Hello, and welcome to the Ryanair Holdings plc H1 FY’24 Earnings Call. My name is Maxine and I'll be coordinating the call today. [Operator Instructions] I'll now hand you over to your host, Michael O’Leary, Group CEO, to begin. Michael, please go ahead when you are ready. Michael O’Leary: Good morning, everybody, and welcome to the Ryanair half one results analyst call. You have seen this morning on our website, we loaded the half one results, there's a full MD&A, and a Q&A with myself and CFO, Neil Sorahan. But just to focus on some highlight pieces, obviously we've had a very strong Easter and record summer traffic that resulted in a very strong half year profit rising at EUR2.18 billion and we expect over the full year now that a profit after tax of about EUR10 per passenger is likely to be achieved and we've declared our first ordinary dividend, it's not a first dividend, but it's certainly our first ordinary dividend has been declared this morning. Highlights of the half one traffic grew 11% to EUR105 million. We maintain a very strong 95% load factor through the summer period. Again, I keep coming back to the point, we're operating in a constrained market in Europe, and that is good for traffic. It's good for load factors, and it's certainly been good for average fares. Revenue per passenger is up 17%, that's a combination of average fares up 24% and ancillary revenues up 3%. We opened three new bases and 194 new routes in summer 2023. We've now, the fleet of Gamechangers is now up to 124 aircraft. The total fleet at the end of September is 563 aircraft. Our fuel bill rose sharply because we were so well-hedged in the prior year. So, in the half year, our…

Yes, sure. Thanks, Michael. Well, as you pointed out there, we're well along the road on our path to achieving all of our capital allocation priorities. The next step is to look at some form of a dividend in the past. As Michael said, we engaged in kind of ad-hoc distributions, buybacks, and ad-hoc one-off dividends. We're now at a size and scale and I think a maturity where we can sustain an ongoing dividend policy and the Board have this morning agreed that the first maiden dividend will be EUR400 million, which is marginally above our long-term prior year payout ratio, but reflective of the EUR400 million, which our shareholders contributed in the depths of COVID, which enabled us to raise that EUR850 million bond and come out of COVID strongly. So that's approximately EUR0.35 per share. Half of that will be paid in February as an interim dividend, the balance we paid after our AGM in September. And then when we look into next year FY25 onwards, what we're looking at a payout ratio of approximately 25% of prior year profit after tax, again, a bit roughly 50-50 interim final dividends in February or March of each year and after the AGM each year. So, I think that underpins the Board's commitments to return funds to our shareholders, but they've also left the door open. So, to the extent that we continue to have a very strong balance sheet lots of liquidity, and we're meeting all of our other commitments, if the reserve is cash, then the door is left open to look at other forms of distributions be that buybacks and/or ad-hoc dividends depending on where the markets are at that point in time. Just to briefly build on a couple of the other points that Michael touched on. Balance sheet is in phenomenal shape, BBB plus rates over 530 aircraft unencumbered at period end, which gives us a huge flexibility in what we do. And importantly, thanks to the strong cash in the business, we're in a unique position where we're paying down debt rapidly, we paid down a EUR1 billion alone in August just gone a EUR750 million maturing bond and EUR260 million are revolving credit facility. So, that gives a huge competitive advantage over everybody else when they're extending leases at high lease rate due to the Pratt & Whitney GTF issue and indeed refinancing themselves into rising interest rate environments. We're paying out of our own cash resources of balance sheet in great shape and has enabled the Board this morning to engage in that dividend policy. I've nothing further really to add, Michael. Michael O’Leary: Okay. Thanks, Neil. Maxine, we can open up to Q&A now. If you can ask everybody to just confine themselves to two questions. And what I'll try and do is pass it direct questions around to members of the team so we can get as many of the management team on the call.

Thank you. [Operator Instructions] Our first question today comes from Jaime Rowbotham from Deutsche Bank. Please go ahead. Your line is now open. Michael O’Leary: Jamie, Hi, good morning.

Hi, Michael. Good morning. Thanks for the presentation. Two questions. So, very encouraging to hear that you're third quarter fares could be up in the mid-teens. I know the visibility is limited for Q4, but could you give us a feel for the range of outcomes you've considered in coming up with the full year profit guide in terms of fourth quarter fares, please? And then on the non-fuel unit costs per passenger, which I calculate were up about EUR2.5 in the quarter. I know this still leaves you a country mile below your peers, which is the critical thing. But could you perhaps just talk about where there might be any flex, any risks up or down to unit cost rising by around EUR2 year-on-year in the second half, please? Thanks. Michael O’Leary: Okay. Thanks. And as for the first part, Neil, you might do the non-fuel unit cost. It doesn't, at this point in time, I think the very fact that we've given you full year guidance this morning separates from the rest of the industry, despite the fact that we're six months out. We are seeing strong pricing at the moment in Q3, but it's very fragile. That pricing is largely driven by a very strong midterm break at start of October and strong forward bookings into Christmas. We are and have cut out significant midweek loss making capacity. I think we are flexing that trajectory. It worked well for us in the last two years and we continue again this year. It is just too early to focus on Q4. Our yield ambitions are modest. We do expect that Q4 will be a loss, I think we lost about EUR150 million in Q4 of last year, the prior year. And I think we're looking at something maybe similar, maybe slightly bigger. We have the unwinding ETS will be a bit of a penalty in Q4. And a lot of Q4 will depend on the strength of the Easter traffic. We get the first half of Easter in the last seven days of March. But if there are adverse developments in Ukraine, there are adverse developments in Gaza and the situation in the Middle East is very fragile. All of these forecasts could be thrown off kilter. So, I think the very fact that we've given you a range of full year guidance is a strong signal today that we think we're in good shape for the winter, but we recognize that it could be thrown off by some adverse developments. Neil, non-fuel unit cost, do you want to take that?

Jamie, how are you doing? We're still fairly close to the two year guidance on a full year basis since we come out in May. Happy to stick with that despite the fact that we're going to be a few aircraft shy of where we thought we would have been to spread the costs over more passengers. Where are the risks, there's a risk that you could see higher spike ups in the likes of route charges in the first quarter of calendar 2024 than we're anticipating. There's a risk that we get left significantly shy on aircraft and then we're handling more crews over less aircraft. But I think we're comfortable with the EUR2 that we have, I think we'll be give or take a couple of cents either side close to that number on a full year basis. It's fact been to the increase in the crews that we would typically have in Q4 ahead of the peak summer. It factors in the inflation we would have seen in some of the handling and maintenance side of stuff over the course of the year. And then of course, it factors in the lower cost Gamechangers, coming into the fleet over the next number of months and the airport deal. So, I'm fairly comfortable that will be close to that, that EUR2 on a full year basis.

Thanks. Michael O’Leary: Jamie, as you recall from slides four of our presentation, as you're right to say, it is a country mile ahead of the gap that's getting ever wider between other competitors, many of whom are in a net debt situation facing rising finance hospitalizing aircraft leasing costs. Next question, please.

Thank you. The next question comes from Jarrod Castle from UBS. Please go ahead. Your line is now open. Michael O’Leary: Jarrod, hi.

Hi. Good morning, Michael, Neil. Michael, do I say you sound rather proud of Ryanair's performance over the summer and indeed over the last few years. And you're now speaking about a small loss over winter, but if you made a small profit, I mean, effectively you could achieve your incentive scheme target. Now, I guess besides being very incensed by the share price, I mean, do you think the Board needs to then look at a new scheme, or do you think existing schemes are for purpose for yourself and senior management? And then just secondly, you spoke about new routes opening up over winter. Can you talk a little bit about how much of that's been impacted by your thinking around your exposure to MENA and moving capacity around given the current situation and potential for people to chase the winter sun elsewhere? Thanks. Michael O’Leary: Okay. I might ask Andy Wilson just to do the new routes for the winter commentary. Just looking at the various share option schemes and the health tips from winter. I'd come back and think there's a possibility we could get close to the enhanced profit target this year. At the moment, I think we'll fall into a short but who knows. But I think those teams have been appropriate, like even if we hit the target this year, myself and the rest of senior management team still we have to remain in full time response to finances. I think it's 2028 [after those ahead] (ph). I think it is important that somewhere, I mean during the previous five years, the management team weren't able to hit the share options through the combination of COVID and the war in Ukraine. And it is important I think for management and not just me, but the wider management team that the share options or assets are achievable. They're working their asses off to deliver these kind of numbers. And I think it's important that there's some we've said the board is a very ambitious target that's a profit of factor $2.2 billion or a share charge price of EUR21, but even if we hit those, management team will still have to remain in full time employment 2028 for those -- for them to benefit from it. So, not alone, is it important they're achievable, but they also mean that we're tying into management we get medium long-term commitment from the senior management team to continue to deliver the impressive performance and results. Adding new routes for the winter. Do you want to give it a comment beyond kind of new routes and maybe Jason McGuinness might comment on that as well?

Yes. I mean, I think like our growth is demonstrated by the agility that we have in terms of what has happened in the Middle East. For example, we would add just north of 100 weekly frequencies into Israel working very closely down there. I mean the airspace is well managed. But obviously tensions are the conflict has escalated there. So most of the European carriers aren't flying in there. But we're able flipped out in terms of 95% of that capacity, we can reallocate because it comes from 23 different basis. So it's relatively straightforward for us to do that. There is some softness in places like Jordan, but again, we've got the ability to flip that capacity around. But on the other side, of course, we continue to grow strongly in the canaries. We have two new bases there from winter on winter. It's a new base, but we've had it there since summer of this year, both Lanzarote and in Tenerife, both going up by one aircraft. And then you look at what we're doing in Morocco, you'll have seen our recent release where we're meeting with the head of government down there who have seen Ryanair in terms of developing not just summer sun, but certainly year round traffic into that market, which is a mixture of VFO and also winter sun. And we continue to grow strongly in Southern Europe where people still go to Malaga, Alicante, Seville, Southern Italy, Sicily and Sardinia. So, we take a very conservative approach in terms of how we spread those routes. And we always have the ability, as opposed to reverse routes and reallocate capacity as we did at the start of the conflict in the Ukraine. Michael O’Leary: And Jason, we're opening 17 new routes into Savannah and now they knew during in November the winter will be mad?

Yes. So they started last week. They've all started very strongly. I've been very surprised how quickly all the seats are filling and we'll certainly be growing in China in summer 2024. Like, I think we would be close to 2 million, 2.5 million passengers in Toronto over the next 12 months. And it's certainly a base candidate over the next 12 to 18 months, Tarana is trying out for a low-cost carrier, and we've seen that in terms of reaction from consumers. But generally, across these winter demand, the strong across CEE, Scandinavia, Italian domestics are very strong. I think that's helped by what we've done on the schedule that you alluded to earlier. 70% of our capacity now for winter 2023 is at the weekend versus 65% last year and 60% prior to COVID. So there's been a lot of work done by the revenue scheduled team to deliver that and it's paying dividends across Q3.

Thanks very much. Michael O’Leary: Thanks.

The next question comes from Stephen Furlong from Davy. Please go ahead your line is now open.

Good morning, Michael. Yes, two questions, please. Maybe if Thomas is there, you can talk about the, any updates on SaaS and also how the winglets are performing in terms of fuel efficiency. And then kind of in that vein, I just want to ask Neil about, I know it's the first quarter and Q4 is going to be at the unwinding of the free allowances on ETS. And can you just talk about that and that overall scheme? And obviously you've been paying ETS for 10 years, but the freelancers go over the next couple of years, that'd be great. Thank you.

Yes. Stephen, just on the SaaS side, so obviously in recent weeks, we've added done some fuel with OMV in Vienna. We've picked up some SaaS, so it gives us more access to different feedstocks, and we're working hard with another one of our field partners to hopefully selling in MOU and with them to increase our target like our percentage target. We're at 9.5% today with this if we get this MOU over the line, we'll be above 10% of our staff will be doing through MOUs. On the winglets, we've been happy with what's installed today. We're seeing close to the 1.5% savings that we disclosed on the winglet side. So yes, it's going well and we hope to roll out another 100 over the winter to get to 130 by the end of the maintenance season this year. So we'll see more of an impact come true with more on the Margaux on the aircraft. On the ETS side Steven. So yes, as you said, the allowance to start rolling off in Q4, which is an impact. So like we have about 25% of our allowances compared to Q4 last year will be gone under ETS. This quarter which will impact on Q4 profitability and also our hedge rate has gone up from about to quarter on quarter compared to FY 2023 and FY 2024 which will have which is the impact Neil and Michael have been talking about in ETS in Q4. Michael O’Leary: But I would add into that too, like you also have three ETS allowances even unwinding for the legacy guys who have far more of their free their traffic covered by the free ETS. So I think again that's one reason why we're seeing some aggressive pricing from the legacy shortfall across Europe and can save market base driving up the headline fare, particularly in countries like Germany, where Lufthansa has a near monopoly, Air France, KLM, same in the Holland and in France. And I think that's driving up our airfares, the extent which competitors are dramatically increasing their airfares. Next question please.

The next question comes from Dudley Shanley from Goodbody. Please go ahead. Your line is now open.

Thank you. Good morning, everyone. If I could ask two slightly longer-term questions, first of all, if we think about the problem with the GTF issue coming on top of the delivery delays from Airbus and Boeing, how do you see that playing out in terms of the outlook for fares over the medium term? And then switching to consolidation in Europe, which seems have picked up recently. Obviously, there's a lot of deals going on. Which deals do you think will happen? How do you see the end game here? How does Ryanair position to take advantage of it? Michael O’Leary: Let me see. We'll add that to instead of me, I mean, medium term affairs Eddie and Jason McGuinness might add on to that and then I'll come back in on the consolidation. So Eddie, Jason on medium term fares.

We have seen already that we've guided sort of our mid-teens in terms of Q3. But I think a lot of what's going to happen at a micro level with the GTS issue is going to be where some of our competitors where our competitors are going to allocate that share, going to allocate that capacity in particular markets. And we've seen a lot of them announcements of base aircraft that just don't add up to the total fleet. With some of our competitors, we've seen a retreat in places like in the Italian domestics which Jason has said like where fares are actually becoming more robust. I wouldn't like to sort of call it as a sort of a macro level where fares are going to go to, but certainly at a micro level, it's going to be where that capacity is allocated with our competitors, but with reduced capacity and no new aircraft coming online from the OEMs I think we're still going to see -- I think we're going to see like fares continuing to rise against that backdrop where economies continue to grow. And there isn't any capacity there to match it. So I think fares still in the like certainly over the next 12 months, we're going to continue to rise, Michael. Michael O’Leary: Jason?

Jason here. I think the -- sorry, I just didn't hear you there, Michael. Michael O’Leary: Give you a certain chance to have a fair, so I don't think that's a general trend over the next couple of years or two or three years.

So I think the general trend is upwards over the next number of years and that's entirely based on the capacity environment. Like, if you look at this summer, the mark was recovered to 94%, 95%, but that includes Ryanair growth. Without Ryanair growth the market this summer is only recovered to 90%. And I think the market isn't going to recover our competitors that is much above 90% into S24 S35 for the issues we've outlined. So that leaves a market that hasn't grown for the last four years. And I think you're seeing that across certain countries, be it Austria, Germany, Belgium, which are all significantly below where they were prior to COVID. And that's all helping the pricing environment at the moment. And it is -- in terms of our growth then, we are growing. We are growing in the likes of Italy, UK and Spain, which is delivering solid fares. And I think they'll be solid over the next number of years.

Okay. Thanks for that. In terms of consolidation, I have long believed Europe is moving reasonably towards four large carriers. If you look at what's going on at the moment Lufthansa Air France KLM and AET all are interested, I think longer term, it probably belongs to better in IAG. Because of the Latin American government carried, Latin American kind of influence of IAG, but Portuguese are always wary of the Spanish that they're somehow closed the EAP base and moved to Madrid. I think if you look at what IAG has done with Aer Lingus, they've demonstrated they can continue to grow Transatlantic business to Heathrow and Dublin and did it successfully. SAS is a croc but I expect to get probably stuck together with Norwegian and you've got a bigger croc up in the Scandinavia and Air France Canada, they going to take a 20% stake in that refinancing? That really needs only two sort of smaller independent players left in Europe, which is easy to get, focused around Paris, Switzerland and Gatwick. I don't believe in the next five years, there'll be an independent there. I think there will be subject to M&A activity and with probably a mix of Air France, KLM and or IAG. And at least Wizz, I would have said Lufthansa would probably buy Wizz and give it a footprint back in Central Eastern Europe. [In Greece] (ph), I think as Wizz grows in the Middle East, perhaps it may be way with Middle East and interest will be able to acquire the Middle East and we'll be able to get access to aircraft. But I think if we return in five years' time, I think you're going to see a European market that looks remarkably similar to North America today with four large substantial airline competitors three legacy guys, Lufthansa, Air France KLM, IAG, and one very large low-cost point to point. Ryanair will be the southwest of the US, except that Ryanair fares will be materially lower than those in Southwest after 10 years of consolidation in North America. Southwest average fare last year was about $140. Ryanair's average fare across Europe was about -- was under EUR50, which does show we are materially lower, cheaper and lower cost in Southwest, but it gives us significant headroom for us to grow our business and I think modestly grow airfares in a consolidated capacity constrained market over the next three to five years. In a manner that will enable us to pay down our debt refund our aggressive CapEx and be able continue to put in place multiyear pay deals for our people. Next question please, I think.

Thank you. The next question comes from James Hollins from ExaneBNP Paribas. Please go ahead, James. Your line is now open.

Hi, guys. Good morning and many thanks. Just a couple for me. On the unit cost, I need it not to work for year 25, but Neil, perhaps the way you're thinking about unit cost, so this will give us some indications on trends. And I'll probably be mainly thinking about wages and whether the pilots in particular start agitating for a bit more from their deals. And then secondly, what is it you know that the rest of the airlines don't know that [indiscernible] is pretty sanguine about their Pratt Whitney issues, but you're calling it out as very significant for them. Just run us through your thinking on why percent of share bigger than some of the airlines are letting on? Thank you. And I might ask maybe [Neal Mcmahon] (ph) to come in on the what we are – gives our update on what we think we need about the Pratt & Whitney issues.

Okay, James. It's a bit early to be talking about FY25 unit costs and that we haven't done our budget at this stage, but what I am sure about is that we'll continue to keep the gap that exists between ourselves and everybody else on the unit cost. We have multi-year agreements in place with our unions. There is modest inflation coming through on the back of those, but that's something that we will cover through other areas of the business. For example, we've already locked in about 300 million worth of savings on our fuel bill based on the hedging that we have into next year, but it'll be likely May before I start to give you color on unit costs for FY25. I need to get the budget over the line with the board first. Michael O’Leary: And Neil, what we got on the Pratt & Whitney issue [indiscernible]?

Yeah, so we know that Pratt & Whitney have significant issues with the GTF engines which will affect over 20% for Wizz and kind of 5% to 10% for other carriers around Europe. The reason why we think this is significant is we know that MRO slots are already full for this winter. This is an unexpected issue that wasn't planned into the maintenance schedule for the engine, for the engine shops. And therefore, we're likely to see delays or our competitors are likely to see delays for engines to come out of the shops. This will increase the lease costs. We already know engine lease costs have increased. So airlines who are looking to lease in engines are seeing prices soar because there's the scarcity of lease engines. And we think that this is going to have a significant impact on capacity for S24 might not be baked into other airlines numbers yet, but I think as we go through the winter, they're going to see that the turnaround times for engines are going to be significantly slower that's going to materially impact capacity for S24. Michael O’Leary: I mean, we take the view, James, about there's anything between 5% and 10% of the European short haul A320 fleet is going to get grounded through most of next summer, which again will further constrain capacity. Some competitors, [indiscernible] will be more affected than others or they have some new deliveries, some deliveries, new aircraft deliveries. This is an issue that affects the Lufthansa, Air France, IAG, short haul fleet. And if Europe is operating at 94% of pre-COVID capacity today, there's consolidation continuing, which will mean more capacity will be taken out. The OEMs are running behind both Airbus and Boeing are running behind on their deliveries. I mean Boeing is likely to leave us up to 10 aircraft short of our 57 deliveries before the summer of 2024 and you add this Pratt & Whitney issue on top. Again, I think there's going to be a real challenge on inter European capacity next summer. We will add maybe 40, 45, 47 aircraft. But overall, there's no chance that Europe returning to its pre COVID capacity next summer. We will see more Asian visitors, I would hope next summer. I think that under -- gives us a reasonable prospect of another strong summer of profit and pricing, and that's already reflected in strong forward bookings. Forward bookings already for winter -- summer 2024, either this early date are running significantly ahead of where they were this time last year. Next question please.

The next question comes from Alexander Irving from Bernstein. Please go ahead. Your line is now open.

Good morning, gentlemen. Two for me, please. First, on capital structure. So how much liquidity do you see is required on an ongoing basis? Think about this, the reference to the announced dividends, which suggests your net cash position will continue to grow. Is that in line with your expectations? Second, drilling into cost a little bit more. So your airport and handling cost per passenger was up 11% year-on-year in Q1. 13% in Q2. What's driving that please? And should we take the current levels per passenger as rough indication of what's stable? Thank you. Michael O’Leary: Thanks, Alex. May Tracey, maybe you might take the second part of that question. As you look at capital structure and Neil come in if there's anything you want to add. I mean, I think we're historically, we want to be in zero net debt position as we pay down debt aggressively. I think the board is of a view that we should keep a reasonably size of a chunk of cash far the inevitable crises that this industry and whenever we think we can do aircraft deals. So I think moving forward over the next number of years, we'd want to keep $3 billion to $4 billion of gross cash on the balance sheet, which is the number we've been operating at for about the last five or six years. We will though pay down the last $2 billion of debt in 2025, 2026. We haven't -- we are going to go through a two or three year period through 2025, 2026, 2027, where there's a material dip in CapEx because of the gap between the last of our max game changer deliveries with the last, which is due in December 2024 for summer 2025 and in the first of the…

Yes. So there's two things right in the airport and handling. So higher ATC costs 72s and that so local air traffic control costs at airport, you've seen an increase. And after termination of some of the COVID reliefs that we were getting the benefit of last year and probably the other driver in that is handling in that. So a little bit of labor inflation in the handling costs across Europe. Michael O’Leary: Cost degrees, Alex, is, so is less than half of the airport and handling cost increase. Some of our competitors have been reporting in recent weeks. So there's materially more airport and handling cost inflation at the main airports that are being operated out by our competitors? Therefore, widening the gap again. Next question.

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

Just two questions. I mean, average fares up 15% in Q3 looks very strong. So are you somewhat surprised by the strength of the fares given concerns over the health of the consumer more widely. And I was wondering if there was any potential one off benefits in there in Q3, for example, from maybe the Rugby World Cup. And then just any comments as well on Q3 on where you expect the ancillaries per pax just in absolute terms or year on year? Thanks a lot. Michael O’Leary: Okay. Neil, I ask you to comment on the ancillaries. On repairs, Harry, they're strong in Q3. Again, I think that the critical driver of fares here is not individual events like the Rugby World Cup, which were nice, but not materially across -- we're carrying almost 500,000 passengers a day. The Rugby World Cup is that [indiscernible]. What's really driving air fares here is the consolidation, capacity constrained story in Europe, the material -- the dramatic increase in pricing that is being leveraged by the life of competitors Like Lufthansa, Air France-KLM and IAG, who are starting with average fares that are 4, 5 and 6 times those of Ryanair, particularly if you take the German market where Lufthansa is [received] (ph) as the national champion has seen off a lot of capacity easyJet and ourselves have removed a lot of capacity from the German market in the last few years in the face of ludicrous airport cost increases, man, German, government taxation, security charges, et cetera. Lufthansa -- the German market is the one that is weakest, it has recovered only about 80% pre-COVID. But short-haul airfares in Germany have more than doubled. And everywhere you go in Germany, people complaining about Lufthansa's pricing. But that's what you get…

Yes. Harry, as we've been kind of saying all year, we expect on a full year basis, ancillaries are up kind of EUR0.50, EUR0.60 per passenger year-on-year. So you're probably looking at similar to the first half, about a 3% increase over the second half. And then thereafter, it's kind of 3% to 5% per annum growth area, depending on John sitting here beside me what he can do for me on dynamic pricing and other things. But we've had a phenomenal step up from EUR19.70 per passenger pre-COVID to EUR23.70 per passenger now, and it's growing at a relatively steady state of kind of 3% to 5%.

Okay. Thanks a lot.

The next question comes from Savanthi Syth from Raymond James. Please go ahead Savanthi. Michael O’Leary: Savanthi hi.

Hey, good morning. In terms of investing for resiliency, I would imagine that you're kind of keeping the buffers that you put in place currently. But as you kind of head into summer 2024, are you planning on kind of making any additional investments or additional buffers? And then secondly, just kind of curious on the MAX – with the MAX delivery delays, I'm guessing you're not going to be able to take advantage of this. But what are the kind of the -- what does the NG pricing look like these days in case you wanted flexibility? Michael O’Leary: Sorry, Savanthi, you broke up at the start. It's the first half of that question and I missed the second half was MAX delivery delays but I wasn't sure what the question was. Can you repeat it again, please?

Sorry. Yes. Just on the -- more so on kind of NG pricing. Like what are you seeing today if you want to take advantage of it, not that you probably can given the delays? Michael O’Leary: Sorry, is that NG pricing? Is it?

Yes, I can take that, Michael. Michael O’Leary: Okay, Neil. Sorry, I didn't hear it again. If you heard her say, will you answer please, and the first half as well, December, 2024.

Okay. Well, just on resilience, Savi, I don't think air traffic control are going to be more to improve, but I'll ask Eddie to deal with that. I'll talk about NGs first. I mean, the market for NG is very hot at the moment. The phone is ringing off the hook of people trying to buy NG of us, the leasing companies, lease rate factors have increased quite significantly. So it wouldn't be minded to go out and try and lease anything from them. So I think we're very happy just to operate what we have and to continue to work with Boeing to accelerate and speed up the pace that we're getting the MAXs into the fleet. But yes, NG is holding values very well. I think Eddie is going to answer the question on resilience.

Yes. Just I think what, [indiscernible] on operational resilience is coming out post-COVID where we were just better prepared than all of our competitors by keeping everybody employed and keeping everyone current our crews and our aircraft current. And we've tried to work really, really hard to sustain that advantage. And you can see that, I think in a lot of the recovery or lack of recovery from our competitors who appear reluctant to get back to full recovery. Some of that, I suspect is driven by sort of meltdown days where ATC dropped everybody in it. And what we've tried to do is have additional crews built into the system and that gives us -- I mean, we're able to lean into that because we're still a growing airline as ATC hopefully will recover in terms of its capacity over the next number of years, we'll be able to pair back crewing levels to what you would need in a normal busy season. But those of you who are at the Capital Markets Day will have seen what John's team, along with Neil's team and Darryl as well in terms of building IT solutions to make best use of those crews so that we can get through those parts of the like on meltdown days, that are happening more frequently. But it's something that we're not crowing about. There's a lot of hard paddling under the surface here to keep that operation going. And we've invested heavily in technology, heavily in manning not just in terms of crews per aircraft, but also in our ops control center. But we have to continue to invest. We're not being complacent in any way about that.

Eddie, just to clarify, so just the incremental investment won't be that much greater than what you're seeing today, right? I mean it's not going to be another big headwind into the next year.

No. I think what you're -- like we have to look at all of these things on a sort of a micro level, don't forget we're spread over 93 separate basis, and there's always room for improvement as to how you grow that. And given the data that we have now, that will inform our decision. But I don't see a step up. But my instincts would be to have -- to increase that slightly, but I don't think it's anything material just because we're going to get into -- we're on a long-term growth trajectory here and that means then that you're going to -- we sort of fine-tune your accruing ratios as you take delivery of aircraft as well. So I'd rather have slightly more than slightly less but not material.

Okay. Thank you.

Thanks, Eddie. Savi, I'm sorry, I couldn't hear the question probably. Next question please Maxi?

Next question comes from Ruairi Cullinane from RBC Capital Markets. Please go ahead your line is now open.

Good morning. It looks like relative to Q1, your hedging position on fuel is advanced, but not so much on FX. So I was just wondering if hedging was paused or what drove that? And then secondly, a longer-term question. And you've got two years of slower fleet growth around 2025, 2026. Do you think that could be a more difficult period to restrain unit costs? And as a result, is there silver lining to Boeing delivery delays? Thank you.

Neil, you want to take the question on hedging. I mean you or Thomas can do the hedging, and I'll do the two years of slower fleet growth.

Yes. On hedging, we're very pleased with the level of hedging that we have in place just under 89% for the second half of this year at about $890 a metric ton and well hedged into next year, over 50%, and in fact, close to about 56% in the first half of the year at savings of $790 a metric ton. What's changed in our hedging policy, not a huge loss. We're possibly not going out with a higher percentage as we would have done in the past, but that's a factor of our competitors' balance sheets not being as strong, and they've not been able to get access to hedging line. So that's why we had a number of options this year where we effectively capped out the worst case scenario and then had downside participation. So you may, over time, see us doing a little bit more on auctions. But we continue to have a kind of 12 to 18 month rolling policy. We're well hedged out to now at the end of March 2025, and we'll continue just to build up on that over the next number of months. Similarly, on the currency side, we continue to run a very active OpEx book, we were hedged at $108, the current year in euro dollar, we're hedged at about $111, $112 into next year. And again, we'll continue to build that over time. So no, we're continuing to execute on us. We continue to have huge hedge lines with our counterparties and the treasury team have never been busier. So we're pushing on.

Okay. And two years of slower fleet growth. I mean if anything we're facing almost three years of slower fleet growth, we will take -- if Boeing can meet their delivery commitment, we get 57 aircraft for summer 2024. We get another 30 aircraft for summer 2025. I think they'll miss some of the summer 2024 and therefore, it will even itself out. We'll pick those up for summer 2025. We will have nothing new for summer 2026, very little for summer of 2027. I think we take 17 aircraft from January to May of summer 2027. So it's not by choice, but I think the two or three years of slower fleet growth don't have -- it gives us a bit of a pause in the organization before we start a decade of aggressive growth. It does take some of the pressure off recruitment and training over that period of time. It may create some challenges, but I think we're facing challenges, I think, on the labor front anyway in the next year or a couple of years, I think we've reflected that in what has been the pay restoration and generous pay -- already generous pay agreements in place with [indiscernible] across Europe. But that inevitably, the upside of the silver lining of that is, it further constrains capacity. I mean the only airline delivery material capacity growth across Europe is December of 2022, December 2023, December 2024 is Ryanair. And we ourselves will be capacity constrained through the summer of 2025, 2026 and 2027. Now I think we'll continue to see significant churn of our operations during that period. We will continue to do aggressive growth deals with ambitious airports. And therefore, we will churn more aircraft out of expensive airport at Dublin, for example, where again…

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

Two follow-up questions, please. The first one, just on the dividend for this year. Can you talk about why you have a EUR400 million dividend instead of a payout for fiscal 2024. And just to clarify, so in the scenario that you think there is surplus cash, could there be a specialty or share buyback even for next year? That's the first question. And then secondly, on your pricing comments for fiscal 3Q, do you think that your pricing trends are better than the overall market? Do you think the market is also seeing similar mid-teen pricing and/or you're benefiting from the trade down that you talked about earlier? Thank you.

Okay. Dividend this year for EUR400 million. Well, if we paid out 25% of last year's profits [indiscernible], it would have been about EUR350 million, EUR360 million. And the Board felt that it sent a strong signal to the market and also to shareholders. But if we rounded that up to EUR400 million, it would repay the shareholders, including myself, I might add who put her hands in our pockets during the depth of COVID and invested EUR400 million at a time when nobody was able to raise equity in the airline industry. And I think that's an effective signal. The shareholders who stood by us during COVID and who wrote those difficult checks during the very difficult COVID period are seeing that return. Is there a prospect of special dividends or share buybacks next year. I mean the answer is yes, but it all depends on trading. It all depends on how the cash flows develop. And it will depend on what the Board decides to do. I mean we will continue to be conservative and judicious, but you have our assurance is that excess cash will be returned to shareholders whenever we're confident that we can meet our payroll commitment, our debt repayment commitment and our CapEx commitment. Do I think Q3 will be better than the overall market? Yes. I think what's driving the overall market across Europe is very aggressive price increases by Lufthansa, Air France-KLM, IAG, easyJet and others and they're all pricing materially above Ryanair, and average airfares are in the case of easyJet double Ryanair in the case of the legacy, they're 3, 4, 5 times higher than ours. And if they're going up, seeing average fares rise by a high single digit this winter and I think they are because of the capacity constraints. They are driving more and more people, more and more customers and their families in the direction of Ryanair taking low fare air travel, and we're seeing strong forward bookings and strong pricing. And I think that's why off a much lower base we're seeing a strong and I think that would continue off a much lower base. We see stronger pricing in the Ryanair model as Europe consolidates or continues to consolidate over the next through two, three, four years as capacity continues to be materially constrained. And I think in the summer 2024, as many of our competitors will be grounding aircraft because they know probably with the engines operate them. I don't know, Eddie, you want to add anything on the Q3 better than the overall market?

Not really. I think you sort of covered it off there. I mean like it's what we've seen before where I hate to use the phrase but sort of trade down. But as people become more price sensitive, they -- I think you're quite wise on what you're saying, that migration of people. And in a lot of cases, given our size and scale, we have more frequencies and two more airports as well. That gives us that a little bit extra, I suppose, in terms of uplift. Yes, nothing really to add on that.

Yes. I continue to be amazed. I mean the amount of the handwringing going on, particularly in the analyst community, consumers under pressure, and they are under pressure, speaking very frankly. People don't stop flying. In other sectors, people trade down to little and all the -- they buy their furniture in IKEA not in some department store. And as there are very strong performance over the last two years, and we're now carrying 22%, 23% more traffic than we did pre-COVID in an industry across Europe, that's operating at about 94% pre-COVID capacity. People are trading to the lowest cost provider, which in every market in Europe is Ryanair. We're also happen to be probably the best on-time performance. So we're delivering great service at lower prices. We're now doing that on aircraft like the Boeing MAX where we can carry more passengers but burning less fuel and delivering very material operating cost efficiency. So I think this is now a time for our expansion. We were desperately working with Boeing to try to get as many of those 57 aircraft we can in time of December 2024 because if we don't keep that expansion going, then consumers across Europe really will be screwed by the Lufthansa, Air France and the high fare national champion, all of whom received billions of subsidies during COVID from Europe taxpayers and they're -- and gratitude [indiscernible] scalping those taxpayers for extraordinary eyewatering airfares. Next question please.

The next question comes from Sathish Sivakumar from Citi. Please go ahead your line is now open.

I got two questions here. So firstly, on the forward booking and you pointed out that saying it's actually much better than last year. How does it like evolved as we went into this quarter for the Christmas period as well as into the Easter next year. And then the second one, any update on the potential risk from the Italian government on the price gap, that will be helpful. Thank you.

I missed -- I didn't get the second half of that, Sathish. I got the first half, I'll deal with. Look, we see, at the moment, all of the forward bookings into the Christmas is strong, the February school midterm break. Ski is running, bookings and fares are running ahead of the prior year, and we have the first half of Easter in the last week of March. So I think we remain reasonably optimistic on pricing for the second half of the year and into Q4, although we always have to qualify that we have availability to Q4 visibility. And I didn't get the second half of the question, if Neil or Eddie did, please feel free to answer it.

Yes, we might get Juliusz because he wants to answer this one on the price cap.

Sathish, on the pricing I think I got your question, but you can correct me if I answer a different one. I think we've had pretty much pricing in Europe guaranteed an EU law since 1997 and all governments recognize that it's there and that it's an integral part of the success that European Aviation has enjoyed over the last nearly four decades. What the Italian government has done over the summer, I would not take it too seriously as a serious well-considered step. It was part of a decree, which was passed, I think, on the last day before the government checked out for the summer break. At the same decree talked about a tax on Italian banks, which the government then had to walk back from and some measures about the taxi industry, which apparently is a mass in Italy today. The European Commission, which we often criticize in those calls were maybe not being quick enough in terms of sorting out ATC in Europe or air traffic control strikes and so on. It was actually incredibly helpful in the context of this Italian situation. They stepped in and put a lot of pressure on the Italian government to reverse that decree when it comes to attempted control prices between mainland Italy and the Italian Island. And I think this is a very good lesson for all the other governments that might have ideas of similar sorts feeding populous agendas, don't go there because you will end up before the EU court and not prosecuted by airlines by the European Commission.

That’s helpful. Thank you.

Thanks, Satish. Next question please Maxi.

The next question comes from Duane Pfennigwerth from Evercore ISI. Please go ahead, Duane, your line is now open.

Good morning. It's been a very comprehensive call. Just one from me. So air traffic control constraints are really not new in Europe. It's something you've been dealing with for several years even pre-COVID. We're hearing much more about these issues in the US. And so just curious, how do you design your network to achieve high utilization, low unit costs despite the constraints that you live with. I mean if there was a moment maybe five, 10 years ago where you said, look we have to operate differently because of this, what are the changes you made from a network design, network planning perspective?

I mean I think Duane, to answer that question, ATC has been a much greater problem challenge for the industry in Europe than it is in the US. Europe's ATCs are fundamentally mismanaged, underproductive and ridiculously expensive compared to North America. The biggest challenge continues to be not just the cost of that, but the environmental impact of flight delays, long flight plan. We've been campaigning aggressively for now two or three years at least the simple issue is during ATC strikes, which you tend not to have in North America [indiscernible]. But in Europe, we'll be dealing with particularly the French 64 days of ATC strike this year so far. We're calling for the protection of overflight because of the geographic location of France, if they -- France uses minimum service legislation to protect its domestic flights and cancels all the overflights. And we think it should be reversed the other way. Europe should be protecting the overflights and cancel French domestic flights. That one initiative would probably remove some 70%, 80% of the impact of ATC strike and not just [EC] (ph) strike and would have a very significant impact on the environmental impact or the environmental damage done by European ATC today. I think we're seeing some movements on that. Europe itself has spent billions over the last 30 years on a single European skies project. They have made not 1 millimetre of progress on it. It's a complete waste of time. I personally believe Europe could deregulate air to air traffic control each individual like they did with the airlines. They should allow the air traffic control providers to compete against each other to provide service. That will be a much more efficient way, force them to compete against each other. But as long as very small ATC unions have a disproportionate power and you have weak European governments who are willing to stand up to these with the way Reagan did with the American aircraft [indiscernible] day back in 1980, I think we will continue to be bedevilled by ATC delays, inefficiency and screwups in Europe. I don't know, Eddie, you want to add anything further on that or Neil, maybe on finance?

Go ahead, Neil.

Sorry, Eddie, just in terms of design, so there's been no fundamental change in design, but it has resulted in, we've had to increase resilience, so crew and resilient because we have to now factor in, there's going to be more ATC delays than there would have been five, 10 years ago. And if we just use the example of the UK, the NASS collapsed on the 28th of August, which resulted in the closure of UK airspace and widespread cancellations because of the increased resilience we had by -- that was on the Monday. And by lunchtime on Tuesday, our operation was fully back to normal despite having 20 aircraft in the wrong position the night before. So I think that's where we're seeing, there's an increased resilience, higher accruing ratios to factor in rather than an aerospace redesign or a network redesign.

Thank you. Michael O’Leary: Okay. Thanks, Ed. Next question Maxine, please.

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

Good morning, everyone. And, two quick questions, please. Firstly, just on your October traffic, your load factor was slightly lower than the prior year. That's the first down year for a long time, were there any anomalies in that month anything to cause that? And secondly, just on the 737 MAX-10, obviously there's been delays to the back, say there's been problems with various engines and so on. What if that isn't certified bill delivered on time what would you do run existing fleet for longer? Are there any other levers you can pull? Thank you. Michael O’Leary: Okay. Thanks, Alex. October 5, it was off 1% is a rounding issue. There's nothing material in there. We could have engaged in seat sales that would have artificially driven it back up just to the sake of it. I think that's the wrong thing to do. We're happy to let the load factor go up 1%, fall 1%. We hit our target for the month. The only thing I would point to do is that there was a very steep falloff in loads on the flights to Jordan and also obviously the Israel, the situation, the Israeli Hamas conflict. At the start of the month, we were operated by [Stewart] (ph) from Israel. There was a dramatic increase in no shows and a collapse in bookings. Much the same way we had in into Central and Eastern Europe when Russia invaded Ukraine in February of 2022. I know there's anything untoward in that. There's nothing we would call out that we expect to we're running slightly ahead we are year-to-date on load factor and expect to hit the full year load factor targets. On 737, MAX-10, remember, our first delivery are until January 2027. It's Boeing expect the MAX-7 to be certified either this side of Christmas our early first quarter of 2024. We think that then rolls on. They expect that will roll on, but the FAA will certify, I think, the MAX-10 sometime towards second half of 2024. It might slip into early ‘25 but we are a long way behind the lead customers on that. So, I don't think there's any particular risk to our first deliveries of MAX-10 aircraft in January ‘27 given that it'll be three or four years behind the original transportation aircraft. If what would happen yes, we would simply I mean, again, it would further constrain capacity if there's any delays to our MAX-10 deliveries in 2027. It would further constrain capacity across Europe where, again, Airbus and Boeing to be challenged on their delivery positions. But I would be reasonably confident that we get those deliveries on-time in the first half of 2027. Neil, anything do you want to add on the Boeing side?

We'll just add that if there was a delay and I don't anticipate because as Michael said, they're on-track to hopefully deliver the first seven out of ten of the lead customers next year. But, if there was a delay, we'd sell less of the NGs. We've penciled in 150 NGs due to exit the fleet as the 10s come in. So, we just manage that within the business, but with every expectation that we'll be getting the 10s in an early 2027.

Thank you. Michael O’Leary: Thanks, Alex. Next question, please.

The next question comes from Gerald Khoo from Liberum. Please go ahead. Your line is now open.

Good morning, everyone. Two for me, if I can. You've talked about 90% of summer 2024, capacity being on sale. I was just wondering why is it 90% are you holding some back for potential Boeing delays or is there another reason for that? And secondly, there's a big gap between the increase in average fares and the increase in ancillary revenue per passenger. I was wondering why you're taking so much of the current strength in demand in fares rather than ancillary? Thanks. Michael O’Leary: Okay. The summer 24, Jason, you might have added some comments on this, like we're at 20%. That's about normal time of the year. In fact, it's more normal. We don't need about 80% of summer 24%. Top of things happen there, but we're not sure about the last of the Boeing 10 aircrafts delivery. Things are still airport negotiations ongoing about new basis, new routes and we're still paying off. So we haven't yet finalized those allocations of the existing fleet. So, that's 90% already I'll say that's higher than it would have been in previous year. Is there a big gap between average fares than ancillary. Yes. We're priced active load factor active, what's driving the strong growth in average fares is the strong upward pricing being, that's being delivered by our competitors across Europe in a constrained market. When again, I would point Lufthansa, maybe Germany is only recovered to 80% of the pre-COVID compared to others. If the two are not the same ancillary, we will tend to get over [balanced] (ph) well advanced ancillary revenue business. It does tend to clip up a couple of percentage points ahead of traffic growth. It's up 3% per passenger in the half year, but it is something to far less pricing fluctuation or pricing volatility than underlying airfare. In a crisis or a downturn, average airfare like that I expect would fall in a capacity constrained consolidated market like Europe I think the rest of the year underlying air fares will rise but I'm pleased we'll continue to turn them along doing what they do and it's a much more reliable source of income, as well as we use the average fares to make sure that we hit the low prices and fill all our flights. Jason, anything you want to cover on 90%, summer 24 sale?

No, like you covered off there, 90% we're actually ahead of where we would have been previously. So more capacity percentage wise on sales for ‘24 than we would have previously. And like there's two other factors at play. There's the potential for two or three new basis next year, but that will depend on how the negotiation progress over the next number of weeks. And likewise, where we feel there's unjustified cost increases into 2024, we're keeping some of that capacity off sale while we negotiate for airport. So, we will not be accepting unjustified airport cost increases into next year. So, that covers off the 10%, Gerald.

Thanks very much. Michael O’Leary: Okay. Thanks, Gerald. Next question, please.

The next question comes from Conor Dwyer from Morgan Stanley. Please go ahead, Conor. Your line is now open. Michael O’Leary: Hi.

Thanks very much. Hi, guys. So, the first question is regarding the excess cash and how best to give it to shareholders. So, before you expressed the preference for the special dividends, but this morning seems to be a bit more of a balance between these and buybacks. So, I'm just wondering if that is just because the decision has been made officially yet or if cheap valuation is making a buyback a bit more attractive now? And the second question is just around pricing growth, it’s a very strong through this period and sounds as though it's benefiting from the headroom you've built up over the last few years. So, I'm just thinking, do you think that can extend beyond this period and that you can probably pace market fair growth over the next few years because you're already talking about an overall market environment to a fare growth should be pretty, pretty attractive? Thanks. Michael O’Leary: I mean, I think you're asking on the pricing growth over the next few years, I think we are the Board, we had a meeting last week. I think we are slightly changing dynamic. I had expected we'd be looking to return surplus cash through, special dividends for the next year or two. We had surplus cash. But the way our PE has de-rated historically, we've been on a 15 times PE most, but we're now down under 10%, at 8% or 9%. I think, I look across the states as I've witnessed at 15 times PE, but with less profit, higher cost, less growth but it is what it is. But I think if, if, our multiple continues to be as insipid as it is or has to have derated over the last number of over the last 12 months. I think it's incumbent on the Board to reassess that we returned cash to fair cash by dividends or share buybacks. And I would be very strongly in favor, restarting share buyback if our PE multiple continues in single digits. I think we're vastly undervalued for the performance we're delivering in a market in Europe is consolidating and maybe near pricing for the next few years.

Yes. Well, I think in fairness, Jason and Eddie covered it fairly well recently, but capacity is going to be the key driver of our pricing for the next couple of years. The market remains constrained, likely to remain constrained for a various number of issues, including the Pratt & Whitney engines, the lack of availability of new orders this side of 2030 and the consolidation play. So look, I mean, nobody knows exactly what's going to happen, but I think there's more risk to the upside on the downside as we look out over the next year or two.

Great. Thank you. Michael O’Leary: Thanks, Conor. Maxine, I think it gets pretty fast. We've done an hour in 20 minutes, and I have to go there to a TV issue in 10 minutes. So we do two more questions, please I then going to cut it off.

That does conclude our Q&A sessions for today. So, I'll hand back over to Michael for any closing remarks. Michael O’Leary: Okay. Thank you very much everybody. I think we've done an hour and 20 minutes and which is very exhaustive coverage of the results. Thanks to the team for what I think has been a very strong six month performance. Thanks to our customers who continue to support here as we continue to do as far as the path on lower orders and exceptional on time performance in the European market phase which will continue to be challenged by capacity constraints for the next couple of years, consolidation, OEM delivery delays and I think the Pratt & Whitney engine will become a much bigger and more challenging issue for our competitors in the next in summer 2025. And I think we've had extensive roadshow, I think about 12 or 14 different teams on the road. I'm in the state, Neil, I think it's also in the state for the rest of the week. Eddie and the rest of the team are covering off Europe. If you'd like a meeting or please feel free, contact [indiscernible] Citi. And we'd be happy to try and fit in a meeting if anybody wants to come and see us in Dublin, over the coming weeks, please feel free to do so. Peter Larkin, head of Investor Relations would be happy to take the call to set that up. With that, thank you so much everybody for joining us this morning. Look forward to seeing you over the next week, and let's hope that there would be a peaceful outcome of the current situation in Gaza and in the Ukraine and that we can all get back to at carrying more passengers at lower fares than our competitors across Europe and hopefully rewarding shareholders for their support during the very difficult period. Thanks very much, everybody. Hope to see you later on this week. Thank you. Bye-bye.

Thank you. Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.