Ryanair Holdings PLC (RYAAY) 2017 Q1 法說會逐字稿

Hello and welcome to the Ryanair conference call Q1 results, July 25, 2016.

(Operator Instructions).

Just to remind you, this conference call is being recorded.

Today, I'm pleased to present Michael O'Leary.

Please begin your meeting.

Good morning, ladies and gentlemen.

Welcome to the Ryanair Q1 results conference call.

As usual, you'll have seen this morning we posted on the ryanair.com website investor relations page the quarterly results release, the slide presentation, and also a Q&A done by myself and Neil Sorahan, the CFO.

And Neil is on the phone from London, where he's doing the press stuff this morning, and I'm here with the rest of extended team here in Dublin.

So just to feature a couple of highlights, we reported this morning a 4% rise in Q1 profits to EUR256 million.

Average fares were cut 10% to under EUR40, so good news for customers.

Traffic grew 11% to 31 million.

The load factor was up 2 points to 94%.

Unit costs were down 9%; excluding fuel, down an impressive 4% in the first quarter.

We've added 16 new Boeing 737 800s during the quarter.

And we completed the February announced share buyback program under which we'd bought 886 million shares.

It was completed in June immediately after Brexit.

In terms of summer 2016, the four new bases in Belfast, Corfu, Ibiza and Santiago are performing well.

We're excited by the eight new bases we've already announced for the winter: Bucharest, Bournemouth, Hamburg, Nuremburg, Prague, Sofia, Timisoara and Vilnius.

And Luxembourg will be added as our 33rd country in the winter schedule.

The one big negative for the winter was the introduction by the Norwegian Government of an air travel tax which sadly has resulted in the closure of our Oslo Rygge base from October and 16 routes being cut from there.

Other than that, year 3 of AGB with our Always Getting Better customer experience was unveiled in April and continues to improve the customer experience, and is helping us to win millions of new passengers to Ryanair.

On-time performance in the quarter fell from 91% last year to 87% due to unusual adverse weather thunderstorms that held over Europe for much of May and June; a succession of unjustified ATC strikes in Belgium, Italy, Greece and repeatedly in France.

And UK NATS has also mismanaged its staffing rosters which is leading to repeated slot capacity restrictions and delays, much of which seem to focus over Stansted at the expense of Gatwick and Heathrow.

We're in discussion with NATS, as we believe that they are protecting Heathrow at the expense of Gatwick and Stansted.

The most important I think theme for the quarter has been strong traffic growth, but also, continuing impressive cost discipline.

The cost advantage over all competitors has increased in Q1.

Unit costs fell 9% -- excluding fuel they were cut 4% -- due to lower cost aircraft in dollar terms, or in euro terms thanks to our strong dollar hedging position, cheaper financing, discounted airport growth deals, lower sales and marketing spend, and weaker sterling which also helped unit costs.

I think if there's a message I could give our shareholders is that in the first quarter, we reduced costs by 4 percentage points.

And if you look across the piece at our so-called low cost competitors, easyJet unit costs were up 2%, Wizz were up 4% and Norwegian up 7%, which means the gap between us and everybody else is materially widening.

In FY17, we have now fuel hedged 95% at about $62 a barrel.

We're extending out.

We've taken advantage of a post-Brexit weakness in oil prices and have now extended.

We're about 55% hedged for FY18 at about $50 per barrel, although we would now caution obviously that most of the fuel savings will be passed on this year and possibly next to customers in the form of lower air fares.

The balance sheet at the quarter end remains very strong.

We had net cash of EUR162 million at the end of June despite CapEx of EUR381 million in the quarter, debt repayments of EUR90 million and share buybacks of EUR468 million.

So we're generating very strong cash flows.

The Brexit vote was both a surprise and a disappointment.

As we predicted during the campaign, it will lead to a period of considerable political and economic uncertainty.

Already the UK looks like it's slipping into recession.

This uncertainty will be damaging to economic growth and consumer confidence, both in the UK and in the EU in the near term; and we will be devilled by this period of uncertainty until the UK's long-term political and economic relationships with the EU have some clarity.

In the near term, we expect the Brexit uncertainty will lead to weaker sterling which will impact our yields, slower growth in the UK and the EU economies, and downward pressure on fares until at least the end of calendar 2017.

Over the longer term, if the UK is unable to negotiate access to the single market or open skies, it may have implications for our three UK domestic routes and also for UK nationals on our share register.

But these risks we believe aren't material and will be manageable.

There may, however, be some significant opportunities for us if UK-registered competitors are no longer permitted to operate intra-EU routes or are required to divest their majority ownership of other EU-registered airlines.

And I would emphasize, this can't be simply -- this won't be a threat by simply reflagging in an EU country because of the ownership rules.

In the meantime, however, we intend to pivot our growth away from the UK airports this winter and for 2017.

We'll focus more on growing at our EU airports over the next two years.

This winter, we'll cut capacity and frequency on many Stansted routes, although there will be some cuts on other UK [P] cities as well, although I emphasize that no routes will close.

We're not going to cut back routes but we are going to cut back frequencies.

And most of those cuts will focus on Stansted where we're already running many years ahead of our multi-year traffic growth targets with Stansted Airport.

In terms of outlook, we have to be cautious in the current environment.

Clearly, many of our competitors have been issuing profit warnings in recent weeks.

We believe, however, the growth opportunities for our lower fares and the AGB customer experience are strengthening.

On average, we're 1% better booked for Q2 [than] the September quarter than we were at this time last year, albeit at significantly lower airfares.

We expect the load factor will be similar to last year at about 93%, but as a result of that, we think our full-year traffic will rise by another 1 million customers from 116 million to 117 million.

Average fares on the close-in bookings have been adversely impacted by these ATC strikes, terrorist events, and the weaker sterling post Brexit.

As a result, we expect Q2 fares will fall by at least 6%.

For the half year, we think they'll be down 8%.

But even those figures remain heavily dependent on close-in bookings for the remainder of August, September and October.

We see little visibility over winter 2016 fares yet, but we see no reason yet, and I emphasize yet, to alter our guidance of minus 10% to minus 12% in H2.

Those were a cautionary [yield] guidance, but they're now much more realistic in the post-Brexit environment.

At this time, therefore, we maintain our guidance that full-year profits will rise by about 12% to approximately EUR 1.4 billion being the midpoint in the range, but we would caution strongly that after -- post Brexit and with the likelihood of continuing terrorist events across Europe, that there remains significant downsides to pricing and, therefore, to yields and profit guidance for the remainder of the year.

Neil then, is there anything you want to focus on in terms of the MD&A?

No.

I think the key thing really, Michael, was the cost discipline in the quarter where we saw unit costs down 9%.

We had a EUR42 million saving on fuel, and when we strip out fuel unit costs, were down 4% in the quarter.

I would highlight, however, that given that the comps over the winter on growth are somewhat less this year, we won't see that level of cost discipline -- sorry; that level of cost reduction this winter, but we are holding the 1% on a full-year basis.

We grew by 24% in Q4 last year.

We're only growing 9% or 10% in Q4 this year.

But very strong cost discipline in the business.

Yes.

Good.

Okay.

With that, I think we'll open it up to our Q&A, and can I please ask everybody don't be asking silly questions if it has already been covered this morning in the video we put up on the website?

Other than that, let's go.

(Operator Instructions).

Savi Syth, Raymond James.

Just two questions from me and one clarification.

The first question.

Are you able to quantify what the impact was from the ATC-related cancellations on your revenue during the quarter and maybe how those cancellations are trending so far this quarter?

And then the second question is just on the slowing growth at Stansted.

I was wondering what the implications are, not just for FY17.

I know there are a lot of cost benefits in there.

And then also, I was surprised why the non-fuel cost was a little bit better for the year given the decline in the sterling.

Thanks.

Okay.

[Other than quantity], no.

It's obviously impossible to quantify the impact of these ATC cancellations other than the obvious ones: we have had to cancel about 1,000 flights; that is about 180,000 passenger cancellations.

There's a direct revenue loss but we have a continuing roll on.

Some of those passengers are re-accommodated on what would otherwise be sold as high yielding close-in bookings.

We have a significant spike upwards in EU261 compensation where we have the right-to-care costs imposed on the airlines which we are unable to recover from these ATCs under the ludicrous EU261 rules.

I missed the second part of the question, Savi, which was what?

Just wondering how it's trending this quarter.

How what's trending?

The cancellations.

There's marginally less of them, but we're struggling.

We are still being hit with increased delays from capacity restrictions imposed on us, in particular in the UK where they're short staffed; they've mismanaged the staffing.

Germany, they're hiding -- they come up with these capacity restrictions which again is a euphemism for they're short staffed.

It's incredible how in the peak summer period these guys are short staffed when they should be -- are aware that's the peak summer period.

But there should be fewer cancellations, although again, there was an Italian ATC strike call for last Friday.

Then it got cancelled, but in some cases, we've already moved the passengers.

It's just a variable that continues.

It's impossible to quantify.

The number on the ex-fuel unit cost, it was slightly healthier.

We're down 4% in the quarter.

As Neil has said, we expect that to even out over the winter where the growth is slower.

We have had stronger growth in this quarter.

But some of the longer-term features that we've been highlighting to shareholders such as we hedged our CapEx dollars at over EUR1 to $1.30, we're adding new 737-800s, they're coming through strongly but at lower unit costs, adding them in at lower unit costs to the balance sheet.

We're continuing to do very good growth deals with airports at a time when we're able to deliver them significant growth.

We've cut back some of our sales and marketing spend because as Kenny and the team are doing more focus on price promotions and being aggressive on pricing.

And we have the lower financing, the bond costs.

We fund a lot of these aircraft with either -- out of our own cash by using the bonds we raised, Neil and the team raised last year, as we've eight-year unsecured money at just over 1%.

So to clarify, Michael, so any kind of benefit from the slowing -- or any kind of relative less benefit from the slowing Stansted growth is more than offset by the fact that you have so many other non-fuel costs opportunities?

That's it?

Yes.

It's not that Stansted growth is slowing but reallocating some of that capacity to other airports elsewhere in Europe.

We're growing, but we have been growing very rapidly at Stansted for the last year or two.

That will now come to -- in fact, it will slightly reverse.

There will be a reduction in traffic this winter and next year in Stansted compared to what we had originally forecast to do there.

We're still growing strongly at Stansted.

All right.

Thank you.

Thank you, Savi.

Next question, please.

Oliver Sleath, Barclays.

Three questions, please, firstly on the summer UK pricing environment.

I appreciate you've lowered your average fare outlook for H1, but how much softening have you actually seen in your sterling-denominated fares since the Brexit vote?

It certainly feels like you're doing somewhat better than people like EasyJet who've been talking about double-digit declines in their sterling price in the summer.

So that's my first question just how the constant currency price in the UK has trended since Brexit.

Second question just on the winter.

You obviously announced your trims to Stansted and other UK bases, I guess on anticipation of weaker demand.

But conversely, do you see any strategic opportunity at all to capitalize on weakness amongst any smaller UK airlines this winter and take some share?

Or would you say that your guide for fares to fall 10% or 12% is quite aggressive enough to pressure the competition?

And finally, could you just confirm whether you will net-net be growing or shrinking in the UK this winter?

Thanks.

Okay.

We'll come back on the summer UK pricing.

We have been -- it's difficult.

We started off this year by being more aggressive on pricing anyway.

We were criticized for being overly conservative on our outlook on pricing and fares.

But we are growing strongly in the UK with capacities at Stansted, the new base in Belfast, additional aircraft in Bristol, Glasgow, Edinburgh.

So we felt we were more realistic whereas others were being somewhat optimistic.

We don't have any time for all that (expletive) about constant currency (expletive).

It's just a complete load of nonsense.

So we don't have any constant currency stuff.

We deal with reality.

The sterling pricing is weaker than it was prior to this, but we're still -- we intend -- as you know, we're price passive, load-factor active.

So we will simply fill our flights whatever the pricing will be; whether that's in sterling or in euros it will be.

And we don't waste any time with constant currency nonsense.

Winter 2016.

We would certainly take advantage if we thought there were -- if there were opportunities there, but we're already -- we're still growing strongly.

Our traffic in the UK winter 2016 will be up on where it was winter 2015.

It's just we're trimming back some of the -- particularly the mid-week, the late Saturdays/early Sundays, where we think it's judicious to trim back.

And we think we've grown pretty rapidly at Stansted in the last number of years.

Post-Brexit, it seems to us sensible now to take some of that capacity out and reallocate it elsewhere.

And net -- at the last [cover], it was net-net --?

David, sorry.

We will be growing in the UK this winter; probably slightly down in Stansted where we're taking just short of 600,000 seats out of a planned 9 million for the winter in Stansted.

But overall in the UK we're growing with a bias towards leisure stuff into the sunshine, to be honest, out of regional UK.

Okay.

Great.

Thanks.

So for the summer pricing, Michael, that sounds like it is lower but you've maybe been anticipating that earlier than other people I guess is what you're saying.

Yes.

We were conservative, we thought sensibly conservative, although if I was being honest, I'd say we were being conservative and we hoped that there'd be -- by the half year we'd be raising the guidance and for the combination --

I think pricing would have lifted if the 17 million idiots in the UK had voted to stay in the European Union it would have settled everything down; I think there would have been a lift to pricing.

But that's not now going to be the case.

And so we think we're reasonably comfortable with the cautious guidance we have for the half year.

The jury's out a little bit more on the second half of the year.

And we think minus 10% to 12% is cautious, but now much more realistic, but we don't see a reason yet to reduce the guidance for the full year.

Very clear.

Thank you.

Thanks, Oliver.

Next question, please.

Jarrod Castle, UBS.

Three as well, if I may.

One, you refer to the release about going to the European Commission to take some measures to alleviate these ATC strikes, etc.

Can you give any color in terms of their response and how you see that progressing?

Two.

Just on the share buybacks, obviously, you've got your EGM on the July 27, and you talk about the obviously selective share buybacks.

I take it based where your share is, etc., that would imply that you would be quite proactive in terms of providing support in undertaking buybacks, so is there a need per se to say selective share buybacks.

And then just on Stansted as well; obviously, less ambitious in terms of growth, but is that going to have any impact in terms of airport fees or the ability to generate the current margins that you do from that base?

Thanks.

Thanks, Jarrod.

I'll take the first two.

I'll ask David then to give his opinion on the Stansted one.

The EU Commission, we're working with the other main airlines, the A4E Group, and I think we're making -- we have -- we're getting some traction on the points we're making.

And if I had my own way, I would simply ban strikes, air traffic control strikes in Europe, as they are banned in the US, but that's probably a move too far for the Europeans.

The three measures we're pushing for which is requiring ATC unions to engage in binding arbitration first instead of striking first, allowing other ATCs to keep the over-flights over France open while the French unions are on strike, and allowing us to recover EU 261 costs from ATC providers, particularly the Brits and the Germans who are just -- have mismanaged their staffing.

I think there's a reasonable degree of acceptance, and I think the more outrageous or the frequency of these ATC strikes and the more they delay MEPs and European Commissioners and their families going on holidays, finally I think there's going to be some movement there.

Now how effective it will be in time, we don't know, but we're not asking for the sun, moon and stars here.

These are reasonably manageable, reasonably effective.

They don't remove the right of French people to go on strike, which is the national pastime over there.

But the critical one for us would be the over-flights.

The technology exists to allow the British, the Spanish, the Italians or Irish to run -- keep the over-flights going, and Europe does seem to be moving towards accepting that there's --

You see, what the French do during these strikes is they have minimum service obligations under which they protect a lot of the French Air France domestic and short-haul flights but they shove all the cancellations on to the over-flights.

We would also push for the over-flights being protected under the minimum service obligations, but that would mean the French taking actually more of the heat, which is something they're not that keen on.

So I think it's likely that the EU might reclassify some of -- above a certain level, 20,000 feet, as being EU airspace which they would keep open, and anything below 20,000 feet, for example, could be French airspace which they can strike all day.

As an airline that doesn't -- well, we don't fly that much to and from France, that would protect a lot of our and the other airlines' over-flights, and it's the over-flights that are getting hit.

And the point we've made to Europe all the time is, if you really have a single market, how can you allow one union of about 3,000 people to close about 40% of the skies over a single market?

It's a contradiction in terms.

If you've a single market, you've a single market, and you can't allow one tiny mob to blackmail us all the time.

So I'd be hopeful we'll get some positive response on that this winter.

Share buybacks I need to be very careful.

We are going on Wednesday with an EGM proposal.

We're at our 5% limit.

We do want to give the Board the discretion to undertake more buybacks, but we have -- we're signaling that we're not going to enter into a planned or a VWAP buyback program during the remainder of calendar 2016.

I don't think it's appropriate that Ryanair should be out there supporting its own share price, and that's not why we're doing share buybacks.

But if you take a year, this year, I think our stock is down 20%/25% in a year when we've had not profit warning, we're guiding the profits will rise by 10% or 12% and the stock still gets sold down 20%.

The Board should have the discretion if it so chooses, and there's adverse news flow or we have a profit warning later in the year, because pricing is weaker, we should have the ability to go out and do more buybacks.

But we're not going to do a planned buyback.

We've already completed the planned buyback for 2016, and therefore, shareholders shouldn't be looking to us to, if you like, buck the market.

But if the market is selling down our stock, it's selling down our stock, we let it sell it down, but we do think we're getting -- we're down at attractive levels, and if it went any lower than this, then I think the Board would be minded to move.

And David, Stansted?

Yes.

Stansted, I think it's important to remember that only as recently as 2013 we were doing just over 13.5 million passengers; and Stansted this year, it will be about 19.5 million passengers.

Up about [50%].

Which is astonishing growth.

And it makes sense now to retain capacity, to reallocate it into other parts of Europe which in the intervening period, other primary airports have been coming to us with growth offers.

Put also into the mix the fact that the Italians are likely to cut their tax increase that they ill-advisedly applied this year and the opportunities open up for us across Italy, Germany, Poland, and even Spain where a price freeze is in place now for the next five years.

Okay.

Thanks.

But I would caution.

We're still -- we're about running two, if not three years ahead of the annual traffic target, so we're way ahead of where we should be at Stansted.

Okay.

Thanks very much.

Okay.

Thanks, Jarrod.

Next question, please.

Duane Pfennigwerth, Evercore ISI.

Just with respect to your longer-term fleet flexibility, you published these long-term plans, but I wonder what sort of flexibility do you have if the environment doesn't play out the way that you expect.

Okay.

I would say we have quite a lot of flexibility, but frankly, I would run this the other way round.

If the environment continues to get worse, we'll be out there looking for even more aircraft and we'll step up our growth even faster.

In an adverse environment, Ryanair grows faster.

There will be opportunities for people to be cancelling aircraft orders and aircraft will get cheaper.

So we would -- I couldn't imagine a set of circumstances where we would, if you take the premise of the question, cut back our aircraft deliveries in any way, shape or form.

If you look at our numbers, we are load factor active, yield passive.

We'll take whatever price we get because we continue to be -- demonstrate significantly better cost performance than any other airline in Europe.

And I think a lot of the profit warnings you're seeing coming from other airlines in Europe is not necessarily --

Some of the airlines were blaming the June quarter results on Brexit, the (expletive) Brexit vote was only in the last week of June.

So while it's convenient and it has added to uncertainty into the September quarter, Brexit had very little to do with the June quarter.

What they do is they're not able to compete with Ryanair, and I think that combination of our lower fares and the AGB, the customer experience improvement which is manifest and certainly being -- we've [often have] very good feedback on it from customers and from surveys.

They're not able to compete with us on price or on service, and that's going to continue to be the case.

So rather than asking, and I think it's important, asking the question if it got really bad would we cut back capacity, the answer would be, no.

If it got really bad, we'd look for opportunities to increase capacity and grow faster.

And I say that as a large shareholder, and if the share price took some pain for a year or two, I'd be very happy to put up with it.

Thank you, Michael, for that very direct answer.

Thanks, Duane.

And just on, as my second question here, I wonder if you could offer some thoughts on what a London passenger looks like relative to your system average, either from a yield perspective or from a profitability perspective.

Thanks for taking the questions.

The profitability, because we move the capacity around, if there's a uniquely profitable airport or route, we lorry capacity onto it and bring it down to the system-wide average.

And equally, if there's an under-performing one, we tend to shave back capacity.

So there's very little geographic difference between the profitability per passenger.

Obviously, the UK, they're suffering; we are suffering.

If the next quarter too would be the weakness of sterling, and Ryanair suffers a bit on that because we report in euros whereas some of our competitors, IAG and easyJet, would benefit from the weakness of sterling.

Their euro revenues translate into artificially higher yields, but it may also hit them on the cost side.

So there's no kind of unique geographical difference between average fares and pricing because we flex the capacities in to keep it -- move everything closer to the system-wide average.

Thanks, Michael.

Thanks, Duane.

Next question, please.

Damian Brewer, RBC.

I have two questions, if I can, please.

First of all, given the growth this year, could you update us on the amount of network that is relatively mature this year versus last; i.e., still building presence, still building market position; and maybe where yields are a little bit more depressed, at least on the initial startup of the route?

And then I'll give you the second question at the same time.

Coming back to a former question in today's session, could you update us on what the 2017/2018 and 2018/2019 fleet lease [retirals] look like at the moment?

And if you were, say, to build the aircraft fleet, do you look at the IRR on that versus share buybacks, or just simply look at that versus the system-wide average?

Thank you.

Okay.

I'm going to ask David to take the first one on the maturities; and then, Neil, get you to deal -- address the lease retrials.

David.

Okay, Damian.

The maturity of -- the percentage of our routes which are new broadly tracks our growth given that most of our growth is into new destinations.

So you're looking at equivalent numbers this year over last year, to be honest, in terms of route maturity.

In terms of where there's weakness, that's not necessarily related to maturity.

Most pronounced weakness would be, for example, Eastern Greece.

Nobody wants to fly to Kos outside of August at the moment.

Beyond that, it's -- it will be hard to be definitive.

Thank you.

Damian, in relation to the leases, we've 39 aircraft on lease at the moment in our fleet out of over 350 aircraft.

We've eight hand-backs in the current financial year, six next year, and 11 the year after that, so that the remaining 14 will then go out between 2020 and 2022.

In relation to our aircraft, well, we're buying aircraft cheaper than we've ever done before.

We've locked in the euro/dollar on the 737-800 deliveries at EUR1.31.

So it is a case of buying the aircraft as cheaply as we can.

We don't get overly hung up on the IRR in that.

If you can buy the aircraft at the right price, you get the right return.

Okay.

Thanks.

Very good.

Thank you.

And it's important to stress we're not getting the aircraft cheaper from Boeing; it's that we've hedged the dollar so that in euro terms on delivery.

And then we are -- that takes care of all the remaining 800 deliveries out to the end of FY19, and then we move into the Max.

The Max we're paying a small premium on the aircraft, but the additional seats and the fuel performance, I mean on a per seat basis, that there will be significantly lower cost again.

So it's interesting.

There's a couple of village idiots out there masquerading as airline analysts who keep repeating some nonsense they've heard from self-proclaimed ultra low-cost carriers who aren't as low cost as Ryanair that by buying an A321, they'll have lower per passenger, per seat, or some [razem kazem] cost, than Ryanair.

Just to give you a flavor for what's happening in the last quarter, Vat Air, the self-proclaimed UCC, delivered traffic loads of 18%.

Their aircraft and ownership costs went up by 34% when they were adding the A321s.

In the same quarter, our traffic went up by 11% and our aircraft ownership costs went up by 10%.

So the gap between us and some other self-proclaimed ULCCs, whatever that means, have got significantly wider because they're adding materially more expensive aircraft and we are adding materially cheaper aircraft.

So those of you who call yourselves analysts and believe that anybody is going to have a lower unit cost than Ryanair in the next couple of years should do some work or get some math classes.

Next question, please.

Neil Glynn, Credit Suisse.

If I could ask two questions.

The first question was following on from a previous question, or at least answer on airport opportunities.

Clearly, this has been a developing theme for many years at this point, but, Michael, I'm just interested in terms of whether you've seen any uptick in terms of airport opportunism to tempt Ryanair aircraft out of the UK since Brexit, or even concerned airports in the UK looking to do more attractive deals as they get a little bit concerned.

And then the second question.

I think per the video this morning there was mention of 11 million customers already on myRyanair, having launched in May.

Just wanted to check that that is correct.

And any insight into up-selling opportunities you've seen so far on myRyanair would be very helpful to think about the commercial momentum it helped with.

Yes.

Good questions, Neil.

I'm going to ask David to take the first and then ask Kenny to update everybody on myRyanair and where we're seeing developments as we go there.

David.

Okay.

I wouldn't say that people are trying to tempt aircraft out of the UK given that we are going to deliver about one-third if not more of all the new seats into Europe.

There is opportunity for them all.

Where we're seeing the most active persuasion is coming from Germany and Central and Eastern Europe who have suffered from stagnation impact from other carriers, including so-called low-cost carriers, and they're coming to us.

So you'll see us growing again next year in Germany at a rate that is higher than the UK, that's for sure; and as you can see, our growth profile this winter into Central and Eastern Europe.

And I think I'd just add that.

We're seeing a number of (technical difficulty) emerging in Central and Eastern Europe at the moment to where there is a degree of unhappiness with the rate and pace of route development, or traffic growth being delivered by so-called budget low-cost carriers that aren't [seen as] low cost.

And we'll certainly be taking up, or David and the team are certainly looking at some very attractive [opportunities] there.

Kenny, on myRyanair.

On myRyanair, so we are now up to 11 million customers who've signed up to myRyanair.

So we're happy with that growth and that continues as well to see an increase in the usage of customers when they're signing in through myRyanair before taking bookings of flights or other products.

We've got our next release coming in the autumn, and that will have more (technical difficulty) myRyanair (technical difficulty) the entire platform, so in app and on desktop.

And then you will see us start to use it for commercial activities, certain types of promotions, cross selling and driving further sign-up of it.

So happy with the development of that, and it's also contributing to the way we will do the travel extras, the ones that [take time] because we know how you're signed in and conduct your purchase.

Thanks for that, Kenny.

If I could just follow up one additional on myRyanair.

Sure, Neil.

I guess when you look at 11 million customers, which is give or take 10% of the passenger base, I guess those sign-ups or the members of myRyanair are clearly travelling more often than the ones that are not members, so it's a bigger proportion of the customer base.

Is that fair?

In some markets, yes.

Not always; not always the case in all markets.

So, yes.

You could say in certain of the more mature markets like the UK and Ireland, it tends to be the more frequent customers, but that's not always the case.

Got you.

Great.

Thank you.

And bear in mind, that number of sign-ups is impressive given we really haven't promoted myRyanair, we haven't given people an incentive to sign up to it yet.

They will be coming into it because we were trying to get -- Kenny and the team were trying to refine the offer under myRyanair.

But as we move out of the summer peak into the winter, there will be much more aggressive targeting of sign-ups and promotions to get people to sign up.

Brilliant.

Thank you.

And I should -- one other word, Neil, on that.

We will also be doing a much more detailed presentation to shareholders on the half-year results roadshow in November on the cross selling, how we're performing on cross-selling ancillaries, etc.

So myRyanair-ancillaries (inaudible) on the half-year numbers.

Next question, please.

James Hollins, [Exane].

At the risk of being told to go on a master class, just two from me.

The first one is on the detail around where you are in terms of fuel costs on euro/dollar hedging for full year 2018.

And the second one is the Eurocontrol costs.

You've seen a good reduction in terms of the unit costs there.

I was wondering if that was an ongoing trend which might extend beyond France, Germany, UK, or is it relatively one-off in its nature?

Thanks.

Okay.

Well, Neil, you take the fuel costs.

The fuel costs.

James, morning.

How are you?

We're hedged on the euro/dollar into FY18 at just over EUR1.12; just under 80% of our hedging in place for that financial year.

Thanks, Neil.

And, James, you're entirely exonerated from any classification as a village idiot.

There's only one or two out there who are pushing this line that a ULCC will have a lower unit cost than Ryanair at some point in time in the future.

Thankfully, you're not one of them.

On the Eurocontrol costs, yes, there was a cost.

There's two things going on.

One, there was a unit cost reduction this year in France, Germany, Italy.

It's also been helped in the quarter though by the cancellations, the ATC cancellations.

So I don't think it's something you would look to continue or we would expect.

In fact, if anything I would expect the opposite.

These are very badly run; European ATC is very badly run.

There is absolutely no cost control.

There's very little management.

And the unions are -- there's anarchy going on around the place.

20 years after the European Union promised us a single sky, we're still nowhere close to delivering it.

So it's not something I would look for.

We'd expect -- we would expect to see Eurocontrol over the medium term rise in line with traffic or probably at a slightly faster rate than traffic.

Yes.

And a lot will depend, James, on what their pension deficits are looking like and how they have to recover them from the airline.

And you can assume that pension deficits will be awful and they're probably going to be shoveling it onto the airlines.

It's a complete -- it's in anarchy.

And you wouldn't mind if you were getting a good service as a byproduct, but the most expensive provider is NATS in the UK and they're probably the least competent in terms of --.

We're getting excuses from them this year that one of the reasons they're short staffed in Stansted is that people retired which must have come at some considerable shock to them given the retirement age is 60.

All right.

Brilliant.

Thanks very much.

Douglas McNeill, Macquarie.

Interested to hear about the progress of Always Getting Better.

Are you in a position to estimate the proportion of your traffic that was travelling on business this past quarter?

And if I could squeeze in one on the Stansted ATC issues.

Is your feeling that NATS is going to get a grip on this any time soon, or is it just a question of waiting for the summer peak to pass and hoping that they do a better job next year?

I think if I deal with the NATS one first, I'll ask Kenny then to update -- I'll deal with the two.

So NATS, no.

I don't expect NATS to get a grip of it.

They've mismanaged this summer.

It will ease off as we move into the winter.

I think also, particularly because capacity will be taken out of the UK post Brexit, I think the other airlines will trim capacity there and that might artificially help it.

But the mismanagement that went on this summer means the summer peak came as a surprise to them, which must be the only party in this industry that the summer peak has come a surprise to.

We think they'll mismanage it again next year.

Remember, this is a company that's owned by most of the major UK airlines so it's no surprise that it's mismanaged itself.

I would rather not really.

All I would ever say, as I said on the ancillaries before, we are delivering some very impressive numbers in terms of ancillary cross sells, the Business Plus, Leisure Plus, reserved seats; but we will hold that to the half-year results number, partly because some of them are reasonably new developments and I don't want to get into the detail of that until we get to the half-year numbers, in which case we give you a kind of before and after once we've had six or nine months of buildup of what we're doing in ancillaries and cross selling.

Fair enough.

Very clear.

Thanks very much.

Thanks, Douglas.

Next question, please.

Alexia Dogani, Goldman Sachs.

I also have two questions, please.

Just firstly on UK capacity reallocation near term, you mentioned Germany as an example that you're seeing interest from airports.

But which other countries will you target, and do you see actually a difference in trading across different European markets currently?

And then just secondly on your medium-term capacity growth plans.

From your comments, Michael, basically the expectation is we shouldn't expect a change, and if anything, there is risk to the upside.

And so should we assume that you will go ahead and exercise the aircraft options you have in place?

And, therefore, when we look at cash flow generation and the balance sheet metrics, would you be still keen in the next growth phase to maintain a conservative balance sheet perhaps at the expense of shareholder returns, or would you be willing to let balance sheet gearing rise a little bit?

Thanks.

Okay, David.

Why don't you take the first half on the UK, the capacity allocations and where it is?

And then, I'll do the [collective] second one on the aircraft.

Sure.

We still expect some modest growth in the UK next year, I think, with the greater emphasis on the leisure side, everybody wanting to get out and get away from it all.

But outside of Germany, we're seeing quite a lot of interest and approaches from airports across Central and Eastern Europe, so from Poland right down into Bulgaria and the like.

In terms of the relative performance of markets, it's not really possible to give a succinct answer on that.

If you take somewhere like Bulgaria, Sofia, where we entered this winter, that market is shared effectively 50/50 between two carriers and we'll come in automatically at 30% of that market.

Now we're very, very pleased with the advanced bookings to date, so I've every confidence.

But each market has entirely different characteristics, but as Michael says, where it's good, we'll be putting in more capacity and it all levels out in the end.

And, Alexia, in terms of the aircraft, as you know, we've set out the fleet growth in one of the slides in the slide presentation.

I would expect that that would be the minimum performance we'll deliver over the next number of years.

Now we won't do anything silly either, but we would be opportunistic if there was a severe and sustained recession in the UK or parts of European Union and airlines were cancelling aircraft orders and Boeing came to us and said, look, we have end of line 800s or we have some aircraft at distressed prices, then we would certainly look at that and we might step up the growth.

But I don't we'd actively go out now to change our aircraft orders or our fleet profile.

That shouldn't change the balance sheet strategy either.

We should continue to add about 50 aircraft each year.

That would assume, and I think it's a reasonable assumption, that we'll exercise the option on the MAX aircraft.

We think they're a fantastic aircraft; the performance are amazing.

But that would still enable us, subject to current profitability being maintained, which again in a price passive environment might not be -- there might be short-term blips to that, I would still expect us to be generating gross cash flows of about EUR2 billion a year.

About EUR1 billion of that would go to CapEx and about EUR1 billion of that would go towards shareholder returns in the wider sense.

So I don't see that it would alter --

So the answer to the question is, one, we'd expect to continue to grow towards EUR180 million as we've originally predicted.

The only thing that would vary that is if we came across some very significant and attractive opportunities in terms of distressed aircraft prices.

And, three, we shouldn't expect either of those to alter the balance sheet management or the continuing strategy to return about EUR1 billion a year to shareholders, plus or minus pricing and profitability.

Great.

Thanks.

And can I just ask a follow-up on the CapEx number?

Actually, you managed EUR1 billion of CapEx for aircraft each year, but clearly, if we start putting the aircraft options into our numbers, this number would increase.

Can you give a slight indication of the level of magnitude of the increase you would expect?

No.

It shouldn't increase because I think the way we've -- it might be -- or it might be [safer] for a year or two.

If we were to allocate -- if we were to exercise the options, the [firms] and options would still come in at around the same, between 40 and 50 aircraft a year.

We've staggered the firms and the options to bring the CapEx in at around the same number.

Yes.

I think, Alexia, what we've said in the past is that we're factoring in about EUR1 billion a year for next couple of years.

It dips back to about EUR850 million in FY19 and then it starts to ratchet up again with the [maximum].

Okay.

Great.

Thanks.

Thanks, Alexia.

Next question, please.

Mark Simpson, Goodbody.

I'm glad you've taken my call as one of the leading village idiots out there, but apologies about that.

I'm sending you over Mathematics for Dummies (laughter).

I'll read it with interest.

Don't believe what you're told by ULCCs who have higher costs than Ryanair.

I don't quite know how you call it a low-cost carrier when you can't compete with Europe's lowest-cost carrier, but go on.

I'll avoid that and maybe come in for a math lesson for 30 minutes one day, but [excellent].

Two questions.

Ancillary revenues.

Obviously, it's going to be an area of long-term growth; big step-up expected in the next couple of years.

Currently down; ancillary revenues per PAX down 1.4% in this quarter; obviously down last year.

I'm wondering if you can just give us a bit more insight into what's driving that performance to date and where you see that changing over the medium term.

And the other side, alternative growth targets outside the UK.

We're looking at German schedules I think being up 28% in the Q3 to December.

I'm wondering if we can break that down again by any specific airports of note.

And also, a question mark in terms of maybe Munich one day coming in as a major hub.

Okay.

I'll let David ruminate on that.

Ancillary revenues, and again, I've been very -- I don't want to get into ancillary revenues in this again.

The reason it's down in this quarter was last year is a couple of timing ones we have in travel insurance in long-term decline as [prepared fall].

We had a credit card cut which had jumped in the prior year comparable and is -- again, we don't have an equivalent jump in this year, the credit card payment fees.

And we are only starting to work, Kenny and the team, with the myRyanair and the ancillaries and the -- to begin to really push cross selling.

And that cross selling is working as we move through the summer.

But I don't want to go out with any numbers too early.

By the time we get to the half-year roadshow, we'll have a credible year on year what we're doing on cross selling.

So I'm not trying to be unhelpful, but we really don't want to get into the ancillaries until we get to the half year.

And at the moment, where there's so much of a dark skies over Brexit and underlying yields, it's not appropriate.

We should be cautious for the moment, and hopefully, we'll have a better -- we'll be able to give you a more detailed analysis in the half-year numbers.

David, on Germany?

Well, I don't really want to add too much detail to that.

We're opening bases as you know in Hamburg and in Nuremburg and almost doubling the size of the Berlin base, which is timely, because Berlin, the facilities are almost full, if not full at this point for base aircraft.

Munich, I don't see it.

It's not on the horizon.

But never say never.

But it's important to add, I think what would might alter the outlook in Germany, and certainly something that's driving the German airports in their discussions with us is the recent speculation that Lufthansa and Air Berlin might by cozying up to each other and there may be some element of push in reunification there.

That would certainly lead, I think, to short-haul capacity cutbacks in the German market.

It might speed up the extent to which certain German airports are actively engaged in talks with David and the team.

We're not the ones pushing Germany.

It's the German airports who are.

We have other airports, however, as you said, in Central Europe, in Greece; also in Spain and Italy.

There's almost no area or market where we don't have airports actively courting David and the new routes team for growth.

Excellent.

I appreciate that and look forward to my math lesson at some point over at the office.

Very good.

Look forward to delivering it, Mark.

That's great.

Thanks, Michael (laughter).

Next question, please.

Andrew Light, Citigroup.

First of all, just some clarity on the UK capacity.

You're taking net 39 aircraft this year, 21 aircraft next.

That's 60 aircraft.

Roughly how much would you have put in to the UK pre Brexit and now post Brexit?

And then secondly, you've talked in the past about potentially being a feeder airline to various long-haul carriers.

How close or how near are you to that and could you scope out the size of that opportunity?

Okay.

Both of those sound like ones for David so I'll let him loose on you.

Thanks.

Okay.

I don't have the specific numbers for the aircraft next year in the UK because that's what we're working on now.

I could say that out of a possible 23 million seats in Stansted next year, we're probably likely to have 2 million less seats than we otherwise might have done pre Brexit.

So that's a significant enough number.

So that doesn't preclude additional growth that we've already announced in places like Newcastle, Leeds and Birmingham; as I say, people trying to get the hell out for a holiday.

And the second part of your question?

Is the feeder into the long-haul airlines (multiple speakers)?

I'd quote the other carriers in that they believe themselves to be close to a deal with us, and we have pretty straightforward terms for that.

We're flying 93% full.

We don't need to feed, but we can see why others would want to connect into our network.

And I would say we're either a couple of weeks or a couple of years away from signing off at one or two carriers.

Okay.

We're at the final stages of discussions with a number of carriers.

But ultimately, it depends on those carriers.

If they want to say yes to our terms, then it will happen reasonably quickly.

If they don't want to say yes to our terms, we're quite happy to keep going as we are.

We're not -- the philosophy of keeping it simple and feeding them at reasonably low cost but in an efficient way is not for changing.

We're not going to be doing cold sharing or any of that complex stuff.

So it's really a decision to the long-haul carriers.

Okay.

Thank you very much.

Thanks, Andrew.

Next question, please.

Johannes Braun, Commerzbank.

I only have one question actually, again on the unit costs.

You're guiding minus 1% for the full year, stable load factor.

In the past, the good unit cost performance has at least partially also been driven by rising fee load factors as you spread your fixed costs over a larger amount of people.

Now you're guiding for a stable load factor.

So incrementally, there should be more [grip] on costs.

Right?

And I was just wondering where this comes from.

We know the components like ownership costs, like financing costs, and so on and so forth, but these have been in place last year as well.

So I was just wondering what has incrementally changed in terms of your cost grip.

Neil, do you want to take that one?

Yes.

Sure, Michael.

I suppose, Johannes, first and foremost, if you look at the ownership costs where we're taking significantly aircraft this year than we would have done over prior years, where we took 11 aircraft two years ago 40 aircraft last year, and it ratchets up to 52 aircraft this year.

We're also financing ourselves out of cash, which we wouldn't have done in the past.

So on the ownership and maintenance line alone, you're seeing cheaper aircraft coming in.

At the same time, we're handing back leases in higher numbers than we've done which are at a relatively higher cost.

You will have seen on the staffing line in the first quarter we were down on a per passenger basis.

Now we've locked in our long-term deals there for the next five years so we'll be able to manage that out.

And then on the airport and handling costs, again down in the quarter, and indeed, we would have an expectation on a full-year basis.

You'll see something down there, thanks to the volume discount deals that David and the team have done across the network, and indeed as we grow into more secondary airports.

Sales and marketing was down in the quarter.

We would expect that to continue to be the trend as the marketing budget doesn't go up as we grow passengers by 10% this year to 117 million.

And then as we move forward, as Michael already said, we've got the game changer, the Max coming in 2019.

So I suppose more of the same.

Just we're pushing it now over at a static load factor, and I think this is a testament to the model that we have.

A lot of people felt that the growth was -- or, sorry; the savings were coming primarily from load factors.

We're clearly pushing it through when load factors are static.

Yes, indeed.

So basically, it's everything apart from staff costs?

It's everything, yes; pretty much.

Performance will be slightly less in the second half of the year because the rate of traffic growth slows down in the second half of the year compared to last year's Q3 and Q4 when there was a significant --.

Remember, we were growing traffic by 25% in Q4.

That won't happen again this year.

So it's will be slightly slower towards the second half of the year, although over the medium term, we have tremendous cost discipline locked away.

And I'll keep repeating the point.

We have huge unit cost discipline, excluding fuel, in a marketplace where, as you've seen in recent weeks, none of our competitors are able to manage down their costs at all.

They're all bleating on about why costs are rising while still putting themselves forward as ultra low cost carriers.

If I was a shareholder in one ultra low cost carrier, I'd be asking who's gaining the benefit of the aircraft leases where their [lead] aircraft costs are rising by 34% in the quarter when traffic is only up 18%.

But I'm not a shareholder so I couldn't possibly ask that question.

Right.

Thank you.

Next question, please.

Anand Date, Deutsche Bank.

I've just got a couple of questions, please.

So if we assume that industry pricing is going to be weak over the next 12 months, then is it right to think that the only rational answer is that industry capacity has to come out?

I'm not saying you; I'm just saying industry capacity.

Yes.

And following on from that, none of your competitors are really announcing anything substantial on that front, so do you think there is a trigger point, or is there a normal period of time before we should expect that to happen, we should expect those kind of announcements?

And then my second question is, at what point do you think we might see issues in the wider aviation sector?

So airports having to deal with lower growth profiles from some of their key airlines?

The leasing companies, everyone is saying, oh, I can just do sale and leasebacks.

At some point, does that become quite difficult for some of your competitors?

Yes.

I'll take the second one first.

Yes.

I think the whole sale and leaseback is, again, typical airline nonsense.

I think what's more interesting in that market at the moment is the weakness of the orders being announced by Airbus and Boeing has materially slowed down.

There's very little news flow out of Farnborough.

And so I find when the manufacturers are not signing up record orders and the airlines are saying, oh, we can keep doing sale and leasebacks at higher prices, all they're really just doing is borrowing, inflating the borrowings against themselves.

Again, I go back to the example this ULCC that says we're negotiating, we're ordering aircraft directly and yet their leasing costs shoot up when they start taking these deliveries.

They're either taking huge profits on the sale and leaseback, or somebody else is taking the profit on those leases.

Frankly, the more people who do sale and leasebacks in a marketplace where Ryanair is buying incredibly -- buying aircraft directly from Boeing, with a very well hedged dollar position and therefore lowering our net aircraft costs, the cost gap between us and them gets wider.

And I go back again to this nonsense of how somebody with an A321 whose aircraft costs are already 3 times higher per passenger than Ryanair's suddenly believes that with 20% lower aircraft costs they're going to get from 300% of our aircraft costs to less than our aircraft costs, it's just rubbish.

Industry pricing.

Yes.

I think it's inevitable capacity will come out.

When you look at the profit warnings being put about by competitor -- other EU airlines in the last number of weeks, they're not yet addressing winter capacity.

I think probably a lot of them are waiting to see what we do.

We're saying we're going to keep adding capacity and if the market gets worse, we'll add even more capacity.

We'll be adding those capacities in markets where we're competing with them.

And you take the people like easyJet whose average fare last year was nearly 98% higher than ours; Wizz's average fare was about 25% higher than ours; Norwegian's was 75% higher than ours; never mind the Lufthansas, the Iberias and all the rest of it.

So I think it's inevitable in this post-Brexit, terrorist-afflicted Europe, if confidence is low and pricing is weak, which it will be, I think it's inevitable they'll start paring back capacity because they don't have the cost base or the pricing to be able to maintain their earnings while competing toe to toe with us.

Just on that point, do you think there is a time period before people throw in the towel?

So is it three months; is it six months?

No.

It's never that binary.

It's not on Monday we're competing and we decide on Tuesday we're throwing in the towel.

It's a progressive thing.

In some cases, they'll reallocate capacity away from markets where they compete with Ryanair into other markers where they hope they don't compete with us.

It's also fundamentally driven by is there any other --

For example, and I use it only as an example, I've no insight, but if Lufthansa were to suddenly take over a huge amount of the Air Berlin short-haul -- loss-making short-haul operation in Germany, I think that would lead to a material restructuring of short-haul capacity in Germany.

If something were to happen to some loss-making competitors where they -- somebody went bust or somebody had to be reorganized or restructured, again, that would have meaningful --

So it tends to be steps rather than a gradual process, but it's very difficult to predict.

Again, [if I try to predict] who's the next airline to go bust, the honest answer is we never know, but they generally tend to hang on for longer than one would naturally -- than a properly functioning industry would allow them to hang on for.

Can I just ask one more as well?

Sure.

Do you think the industry has learnt anything from what happened after [Mallers]?

If we assume that someone of a reasonable size, something happened and they have to shrink very dramatically, does everyone just flood it and that's what's going to happen this time?

Or is there a more structured way that people can look at it?

David is shaking his head so I'll let him answer for himself.

I don't think this industry ever learns anything.

The industry -- in good times, they all run out and order aircraft; they all over-expand with high-cost aircraft orders, all the rest of it.

And what they never learn -- what we do is we maintain our discipline.

We order aircraft during downturns; we're able to lock away dollars.

We lock away fuel.

We manage these things for the longer terms.

What this industry needs to learn is that you can't compete with Ryanair on price or on customer service, and if they could only learn that, they'd be fine.

But every time they have a set of results, it's, oh, we don't compete with Ryanair.

We have different markets.

We have different customers.

We have different something.

Everybody has some excuse.

So, no.

I don't think they ever learn much.

But I think the Mallers situation was somewhat unusual in that I think other -- I don't think other EU governments would allow other airlines to go bust like Mallers does.

You see the Polish government desperately trying to keep LOT alive long beyond the point of resuscitation.

The Scandinavian Government is desperately trying to lorry money into, and government travel orders and keep SAS alive long after it has ceased to have any kind of prospect of reaching break even.

The Portuguese Government sold TAP to private sector' now they want to buy it back again.

The governments almost just never learn, and so my view is I think it's unlikely that the Mallers situation would recur, and it will be better for Ryanair if it doesn't recur.

Like we would like to see Alitalia, TAP, SAS erode over time so that we just keep expanding into their markets.

And now I don't know what David's going to say because he's shaking his head vigorously here, but -

So, David, feel free to contradict me, David.

No.

I was shaking my head vigorously at the thought that the industry ever learned anything.

Oh.

Okay.

Not a chance.

But the one other consideration is that the other airlines don't seem to have the aircraft deliveries to be able to pick up that slack anyway.

So whether or not something of the scale of Mallers and the capacity to react in the same way exists at the moment, I'm not so sure.

But certainly, the idea that anyone's learned anything is out of the question.

Okay.

Perfect.

Thank you.

I think probably the only thing is what we have learned is that at least Ryanair can learn how to do customer service which we've managed to learn over the last couple of years after some fraught initiation.

But AGB, which we're now rolling out into the third year, has I think transformed the business and the customer perception.

And the great thing about AGB is -- we're rolling into year 3 -- is that cumulatively over the three-year period, we will have delivered unit cost reduction of about 4%, 3% to 4% over that three-year period.

So maybe we can learn how to do things better, but the rest of the industry, no; they're hopeless.

Kenny's doing a good job.

I thought it was Mike.

I was [learning humility], never mind Kenny (laughter).

Thank you, guys.

Thanks, Anand.

Next question, please.

Damian Brewer, RBC.

Just one follow-up question, please, and just coming back to some comments made in the call.

If you're only going to do what sounds like some quite opportunistic share buybacks and the CapEx is where it is, what will you be doing with the excess cash capital you generate this year?

Will that just sit on the balance sheet waiting for opportunities, or is there anything else worth highlighting?

Thank you.

No, is the answer to the question.

The excess cash -- if you take that this year we will have done nearly EUR1 billion -- what was it?

EUR885 million in share buybacks, that was this year's return.

Next year, if you look at calendar 2017, I think we will be looking at probably doing a similar level of shareholder returns.

The Board is still considering whether that will be a share -- a 100% share buyback, or whether they might split it between the share buyback and a special dividend.

But I think we'll take that under advisement when we get to -- into calendar FY17.

So we might decide something around the Q3 numbers in February depending on what profitability and fares of the winter all looks like.

But I don't expect -- and that depends on earnings.

If we have -- we hit our forecast earnings this year of EUR1.4 billion.

which is again very, very sensitive at this stage to any deterioration in the pricing environment, we should still be generating something north of -- just a little bit above EUR2 billion in free cash, about EUR1 billion in CapEx, and about -- maybe we'll take it up from EUR885 million to EUR1 billion in shareholder returns.

And if there's some opportunistic stuff we'll do between now and the end of calendar 2016, that will come off that EUR1 billion.

But I think it's reasonable to assume that we would do another EUR1 billion.

There won't be any excess, I think -- any excess over that EUR1 billion.

Does that answer the question?

Yes, absolutely.

Thank you.

Very clear.

Thank you very much.

Okay.

Thanks very much.

Any other questions?

James Goodall, Redburn.

I was just wondering if you can comment quickly on the relative performance that you are seeing between your different passenger demographics; so if you're seeing any relative softening in business passengers versus your Beach Leisure and your City Leisure.

Cheers.

I think the answer -- the simple question to the answer is, no.

We don't get into that level of analysis anyway.

We're moving into the summer period where there's a natural decline in business travel; there's an uptick in families travelling with children, so the Family Plus will be doing very well at this time of the year.

But that would be in line with what we are expecting anyway.

There's nothing unusual.

Pricing.

Pricing is softening across all of those categories.

And particularly with weaker sterling, that will impact us on the close-in bookings as well.

Okay.

Cheers.

Thank you.

Any other questions?

No?

Okay.

There are no further questions registered at this point.

Okay, ladies and gentlemen.

So-- and can I just say thank, everybody, for participating.

To Mark in Goodbody's, thank you for taking it in the spirit in which it is meant.

Shane is here all day today.

Shane is the head of the customer -- or Head of Investor Relations is here.

If anybody has any follow-up questions, please feel free to direct them to us.

As you know, we're not doing a roadshow on the Q1, and if anybody wants to pop over and see us at some stage over the summer, please feel free to do so.

Other than that, I think the next development will be we have -- the EGM is on Wednesday of this week.

We think that will take all of two and a half minutes.

The AGM is in September, and then we have the half-year results with an extensive roadshow in November.

So I would think, again, the execution continues.

We will continue to be load factor active, yield passive.

The unit cost management continues to be as best in class.

And really, we have to kind of keep an eye on pricing where we will be price takers for the remainder of this year.

But I think as we would caution everybody if there's going to be any change in the guidance, it is more likely to be to the downside on pricing, but we don't see it yet, there's no reason yet to alter full-year pricing.

We would try not to, but if the pricing gets materially weaker, then we may have to.

Okay, Neil.

Anything else you want to add to that before we close?

No.

I don't think so, Michael.

I think it's been quite a comprehensive Q&A, and for anyone who missed the [pre-records], we've got a little bit more color on some of the individual costs and other items there as well.

Great.

Okay, everybody.

Thanks very much.

Talk to you all.

Bye bye.

Thank you.

This now concludes our conference call.

Thank you, all, for attending.

You may now disconnect your lines.