Ryanair Holdings plc

Okay, good morning ladies and gentlemen. Welcome to the Reiner Q1 results conference call. You'll have seen this morning we released our Q1 results together with an MDNA and a slide presentation is on the Reiner.com website. I therefore won't read the press release, but I'll touch on a couple of key themes. We reported Q1 profit of 360 million, that's down on last year's Q1 663 million. Despite strong traffic growth, traffic is up 10% in the quarter to 55.5 million customers, but this has been offset by weaker than expected airfares, some of which is impacted by the first half of Easter falling into the prior year Q4. Nevertheless, traffic growth is strong, up 10% to 55 million, but it's only strong at a price and we're having repeatedly stimulate fares and bookings and the close in fares and performance of close in bookings has been disappointing and materially weaker than we've expected, particularly on the way into the peak months of July, August and September. We have 156 game changers in the fleet at the end of June, that is 20 aircraft less than we had originally budgeted. We are seeing record summer scheduled bookings, but at lower prices. We are continuing to sign up multiple approved OTA partnerships, which would protect consumers and ensure the consumers get the lowest, Rainier's lowest airfares while we get the consumers correct email and payment details. We've continued to extend our fuel hedges at attractive prices. We're now 75% hedge for FY25 at about $79 a barrel, saving ourselves over 450 million euros in the current year. And we're now extending our fuel hedges for FY26 to 45% of our needs at about $78 a barrel. And as of Friday, we have completed just over half of the 700 million share by back. Touching briefly on our continuing environmental commitment during Q1, we took delivery of 10 Boeing game changer aircraft. These offer 4% more seats, but burn 16% less fuel and have less CO2 emissions as well. And the retrofitting, winglet retrofit program on the NGs continues. We're on schedule to achieve our target of retrofitting the entire fleet of 409 NGs by 2026. These winglets reduce fuel burn by .5% and noise by 6%. However, much of this excellent environmental work is being undone by the deteriorating performance of European ATC. Euro controls old numbers this morning shows that while flights in July or up to July are 4% higher year on year than they were in 2023, it's still 3% less than the 2020-19 levels. Year to date, the number of flights across Europe is 5% below 2019 levels. And yet, we are suffering, as are all other airlines, repeated inexplicable ATC capacity restrictions. These can only arise from material short staffing, mainly in the French, German, and Hungarian ATC areas. And we are suffering horrendous ATC delays, particularly which is inexplicable on the first wave of morning flight departures. They're blaming all sorts of things like adverse weather, et cetera, et cetera, but it is down to under staffing. And we are having our worst summer ever in terms of ATC delays and flight cancellations because as these delays roll through the day, we're having to cancel late evening flights at Curfew airports. We're continuing to call on the EU Commission President Ursula von der Leyen and the EU Parliament to deliver their long delayed reform of Europe's hopelessly inefficient ATC services. In terms of fleeting growth, this summer we're operating our largest ever schedule. We have over 200 new routes and five new bases as we deliver as much low fare growth as possible for passengers and our airport partners in FY25. To that end, Lauda has extended operating leases on three of its A320s out to 2028. And we have agreed with Boeing, we'll continue to take delivery of 737 game changers through the peak months of August and September. All of these aircraft will arrive too late to be able to schedule them for peak summer flights. We'll use them as backups and as spare aircrafts through the remainder of August and September. We expect, and it is real, that European short-haul capacity will remain constrained for some years. As I said, Eurocontrol's own figures suggest that year to date we're five percent behind where we were in 2019 in terms of EU capacity. A320 operators are grounding aircraft for engine repairs. The manufacturers are continuing to struggle with delivery backlogs, more pronounced in Boeing, but also Airbus is failing to hit its delivery commitments. And airline consolidation continues. Most recently, the Lufthansa, the EU approved the Lufthansa takeover of ETA in Italy. We believe IAG's today takeover of Europa should also be accelerated. These capacity constraints, combined with our significant unit cost advantage and a strong balance sheet, low cost aircraft orders and industry leading on-time performance will, we believe, pay in a decade of profitable growth to 300 million passengers by FY34. To touch on shareholder returns, as I said, to date we've completed just over 50 percent of the program. When it's complete, Rhianna will have returned over 7.8 billion to shareholders. We also expect a final dividend of 200 million to be paid to shareholders in September, which will take the total shareholder returns to just over 8 billion since 2008. Rhianna ADS's, following a recent board review, the board approved a change in the ADS ratio so that one ADS would equal two ordinary shares compared to currently a one to five ratio. We hope and expect that this will make the ADS more attractive to new investors and will potentially increase ADS liquidity. Turning to the more important issue, which is the outlook. FY25 traffic is expected to grow 8 percent, but somewhere between 198 to 200 million passengers. We think we're edging closer towards 200 million than 198, subject to no worsening of Boeing delivery delays. We were supposed to take seven aircraft from Boeing in July. That now is only going to be five. Two of those have slipped into August and we're supposed to get 10 aircraft in August. That's now down to eight and probably heading towards seven. So, we're still struggling even to get our delayed Boeing delivery in on time. As previously guided, we expect unit costs to rise modestly this year as our ex-fuel unit cost, most notably pay and productivity increases, higher landing and ATC fees and the impact of multiple 737 delivery delays on our unit costs are substantially offset by our attractive fuel hedge savings and rising net interest income. These gains will significantly widen Ryanair's cost advantage over its competitors and allow us to continue to grow strongly, albeit at lower fares than we'd expected this summer. While Q2 demand is strong, pricing remains softer than we expected, particularly the close in air fares. It is not pricing up the way it has for the last number of summers and we are repeatedly seeing price resistance as we try to close off cheaper seats and we're having to open up again. Close in in July and in August, we have only 34% of September already booked, but we expect this trend will continue. As a result, we now expect Q2 fares will be materially lower than last summer. We had previously expected them to be flat to modestly up. The final H1 outcome is, however, completely dependent on these close in bookings and yields in August and September and we think trend is downwards, not upward. As is normal this time of the year, we have zero visibility in Q3 and Q4, but we see no reason why Q3 and Q4 pricing won't be soft as well and we will have to continue to simulate through the second half of the year. Q4 will not benefit from last year's early Easter and therefore it's too early to provide meaningful full year profit after tax guidance, although we would hope to be able to give you some of the headlines that are H1 results in November. The final FY25 outcome remains so as to avoiding adverse developments during FY25, particularly given the continuing conflict in Ukraine, the Middle East, repeated ATC, short staff, short staffing and capacity restrictions, which is leading to a spike upwards in cancellations or further bowing delivery today. And with that, Neil, I turn over to you for a quick run through the MD&A or highlights on the MD&A please.

Yeah, no problem. Thanks, Michael. I think I'll turn first to costs in the quarter as previously guided. We saw costs modestly up as we saw the benefits or our fuel hedging offset much of the non-fuel inflation coming through, the likes of the annualisation of productivity pay increases and of course the impact of the bowing delivery delays. Balance sheets in very good shape. We finished the quarter with 4.5 billion in gross cash. That was after half a billion at Capex and we'd spent about 250 million on the buyback, which we all know started in May during the quarter. Yeah, cash improved from 1.4 billion to 1.7 billion. And just on the buyback, as Michael said, we're now over halfway through the programme at this stage. It's going very well, a little bit ahead of expectations on that. And Michael, I'll hand over to yourself then.

Okay, thank you. Before I open up to questions, I'm going to deal with the first question. What does material mean? We don't know what material means, although clearly we think the minimum floor on price falls into Q2 is going to be above 5%. Could it get to double digits? It could. It doesn't look that way at the moment, but pricing on closed-in bookings is getting weaker as we have moved through July. We see no reason why that will change in August and certainly no reason why it will change in September. We are now going on a front foot aggressively and we will continue to aggressively advertise low fare availability. We will maintain our targeted -96% load factors. We have a much lower cost base than any other airline and if the fares are going to be materially lower this year, then that's what it's going to be. We repeatedly guide everyone that our fare guidance, to the extent that we give fare guidance, is always dependent upon closed-in bookings. And the reality is that during June and also now into July and August, which is surprising given the capacity constraints, closed-in pricing is materially weaker. It is down on where it was prior year. Why? We don't know. We look around and we see the consumer spending under pressure all over Europe. There's no one market where we're seeing any material strength or weakness. We think the consumer is under significant pressure across Europe. Interest rates are materially higher, mortgage loans, etc. are materially higher. Most consumer-facing operators are under pressure and we believe that is being translated into air People are traveling. We are growing strongly, although we're growing at a slower pace than we had originally budgeted to because of the Boeing aircraft deliveries. But we are having to increasingly discount to fill our flight. We think that's good news for passengers, even if it means short-term pain for shareholders. I share your pain obviously, but we're better off at the moment. If the consumer is under pressure and there has to be price discounting, then we will lead the discounting and we're going to continue to lead that price discounting through July, August and September. I will now open it up for questions please.

Thank you. If you would like to ask a question you may do so by pressing star flow by one on your telephone keypad now. If you do change your mind please press star flow by two. When preparing to ask your question please ensure your line is unmuted locally. Our first question today comes from Stephen Burlong from Davey.

Please You talked about ATC there firstly. I seem to remember that they were recruiting or investing in Carl's Drew and I was just wondering if you heard anything from Eurocontrol that maybe by next summer things will have normalized or would you be not optimistic about that? And then the second thing I was just wondering about cost inflation in the industry. Do you think that whether it's staffing or operations it's sticky and if it is and the pricing isn't do you think that the industry in theory could have lower margins post-pandemic than pre? Thank you.

Thanks Stephen. Eurocontrol is a mess and I think even Eurocontrol are in denial. The figures they're producing shows that years to date European flights are 5% below 2019. They're 3% below in the month of July. They're 3% below 2019 and yet we rail against Eurocontrol about their performance and the performance of the ANSP. They keep saying oh the capacity is up 10-20%. We're at record levels. We're not at record level. We are putting a lot of pressure as our other airlines by the way. When you really drill down into it you know there is a marked increase in thunderstorms over Europe this summer but that would affect punctuality through the day. Where we are highly critical of Eurocontrol and the ANSP is we're typically having about one in four or one in three of our first wave departure flights early in the morning being delayed by capacity restrictions when there's no aircraft up in the air. There's no reason why. The only reason why first wave flights are being delayed is because they don't have enough staff deployed for the summer schedules. I talked over the weekend to other competitor airlines and they're seeing exactly the same thing in fact worse. If the first wave of flights are delayed it is because and we are aware that the French are materially understaffed on the first wave. The Germans are under control covering up this massive underperformance by the French, the Germans and the Hungarians in particular. In actual fact the air traffic control this summer is much worse than it was last year. Last year we had 53 days of French ATC strikes. In many respects that was easier to manage. You just cancel the flights everybody knows it's a French ATC strike okay and you cancel the flights and you re-accommodate passengers. The problem we're having at the moment and all airlines are suffering this is across Europe we're having massive time delays on the first wave of flights. No way of picking that up during the day and then you're running into cancellations on later flights that evening either because crews are running out of hours, or curfew airports won't let us in late which we understand. I'll give you just an example of that over to this weekend. Now it was compromised by Friday's computer failure. Our ATC delayed more than one in three of every Ryanair flight this weekend. So ATC delayed 37% of our flights on Friday, 35% of our flights on Saturday and 35% of our flights on Sunday and we're the largest airline in Europe. It is a shambles of understaffing mismanagement and I would point to the fact that ATC fees have increased by 15% over the past three years since 2019. So we're being scammed for significantly higher ATC fees by these government monopoly ANSP's who then don't properly staff and recruit and staff for the the schedules that we've already filed some six months ago. So it's we're seeing among our competitors are seeing some material cost inflation. Labour is obviously one where a number of our competitors are out there now conceding significant pay increases. Much of that is to catch up with the pay increases that Ryanair had negotiated with our unions and our pilots two, three years ago. The Arlingas pilots haven't had an increase since 2019 whereas the Ryanair pilots have had increases in 2024. We also have been seeing pay increases in 2025 and 26. However our pilots are flying larger aircraft. These aircraft are burning materially less fuel so I would think on the labour side while it's challenging out there our pilots are materially more productive. We are seeing some airports where we operate where you know particularly in Portugal where you have airport monopolies like Vinci who own Ana in Portugal are you know significantly increasing airport fees because they have a monopoly down there. We are negotiating though a lot of growth incentives and discounts for growth. I would point to Italy in particular where a number of the regions in Italy have scrapped the municipal tax something that we certainly applaud and would welcome. So there's a balance. I think there is as capacity will be constrained for the next two or three years. I think we are facing a period of cost inflation generally within the airline industry but as capacity is constrained I think that will be reflected in higher airfares particularly among our high-fare competitor airlines across Europe. It's just we're not seeing it this summer because consumer I think is under pressure with higher interest rates and certainly average airfares are lower than they were in summer of 2024. Now we did in 2023 we did benefit from two years in summer 22 and summer 2023 of double-digit fare increases. Maybe this year is just the rebalancing but ultimately over the medium term I think airfares will be higher in Europe. They're materially lower in Europe than they are in North America and we do tend to trend up behind North America. Adrian you want to say on airfares?

No I mean like no more than what you said already in terms of that the demand is there but the consumer is reacting to pricing and that is generally across the piece, generally across markets throughout Europe. So it's a question of you're trying to you're trying to ratch it up there but the consumer has reacted to this generally as soft as a third mold, nothing else really. Thanks Eddie. Next question please.

The next question comes from Jared Castle from UBS. Please go ahead your line is now open. Jared hi.

Hi thank you and morning everyone. I mean it's just on fares I don't want to spend too much time on it because I think a lot gets said but I mean you say demand is there but you're having to stimulate which does suggest that not everything is well on demand fronts and I mean I guess you've acknowledged that the consumer is feeling some pain at the moment as well but I mean I guess has surprised you just how quickly things have deteriorated because it seems still like in June things were you know might be okay so has there been a step change I guess is the question around that and then just coming back to cost as well I mean you know by far you're the industry leader I don't think it's even a question but you know this is the second year of extra unit cost going up. I mean when we look out I guess to to March 26 you know do you see kind of inflation abating and I guess extra unit cost being much more stable from here on out. Thanks.

Thanks. Are we surprised at pricing? Yes. You know we did see a weaker Q1 you know partly that was the move of the first half of Easter into Q4 but you know at that point in time you know we had about 30 40 percent of the Q2 bookings in we were on targets but I mean Q2 was certainly softening like we were moving down if you go back to our original sort of you know expectations rather than guidance on pricing we started off the year we'll be up maybe five to ten that was an attempt on our part to walk back from up 20 percent last year it won't be a third year 20 percent. In Q1 we're now saying no it won't be five to ten it'll be maybe north to five it's getting weaker and I think we might have been so you know I think there was reasons to believe that the peak would be that the price would be into the peak it hasn't been you know and everything here is dependent upon the close-in bookings and the close-in bookings we are having to continue to stimulate close-in bookings so volume is there I mean we are growing you know by far the largest here and we are growing as of you know eight to ten percent above this time last year. June was the first month for example where we've ever carried more than 19 million scheduled passengers we didn't even do that in August of last year but the close-in bookings are materially weaker we have for each of the last four weekends attempted to close off some of the cheaper seats and drive people up as we come in and each weekend we've been running 50, 100,000 bookings less than target and we're opening up again on Monday and Tuesday so it's not that we're not trying but ultimately the consumer is king and if the consumer won't pay those higher fares we simply will accept that that's the way the market is going to be this year. I look around the marketplace generally there's carnage all over any of the consumer facing stocks of cattle, carpet right going into liquidation, all the luxury goods though we're not necessarily luxury goods but the consumer is under pressure and we have had two years of very strong price growth we're not I thought we would have modest price growth this year I mean what has surprised me is how weak pricing has been despite the fact that capacity still hasn't recovered to 2019 and that I think is the greatest surprise but you know if close-in pricing is weaker than we expected we live with that we will respond and are responding immediately by opening up some cheaper seats close in which is why we're hitting our kind of target 95% load factors during the summer months but we now accept that Q2 is going to be materially weaker on pricing it is going to be above 5% it could be 10% it could be into a double digit number at the moment it doesn't look like it but the trend is downwards and weaker so I would rule nothing out and it could well be a double digit decline in pricing in Q2 and then if that's it if it's double digit down pricing in Q2 all bets are off in Q3 and Q4 we will simply go into Q3 and Q4 load factor active price passive and that is the way it will be in terms of costs again yes there is a I mean our cost increase is modest the unit cost increase it would have been better if we had got all the aircraft deliveries from Boeing you know we are 20 aircraft short of what Boeing had contracted to deliver we have recruited the pilots we have recruited we are over crewed on pilots and cabin crew mind you given the right the amount of ATC disruption we're in a reasonably fortunate position is that we're have significantly better on-time performance than almost any other airline in Europe but we are burning through huge amounts of crew hours both pilots and cabin crew trying to deliver schedules where ATC are delivering you know yesterday for example we were looking at two and three hour slot delays through the middle of a Sunday in the second last Sunday in July so will unit cost be setting up yes do I believe that will continue out into 2026 I think it will moderate itself but a lot of that depends on Boeing delivering us aircraft and we're already now focused on our spring 2025 deliveries and as of our last conversation with Boeing on Friday some of our spring 2025 deliveries are going to be delayed into the peak summer of 2025 again now the numbers will be a lot less we will certainly have the benefit of the 20 delayed aircraft deliveries this summer which we will get before the end of the year but we will have less capacity into summer 25 than we are originally scheduled to have with our Boeing delivery and then we're into two years of essentially no capacity growth at all and if the consumer is going to be under pressure for the next year 18 months that might not be the worst place to be but at this point in time all we can see you know I caution here you know as of today's date we have 95 95 percent of July already sold we've only 74 percent of August sold so we've another 20 21 percent of the bookies to take in August we've only 40 percent of September sold so we have you know when we get we go back here we say we've mature we don't have visibility we really don't have visibility numbers are heavily dependent on the toasting bookings and whereas as is currently the case toasting bookings are materially weaker in terms of price that's what it will be and that's where we're going thanks Jared next question please

the next question comes from Alex Irving from Bernstein please go ahead Alex your line is now open

thanks good morning gentlemen and two from me please first of all I think whether the demand change is structural or cyclical I don't ask what the Fed is going to be next summer but do recent demands in fair trains change your own internal steady-state expectations of where net income the passenger is likely to be as we go out into F26 F27 and beyond and then second on ancillaries right broadly flat per passenger year over year this quarter is that basically just Easter moving or do you think that is slowing down too how should we think about the path of ancillaries for passenger going forward thank you

Neil I might have to ask you with ancillaries is demand structural or cyclical look I think the price there's nothing wrong with demand the pricing is cyclical the consumers under I mean our guess is the consumer is under pressure out there and you know they're simply not willing to pay up even for close-in bookings when we try to close off cheap said some of the cheaper seats at the moment bookings die when we open up again bookings recover and you know we are still will grow this year from 183.5 million passengers last year towards 200 million do we think there's any longer term change in the trend of people traveling across Europe no we don't but it may be if they're but they I certainly am of the view they're going to be price-censored the remainder of this year and maybe into summer 2035 unless there's a material change in interest rates or you know consumer disposable income and it seems to us that the consumer across Europe is under pressure at the moment and that's a they're going to be more price-sensitive that's good for our model we do have an a wider cost gap between us and every other airline in Europe we are adding more aircraft if and when Boeing deliver them we're adding more aircraft with more seats that burn materially less fuel and so not alone are we hedging better into FY25 and FY26 but we'll also have a higher proportion of the fleet will be burning materially less oil and carrying more passengers and we believe that max 10s if and when they get certified and delivered in 2027 onwards will structurally lower our unit cost base and so we believe we have material cost advantages going forward over the medium term I see no alteration to the supply dynamics in the European sector there will be less airlines operating in Europe there will be offering less capacity nobody the 8320 groundies will continue for summer 24 summer 25 but at the moment until the consumer the consumer spending begins to improve I think we should be bearish on pricing and expect pricing will continue to be down year on year

Neil Ancillaries sure Alex how you doing on the Ancillaries as you saw we were flat on a per passenger basis different products doing different things seats are running ahead of ahead of last year as is on board spend the teas the coffees the the duty free priority boarding is a little bit tougher this year so it's not rising at the same extent so I think now this stage into Q2 we're probably looking at flatish Ancillary again and beyond that it's too hard to call but you're probably looking flatish with a fair wind marginally up but no better than that

Thank you very much Neil. Next question please.

The next question comes from Harry Gowers from JP Morgan please go ahead Harry your line is now open.

Hey morning Michael now first one just on the weakness in Q2 fairs I mean is this completely network wide in terms of the weakness or is there any particular pockets geographies or any particular cohorts that you might be able to call out and then second one I mean the buybacks obviously running well ahead of schedule 50% done is is it a base case for you guys that we might get another announcement or an extension in a few months time thanks a lot.

Thanks Harry no there's a network wide you know given our scale you know and I think we're authors of that wherever we're a pricing if we're pricing aggressively we tend to be pricing aggressively across the piece there's no one market where if we're doing lots of 19.99 C sales and 20% off C sales there's no one market where we're suddenly pricing upwards so it is across the piece it seems to be system wide and no unique markets there on the buybacks as I said you know we've indicated previously that the buyback we expected to complete the 700 million buyback by the September AGM it is no secret that the board is looking at a you know maybe a top-up buyback but that would be a decision that would be taken probably at the board meeting at the AGM and if we have something to announce it would be announced either at the AGM or the second quarter or that half your results in November. Thanks Harry next question please.

The next question comes from Shandley from GoodBuddy please go ahead Jolene is now open.

Goodly hi. Good morning Michael and two questions for me if I may first of all just on Boeing I was wondering if you could give us an update on what's going on there because the last thing we heard from a lot of customers was that things were improving slowly but they seem to have taken a little step back for you guys based on what you said earlier and then second of all if we take a step back and think about the gap before the max terms arrive how should we start thinking about network optimization in that scenario?

Okay thanks Dully I think it's fair to say we believe the situation in Boeing has improved but you know we're still running into glitches we had thought we were going to get seven aircraft in July that's now five we were going to get 10 aircraft in August that's now eight so you know presumably over those kind of two key months we're going to be five aircraft short. The greater concern at the moment you know but it's developed as recently as last Friday is our deliveries in 2025 we're originally supposed to get 29 deliveries between the end of February February to the end of May they're now moving towards March to the end of July and we don't yet have a handle so we've sent Boeing back on Friday please explain why these are moving there's no reason why these should move I think there is a risk of labour disruption in Boeing in October when the contracts come up for a new but we were getting a little concerned like I don't want we can't have a second summer in 25 what we've had this summer where we're constantly chopping and changing schedules because of you know Boeing aircraft delivering a week or two weeks later than they had originally promised but overall I think Stephanie Pope was doing a job there is at least management on the ground in Seattle where there's someone we can talk to it's just the schedules are sort of moving slightly backwards. The bigger issue there you know if they leave us if we're 10 aircraft short for summer 25 it's not the end of the world particularly in this softer pricing environment we will still have probably the guts of 30 or 40 additional air of capacity growth for summer 25 or summer 24. The bigger issue now is getting the Boeing the Mach 7 certified in the first half of 2025 the Mach 10 certified in the second half 2025 which would then mean we would not expect any delays in our the first 17 with our first 17 Mach 10 deliveries in the spring of 2027 but it is important that Boeing hit those Mach certification dates and also that their plans step up in production both they and the Airbus are planning steps up in 2640 aircraft a month that they achieve those dates otherwise we run into delays on our spring 27 deliveries but that's not really germane at the moment I think where we are at the moment we particularly if you know in this softer consumer spend environment I think we'd be reasonably relaxed to take the the remaining 49 aircraft deliveries were due from the end of July this year up to the end of July next year and then no capacity very little capacity no capacity growth in FY in summer 26 very little in summer 27 that's probably the right place to be with no capacity growth in Europe as we would hope consumer spending will recover over the next two or three years in a marketplace where capacity remains constrained. Over the medium term you know we are already we have always been engaged in network optimization we are constantly churning aircraft routes I mean we've had the example this week of Bordeaux who we have a through or three aircraft base in Bordeaux and they materially what they basically wedged on our agreement the cost dramatically escalated so we announced the closure of Bordeaux within a week of the that closure we had six other French airports on looking for those aircraft now it's likely those aircraft have to be churned outside of France elsewhere because we have better growth at better costs elsewhere we had planned to put three aircraft into Dublin this summer again we have this mad capacity cap at Dublin airport and an incompetent green transport minister who won't do anything about it so the those three aircraft two of them went into Italy where they're scrapping the municipal tax and one aircraft went to Poland so you know we are continuously churning but there will be and we are having more aggressive more kind of aggressive discussions with a number of airport partners into the winter of 24 summer 25 because there is going to be a greater rate of churn particularly of underperform either underperforming airports or those airports where costs are increasing. Portugal is likely to be an area focused there we've already closed the Pont del Gada base I think it's likely given the cost increases the Madeira base will close and they whereas Italy for example where municipal taxes being rolled back in costs are falling we'll see a greater allocation of aircraft. Eddie anything you want to add to that in terms of? Yeah I mean it's

really sort of I suppose two phases I mean like we've done a huge amount of work over the last two to three seasons on utilization now it's looking at the quality then of the what frequencies we have on it but that also feeds into cost you've called out most of them there and if you look in places like Morocco where we still have some element of utilization to go as we tag on domestics but the one other call out I would give that has a structural cost problem there is Germany and so you're you're now having taxes or charges per passenger there and north of 55 close to 60 euros you know as they have what you would see as a secondary major airport in Germany and you know they will be front and center along with Portugal to say and other high cost countries and regions in this churn so the churn will be will be more than it has been in previous seasons because we're not growing as much and that there are less alternatives out there for airports so there will be a big focus on that now over particularly over the next number of weeks for summer 25 and then beyond.

Thanks Eddie next question thanks Dudley next question please.

Thank you the next question comes from Jamie Roboton from Deutsche Bank please go ahead. Jamie hi.

Hi Michael two from me first one obviously you've talked again today about the constrained intra-european supply but obviously one could argue stubbornly that last year's price point was actually now oversupply rather than undersupply which is why you're having to lower the fares to fill the planes you touched on this earlier how bad would it have to get to start practically moderating down the capacity growth for summer 25 rather than it coming organically by the Boeing delays or do you think the consumer just comes roaring back from whatever's weighing because you just mentioned you know growth in 25 then non in 26 27. I just wonder whether there may come a point where the other way around starts to look like a better plan to allow the consumers some breathing space. Second one for Neil may be on the non-fuel unit costs in Q1 the maintenance line came in lower certainly than I expected and you mentioned on page six of the release of supplier credit in there presumably from Boeing have you as I suspect you might have a fair bit of credit stored up allowing that line to be lower than normal for the rest of the year or would there indeed need to be further delays for this not to go back to being higher maintenance cost in the coming quarters. Thanks guys.

Thanks you broke up in the middle of that but I mean if I understand the gist of the question is you know would we if in a softer pricing environment would we not I don't know take delivery of or not deploy those aircraft for summer 2025 if that's the question the answer is no in a softer pricing environment we will take the capacity and we will fly it more if we can we would take more market share from competitors given that we have a much lower unit cost base we will accept lower margins and lower pricing and if that means we push some more competitors out of our markets then that's the way it will operate. We prefer periods of recession or where consumers are under pressure because that's when we grow best and lay down the kind of market shares for improved medium term kind of profitability etc. So we will take those aircraft I would take them as early as early as I can in fact we've already said to Boeing United at once as we were talking walking away from Max 10s in 25 or 26 that they did that we take them at our pricing so no if there's a consumer pricing is soft that's our marketplace we will grow and try to grow faster in those markets at lower margins we have a much lower cost base the unit cost base if we grow faster will be slightly enhanced or improved but at the moment the Boeing delivery delays are constraining our ability to grow and are also at the edges damaging our unit cost performance but overall our cost base is our cost advantage is widening over all of our competitors and they'll have to decide for themselves what they want to do in response to our lower pricing and Neil you want to take the second half of that question?

Yeah I will do Jamie yeah you referred to the maintenance line there there is a modest credit from Boeing in the Q1 not material we have an agreement with them in relation to compensation again confidential they're very heavily motivated to get the aircraft in on time so if aircraft start coming in on time then it won't really be a particularly material number if there are significant delays then that number could get bigger but for the Q1 was totally immaterial

Thanks guys thanks Jamie next question please

the next question comes from James Hollins from B&P Paribas please go ahead James your line is now open.

Hi how you doing? Yeah just on the on the revenue clearly you very well flow the consumer problems I'm guessing five new bases see some root and maturity in there as well I was wondering if we could lay any blame on your revenue management systems and maybe not building the load through the booking cycle as well as it should and if that's something you need to address and the second one 74% sold for August thank you for that number I'm wondering if you might put a number on what you've actually sold at or whether the guidance is all down to an assumption of late bookings weakness thank you.

Yeah okay on the revenue management no I wouldn't put any blame on them in actual fact they've done a terrific job in a you know they noticed that we pick up faster than almost anybody else that pricing is getting softer you know when we were the first ones out in March April talking about pricing being softer than we had expected we were the only ones every else oh no we're not seeing any we're not seeing any and then two or three months later they're all seeing much the same thing but I don't worry about what they generally they say we at the moment in July we went into July about one and a half percent ahead of target where we were in target bookings which is why we thought now okay let's turn off some of the cheaper seats and price up into July every time we've attempted to turn off we have struggled to make sales or we failed to hit our either daily or our weekend volume targets and we've had to open up again so we went into July about one and a half percent ahead of target as of this morning we're still 0.5 percent ahead of target so we'll finish July just after marginally ahead of targets now we have had a shed load of cancellations during July over 400 this weekend mainly due to the computer system and ATC delays over the last three days but you will see us hit you know impressive load factors and traffic volumes in July but at the moment we're half a percent behind the target for August and we're about half a percent behind for September we need to get that back towards you know being half a percent ahead we want to go into each of these months slightly ahead of target so that we have the availability to open up or close off or open up as we need and so no the revenue management system is bang on where it needs to be they have done everything they can to try to price up into the peak summer months and in fact we've fallen one percent we are against target as we've moved through July but we're still half a percent ahead of target they've protested August and September but we're half a percent behind in August and September we will close that up over the next couple of weeks so yeah no I think the revenue management team are doing an excellent job our philosophy here is to be load factor active yield passive now we have tried in the last couple of summers to be more yield active because we had such strong demand into the post-COVID recovery I am surprised at the weakness of pricing given that Eurocontrol's own numbers confirmed this year yeah while capacity is up in July it's four percent higher year on year it's three percent behind where it was in 2019 but there is no doubt that the consumer is more price sense I've talked to one of the long-haul carriers a week ago and told me the transatlantic is softer this year than it was last year everything just points to the consumer spending being a little bit softer than we had expected and we I thought we'd originally been cautious and in guiding this year that for summer pricing fares would be you know it'd be up five to ten percent after two years of up 20 percent we weren't half cautious enough but we have zero visibility what was the second part of the question that was the revenue management system oh yeah can I give any indication of what that pricing is in July and August we've given it to you this morning it's in the pricing will be materially lower than it was in 2023 and I'm not willing to define what materially lower means I've just said it's above five and it could be double digit it's not double digit yet but I think the way it's trending it could well be double digit by the time we get to the end of September for q2 okay thanks thanks James next question please

the next question comes from Satish Sivikumar from the city please go ahead John I got

two questions here first is on the fleet to crewing ratio so obviously yeah ATC's are impacting right now but as we go into the winter how should we think about that ratio will you see that turning back to 2019 and or if at all when do you get back to that level and the second one is given that you got to do some time stimulation now what does it mean for winter capacity do you see some scope to optimize winter capacity again both midweek as weekend as well yeah thank you

okay thank you they're going to ask maybe to deal with the first half which is the crew ratio and then I'll deal with the winter capacity

yeah I mean the the crewing ratios are are very strong I mean with both with pilot and cabin crew in particular pilots you've got a plan a full 18 months out and we would have been like in previous years we would have been down to you know five five point two crews for aircraft we're now around five point eight crews cabin crew are probably in a more healthy state and and you know we have needed those for the for the disruption that we've had to to run standby crews particularly as the days if you've got delays and you have to call in standby crews in the late evening to do the final sector sometimes and many of our competitors just don't have that resilience built in into their crewing which means that there are substantial or significantly more cancellations but are we going to pair it back we've always said that we will pair it back but not until you know ATC is fixed we've we've gone through all the other areas of resilience that we've bolstered up over the last number of seasons both in our operations control center here by doubling the capacity there and the sort of physical footprint of it along with a lot of new systems are now critical for us in planning disaster days like last friday and i think we're significantly better at that yes we would like to get crew levels back but now is not the time to do that we need those crews but over time yes there's some there's some headroom there for us to pull down

in terms of winter capacity to teach no there's no change we have as you know we're on track we to get very close to 200 million passengers this year that would be up about eight nine percent year on year q1 traffic is up 10 q2 traffic we think there might be a fraction below that could be nine ten second half of the year we expect it to be up kind of eight ten percent as well we are there are some pinch points there dublin for example because of the cap we may well not get a stop for the extra flights we normally do at christmas but we will redeploy those aircraft to doing christmas extras elsewhere our response to weaker pricing would be if it's going to be a weaker pricing this winter we will accept weaker pricing but we will deliver the traffic we wouldn't and cut back at the capacity growth we wouldn't add it either i mean if you take 20 we're expecting to get from bowing this winter they we don't plan to deploy those aircraft we will need them for next summer schedule april may and june but it will be steady as she goes and we will take the pain on the pricing tracy anything you want to add in there in terms of winter capacity yes

we just continue to do what we always do a network optimization we will reduce capacity in the stock to trading periods midweek in january 7th of march and we've three bases for the winter reggio tangier and trieste and then we continue with winter sun and expansion and centrality in the eastern european market

okay and morocco i think would also be a mark where we would grow meaningfully in morocco this winter where you winter sauna but also a growing domestic presence in the moroccan market thanks to these next question please

the next question comes from raymond james please go ahead your line is now open hey good morning um

just uh just a question on another question on just the fair booking environment you know some of your committers have talked about maybe the book summer booking season extending a bit further out i wonder if you're seeing anything on that front i know you mentioned september's only 34 book so maybe too early but um and then on the second question i was kind of curious what the significance of the win against bookings.com on friday was

okay sorry you broke up a little bit what was the first question the summer bookings is are they likely to extend longer is it just the season extends you've

had some competitors talk about maybe summer bookings extending longer than normal so the peak maybe being a little bit longer i'm wondering if you're seeing any of that

our monthly traffic stats are you know our monthly traffic you know our summer schedule runs through to the end of october and the traffic does dip in september and october but you know we would expect to see strong load factors i would kind of slightly counter that is that we're in a weaker pricing environment so you know i think we will see strong bookings through september and october what we don't yet know is what the pricing mechanism will be you know of october and as we stand today you know we have less than 20 percent of the seats sold for october so i wouldn't hold too much of a truck the summer travel period is extending you know we're short whole year-round operator we do cut back as tracy said capacity meaningfully in the winter but during the summer which would include september october we keep going but we keep going at weaker pricing currently the pricing environment is materially weaker the win over booking.com last week i think is seismic you know we had seven days or five days in front of a jury and courts in delaware uh we were you know and the the verdict of the jury is comprehensive we won on almost every we lost only one of 12 points on our suit against booking.com which means we have now our jury has now established that booking.com were in breach of the the u.s computer fraud and abuse act they also found that they that abuse that they were the deceptive trade that they had knowingly and with intention to and intent to defraud have been illegally screen scraping our website we had so much evidence of booking.com scamming consumers by overcharging them for rhino airfares and rhino air ancillaries booking.com with a battery of lawyers arrived in saying no we don't do that maybe we don't do that we don't do that it was kind of trumpian defense and the jury just shot it down that was i thought also quite significant that the jury found in our favor on all of bookings counter the suits against us which is that we had defamed booking.com by calling them overcharging pirates that we have somehow engaged in unfair competition against a 130 million billion travel behemoth and that we were engaged in deceptive trade practices i mean i was surprised that booking.com allowed this to go into court given that the evidence against them of what the scamming that had been going on them illegally scrape or illegally scraping our website and using it to overcharge customers for overcharged customers and then try cover it up with the you know by giving us fake email addresses and fake payment details they claim not to and i think what was notable is that booking.com took us off sale about four or five months ago in the run-up to this case and then you know what they're kind of defensive what we don't sell rhino anymore no but when you did you were scamming them i think it is what's interesting is now whether they appeal or not we don't know i'm not sure there's any grounds for appeal but that might not stop them anyway but i think it will now be materially difficult for booking.com to scrape any airline's websites now other airlines who have higher fares may not mind working with booking.com we object to working with booking.com on the basis that they are going to overcharge our customers for our airfares booking.com have the same opportunity as all the other now approved otas if you want direct access to the rhino.com website you can have it but only if you agree that you will not scam and overcharge our passengers and you must show and display our real airfares and our real ancillary prices and you must give us the genuine customer emails and payment details almost every other ota has now signed up for that with two notable exceptions booking.com who also have kayak and in the state and e-dreams a spanish pirate in europe but we think ultimately their models are now ultimately flawed it's fine for booking.com who do deliver you know meaningful distribution for hotels and accommodation but they charge those hotels accommodation 16 20 percent for their services it is not fine for them to try to and our customer in what is clearly an attempt by them to grab a huge volume of our bookies and turn around and try to overcharge us or the consumer and the reason they've been overcharging consumers for rhino airfares is because rhino won't agree to pay them a fee for their non-existent services we don't need booking.com to sell rhino airfares across europe and we have the lowest airfares we're surprised that other airlines do but that's a matter for them but i think it means i think that they the booking.com ruling is now i think the death knell for ota's illegally scraping the rhino air website and therefore they will not be able to insert themselves into the relationship between us and our customer and then turn around and either charge the customer a fee or turn around charge rhino air fee so i think it is pretty seismic we'd be interested to see what other airlines do in north america you know when in our view they should turn until booking.com stop overcharging their customers but that's a matter for them but we think the booking.com model in so far as it relates to accommodation is valid if you know they've made huge multi-billion fortunes out of it but scamming customers for overcharged airfares is not going to work going forward after the delaware ruling thanks avi next question please

the next question comes from duane finningworth from evercore isi please go ahead your line is now.

Hey hey good morning can you expand on the board's decision to change the exchange ratio on the on the ads you know how to adr holders navigate around the foreign ownership restrictions and do you think this will help the ads trade closer to parity with the locals from evaluation perspective.

Thanks duane i mean look we're trying i've always been with the challenge we have even in our own present buyback is the ads have always been a reasonably illiquid they're closely held by a number of very large shareholders and so what we're trying to do is to make them a little bit more or create a bit more liquidity in the ads program we do believe if we can do that that it may help ads liquidity i'm not sure it will until we resolve the the ownership and control restrictions here in europe where we are pushing hard together with a number of other airlines that there should be controlled restrictions but not ownership restrictions i'm not sure that the gap between the european ordinaries and the ads will close and maybe i might ask neil for a comment on that i might ask julius from a legal point of view to comment on it as well as neil

yeah i think that's very common in relation to the premium there's quite a large premium at the moment on the ads compared to the ordinary shares we did look to dwayne asks where our ads are trading in absolute terms versus other airlines and travel industry stocks and it's a head off by with some considerable distance so it makes sense to effectively realign to bring the price down close to 50 or 60 and ads is where which is where kind of we'll get to following the split and that may hopefully increase liquidity because we need that liquidity to not only finish the current buyback but to also do future buyback so that we can get closer to 50 percent eu ownership and control and then see where we go from there and i'm sure julius may have some color on that

so julius i don't know if you want anything on the ads issue and maybe i might also ask you since it was your team have any any commentary on the booking.com ruling in delaware sorry i should have asked you to comment on that in response to savvy's question so firstly the ads and secondly the booking.com ruling

thanks michael hi everyone the change of the ratio in the ads won't immediately impact on our own and see situation we are still over 48 percent eu owned at the moment and trending up slowly at this stage but we think it is within sight that we will get over 50 percent at which stage the board will be in a position to restore voting rights for non-eu shareholders so it's helpful in that context and in relation to booking.com i think one the only thing i would like to add to what michael said before was that this is the fourth significant ruling in the last two years in our struggle against screen scraping the first of those was against last minute in the paris court of appeal in 2022 when the court said that screen scraping of our website is equivalent to free riding on our investment this was a case against last minute we then had a island against flight box a polish provider of software for screen scraping which essentially said the same thing that that screen scraping is unlawful and then the court of appeal of milan again in the case taken against us by last minute earlier this year said that our objection to screen scraping does not amount to an abusive dominance position so it removed that hurdle so with the booking.com ruling in the u.s i think it is fairly clear it should be fairly clear to all that screen scraping is unlawful and must not continue so it really puts e dreams in a very difficult position as pretty much the last ota that still continues to scrape our website

thanks

julius

thanks dwayne next question please

the next question comes from manoeuvre kyanee from bank of america please go ahead your line is now open hi yes

i just wanted to ask on now that etha and lufthansa have the green light what's your view on the italian market and any comments on the remedies that have been proposed proposed especially at lennata and then secondly for neil just if you could remind us on the capex outlook for this year and next year and i know you're expecting the max 10 certification next year but if there are delays on that how should we be thinking about the capex profile like when would you when are you scheduled to start pre-delivery payments on the max 10 for now thank you

thanks manoeuvre i mean i'll touch on the lufthansa takeover you know we welcome the ruling out of europe i think it's depressing that europe is so slow to approve what is the inevitable consolidation of the airline industry in europe we believe and have long supported lufthansa purchasing etha you know the alternative is that the italian taxpayer keeps bailing out every time it loses money which is an annual event in etha so we think it was is long overdue obviously we don't think the over slots in lennata we are not interested in stocks in that day we do think easy jet or somebody will take up those slots but ultimately it seems to us that the only way the likes of ita tap in portugal sas up in scandinavia are going to survive over the medium term is going to be some process consolidation whereby the high fair legacy carriers gather or have coalesced together we will continue to expand across europe with a much lower cost base than the other airline and therefore we think that that consolidation process is ultimately good for our growth we see strong growth in the italian market we do believe that etha will do as they have done in every other that will be pivoted capacity into feeding from italy into the two big hubs in germany munich and frankfurt there'll be less capacity deployed doing o and d markets from italy to europe or italy domestic and we will certainly be adding more capacity into those marketplaces to ensure that italians do not become the the victim of lufthansa's very high airfares as german consumers are currently struggling with the german market is the least recovered market in europe it's operating about 82 or 83 percent of its 2019 capacity and the germans are now paying among the highest airfares in europe as a result but it is inevitable i think that the consolidation process should continue and we think there should be a much faster clearance process that should consist of handover slots at congested airports and get on with it and if you want to put on capacity and also what will happen now if the max 10 certification slips please

yeah well on the capex manoeuvre no change from the guidance that i gave back in may so we're looking at about 2.3 billion capex this year although that's predicated on all of the aircraft coming in this side of 31 march next year we're looking at somewhere between 1.1 and 1.2 there could be a little bit of timing between this year and next year depending on Boeing deliveries the max 10 doesn't really become meaningful from a pdp perspective or from a delivery perspective until actually 2027 and there there will be the first pdp's due within the next kind of 12 to 18 months we'd be hopeful as michael said in his opening comments that the certification process will have moved on and that we'll be taking our first aircraft as planned in the first half of 2027 so it wouldn't have an impact but if there was to be a move out the first couple of years of pdp's are not that meaningful in any event

okay thanks manoeuvre thanks to you next question please

the next question comes from gerald from liberum please go ahead your line is now all right

morning i've one two from me if i can um you talked at great length about the air traffic control delays i was just wondering whether you might be able to quantify the cost in any way and secondly i think you mentioned that you extend the leases on some of the now the a320s how much scope is how much more scope is there to extend further leases or are you have you extended everything that you can already

okay thanks gerald it's been impossible to quantify the cost of these a t c delays you know coming into that we're now in the peak travel period this time last year you know we'd had 53 days of french a t c strikes now though the strikes are easier in many ways to handle because you cancel the flight and while we have right to care obligations we don't have compensation obligations we are struggling over the last two three weeks with materially lower on-time performance i mean historically our on-time performance this time last year was over 80 percent at the moment we're struggling to get to 65 66 percent so one third of our flights are being delayed it is leading to some higher car modest rates of cancellation of flights because of airport curfews and we are therefore responsible for more compensation so i think there's likely to be a modest uptake in our eu 261 cost this year but we haven't quantified it we don't know how long this is going to last and whether the situation will improve i've spoken to a number of the other airlines in a a4e group and they're all equally frustrated as we are with the lamentable performance of a t c and it you know will encourage us to lobby harder for some more effective a t c when europe has delivered nothing and or some underlaying got reappointed president last week promising you know competitiveness and improved competitiveness despite five years of sitting on our arks doing nothing about air traffic controls so maybe this might inspire we think the more if a few commissioners and parliamentarians have their flights delayed this summer because of a t c delays we might see some action the problem is most consumers just blame the airline it's our fault if you know so they blame the airlines for the delays they get compensated for the delays and yet we're not allowed to recover our eu 261 cost for bnsp or a t c providers because they're generally immune from prosecution across europe so it's just another lamentable failure in europe's a t c infrastructure we need real effective reform privatization would be far and away the best thing could do with that loss ensuring that they're actually properly staffed and protecting over flights during national strikes and on the a3 loud ages we have we have extended three of the leads out of 2028 but we have about 25 or 26 is allowed to a3 20s run out to 28 we don't are not minded to extend the leases beyond that date although the aircraft are getting old i'm sure to but it was very much part of our vision that the the max 10 deliveries are all turners of a3 20 deliveries would replace those aircraft in 2028 and that continues to be the case you know if there was a material change in the the outlook i mean the reason i should say we extended those three is we were able to extend those three aircraft without any increase in the rates have doubled in the last 12 months over the rates we're paying for in the loudest but you know where that kind of value is available we were having taken i think in all cases the lessors want to keep Ryanair as the customer and see value in having Ryanair as the customer there but aircraft leasing is not a big part of our operation we own almost all of the Boeing 737 fleet we have very little leasing left in place and it's mainly on the louder a320 fleet and we wouldn't see leasing as the way forward and leasing has been you know the lessors that we see most of the swanning around Dublin in their overpriced offices and overpriced automobiles the world has moved in their favor you know in the cost of engine leases aircraft leases now out there record high and because i think that will widen or significantly increase the cost of the aircraft that we own and we're paying down the debt of those aircraft aggressively and all we have is appreciation chart thanks for the question next question please

the next question comes from Alex Patterson from still from palehunt please go ahead

hello everybody um two questions from me please firstly i just wanted if there's any regional variation in terms of the fair declines is it perhaps stronger in no no

it's

all a

piece we've answered that question already

oh sorry and then on the the load factors you said that you were half a percent behind for August and September that was behind plan was planned flat on last year i.e. our bookings moving later

yes the plan is flat on last year we set the time sorry the plan is on last year but with you know nine or ten percent additional seats this year so the plan is flat we had aggressively priced into July so we went into July and one and a half percent ahead of the target let the target lose on a daily basis but we're running one and a half percent ahead in July and that's what we thought right we can now price up into July and every time we tried to price up we met resist and finished up opening up again and as we've gone through July we've moved from being one and a half percent ahead of target today we're half a percent ahead of target now we're getting very close to the end of the month so it's likely we've finished modestly ahead of target but we're half a percent behind for August and September so our efforts to price upwards have failed the closed-in bookings there were meeting significant pricing resistance on closed-in bookings and we're having to open up again and i think that's reflected this morning in our commentary which i accept is comes as a surprise i mean we've been surprised as well but we're not seeing any material we're not seeing the same kind of aggressive load factor build and pricing that we have seen in both of the last two summers in summer 22 and summer 23 when we were repeatedly closing off cheap seats closed in and you know and bookings running ahead of our daily targets but it is against this time last year so we would expect to hit the same load factors as last year the traffic would be up about nine ten percent but the material yields and the average fares will be materially lower in q2 july august september thank you thanks alex next question please

our final question today comes from johannes born from stifle please go ahead your line is now open

and as i yes i actually just one left for me and that would be on the free on the free cash flow which looks for q1 actually pretty good despite the profits being down i can see that it's largely because of lower capex given the delivery delays of Boeing but there's also cash inflow from ticket prepayments which are much stronger than last year above 600 million and i just wonder how this fits with your warning of significantly lower yields in the summer is it just the volume growth that i can see there is there anything else that i miss

you want to take that with the free cash flow yeah johannes bookings traffic is strong we're taking in about half a million or more bookings a nice at this point in time so the cash continues to flow very strongly you're right half a billion in capex is slightly lower in the first quarter but i expect the cash to continue to remain strong over the course of the year i think that's a factor of the volumes that are coming in and what they're paying for the fairs fairs are down as michael said but yet they're up on where they were on a pre-covid basis and that's coming through in the numbers on the cash flow four and half billion in gross cash 1.7 billion net cash at the end of the quarter all

right there's lastly the volume element compensating the price element

yeah i mean there's a steady flow of cash in every day yeah all right thank you

okay johannes thank you very much okay ladies jim if we know other questions we'll wrap it up there as i said you know i'd be we are surprised by the heavily driven by close in bookings and the close in bookings we're having to open up rather than close off as we move into the peak summer period we think that will continue nevertheless traffic growth will be strong cash flow generation will be strong we will continue to focus on returning cash surplus cash to shareholders and the booking.com win last week was a momentous win we think that is structurally significant for us going forward and for us and for the industry going forward and therefore we will continue to deploy capacity we'll continue to be load factor active price passive and we will still have strong profitability this year although clearly profitability will not be as strong as we had originally hoped for the full year but it pricing is where it is and we will continue to aggressively price in all markets so that we hit our traffic load factor assumptions and if anybody has any follow-up questions they want Peter Larkin is here head of IR is here in Dublin Neil is doing some investor meetings in London i think and frankfurt to the next day or two but other than that we will see you all either here for the HGM in September or on the happier results road show in November thank you very much everybody good to talk to you