't even taken account of some of the orders that are still out there from the Chinese airlines, the Middle Eastern airlines, some Indian airlines for additional aircraft. Therefore, I think the world is going to be challenged for certainly short haul aircraft for the next five, seven years out to 2030. Ryanair is one of the few airlines that has secured a pipeline of reasonably low cost new aircraft deliveries over that period of time. These are new aircraft deliveries that will transform our operating costs because they offer significantly more seats, but at a significantly reduced fuel consumption. So I don't think I've ever been more excited about our growth and the possible profitability of our growth in Europe in the next three to five years where capacity is going to be meaningfully constrained. And I think if you look at the pricing of air travel across North America compared to where it is in Europe at the moment, it's clear that pricing in Europe is has some considerable way to go to catch up with North America. Will it get all the way to North America? I don't know. Nobody really knows. But certainly, if you are at the lower end of the pricing model, as Ryanair is, I think we have more headroom for price increases over the coming years to cover higher costs, although we'll be using our low-cost aircraft and improved fuel consumption to keep airfares down. And I think one of the big differences in us and some of our competitors we reported last week is we saw average airfares rise double digits in our Q3, whereas their average fare performance was significantly behind that of ours. And that's, I think, in large measure because we're expanding into a lot of their markets and we're expanding profitably, whereas they're unable to compete with us and reporting losses. Thanks, Michael. Next question, please.

Thank you. The next question comes from Rory Cullinane from RBC. Please go ahead. Your line is now open.

Rory, hi. Good morning. Yes, the first question on Boeing delivery delays. I thought the previous expectation would be that you'd be down around 10 aircraft this summer, and it now sounds more likely to be down seven. So I was wondering what potentially drove this slight improvement. And then secondly, on the modest growth in aircraft, ancillary revenues per passenger. You previously explained that ancillary revenues should be more stable than fares, but is this driven by you sort of holding back on pricing or are you seeing some take-up of ancillary products declining in the current environment? Thank you.

Okay, Neil, I'll ask you to do the ancillaries. You are as crazy as you can here. Just in relation to Boeing, like, you know, it's a movable feast here. Originally, we thought we'd be down five. Then it looked like we were going to be down 10. Now we think our best guess is that by the end of June, we'll be off about seven aircraft. Now, that could be nine. It could be five. We are working. We have eight aircraft deliveries due in May. There's seven due in June. And then there's about nine in July. And we're hoping that we will get some of those Julys into June. I mean, I think it's fair to say we will also take some deliveries in the first seven or ten days of July. But we have said to Boeing that under no circumstance are we taking aircraft after there's a weekend there the 13th, 14th of July. We're not taking aircraft after that because, frankly, if we're not certain to get them before that, we can't put them on sale. So I think we are working well with the team in Seattle. There's a big focus on those aircraft deliveries in June or in May, June, and the first couple of weeks of July. And we think there's a reasonable prospect that we will get 50 aircraft, might be 52, it could be 48. The big driver, though, is it's certainly not going to be 57, and we accept that. But we have said to Boeing, if we don't get them by that second weekend in July, we're not taking them until October, which is why, again, our number for next year has moved back from kind of originally 205 million towards 200 million. But it's movable. You know, we would be hopeful that Boeing will do slightly better. But if they have other unforeseen events like the MAX 9 issue, it might move slightly back the other way. Ancillaries and modest growth. And Neil?

Yeah, Rory, we're very much on track to what we said we would do this year. We said we'd be up 50 to 60 cents on a per passenger basis. That's exactly where we're going with 23 euro per passenger basis. in the quarter just ended. And you remember, there's a big step up in ancillaries after COVID, where we've jumped from about 18 euro passenger to 23 euro passenger today. Longer term, we think we'll track ahead in the growth in passenger numbers. So a couple of percent, two to three percent per passenger increase in spend for the next two or three years. So we're bang on where we thought we would be.

And certainly, I mean, again, and I come back to the OTA point, if we can convert a number of the OTAs into partners who are no longer charging for ancillaries, you might see actually an increase in ancillary conversion and some pricing improvement because the people were originally paying 20 or 30 euros for a 10 euro bag. They may, well, we may convert more and with a bit of yield management, we might get 11 or 12 euros on average for those bags. Thanks, Rory. Next question, please.

Thank you. The next question comes from Gerald Koo from Liberum. Please go ahead, your line is now open.

Morning to you, if I can. Firstly, on the balance sheet, looking at current assets and the other assets line, which sits just below 1.2 billion euros, at 1.153 million euros, I was just wondering what that line relates to and how how and when that might convert into cash. And secondly, on the MAX 10, I know your first deliveries are two years after the first ones. At what point do you get concerned about certification delays impacting that sort of early 2027 delivery date for yourselves?

Okay, I'll take the max 10. I'm going to ask maybe Tracey McCann here, would you, that's current assets, other assets issues. The max 10 deliveries, the first, I mean, the first deliveries to the North American Airlines are scheduled to take place at the end of calendar 24, early calendar 25. I don't think we would be concerned about, our first delivery said we only take 17 aircraft in the first half of 2027. So I think we would begin to get concerned if they miss the summer 25, if the first deliveries of the MAX 10 run into the winter of 25, spring of 26. I think at that stage we'd start to get a little bit concerned. We don't honestly foresee there being that kind of a significant delay. uh these aircraft are you know there are kind of production slots there in seattle in wichita and in seattle for them um i think the issue is more certification uh they're still hopeful that the max 7 will be certified uh in this the current uh quarter and delivered the first and delivered they're already built and the first delivered to southwest for summer of 2020 So I wouldn't want to be complacent, but I mean, I am reasonably happy that we're not the lead customer for the MAX 10. But given that we're taking our first aircraft two years after the first scheduled deliveries to the American Airlines, I'd be reasonably relaxed. And Tracey, do you want to take that point on the other assets?

So the prepayments, most of the other assets are prepayments, so typically prepayments from airport charges, fuel charges, and then the carbon credits is the biggest mover in that.

And I just add to that, Gerald, over many years, we've got significant discounts from large suppliers by giving them prepayments, and some of that will be reflected in the non-current asset line as well, which I think you might have been referring to. Okay, thanks.

Thanks, guys. Thanks, Gerald. Next question, please.

The next question comes from Conor Dwyer from Morgan Stanley. Please go ahead, Conor, your line is now open.

Hi, guys. Thanks very much. First question is on pricing commentary. So if you're currently running low single digits ahead initially for the summer and you think you can get to mid to high, is that just as the impact from the late Easter, hurting April and May dissipating? Or you think you can get more in the late yields? And secondly, assuming certification does happen on the max 10 day this year and United doesn't actually take them, how... How confident are you that you would be able to actually take them and run that capacity? What kind of lead-in time would you need for that? Thanks.

Okay, on pricing, look, I think the biggest driver at this point in time on pricing is that the first half of Easter is in March and not in April. you know, Easter is still a big driver of forward bookings at this time of the year. Q4 is materially stronger than Q4 was this time last year. We are still expecting a loss in Q4. But bookings through the summer are running ahead of where they were this time last year, both in terms of volumes and pricing. But I would believe, I mean, This time last year, we were in a very strange... We had a very, very strong January, but an awful lot of that was still post-COVID recovery, people getting out there and booking early. So we had a very, very strong first quarter. And then pricing softened into the second and third quarter of last year. I'm not sure this year we won't see... Pricing at the moment is, you know, sort of modestly up, but I would expect it to strengthen further as we go through into calendar Q2 and calendar Q3. It might be wrong. It might, you know, I might be calling that wrong, but that's the way it feels to me. And I think what we need to see, like we monitor closely some of our A320 competitors, and they haven't yet, in the case of Wizz, taken out, as far as we can tell, the 40 or grounded 40, 45 aircrafts. Same with the Volaris, Volateas. I don't think they've finalized where the capacity is coming out yet. So there may be more to go with that. We don't know. But I think pricing will continue to drift upwards into the summer of 2024. But we haven't, you know, there's more to run on that. And we won't have a better feel for that until we get to May and we're, you know, on the full year results road show. Second point, Max Tens. I mean, they're... If we were to, I mean, I would be very happy to start looking at Boeing, and clearly we'd want to negotiate the price of them. I would be very happy to take max 10 deliveries for summer in advance of summer 26. I'm not sure we'd be in a position to take them in advance of summer 25, but I'm not sure they can manufacture or deliver in advance of summer 25. But if someone like United want to walk away from those deliveries over the winter of 25 into 26, Or we could take more aircraft in for summer 26 and certainly increase. We have 17 aircraft, max 10 deliveries in the spring of 27. I'd be very happy to take that up from 7 to 30, 40 aircraft over the winter of 26, spring of 27. We have more than sufficient demand across Europe for these aircraft. And the operating performance of these aircraft is dramatic. But I don't foresee, despite all of what I thought was kind of nonsense commentary out of United last week, I don't see any chance of not taking the MAX 10s. And I'm sure there'll be a queue, not least of rapacious aviation lessors out there and others looking to get those aircraft if United or somebody else walked away from them. I mean, we're still expecting a number of very large orders coming out of the Middle East. And China might also step up to the plate as well. So if somebody wants to walk away from MAX 10s, I think there'll be a queue of people to take them. But to answer your question, we'll be very keen on taking Max Pence for summer 26, not summer 25. That would be too early for us.

Great, thanks.

Thanks very much, Conor. Next question, please.

The next question comes from Maniba Kayani from Bank of America. Please go ahead. Maniba, hi.

Good morning. I just wanted to clarify on pricing for Q4. So fares were up 13% year-over-year in Q3, and kind of what's in your guidance for Q4? And then secondly, just on capital return and the share buyback, given the share ownership issues post-Brexit, like how does that impact your ability to do a share buyback this year? Thank you.

Sorry, give me that slide. The second piece of it again, Maneuver. I was going to do share buybacks.

Just in terms of your EU ownership post-Brexit, and how do we factor that into a potential share buyback?

Okay. I wouldn't get into pricing on Q4. We would never break it down on a quarterly basis. But you can work it back from our full year guidance. Yes, we've narrowed the range slightly, but more to reflect the hit in Q3. We're still somewhere between 1.85 and 1.95 billion. But detail on Q4 pricing and our costs, we wouldn't get into at this point in time. On EU share ownership, we continue with the only airline that is very close to 50-50 EU ownership. Other competitors like EasyJet and Wiz are way below 50%, but that's a matter for the EU Commission, not for us. I do believe, though, that if we did a share buyback, I think we would probably be looking at trying to buy ADRs and ordinaries. I think it would be in our interest to do both. Although in the past, we have found it easier to buy ordinaries in Europe. It has been very difficult for us to buy ADRs. One of the challenges we face with the ADRs is they tend to be quite tightly held by a number of very large institutions in the US. And when we come looking to do sharebacks, they all go here, buy somebody else's ADRs. But if we are unsuccessful in... executing share buybacks of ADRs, we would simply buy more ordinaries and then over a period of time, as we've done in the last two years since Brexit, continue to use the fairly draconian powers we have to disapply non-EU buyers of the ordinary shares. But I would think the working theory, my working assumption would be If we are returning cash to shareholders by way of further share buybacks, we would probably split that 50-50 between the ADRs and the ordinary sets so that we balance the EU ownership rules. Thanks, Muneeba. Next question, please.

The next question comes from Alex Patterson from Peel Hunt. Please go ahead. Your line is now open.

Alex, thanks. Morning, everyone. I just wondered if you could give any more color on the commercial agreements you've got with the GDSs and now with two OTAs. Are they paying exactly what a customer would pay if they booked directly on your website, or are there any fees in between, like an API fee or anything else? Is there a second one? No, that was it.

Already been asked by everybody else. So, I mean, what we're trying to do, there is no, we don't charge them anything. We are very willing to give people direct access into the GDSs and the OTAs. I mean, the critical thing for us is to eliminate the kind of illegal screen scraping. And if we can kind of eliminate the illegal screen scraping, that makes it much more difficult for these kind of OTA pirates to exist. They get direct access to our fares and ancillary prices in our website. They undertake... So what we do, I think what we do is we free them from the cost of the inter-digital piracy by giving them a direct feed, and they in return agree that the booking will be made directly in our website. So we have the contact with the customer, both the email contact and the payment details, and they agree that they will not... levy any fees or charges on our underlying airfares or ancillary. That does not necessarily preclude them from charging some kind of fee for their services, as many travel agents now do, but it has to be an identifiable fee for, say, the love holidays, for example. They generally do package holidays They may take something or they may make their money out of what the other elements of the package they sell. But the customer booking with them on Ryanair is paying the underlying Ryanair airfare and the underlying Ryanair ancillary prices without any inflation, price inflation or price distortion. And, you know, we don't at the end of the day have a difficulty if... As with the GDS distribution, if travel agencies want to levy a fee for what they serve, as long as the customer knows that that's the travel agent fee, we don't have a problem with it. We think ultimately over time it will be difficult. Consumers will certainly move away from travel agency fees if the fees are unreasonable and will just increasingly book directly in the Ryanair.com website. But critical to all this is protecting the consumer from overcharges and then not having some OTA in a position like Booking.com is with the hotels where they control hotel distribution and they charge them 15, 20 percent of revenues for that distribution. It may work for the hotels, but that certainly wouldn't work in a low margin industry like airline industry for us. Eddie, do you want to add anything to that?

Yeah, I mean, it's just like when the APIs are fully functioning out there, you'll see that people would, it'll be absolutely clear in the case of somebody buying a package of the elements that they're buying, and they'll see that they're getting the Ryanair price, the Ryanair ancillaries, and there's no ability within that flow to add on extra charges. So in that sense, it'll be very transparent for consumers because some of the most egregious complaints we get here are from consumers who buy through pirate screen scrapers. They don't get any of the emails, the service emails, and they're the ones that turn up at the desk and didn't realize, didn't get any of the three or four emails to tell them how to check in online beforehand. So when these things are up and fully functioning, we've done the deals, and while we're working on them in the background, when the APIs are up there, you'll see how transparent it is. Okay. Thanks, Eddie. Thank you.

Thanks, Mike. Next question, please.

Our final question we have time for today is from Neil Glynn from Air Control Tower. Please go ahead, Neil. Your line is now open.

Good morning. Just two quick ones then. The first one, crew rostering has been mentioned a number of times and I just wanted to check. I think you're running at 5.8 at the moment versus 5.4 historically. Should that 5.8 continue into this summer or is it likely to be higher? And then the second question, more big picture question. Pre-COVID, the fourth quarter was generally profitable, and I appreciate there's clearly a range of factors driving a heavy loss this year. But to what extent do you think the seasonality of your earnings has structurally changed? And if that's the case, might this have any ramifications for how you deal with unregulated airport contracts, for example?

Okay, Eddie, maybe you want to take on the COVID.

I mean, the crew rostering isn't the crews for aircraft. It's just one of the inputs there. I mean, where we've made very large inroads is on the support systems that we have here in terms of computerized systems that we have in the operations control center that helps us particularly effectively on meltdown days, which manages ours properly and then spreads them more evenly. So the accruing ratio, like I mean, there's no significant increase. We're keeping it at the same levels that we have, which would be, you know, it would be in the range of 5.4 to 5.8. But I wouldn't see it going beyond that. There's no need to hit anywhere near six or anything like that. But some of this is a function of the number of smaller bases that you have. We're getting much better at managing ours particularly in the peak. So I don't see any sort of more upside that on crewing. But, you know, that will be traditionally higher than where we would have been. And if we didn't have this ATC environment, French ATC strikes and that, we would probably, we should be able to pull that back. But that's some distance away.

I think it's something we are working towards, though. You know, we're pushing hard with the European Commission. I guess the European Commission made one simple addition, which was to protect overflight, particularly overflight over France. You know, it would dramatically transform both on-time performance and ATC disruptions across Europe. And with European elections coming up this year, you know, it's very depressing and... that Europe hasn't moved on this. You know, they're great for talking about the single market and Ursula von der Leyen telling you what you're doing to protect the single market. And yet the French shut down the single market for air travel 57 days last year, complaining about Macron's pension reforms that didn't even apply to them. So, you know, we continue to campaign for that. Seasonality. Look, it's a seasonal business, and I don't think you can ever get away from that. We make the vast majority of our profits in the first two quarters, the first half of our year, which is the June and September quarter. I don't see any reason why the third or fourth quarter shouldn't be kind of break-even or why they should be loss-making. But there are a number of issues there at the moment. We are One of the challenges is that we gear up for a lot of summer growth, and most of that gear up takes place at the end of Q3 and Q4. We have to start the recruitment of pilots and cabin crew, training of pilots and cabin crew. We tend to take a lot of the aircraft deliveries from Boeing in the first three or four months of the year without having been able to deploy those aircraft or use those aircraft in service. So there is a disproportionate weighting of costs into that fourth quarter without, if you like, the commensurate revenues. And that's why Q1 and Q2 tend to be very significantly profitable. I mean, again, I try not to get lost in the short term or in the quarterly stuff. I think the key message here is, you know, even with this morning's new numbers and we are back at where we are at the end of January, you know, we're on track to make over 10 euros net profit per passenger for the first time in a number of years. I think that 10 euros net profit per passenger will be the kind of baseline going forward. I think there's a reasonable prospect, plus or minus uncertainty in geopolitical events, that that number might move upwards from 10 towards 11, 12 or 13 over the next couple of years, particularly as we get more and more game change from max 10 aircraft into the system, where we are carrying materially more passengers per flight, but burning significantly less oil. And I think what's really my key takeaway from this year's numbers is we're about to make 10 euros net profit per passenger in a year when our oil bill went up 30, 40%. We went from being hedged at $65 a barrel in FY23 to $89 a barrel in FY24. And yet, you know, our customers were willing to pay us, you know, modestly higher airfares. better performance than ancillaries at a time when most of our competitors are either still losing money or reporting reasonably modest profitability for the full year. So this is a very impressive model. The costs are heavily controlled. We are widening, hugely widening the gap between us and our principal competitors in Europe on airport and handling costs, aircraft and ownership costs. And I think that will continue for the next couple of years. I think we have a reasonable expectation that despite the surprise or the sudden impact of the OTAs on the Q3 numbers, we'll have a strong year of profitability. And I think a realistic prospect of strong pricing through summer 24, which will deliver another year of strong profitability in the year ended March 25. Neil, I think that's as much I can add on the seasonality. Any other questions?

We have no further questions, but that does conclude our Q&A session for today.

Great. Okay. Thanks very much, everybody, for participating in the call. Neil is doing a kind of a roadshow day through London today, France and Paris and Frankfurt, trying to persuade more and more.

Do you remember me? That's correct, yeah.

Yeah. I try to encourage more European share ownership here. It's not that we don't love the Americans, we do, but we're going to need more Europeans on the share register. In the meantime, we'll continue to try to execute and deliver. And thank you. We are not doing a roadshow on the Q3s. If you are, happen to be in Paris or Frankfurt and want to meet you with Neil, by all means, ask for them. Other than that, if anybody wants to come see us here in Dublin over the next coming month, please feel free to do so. And other than that, we'll see you at the full year results roadshow in May. Thanks very much, everybody. Good to talk to you. Bye-bye.