Welcome to the Ryanair Q3 FY22 Results Conference Call. [Operator Instructions] I'll now hand the floor to Michael O'Leary. Please begin your meeting.

Yeah, thank you. Good morning, ladies and gentlemen, you're all welcome to our Q3, this Q3 results conference call. You'll see the comprehensive release this morning on the ryanair.com website of the Q3 numbers or the MD&A. We also released a video interview of myself and our CFO, Neil Sorahan, which should have dealt with most of the major issues. A couple of quick things. We've taken as read and everybody's read, seen the results. So I think the strength of the numbers here with the recovery of traffic during the third quarter, up to 31.1 million passengers, that was significantly faster recovery than any other airline in Europe, also dramatically higher load factor than any of the other so called local airlines who all still have load factors in the mid-70s, we delivered an 84% load factor. That would have been significantly higher, as would the yields, if we hadn't had the sudden emergence of the Omicron variant in the last week of November and the first week of December. And I think we should be just a little bit cautious going forward. We were heading for a very, very strong Christmas and December last year. And as Omicron broke out, and government started imposing or re-imposing travel restrictions, we got hit and it probably cost us about 2 million passengers in December. And also that 2 million passengers that people tend to book later. So it had an impact on both passenger volumes, we fell to 9.5 million in December but also critically on yield. We took out about a third of our January capacity again because bookings just collapsed. We did hang on to some of that Christmas return traffic in the first week of January but other than that the rest of January was a washout.…

Yeah, yeah. I'll very quickly run through that. You've covered the field already, we're equally well hedged on carbon as well for the next year. So we're about 100% hedge for FY22 to €24 in EUA, we're 80% hedged into FY23 at €45 in EUA, compared to current prices of €90. The balance sheet remains in a very strong position with cash just under €3 billion at year end, after having or at the end of December after having paid off the UK CCFF five months early. And indeed, net debt despite €800 million of CapEx is now modestly €2.1 billion at the end of the quarter. There will be a big focus on the balance sheet over the next couple of years to get that back to broadly net cash net debt position. And then the final thing that I was pleased within the quarter was the unit cost ex-fuel development where we saw unit costs get back to €32 per passenger.

Okay, thanks Neil. And we'll just open up to Q&A now. Everybody is limited two questions. Can I deal with the first question that comes from everybody, what will the yield be like for summer of 2022? We don't know. Our focus on like most of our competitors will be on recovering volumes quickly and restoring loads to and try and to get load factor back up to 90%. If there is no further Omicron or COVID restrictions, then we think there will be a reasonably strong traffic recovery through the second half of February into March and certainly into April. But forward load factor or forward bookings are running significantly behind for summer of 2022 where they would have been on this day in advance of summer of 2019. And so while bookings have jumped or bookings have recovered very strongly in the last two or three weeks, that needs to continue uninterrupted, I think, for another eight or 10 weeks. So that we can get not just April, which at least we're able, but also the peak summer months forward bookings back to the level where they would have been this time, two years ago, pre-COVID. We will as always remain load factor active, yield passive. I think that was demonstrated in the Q4 numbers that we delivered an 84% load factor. I smiled to myself as I listened to a number of our competitors last week claiming to be load factor active and yield passive, yet they only delivered 77% load factor in the Q3 compared to our 84% and they were only delivering about 25% of our seat capacity. But nevertheless, lots of them claimed to be Ryanair, we're not actually delivering what Ryanair delivers. We don't know what the yields will be, we're not going…

Thank you. [Operator Instructions] And our first question comes from the line of Mark Simpson at Goodbody. Please go ahead, your line is open.

Good morning. Yeah, two questions as allowed. First one, you mentioned in the preamble that you're going to pay down debt over the next two years in terms of the presentation on the website. I'm just wondering if there's an update on CapEx we can have behind that statement? And then secondly, whilst we're not looking for a specific overall guidance on the summer, there are two areas that kind of stand out in terms of competition. One is domestic Italy, the other is Vienna. I'm just wondering, can you give us an update on how you see the strategy of managing those markets, particularly where one of your competitors, has kind of made a statement down on the domestic Italian side with their increase coming to capacity. So it's really between you and Wizz being played out in Italy and Austria, be interested to have your take on that? But first off, all, maybe a CapEx update from Neil?

Sure, thanks. Just before Neil comments on CapEx and I might have Eddie to just give news on domestic. I think it's just - it's important again, there is a non-natural view out there generally, maybe among I think some unions across Europe and labor that, oh, we're out of COVID and we're recovering from it, it's all behind us. It isn't all behind us. We're still repairing load factors, we're still repairing bookings, and we still need to get our forward bookings for the summer up to where they were before. Even when that does repair, we are - we went into COVID essentially with zero net debt position and we will emerge with a 2 point - effectively a €2 billion net debt position. Foremost in the Board's mind at the moment is returning that net debt position to zero as quickly as we possibly can. So our primary uses of cash in the next, I think 18 months - 18 months/24 months will be, pay down that debt to return us to a net zero debt position. Neil, net debt and on CapEx?

Okay, on CapEx Mark, no change from our previous guidance. So about €1.2 billion CapEx in the current financial year to 31, March '22, that shows maintenance CapEx. That will increase to €2.3 billion next year, which is our peak year of CapEx, and then it starts to pull back although the next year after that we'll start with a €2.0 million and then you'll see a drop off thereafter.

Okay, and Eddie domestically in Vienna, are we noticing anything from or do we even notice competitors in those markets that are not Italian?

I think, particularly on Italy, we've had a huge investment in Italy over the last 12 months. We've gone from, for the summer of this year, we go from 67 base aircraft to 92 base aircraft. We've got three additional bases opened up and we've got just in comparison to, there are gaps there that have been left by Alitalia and EasyJet as well, but we now have well over 100 domestic routes. Wizz have got less than 30 routes there and we have the frequencies. And we are, I mean, particularly as we flew pretty much our entire schedule down there, throughout the whole sort of COVID crisis, we are the sort of go-to airline for domestics in Italy at the moment. And we know that some of our competitors down there are less than maximum sort of load factor, certainly in around a 50%, 60% mark and sort of desperate fares there at the moment of €299 and €499. So we have grown by almost 40% in terms of base activity in Italy. And I'm pretty confident we are going to, more than confident that we're going to have the lion's share of the domestic traffic in Italy. And Vienna, again, we will have just close to 20 base aircraft there this summer, as against Wizz, which is gone sort of backwards there. They were going to do nine, they're back down to five, talking about going back up to six. And we've got significantly more capacity. They've recently canceled 14 competed routes out of there, notable ones will be Madrid, Kelowna and Warsaw. So I think we are certainly more than grabbing market share and frequency build and competed airlines are on completed routes. We see them pulling away from us.

And just a follow-up, do you think that your fuel hedging strategy gives you a massive advantage this year and able to actually take the competition in being able to manage your prices with a decent return, take that to the airline which is unhedged?

I - fuel we never do that and we don't hedge fuel here to maximize returns. I mean, the returns will very much depend on the speed and depth of the recovery. I think what's important with our fuels hedging strategy is that we can deliver cost certainty to our shareholders for the next 12-18 months. I mean, we have seen some spectacular deviations by some of our so called competitors, arguing that they now will be unhedged because they've never made money hedging. Well, they're about to lose a shedload of money by not hedging with, particularly with spot prices of $91 a barrel. And but to be fair, all we see for them in some of those - as Eddie said, some of those markets easily, they struggle for a 50% load factor. And we see desperation pricing in recent weeks, we've seen some seats sales at €299 and €499 in domestic Italy, although nobody in domestic Italy seems to notice them. But I think most of the other airlines, certainly EasyJet and the other well run sort of airlines, local airlines in Europe are hedging. We don't - always we're not hedging, but hedging gives you cost certainty for your shareholder and investor base for the next 12 months. And it would - it really takes a spectacular, I would say, leap of mismanagement to be looking at a post-COVID recovery where I think all of the pressure on oil will be to the upside on the back of economic recovery and also political uncertainty over Ukraine. We would want to be certainly, I think it is a sensible strategy to be hedged. The real challenge in hedging was, would you kind of hedge up to 80%, 90% and we didn't think that was sensible, which is why we've got a, I think a very clever and sensible mix of jet swaps and caps, which insulates us from the upside but there is still benefit from a sort of the caps on the downside if there was some kind of collapse in oil prices. But no, it won't affect the return. It just gives our investors cost certainty.

That's great, much appreciate it.

Thanks, Mark. Next question, please.

Thank you, that comes from the line of Sathish Sivakumar of Citigroup. Please go ahead, your line is open.

Hi, Sathish.

Thanks, Michael and I've got a couple of questions here. So firstly, if you could actually give an update on the recent ICO report on ministry, regarding the Belarus space? And secondly, on the ancillary revenues, if you could actually share some color on the quarterly momentum that you're seeing on priority boarding and reserved seating, i.e., do you expect it to normalize in the coming quarters? Thank you.

Okay, yeah. Thanks and good question, Sathish. We welcome the ICAO report on the diversion in May of 2023. I think it is clearly, we think it could have gone further, but at least it has certainly highlighted that it was inappropriate state actors who essentially engaged in an act of modern day aircraft piracy. I think we are calling on ICAO and on the aviation and the government authorities of Europe to ensure that there are appropriate undertakings given by certain Belarusian state and this will never happen again. It is fundamental to air travel going forward that both airlines and our passengers can expect to overfly even rogue states, free from any interruption or dishonest diversion or piracy of aircraft. We certainly welcome and we fully support the action now being taken by the US Department of Justice against the four named officials in Belarus and we, as the airline involved would be seeking to support any actions taken against those actors. I think it is fundamental to the future of air travel that we do not have a reputation of, or to my mind, it was the first case since the Chicago Convention 1945 of a state sponsored act of international piracy and we should not reopen the - there should be no overflights at Belarusian or less appropriate guarantees are obtained from and then this won't recur. In the meantime, we continue to fly around the Belarusian state, we, it's generally on our north south flight from the Baltic states down to Greece. And those kind of destinations where we might overfly Belarusia but we believe all the EU states should show solidarity and avoid Belarusia until appropriate assurances are given and Eddie, you want to give us some color on ancillary revenue developments?

Yeah, I mean, on ancillary, I suppose the big call, it's really for us internally here are duty free sales and reserve seating and priority boarding. And as we had been working our way through that, during the sort of shutdown on COVID-19 and our labs people over the last two years, have been doing a lot of work in terms of dynamic pricing, particularly on the priority boarding side and that is continuing to show build. And we've also put in some dynamic pricing in terms of the number of price points for baggage as well, but I think we'll only see that more closely and as we get into the summer, but we still have some way to go, I think on dynamic pricing on seats, which we have yet to tap and the way that we've done with priority boarding. So very pleased with what's happening there. And obviously on duty free out of the UK, we're continuing to build on that. And again, into the summer, I think we'd really only see how solid that is when we get those volumes back up. So I'm very pleased.

And roughly what proportion of our flights operate to and from the UK?

It's a bit just under 30%.

Okay, thanks, Sathish. Next question, please?

Thank you. That comes from the line of Savanthi Syth at Raymond James. Please go ahead, your line is open.

Hey, everyone. Just two questions. And just on the non-field passenger performances, as Neil pointed out, it is very strong show in there. Just curious if you expect that to slip here in the fiscal 4Q given how much frozen capacity you've cut here in January and February? And just any early thoughts on where that can go in fiscal year 2023 just in terms of kind of upper and lower bounds, perhaps? And then for my second question, I guess, if you can provide some color on how you're thinking about the opportunity in Germany relative to perhaps kind of what your ambitions were pre-COVID? Thanks.

Okay, we'll have Tracey [indiscernible] who will take that the nonfuel passenger cost developments and where we think that's going and I'll have Eddie maybe to comment on the opportunity in Germany.

Okay. We've seen a very strong performance in the non-fuel costs in the quarter of €32 per passenger that was driven by increased load factors, increased aircraft utilization, a lot of work done on the variable cost on renegotiation in a lot of our airport deals. And we continue to benefit from the staff pay reductions. And where we see it probably coming over the next year is, as we said before, “we'll start to see an increase in Eurocontrol and ACC costs which are pretty much out of our control.” So that probably give us a better [euro] passenger, I think next year but we hope to get to the pre-COVID levels as we return to an increased load factors.

Okay, and Eddie, you want to talk on developments in Germany and particularly the closure of the Frankfurt main base?

Yeah, I think, our view on Germany would be that there is a structural problem with airport costs in Germany, that's evidenced by what's happened in Frankfurt recently, where practically every other airport in Europe that we dealt with was looking to lower prices and in Frankfurt, they were looking into not only higher prices, but to look for higher thresholds of passengers. And I suppose Germany is really a story of two types of airports, the secondary airports are still very competitive, in terms of, the smaller airports like Baden, Mannheim, and Niederrhein, places like that, where we've been able to sort of put additional capacity in there but we, Germany is a one country that we have significantly reduced base aircraft, if you compare it with summer '19 and it's all down to pricing security taxes. And we have, we didn't recover fully to the amount of base aircraft that we had previously had in Berlin, but something needs to happen in Germany on pricing, particularly where you've got less capacity in Europe and you've got more choice with other airports and Frankfurt was the was the big casualty there.

What about Nuremberg and Hahn?

Yeah, that's all same, the sort of the more sort of secondary airports, I mean Hahn has its own difficulties at the moment being in administration, they're looking for a buyer at the moment. But Nuremberg came back with a published deal that was open to everyone on a non-discriminatory basis and made sense for us to go back in there. Originally, we went out to Nuremberg because of the non-delivery of the MAX's, but places I say like the smaller airport, the Baden's, the Mannheim and the Niederrhein's and places like that are the only ones that are at least trying to lower costs when they know that the international competition for them on movable aircraft would LCC is going to - tend to go elsewhere.

Yeah, I think also, for my piece, I think Germany is an example again of our cost discipline. As Eddie has said, Frankfurt Main were coming up with a ridiculous price increase into a post-COVID recovery. I think what's interesting is you see kind of essentially the big hub airports, I mean, Heathrow came up with a ludicrous, I think £15 per departing passenger, 15 pound sterling for departing passenger. One of the richest airports owned by the richest shareholders in the world and their first response to a COVID catastrophe and the need to recover was to put up charges again. Frankfurt Main is doing the same because they can, they have a very large connecting home there. We're happy to grow in Germany, we are growing at a number of the smaller airports. But frankly, we have better uses of our aircraft this year, this summer and into 2023. And if an airport doesn't want to work with us to stimulate or to be use price to stimulate an aggressive traffic recovery, then frankly, we have 200 other airports elsewhere in Europe where our aircraft are better deployed, and we'll deploy them elsewhere. We will not give up on Germany, but like frankly, I think the German market is in for two or three years of very - of difficult times for the airports where they're increasingly reliant upon the state subsidized Lufthansa Group. Lufthansa have no interest in returning traffic volumes. They're leading the chart on slots waiver - on the waiver of the slot or the user of slot rules. And German - the large - certainly the German, large German airports are going to see a significant decline in traffic, materially higher air fares while it becomes a kind of a loose hand monopoly. But there's kind of a mood in Germany around supporting the national champion. It all seems, propping of Lufthansa. Not just with €12 billion in state aid but also eliminating competition. We need that to be a reasonably short term phenomenon. But we're very happy to redeploy aircraft into growth markets in Central and Eastern Europe, where we're growing far more - far and growing much more - at a much more accelerated rate than any other airline. We have growth opportunities in Italy, in Spain, in France, Ireland and in the UK and if some German airport wants to put a face, good luck, we'll see you when you change your mind in two or three years time when you have about 20% less traffic than you do pre-COVID. Next question please?

Thank you. The question comes from the line of Alex Irving at Bernstein. Please go ahead, your line is open.

Alex, hi.

Alex, if your phone is on mute, you'll need to unmute.

Okay, just move on to the next one.

Okay, so the next question comes from the line of Stephen Furlong at Davie. Please go ahead, your line is open.

Stephen, hi.

Yeah, hi, Michael. So two questions, one for you, Michael and then one for Neil. And Michael, just might talk about what's going on with Boeing and, obviously, the performance of the new aircraft but also in terms of MAX 10s and new orders beyond 2025, 2026? And then, Neil, just I would like to talk about carbon credits and costs. I just haven't seen that much with other airlines, where you actually hedge this and you might just talk about how that came about in the market because I think that's quite interesting? Thank you.

Okay, well, the kind of key development with Boeing in the last quarter Q3 is we took delivery of about 25 aircraft. In the quarter, we were up to 41 aircraft at the 31 December. I know Boeing's results of last week, they delivered 99 aircraft in the quarter. So we accounted for one in every four Boeing aircraft delivered - delivery in that quarter. We expect to take another 24 aircraft from them, six aircraft a month in January, February, March and April and that gets us up to our 65 aircraft for summer 2022. Performance of the MAX aircraft has been exceptional. The few, I mean, admittedly some of this is because we're operating with lower than normal load factors. We're operating with an 84% load factor in Q3 as opposed to more normal 90% load factors, but the fuel consumption is better than the original 16% promise. And the noise performance has been noted by almost all passangers, they're exceptionally quiet aircraft on board. And I think our initial concern which was that there will be crew or passenger reluctance to operate the aircraft. Absolutely no, and we feel despite the fact we're offering to customers, you can offload off the aircraft and travel on the next [NG] if you want. Not one passenger has sought to offload. In fact, if anything, more and more people want to fly on the new air - the new quieter aircraft. And on the MAX 10s, I think, there's been disappointing and the sales operation in Boeing has been [asleep]. They've been, I think, disturbed. I think worrying from a kind of a, as Boeing's largest customer outside of the USA, it's been worrying to see a trend in recent months of Boeing customers converting to Airbus. We sold Jet2 order Airbus. Qantas order Airbus and even KLM, who for nearly 100 years have been operating shorthold Boeing equipment, now it looks like they're moving towards Airbus as well. Certainly the Airbus sales team are performing very well and Boeing doing nothing, we haven't heard back from the sales team since, I suspect, about last October. Although they know where we are but I think the good news is, we don't need any aircraft deliveries or orders from Boeing until '27 or '28. But for an OEM that's losing so many customers to a it's Airbus opposition, it's remarkable that we haven't - that they haven't been camped outside our offices here, trying desperately to restart our discussions on the MAX 10. But we live and wait in hope. In the meantime, Neil, carbon credits?

Sure, Stephen, carbon credits where would that come about? Well Michael talked about our desire for certainty on fuel. Carbon is becoming a bigger cost and has been have been for the last couple of years. So we took the decision to line up our counterparties and developed a forward market for EUAs. We're able to do that thanks to the BBB rated balance sheets that we have and I think wisely locked in carbon exposures out at the end of FY23 and in a market that is rising and spots trading about €90 euro in EUA. Today, we're headed out into next year at €45 or €45 for 80% of our requirements and that boils down to our desire for certainty on the balance sheet that we have which convinced counterparties to setup this market which traditionally wasn't there.

Okay, great. Thank you.

Thanks, Stephen. Next question please.

Thank you. Next is from the line of Muneeba Kayani at Bank of America. Please go ahead, your line is open.

Thanks for the call. One follow up question on Ukraine. What's your exposure there, you've added some new routes there and what have you seen more recently with the kind of political tensions? And then secondly, on the cost side, have you seen a salary pressure for cabin crew and pilots and how does that impact your strategy to get back to unit costs pre-crisis level?

Okay, on Ukraine, we have a reasonable size operation to Ukraine, but mostly is centered on Kyiv, and airports in the west of Ukraine. We do have a plan, our plan this year is to grow to about 1 million passengers. Last year, we got close to 4 million passengers to and from Ukraine, this year. Again, I've said there being any sort of negative developments, we will continue to operate that plan. But we have no aircraft base in Ukraine. So if there was a Russian invasion or there was some kind of political disruption up there, we will pivot those aircraft away from Ukraine into the summer, we can fill those aircraft readily going to other destinations, any of the other 200 destinations we have across Europe. We remain committed to Ukraine, as long as Ukraine is looking westwards. There are huge economic workflows or people traveling to and from Ukraine, working in Central Eastern Europe. And there's a very large migrant workforce in Poland, in Germany and we see no reason why Ukraine won't - will continue to grow. It certainly one of the countries, and if it's not invaded by Russia, it's a country we would expect to open a couple of bases in Ukraine sometime in the next, I would say, two or three years subject to agreement on costs and prices. We did have the new routes team were down in - visiting the Ukraine airports. Again, it's about our third or fourth visit in January. But I think it was understandable, really the Ukraine authorities weren't in a position to just go to new routes and bases, they were somewhat otherwise distracted. We hope the situation in Ukraine gets resolved diplomatically. And if it is, it remains a very exciting growth opportunity for…

And Michael you covered Ukraine comprehensively. I mean, we hope that the conflict will not take place, that the standard will be resolved diplomatically. We look forward to investing in Ukraine.

And Eddie?

Yeah, I mean, because you've covered most of it there, except to say that, we tend to think of financial results obviously on a quarterly basis. But with the restoration of pay, I mean, you've got to look at, not just this summer, but what's going to happen next winter, and whether there is a reoccurrence next November of some other sort of Omicron type variant. So on that basis, like this isn't over and we don't have a clean set of heels just yet. But we do want to, clearly people made sacrifices here to keep the business on track. Pilots took a - agreed through the unions for pay cuts of 20%, the cabin crew largely around 10%. And we have to have an orderly way of doing that. And we're in negotiations at the moment to do that. So that with a number of unions, and if we can do some of that area, we can do some of that area, but only on the basis that we've got cost certainty over a longer period of time.

Okay, thanks, Eddie. Next question, please?

Thank you.

Thank you. And the next question, sorry, just one second. Sorry, the next question comes from the line of Jarrod Castle at UBS. Please go ahead, your line is open.

Jarrod, hi.

Hi, morning, everyone. Just coming back to growth over the next two to three years, I mean, the biggest markets at the moment are Italy, followed by Spain and the UK. I mean, if you look out two, three years time, should we see more concentration in terms of revenue mix in those markets or do you think it will become more balanced? And then just secondly, on summer, I mean, obviously, the northern hemisphere is in winter, but it's - there's been much publicized stoppages in the US, not enough staff and people getting sick. How do you plan to kind of, will hopefully be a period where there's less people getting infected, but how do you plan to kind of manage something like that in summer, should you see things spike in terms of planes at hand to fulfill schedules and staff shortages, potentially, if they arise due to people being unfit to travel?

Okay, let me touch briefly on both. I mean growth over the next two years. Again, in all cases, for the last 35 years, growth here is almost an opportunity. The growth will go whenever we see the best deals. I think we do comment because of the scale of the markets. We're seeing very substantial growth opportunities in the UK, in Spain and in Italy. But we - this summer, we will grow from about eight to 20 aircraft in Vienna. Budapest, for example, which is the home airport and one of our competitors, we see that this year growth to, is it nine aircraft? 10? Eight? We grew to eight aircraft base in Budapest this year, which will be one more than Wizz, where I think will be at seven aircraft this summer. We are - we're growing faster in many Central and Eastern European markets than the incumbent carriers. So our growth will always be opportunistic. And, it's not some Napoleonic invasion of Russia, here. It is, whoever comes up with the best deals will get the next four or five aircraft. And I think it's very sad, the new routes team are absolutely inundated with requests for meetings, negotiations at airports, and one of those that I would drop in bases, if we saw a resolution of the political uncertainty in Ukraine, Ukraine could take 15, 16, 20 aircraft as, four, three, four or five base at five different airports over the next two or three years. That - I think the critical opportunity or the thing to focus on is not so much the actual, you the geographic areas, focus more on the fact that Ryanair would take delivery of some 60 aircraft a year each year for the neck, right away. We're 65 into…

Thanks Michael.

Can I just add on to that on the labor side, I mean, we have absolutely no issue with the supply of pilots. And on the cabin crew side, as we have and don't forget, well we were flying most of our - all of our aircraft and over the over the last two years, we kept up the sort of the fields of recruiting, so in terms of the cabin crew side. So we've no issue with cabin crew. We may have some pockets in the UK, but if you look at on a macro level of the amount of cabin crew, there isn't an issue for this summer, given the sort of run rate that we have in terms of applications and on the number of courses running. So we're not coming from behind at all. We are coming from a steady platform of training.

And it's a good point. And even in the UK, I mean, our cabin crew generally are earning between £30,000 and £40,000, it is significantly ahead of hospitality and significantly ahead of retail, and it's probably double or triple what the fruit pickers are earning now. I know that's a different issue but we would - we don't expect to see any issues there. And I think, again, I come back to the point, I think the high rates of vaccinations will hopefully protect us from the experience of some of the US carriers on labor shortages.

All right. Thanks very much.

Thanks. Next question, please?

Thank you. Next from the line of Jaime Rowbotham of Deutsche Bank. Please go ahead, your line is open.

Jamie, hi.

Hi, Michael. First, you flagged your superior December quarter load factors versus peers. Provided there are no further COVID curveballs and if the forward bookings curve continues to rally, what do you think is the best case for load factors in Easter and peak summer? Can you get back to pre-crisis type levels in the mid-90s? And secondly, your environmental targets, front and center in today's statement, you hope to power 12.5% of flights using sustainable aviation fuel by 2030. What are the main constraints to achieving that? And will that level be quite consistent across the network or will it be skewed paths depending on where the staff is stored? Thanks.

Thank you, Jamie. I'll let, Thomas Fowler regarding to sustainability to address the environmental issues, just I'll give the load factor issue first. I mean, we would have gone - I think we would have had a load factor in the third quarter if we hadn't had Omicron that would have been in the high 80%. And we won't get there in February, we won't get there in March. I would be hopeful that we will get close to 90% through April as long as there is no COVID negative development. I'm not sure we get over 90%. But we're certainly are, I think our thinking going forward is that once we get into the peak summer months, and obviously the June, July, August, September, that we would expect our load factor to be back up over 90%. Now, a word of caution. That's because we'll be load factor active and yield positive. We will drive load factors up over 90%, but maybe at the cost of yield. So we'll be aggressive on pricing. We're not expecting and we know we're working on our budget for FY23 at the moment. We don't expect to get back to kind of 95%, 96% load factors that we were at pre-COVID this year. But I think we are budgeting for a kind of low 90% load factor through the year. And we will take it on. If we have to be aggressive, we'll take the hit on yield rather than on the load factor. So I think close to 90% for Easter, April and then I think over 90% is the peak summer months. And Thomas, the environmental?

Yeah, Jamie, so obviously the 12.5% target is aggressive for the biggest constraints we see today is the availability of SAF. So at the moment it's not less than 1% is produced in Europe today. And obviously the current split for 50/40 proposal has put a mandate on fuel producers to produce 40% SAF by 2030. But we've seen some of the major oil companies come out with statements in the last few months to say 10% of their aviation production will be SAF by 2013. So that gives us confidence that we should meet the 12.5% target. But if not, we'll be very close to it in 2030. And then the price like so obviously, the price is a lot higher today and when we this production round, so if the price comes down. And obviously we - we haven't called for some incentives to begin with the producers to produce it and regarding the pickup, I think there will be - it will be - there probably be more pickup at some of the main locations initially because that's where most of the fuel will be selling to. But over time, we see an even distribution across all airports in Europe on the demand base in Europe.

Okay, thanks, Thomas. Thanks Jamie. Next question, please?

Thank you. That's from the line of Neil Glynn at Credit Suisse. Please go ahead, your line is open.

Hi, Neil.

Morning all, and just following on from that question. Firstly, just on the Easter. I realize the forward looking curve is later these days but can you give us some kind of a sense as to just what proportion of Easter bookings are actually in place this year versus 2019 to help us understand the increased reliance on late bookings towards Easter? And then a second question, maybe a bit more on the field. Obviously the subject of the 737 popularity has been topical and we're all clearly wondering about your future fleet plans. But the fewer non-Ryanair 737s that are actually operated in Europe, following the recent decisions from KLM and Jet2, pops a question for me in terms of the availability of engineers, maintenance facilities, maybe even top rated pilots to an extent. Is that something that's a concern for you? Or are you very much in control of that situation and that's irrelevant?

It is a good question. I mean, I'm not going to give you obviously a proportion of Easter in advance. But I want to give you a flavor for what's normally happening here. Pre-COVID, we would enter into a month, on the first day of the month, we'd have about 80% of the kind of the bookings for that month or the expected times that month already pre-booked. Currently at the moment, and it both bounces up and down. Omicron variants have damage, we're running at about 60% pre-booked. That would have - it must have been strongly, it went up from 45 through 50%, 55% as we went through kind of August, September, October, November, and then it got a big hit the kind of raw gut pulled out from under us in December into January, but which is why we took our 33% of the capacity in January and 15% of the capacity in February. So we would typically now expect to enter a month at the moment with about 60% of the final target in the bag. Some of that is also a reflection to that we now have are a much bigger domestic operation in places like Italy and in Spain. So where they do and we'll talk later, but we know they're going to book because that kind of domestic short hauls are generally books later. So we're running about 20% behind. We monitor and on a daily basis and we open up, close off, open up close off, if we think the weekend bookings or bookings on Monday or bookings on Tuesday. We do some tactical stuff like we ran a 24 hour £9.99 seat sale and I think it was Wednesday with essentially the availability is the first half of February. I mean,…

Great. Thanks, Michael.

Next question? Thanks Neil.

Thank you. The next question comes from the line of James Hollins at BNP Paribas. Please go ahead, your line is open.

James, hi.

Hi, morning. The first one is for Neil. I think last, we talked about H2, fiscal H2 costs being about €35 per passenger. Obviously Q3 you've done €32. I was wondering if you're beating that number, or whether we should expect some pretty significant ramp up costs obviously what most airlines talking about that? The second one, I'd like to caveat this is not a question about some yields and I do recognize you're load active and yield passive. But just following your comments Michael, calling out effectively a lot of operators not having enough staff into the summer to operate full schedules, calling out us analyst as idiots for thinking that capacity might actually be quite high into Europe. You've got it down maybe double digit percentage, just wondering how that plays into how brave your revenue management team would be at this stage and [yields] were coming through the next couple of months as you call out that capacity outlook for the summer, hopefully a surge in bookings etc.? Thank you.

Neil, you'll take the first one, H2 cost?

Sure, James. So there's no change on a full year basis. We're expecting to come in somewhere around €35 euro per passenger ex-fuel. If you recall we were well over €60 in the first quarter of this year. And that's been ramping down into Q2 and Q3. So blend is about €35 on a full year basis.

But then and second one, may I, perish the thought that I would ever call an analyst who we respect and value highly, idiot. But I've seen some kind of pieces recently talking about, we dispute Ryanair's view that there will be capacity will contract in Europe. I don't know how you dispute it. The legacy airlines have spent inordinate amounts of lobbying and resources trying to extend their soft labor scheme, and expressing deep unhappiness that it has gone from 50/50 to 36/64. I know of no legacy airlines that proposes to operate it full pre-COVID short haul operation, this summer. They're all talking about quoting it back. Alitalia's fleet is 50% less than it was pre-COVID, TAP's fleet is about 35% less than it was pre-COVID. And if you look around the piece, even EasyJet's fleet is now less than it was pre-COVID. We are the only airline with significant additional capacity this summer and to a lesser extent, Wizz have a better growth capacity. Because they have a much smaller base, it looks like a higher percentage, but in general terms, I can't don't see where and particularly when you don't have the long haul, the Asian tramping across Europe this summer, and they won't be - there is still travel restrictions on them. I think the US will partially recover but they will be slow to travel outside of America. Again, there's going to be nobody to fill the short haul flights of Lufthansa, Air France, IAG, Iberia, you name it. And that's why, they could build them. I mean, Lufthansa is out there pointing on about operating ghost flights. To which, we said, but the obvious solution to your ghost flights was to introduce some low fares and sell them to the traveling, the people…

Yeah, and I appreciate it. Both, thanks.

Thanks. Next question, please?

And that's from the line of Alex Patterson at Peel Hunt. Please go ahead, your line is open.

Alex, hi.

Hi, good morning, everyone. Two questions, please. Firstly, you've got a lot of new bases and routes coming through, should we expect those to perform as your existing do or should we expect and perhaps because you've got plans for big marketing spend and price stimulation or should we expect them to perhaps mature over a season or two? And then secondly, carbon costs are clearly going to become quite significant in a couple of years time when the hedging drops off unless the carbon price falls. It's not obvious that there's a lot of costs that you can reduce to mitigate that. Should we therefore look at those being passed through to passengers or are you planning to perhaps have lower margins?

Okay, thanks, Alex. I'm going to have Eddie just take the new base performance and then maybe Thomas, give us a review on carbon cost pass through and I'll ask Neil, maybe to sweep or coming with his view. Thomas, Eddie?

I know it's a simple answer because like and largely when we open new base, they are one or two aircraft bases and we tend to reverse traffic into those which has already come from non-base activity. And even in bases that we hadn't been in previously like places like Arlanda, we've actually gone from two to four aircraft there. So it's, like we've been doing this for years, no different from - in the COVID-19 times. You reverse the traffic and you take less of a risk and then you build from there.

And then, and Thomas, see carbon costs and when we would be able to pass them through?

Like on the carbon side, we have seen big increases in the last 12 months. I think it's where one like feel, the customer load factor, active yield, passive on the bookind side. So there'll probably be a 12 month lag between whether we recover the increased carbon costs and along that way, as we've seen with the fuel price previously, but obviously, all indications of on carbon will remain at the level that is today between €90 and €100.

And Neil, the ability to pass them through?

Well, we're already seeing the likes of Air France who don't pick up any carbon at this point or any SAF at this point in time, adding on surcharges for their customers. I think there will be an effort with the industry to try and pass this trough. But I also think that aircraft are going to become more efficient, where we're taking on more Game Changers, 16% lower fuel burn, 60% lower CO2, which will help. We're well hedged for the next two years, as we already talked about. So it's really an issue from kind of FY24 onwards. But I think there will be an effort as has always been the case in the past that the legacy guys will try and recover. And we'll hopefully track them behind us.

Hey, thanks, Neil. Thanks, Alex. Next question, please?

Thank you. And the next question comes from Alex Irving at Bernstein. Please go ahead, your line is open.

Alex, hi.

Hi. Good morning, gentlemen. Two from me, please. First of all, on the strength of demand. So we've seen some increase in the cost of living, but then how that affects finally on the demand side, think about, say consumer budgeting, whether or not there's enough travel going on to benefit the lower fare alternative? And then second, just want to follow up on some environmental issues, please. So could you maybe talk about where you think we are with the Single European Sky, is this getting more likely? Or do we sort of remain stuck as we have in the past? Thank you.

Thanks. Demand slope, what we've seen Alex once the EU issue that due to COVID surge on the first of July last year, demand strength has been - demand has been incredibly strong. I think there's huge pent up demand. There's lots of people there, we saw particularly the October bank holiday or the October mid-term school break last year, very strong demand and high yields. The Brits, the Irish, the Germans all moving with our families. We thought that then again was good, that was good build for a very strong Christmas. And if we had a very strong Christmas, frankly, we'd be back to pre-COVID volumes by, into January, February, March, all the way back to normal. And then the raw gut pulled out from under us in the first week of December with the Omicron kind of panic and hysteria and coverage. So, again, absent there being any negative development on COVID, we think there will be a very strong recovery into Easter in April and the schools that's traditionally a time where lots of schools go on school tours and families take the first of the kind of summer breaks. I think the other, kind of just have and again, this is a slightly sort of, it's not based on fact but definitely, I think an awful lot of families generally at Christmas and New Year are booking their summer holidays. And again, they stand at home over that Christmas/New Year period worried about Omicron and restrictions and people have to have negative PCR to get back in and they go ski and they could go skiing, they could go but they might have been able to get back if they have tested. So huge uncertainty. We see that repairing itself now but again, we need…

Maybe just that we keep pushing, obviously, for reform and the more environmental arguments we hear in Brussels, Airlines having to make an effort, the more obvious it becomes the government and the European Commission are not doing enough. Various studies indicate that if European ATC was reformed, between 10% and 15% of fuel could be saved. That is more than any of the commitments made by anyone in European aviation for the next five to 10 years. And that could be fixed immediately with a little bit of goodwill. So we keep pushing for it. I kind of share Michael's pessimism as to chances of success, but we are not giving up.

That I think is a good point. I mean, the environmental upside of reforming air traffic control, like remember, you'd eliminate 90% of flight delays if you had an effective air traffic control provision, and what a huge reduction in fuel consumption, fuel costs, and also environmental waste and then questionably [indiscernible].

Currently there are no further questions in the queue at this time.

Okay. So, thank you very much for joining in the call. And we're not doing a Roadshow because in the Q3 we generally don't. Neil and Peter here in Dublin, if you have any follow up questions or want to call, please plug and we'd be happy to get to talk to you individually. All of them are, I think, looking forward. Let's kind of keep being I think cautiously optimistic. There is a strong recovery underway, but we need to get through or get to and get through Easter, without there being any further negative COVID developments and in those circumstances, we think we would be set fair for a very strong summer recovery. Our costs are well under control, the fuel hedge position I think gives us a very strong cost base going forward. We have a much lower cost base than any other airline in Europe. But we will deploy that cost base over the next six months in a load factor active yield passive manner that will put kind of traffic and load factor recovery ahead of short term pricing advantage as we seek to rebuild. And the aim is to deliver 165 million passengers in the year to March 2023, which would be 14%, 15% ahead of where - what we carried in pre-COVID, the 149 million we carried pre-COVID in the year to March 2019. Thank you again for your support. For those of you who have stuck loyally with us during the COVID, we hope to vindicate your judgments with superior returns over the next 12 months. And we look forward hoping to see you all. We'll be doing a full-year Roadshow, our full year results at the end of May. We'll remain with you in full and in terms of Roadshow across the Europe, the US during that. So thank you very much everybody and if you want to follow up, please contact Neil or Peter here in Dublin. Good to talk to you all. Bye-bye, thank you.

Bye-bye.

This concludes the conference. Thank you all very much for attending. You may now disconnect your lines.