Ryanair Holdings plc

Good morning and welcome to the Ryanair H1 Results call. My name is Adam and I'll be your operator for today. If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to Ryanair Group CEO Michael O'Leary to begin, so please go ahead.

Good morning ladies and gentlemen, welcome to the Ryanair H1 Results conference call. We're joined by all the members of the team from different parts of the globe. I'm going to run through a quick highlights, ask Neil Thornton, our Group CFO, as usual, to give you a comment on the financial highlights and then we will maximise the time for Q&A. So you'll have seen this morning we reported H1 after-tax profits of 1.8 billion, 18% lower than the prior year H1 profit of 2.18 billion. The highlights of the half year were traffic, strong growth, 9% to a record of 115 million. It would have been higher but for the repeated Boeing delays. At the key theme was average fares fell in the half year by 10%, but the trend is improving. We were down 15% in Q1, down 7% in Q2 and we had turned to Q3 when we took it forward guidance. We have 177 game changers in a 608 aircraft fleet at the end of the half and that had risen to 172 by the end of October. We have five new bases, 200 new routes opened this summer. The approved OTA partnerships now cover about over 90% of all OTAs. These protect consumers from being overguarded by OTAs. We give OTAs direct feed into the Ryanair.com website, but in return they guarantee that the customer will get only the Ryanair prices. We also get the customer email, accurate customer email and accurate customer credit card. So we have a direct relationship with every customer now booking through approved OTAs. I think again our strong balance sheet has enabled us to take a very strong fuelhead position. We're 85% hedged for the second half of FY25 at $79 a barrel. We've jumped on recent points of weakness to increase our FY26 cover to 75% at $77 per barrel. We completed the 700 million share buyback in August and as of today we've done just over 30% of the 800 million follow on share buyback. We expect that buyback will continue, will probably run out until about April, May of 2025. And the board on Friday confirmed that the interim dividend of 22.3 cents per dividend or dividend per share has been declared to be paid in February 2022. Looking back at the half year, ancillary revenues were resilient, rising 10% to 2.74 billion, slightly ahead of our 9% traffic growth. I think the key metric though is that operating costs perform well. They rose 8% lagging behind the 9% traffic growth. As the fuelhead savings offset higher staff and other costs, two main or two in part to buoy delivery delays. We found ourselves gearing up for buoy deliveries last summer with being over crewed, overstaffed, and then finishing about 5 million passengers short of where we were originally going to be. Yet if you take the half year, the operating costs rose slightly less than traffic. The ban on street remains strong. Growth cash at the end of the half year is over 3.3 billion euros. Net cash was just 600 million at the 30th of September. And that is despite paying out 900 million in capex, 900 million in share buybacks, and a 200 million final dividend in H1. We own our entire Boeing 737 fleet, that's 580 aircraft. It's fully unencumbered. And this I think materially widens Reiner's cost advantage over our competitors in Europe, almost all of whom now are exposed to expensive finance leases, financing costs, and leasing costs. As I said, we expect to complete the 800 million follow on buyback program sometime in mid 2025. When we finish that, Reiner will have returned almost 9 billion euros, including dividends to shareholders since 2008, and will afford back approximately 36% of our original issued share capital. In terms of fleet and growth, so at the end of October we had 172 game changers in our fleet. We now expect the remaining nine Q3 deliveries, after deliveries due in September or in October, November, December, would be delayed into Q4. So we're hopeful we get those in January, February, March. If the Boeing strike settles reasonably quickly. However, there's no doubt that we're going to now miss some of where, when we take those nine aircraft in Q4, that leaves us with 29 more aircraft to take for summer 2025. Boeing had originally penciled in to deliver those this winter. We now think it's reasonable, and we have no guidance on this, but to delay about half of those aircraft. So we think we get about 15 of those 29 aircraft prior to the end of June. In other words, in time for summer 2025, but half of them will be delayed into the winter of 2025, 2026. And accordingly, that means I think it's sensible now we begin to walk back our original schedule traffic. Originally for FY25, we had expected to carry 205 million passengers because of the Boeing delays, we've had to walk that back to 200 million. In fact, I think we've come in a shade just under 200 million in the full year. The original target for FY26 were 215 million passengers. We now going to have to walk that back, I think, to about 210. With the possibility that it may have to get shaved more, it might come back to 209, 209. Entirely dependent on whenever Boeing settles a strike and then can give us some reasonably accurate update delivery on aircraft. We are working closely with Boeing. I speak to Stephanie Pope on a weekly basis, both again on Friday. There is a labor voting on the new APA today and we'll have a result tonight. I'm impressed by the work that she and Kelly Ortenberg have done. They're there, they're on the ground in Seattle. You can lift the phone, you can talk to somebody that was there under the previous management. She is busting a gut to try to get us deliveries. In fact, even during the strike, they brought in management. We had two aircraft ready for delivery when the strike started. They brought in extra management, got those two aircraft out to us during October. So they're doing everything they can and they have our full support. I think, though, this is a positive generally for the industry. We are going to be short aircraft ourselves for FY25. We're going to be more short aircraft than FY26. I'm looking forward. If the experience this year, we were surprised by the price softness. We've come off two years in summer 23 and summer 24 of 20% price increases due to the post-COVID recovery. This year, we were a little bit surprised by the price softness. We think it's due to consumer spending tightness in Europe, certainly the impact of the OTAs and the fact that we're five million passengers short on our original target growth. But if we're constrained in our deliveries next year, we know that the rest of the European industry is heavily constrained because of the repairs and the OEMs are struggling to increase production. I would be medium term very optimistic on where pricing is going to go because of these capacity constraints. I saw some of the coverage today in Ireland and the UK, oh, a bit of a negative. Ryanair would be scaling back its growth ambitions. We will still get to our 300 million passengers by 2035. There's not much Boeing get the Max 10 certified, but we're going to have to grow a little bit slower in FY25, FY26.

Once we

get the balance of the 29 outstanding aircraft, and that might be into summer of 2026, then we'll be back up to our target of 225, 230 million passengers. But I think these constraints should be positive for pricing into summer 25 and summer 26. As you're aware, the board is reviewing the airline ownership and control. We confirmed that over 49% of Ryanair issued share capital is held by EU nationals in September. We think it's appropriate to review the potential variation of either the ownership restrictions, which prohibits non-EU nationals acquiring our ordinary shares, or the voting restrictions, which is how you exercise control. That process continues. As we consulted those far with about 60% of our shareholders, we think it would take another three or four months, and we would hope that the board would hope to make a decision on that, whether we are sensible to vary the ownership and or the control sometime in the first half or the middle of 2025. First, the key element then, which is outlook. So at this point in time, and I say this, we have about 70% of the bookings in the system for Q3. We have only about 11% of the bookings in the system for Q4. So we have very little visibility. However, we're pretty sure at this stage we're going to finish somewhere between about 198 to 200 million passengers. I think the midpoint just over 199, up about 8% on the year, subject to no worse worsening of the current Boeing delivery delays. Unit costs are performing well, and we now expect full year unit costs to be broadly flat, as our fuel hedge savings, strong interest income and some modest aircraft delay compensation, with largely offset ex-fuel cost inflation, most notably crew pay and productivity increases, higher handling and ATC costs, and the cost of inefficiency we suffered this year because of repeated Boeing 737 delays. Forward bookings into Q3 are strong, and the decline in pricing appears to be moderating. Again, what does that mean? Well, if I go back, Q1 pricing was down 15%, Q2 pricing is down 7%, Q3 pricing will be down by less than that, but it will be slightly down. So I think a small single digit decline, the trend I think is favorable. But then we get into Q4, and Q4 we will have a very challenging prior year comp, because half of Easter was in last year's Q4, none of Easter is in this year's Q4. But at this point in time, Q3 bookings are strong, the price of clients are moderating, but we still have 30% of Q3 bookings to make, and those will be the key closing Christmas and New Year bookings. We have zero Q4 visibility, and the quarter won't benefit from last year's early Easter. That will make the prior year Q4 comps challenging, and therefore I think it's too early this morning to provide any meaningful FY25 BAT guidance. The final outcome would be subject to avoiding adverse developments during the remaining five months of the year, especially with the risks of outbreak of the conflict in Ukraine and the Middle East, repeated ATC short staffing and capacity restrictions, and are further buoyed with a brief delay. Can I hand over to you, is there any comment, anything you'd like to throw out there to keep the attention to on the balance sheet of the P&L?

Okay, thanks Michael. You covered it fairly well, but I'll just reiterate please with how costs went in the first half of the year. The hedging that we locked in for the years delivering goods, Davies, but we're focusing across all of the other lines as well, and that's enabled us now to improve the guidance on the full year unit costs to broadly flash. Balance sheet rock solid, triple B plus investment grade rating, over 580 aircraft unencumbered, which gives us a massive advantage over everybody else. And another reason as to why the cost advantage and the cost gap between us and everyone else is widening is because we're refinancing ourselves through cash when everyone else is out there raising expensive leases and expensive debt. Distribution is going well, we're about one third of the way through the 800 million buyback as Michael said. That will hopefully get us out of the slum work off next year. We've now locked in some modest savings on fuel hedging into next year, which is very important in this current very volatile oil market that we're in. And then on capex, while we're still guiding 2.3 billion capex for this year, having spent about a billion in the first half of the year, the reality is that some of that is now likely to slip into next year when we've got greater visibility on where and when the aircraft are coming in from Boeing. We'll revisit that, but it's a timing issue more so than anything else. And I don't think really Michael has much more to add. Yeah, I think that's

fine. Okay, let's open up to Q&A please. And I'd like to spread some of the questions around the wider management team here.

As a reminder, if you'd like to ask a question today, that staff will avoid one on the telephone keypad. And our first question comes from James Hollins from BMP Paribas. James, your line is open. Please go ahead.

Yeah, thanks for having me. Yeah, just one from me actually. So feel free to spend twice as long as you would have done on this. I think the ATA situation, I mean, it's clearly been discussed at length, well certainly between me and my investors. Maybe any chance you could quantify what the ATA situation was, not just in Q1. It seems to be from your comments you very much thought that lasted into the summer. So we start to think about, I guess fiscal 26 and the not easy comps. But just as much detail as you can. And I think you did note it was probably a bigger impact than you had thought. So just I'd love to hear your thoughts, maybe Eddie if he's on as well. Thanks very much.

Okay, I'll give you an intro and ask Eddie to comment on it. Maybe Jason McGuinness as well. You know, I dismissed the impact of the OTA online travel agency dispute last, it started last November, December. Now it undoubtedly took two or three points off our load factors in the third and fourth quarters last year. I think it did hit us this summer by more than I allowed for. I mean, the one reason I was a bit dismissive is I didn't see any of these bookings going to our competitors. I mean, there was no notable bump in load factors or yields of either the easy get ways or the others. But I think we've seen a strong bump in both bookings and load and for some of the tour operators this year, 2E, Jet 2, etc. And so I think some of that traffic did migrate away from the OTAs and Ryanair on to the kind of tour operator side. I would, by the way, however, you know, was it the right thing to do? Absolutely. We would fight with the OTAs again tomorrow morning and with anybody who tried to interpose themselves between us and our customers, particularly when they by interposing themselves, they are overcharging our customers and giving us fake emails and fake payment details. Now, I'm pleased to say the relationship with over 90 percent of the OTAs now excellent. We've only two standouts who have not yet signed up to the approved OTA deals. In other words, two OTAs who are still overcharging their customers. And that's booking.com, although they're small in terms in volume terms in Europe and eDreams in Spain. Other than that, everybody has signed up. So I think if I was, you know, and we're guessing here, if we're looking at how much of our decline in pricing, you know, if you take our pricing in Q1, Q2, we're down 10 percent. I think it's reasonable now to believe that up, you know, maybe up to half of it is the OTAs and half of it is pressure on consumer spending. I don't think you can get away from the pressure on consumer spending issue. You know, we went from two years of pricing going up 20 percent, 20 percent. We did expect to moderate this year. I thought we'd be up between five and 10 percent and we were down 10 percent. Sometimes it happens. There's nothing wrong with the model. And I would always sacrifice short term fares for market share growth. And we have taken enormous quantities of market share from competitors across most of the major European markets this year, mainly because they were constrained repairing, cracking with the engines or having been in the case. I give you each yet they still haven't recovered their pre-COVID traffic volume. We're operating at 40 percent more than our pre-COVID traffic. I would always sacrifice your term pricing and short term profitability for long term for growth and longer term gains. But I think the OTA was more damaging than I had first allowed for. The good news going forward is they forward bookings into next summer with the OTA is already very strong. Their pricing is well above our average pricing. But we would expect that because they're taking kind of their booking summer holidays next year, whereas we're booking taking bookings into the winter period. And we will have a much easier prior year comp next year. You know, when we get to Q1 of next year, we will have both of both halves of Easter will be in Q1. We should have a strong flow forward bookings coming from the OTAs, but ensuring that all of those customers who are booking through those OTAs are now getting real Ryanair prices. The OTA is free to levy a separate fee, and that's fine. But we're getting the customer email and the customer credit card details so we can interact with each customer as well. So I think that's been a very successful outcome for us. But we've no doubt we've taken short term pain this year. Looking forward, as of today, we're about two percent stronger booked into summer. If you take the summer season of twenty twenty five than we were this time last year. Now, it's on a pretty tiny sliver of bookings like, you know, but to be two percentage points further ahead on a very small number is quite strong into next year. And we will have, I think, weaker prior year comps by the time we get to summer twenty twenty five as well. Eddie and maybe Jason McGuinness want to add something to that?

Yeah, I mean, the difficulty, James, sometimes is that when you're you're looking at comparisons is when when you look in prior years with OTAs, like, you know, it was impossible to identify who was doing what coming through the pipes because they were, you know, they were using other intermediaries to scrape. Well, we can see now is that, you know, as Michael has pointed out there about summer summer booking, there are, you know, OTAs don't, you know, are not a sort of a homogenous set here. They do. They operate in different ways. But we can definitely see the holiday ones that do package holidays are they booked further ahead and that higher fares. And, you know, if you look at that in the period to last year, well, then if we weren't getting those bookings, then we were obviously chasing those to get a load factor. But the good thing as well is that, you know, you know, the OTAs, it's not just a question of switching on the pipe here either, because some are better than others in maximizing what's coming through there. Like the ones that are more tech focused and have got up to speed much more quickly and others haven't. But there's no doubt that we can see the forward bookings, particularly for the summer ones. There are ones that there are bookings that we didn't get in January, particularly of last year, because when this happened, you know, broadly in mid to late November last year, you know, you're pretty much sold into December. So it was really those summer bookings in January. And then the effect of, you know, obviously the other factors of the sort of macro issues of like interest rates and then the consumer sentiment and all that fed into it. But I echo as well what Michael said there. Look, you know, the hard decision was to do this. It was the right thing to do. We can see that reflected in, you know, customer issues like some of the hardest customer issues we had. You know, when you get to the sort of volumes that we have now, people showing up and being charged check-in fees because the OTAs had just, you know, sold on these and couldn't care less at that stage about like what problems were visited upon consumers at airports. So broadly speaking, like echo, it was absolutely the right thing to do. Some are better than others. We still a little bit to go with some of the OTAs in getting and spooling back up to where they believe they were comparably with last year. Jason.

Yeah, if I take Q1 and Q2, so Q1 the fairs are down 15 percent. I think as much as you know, a third of that was probably the first half of Easter moving into prior year Q4. So if you strip back Easter and, you know, I'm doing back of the envelope here, I think Q1 pricing like for like is down somewhere between seven and 10 percent. Q2 down seven percent. Q3 was down by a figure of between 0 and 5 percent. How much of that do you think is OTAs and how much is just the economic, the consumer spending under pressure? And I know it's a guess.

Yeah, it's like for me. Yeah, I don't disagree. I think it's about a half and half the interest rates inflation environments. I think last Christmas into January, the consumer was certainly weaker. I could see it. I could see it in the volume, particularly, as we said previously, across leisure and canaries. But lots of the markets continue to book very well. Like Central and Eastern Europe was strong throughout the whole period. Logue factors through the summer are very strong and very happy how the summer is finishing out. Particularly, we've had a very strong October midterm. Hopefully that continues into December, but a little bit too early to tell in terms of Christmas. And I agree, like summer is 25, very early days so far, but I'm very happy at how it's selling, very happy with how it's selling so far. All the markets selling, selling well. And I think that is an indication in terms of the capacity environment as well. I think people are booking earlier this year than they have been on the leisure and canary.

OK,

thank you. Thanks, James. Next question,

please. The next question comes from Harry Gowers from JPMorgan. Harry, please go ahead. Your line is open. Harry.

Yeah, good morning, everyone. I've got two questions if I can, probably both for Neil. Just on the excess fuel costs, I mean, I think we should start to annualize some of the pay increases put through at the back end of last year. So maybe a little bit more colour on what you're expecting for excess fuel costs per pack, specifically over winter or on a full year basis. And then related to the first one, on the delay compensation received in the first half, maybe you're able to quantify the total. And will that continue to be a bit of a tailwind maybe for excess fuel costs over the next 12 months or so? Thanks.

OK, Harry, I'll start with the second one first. We're not going to quantify the delay compensation. It's modest as we call out in the press release in the first half of the year. It's confidential between ourselves and Boeing and falls well short of putting us back in the money for the five million plus passengers that we've lost. Will there be more in H2? The likelihood is yes. It will depend very much on how many aircraft we get and when we get them. But again, it will be relatively modest in the overall scale of things. On unit costs themselves, total cost is on a very good job. Absent the Boeing compensation, we've seen some improvements on other ex-fuel cost lines in the second quarter of the year. We hope that continues into the third and fourth, which is why we're guiding total unit costs broadly flat rather than marginally down, which we had previously. We would hope that next year with the slower growth, we won't be over crewed. It was the case this year with enough crews for about 20 more aircraft. That hopefully won't be the case into next year. And as you rightly said, as we get out into kind of the first quarter, calendar quarter of next year, we'll start to annualize some of that productivity pay that that had come through. But it's too early to put numbers on where our unit costs are going to be next year. We haven't done the budgets yet. But I think we've done a good performance this year and pleased that we're guiding broadly flat and locking in with the 75% fuel hedging that we have modest year on year fuel savings.

OK, thanks Harry.

Next question,

please. The next question is from Stephen Falung at Davey. Stephen, your line is open.

Stephen, hi. Hi, Michael. I guess to me, just where you just looking at the allocation of growth, and I think you call out some scrapping of aviation taxes, Sweden, Hungary, and various regional airports. You just might talk about that where you see that going. And yeah, well, maybe I'll start and then I'll come back for another one.

OK, and I might again ask any joining. Look, I mean, we are tonight on aircraft, so we're doing a lot more turn. We're taking aircraft away from airports and our countries who are raising taxes. The two big call out, they would be the French budget. Now, we're small in France, even though it was the number three airline. We're taking capacity away from France. We're reducing capacity in Germany, where the government hasn't got a clue. They're not alone raising aviation tax, but also ATC fees and security charges. And even the group are now reducing flights significantly. They've reduced about a thousand euro wing flights in Hamburg. I'm medium term optimistic on Germany. I think they'll eventually realize that either this government hasn't got a clue or this government is going to change its policy and start lowering air travel, air travel costs in Germany. And then we had the UK budget last week where they increased APD, you know, in a new Labour government committed to growth, got elected on a policy to do with tax, increase taxes on air travel on and off an island on the periphery of Europe. So we again, and I think this plays into the capacity constraint story for us next year. If we're only going to be able to deliver between 205 and 210 million passengers, there's going to be a lot more charm. And I think you'll see us moving some capacity out of Germany, France and the UK next year. We're not able to grow in Dublin because of the traffic cap. And we will be redeploying that air for that capacity into countries who are scrapping taxes, Hungary, Sweden, who have scrapped their aviation tax entirely, which is, I think, you know, a sign of what's to come. The home of flight gaming is now scrapping aviation tax. They've worked out that that's not the way to grow their economy. And Italy, we're having significant success for a number of the bigger regions in Italy, Reggio Calabria, Benincia, Giulia. And we hopefully, a Brutto, where Pascara Airport is, have scrapped the 650 municipal tax. And we think there's a reasonable prospect that more Italian regions will scrap this at Italian pilot pension tax. And so we're redeploying turning aircraft. We will get probably 20, 25 aircraft growth for next year. But our growth, if we go from 200 and 210, will slow down to about 5 percent. So there will be more charm. And again, a lot of that is being where we're having some very interesting discussions with some of our airports where we're saying, Tim, look, you know, you're at the bottom of the list of our kind of either you're one of our higher cost airports or you're... And airports are getting very, I think, realizing that they're about to lose aircraft and capacity. And that's making them with nobody else in town, with nobody else coming over the hills because of capacity constraints in Europe and the cost of getting a lot more aggressive. So I think you'll see us reallocate a lot of our significant proportion of our aircraft capacity next year to those states and those airports who are lowering taxes and lowering fees to incentivize growth. And I think that's why the traffic cap in Dublin is so damaging. You know, we've just opened a second runway and take some Dublin's capacity to 60 million passengers. But we have a pudding of a transport minister, a green transport minister who thankfully is not running for election because he probably wouldn't get reelected anyway. And we would hope the election is going to be called next week, that the new government, the first thing the new government will do would be scrap the tax. We had a very, I think, good hearing in the High Court on Friday. The judge is going to give a ruling today at two o'clock and we're pretty confident that he'll rule that there will be a stay on the IAA's ability to limit costs next year while pending an appeal to the Europe. And all of our legal advice, and it's pretty black and white, is that the Dublin airport traffic cap is contrary to EU law. And I think it would be scrapped by the EU courts. I don't know whether you want to add to that, Eddie and maybe Julius, come in on the Dublin cap.

Yeah, Michael, I think you covered most of the geographies there, except that I would say that, you know, post-COVID, we would have probably expected, you know, airports in terms of traffic recovery to move earlier. But now that it has started in, you know, cases like Yashley, where you have taxes coming out, or you look at just one example of Sweden, whereby, you know, SAS are much smaller than they were post-COVID or pre-COVID. Norwegian largely, you know, back in Norway, what does Sweden do for traffic? And they figured out they lowered the taxes. We put in 30% more based aircraft. And I think that's really going to start to play out across Europe where when these airports now realize there's nobody else coming. So I think the sort of the cracks are beginning to come. And we see one other area where we put in a lot of capacity as well as states like Morocco, you know, where we've got 14 or 15 based aircraft down there, close to 10 million passengers. So I think there's lots more. I think there's lots more to come. But I think you've covered all the

geographies there,

Michael. I think one of the points I'd make, we're looking at the UK market next year, like we expect to take our traffic down from about 55 million to about 50 million passengers. We're not going to close routes. What we're going to do is, you know, we have enormous capacity in the UK, but we're going to trim out frequencies. And I think you're going to see us across a lot of our bigger markets trim frequencies next year, switch that capacity to those countries who are strapping aviation taxes or lowering access costs and airports who are incentivizing growth. And I think, again, I will be one of the reasons I'm optimistic on pricing next year, apart from the fact that we'll have a pretty weak prior year comp, is that we will be constraining frequencies. We will not be closing routes. We will not create vacuums that, you know, I don't think there's any comp and competitors in Europe anyway. But we're certainly not going to be inviting anybody else into markets where we are currently operating. But trimming capacity on a lot of markets out of Ireland because of the traffic cap and in the UK because of this insane rise in APD, I think will be very good for our pricing next year. And again, if you come back to Nilo Soren's point, if you look at the cost discipline in this business, the cost discipline is unmatched by any other European airline. If we get any bump in pricing next year, you're going to see an awful lot of that flow straight to the bottom line. Julius, you want to give us anything on David Dublin cap?

Thanks, Michael. Maybe just to say that it is accepted by all parties that there is a serious question of EU law to be answered in relation to the cap. And this is this is reflected by the fact that the court case on Friday was argued not only by Reiner, but also by a lingus and and importantly, an association of American Airlines who are concerned about the risk of losing some of their slots in Dublin. So it's hard to be definitive and hard to predict the outcome of a court process. But we are fairly optimistic that the court will see sense in our arguments and and grant the state that we requested, which would result in growth being possible in Dublin next summer. OK,

thanks. Thanks, Julius. Stephen, is your second? No, I leave it at that. Yeah. Thanks, Michael. OK, next question, please. Thank you.

The next question comes next question comes from Jamie Robotham from Deutsche Bank. Jamie, your line is open. Please go ahead. Jamie, your line is open. Please ask your question.

Jamie, go ahead.

OK,

let's move on.

We will be gone for now. The next question comes from Muneeba Kayani from Bank of America. Muneeba, your line is open. Please go ahead.

Muneeba. Good morning. It's Muneeba from Bank of America. So just wanted to follow up on the earlier question around OTAs. And you said that 90 over 90 percent have been converted. What exactly does that mean? Like, are they all kind of the technology? Is it fully kind of integrated at this point? And and then secondly, are you where our discussions with the two remaining ones? Do you do you think you would be able to get them on board as well? And then a question for Neil around cash return and buybacks in the video you mentioned that there could be more. How have you thought about the amounts for share buybacks, the 700 and the 800 that you've announced this year? And kind of any framework for thinking of the amount into next year? Thank you.

Thanks, Muneeba. Maybe I'll take the first and Neil give you the second. So on the OTAs, we have if you take the range of OTAs who are making bookings on our system prior to last November, we've now signed up over 90 percent of them. There's essentially only two remaining OTAs who have not signed up to our deals, who are still overcharging or inflating our airfares and overcharging consumers. And that is Booking.com. But they're very small by volume in Europe. These names are bigger by volume in Europe, particularly in Spain. We have multiple court cases ongoing with both. We've won in with Booking in the States in Delaware. We've won numerous cases against eDreams in Europe outside of Spain. We have lost a couple of defamation actions in Spain, although generally they've been ex parte defamation actions where we haven't been in weren't able to make our case and we would be appealing those measures. I expect I think it's inevitable that both Booking and eDreams will eventually sign up to our approved OTA agreements because I think it is very difficult using the transparency of the web to be able to be overcharging your customers while your competitor OTAs are selling them directly. I think it's much better to have Ryanair's low fares with no hidden charges or no inflation. But I think the critical thing is so far we've protected over 90% of our OTA customers and we expect that figure will rise towards 100%. Over what period of time, I don't really know. I think it's much better on the OTAs unless Jason or Eddie you want to come in on it and then Neil you answer the second question.

Yeah, sorry Michael. What you have is that without naming the specific ones, those that are more tech focused companies are much better at maximizing the APIs that we've put into them already because they've got the tech resources on the other side and some aren't. They are still coming up to speed, particularly because as part of the OTA agreements, they can't put on extra charges on things like ancillaries. So they've got to be doubly sure that they are reflecting the transparency and pricing. So there's some way to go on some of them while they maximize it. But those that are selling out summer holidays for next year in terms of packages where it's a little bit more complex on their side where they've got to put hotels and all that as part of it, they're generally getting back up to where they would have been. So they're at different paces. But I'm not going to give a color on how many, what ones are behind the curve. It's just about their tech resources on the other side.

Okay, and just for a handout on the share buyback point, Maniba, I would draw your attention to two things. One, the Boeing delivery delays this year meant we had, you know, with less capex, more spare cash. Our first instinct was to return that additional cash to those, that spare cash to shareholders. I would highlight, however, as we've done in the results, we have two large bond repayments coming up in September 25, 850 million and May 26, 101.2 billion. We are determined to pay down that debt and that will be the board's first priority while maintaining our dividend policy going forward. Neil, on that share buyback?

Yeah, I think you kind of read into where I was going to go. I mean, the quantum this year was driven by the slower capex, but also we didn't have any big bond repayments. We got an opportunity just given where the share price went in the July, August period to lean into the 700 million buyback. We finished that earlier than anticipated. And 800 with the slowing capex and the delays in Boeing seemed about the right number. That gets us out the next number, but we're very focused that we do have that 850 million bond in September 25. We've got 1.2 billion bond beyond that. We'll continue to pay back 25 percent of prior year PAT. And you're seeing that we've already announced about a 240 million dividend in February. There'll be another 240 million or thereabouts in September of next year. But ultimately, the profitability in the business, the capex opportunities, the debt repayments will dictate how much spare cash is available for the boards to return. But I think the key is let's finish the 800 million buyback first and then we look at what comes after that, Maneba.

Thank

you. Next

question, please.

The next question comes in Dudley Shadley from Goodbody. Dudley, your line is open. Please go ahead.

Thank you very much. Two questions, if I may. First of all, can you just update us on the latest you've heard on the certification of the MAX 7 and then the follow on certification of the MAX 10? And then the second question is one of your favorite topics, Michael, which is ATC disruption. It was particularly bad during the summer, especially for the first wave. Can anything be done about this and can it be done without roof charges going up over time? Thank you.

Great. OK. And they just didn't. You know, I put your speed to Stephanie Pope on Friday afternoon. They remain confident that they're still working away on the certification. They still expect certification, the MAX 7 in the first half of FY 25 and then at the MAX 10 certification will follow reasonably quickly thereafter in about sometime in the mid second half of 2025. And I think we should take them at their word. We've had some reasonably positive feedback with IASA, who have said that, you know, they're reasonably impressed by the MAX 10 and don't see any reason why that certification won't take place. It's a good aircraft, but it's driven by getting the MAX 7 certified first. And I think what's important, though, is that work continues even while the strike is ongoing. The ATC disruptions have been a shambles this year. I think what's really depressing about ATC is, you know, so much of this is fixable. Much of the Euro controls own figures show that flights in Europe this summer were at 98 percent of their pre-COVID volumes. So it's not that the skies are black or they're dealing with huge growth. They're actually dealing with fewer flights than they had in 2019. But they're short staffed. And in many cases, they're short staffed because people simply won't come to work on Saturdays and Sundays. Or as in the case of the French, they've done this mad deal with the French unions where they can report to work three hours late. Now, you know, if you're an accountant reporting to work three hours late doesn't make that much difference. But if you're a pilot or you're an air traffic controller and you're due on at 4 a.m. in the morning and you report at 7 a.m. in the morning because you can, then the whole first wave gets delayed. So there are two things that can be done. And we're pushing hard with the EU Commission. One, protect over flights during national ATC strikes. The Spanish, the Italians and the Greeks already do this. They use minimum service to protect 100 percent of over flights. But the French use minimum service and legislation to protect about 80 percent of their domestic flights and only 20 percent of over flights. So and because the geographical position of France, everybody else gets screwed. So two simple measures would be one, protect over flights during national ATC strikes. And two, we require a commitment that each of the ANSP's, particularly the French, the Germans and to a lesser extent the Spanish, will be fully staffed for the first wave of flights every morning. There is no point in having a labor deal that allows some air traffic controller. And, you know, we're talking one or two air traffic controller short on the first wave of flights in France could take about 20 percent of its capacity out. We're talking tiny numbers of people here that are being grossly mismanaged. And, you know, I think if the new EU Commission, I think we're optimistic, Oisne von der Leyen has put competitiveness at the center of the new five year mandate for the EU Commission. And if you really want to do something about competitiveness, start with fixing Europe's chronic ATC services. And those two simple measures would eliminate about 90 percent of ATC delays.

Next

question,

please. The next question comes from Alex Irving from Bernstein. Alex, your line is open. Please go ahead. Alex, Mike.

Hi. Good morning, gentlemen. A couple from me, please. First of all, following up on the Max 10, you know what you say about the mention Boeing, but what are you crewing for? Is there a risk of unit staff cost inflation if this gets pushed out? Second is on auxiliary sales for passenger. I'm sorry, notice that growth has been pretty low in this quarter and the last quarter. What's driving this and what initiatives are you currently working on to get these back to growth,

please? Sorry, if you just repeat the second half, you broke up the pack something in the second quarter?

Ancillary sales for passenger. It's been low growth the last two quarters. What are we working on to get them back to growth?

Okay, and I'll give that to the second one to Neil. Max 10, look, we're very optimistic about the Max 10. You know, it's why I wouldn't change one decimal point of our growth trajectory to 300 million by the mid 2030s. The big issue for us is we're due our first 17 deliveries of Max 10s in the first half of current 27. So we have them there for summer 27. As long as the Max 10 are certified in the second half of 2025 and Boeing can increase their production, their monthly production in line with their projections, then there should be no delays to those deliveries. Do we see those aircraft will bring us compared to the original our 737 NGs? We're getting 20 percent more seats burning 20 percent less fuel. I mean, they're transformational of our operating costs. We don't foresee any significant staff impact. It will make our if you go back to slide three of our presentation, slide four of our presentation unit cost line, it will meaningfully widen our staff cost leadership, airport and handling cost leadership, everything with the sole objective of route charges, the aircraft for every year and our fuel leadership over every other airline in Europe. We will not obviously recruit additional pilots if there's some additional delay to those deliveries in the first half of 2027. But I think you've seen us, which did happen to us in the summer of 2024. So I don't see any significant bump in staff costs arising from we will have a fifth cabin crew on board. But all of our pay deals at the moment with pilots, cabin crew are done, whether you're they factor all variants of the 737s. We will only be taking 17 aircraft in. So, you know, if there was if somebody was silly enough to say, well, we know we don't we won't fly to the Max 10 unless we get X, Y, Z. We say fine. We simply move to a different geography where we'd have no difficulty getting our crew in the Max 10. So I think there's nothing but upside for us in the Max 10. The productivity of the aircraft are extraordinary. The productivity, by the way, of the even of the end of the of the game changers have been extraordinary. We are getting four percent more seats. They are burning 16 percent less fuel. These are transformational in our business. We own the aircraft. And I look across at some of our competitors who are frantically doing sale and lease backs, desperately doing, you know, cooking the books, trying to take fucking profits from sale and lease backs through the P&L. We have none of that and we have no long term debt or leasing costs on our balance sheet. So I can't wait for the Max 10s. I think they are going to be transformational for our costs and for our profitability from summer of twenty twenty seven onwards. And I can say I'm not quite sure that they on the ancillary sales and theory says per hour, 10 percent traffic is up 9 percent. So we are getting, you know, as we said, ancillaries continue to bump a little bit ahead of traffic growth. But then Neil and maybe another any you want to add something on ancillaries there?

Yeah, I'm happy to that, Mike. As you said, it was a pretty good performance in the first half of the year with the 10 percent increase in revenue. You know, there's probably three big areas, Alex, as you're well aware, where we make a lot of the money to reserve seating. That's going well. It's up year on year. And we'd hope that there's more we can do on optimizing that and the pricing around that on board sales have improved year on year. And our new order to seat initiative, which we were trialing in the early summer and are now rolled out across the network, is going very, very well with people keen to get their order in early on board. So I'd be hopeful more to come from that. The one area that probably disappointed me a little bit this year was the priority boarding. I think some of that might have been down to the fact that we've been under pressure with air traffic control this year to try and not take on slots. Our priority is to close the door, get people onto the aircraft and fly. So there's maybe been a little bit of gaming from some of the customers on not taking the bags on board. But we're addressing that. We're working through it from upside there. So I feel there's a bit more to go on the priority. We've been quite clear. There's not going to be any major new initiatives coming, but there's lots to be done with the products that we have, just enhancing them. I'm pleased with what's happening on board. Having underperformed for the past couple of years on board sales have turned the corner this year and I think we'd order to seat plenty more to go on that front. And then working with labs, we'll continue to try and work on improving the seating and working with my colleagues in the operations and the airports. We will work on improving the priority boarding.

Thank you.

Anybody else want to come in

on ancillary?

No, I mean, it's really just the interplay or whatever between those core products in terms of optimizing revenue between the tradeoffs, between behaviors on bags and priority boarding and bundles and issues like that. And it's just we'll never get to the end of it, Alex, with the lab scene as the models get even more sophisticated in time.

I have one thought there. In the past year where the average fare was down 10% per passenger, a lot of that is due to consumer spending being under pressure. I think it's very impressive that ancillary revenues were up 10% on a 9% traffic growth. You know, we are still able to mine the ancillary revenue line and to encourage or convert customers to the convenience of priority boarding, reserve seating, etc. Even in a period of time when consumer spending is clearly under pressure. Next question, please.

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

morning, everyone. You hedge 75% of your fuel for 2026. And if I look back a year ago, you'd only hedged 53%. That's age for March 25. So why have you, I guess, increased the hedging? Is this suggesting anything in terms of the direction you see oil going to in the next year? And then also, you know, you've kind of highlighted a lot about ownership first control rules and your engagement with, you know, stakeholders. I'm not asking, you know, kind of where this heads, but can you kind of just give a bit of color in terms of, you know, potential outcomes that you'd like to achieve? Thanks.

OK,

I'll ask maybe Julius, do you do the ownership and control? Especially on hedging, Jared. Look, you know, we're always there waiting to pounce. We see weakness in oil prices, you know, below our current year where we can lock away a cost saving. I think we're always keen to do so. We're undoubtedly in a period where the world is more volatile. Fuel prices a week ago were under $70 a barrel. Today they've opened up over $75 a barrel. So, you know, what we're trying to do is to have some cost certainty going forward. We've hedged this year at $79 a barrel. We're now 75% hedged at $77 a barrel. I don't think we would go over a median term higher than that. I think there's a real risk that they, you know, and some of the market analysts are beginning to talk now, but maybe $60 a barrel. We could find ourselves a bit exposed compared to our own hedged competitors. Oil prices could go lower. But then we'll pick that up with our 20%, 25% unhedged fuels. But I like the feel of where we are at the moment. I think given the situation in the Middle East and in Ukraine, as we move into the winter, there is always a risk that oil prices will go higher, $75, $80 a barrel. We're not trying to beat the market. We know fucking nothing more than anybody else does about oil prices. But we have a balance sheet that allows us to hedge out, to buy forward into plane jets. And we are always, if you go back two years, we were hedged at $89 a barrel. This year it's $79 a barrel. Next year we're at $77 a barrel. If I saw an opportunity there, say if oil prices fell below $60 a barrel and we could meaningfully go in and hedge another 10%, 15% and bring it down, you know, towards low 70s per barrel, we might move. But I think it's unlikely. We're still burned or scarred by the memory of COVID where we were hit to COVID. We used to have a rolling 90% hedge policy. I don't think we'll ever again hedge up to 90% unless there's some ridiculous opportunity there. But I like the fact that we have very stable unit costs. We are taking more game changes. That gives us an operating cost kind of efficiency. And we've hedged 75% of our fuel this year at

$10

a share less than the current year. So I like what we're able to do to secure our kind of stable costs next year when I think given week prior year comps, there's a reasonable risk to the upside in terms of pricing, particularly with even our own capacity constraint next year. And Julius, maybe you talk, give people a quick briefing on the ONC consultations and where we think it might go.

Yeah, thanks, Michael. So over the last few weeks, we spoke to shareholders who represent approximately 60% of the issue share capital. Those shareholders currently hold both through the ordinaries and through the ADRs. We received a lot of interesting feedback and generally found this exercise very useful. We still have quite a few meetings in the diary for the coming weeks. And at the same time, we are in discussions with our regulators. So that's the national regulators in Ireland, Poland, and Malta, and also the European Commission. I wouldn't want to talk more about potential outcomes. And I don't think it would be appropriate to give more color, given that we haven't yet spoken to everyone. We have an open invitation out on our website for shareholders to express their views. And we have received interesting feedback to that channel also. So I don't think it would be appropriate to those that we haven't spoken to yet to now go and get more color. But it has been useful and we will give an update as soon as we can.

Thanks. And I think there's an important point to be made here, Jared. There was some concern at the start of this, particularly with the ADR holders. The ordinaries were trading at a discount of 29% to the ADRs when we started this consultation on the 11th of September. Over the past six or eight weeks, that ordinary discount has narrowed down. As of last Friday, it was at 18% the discount on the ordinaries compared to the ADRs. That narrowing has been entirely due to the prices of the ordinaries rising by 11% over that seven week period. In fact, the price of the ADR has increased by 1%. So I think there was a fear among ADR holders that if we move here or this would, that what they see as a premium on the ADRs, what we interpret as an unfair discount on the ordinaries, would be arbitraged away by the ADR price falling, in fact, as it has been borne out over the last six or seven weeks. We think what will happen is that the discount on the ordinaries will arbitrage away as the ordinaries will rise up to where the ADRs are. And I think that's a key point. But yeah, as Judith has said, we have an open mind on this. The board will consider it. And the alternatives are we could remove the ownership and control restrictions. We could remove just the ownership restrictions, but keep the voting control restrictions or we could keep the ownership restrictions and remove the voting restrictions. So and it will not only the board will take account of the views and the inputs of shareholders, but we also have to then liaise with our regulators as well, the European and national regulators of the five airlines that we presently own. And we think that process is there a time frame, probably mid next year before we come to some kind of conclusion, I think it's at a reasonable time frame.

That's the best estimate at the moment, but no fixed time frame.

OK,

thanks, Julius. Thanks, Jare. Next question,

please. The next question comes from Sivakumar from City. So this your line is open. Please go ahead. Thanks, Michael.

I got

two

questions. I got two questions here. First on the ancillaries on the video, it did mention about 35 percent of the passengers are ordering directly via app. So in terms of the spend, how does it actually come past consumers or customers ordering via app? Are they going to spend more versus the traditional on board spend? Any comparison on that? Like what is the spend for packs would look like? And then the second one is on the fuel cost as we go into next year when the staff mandate kicks in. Like, do we have any visibility around how much of the staff procurement is done at what price so that again, it gives us good visibility in terms of fuel cost into the next few years? Yeah, thank you.

Thanks, Adish. On the order to see what we're seeing is a greater propensity. Now, you know, it's reasonably recent, but there's an increased propensity of people making the orders while they're sitting there waiting for the aircraft to board. I think it will boost the spend per pack on in-flight sales. But in-flight sales are a pretty small part of our total ancillary volume. As Adi has said, the large volume, the large moving items are the priority boarding reserve seating. But we think, and it's currently borne out in the first couple of weeks of trials, there is a notable double digit increase in the percentage of people who will shop on board when they can do so in advance using the order to seat functionality. We think that will continue. I'm here with Thomas Fowler, our director of fuel sustainability. Thomas, you want to take the second part and then I might double back and ask Adi or Neil to comment further on the order to seat.

Yeah, so, Sathish, just on the staff side, we're currently negotiating the prices with our fuel suppliers ahead of the mandate next year. So it's very early to give an exact number on it. But we will, we have some contracts rolling off with suppliers in January that we're negotiating at the moment. And like we're looking at somewhere, staff premiums of between two and four times depending on the region. But we're nowhere near finalised on it yet. Thanks, Thomas.

And, Edi, Neil, you want to comment on the order to seat ancillary spend?

I mean, as you say, it's just, it's just two points I'd make is that one is from a labs perspective. Here's a low cost solution done by Bluetooth that has changed behaviours on board and just shows the innovation that we're getting from the lab side without any servers on the back of the aeroplane or any certification or anything like that. So it's a pretty slick solution. And then the second thing I'd say, and I'm here with Sinead and you get this anecdotally back from the crew that people are more inclined to buy more when they're ordering on the app rather than asking directly. So sometimes people don't ask for like three packets of fringles or four cans of honey can but have no difficulty doing that when they are when they're doing it to the app. So it's a behavioural change. And so people, it looks like people actually will need more data on it but it does look like they actually buy more per passenger.

Yeah, I'd agree with Edi there. I think one of the other benefits it has is that people who may have traditionally waited for the second service or the third service are now willing to put in that random order between service and you get the incremental sales that you wouldn't have got before. Yeah,

I'll give you an anecdote. When I came back with the kid from Rome, the school midterm last week, my wife now has me ordering the stuff to, if you are paranoid that we won't have a panini or a Bahamian cheese or something on board. So we now order to app. The only downside is I was sitting in row four, people around me say they arrive down with my stuff first. So I see you get special service here on the Inflite. No, no, it's the order to the seat and you can go in too. I think it will significantly boost the conversion of people on board but it won't be dramatic. Its impact on our overall and salary revenues won't be dramatic because Inflite sales is reasonably small percentage of that. Next question,

please. The next question comes from Sevanti from Raymond James. Sevanti, please go ahead. Your line is open.

Hey, good morning. Hey, two quick questions. If you look at the next 12 to 18 months, just given your slower growth plan, are there any kind of major cost items that you think from current trends you'll see kind of greater pressure or maybe because some of the items that you're working on that might see less pressure than you're seeing today? And then just on the second question, could you talk about the steps that you need to take to migrate that last 25% of customers to the app and are there any kind of related cost savings that you're expecting?

Okay, ADR, excuse me, second half. I'll do the first half. Next first 12 to 18 months on cost items, I think the two that we would focus on at the moment is the propensity of governments like the French and the UK to look for increased taxes on air travel. I think we've seen very significant successes in getting the Irish, the Hungarians, the Swedes, the Italian regions to roll back taxes but there's no doubt in my mind that the UK and French are going in the opposite direction. I would worry about route charges, although I think while we think there's some reasonably simple solutions here on route charges like protecting over flights and making sure that they all show up to work first thing in the morning, I think it would be used by governments as a way of trying to drive up, or by ANSP's, to drive up route fees or ATC fees by above inflation. Other than that, we think airports and handling, labour, aircraft and ownership and our financing income line will continue to be strong. But I think I draw an awful lot of comfort from our cost performance in the first half of this year and over the full part of this year. No other airline in Europe is going out there this year with kind of cost flat unless they're kind of scamming the P&L by recognizing loss of sales and leaseback profits through the P&L. I think the real upside for us in the next 12 to 18 months with our capacity constrained and revenue or frequency reductions in a lot of the bigger markets is I think there's a real potential to the upside on pricing and fares. And I hope we're beginning to see that as we move into Q3 where there's no doubt in my mind we're strong bookings, pricing, the price declines are moderating. A lot depends on what happens in summer 2025, but I would be reasonably optimistic that, you know, and again against prior year weak comparables, we'll see fares up in summer 2025. Eddie, do you want to talk about the migration of the other 25% of customers to the app?

Yeah, I mean, like the real benefits here, we've seen this flowing through from the app and the data travel app where we're actually able to communicate what gates you're going to, you know, any delays that might be coming. And we're just we're able to manage that much, much better. And the next phase of this will be on the you'll be able to get you'll be able to manage operational problems more easily on the day. So, for example, if you're down gauging an aircraft from an 8200 to an 800 and there's a different seat configuration, you'll be able to virtually do that in real time without people having to, you know, talk about which seats they're in and all those things that will drive operational efficiency and 25 minute turnaround. And, you know, there's also the ability when you've got everybody on this app to get around those old legacy systems that are at airports, which have been around since old gods time, you know, CESA systems, etc. You'll be able to manage queues of virtual boarding areas, etc. So that will speed up like anything that speeds up getting people on aircraft turning around on time, particularly as more larger gauge aircraft come online. We've got to be thinking about that as well. And ultimately, like, OK, it saves it saves paper. And what there's that there'll be ultimately a cost benefit for us in getting around legacy systems and it'll be a much better experience and it'll be in place for next summer. And you just need that you'll need a smartphone to do that. 70% of people do it. And like we did this before with online online check in and people didn't have to go to check in desks. It's another change. But I think people see the benefit of it.

I mean, I'm a very optimistic. I think we know we can't guarantee of eliminate 100% of, you know, things like a boarding card, reissue fees, airport check in fees. But really, if we have everybody on the app and we're sending you messages, it should really collapse those fees, those fees, which are really are a source of irritation to a small number of passengers.

And

increasingly, there's a huge vast majority of our passengers who arrive at airports without having checked in our customers of OTAs who weren't passed on the reminder emails or the text SMS went to some fake mobile phone number. When if we have 100% of people on the app, you'll be getting the reminders. And I think everybody then you'll be able to check in there on your phone the day before you travel. We should really be able to eliminate 100% that there'll always be some moron who will ignore the messages, think it's spam and won't check in. If they still arrive at the airport and haven't checked in, they will be they will be hit with a fee. But we think we should be able to collapse that to almost zero. If once we have everybody on the app. So there'll be a real boost, I think, in our interaction with customers, but also eliminating some of those annoying fees for customers, some of which are they only pay because they're not paying. And OTAs didn't pass them on our kind of reminder emails and text SMS. Next question,

please. The next question comes in Dwayne Fenigworth from Evercore ISI. Dwayne, your line is open. Please go ahead.

Hey, good morning. Thanks for going into overtime here. Just over staffing. Have you paused pilot hiring? And maybe you could put into context, you know, the number of pilots you plan to hire in the next year versus what you've done the last couple of years. And then really, the point of the question is, do you have an estimate for the size of the cost headwind from over staffing, which presumably should should work itself out over the next year or two?

I think so. I wouldn't want to put a particular number on it, Dwayne, but, you know, we had geared up. We were crewed for we had trained up and, you know, we recruit and train pilots in the January in the first and in the first calendar, first two calendar quarters. So we had hired more than 20 more pilots and aircraft and climate group for 20 more aircraft than we actually operated through the summer of 2025. Now, we could have taken the decision right. Let's make them redundant, get rid of them. We won't. We did think natural attrition would take them out. The problem actually, the moment is we have very little attrition of pilots and cabin crew. You know, we're an all time record low turnover of pilots and cabin crew. So we did carry them through the summer. I think it was it did minimize some EU 261 compensation costs because we did have more standby pilots than by cabin crew. But we wouldn't want to do it again. And I think that's why we're telegraphing now to the market early. We're taking down the growth next year. We're saying today 210 million. If Boeing come back with adverse news between now and Christmas once the strike is off, I mean, Stephanie Popa has committed to me. She'll come back to me once they are out of the strike and have people back to work. They'll give me a definitive delivery on our nine Q4 delayed deliveries. And then how many of the 29 aircraft, the last 29 aircraft we're going to get advance of. And I said, when I say summer 25, I said, Stephanie, I'm only taking aircraft up to the end of June. I'm not counting any in July and August. This year we were trying to take deliveries in July, trying to take deliveries in August. We had crews ready to go and, you know, we had them on sale and we had to chop and change the schedule. It was like it was very disruptive and costly. But because of the lack of attrition at the moment, we have stepped down or canceled a lot of pilot recruitment and training, pilot recruitment and cabin crew recruitment and training, both in the calendar fourth quarter and in the calendar first quarter of next year. We are doing some modest pilot recruitment, but it's very modest. Almost all of it will be taken by our cadet program, will be absorbed by our cadet programs, recruiting our cadets as second officer, promoting them through the first officers. There's very few people leaving at the moment. There's not a lot of other 737 jobs across Europe. There's very little demand in the Middle East for 737 pilots. And so I think our turnover attrition of pilots is at an all time low, which is good. I think people are generally happy with where they are. They're getting the benefit of significant pay increase and productivity pay increases over the last two years. And people seem to be generally happy with life and nobody's leaving. Cabin crew, same situation. But again, because the recruitment and training of cabin crew is a much shorter cycle, you know, but we have canceled a lot of recruitment and training programs that we had planned in the Q3 and Q4. And calendar Q1 of next year, we will do some cabin crew recruitment training in the first half of next year, but probably only running at about 30 or 40 percent of what we would have normally done in previous years when the tuition was higher. So, but I think we had a meaningful cost penalty this year. You know, if you look at over the full year, you know, we expect the kind of the staff costs going to rise, traffic up about 9 percent, staff costs will rise between, you know, high teams. Some of that, a couple of percentage points that is because we were overcrewed through the summer with those pilots and cabin crew for the 20 aircraft, which we didn't get. So and that hits us on the double. We're down five million passengers. We don't have yet. We've lost that five million passengers. We've lost the considerate of those five million passengers, but we've married the crews through the summers at the same time. Neil, you want to add anything on that?

No, I think you've covered it very well. It was the 20 aircraft were to be over crewing was the key lag for us this year. And hopefully we can manage that down a bit into next year if we're growing for for less aircraft in the face, we'll accrue appropriately.

Yeah,

thank you. Thanks, Wayne. Next question,

please. The next question comes from Ruby Colanais from RBC. Your line is now open. Please go ahead.

Yes. Good morning. Firstly, on slide 17 of your presentation, you've now got 10 percent passenger growth in four years, 27 on one percent fleet growth. So how should we think about that? And then secondly, you're wondering if you think you through your book to date pricing was much different from your fair expectations given the slightly weird prior comp you've got from OTAs removing run air flights from their websites last November. Thank you.

Thanks, Corey. I mean, I can't remember off the top of my head of what's on slide. So what number traffic number of being for F.I. 27 there? You look if you're looking at it. Oh, hang on.

If we do 30 in there, which is, you know, point in time, it may or may not be that number, depending on the number of aircraft we get.

You know, I think that's reasonable. I mean, like we would expect for F.I. 27. I mean, a lot of this now would be dependent on getting if Boeing deliver all of the 20 million. I've been assured to Stephanie Pope on Friday that, you know, while they may miss some of the deliveries for summer 2025, we will have all of the remaining game change, the 210 game changes in the system by for summer 26. I think it would be reasonable that we would get close to 230 million. So, you know, we are determined to continue to hit those traffic numbers, but they're dependent on Boeing delivery delays. So if you take our F.I. 25, we are 200 million. I think we'd be at about one hundred and ninety nine and change. Twenty six was originally two fifteen. We would step that back now towards about 210. But I see no reason why we wouldn't then be able to get that back up towards 230 million for F.I. 27. Now, maybe it might be 225, 227, 228, but, you know, we will as soon as we get those aircraft, we can deploy them profitably. And so I think that's reasonable. We then will have a year or two. I'm not sure about F.I. 28 or F.I. 29, because we will at that point in time be facing with re-delivering some of the louder A320s. And we're heavily dependent on Boeing not having any delivery delays on the first of the of the the Max 10s on Q3 and the OTA. Look, it's hard to separate it. I mean, all we can give you is what we have at the moment. That is that the forward bookings in the Q3 are strong. We released the October traffic stats this morning. Ninety four percent load factor traffic up seven percent. And that was with even with the Boeing delivery delays. And it's hard to again say how much of that is due to the OTA is coming back on. Andy has made the point where we have approved it to late to be in place with over 90 percent of the OTA. Some of them have not yet got the the pipes or the API pipe fully functional because their IT departments are slower than some of the bigger ones who are better at the IT. And so I think there's more to come from the OTA than Q3 and Q4. But what we can tell you at this point in time is traffic growth is strong. We would still expect in Q3 that the schedule traffic in Q3 to be up some seven, eight percent in line with the October number. And the price decline is certainly moderating. And I go back again minus 15 in Q1. Some of that was the Easter moving into Q4 minus seven in Q2. I think a midpoint between zero and minus five in Q3 would be a reasonable back at the envelope. It's not a forecast. Please don't quote it back to me as some bloody forecast. But it is moderating. And then it's just hard to know how much Easter will affect Q4. But whenever we have a tough prior comp in Q4, we will have a bumper Q1 because we'll have all of Easter in next year's Q1. Whereas we only have half Easter in the prior in this year's Q1. Thanks, Rory. Next question,

please. The next question comes from Andrew Lobenberg from Barclays. Andrew, your line is open. Please go ahead.

You're cutting capacity to the UK, you say, by 10 percent. What are you going to do with those slots? And then a second question back to OTA. Are you bored of it yet? You say 90 percent of the OTAs are signed up. But eDreams is kind of large, I think. So would it be fair to say that that represented more than 10 percent of your passengers back from last year? So actually, you're missing a bit more than 10 percent, you suggest that. And what is the pathway forward for you to kiss and make up with eDreams?

OK, thanks, Andrew. We are a lot of the guys, as I said, we tried to make the point that the a lot of the airports in the UK, if we cut about five million passes out of the UK next year, it will be done on frequency. We won't move aircraft. We won't vacate overnight aircraft in place. Now, most of our UK airports are not slot restricted, but we certainly wouldn't reduce overnight aircraft at the big airports. I don't know if I've got it all right, but we will take some of the capacity we operate at those airports on aircraft that are based elsewhere in Ireland or in Europe, flying in and out of those airports. And we will divert some of those frequencies away from the UK to other lower cost destinations like Italy, regional Italy,

Sweden,

and Central Eastern Europe, where we're seeing incentives or increasing incentives. So we don't think and we wouldn't compromise slots at any of the couple of UK airports where slots are an issue. On the OTA, eDreams is one of the bigger ones, but it's nowhere near 10 percent of passengers. None of the OTAs on their own or are significant, have a significant impact on our volumes. They're all reasonably modest on a standalone basis. If you look at the eDreams business model, however, you know, most, almost 100 percent of what they claim to be profitability is coming from this eDreams prime subscription, where they promise you a discount on 100 percent of flights. And yet on every flight we try, they're overcharging customers. We think it's inevitable that eDreams will ultimately have to sign up because I think they're going to cede market share to other competitors, like Love Holidays and the other OTAs who would simply take that because the other OTAs can now offer low Ryanair fares at Ryanair's prices, whereas the ETA is still trying to run a business where they're inflating Ryanair fares and the cost of Ryanair ancillary services. And I think given the transparency of the web, it's inevitable that they will have to sign up eventually. We're indifferent as to whether they do or they don't. But at the moment we're off sale with eDreams. That suits us fine. We don't want to be on sale with anybody who is inflating our air fares or overcharging our customers. And it's a matter for eDreams. We frankly couldn't care less. It's not going to make any difference to us going forward. But we are absolutely determined to ensure that nobody gets between us and our customers and that we, by working with approved OTAs, we are going to ensure that those OTAs are offering their customers real Ryanair fares and we're getting real customer emails and real customer payment details. Anybody else want to add anything on the eDreams OTA side? Feel free. No? OK. Next question, please.

The next question is from Gerald Kue from the Panmoor Library. Gerald, your line is open. Please go ahead.

Morning, everyone. Firstly, on the tax rates, which seemed a bit high at 14% in Q2, obviously above the standard rate, I was just wondering why that wasn't what would be a sensible assumption for a full year. And secondly, on your revised air craft delivery schedule, could you clarify what you've actually assumed in terms of timing of the resolution of the strike at Boeing, please?

OK, maybe Neil or maybe Tracy McCann might apply there on the tax rate and then I'll take the Boeing delivery schedule.

Yeah, I'm happy to jump in there on the tax, Gerald. As you're probably aware, we make most of our profits in the first half of the year. And jurisdictions where tax rates are slightly higher, whereas we tend to make less money in the second half of the year. So you'll see the tax rate migrate down as losses come into some of the markets in H2. I think a reasonable assumption for the full year would be somewhere close between 10 and 11% tax for the full year. Thanks,

Neil.

And on the aircraft delivery schedule, we put there an updated aircraft delivery schedule, more showing so we can give you a sense of where we think we are in terms of the additional Boeing delivery delays and why that's causing us to step back our traffic of forecast for FY25, but also FY26. We've made no assumptions on the settlement of the strike. There isn't a strike. There's a balance today on the 38% pay increase. We've no idea whether we get set or not. Boeing themselves think it's about 50-50. I suspect the labor may well turn it down if they're at 38%. I mean, my view is these guys will hang out for 40%, but what do I know? I mean, all we're saying there is that's what our current forecast would be for FY26. To get to 210 million passengers, we need to get, you know, the benign delayed Q4 aircraft in by the end of April or May. I'm saying we get those in the first quarter. And then the critical issue is how many of the 29 additional aircraft do we get by the end of June? We're not going to schedule any aircraft deliveries in July or August. So whatever we get by the end of

June,

at this point in time, I think 15 is a reasonable assumption. But I would, that's heavily qualified by once Boeing and, you know, again, I talked to Stephanie Pope on Friday, they will update their kind of delivery schedules with us once the strike is finished. And they have, they think that it will take about four weeks to get back into kind of full production after the strike. We hope the strike gets resolved this week, in which case at least they're back up to full production before Thanksgiving or after Thanksgiving, but before Christmas. But there is a real risk that those, you know, we will get less than those 15 aircraft in time by the end of June. If it's 10, if it's five, I don't know what that impact will be. We would have to move some of our traffic growth out of FY26 and into FY27. But I would caution again, the more we have to delay our growth, the better I think would be the outcome for pricing in summer 2025 and in FY2026 with a week prior year comp in FY2025.

Okay, thanks very much.

Personally, I would like to take as many aircraft as we can get. But as a shareholder, I think the more the aircraft are delayed, the better it would be for our profitability in FY26. Thanks, our next question, please.

Our last question comes from Conor Dwyer from Morgan Stanley. Conor, your line is open. Please go ahead. Conor, hi.

Hi, guys. Good morning. First question is just on the buyback. You talked about the slowdown being influenced by the payback of the bond next year, lower capex this year, accelerating it. I'm wondering if there's any influence by the fact that you're also expecting potential rule changes on the ownership and if basically it would make a bit more sense to hold back some of the cash to do more of the buyback on the ordinary. And the second question on the pre-recorded call, Neil, you spoke about a willingness to explore other financing options if they become more attractive than cash. Just wondering if that's only to really kind of change the capital structure or if you also might consider extra leasing to bump up the growth of the overall business over the next few years. Thanks very much.

OK, thanks. I'll take the first again, Neil, to take the second. On the buybacks, I don't think the review of the ownership and control would have any difference. The buybacks are not driven by the pricing of the discount on the ordinaries or on the ADRs. I mean, the current buyback we've skewed 70-30 towards the ADRs anyway. But I think it's instructive that since we've began this consultation process with the shareholders, the discount on the ordinaries has eroded from 29% to 18%. And almost all of that has come as a result of the pricing on the ordinaries rising, even at a time when we're buying more ADRs than ordinaries. So I don't think it'll make any significant difference. If the board was to change either the ownership or the control rules in conjunction with our regulators, we will still be facing, I think, the material challenge of very strong cash generation, as long as we maintain kind of current profitability for the next two or three years while we have a gap or a fall off in capex. And what drives our share buybacks is surplus internally generated free cash flow. We have no other uses for that cash. And therefore, as with evidence this year, we completed 700 million share buyback. Now, I think there was no doubt that the decline in the share price as a result of the disappointing guidance on pricing and fares this summer certainly incentivized the board, I think, to move quickly and to accelerate the share buybacks. But it was driven by having surplus cash. I think the surplus cash will be a little tighter for the next year or two, given the two big bond repayments. But there should still be room for share buybacks over those two years. And then we're back into significant capex as we start as the max 10 deliveries start to roll out in the first half of 2027. So I don't think the bond and the board's willingness to look at buybacks will be in any way affected by the consultation process on ownership and control. It will be driven solely by our ability to continue to generate really strong free cash flow and deploying that free cash flow in terms of shareholder returns. I look around me at our competitors, all of whom have massive net debt positions. And yet we're you know, we've returned nine billion to shareholders over the last 15 years. And I think if there's every indication through a combination of dividends and share buybacks, that we'll be able to continue that market leading performance for the next couple of years. Neil, I forgot the second, I was suddenly doing the pre-record on

the financing options available to us. Connor, we've always been opportunistic in what we do. The reality is in relation to leasing, we've got a higher investment grade rating than any of the lessors out there. So we can raise money cheaper than the lessors. They would have to have a compelling reason for why we would go towards that financing. I can't see with capacity constraints for some years that the lessors are going to reduce what are now sky high leasing rates, which thankfully we're not paying, but our competitors are. But you know, if the bond market, for example, was to become cheaper than financing ourselves out of cash to refinance bonds and stuff like that, we might look at it. Potentially in a few years time when we're trying to take some of the residual risk from the NG's off the balance sheet, we might look at lessors. But I think if their pricing remains where it's at, that wouldn't be my first, second or third port of call when it comes looking at alternatives to our current cash.

Very clear. Thanks very much both.

And again, I think looking forward to next year, nothing fills me more full of optimism more than the aircraft lessors making record profits on lease extensions and new aircraft leases to our competitor airlines. You know, they're driving up the cost of operations of our competitors across Europe at a time when we're taking buying new aircraft, using our balance sheet. And those aircraft are carrying 4% more passengers, but burning 16% less fuel. When we get to the max 10s, 20% more passengers at 20% less fuel. So I'm very optimistic going forward that the unit cost gap between us and our competitors will continue to widen and our competition in Europe are going to be under significant pressure. You look at the Francis results last week, Air France this week, you know, always talking about EBIS because there isn't any earnings there. These guys in a constrained capacity market are going to drive up airfares for the next couple of years. I think that would give us a lot of headroom for to see modest growth in airfares, much which will flow through to Ryanair's bottom line. Any other questions or is it the end of it?

That concludes the Q&A session. I'll hand back to you.

Thank you very much everybody. I think we've run an hour and a half on questions Q&A. We have an extensive road show in place. I'm a member of the team over here in the US and Neil is in the UK heading for the US. Eddie and there's other team members will be covering investor meetings in the UK and Europe. If anybody wants to meet with us, please can you contact Davies GoodBuddies or Citi. We'd be very happy to have a meeting with any investors. May I conclude by saying, look, I think we've had a froth summer on pricing. We were surprised by the downturn in pricing after two years of very strong pricing. I think the real message today's takeaway from this call though is look at the unit cost performance. The unit cost performance is absolutely bang on. We are doing a stellar job on containing costs. We've been surprised by the weakness in pricing this year, but I think it's reasonable to expect that pricing will move modestly upwards for the next summer or two in a heavily constrained marketplace as long as there's no geopolitical events that disrupt air travel. And I would think the Reiner balance sheet, certainly Reiner's P&L, is poised to benefit from any improvement in pricing or upturn in pricing next year, particularly as we will move into FY26 with a very weak prior year comp. And with that, may I say thank you very much. I look forward to seeing you all at some stage over the next week. Oh, and Neil and Jason are going out to the Blair Industrial Conference in Chicago, or Baird Industrial Conference in Chicago next week as well. So if we don't get you this week, then anyone's meeting with Neil or Jason will be in Chicago next week. Thanks, everybody. I hope to see you soon. Thanks. Bye.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.