Ryanair Holdings PLC (RYAAY) 2022 Q3 法說會逐字稿

Welcome to the Ryanair Q3 FY '22 Results Conference Call. (Operator Instructions) Just to remind you, this conference call is being recorded.

I'll now hand the floor to Michael O'Leary. Please begin your meeting.

Thank you. Good morning, ladies and gentlemen. You're all welcome to our Q3 results conference call. You'll have seen a comprehensive release this morning on the ryanair.com website of the Q3 numbers, 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 themes, we've taken as read and everybody has read -- seen the results. So I think the strength of the numbers here was the recovery in 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 factors than any of the other so-called local airlines who all seem to have load factors in the mid-70s. We delivered an 84% load factor. That would have been significantly higher as were the yields if we haven'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 reimposing travel restrictions, we got hit in -- probably cost us about 2 million passengers in December and also that 2 million passes that people tended to book later. So it had an impact on both while passenger volumes, we fell to 9.5 million in December, but also critically on yields. We took out about 1/3 of our January capacity again because bookings just collapsed. We did hang on some of that Christmas return traffic in the first week of January. But other than that, the rest of January was a washout.

As we said, we have -- we would have originally expected to do about 10.5 million passengers for January. Taking out 1/3 of the capacity, we reduced the passenger target to between 6 million and 7 million. We've probably taken out about 15% of the February capacity as well. And so there's kind of a -- there's a misconception out there that these lockdowns just hit passenger volumes, they don't hit passenger volumes and they hit passenger yields and revenues. And we think, therefore, that the impact of Omicron was quite damaging on the December numbers and therefore in those -- the Q3 numbers despite the fact that we still did 31 million passengers and an 84% load factor, it will also continue into Q4. As I said, January will be somewhere between 6 million and 7 million passengers. February will be down about 10%, 15% on what we would normally have expected.

Again, I think we're heading for something over 8 million, about 8.5 million, something at 8 million to 9 million passengers. But -- and then March, we're hoping to maintain that very strong recovery probably back up to something between 11 million, 12 million passengers.

But if there are any more sort of surprising variance or anything else emerges, and governments again started kind of panic as they did in early December. We will get hit for Easter in the middle of April. All the indications are, at the moment, there will be a strong recovery into Easter and into summer 2022, but it is hugely uncertain if there is any other kind of COVID development.

So with that as a backdrop, I think the highlights of the third quarter is we continue to invest heavily in our environmental strategy. Our premise disclosure project rating, an independent rating move for B- to B, which is industry leading. Traffic rebounded very strongly in Q3 despite the impact of Omicron on the December traffic but close in bookings in years in December and January and into February were badly damaged by those Omicron restrictions, and we are spending. We are aggressive on pricing at the moment to recover traffic and load factors into February and into March.

The balance sheet remains strong. We repaid the CCS [600 million] loan in October, 5 months earlier than scheduled. At the end of December, we've taken 41 game changer deliveries. We expect that to rise to 65 aircraft before the peak summer of 2022. To accommodate that additional capacity, we've announced 720 new routes, and we're opening 15 new bases, all of which will operate in the summer 2022.

We are very well hedged on fuel and it separates us from some of our competitors. We're very strongly hedged at prices that are a significant discount to the current spot. We see red crude open up this morning over [$91] a barrel. We're very strongly hedged. 100% into Q4, 80% into H1 of FY'23 and 30% into H2 of FY'23.

That's a mix of swaps and caps -- and the reason we're using caps is that we don't want to take a risk. We don't want to commit to having kind of buying into plain or 80%, 90% of our capacity increase that are further kind of repetitions of code restrictions or sort of the things that disrupt travel.

We think we have a very good balance. Again, we see -- I think it's hard to believe that we won't operate at 60% or 56% of our scheduled capacity through the summer of '22 and into the winter '23, but the caps at least are a modest cost way of giving ourselves further insulation take us up to about 80%.

And it means that for the remainder of this fiscal year and for much of the next fiscal year, we will benefit from significantly lower than spot price oil cost. And that will give us yet another significant cost advantage over all of our competitors in Europe.

Our Summer '22 capacity is now on sale. We're offering 114% of our pre-COVID capacity that's essentially the Gamechanger deliveries less a couple of NG aircraft we do we favored off lease, and we are committed to stepping up our 5-year growth, which, as you'll be aware, has accelerated from it an end target of 200 million passengers.

It's now 225 million passengers because we think can expect there will be a strong recovery post-COVID into summer of 2022. And certainly, there is a huge gap in the market out there Actually, we do not believe some of these analysts report to expect capacity will be flat in summer '22 pre-COVID-19.

In [Mons] will be down. I think it will be done by a double-digit percentage, but maybe it'd be a high single figure percentage. But you see the legacy airline said they're desperately trying to hang on to the slot waivers. They're definitely trying to hang on to those slot waivers for a reason. They do not want to operate a large proportion of their short-haul traffic, their short-haul schedule.

A lot of that is driven by the fact that about 50% of their short-haul traffic is connecting to or from long-haul. And there's no doubt that long-haul will be slower to recover in summer of 2022, and I think in somewhere in '23. So we think that will be meaningful -- there will be a meaningful reduction in short-haul capacity in Europe in Summer 2022.

We will be, by far and away, the fastest-growing airline in terms of absolute traffic numbers and capacity in that marketplace, and we are deluged with airports and government who are besieging us and also besieging us trying to get to allocate more aircraft to their markets.

And we're doing very effective COVID recovery. Our post-COVID recovery -- traffic post-COVID yields in both airports and governments all over Europe. I don't want to add too much more to that. Neil, do you want to take through MD&A? And couple of highlightsi will han dover to (inaudible).

You've covered a few already. We're equally well hedged on carbon as well for the next Year. So we're about 100% hedged for FY '22, a EUR 24 in EUA. We're 80% hedged into FY'23 EUR 45 to current price of [90]. The balance sheet remains in a very strong position of cash, just under [3 billion] at year-end after having -- or at the end of December after having paid off the U.K. CCFF 5 months early.

And indeed, net debt this [800 million] of CapEx is down mostly EUR 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 a broadly net cash, net debt position. And then the final thing that I have as pleased within the quarter was the unit cost ex fuel development we saw unit costs get back to EUR 32 per passenger.

Okay. Thanks, Neil. We'll just open up to Q&A now that everybody's limit 2 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, unlike most of our competitors will be on recovering volumes quickly and restoring loans to -- trying 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 -- forward bookings are running significantly behind for summer 2022, where they would have been on listing in advance of summer of 2019.

And so while the bookings have recovered very strongly in the last 2 or 3 weeks. That needs to continue uninterrupted I think, for another 8, 10 weeks. So that we can get not just April, which is at least rate, but also the peak summer months forward bookings back to the level where they would have been this time 2 years ago pre-COVID.

We will, as always, remain load factor active deal pass I think that was demonstrated in the Q4 numbers when we delivered an 84% load factor. I smile to myself as I listen to a number of our competitors last week, claiming to be load factor active, and yield passive yet they only delivered a 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 claim to be Ryanair while not actually delivering what Ryanair delivers. We don't know what the yield will be. We're not going to speculate on this morning's call as to what yield would be your all big analysts out there you can get as well as we can have a look at yourself.

I think what we will see though is very strong. If there is no more negative COVID development, then I would be cautious on that front. You'll see very strong traffic recovery, not in February because we've taken out about 15% of the capacity in February. You should see a very strong load factor recovery into March and then Easter or April, which will be the first month of the new year.

In the new year, we're aiming for targeting 165 million passengers. We would want and expect to see a very, very strong traffic and load factor recovery in April. And then that would set us up well to be before the summer.

If, however, there is another Omicron variant that emerged in the middle or the end of March, then Easter will get wiped out the way. Christmas got wiped out in December, and we will cut it back 2 or 3 months.

So I think the sense of a away to do at the moment is to be cautious. I think we should expect some more COVID negative news flow somewhere. We don't know where it comes from. But I think it would be sensible just to be cautious, and that's what underlies our message here today. Okay. Please go ahead, the Q&A, please.

(Operator Instructions) Our first question comes from the line of Mark Simpson at Goodbody.

Two questions. First one, you mentioned in the preamble that you've got to pay down debt over the next 2 years in terms of the presentation on the website, I'm just wondering if there's an update on CapEx, we're going to have behind that statement? And then secondly, whilst we're not looking for a specific overall guidance in 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 put a statement down on the domestic Italian side with their increased commitment 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, maybe a CapEx update from Neil.

Sure. Just for, as Neil comes on CapEx, and I might ask Eddie just to give his views on defense. I think it's just -- it's important, again, there is a natural view out there generally, maybe among -- I mean some unions across Europe and labor that over out of COVID and recovering from this way. It's all behind it. It isn't all behind us. we're still repairing load factors.

We're still retaining bookings, and we still need to get our forward booking for the summer of the way they were before. Even when that does repair, we are -- we went into COVID essentially with a zero net debt position, and we will emerge with a 2 point -- effectively a [2 billion net] debt position.

As the foremost in the Board's mind at the moment is returning that net debt position to 0 as quickly as we possibly can. So our primary uses of cash in the next, I think, 18 months 8, 24 months will be paid down that debt to return to a net-zero debt position. Neil?

On the CapEx market, no change from our previous guidance of about EUR 1.2 billion CapEx in the current financial year to 31 March, '22. That still maintenance CapEx. That will increase to EUR 2.3 billion next year, which is our peak year of CapEx. And then it starts to pull back, although the next year after starts with a [EUR 2 billion], and then you'll see a drop-off thereafter.

Okay. And the estate Indiana, are we noticing anything from -- do we ever notice competitors in those markets or other than non-Italian?

I think particularly 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 based aircraft to 92 based aircraft, we've got 3 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 through the whole sort of coved crisis. We are the sort of go-to airline for domestics in Italy at the moment.

And we know some of our competitors down there are less than maximum sort of load factor, certainly in around the 50%, 60% mark and sort of desperate fares there at the moment of [2.99 and 4.99]. We have grown by almost 40% in terms of base activity initially.

I'm pretty confident we are going to -- more than confident that are going to have the lion's share of the domestic traffic in Italy. On Vienna, again, we will have just close to 20 basis aircraft there this summer as against Wizz, which has gone sort of backwards there.

They were going to do 9 down to 5 talking about going back up to 6, and we've got significantly more capacity. They've recently canceled 14 completed routes out of their notable ones will be Madrid, Cologne and Warsaw. So I think we are certainly more than grabbing market share and frequently build and completed airlines on -- completed routes, we see them pulling away from us.

And just a follow up. Do you think that your fuel hedging gives you a massive advantage this year and be able to actually take the competition in being able to manage your prices with a decent return, take that to other (inaudible) alignment is unhedged.

I don't think fuel ever give us in. We don't hedge fuel to maximize returns. I mean, the returns will very much depend on the speed and depth of day recovery. I think what's important with our fuel 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 are about to lose a shitload load of money by not hedging, but particularly with spot prices up [$91] a barrel.

But to be fair, all we see from them in some of those some of those markets that usually they struggled for a 50% load factor, and we see desperation pricing recent weeks. We see some presales of [2.99 and 4.99] in domestic Italy. Although nobody in domestic Italy usually seems to notice them. But I think most of the other airlines, certainly, easyJet, the well run sort of airline -- 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 we can take a take 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 for us in hedging was, would you kind of hedge up to 80%, 90%? If we didn't think that a 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 -- on the upside, but there's still some benefit from us with the caps on the downside if there was some kind of collapse in oil prices. But now it won't affect the returns. It just gives our investors cost certainty.

That comes from the line of Sathish Sivakumar of Citigroup.

Quick couple of questions here. So firstly, if you could actually give an update on the recent ICO report on (inaudible) regarding the Belarus airspace? And secondly, on the ancillary revenues, could actually share some color on the quarterly momentum that you are seeing on priority boarding and results seating, i.e., why do you expect it to normalize in the coming quarters?

Good question, Sathish. We welcome the 8K report on the demands diversion in May of 2023. I think it is clearly -- we think it could've gone farther, but at least it has certainly highlighted that it was inappropriate state actors who essentially engage in an act of modern day aircraft piracy.

I think we are calling on [8K] and on the aviation and the government authorities of Europe to ensure that there are appropriate undertakings given by certainly the Belarusian state. This will never happen again. It is fundamental to air travel going forward that both airlines and our passengers can expect to overfly even long states free from any interruption or (inaudible) diversion or piracy of aircraft.

We certainly welcome what we fully support the actions now being taken by the U.S. Department of Justice against the four named officials in Belarusian, and we, as the airline, involved will be thinking to support any actions taken against those factors.

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 state-sponsored and active international piracy and we should not reopen the -- there should be no overflights of better Belarusian or less appropriate guarantees are obtained from and that this won't recur.

In the meantime, we continue to fly around the Belarusian state. We -- it's generally on our north south like from the Baltic states down to Greece and those kind of destinations where we might oversight Belarusia, but we believe all the EU states should show solidarity and avoid Belarusia until appropriate assurances are given. Eddie, do you want to give us some color on ancillary revenue development?

Yes. I mean on ancillaries, I suppose the big calls really for us internally here are duty-free sales, reserve seating and priority boarding. And as we have been working our way through during the sort of shutdown on COVID-19 because our lab people over the last 2 years so we've been doing a lot of work in terms of dynamic pricing, particularly on the priority boarding side, and that is continuing to show build.

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 in 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 happen the way that we've done with priority boarding.

So very pleased with what's happening there. And obviously, on duty free of the U.K., we're continuing to build on that. And again, into the summer, I think we really only see how solid that is when we get those volumes back up. So I'm very pleased.

And what more proportion of our flights to operate to and from the U.K.?

It's a big just under 30%.

That comes from the line of Savi Syth, Raymond James.

Just few questions. Just on the non-field passenger -- passenger performance, as you pointed out, is very strong showing there. Just ous if you expect that to flip here in fiscal 4Q, given how much close-in capacity you've got 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 for my second question, curious 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?

Okay. You want to take that the nonfuel passenger cost development, we think that and then I ask Eddie maybe to comment on the opportunity in Germany?

Okay. We've seen a very strong performance in the non-zero cost in the quarter of EUR 22 passengers that was driven by increased load factors, increased (inaudible) utilization. A lot of work done on the very good cost on renegotiating a lot of our airport deals, and we continue to benefit from the (inaudible) payment option.

Where we see it probably coming over the next year is as we start to see an increase in EUROCONTROL and ATC costs, which are pretty much out of our control. So that probably give us about a euro passenger in the next year, but we hope to get to the pre-COVID levels as we return to increase load factors.

Okay. Eddie, you been talking on developments in Germany and particularly the closure of the Frankfurt main base?

Yes. I think our view on journey would be that there's 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 to not only higher prices, but to look for higher thresholds 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 (inaudible) Nuremberg, Niederrhein, places like that where we've been able to sort of put additional capacity in there.

But Germany is a one country that we have significantly reduced based aircraft if you compare it with summer '19. And it's all then pricing security taxes. And we have -- we didn't recover fully to the amount of base aircraft that we previously had in Berlin, but something needs to happen in Germany on pricing, particularly where you've got less, you've got less capacity in Europe, and you've got more choice with other airports, and Frankfurt was the big casualty there.

(inaudible)

Yes, that's sort of more sort of secondary airport Niederrhein has its own difficulties at the moment being in administration. They're looking for a buyer at the moment. but Nuremberg in back with a published deal that was open to everyone on a nondiscriminatory basis and made sense for us to go back in there.

Originally, we went out in Nuremberg because of the nondelivery of the MAXs. But places I say, like the smaller airport, (inaudible), the Nuremberg and the Niederrhein and places like that are the only ones that are at least trying to lower cost when they know that there the international competition for them on movable aircraft with LTC is going to tend to go elsewhere.

Yes. I think also from 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 essentially the big hub airports Heathrow came up with a ludicrous.

I think GBP 15 for the parking passenger -- GBP 15 sterling for the parking passenger. One of the richest airport owned by the richest shareholder in the world, their first response to COVID, a 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 in a number of smaller airports. But frankly, we have better uses of our aircraft this year and this summer and into 2023. And if an airport doesn't want to work with us to stimulate or to be used price to stimulate an aggressive traffic recovery. And frankly, we have 200 other airports as were in Europe, where our aircraft are better deployed, and we'll deploy them elsewhere.

We will not give up on Germany. But frankly, I think the German market is in for 2 or 3 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, and they're leading the charge on slot waiver on the wavier, users stop rules.

And German large German airports are going to see a significant decline in traffic, materially higher air fares, while it becomes a kind of a Lufthansa monopoly. But there's kind of a mode in Germany around supporting the national champion. It all seems to go propping up Lufthansa, not just the [12 billion of] stage A, but also eliminating competition.

We think that will 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 more accelerated rate than any other airline. We have growth opportunities in Italy, in Spain, in France, Ireland and the U.K.

And they've -- some German airports want to put up fees -- good luck, we'll see you when you change your mind in 2 or 3 years' time with you about 20% less traffic than you do pre-COVID. Next question, please.

That question comes from the line of Alex Irving at Bernstein.

Let's just move on to next one.

Okay. So the next question comes from the line of Stephen Furlong at Davy.

Two questions. One for you, Michael and then one for Neil. 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 cost 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.

Okay. Well, the key that with Boeing in the last Q3 as we took delivery of about 25 aircraft in the quarter. We are up to 41 aircraft at the 31 December I noted Boeing's results of last week, they delivered 99 aircraft in the quarter.

So we accounted for 1 in every 4 Boeing aircraft deliveries in that quarter. We expect to take another 24 aircraft from the 6 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 within 84% load factor in Q3 as opposed to 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 passengers, they're exceptionally quiet aircraft on board. And I think our initial concern, which was that there will be a crew or passenger reluctant to operate the aircraft. Absolutely, no. We feel, despite that we're offering to customers, you can offload up the aircraft and travel the next G, if you want, not one passenger and so to offload deficit anything more what we want to play on the new the new quieter aircraft.

On the MAX 10's, I think the disappointing the -- I think the sales operation in Boeing has been sleep. They been having disturbed. I think worrying from a kind of as Boeing's largest customer outside of the U.S.A., it's been worrying to see a trend in recent month of Boeing customers converting to Airbus.

We saw Jet2 order Airbus Qantas, or Airbus even KLM who for nearly 100 years, have been operating shortfalls Boeing equipment. Now look at their moving towards Airbus as well. Certainly, the Airbus sales team are performing very well. Boeing doing nothing. We haven't turned back to 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 for Boeing until '26 -- '27 or '28. But for an OEM that's losing so many customers to its Airbus opposition. It's remarkable that we haven't -- that they haven't been capped outside our offices here trying desperately to restart our discussions on the MAX 10, but we live and waiting on. In the meantime, Neil carbon credit?

Sure, Stephen. Carbon credits were come about what Michael talked about our desire for certainty on fuel. Carbon is becoming a bigger comp than it has been for the last couple of years. So we took the decision to 9 of our counterparties to develop in a forward market for EUA. 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 to the end of FY'23 in a market that is certainly rising. I mean, loss trading about EUR 90 an EUA today. We're hedged out into next year at EUR 45 for 80% of our requirements. That boils down to our desire for certainty on the balance sheet that we have, which convinced counterparties to set up this market, which traditionally wasn't there.

That's from the line of Muneeba Kayani at Bank of America.

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

Okay. On Ukraine, we have a reasonable size operation to Ukraine, but mostly is set up here in airports in the west of Ukraine. We do have -- our plan this year is to grow to about 1 million base last year was close to 4 million come from Ukraine this year. Again, as said there being any sort of negative development, we will continue to operate that plan.

But we have no aircraft base in Ukraine. So if there was erosion in (inaudible) long-term kind of position up there, we will pivot those aircraft to wait to Ukraine into the summer, we can build 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 westward. There are huge economic workflows or people traveling to or from Ukraine, working in Central, Eastern Europe. There's a very large migrant workforce in Poland, in Germany, and we see no reason why Ukraine won't continue to grow.

It is certainly one of the countries not invaded by Russia. It's a country we expect to open a couple of bases in Ukraine sometime in the next, I would say, 2 or 3 years, some into agreements on cost and prices. We did have the new Roots team. We're down visiting the Ukraine airport. Again, it's about a third or fourth visit in January.

But I think it was understandable we did Ukraine has already in a position to disclose kind of new routes as that they were somewhat otherwise distracted. We hope the situation in Ukraine gets resolved systematically. And if it is, it remains a very exciting growth opportunity for us.

I mean it's the same population base in Poland with the same kind of propensity for travel to and from the EU.

And just on the cost and the salary pressure, I mean, we don't see much salary pressure at the moment. The vast majority of our people will be pilots ad cabin crew. We are in the -- coming to the end of the second year, our 4- and 5-year multiyear pre-deals .I might ask Eddie to just give you a flavor, but we're coming. This is the first year we're committed to kind of pay starting of the first 2 or 3 years of pay restorations in July.

We are -- we began having discussions with some of our unions and our people about bring that forward from July to April or we may restore instead of 3 years of restoration may be doing over a 2-year period, but we will want a year or 2 tacked on to the end of those agreements, if we're going to accelerate those kind of pay deals.

We have to be careful because I think we still don't think we're out of the cost of works on the COVID. We think there is a potential for further negative COVID surprises. But where -- if we do better over the next year or two, the first people worked with we two things we want to do is pay down our EUR 2 billion of net debt; and two is to restore the pay of our people in a kind of sensible sustainable fashion.

However, the backdrop for that is there are literally thousands of unemployed pilots out there. We are -- I think we -- at last now, we have about 900 today coming through our cadet training program across the system. We have seen no shortage of pilots for the coming number of years. Again, similarly with cabin crew, we're running a lot of cabin crew training this year for the growth across Europe.

There would be one more that the U.K. would still be, I think, an area where there are some pressure points, particularly on the cabin crew side that a lot a freedom of labor in the U.K. I think we're in many sectors particularly some of the people who are most vocal in calling -- supporting Brexit, who now want the government to issue work fees for staff, food pickers and (inaudible).

But I think we -- our cabin crew atleast are relatively well paid, certainly well above hospitality, kind of supermarket workers or entry-level workers in the U.K. But if there's going to be a pinch point on salary, I think it would be likely to be in the U.K. and certain spots in the U.K. around cabin crew.

But other than that, we don't see much salary pressure, upward salary pressure -- I should say, obviously, lab and the IT is an area where the ongoing salary pressure is there, but we have four centers across Madrid, Dublin, Brussels and in Portugal, and we continue to attract very -- continue to recruit very attractive graduates, but there is a high -- a relatively high rate of turnover in the labs and IT area.

Eddie, you want -- Juliusz you want to have some the Ukraine side and Eddie do some flavor on this, what you think on the salary pressure side? Juliusz?

Michael, you've 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?

Yes. I mean I think 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's a reoccurrence next quarter, some other sort of Omicron type variants.

So on that basis, like this isn't over. 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 agreed to their unions for pay close to 20%, the cabin crew largely around 10%.

And we have to have an orderly way of doing that, and we're in the negotiations at the moment to do that so that with a number of unions. And if we can do some of that earlier, we can do some of that earlier, but only on the basis that we've got cost certainty over a longer period of time.

The next question comes from the line of Jarrod Castle at UBS.

Just coming back to growth over the next 2 to 3 years, I mean, the biggest markets at the moment are Italy, followed by Spain and the U.K. I mean if you look out 2, 3 years' time, should we see more concentration in terms of revenue mix in those markets?

Or do you think will become more balanced? And then just secondly, on summer. I mean, obviously, the Northern hemisphere in winter, but there's been much publicized stoppages in the U.S., not enough staff and people getting sick. How do you plan to kind of hopefully be a period where there's less people getting impacted, 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. Firstly, I mean growth over the next 2 years, again, in all cases, for the last 35 years, growth here has always been opportunistic. The growth will go wherever we see the best deals. I think we do comment because of the scale of the market. We're seeing very substantial growth opportunities in the U.K., in Spain and in Italy.

But this summer, we will grow from about 8 to 20 aircraft in Vienna. Budapest, for example, which is the whole airport of one of our competitors, we'll see that this year grow to was it 9 aircraft? -- 10 -- 8. We'll grow to 8 aircraft based in Budapest this year, which would be one more than Wizz.

I think it will be a 7 aircraft this summer or this summer there. We're growing faster in many centers and Eastern European markets than the incumbent carrier. So our growth will always be opportunistic. It's not from the (inaudible) invasion of Russia here. It is -- whoever comes up with the best deal will get the next 4, 5 aircraft.

And I think it's fair to say the new routes team are actually inundated with requests for meetings, negtotiation that airport. And one of the ones that I was talking if we saw a resolution of the political uncertainty in Ukraine, Ukraine could take 15, 16, 20 aircraft at 3, 4, 5 different airports over the next 2 or 3 years.

I think the critical opportunity are -- the thing to focus on is not so much the actual -- the geographic areas. Focus more on the fact that Ryanair would take delivery of some 60 aircraft a year -- each year for the next -- with 65 in summer 2022. There'll be another 60 for summer '23, another 60 for summer '24.

We could allocate all of those aircraft this summer if we wanted to, to airports and governments who are engaged in pulling in the very dedicated centers. A good example of that will be the Irish government. I mean we had no plans to grow in Ireland in summer 2022. In fact, we were going to cut the fleet.

And the government have come up with a very innovative COVID-recovery incentive scheme. I think the total value of the scheme is about [EUR 90 million, EUR 100 million], which is passed through the -- by the government through the airports on to those airlines who are delivering growth.

And as a result of that, we've gone from closing our planned airport capacity, Dublin Shannon compared to pre-COVID. We're now on our largest ever schedule of the core Dublin and Shannon this summer. Entirely responds to me very enlightened. I think government recovering program, which is available to all airlines in growth, not kind of just designed for Ryanair.

But we have the flexibility to deliver formal growth than any other airline. So we will always be opportunistic. Our staff again, I think we have with a SaaS situation better than any other airline in Europe during COVID. We kept all of our aircraft cards. We kept all of our pilots and cabin crew card even in some -- by the way, this is midway that we operate a lot of ghost flights to protect blocks. We have never in our life operated ghost flights.

In fact, we're usually criticized for the office we just can't device and we have low load factors. We don't do that either because we don't have a lot back. But we did operate flights during the 18 months of COVID where we sent a plane up there to keep the plane current. Plane full of pilots and cabin crew to keep them all current because they all have to operate by the month.

So we didn't operate any empty flights like some of the pipes were operating were full of pilots and cabin crew to keep them all current. We are going to oversight the over regroup this summer, but I don't see us having the same issue in the U.S. with staff calling in sick. There's a huge proportion of our staff are now vaccinated.

There's a huge vaccination uptake across certainly Europe and Continental Europe. I mean some countries Austria, Germany or talk about mandatory vaccinations. I'm not sure they'd be able to make it mandatory. But across most of you, we see very, very high Italy, Spain, Ireland, U.K., 90%, 95% vaccination thresholds.

There is much greater resistance in the U.S. vaccinations. You have a very strong and idiotic antivac kind of group, which seems to be about 40%, 45% in the population. We don't see that happening here in Europe. But our view right that you are, we always roster and roster significant staffing pilots and cabin crew.

We build a sickness and routine sickness into that. we have roster significant standby's on a daily basis. And we would expect us to continue to roll through. We have no difficulty with that in the last 3 or 4 months into what's been a very strong post-COVID recovery.

So couple of pin points we didn't see over Christmas was security staff at airports that a number of airports and handling staff at a number of airports. Strangely at some of the bigger airports like Berlin and Frankfurt, where I think they will be opportunistic but they were not showing up to work on Saturday, they always need to get close contacts on a Saturday and Sunday, and then remarkably, they all return to work on Monday.

But I think that would even out. We don't think that would be a significant issue into East or into summer, as long as there is no negative COVID development, if there is it. But we -- I don't think rather the -- we expect there to be other variants. And we hope that there won't be any other variants that would result kind of match sickness that was caused by Omicron in the first week or two in December, where European governments were closing down.

Despite by -- even then the South Africans were telling people, look, it does seem to be more prudent but a lot less -- have more (inaudible). about this variant. So starting, I think we managed more that we will continue to manage it well. We don't believe, given the high rate of vaccinations in Europe that we'll have similar kind of sicknesses, I say, as they have suffered in the U.S.

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 -- don't forget, while we were flying most of all of our aircraft over the last 2 years, we kept up the sort of the field of recruiting, so in terms of the cabin crew side.

So no issue with cabin crew. We may have some pockets of the U.K. But if you look at it on a macro level about the amount of cabin grew, there isn't an issue for this summer given the sort of run rate that we have in terms of applications and the number of courses running. So we're not coming from behind it all. We are coming from a steady platform of airplane.

That's a good point. I mean in the U.K., I mean our cabin crew generally are earning between GBP 30,000 and GBP 40,000. It's significantly ahead of hospitality, is significantly ahead of retail and it's probably double or triple of what food makers are earning now 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 what I think the high rate of vaccination will hopefully protect us from the experience of some of the U.S. carriers on labor shortages. Next question, please.

That's from the line of Jaime Rowbotham of Deutsche Bank.

First, you flagged your superior December quarter load factors versus peers. Provided there are no further COVID curve balls and if the forward booking 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 precrisis type levels in the mid-90s?

And secondly, your environmental targets are 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 perhaps depending on where the staff is stored?

To address the environmental issue. Just as the load factor issue first. I mean we would have gone -- I think we would have done a load factor in the third quarter if we haven't had Omicron, it would have been in the high 80%. 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 -- our thinking going forward is that once we get into the peak summer months and I would say June, July, August, September, that we would expect our load factor back of over 90%.

Now what is the caution. That's because we'll be load factor active or passive. We will drive load back result over 90%, but maybe at the cost of yield. So we'll be aggressive on pricing. We're not expecting -- and we're working on our focus for FY'23 at the moment. We don't expect to get back to kind of 95%, 96% load factor 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% into the peak summer months. And Thomas environmental?

Yes, it's obviously the 12.5% target is aggressive, for the biggest constraints we see today is the availability of St. So at the moment, is not less than 1% is produced in Europe today. And obviously, the currency for 55 proposal has put a mandate on field producers to produce 4% at by 2030. But we've seen some of the major oil companies come out with statements in the last few months, say, 10% of their aviation production will be staffed by 2030.

So that gives us confidence that we should meet the 12.5% target, but if not, we'll be very close to inventory. And then the price is a lot higher today, but we think just the books and ramps up the price comes down. And obviously we haven't column for some incentives to be given to producers to produce it.

In regard to pickup. I think it will be a bit -- there'll probably be more pickup at some of the main locations initially because that's where most of the fuel will be sent to. But over time, we see an even distribution across all airports in Europe on the demand in Europe.

Thank you. That's from the line of Neil Glynn at Credit Suisse.

Just following on from that question. Firstly, just on Easter. I realize the forward booking 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 light bookings towards Easter?

And then a second question, maybe a bit more less field. Obviously, the subject of the 737 popularity has been topical, and we're all clearly wondering about your future fleet plan. But the fewer non-Ryanair 737s that are actually operated in Europe following the recent decision from KLM and Jet2, prompts a question for me in terms of the availability of engineers, maintenance facilities maybe even type rate of pilots to an extent.

Is that something that's a concern for you? Or are you very much in control of that situation and this is irrelevant?

Good question. I mean I'm not going to give you obviously the proportion to be Easter in advance. But I mean, to give you flavor what's normally happening here, pre-COVID we would enter into a month on the first day of the month. We have about 80% of the kind of bookings for that month or the expected target of that month already prebooked.

Currently, at the moment, and it don't bounces up and down. Omicron did some damage. We're running at about 60% pre-booked that would have -- that's built strongly. It went up from 45 to 50, 55 as we went through kind of August, September, October, November. Then it got a big hit that kind of pulled out from under it in December into January.

So which is why we took out 33% of the capacity in January, 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 the that we now have a much bigger domestic operation in places like Italy and in Spain.

So where they do -- and we do look later, but we know they're going to book because that kind of domestic short hauls of generally book (inaudible). So we're running about 20% behind. We monitor it 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 (inaudible). We ran 24 our 999 fleet sales. I think it was Wednesday with essentially the availability in the first half of February. I mean there's no doubt that February as we move into it, with about 50% of the capacity cut. We're weaker in the first half of February. We had the cool midterm in the third week of February, and then the fourth week of February is reasonably well booked as well.

So it's, again, a question of growing back the bookings that it's very hard to shift a lot of bookings in the first 2 weeks of February during the month of January when still much of the media was still focused on Omicron and developments and lockdowns and everything else.

But it's getting there, and we think that will -- if there is no negative COVID development, it will repair very strongly into March. Easter in April will be critical in that there are no negative development, and a lot of people travel, families travel for the Easter holidays, Easter break. And if it all goes well and we don't have negative PCR requirements on returning back to (inaudible), then I think that would put a lot of confidence into summer, we see a big surge in summer bookings as well.

So but we keep making the point at the moment. Not roads later than -- they're booking late, but it's very fragile. Any negative development, as we saw during December, will have an immediate and very damaging impact, not just on volumes, but also on yields as well. 737, it's a very interesting situation. I think if anything, the lack of Boeing kind of customers are the slight Boeing customers in Europe to Airbus is indicative firstly, of the sales failure on the part of Boeing.

I mean it's one thing not attracting new customers, but to lose your existing customers to your direct to pressure, Airbus seems to be a failure of your sales force -- you can argue that KLM, Air France KLM or the government of the airlines who are receiving massive volumes of state aid we're probably inevitably going to be not in the direction of airbus but to new Jet2 reasonably well-run Boeing customers to Airbus, I don't know what the Oscar was to do 1 or 2 customers is probably here, but this is kind of a 4 or 5 of them is to get a costly tube.

What's interesting though is we see going forward, certainly next year or 2 there's going to be very, I think, dramatic -- I think there's going to be much more upward pressure on paid for Airbus pilots and Airbus engineers.

You see people here that the likes of that the lower end of the pay scales (inaudible) are probably using some pilots to Wizz and to easyJet. But then with an easyJet losing pilots to Airbus and Air France and all the Airbus operators who are pay more.

So I think you're going to see a lot of much more pay inflation on the Airbus side and ever engineer side. What's interesting on 737 is there's a lot less demand and a lot less, I think, rotation or job opportunity for 737 pilot engineers to ship across Europe. We're trading upwards of about 1,000. We -- almost 1,000, 737 cadets in trading at the moment. Interestingly pre-COVID need to move around doing all the math that they were doing in 2017 and 2018 and causing a pitch point on pilot they've now blow themselves up as it was inevitably going to happen.

We've seen a long set of pilots returning from Asia and from the Middle East. And yet, we have reintroduced the payment for our architects are now paying us what about EUR 25,000, EUR 30,000 for their cadet training, and we have nearly 1,000 of those in cadet training at the moment. So I think we will -- the opportunities for 737 pilots across Europe in the next number of years will largely be combined to Ryanair.

Now we do pay well and we are very productive and beneficial and rosters stuff like that. But I think actually, because we have such scale, that's why we're investing in new training facilities, we offered a $50 million training facility in Dublin. We'll operate another 1 come in the Iberian (inaudible) and probably someone in Central and Western Europe and Eastern Europe over the next 2 or 3 years.

But we have the capacity to train all our own engineers, our own pilots and our own cabin crew. But given the cost of trend of kind of trying to retrade the 737 pilot onto an Airbus, I think if anything, there will be a lot less turnover of pilot here in Ryanair, certainly a lot of that turnover of engineers because we will train our own, but we would essentially be the only significant, I would say, a 737 operator a year in Europe in the next couple of years.

So I would argue the comps are actually is a strength to our cost model here in Europe, where as I think all the other operators certainly if you look at the (inaudible), BAs, Air France, KLM, there a lot more turnover and stealing of each other's pilot because they're all careless quality.

The next question comes from the line of James Hollins at BNP Paribas.

First one is for Neil. I think in your last call, you talked about H2 or fiscal H2 costs being about EUR 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 as most airlines talking about that?

The second one, now I'd like to caveat. This is not a question about summer yields, and I do recognize your load active yield passive. But just following your comments, Michael, calling out effectively a lot of operators by having enough staff into the summer to operate full schedules calling out our sales to idiots for thinking that capacity might actually be quite high in Europe.

You called it down maybe double-digit percentage. Just wondering how that plays into how brave your revenue management team would be at this stage of the year coming through the next couple of months as you call out that capacity outlook for the summer likely surge in bookings, et cetera.

Neil, you want to take the first on ex-fuel cost.

Sure. James, there's no change on a full year basis, we're expecting to go in somewhere around EUR 35 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 plan is about 35% on a full year basis.

And the second one (inaudible) but I would never call an analyst who we respected value highly idiot I've seen some kind of pieces recently talking about we dispute Ryanair's view that there will be capacity with contracts I don't know how we dispute it.

The legacy airlines have spent inordinate amount of lobbying and resources trying to extend their soft waiver scheme and expressing deep unhappiness that it's gone from 50-50 to say 36-64. I know I have no legacy airlines that proposes to operate its full pre-COVID short-haul operation this summer. They're all talking about coating 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 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, we have a bit of growth capacity because they have a much smaller base, it looks like a higher percentage.

But in general terms, I cannot see where -- and particularly when you don't have the long haul, the Asian (inaudible) across Europe this summer and they won't be, there are still travel restrictions on them. I think the U.S. will partially recover, but there will be slow from outside of America again. there is going to be nobody to fill the short-haul flights of Lufthansa, Air France ,(inaudible), Iberia, you name it. And that's why they could build them.

I mean, Lufthansa is out there operating those ghost flights, to which we said, but the obvious solution to your ghost flight was introduce some of low fares and sell them to the traveling the people but giving you [10 billion or 13 billion] of Stage A. They have no commitment to doing that.

Now I would certainly -- I wouldn't teel you the nature of whether the decline in capacity this year was going to be a high single digits, 7%, 8%, 9% or whether it's going to be 12%, 13%, 14%, 15%. I don't think it matters that much. It is certainly, in my view that the capacity would be meaningful shortly will be meaningfully down this summer into a market where oil prices -- oil has gone above $90 a barrel instead a 7-year high.

And you have airports most notably Heathrow, Frankfurt Main and inevitably (inaudible) shortly follow with significant cost increases. Therefore, it is, to my view. How brave would our revenue management team be in fact, it wouldn't be brave at all. I mean what we tell our revenue management team, if you must hit the passenger traffic.

Your load-factor active, yield passive. Now would we take a chance and hold out for a higher yield? We absolutely wouldn't I would always give away yields here in return for a more accelerated recovery in higher load factors. And you see that demonstrated in the third quarter both Wizz and easyJet with much smaller operations delivered a 77% load factor.

We delivered an 84% load factor with 34 million passenger. That was more than almost 3x higher easyJet traffic and 4x more than Wizz traffic in the quarter. So our revenue management team here don't have to be brave. They just have to hit them. The billing that some they will get brave the in the passenger volumes on the load factors, and then they have to be very (inaudible).

But I think it's inevitable with less capacity in Europe, I struggle to see and certainly with less a combination of less capacity short haul and higher oil prices. I struggle to see why particularly with inflation running ramping across Europe in the long-term, there won't be a strong pricing recovery certainly in the peak summer months as long as -- and I keep going back to the point, as long as there is no negative goal of development in the next couple of months, and we should be -- we are expecting our worrying that there will be at least 1 or 2 more negative variance emerge.

Next question, please.

And that's from the line of Alex Paterson at Peel Hunt.

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 or big marketing spend and price simulation? 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. I'm going to ask Eddie just to take the new base performance and then maybe Thomas give us your view on carbon cost passthrough. And then I'll ask Neil maybe to sweep or coming after Thomas. Eddie?

No, no is the simple answer because like largely when we open new bases, they are 1 or 2 aircraft bases and we tend to reverse traffic into those, which has already come from nonbase activity. And even in bases that we hadn't been in previously like places like Orlando, we've actually done 2 to 4 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 say less of a risk and then you build from there.

And Thomas (inaudible) carbon comps and will we be able to pass them through?

On the carbon side that we see big increases in the last 12 months. And I think this is one like fuel because we're load factor active, and yield passive on the booking side, there'll probably be a 12-month lag between whether we recover the increased carbon cost and then on that way as we've seen with the fuel price previously.

But obviously, all indications among the carbon will remain at the level that it is today between EUR 90 and EUR 100 or and the ability to pass that through, well, we're already seeing the like of Air France who don't think of any carbon at this point or any staff at this point in time adding on sort of charges for our customers.

I think there will be an effort with the industry to try and pass this true. but I also think that aircraft are going to become more efficient. We're taking on more Gamechanger 16% lower fuel burn, 60% lower CO2, which will help we're well hedged for the next 2 years, as we already talked about. So it's really an issue from kind of FY'22 onwards.

But I think there will be an effort that has always been the case in the past that the legacy guys will try and recover and we hopefully track up behind us.

The next question comes from Alex Irving at Bernstein.

Two from me, please. First of all, on the strength of demand. So we've seen some increase in the cost of living, how that affects on the demand side. Think about you see budgeting, whether or not there's enough travel going on, do you benefit at the lower fare alternative?

And then second, I just want to follow up on environmental initiatives, please. So could you maybe talk about where you think we are with the single European Sky? Is this getting more likely? Or do you sort of remain stuck as we have in the past?

Thanks. Demand strength, what we've seen, Alex, once the EU issued the digital COVID (inaudible) on the 1st of July last year, demand strength has been -- sorry, demand has been incredibly strong. I think there's huge pent-up demand.

There's lots of people there, and we saw it particularly in the October bank holiday at the October midterm school break last year. Very strong demand of high yield, the Brits, the Irish, the Germans, all moving with their families. We thought that then again was -- that was good to build for a very strong Christmas and we had a very strong Christmas.

Frankly, we'd be back to pre-COVID volumes by into January, February, March, all they're back to normal. And then the row got pulled out from Omicron in the first week of December with the Omicron kind of panic in hysteria and coverage. So Again, haven't said there being any negative impact of COVID, we think there will be a very strong recovery into Easter in April and schools have traditionally have lots of schools go on school tours.

Family take the first of the kind of summer breaks. I think the other kind of just -- and again, this is slightly sort of not based on fact, but I think all for the family, generally at Christmas and New Year booking summer holidays. And again, they stand at home over that Christmas New Year period, worried about Omicron and restrictions that people have that negative PCR to get back and could they go skiing, and they could go skiing, they could go, but they might have been able to get back at their destination.

So there's huge uncertainty. We see that repairing itself now. But again, we need to have a strong Easter booking period, a good experience in travel over Easter, then I think you'll see that kind of flow of Christmas or summer booking. But we think the potential demand is very strong because of the pent-up demand.

And also remember, families and huge numbers of families have been sitting at home are working from old haven't been able to spend money for the last 2 years. There are huge pent-up savings there. And one of the first things they'll spend that money on will be travel and holidays. And so again, as long as there's no negative COVID development, we think Easter will be strong.

And if there's a strong Easter, that would lead to a very strong recovery in both load factor volumes and then hopefully yield into the big summer months of June, July, August, September. (inaudible) again long given up on the single European Sky. It is, I think, 20, 30 years. They've been talking about. They never made any progress on it. The idea that the European Commission is going to override the very powerful national air traffic control union is a mix.

It is never going to happen. But the technology has moved beyond the things European Sky, I think what we should have now is in deregulation of ATC across Europe.

You have multiple national providers. And again, we keep making what Ireland could provide, for example, overflight over France on a day by the when the French AC on those regular days when the French air traffic control will go on strike.

What it means is deregulation and breaking it up, not a 20-year phase project of a single European Sky. We've never going to see a thing in European Sky. The unions won't kind of bend to it, and these are very small but very powerful unions.

But what tends to happen over time is very small and powerful unions like the type centers and the place workers and fleets street, eventually, the technology moves beyond them and the airlines should be freed up to purchase air traffic, those air traffic control services from whichever national provides one provided.

But what we need is the commitment from Europe to say you're not going to close the guys over Europe. And if the French run to go on strike, somebody else can provide the ATC services that keep us moving. So I would be all in favor of deregulation and competition, which is what has delivered the expenses for presuming in the airline industry. And that needs to be applied to the air traffic control industry as well. Juliusz, do you want to add anything on that?

Maybe just that we keep pushing, obviously, for a (inaudible) the more environmental arguments we hear in Brussels airlines having to make an effort, the more, obviously, it becomes the government and the European Commission are not doing enough. Various studies indicate that European IPC 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 5 to 10 years. And that could be fixed immediately with a little bit of good win. So we keep pushing for it. I kind of share Michael's pessimism as to chances of success, but we are not giving up.

I mean it's a good point. I mean it's the environmental upside of how performing air traffic control. Remember, you'd eliminate 90% of flight delays, if you had an effective air traffic control provision and with a huge reduction in fuel consumption, fuel cost and also environmental weight. Next question, please.

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

Okay. Folks, thank you very much for joining in the call. And we're not doing a roadshow as of Q3. And Neil and Peter are here in Dublin. If you have any follow-up questions or want to call, please add any we'd be happy to get to talk to you individually. Other than that, I think looking forward, let's kind of keep being, I mean, cautiously optimistic.

There is a strong recovery underway, but we need to get through or get to get through Easter without there being any further negative COVID development and in those circumstances, we think we would be set fair for a very strong summer recovery. Our comps 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 comps base over the next 6 months in a load factor active, yield passive manner, that will put kind of traffic and low bank recovery ahead of short-term pricing advantage as we seek to rebuild.

And the aim is to deliver [155 million] passengers in the year to March 2023, which would be 40%, 50% ahead of where what we carried in pre-COVID -- 149 million we carried pre-COVID year to March 2019. Thank you again for your support.

For those of you who have stood loyally with us during the COVID we hope to indicate your judgment with superior returns over the next 12 months. As we look forward, hoping to see you all, we'll be doing a full year road show to our full year results at the end of May -- remain full and instead the growth across Europe, the U.S. during that. So thank you very much, everybody, and thank you want to follow up, please contact Neil. Good talk to you all. Bye-bye. Thank you.

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