Ryanair Holdings PLC (RYAAY) 2009 Q1 法說會逐字稿

Good afternoon ladies and gentlemen, and welcome to the Ryanair first quarter results conference call.

(Operator Instructions).

I would now like to hand over to the chairperson, Mr.

Michael O'Leary, please begin your meeting and I will be standing by.

Thank you very much.

Good afternoon ladies and gentlemen, welcome to the Ryanair Q1 results conference call.

I'm here in Dublin with Michael Cawley, David Broderick, Neil Sorahan, and Jimmy Dempsey, and Howard Millar is joining us from the roadshow team in London this afternoon.

This morning, we announced Q1 profit of 21 million, down 85%.

Fuel cost almost doubled and yields fell due to the absence primarily of Easter in the quarter and its presence in the prior year comparable.

Despite the absence of Easter, however, traffic grew by 19% to 15 million passengers as average fares fell by 8% to EUR42, while total revenues grew 12% to 770 million.

Unit costs excluding fuel fell by 6%.

Including fuel they increased by 18% due to higher oil prices and longer sector lengths.

Trading conditions have been difficult in Q1.

We've felt the loss of Easter and the impact of much higher oil prices.

Oil prices have almost doubled in Q1 from 61 -- or EUR61 last year to EUR117 per barrel.

The fuel bill rose by 93%.

Fuel now represents almost 50% of our total operating cost compared to 36% last year.

Yields fell by 8% in the quarter as we opened new routes and bases, and felt the impact of the absence of Easter, which considerably distorts the prior year comparables.

Yields were also impacted by a reduction in check-in baggage penetration rates as more passengers switched to Web check-in and carry on bag facilities.

Traffic, however, grew by 19% to 15 million while load factors at 81% were almost in line with Q1 last year despite the absence of Easter.

Ancillary revenues grew by 20%, again faster than the rate of traffic growth and we expect this will continue.

Passengers will shortly be able to use their mobile phones and BlackBerries on 10 Dublin based aircraft in a trial test which will expand to almost 40 aircraft by the fiscal year end.

We're taking advantage of last week's weaknesses in oil prices and are now hedged 90% for September at $129 a barrel, and 80% for Q3, that's the October to December quarter, at $124 a barrel, which was essentially $129 a barrel last week, plus the 10% of $70 a barrel we had already in place.

We remain unhedged for Q4.

Continue to believe that oil prices remain subject to irrational exuberance, but as many of our high fare competitors continue to increase fuel surcharges we remain committed to no fuel surcharges, ever.

And we continue to absorb higher oil prices even if it means short-term losses while we continue to deliver Europe's guaranteed lowest fares to our 58 million passengers.

Excluding fuel unit costs fell 6%, better than we previously expected.

We've responded to much higher oil prices by aggressively tackling costs in many other areas.

In the last quarter we've added cheaper, more fuel efficient aircraft.

We've implemented a companywide pay freeze and [announced] redundancies in our Dublin call center.

We have and are continuing to renegotiate many of our airport maintenance and handling contracts and we plan to introduce check-in kiosks in the October at our main and most expensive airport in Dublin and Stansted to further reduce airport and handling costs.

The increased discretionary charges for baggage and airport check-in have encouraged more passengers to use Web check-in and carry on luggage, and this is helping to significantly reduce our handling costs while at the same time having a downward impact on average fares and yield.

We've recently announced significant capacity reductions for the coming winter for the two most expensive airports, Stansted where we will ground up to 15 aircraft this winter, and Dublin, where we ground up to four.

I will do that because regulatory failure has allowed these monopoly airports to further increase their already high charges.

These high costs make it more profitable to ground some aircraft rather than fly them there this winter.

However despite these capacity cutbacks of the two most expensive airports, Ryanair's traffic will still grow by almost 10% this winter as we switch routes and capacity growth to lower cost, more efficient airports and bases.

Accordingly, passenger volumes for the full fiscal year will grow by 14% to just over 58 million, slightly lower than the 16% or 59 million we previously guided.

The demise of low fare air travel is again being predicted by all the usual suspects, principally BA and others, many of whom are still using each losing short haul traffic to Ryanair.

Higher oil prices won't and end low fare travel.

It just increases the attraction of Ryanair's guaranteed lowest fares as consumers become more price sensitive and switch away from high fare fuel surcharging air lines like BA.

Higher oil prices will speed up the decline of high fare short haul travel this winter as many European airlines consolidate or go bust.

We believe the oil price of approximately $130 a barrel are unsustainable over the medium-term, but we don't know when they're going to fall or by how much.

The industry is cyclical and this downturn will provide enormous opportunities for strong well-financed air lines like Ryanair to grow.

The outlook for the remainder of the year which -- I [will tell you] what we focus on now, is entirely dependent on fares and fuel prices, and we believe it remains poor.

The emerging economic recession in the UK and Ireland which has worsened significantly in recent months caused by the global credit crisis and higher oil prices means that consumer confidence is plummeting, and we believe this will have an adverse impact on average fares for the rest of year.

We will respond as always with much lower fares and aggressive pricing to keep people flying and maintain our high load factors.

We now believe our average fares for the year will fall by as much as 5% if European [airfares close] this winter.

Ryanair will lead this downward pricing at a time when most of our competitors are hoping to raise fares and increase their fuel surcharges.

The market this winter will be heavily impacted by the timing and the scale of EU airline bankruptcies and consolidations, many of which are inevitable at these higher prices.

Our better than anticipated cost savings will flow -- which flow from capacity and cost reductions already announced or achieved will partly offset these lower years -- yields.

On the basis of our existing fuel hedges and an assumed Q4 oil price of approximately $130 a barrel, and if average airfares fall by 5% for the full year, we would expect a record of full-year result of between breakeven and a small loss of EUR60 million.

The capacity reductions which will ensue from this winter's wave of airline bankruptcies and consolidations will create more opportunities for Ryanair to grow.

When oil prices fall significantly as we believe they will over the medium-term then our earnings will rebound strongly.

We have one of the strongest balance sheets in the industry, and the (indiscernible) (technical difficulty) continues to be strongly cash degenerative with over 2.2 billion in cash.

With the lowest fares and the lowest cost base in the industry, Ryanair is the best positioned low fare airline, indeed any airline in Europe, to take advantage of the opportunities of these very difficult trading conditions we create.

Howard, do you want to take us through the MD&A please?

Then we'll open up for questions.

Thank you Michael.

For the purposes of the MD&A, all figures and comments are by reference to that adjusted income statement, excluding the exceptional items.

Exceptional items during the quarter ended 30 June 2008 amounted to a total of EUR111.4 million, consisting of the impairment of the Aer Lingus shareholding of 93.6 million and an [accelerated duration of] depreciation charge of 17.9 million on aircraft to be disposed in 2009/2010.

Adjusted [property] -- excluding exceptional items decreased by 85% to EUR21 million compared to 138.9 million in the quarter ended June 30, 2007, primarily due to a [93]% increase in fuel costs.

Total operating revenues increased by 12% to EUR776.9 million, slower than the 19% growth in passenger volumes, as average fares decreased by 8% due to the absence of Easter and lower baggage penetration rates.

Ancillary revenues grew by 25% to EUR146.8 million during the quarter.

Total revenue per passenger as a result decreased by 6%, while its load factor decreased by 1% during the quarter to 81%.

Total operating expenses increased by 40% to EUR751.2 million, primarily due to the increase in fuel prices, the higher level of activity and increased costs associated with the growth of the airline.

Fuel, which represents 49% of total operating cost, compared to 36% in the quarter ended June 30, 2007 increased by 93% to EUR366.6 million due to the increase in the price per gallon and an increase in the number of hours flown, offset by positive movement in the US dollar exchange rate versus the euro.

Unit costs excluding fuel fell by 6%.

Including fuel, they rose by 18%.

Operating margins fell by [19] points to 3%, while operating profit decreased by 84% to EUR25.7 million.

Net margin decreased by 3% from 20% at June 30, 2007 for reasons outlined above, earnings per share decreased by EUR1.40 for the quarter compared to EUR0.898 in the quarter ended 30 June 2007.

On to the balance sheet, the group's balance sheet reflects the cash generative strength of the business.

The group generated cash from operating activities of EUR194.5 million, and a further EUR78.8 million from the sale of a Boeing 737-800, which [profited from] a 33.1 million share buyback program, and capital expenditure incurred during the period, with the remaining balance reflected in total cash of EUR2.25 billion.

Capital expenditures amounted to 110.4 million which largely consisted of advanced aircraft payments for future deliveries and the delivery of three aircraft during the quarter.

Long-term debt, net of repayment, decreased by EUR49.5 million as well during the quarter.

So with that I'll hand you back to Michael in Dublin.

Okay, let's open it up to questions.

And just before we do, could I say obviously the two significant changes between this and the annual result in early June with the yield guidance has significantly worsened.

We had the time based on forward bookings into June, July and August.

We're predicting yields would rise by 5% for the remainder of the year.

I think while yields will be up in our second quarter they're going to -- we now expect they will fall significantly in the second half of the year.

That's why the much more negative guidance.

Also there seems to be a greater switch off which I would welcome, a greater switch off of passengers traveling with hand luggage and not paying check-in baggage fees and using the Web check-in facility, and that's one of the reasons why we've been able to speed up the unit cost reductions.

I think the underlying method here is with a 2% unit -- our 2% increase [set-related] in the quarter, unit costs excluding fuel have fallen by 6% which is about an 8% unit cost reduction on a like for like basis.

[That was] a very strong cost performance and puts us back on track.

If you remember the last two years we've had difficulty with increasing, for regulatory reasons, pilot staffing numbers and cabin crew numbers.

We're now, with the exception of fuel, back on a significant reduction in unit costs and we expect that will continue.

Okay, we'll open up for questions please (inaudible).

(Operator Instructions).

Stephen Furlong.

Davy Stockbroker.

Just two questions.

One, maybe just -- talk about hedging for a second.

Tell me what you would think -- what levels or timing would you look at hedging into next summer?

So beyond your Q4, is there a level or price?

Because obviously the comps would be easy if oil fell.

And the second thing would be just in terms of the yield number for Q1, and what do you [actually] think was Easter, i.e.

in the April quarter -- April month rather than May or June, or was it also a bit of weakening yields at the back end of June?

Thank you.

I would look -- it's difficult to give you any guidance on hedging.

I think we've watched oil on a daily -- might be even an hour to hour basis.

[As the one] we've been confident in predicting we wouldn't be hedging at $130 a barrel.

We thought there was an opportunity and we're nervous about the two winter quarters, Q3 and Q4.

We're clearly guiding toward the kind of breakeven number with oil at 130 for the remainder of this year.

And there was an opportunity last week to (inaudible) closeout Q3 at under 130, we took it.

We may well be wrong and oil may continue to weaken.

I think oil demand this winter will be significant (inaudible) kerosene demand would be significantly down.

We may not call the market right again, but at least we managed to secure an oil price into the third quarter below 130.

We haven't gone into the fourth quarter yet because that fourth quarter number is slightly above 130, and we would like to take a couple of weeks to see where the more medium-term oil price is going.

We don't have any predictions on next summer.

I would be inclined given that we've gone through the summer at oil up at around 130 through the peak summer months.

We have much easier comps for next year.

Clearly there is a price at which we would be hedging into next summer, but I doubt it would be at $128 or $129 a barrel.

I think we are where we are on hedging, we haven't hedged, we've been calling it wrong since about this time last year, when we first heard -- hedged 10% of this year third quarter at $70 a barrel, the market has continuously moved away from us as it has from almost every other airline and oil price speculator.

And I couldn't give you any guidance on what we might do for the first after the summer of next year.

Our greater focus for the summer next year is how many airlines and who will survive this winter.

And therefore how much capacity will be in the general system next summer.

We will clearly add some capacity ourselves, but I would suspect around Europe we will be dealing with a lot less capacity generally.

Yield numbers in the first quarter -- I think one of the things you should stress about the yield number in the fourth quarter, clearly (indiscernible) is responsible for a significant amount of it, but also the currency factor is responsible for a significant amount.

If you take -- strip out our currency effect of the Euro Sterling on our yields in Q1, we would estimate that the underlying like for like yield decline is on the order of minus 3%, minus 4%, which is not dissimilar to easyJet's number of last week, if you strip out they had benefited from the currently movement in the opposite direction.

And so Easter is undoubtedly responsible for some of the year's decline, but I think adverse movement in currency, certainly compared to easyJet, who reports in Sterling, accounts for a significant proportion of it.

And if you can strip out the currencies which -- I think our yields movement is very similar to our principal competitor's movement over the first quarter.

That's great, thank you.

John Mattimoe, Merrion in Dublin.

Just on the comments made on the yields at the start, just in terms of the two factors and the change from two months ago, being more caution for the winter and the greater switch off of the check-in luggage.

Could you maybe give some type of sense of the relative importance of those versus each other as a -- is the bigger part of the reduction in your outlook because of the winter or is it because of the reduction in the check-in?

No, I think -- look, without getting into -- I'm not going to analyst split it out for you -- split out the detail.

But more of it is due to the fact I think we're much more bearish on fares than yields this winter.

When we were [sitting here] on the full-year results in the first week of June, we're looking forward looking into July and August, they looked like they were improving and they have improved over the previous year.

Will that continue through the winter?

We heavily guard [against] (indiscernible) the earnings for the year entirely depend on the [out turn] in fares.

I think the world has changed significantly in the last two months.

You look at the collapse of bank share prices, everything else, much of it has happened in the last two months.

There is no doubt, and I say it again to myself, I was overly optimistic in our yield forecast two months ago, and I can promise you, you won't see that again while I live and breathe.

It's hard to know where we are for this winter.

Outlook -- our guidance at the moment is very bearish and very negative.

We don't think it will be any worse than that.

But that's not a guarantee.

But clearly this winter is going to get much tougher, in part that's -- we're going to kick off with a series of very aggressive pricing promotions into September and October that will start later on this week, and will run week on week on week, each week through September, and through the remainder of August, September, and October.

We're going to be very bold on pricing and load factor and we're giving you all the bad news now.

And Michael am I right in thinking your guidance doesn't factor in any capacity attrition or consolidation in the market?

No.

And in terms of how awful could it get, are we talking significant double-digit type of declines, winter on winter?

I think we're looking now and -- our guidance now, we still don't factor in major consolidations or bankruptcies, looks at or envisages a double-digit yield decline in Q3 and Q4.

Okay.

And a small [key] yield increase in Q2.

Sorry, was that small for Q2 or small for the summer in total?

Small yield increase in Q2.

Okay.

And just on the booking profile of the last call you mentioned that the profile had been something I think in the order of two percentage points better booked that it was the previous year.

Has that gone back to a more normal pattern or are you still in slightly better booked in volume terms than you were this time last year?

I think in the last two months we're now back to pretty much in line with where we were in the previous year, but there has been a degree of weakness I think for the last two months.

I was for the last six or eight weeks.

And we are responding to that with a series of spectacular pricing initiatives over the next six to eight weeks.

We intend to restore the forward booking profile to be one or two percentage points of where -- as of where it was in the equivalent month last year, and we do that at the expense of yield.

Okay.

And on the capacity side, are you happy that you've done as much as you're going to do for this winter in terms of capacity, or could there be more to come?

Are you maybe casting your mind forward towards the following year?

It's hard to -- we're comfortable with what we have done thus far.

I think if there is going to be any change done, the capacity front, it will be to add capacity.

Our focus from a cost point of view this winter has been to remove capacity at Stansted in Dublin, where we have two very expensive airports with expensive landing charges and all the other hidden charges.

Most of our other airport costs we are very happy with.

We're renegotiating with them.

We do have a plan, though, if there is significant (indiscernible) -- kind of (indiscernible) like a -- Alitalia bankruptcy or something, we could take some of those aircraft that have been grounded and move them somewhere if there was an incentive for us to do so.

It's hard to know -- I think our guidance this morning is bearish, it's on the conservative side of our current expectations.

But it's not hard to believe that's pretty much where we believe that it will turn out this winter.

And two quick financial (multiple speakers)

I'm fairly certain there won't be any more capacity.

I can't see -- Michael might want to (indiscernible) this, I can't see we take any further capacity out of either Dublin or at Stansted.

Because what we announced is (indiscernible) all the people understand, what we announced at the moment is 15 aircraft left in Stansted, four aircraft left in Dublin.

(indiscernible) Stansted that's about 22, 23 aircraft on Tuesdays and Wednesdays or some of the (indiscernible) at end of November and December.

And it's less, it's about down at 10, 11 aircraft less on Fridays and Sundays and most of those aircraft will be operating for example on Christmas week.

So it's a much more flex schedule this winter at Stansted and Dublin.

We essentially only want to fly aircraft when we think we can make money at the very high airport charge in Dublin and Stansted.

Airport charges are still increasing, by the way.

And into the following year, have you given any thoughts to capacity, then, for the following year except (multiple speakers)

No.

We already are aware of what the aircraft orders are, they're set in stone.

We will take those aircraft, I expect we will fly them, but really we won't have any idea on capacity until -- I think we want to be very flexible through this winter.

There's going to be a lot of consolidations and bankruptcies and people falling over.

And I would want us to have plenty of additional capacity.

So we're receiving offers now from airports who twelve months ago wouldn't even talk to us.

And most of the offers are conditional upon if our existing carrier goes bankrupt, or when our existing carrier goes bankrupt this winter, will Ryanair step in here with 4 or 5 or more aircraft.

We are never been busier, I would say, talking to airports about aircraft or aircraft additions.

So the opportunities are much greater than they have been heretofore, but most of them are heavily kind of caveat on existing carriers falling out of bed.

I just had two quick financial questions if I may.

The first one is just on the nonfuel unit costs, the decline of 6% in the first quarter.

Is that something you'd be aiming to sustain over the rest of the year?

Howard, you want to take that?

Yes.

We think Q1 was very good, Q2 won't be quite at that level, but will still be unit cost reduction.

Q3 and Q4, because of our lower load factor, obviously we've got 20 aircraft or as Michael said, the equivalent of 20 aircraft on the ground.

Overall we feel that unit costs on a per passenger basis will be somewhere in the region of 1.5% to 2% down over the year, and I would have been (indiscernible) [hoped] that would've changed from flat to probably slightly up when we talked to you two months ago.

Can I just clarify the 1.5% to 2% down, that's for the full year?

Or is just for Q3 and Q4 year-on-year?

Yes.

So Q2 was also -- unit costs will fall, not quite probably as good as Q1, but Q3 and Q4 will be advert, so the net decline here (technical difficulty) would be somewhere in the region of 1.5%, 2%.

That's fine.

And Howard, just on ancillaries (multiple speakers)

(indiscernible) sector length rose by 2%, so it's on an adjusted sector length base of about 4.

On the ancillary [stand] and the rate of increase in the per passenger basis that you had in Q1, would that have been distorted by Easter or is that the rate of -- should be sustained through the year?

We think yes, that unit ancillary costs -- ancillary revenue will continue to outpace the growth in passenger volumes.

(indiscernible) in the first quarter is probably indicative for the remainder of the year.

That's great.

Thanks a lot Howard (multiple speakers)

Geoff Van Klavern, Exane BNP Paribas London.

The first question on capacity adjustment this winter, can you just remind us how much flexibility you have to reduce your pilots and crew?

I understand a lot of them are on contracts, maybe some guidance on what you can do there.

And just secondly, on the check-in kiosks at Dublin and Stansted, perhaps you to give some guidance on the savings these will produce.

And just thirdly, interested on the baggage charges.

easyJet was saying they introduced baggage charges, and they didn't cause a reduction in volumes of checked in baggage.

You're saying that they do.

Perhaps you could just clarify that please.

On the aircraft grounding this winter, we will have some cost savings on pilots and crew.

It won't come from headcount.

Remember a lot of the capacity savings come from flexing the schedules.

We are also taking delivery of another net 30 aircraft over the winter for next summer.

And so -- but a lot of our -- about half of our crew's pay comes from productivity payments, flight payments and commissions.

And you will see some savings from that over the winter.

Check-in kiosks, you're seeing some of the savings coming through at the moment.

We would expect to be reducing check-in desk [rentals] at Dublin and Stansted where we're [likely] to rent check-in desk despite the fact that we've already paid for them in the terminal charges.

We would have less check-in staff per (indiscernible) check-in staff because we will have less check-in staff per flight.

We will be trying once we get the kiosks up to migrate almost 100% of check-in onto the kiosk and away from check-in desk.

And if the trend in bags continues, I expect we will be cutting back maybe by 50% the number of baggage handlers we need.

Since we are handling far fewer bags on a per flight basis as we increase the rate of check-in, or as we increase the rate of baggage charges.

As for easyJet, guidance on baggage charges -- look, easyJet has a policy of generating more optimistic than we are, they normally come into line with our guidance after about three or four months.

If our experience is that passengers are moving away from check-in bags -- remember, this is partially our policy.

We're increasing check-in baggage charges to try to dissuade passengers or move them away from checked in bags.

I suspect that our experience will be mirrored by theirs in the next couple of months.

Just to clarify, the kiosks.

Are they for people without any baggage or (indiscernible) if you've got (multiple speakers)

People without baggage who will still expect [that you will be] checking in on the website.

They wouldn't have to go anywhere near a kiosk.

What we're using the kiosk for would effectively be to replace the physical airport check-in (indiscernible) system.

Where for example we would have 80 check kiosks and Stansted, presently we rent check-in desks.

I think our -- over the winter we would be trying to get that down, we would keep may be ten check-in desks instead of 66, and using those as backdrops.

It will also speed up the processing time for airports because all of the -- well currently ticket based transactions, excess baggage fees, change fees, printing off baggage tags will all be done -- we send the passenger to one of 60, 80 kiosks.

So we'll be eliminating check-in desks altogether.

We would eliminate airport queues altogether.

But we'll still be trying to incentivize people to travel with (indiscernible) check-in on the Web, because that's what reduces their -- airport dwell time down to 25, 30 minutes instead of 1.5 or 2 hours we presently recommend.

Okay, thanks very much.

Duane Pfennigwerth, Raymond James.

It's Duane Pfennigwerth and Jim Parker with Raymond James.

Wondering if you could talk about any regional or country-specific weakness on the yield front ex-the currency dynamic that you already discussed.

There is no notice about country here, but it seemed to us based on -- the advance bookings we have in the system for September and October, there doesn't seem to be any unique regional feature, but generally isn't anyway in our business model.

And we continue to have two underperforming bases, one in Shannon, the other in Frankfurt-Hahn.

And so I expect that they will need immediate action this winter.

But our policy is not -- we're not going to wait for September, October, November.

We're going to start at the end of this week and for the next eight weeks very aggressive pricing promotions.

They will be systemwide.

They will be across the board, and we intend to drive down fares and make it more attractive for people to fly this winter right across Europe.

Thank you.

Just on the competing capacity front, as we run the numbers it looks like it was roughly flat in the June quarter, and looks to improve maybe down 3% by the December quarter.

I guess one, do you agree with this, does this match your analysis?

And two, what level of capacity reduction against you would help you get more optimistic on the winter yields?

And I think Jim has a question.

I don't think -- we're again, we're not going to wait to get optimistic on the winter yields.

We're going to price down the winter, we're going to start this week and rolled out for the next 6, 8, 10 weeks.

It's hard to know if you to everybody's announced capacity reductions there will be a significant European capacity reduction is winter.

I wouldn't necessarily believe all the capacity reduction currently announced might actually happen, but it's going to be so distorted by the scale and timing of bankruptcies.

You have airlines at the moment who never made a profit who are, some of whom in Germany are in the Eastern Bloc, talking about negative EBITDA and all the rest operation that.

I can't see how they're going to either survive or refinance this winter.

But the real capacity reductions will be determined by consolidations, what happens to [Span Air], they are presently talking about huge capacity reductions, Vueling, same thing in the merger with Clickair.

There is no point in us, at this point in time, coming up with an optimistic scenario for the winter on capacity reductions and therefore our yields will be better.

Let's make it (indiscernible) as bad as we think it is, we're going to price that accordingly, we're going to sell that accordingly over the next six or eight weeks.

And if the situation gets better sometime during the winter because of massive capacity withdrawals, we will tell you then.

Michael, this is Jim.

I'm curious if you are actually seeing any softness in business currently.

And your very aggressive pricing initiatives, are they intended to accelerate with the demise of other carriers, or are you responding to softness in bookings?

Which is it?

It's the latter.

Two months ago we were able to say, look, forward bookings look like -- forward yields into the summer months look like they are going to rise by a couple of percentage points.

As current bookings are running a couple of percentage points ahead of where they were this time last year.

Two months later, the situation has not reversed, but it's got a lot weaker.

We're now looking at bookings into September and early part of October.

The yields are down on previous year and the rate of forward bookings is running at about the same as it was this time last year.

So about two percentage points behind where we were a month or two ago.

I think it's time for us to stop sitting here waiting for everything to happen and it's time to start making things happening.

We don't price -- as you know, we're already priced 50%, 55% below easyJet.

We're about (indiscernible) 60% or Aer Lingus are more than 100% more expensive than us, so we don't price ourselves off our competitors.

We price to fit our load (indiscernible) -- we price to maintain our load factors in the high 80s, and that's what we're going to do.

So our pricing initiatives over the coming week will not be driven by competitors.

We don't frankly -- we wouldn't know which competitor (indiscernible) some will, and we wouldn't be able to price to kind of drive the competitor out of the business.

It's pretty much impossible to do in this industry.

We're going to price to maintain very aggressive load factors and to keep the citizens of Europe flying at very cheap fares this winter, and if that means somebody else goes bust, so be it.

But it won't be because of Ryanair's prices.

It will be simply because they're losing money.

Why have we not seen any bankruptcies in Europe?

We've seen several already in the US.

There's some seasonality to all of this, or why haven't we seen them?

I think generally in Europe, there's a bit more seasonality.

The summer cash flows tend to be a little bit better.

We've seen some considerable signs of stress in the marketplace, like we know certain competitor airlines who have been put on advance payments not just for fuel, but for airport costs, handling costs.

And it's very hard to see how (indiscernible) very significant refinancing come August, September, October that those guys won't go bankrupt.

You've seen some, but they have been small -- the (indiscernible) Maxjets.

There have been 26 airline bankruptcies around the world since the first of January this year.

About 12 of those have been in Europe but they have been on a relatively small scale.

You've seen the Vueling/Clickair merger in Spain, two lossmaking airlines, put them together you just have a bigger lossmaking Iberia subsidiary.

I think that would be the (indiscernible) more to come.

Alitalia in the United States would long since have gone bankrupt, but the Italian government gave them another 300 million loan to keep them going, and will probably have to fund them again this winter.

Our business is not determined by how the competitors are doing.

Our business is determined by our cost base, which is (indiscernible) than any other airline and our ability to price downward to maintain very high load factors even during one of these cyclical downturns.

We have done this after 9/11, we did this after the Madrid bombing, we did this after the first and the second Gulf war.

And we're going to do it again this winter.

We've been preparing for this downturn for about the last 12 months, that's why we have bundles of cash.

And I think the good thing I would point investors to his we're taking out costs at the moment.

When you cut out all about oil and the fuel crap and our failure to call the market right this time last year by hedging, we're responding aggressively now with a 6% decline in unit costs.

I take it that's good news.

Okay, thanks.

Jonathan Wober, Societe General in London.

I see on your presentation (technical difficulty) on your web site today that you are again stating your ambition to double profits in five years.

As I recall, the base for the five years was March '07 when you made EUR400 million.

Am I correct in that?

Yes.

Two years into your five-year period, by the end of this current year you will be making a loss of up to 60 million according to your current guidance.

So you've got three years to make up about 850 million or something like that.

Is that still a realistic plan over three years and how are you going to do it?

Is it going to be yields going to recover strongly, or are unit costs going to continue to come down very strongly, both of those?

Or is it actually time to maybe abandon that ambition as being unrealistic?

I don't know.

And just a detail question, if I may as well.

Can you give some idea of where headcount will go over the course of the year?

It rose really sharply in the first quarter.

Secondly, can you give us the number of leased versus owned aircraft on the balance sheet date at the end of June, and also planned for the end of the financial year?

And finally, can you tell us the dollar rate that you got hedged for the current financial year?

Thank you.

Let me deal with the first two and then I'll ask Howard to give you the leased versus owned aircraft and the dollar rate for the rest of the year.

I think it's (indiscernible) plans (indiscernible) and we said we'd double traffic, fleet traffic and (indiscernible) by 2012.

Your correct, that's off last year [but] the '08 profit figure of 400 -- of the '07 figure of EUR400 million, [a profit of] EUR400 million.

I think largely it will depend on what happens to oil.

I don't believe, and I might be wrong, I don't believe oil will stay at $130 a barrel.

If for example oil was to fall to $70 or $80 a barrel in the next year or two and there is significant consolidation this winter, I think that you will very readily show a plan where we get to 800 million a year, particularly if we're back on the -- back reducing unit costs.

And -- but the ones we can deliver, we know we've got them leased, we have the orders in place, we know we've doubled traffic, we have the new bases, the new routes, the new destinations in place.

In actual fact owned (indiscernible) costs -- the costs of those airports are falling significantly.

What we need then is a break on a couple of other issues.

Oil prices, we need a break on the monopoly airport costs at Dublin and Stansted, and it's not hard to point -- remember Stansted Airport doubled their charges to us in the last 12 months.

Stansted is broken up by the competition commission and it's now competing airport with the other two London airports, we may well be in the position of (indiscernible) effective terminals there at a cost of EUR200 million instead of a second term, that's EUR4 billion that they presently proposed.

That would significantly reduce passenger charges at Stansted.

So there's lots of things that we could affect over the next two or three years that would (inaudible) increase our profit to EUR800 million a year.

Peculiarly if oil prices rise to $250 a barrel, absent some mass bankruptcies in the industry in Europe, we may not get there.

We will double the fleet, we will double the traffic and given any fair headwind I think we will double profits as well.

If you look back over each period of five years in the last 20 years we have more than doubled profits in every five-year cycle.

Headcount for the remainder of the year won't be significantly different where it is at the moment.

We would have some improvement of price and (indiscernible) towards the back end of the winter, with no significant increase between now and then.

And in actual fact the headcount expenses this winter with some of the (indiscernible) capacity cutbacks will fall.

Leased versus owned aircraft at end of the year we would expect to be -- what's the figure here -- a fleet of 166 aircraft.

127 of those will be owned and 39 will be leased.

On the dollar rate, Howard, do we disclose our dollar rate for the year?

I think we are advising now with finalizing some of our covering [face] we're looking at an average rate this year of about [1 44], that's up a bit on where we were at the -- some eight weeks ago, as we finished out some of the end of our contracts.

So an average rate of [1 44].

In terms of aircraft, Michael talked about the end of June, but I think he said 127 on the owned and 39 in operating lease.

For the 49 deliveries, including the first couple we got at the start of the year, for the 49 aircraft for delivery in this fiscal year, we have 15 in operating lease, 28 in (indiscernible), and 6 on [Gelco's] balance sheet.

So [34] on balance sheet, 50 off balance sheet (multiple speakers) after March '09.

Thank you very much.

[Ken Ruskin], [Nugent Fund Management] in New York.

I just had a question about understanding the reconciliation from the early June comments to now, specifically about the June quarter.

I just want to understand, as it sort of implies to me it has to be that bookings in June in the last few weeks were quite weak.

I wonder if it's -- there's a shift in unwillingness of customers to pay higher fares in the last few weeks, and they're booking more in advance.

If that sort of made you more optimistic than you should have been, and then just looking forward, how you adjust to that over the next few months.

No, I would characterize it the other way.

On the first week of June we had decent visibility into June, good visibility into July, and -- moderate visibility into August.

I think it's fair to characterize that (indiscernible) the first week of June has continued on the average fare and yield front through July -- June, July and August, but the baggage conversion has been slightly lower than we would've expected at that stage.

But what's different as we move now into the first week of August is that the forward bookings as of September and October would appear to be weaker by a couple -- one or two percentage points, and we're beginning -- we're opening up more cheaper seats.

So I think what we're seeing is -- as I said in the statement, the collapse of consumer confidence and consumer spending.

Everybody has to -- a lot of people are prebooking their holidays, their travel plans for July -- the peak summer, June, July, and August are (indiscernible) price insensitive, and we have a lot of those bookings in the system at the time.

A lot of that fare increase as we said back then was driven by competitor fuel surcharges.

Competitor fuel starch surcharges are still rising but we don't think they will hold into September/October.

We think the consumer sentiment, particularly in the UK and Ireland, have worsened significantly over the past eight to ten weeks.

We've seen collapse of bank shares, collapse in property prices, a lot of bad news.

That leads us to be now much more conservative, even though we're talking about movement of about two percentage points in forward bookings, to be much more conservative.

We're going to be much more aggressive on pricing and promotions from the end of this week onward.

So it's not so much about the percentage of people who are booking at the last-minute going down (multiple speakers)

No.

I have one follow-up question (multiple speakers)

If anything in fact it's the opposite.

If the people were booking well in advance, I think into September and October, need more price stimulation so that we take that traffic, if need be, from our competitors as well.

If it isn't going to be significant traffic growth this winter, then we have to take share from competitors and that share can only come at the back of more aggressive pricing.

Okay, thank you.

One last question, I just want to understand on the comparison with easyJet and (indiscernible) numbers it seems like the revenue per season easyJet was up mid single digits, currency adjusted.

I don't know if we have the wrong numbers or not, but I just want to understand -- should easyJet be benefiting more from a trade down just because they're sort of competing more directly with the legacy carrier?

This is a Ryanair conference call so I'm not going to spend too much time on the easyJet strategy.

All I've seen is (indiscernible) number which (indiscernible) positive currency benefits, they have a reporting in Sterling, and it looks like the underlying yield stripping out the [GB Airways] acquisition and currency was about down 3%, and if you kind of (indiscernible) rule out the fact that we're reporting in euros, the underlying yield declined for this quarter looks to be on the order of about between 3% and 4%.

It's not dissimilar.

I think we're both saying pretty much the same thing.

We're both reporting the same thing it's just (indiscernible) report in Sterling so they get a currency benefit.

We're reporting in euros, we take a currency penalty.

Chris Reid, Deutsche Bank in London.

I've got three questions.

On the airport charging side, that was done quite substantially on a unit basis.

Could you just talk a little bit about why that was?

I guess that was (indiscernible) positive in these figures.

The other two questions, was there any impact on the commercial management side of the business, given one of your managers resigned and moved to Aer Lingus?

Was that any sort of motivation in the change in the guidance?

And finally, it seems to me if I look at what you said eight weeks ago, it seemed -- seems to me that you weren't expecting yields to be down in Q1 by 8% then.

Or maybe you were.

So surely there must have been some weakness at the back end of Q1 in terms of recorded fares, because otherwise you would've told us that six weeks ago.

Thanks.

On the airport charging side, guess we're seeing extraordinary -- receiving extraordinary offers at the moment, and those offers are getting better and better.

I think what you're also seeing is we don't have the same kind of massive cost increases at Stansted and Dublin in the first quarter on the like for like basis we had the previous year.

Although both cost increases are still significant at Stansted and Dublin, (indiscernible) order of double digits, this time last year Stansted had gone up by 100% and Dublin by something on the order of more than 50%.

At every other -- on -- as you say all the other air courts, excluding Stansted and Dublin, our airports and handling costs are falling, at all of those other airports combined.

And they're helping to put us back on a footing of kind of improved unit cost performance at the airport charging side.

On one manager resigning, look.

One manager resigned, went to join Aer Lingus, I think he was a good guy, I'm sorry to lose him.

But I promise you, we don't determine our guidance, our airline strategy on the base of one manager coming or going.

We've had guys that left before; I think he left for fairly simple reasons.

He was getting paid double our money at Aer Lingus.

And there wasn't much opportunity for promotion for him here.

We understand that he was a guy in his mid 30s.

I'm not sure he went to the right place, but if I was 30 and in my mid 30s and somebody offered me double my money, I would probably go too.

But one manager resigning has nothing to do with our guidance.

I wouldn't -- it would have entered our thought process whatsoever, particularly not when he is going to an airline whose current short haul fares are more than double Ryanair's short haul fares, and who just increased fuel surcharge for the eighth time in the last two years.

So no, it has no effect on Sean.

We wish him well, although he needs all our good wishes given on where he's going.

And on the Q1 yield, I think -- if you look back, and I don't want to be (inaudible), I think we should have given you -- I think we probably got over, I got overoptimistic in the statement attached to the first quarter.

If I read you (indiscernible) kind of refresh your memory what I said on the full-year results, we said outlook for the coming fiscal year to March 2009 remains entirely spent on fares and fuel prices.

Based on forward bookings, and this is at the third of June, we now believe it is likely that average fares for the coming year will rise by approximately 5%.

And if oil prices remain at $130 per barrel, then we expect to break even for fiscal 2009.

Now we probably should have stuck a sentence in there.

We said, however, Q1 yields will be down because of the absence of Easter.

I think we didn't give enough of a flavor that the Q1 yields will be down, although based on the strong Q2 bookings at the time we thought maybe that our -- average yields, average fare yields would rise for the -- if you like the following three quarters.

So I think we probably could have -- I should have given you more color on that in the full-year results on the second of June, I didn't.

You're getting plenty of color on it now.

You're down 8% in Q1, there will be a small single digit increase in average fares in Q2, and we're presently guiding -- and remember, this is heavily qualified.

If we're -- based on what we can see at the moment and some -- based on the kind of very aggressive pricing and fare promotions we're planning for the next six to eight weeks, we now expect average fares will fall by up to -- a small -- low double-digit figure in Q3 in Q4.

Thanks, that's very clear.

Much appreciated.

[Kieran Mancoyne], [OD] in London.

I've got three questions.

Michael, you said you're taking net 30 new planes over the course of the winter.

As things stand, can you give us some idea of the where you think you will put those new planes, perhaps show us where things are strongest?

And as a corollary of that, if we perhaps map out sort of an 18 months scenario where oil stays high at $130, and yields stay weak, do you ever envisage perhaps seeking to delay some of your deliveries with Boeing?

My second question is, could you give us some more color about what exactly is going wrong at Frankfurt-Hahn?

Some color on the competition or yields or why it isn't working.

And then thirdly, perhaps a question for Howard.

The 18 million accelerated depreciation that you've made on the aircraft, how many planes exactly -- could you give us a color, just so we understand whether your balance sheet value for your aircraft is an up-to-date and accurate version of what it's worth?

Can you just tell us what that 18 million was about how many planes, etc.?

Where will the new aircraft go is absolutely impossible to tell you at the moment.

We presently have based offers on the table, though, that we would absorb hopefully on the order between 50 and 60 aircraft.

We may do some, all or none of those bases.

Did you say 15 or 50?

50, five zero.

And our net aircraft delivery (indiscernible) winter are 32.

It always depends on who goes first, who consolidates where over the coming winter.

For example, British Airways are rumored to have a big short haul capacity cutback in Gatwick this winter.

Now if Gatwick came to us and said would you put 10 aircraft in here and the cost base was right, we would certainly consider looking at Gatwick, particularly if it was cheaper than Stansted.

So we intend to be very opportunistic through this winter, wait and see who goes [first], or who cuts that capacity, who consolidates, and a lot of that will drive that aircraft air capacity next year.

However, if nobody goes bust and nobody consolidates, and for some strange reason everybody survives the winter with oil at $130 a barrel, we can still put those 30 aircraft -- we will still not have enough aircraft to fulfill the base offers we presently have available to us, which are lower than our average airport cost at present.

What happened if oil stays at $130 and yields are weak, there will be more bankruptcies, there will be more consolidation.

It's almost like what happens to the price of oil.

But you won't delay your aircraft delivery.

No.

We will not -- we will take aircraft deliveries this winter, and we will in time confirm the options we have for delivery in 2010, 2011.

We have no intention -- we may take some capacity out during the winter at expensive airports like Stansted and Dublin, although in our defense we wrote to both Stansted and Dublin offering to fly those aircraft this winter if they reduced their costs on those particular aircraft on route.

Of course they told us to (expletive) at ourselves.

So we won't flow down, we will maintain our rate of growth, we will double the fleet of the traffic to 2012, and I think we will do so in a European market where there will be far fewer competitors as a result of some of them going either bankrupt or consolidating this winter.

In Frankfurt-Hahn, it's important not to (indiscernible) I think it's important to kind of qualify, is Frankfurt-Hahn losing money at the moment?

Yes it is.

But only because we're trying to -- tempted to grow very rapidly at Frankfurt-Hahn.

We presently have a base there of 10 aircraft, having it -- we're grown from 2 to 4, and last year we ramped it up from 4 and the target was to go to 12 aircraft this year almost overnight.

It's too much capacity growth in one fell swoop.

We've already agreed with Frankfurt-Hahn, we won't put the 11th and 12 aircraft in there this winter.

That will be -- where we deferred that growth, we may well put it back in there next summer.

But I think whereas Shannon is just fundamentally a lossmaking base, we have a very low cost base there and it's part of our investment in regional Ireland although we don't get much thanks from the Irish government for it.

Frankfurt-Hahn, I think if we slow down the rate of growth at Frankfurt-Hahn, I do believe it will return to profitability.

And -- although as those great geniuses in the European Commission have recently announced an investigation of our cost base at Frankfurt-Hahn, they might do us a favor and rule it as to be another round of illegal state aid, in which the case they might force us to either close the base or withdraw capacity.

I don't expect it to happen, given that the German courts have already thrown out the Lufthansa complaint about the cost base at Frankfurt-Hahn.

It's just another remarkable example of those half-wits European Commission launching a state aid investigation in a case where the German courts have already investigated and thrown it out.

So -- I would just caution there's nothing wrong with Frankfurt-Hahn.

I think at the current time we're trying to grow it much too quickly.

We've had a 100% capacity increase over the last 12 months.

We've now got to slow back down that growth and I think a lot of those routes -- through selective pruning some routes would be (indiscernible) without more sun destinations there over the winter, I think Frankfurt-Hahn will be fine.

And Howard, you want to do that 18 million accelerated depreciation question?

That relates to 23 aircraft.

I think the big issue here in relation to the aircraft is we were buying these aircraft when the dollar/euro exchange rate was a lot less (indiscernible) in fact some of those aircraft were want bought at 0.82.

So we're doing is we're taking our older, more expensive aircraft, and replacing them with aircraft that in some cases are really half the price.

I think (indiscernible) surprised when we tell people we're paying -- we sold these aircraft for pretty much what we bought them, in some cases we actually sold them for more in dollar terms, roughly the exchange rate has moved quite significantly over that period.

It's also a very strongly cash -- generating a lot of cash for the business, and we're adding more cheaper aircraft, which as we add more of these aircraft we will continue to reduce our unit cost per passenger of ownership.

Edward Stanford, Cazenove.

One question on BAA, have they got the message yet that they are beginning to come to the table to offer deals, or is it too early to expect that?

One monopoly cannot get the message.

Monopolies do what monopolies always do, that is ignore the message.

Dublin airport has [been again] for more cost increases in currently with the idiot regulator we have in this country.

He of course was on holidays while the air traffic control system collapsed here three or four weeks ago.

In the UK it's slightly different.

The Competition Commission looked like they're going to have the recommendations which are June, sometime at end of September, may well call for at least a breakup of the BAA monopoly.

We're seeing some mutterings from the BAA about we feel your pain, and we want to respond (inaudible) but as usual, apart talking about it, responding, we don't get much action out of them.

I think they're probably tactically trying to make it look like they're responding to customers' needs, but really only for the purposes either fact-finding or -- probably misguiding the Competition Commission.

We think it's all unreal, nothing will come of it.

As soon as the Competition Commission has reported one way or another, and normal service will be resumed they'll be back trying to weigh 4 billion pounds building a terminal that we can build for 200 million.

It's all (inaudible) in a sense, that's why the (inaudible) industry is so (expletive) up in Europe.

We have a system of airports there that are rewarded with a regulatory system that says spend as much as you want and we'll give you 5% that.

Whereas mostly of the airlines are out there dealing with the reality of much higher oil prices, declining airfares.

We don't need half of these facilities.

One of the great scams that has been perpetrated upon the industry by the European Commission in recent months is this whole new system where -- what do you call them, the mobility, the mobility (inaudible) -- passengers with reduced mobility, PRM.

At most airports in Europe the airport -- or the airlines have been organizing their own services for that, paying our own contractors to provide wheelchair assistance, all that kind of stuff.

As the half-wits of (inaudible) decided that's not good, that's not a good system.

They now want to allocate the airport to organize it.

The airport in most cases, and Stansted and Dublin would be at the top of the queue here, are now profiteering on this.

They're now organizing the reduced mobility services, but taking about a 25% profit or cut on it for -- as the administers have burdened their suffering.

And for the exactly the same service going forward now from this week, at most airports we're now paying something like between 25% and 100% more for wheelchairs than we were paying last week when we were all contracting directly with the exactly the same wheelchair service provider.

So with every (indiscernible) every hand turn, every regulation is turned by these airports as an opportunity to profiteer against the passenger and airline.

And as soon as these half-wit regulators, Harry Bush in the CAA and Guiomard in the CAR in Ireland, are dismissed on the grounds of incompetence, and let us go back and just appealing to monopolies for monopoly abuse, the better.

But don't ask me any questions about regulators.

We could be here all day.

(Operator Instructions).

Neil Glynn, NCB in Dublin.

Just three quick ones.

First of all in relation to baggage, can you confirm to what proportion of passengers checking in a bag we saw in Q1 there?

The previous percentage I am aware of was around 60%.

And how about an overall negative impact on the bottom line, and will we have to wait until October to really see the cost savings, the forecast savings on positive impact on the bottom line you talked about in the past?

Number two then, in terms of supply chain management, there was a big 33 million inflow on the cash-flow statement from creditors in Q1, which differed significantly from Q1 '08.

And wondering is that a question of squeezing suppliers to help the cash-flow situation.

And finally, just to check, will that 2% increase in sector length hold for the full-year, or what will we see for FY '09?

I missed part 3, what was that again?

The sector length increase of 2% we saw in Q1, will that hold through for the full financial year?

It should pretty much, unless there some significant opportunity crops up during the winter as a result of somebody's bankruptcy or consolidation we would expect that to hold.

Baggage in the first quarter, last year was running (indiscernible) about 60%.

It's probably fallen under 60% in the first quarter, and we begin (inaudible) -- we believe it's probably heading for under 50% as we run through the winter.

We would expect it to fall something on the order of between 40% and 45% this winter.

It tends to spike up a little bit during the summer in July and August because people tend to travel with more checked in bags.

We suspect the underlying figure will probably be somewhere around 40%, 45% this winter and still falling.

Remember our overall objective is within a two-year period to get it down to about 25%.

Part of that is the increase in the carry on luggage limit up to 10 kg.

Howard, do you want to take that question?

I would imagine that's a timing issue.

There's nothing untoward, I don't know what it is but -- Howard?

(multiple speakers)

I think it's quite simply explained.

If you look at the (inaudible) assets, which is largely prepayment (technical difficulty) [quarter] assets have declined by about 40 million, and that's really translated to the fact that our friends in the fuel companies are getting a bit better at billing.

So if you net that out, that 40 million, that's pretty much most of the movement.

Just a follow-up in terms of baggage.

(technical difficulty) (inaudible) Today you talked about trialing no baggage flights.

Will that need an increase in average fares to make that work, or will the cost savings be more than enough to improve the bottom line on those routes?

I think what we're trying to do is, this is partly -- we're testing things in the run-up to kiosks.

There's not that many flights.

We have the some flights at the moment on some domestic routs, Milan/Rome, Cork/Dublin for example, where routinely you would have less than 20 checked in bags per flight.

And I think what we will be trying to trial is on those flights we go to no bags altogether, then we would actually have no check-in and no baggage handlers at all.

We simply either check-in on the Web, in fact we might not even use the kiosk.

You would have a completely automated flight departure apart from the cabin crew and somebody at the boarding gate to close the boarding card.

We would have -- it wouldn't have any effect on revenues, but we would have a very significant impact on costs.

We would be going back to the handling companies and in airport, but maybe take even the regulators, we pay a terminal charge at Dublin airport.

You're supposed to pay for check-in and all, but then you get a double charge for check-in.

If we don't use any check-in on that flight, they already checked in on the Web site, we have an argument with the regulators in this country why are we paying a term to charge for those passengers at all?

We don't need the terminal.

As (inaudible) trying to examine ways that we could kind of split up some of these high airport costs.

It's also one of the ways where we want to use a kind of explain both to the expensive airports like Stansted Dublin, and to the regulators.

Dublin airports are proposing to build the second terminal in Dublin is not a one-building, it's a two-building terminal.

The second building of this two-building is actually a busy specifically designed for the deep queuing check-in spaces and lines at a time when we're tell them look, the whole world is not going to deep check-in queues.

They're going towards no check-in queues.

So don't build a second building.

Get rid of it altogether and get people to check in using kiosks or the Web site and then you don't need a second building whatsoever.

The same thing applies in Stansted.

This is an opportunity to translate -- if you can kind of migrate passengers traveling with hand luggage and using Web check-in or kiosk check-in, your now fundamentally building (inaudible) airport buildings not the five-story buildings that the BAA and Stansted are so beloved of, but maybe one or two-story buildings with much shorter dwell times for passengers.

Passengers would check-in on the Web site, show up at the terminal 30 minutes before their departure and just go straight through security.

And so it's much more a cost drive and it is either a revenue enhancement.

I (inaudible) come back to your previous [line under] that [baggage] negatively impacted the bottom line, we don't think so.

There's no evidence as we increase the baggage charges downward effect on fares and yields.

We think what's driving fares and yields is lack of consumer sentiment at the moment.

This time of the year, June, July, August, when people are paying the highest fares is also when people are traveling with the most amount of checked in bags.

They're going on holiday.

I'm going to sign over to Howard here, I have to go to the next investor meeting.

Okay.

Does that answer your question?

That's great, thank you.

[Guartao Lu].

(Operator Instructions).

I'm sorry, I think that's a mistake.

Anybody else got a question?

We appear to have no further questions at this time.

I will hand the conference back over to you.

Thank you very much for your time and attention today.

If anybody has any (inaudible) as you know as is traditional on Q1 and Q3 we don't do a roadshow.

We will be doing the full roadshow at the end of the half-year results, which are due I think in the first week of November.

That obviously -- we'd then have the summer under our belts and a much better picture of what's happening during the winter.

If anybody has any follow-up questions, please feel free to route them back in here to David Broderick or Jimmy Dempsey.

We would be happy to take them, and again thank you for your time, and here's to much cheaper fares and much fewer competitors this winter.

God bless everyone.

Ladies and gentlemen, thank you for your participation.

This concludes today's conference.

You may now disconnect your lines.

Thank you.