Ryanair Holdings PLC (RYAAY) 2023 Q2 法說會逐字稿

Welcome to the Ryanair H1 FY '23 Results Conference Call. (Operator Instructions) Just to remind you, this call is being recorded. Today, I am pleased to present Michael O'Leary. Please begin your meeting.

Okay. Good morning, ladies and gentlemen. You're all very welcome to the Ryanair half year results conference call. I'm in London with a portion of the team; Eddie Wilson is in Dublin with another portion of the team; Neil Sorahan is in New York, all joining us on the call this morning.

I'm going to take the results, and the MD&A and everything, that is [just] read. So the -- I think we'll maximize time for the Q&A here. Couple of great themes I would point you to the slide presentation on the website.

I think the 2 key issues coming out of COVID and coming out of the half year is Slide 4 which shows the unit cost, ex-fuel gap widening considerably between us and every other airline in Europe. We went into COVID with a unit cost ex-fuel of EUR 31. We come out of COVID, that number has slipped down to just under EUR 30. Whereas almost all of our EU competitors have emerged out of COVID with significantly higher ex-fuel unit costs rising, and that gap is widening.

I think that's one of the reasons why we're seeing such a strong recovery in Ryanair. This summer we had -- we were fully staffed into the summer. We operated at 115% to pre-COVID capacity. Fares in the first quarter were under pressure because of the Ukrainian invasion, which damaged Easter. But into the second quarter, the September quarter, we've seen traffic growth of 11%, 12%, capacity growth of 15% for the airfares. Average fares were up 14% in the second quarter.

We don't expect that to continue into the winter, but we have been quite surprised at the strength of forward bookings into the third quarter. We had a very strong October mid-term. Christmas looks strong, both at volume and at the average fare level, and this weekend's bookings were stronger than the previous weekend's bookings, which is remarkable, given all of the kind of coverage of recession, inflation, consumer price pressures.

I think we're seeing something at the moment. I don't know how long it continues, but we are seeing one -- and I would point you to Slide 10, which is competitors' cutting capacity as Ryanair's [growth]. We're going into the second half of the year, the December and March quarter, offering at 110% of pre-COVID capacity. All of our competitors are still running at less than their pre-COVID capacity. The one exception being the smaller Hungarian airline, but our experience with them in recent quarters has been that they talk about offering capacity, but then they [cut] frequently and close in, so they actually operate probably only 10%, 15% more than pre-COVID, but also much smaller base than us.

So what we're seeing at the moment, I think, is a combination of 3 things: One, a lot of people booking with Ryanair because we had delivered a very reliable service this summer, and they know they can trust us to not cancel the flights, and we get the baggage and the flights there more on time without risk of cancellation. Two, we're adding capacity. We're taking big market shares across Europe in all markets because we have in hand new aircraft, fuel efficient aircraft, and we are still growing at a time when others are cutting capacity. And three, we have significantly lower airfares than the competition. And I think if that continues through this winter, we could have a very strong winter.

Now, we're still forecasting we could lose something between EUR 100 million and EUR 200 million this winter. We still have challenges out there. We've had a very strong first half of the year. But I think if we get through the winter with strong growth, 10% pre-COVID with a reasonably strong pricing performance, and we have no disruptions from COVID or Ukraine, then I would hope we'll be at the lower end of that EUR 100 million to EUR 200 million loss in the second half of the year. But it will still be a loss.

But that would leave us in a very strong position going into the summer of 2023 when we think, with the likely recovery of Asian traffic coming to Europe, the Transatlantic, the traffic is very strong given the strength of the dollar. The strength of the dollar will keep more families at home holidaying in Europe next year because they can't flow Transatlantic given the strength of the dollar. And I think we're looking at a year, if the Asian traffic returns to Europe summer 2020, could well be quite strong. And we would hope to see a second year of mid to high single-digit fare growth, which would help us pay for the higher oil prices.

So we're seeing continuing strong recovery. We're cautious that the second half of the year -- remember, this time last year, we were looking at a very strong Christmas, and Omicron emerged out of South Africa in the last week in November and it cancelled Christmas. We were looking at a very strong Easter, and then Putin bated Ukraine, and that kind of crushed Easter, and also damaged our Central and Eastern European traffic for a couple of months.

But we have recovered very strongly out of that in a marketplace where most of our competitors were challenged on the staffing side this summer. They still haven't restored their pre-COVID capacity. Most of them are not as well hedged as we are, on fuel or on the dollar. And I think the dollar -- the strength of the dollar is going to be a key challenge for EU airlines for the next couple of years. Whereas Ryanair has fully hedged our CapEx on all the new aircraft deliveries out to 2026. We're well hedged on our OpEx for this year and into next year, and we are in a market where we have a widening cost leadership over everybody else.

So I think we're -- we've reasons to be proud of our recovery in the first half of the year. I think we want to recognize the contribution our people have played in that. We've been in communication with all of our union partners over the weekend – [said] -- confirming that we are going to restore or bring forward to pay restoration from April 23 to December 22. Over 90% of our pilots and cabin crew are covered by those pay restoration and pay agreements, which run out to '26 and '27. By bringing it forward, it means they will all go back to their pre-COVID fully pay restored in the Christmas payroll.

There's a couple of smaller unions out there, the Belgian pilots, the Iris pilots. So we have invited to return to pay restoration negotiations for various different reasons, none of which are really explicable. They are continuing to deny their members the pay restoration that over 90% of our pilots and cabin crew have agreed elsewhere in Europe, but that's a matter for them. We would like to see the pay of our Belgian and Irish price restored pre-Christmas. But it can't be done unless the unions agree a pay - a medium-term pay like everybody else.

With that said, I think we are -- the only other kind of blemish on the horizon is Boeing. We are due to get 51 aircraft from them and before the end of April next year. We do not think we'll get those 51 aircraft -- having come back from Seattle 2 weeks ago, I'm hopeful that we'll get between 40 to 45 aircraft by the end of June. We will not take aircraft deliveries after the end of June because we can't put them on sale for the peak period. But if we get between 40 to 45 aircraft by the end of June, I think that still puts us on track to hit our 185 million passenger target for FY 2024.

There is some concern out there that we have higher oil prices into next year. We've hedged 50% of our fuel bill at $93 a barrel. I think there's a reasonable prospect if there's no negative news flow on COVID and Ukraine this winter, that actually -- fares will be modestly up into the summer of next year because we will still be short. European short haul will still be short capacity compared to pre-COVID. But there will be stronger demand because of the strengthening dollar and the return of Asian traffic.

All in all, that leads us this year to restore guidance. We're cautiously guiding a return to full year PAT of between EUR 1 billion to EUR 1.2 billion, which is just about where we were pre-COVID. That's allowed us -- have given us the confidence to restore pay this side of Christmas. But it could still be [delayed] if there's negative news flow on COVID or Ukraine this winter. And therefore, I'd like everybody to be -- keep their feet on the ground and remain cautious. But there's no doubt that Ryanair, the management team and our people, have recovered faster, stronger and better than any other airline in Europe, and we would expect that outperformance to continue.

Neil, do you want to add something and I -- maybe touch briefly on the -- I think, particularly currency, dollar hedging and CapEx, please?

Yes, and balance sheet as well. Just before I get into -- the balance sheet has performed very well. We finished the quarter with EUR 4.6 billion in cash. And importantly, net debt dropped from EUR 1.5 billion to just over EUR 0.5 billion, and that was despite nearly EUR 1 billion -- EUR 900 million in CapEx in the first half of the year.

As Michael has already said, hedging, we're in a very strong position there, particularly on the CapEx hedged at the end of the order book at EUR 1.24, which compares very, very -- to [98] swaps this morning. Equally, Jet, for the second half of the year, we're 87% hedged at just under $70 a barrel, on a well-hedged, [1.15] on the euro/dollar for the second half of this financial year, and about 20% hedged, on euro/dollar at [1.08] into next year, with 50% of our jet hedged away at approximately $93 a barrel.

I think it's important as well to note that we own all of our 737 aircraft. They're unencumbered and in a rising interest rate environment, and release rates are going up. We won't have the challenges of other airlines out there, which again, will help from a cost perspective over the next number of years. Michael, that's about all I want to add.

Okay. That's fine. And Eddie, maybe you want to give us a quick couple of lines on the outlook for growth into this winter and into next summer?

Yes. We -- unlike our competitors, we plan to grow close to 10% this winter, Plenty of opportunities out there. We've done long-term low-cost deals with our -- at our major hubs in Stansted, Charlotte, Bergamo, and we continue to leverage lower cost at airports. And those airports, which are an increasingly smaller proportion of the spread of airports that we have there -- If you've got cost increases, well then, you won't be rewarded with any capacity growth whatsoever. And we have an excellent pipeline of people joining from pilots and cabin crew to support that growth over the next number of years.

So, as Michael was saying there -- like fares have been strong this weekend, I think that's really -- it's a function of less capacity with our competitors. And also, I wouldn't underestimate the story of reliability also in the U.K. the last week, and extending our deals in Birmingham. And the background over there is that we're the most reliable airline, and I think that's feeding into bookings.

Okay. And do you want to touch -- wait, I'll maybe ask [Darryl] to give us a quick detail on how they did -- just the flavor of the discussions with the unions over the weekend went on the pay restoration.

Yes. I mean, they've gone quite well. We briefed the unions. And we have -- what tension we have is that we get into discussions from April last of – April [discounts], whereby we pushed out the pay deals for the next 2 to 3 years over to '26, and some cases also '27, and we were able to restore pay earlier that was going to come in, in April where there was normally going to be a review cost.

So then today on the back of a strong operational performance, we think it's the right thing to do at the right time, even though there is uncertainty on the winter to get paid fully restored for all of our people, and Michael has already referred to the 2 countries where we still need to do that. I'm pretty reasonably confident that we can do it at the same level and get that up to 100%, but that is a matter for the 2 unions there. So there is a predictability on pay over the next 3 to 4 years.

Yes. I mean they [were just] positive. Generally speaking, the unions came back very positively. And the idea that it was actually -- that was brought forward from April into the Christmas payroll, I think was welcomed.

Good. Okay. All right. With that, let's open up to Q&A, please. And we're tight for time, so we're limited until about 11:00 or just after 11:00 when various people have to go to meetings, but let's run -- we'll keep it as tight as we can, please.

Thank you. Our first question comes from the line of Jaime Rowbotham at Deutsche Bank.

Two for me. Firstly, on the nonfuel unit costs. The move on pay restoration is clearly a commendable one. Can you give us a rough estimate of the incremental cost to Ryanair of bringing that forward? Clearly, you've had to bake something into your full year guidance for this. And perhaps you could tell us where you think it leaves you on nonfuel unit costs for the year to March '24?

Second question, Michael, you mentioned fares could still be up next summer potentially offsetting fuel, if that stays high. Do you mean fares up Y-o-Y next summer or still up versus pre-crisis? And within that, any areas where the supply-demand imbalance is giving you particular confidence or areas where you're less confident?

I'll do the fares, Neil, and maybe you do the nonfuel unit --

Sure, yes.

In terms of fares, look and -- we're in the rounds of speculation here, but there's no doubt in my mind that we -- And again, I would point you to Slide 10 where you see what were competitive cutting capacity this winter. You've Lufthansa operating at 80% pre-COVID, IAG 87%, AF 85%, and easyJet 90%. I mean, people are unhedged -- are significantly unhedged for fuel this winter. Oil is an increasing cost, and people are I think sensibly cutting capacity into the winter. The days of land grabs and fighting for growth are over. People are much more sensible. I think management in European airlines are much more sensible now. Even Wizz who are diverting all of their growth out into the Middle East and further away to avoid competition with Ryanair, is a good, sensible strategy.

And I think that's likely to lead to what we -- if we go through a winter where there is -- we are meaningfully short of capacity in short-haul Europe, is operating at 80%, 85% of pre-COVID, Ryanair is offering at 110% of pre-COVID with load factors in the low 90%. That creates, I think, a space into next summer, where I think I'm reasonably optimistic that fares will rise. And it's year-on-year, not on pre-crisis. We're already up on pre-COVID fares. I think fares will rise year-on-year by another, I would say, mid to high single-digits through next summer.

That's driven by 2 things. One, Easter is in Q1 next year. So that gives you a very strong springboard through Q1. I see -- I can see no other alternatives that there will still be very strong demand for holidays, families traveling abroad next summer within Europe. Asian travel traffic will hopefully recover, and that will underpin short-haul connecting traffic on the legacy carriers. The Transatlantic market is incredibly strong.

And while there's some short-term concern about inflation, recession economy, try booking and getting a restaurant booking, a hotel in London, Dublin, most of the European cities, and we're still in full employment and people are still spending. And certainly, this Christmas is going to be very strong. And if we have Easter in Q1, a reasonably strong or robust Q2, I think -- it's, I think, very reasonable to predict that certainly for the first half of next year, especially if oil prices, spot jet stays up at around $110 a barrel.

And there will be significant upward pressure on airfares, with less than pre-COVID capacity recovery across Europe into December 2023. That's my view. And I think, as long as there is no adverse developments on COVID or Ukraine this winter, then, I think the trends we are seeing this summer and into the third quarter, will continue into the fourth quarter and the first 2 quarters of next year. Neil, maybe you want to comment on the nonfuel unit cost development?

Yes, sure. Jamie, I'm not going to give exact figures around what the payroll is going to be over the second half of the year. But we've previously guided that unit cost ex-fuel will be approximately EUR 31 in the current financial year. We're not deviating away from that. We see slightly lower load factors into the second half of the year, and we'll see that step up on the staff cost, the route charges. But we're sticking to that EUR 31. And then, if we get the extra Gamechangers into the fleet next year, we hope to start seeing unit costs, ex-fuel coming down again.

Next question, please?

That comes from the line of Alex Irving at Bernstein.

Two for me, please. So first of all, digging in on staff cost a little bit. I thought that your unit staff cost went up between our Q1 and our Q2, even as productivity rose. It looks like it was about EUR 5.60 in Q1 and EUR 6 in Q2. I'm wondering what's behind this? Were you rostering extra hours this summer to handle potential ATC delays? Is it a change in pay levels? Is there something else? My second question for you is, I...

Yes, second part?

(technical difficulty) It looks like it's starting to hit a new sort of steady state growth in the low single-digits annually. Do you have the ability to accelerate this either by pricing up closer to inflation, by introducing any new products? What's the size of the opportunity here going forward?

Sorry, Alex. I just wanted Neil answer for -- you broke up at the start of the second half -- the second question. Can you just repeat the second question, please?

On ancillaries, what growth opportunity do you have going forward? It looks like we're starting to normalize at a low single-digit growth per passenger per annum.

Okay. Neil, you start and I'll do the ancillaries.

Okay. Yes, sure. On the staff, there's a number of factors there. Yes, we were ramping up as aircrafts came in. We also have seen the likes of the payroll support rolling off and the start of pay restoration, which we'd agreed with people starting to kick in over the course of the summer. So it was a combination of all of that which led to the increase, and obviously, increased activity, increased sector pay for people. And then, of course, we'll now have the full pay restoration, the balance of it coming into the second half of the year.

And on ancillaries, I think, you're right. I think we expect it to normalize now, a growth of low single-digit on a per passenger basis. We're still seeing a conversion on the big ticket items, priority boarding, reserve seating. We are beginning to yield manage some of that with some degree of success. And we are still seeing a strong recovery, but there's more to go on the in-flight sales, particularly with duty-free on 40% of the flights operating to and from the U.K.

We are still struggling with kind of supply issues, or some of the bar providers or the duty-free providers. The supply is a bit hit and miss. We will spend, I think, this winter, trying to sort out the labor staffing at our -- the in-flight suppliers, and having a much more reliable delivery of duty-free supply and product. We're having a lot of sellouts, and in some cases, stock-outs on some of that. So I think there's more to go, but I think it's reasonable for the next 2 or 3 years to expect modest low single-digit growth in ancillaries per passenger.

Next question, please?

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

Just quickly on the fiscal year '24 capacity growth. I'm just wondering if you could talk about what are your expectations there? And you mentioned you think you can hit that 185 [million] if there are 5 to 10 MAX delays. But do you have -- does that mean you have a range for next year, or you can hit the utilization or something like that to get there?

And then just as a second question, just beyond strong demand, are you seeing any new booking patterns that are showing up in your numbers? Or is this going to -- the environment is strong just -- as you pointed out, capacity is low and demand is strong?

Let me start with the second one first. I give you -- there's a couple of new trends, but how sustainable they are, we're not sure. Firstly, we have a much bigger market share in a lot of European markets. So we're seeing much more -- with a much bigger position in the Spanish domestic, Italy domestic, Ireland, U.K. to Europe, we're growing strongly, particularly in the provinces. And we're seeing, I think, stronger off-peak demand and pricing in those domestic markets where it's not subject to leisure, it's not leisure. It's just kind of continuous year-round traffic, particularly in markets like Italy where Alitalia are in retreat, Wizz are in retreat. Vienna, we're growing strongly, again, level -- Wizz are all retreated out of Vienna. And we think that will continue. We are undoubtedly then benefiting, but certainly in the short term from a very strong reliability this summer giving us a kind of glow of being a more reliable provider, competitors cutting capacity strongly this winter at a time when we're expanding capacity.

And I would suspect, maybe we're seeing the beginning of people becoming nervous about a recession consumer price index inflation, et cetera, and that maybe more and more people are beginning to turn to the lowest cost provider, which in air travel is Ryanair in Europe, the kind of IKEA, little or all the effect, and I think that will continue now. How they play out, we don't really know.

But certainly, I think it's fair. We have been surprised by the strength of bookings and pricing coming out of the peak summer period through. We expect it to tail off a little bit, or have to get more aggressive on pricing through September. We're getting through October. We're then into November at the moment. We still haven't done any great seat promotions, and we don't have to.

But again, I would argue, that's fragile. And if we have an Omicron or a Ukraine or some negative development, that could fall over very quickly. So I think we're right to be cautious. If we get through to the spring without any negative developments, then we could have a reasonable second half of the year, but we should be cautious rather than optimistic.

Summer '24 capacity, if Boeing delivers 40 to 45 aircraft instead of the 51, we will still just about hit the 185 million passengers. We will get a little bit more aircraft utilization. We are opportunistic. We've done a deal for one additional NG that's being offered back to us, that we used to operate on an operating lease. We've got a long-term low-cost lease rate on that. The load factor will probably go up maybe 1% next summer. So there's a combination of different things that -- but we won't kill ourselves to get to 185 million. If Boeing leave us short of aircraft, and -- we have to come back to them and say, look, it would be 183 million, 184 million, 182 million passengers. That's what it will be.

We will be more mindful next year that we continue to recover our business, that we continue to carry people across Europe, particularly during the peak period Q1, with Easter in Q2. But airfares that are up mid to high single-digit, I don't think will get a second [tier] of double digit. But certainly, single-digit -- mid to high single-digit is, I think, entirely rational and reasonable next year, as long as there's no outside or adverse outside factors.

And with a mixture of aircraft deliveries from Boeing timing of those deliveries, aircraft utilization, a bit more on load factor, we could still get to from 168 million this year to 185 million next year.

Next question, please?

That's from James Hollins at BNP Paribas.

One for you, one for Neil. One for Neil is on the -- on your little video there earlier. It seems to be very clear that you plan on just using cash to repay the volumes in the next 9 months. Just wondering -- just thoughts, Neil, on what's the right to liquidity level for Ryanair going forward as you come out COVID, and am I right in thinking it looks like cash rather than refi?

And then the second one, probably for you, Michael. Again, on your video, you're talking about 110% capacity this winter, but you sort of hinted a bit of scheduling and productivity improvements around higher weekend capacity, maybe flattish on the weekdays. Just let us know what you're doing on that, please?

Neil, you do the first one, then Eddie -- and I'll ask you rather to take the second one on the winter. I might get Jason to get us -- who's here as well, to give some commentary on that as well. So Neil, uses of cash?

Well, the use of cash for the next 12 to 18 months of paying down those bonds and the CapEx. If there is an opportunity in the market to do something at very low levels, we look at it, but the working assumption is very much that we will use the cash, and we want to get down to that net 0 debt position by the end of next year. We still like holding a fair bit of cash in the -- on the balance sheet, the 4.6 -- sorry, EUR 4.6 billion at the end of September. I'm not sure if it needs to be EUR 4.6 billion at (inaudible), but it's important to have somewhere between kind of EUR 3.5 billion or EUR 4 billion on a long-term basis, in case you get hit by further shocks over the next number of years.

I want -- just to point out, of that EUR 4.6 billion, EUR 1.6 billion of that is for debt repayment next year, and then we're in peak CapEx. So we're spending about EUR 2 billion a year. Like it's -- we don't have EUR 4.6 billion spare lying around. We have uses for that. But the opportunity that we're paying -- we will pay down bonds next year that are funded at 1.2%, 1.5%. If we were to refinance at the moment -- even for us, we're looking at 5%, 6%. So I think, it's in our interest as an airline to pay down debt, while our competitors will either be looking at additional equity raises or refinancing bonds and debt markets that have moved materially adverse. So it's more sensible for us to use the cash and pay down debt. Eddie?

Yes. I think there's 2 points there. Just on the utilization. While we made some strikes, some are on utilization, given the backdrop of ATC. A lot of that was just eaten up into (inaudible), which accrued. We know that in a certain basis. But what -- we were able to do that in the winter to tweak up the utilization -- use of those aircraft. And also, we grew a couple of percentage points when you look back to where we were back in particularly 2018 and the proportion of flying, moving in of the Tuesdays and Wednesdays and maximizing the number of aircraft at the weekends, higher-yielding flights. So looking radical there with just -- that shifted as -- the ability to be able to do higher utilization in the winter time, and then that shift into -- from mid-week into weekend flying.

And maybe I have -- Jason, again is here, Head of Commercial. Do you want to just comment on the kind of profile of the winter schedule lighter mid-week, heavier weekends?

Yes, James. So we spent a lot of time -- the team spent a lot of time this summer, prepared for winter in terms of focusing the growth on weekend traffic. Historically, we would have flown about 40% of our winter capacity on mid-week. That's down 35% this year. So it's a -- weekend traffic is up to 65%. So that's been hugely beneficial in terms of yields and load factors, and contributing to a strong Q3, and that continues on through the rest of the winter as well. So it's been hugely nonofficial this winter and something we're going to try to improve across next winter as well.

And it also helps crew utilization. We're still getting good crew utilization by flying people over 4 or 5 days of duties across weekends rather than having them sitting around on Tuesdays and Wednesdays rostered [home] standby. So generally speaking, more efficient. We couldn't do that if we were having a big land grab or capacity wars with other airlines. But the fact is that all the others cut back this winter, and we grow, it gives us the latitude to kind of target our growth at the -- on the days of the week or the weekends when people want to fly rather than just having to be very aggressive on capacity and pricing in the middle of the weekend. Again, we would hope that, that will translate into a better than forecast performance in the third and fourth quarters. But again, caution, fourth quarter, no Easter, and the third and fourth quarter are hugely exposed to any adverse negativity on COVID or Ukraine.

Next question, please?

That's from Stephen Furlong of Davy.

Just go through again Slide 4 there in terms of the ex-fuel cost, in terms of where you see a big team, of course, inflation of the cost base across not just this sector but other sectors. So that's not happening in Ryanair. Just go through that again.

And then secondly, on Boeing, just talking then about your relationship there, how is it going? What they're doing? Or is the U.S. airlines, for example, calling for some resolution on the MAX 10 in terms of what's happening there?

Very briefly, if you run through Slide 4, what we've seen compared to pre-COVID -- we've done an update on -- based on the half year results or disclosures of the main competitor airlines. There's been a huge widening of the gap or unit costs. Historically, we've been significantly more efficient than other airlines, airports, and handling costs are materially lower. Our ownership and maintenance costs are very materially lower than Wizz, easyJet, even the Southwest in the states.

That gap seems to have widened quite dramatically during COVID. As we emerged out of COVID, we had the benefit of the sensible kind of pay costs that we agreed in return for keeping people current and employed during COVID. Some of our competitors were understaffed this year when that was panic pay increases and desperate deals, sign on bonus to get people to join.

We have negotiated sensible extensions of long-term growth and traffic recovery deals at airports. We're not exposed as many of our competitors are, to kind of monopoly airports at Gatwick, Charles De Gaulle, Switzerland, some of the Eastern European capital city airports where they are price takers. We are very aggressive -- We've closed bases this summer. We've closed Frankfurt Main. We have a Brussels up until we close this winter again in the face of cost increases out of time when their -- those airports are facing traffic declines.

So we continue to be very disciplined. And that means, if you take most of our biggest bases, Stansted, Bergamo, Charlotte, we've extended our traffic growth deals there over the medium to long-term, any they now run out to 2028, '29, '30. Ownership and maintenance costs, I think, that was going to be the seismic difference post-COVID. We own all of our fleet, 90% unencumbered. We could fit the aircraft on the ground during COVID. We didn't have to pay lease rentals. And most of our competitors who went into COVID owning a significant proportion, their fleet have come out of COVID now with owning very little of their fleet. Some -- most, if not all of the fleet, now on operating leases.

Therefore, I think, subject to ongoing cash drains in terms of monthly operating leases, much more expensive cost, that we have maintenance provisions. And then as interest rates rising, I think challenged on -- some of their operating lease costs will rise as well. So I think the gap between us and that competition is widening. And I expect that -- I'm not sure we stayed under EUR 30, a passenger ex fuel unit cost. But I think the next 3 or 4 years, that cost -- or EUR 30 might go -- it will stay in the low 30s, EUR 31, EUR 32, EUR 33. But a time when our competitors will all go above EUR 50, or in some cases about EUR 60 or EUR 70 ex-fuel, they will be under much more pressure to get airfares off -- and therefore, to control capacity growth. And that will give us, I think, quite significant headroom for us to expand our capacity, but see fares rise modestly to cover our unit cost. We'll have much more headroom than any of our competitors will.

Boeing relationship, look, it's challenged at the moment. It is very difficult. But we've come to the realization, we have to work with Boeing. They are continuing -- they are challenged with production in Seattle. We accept now we won't get the 51 aircraft that they had originally contract delivered to us by the end of April. I think if we get to 40 or 45 aircraft by the end of June, that still allows us to maintain our ambitious traffic projection -- or traffic growth projections out to FY '24. I think over that period of time, the -- that their blockages -- production blockages which will work their way out of the system. We are back having discussions with them about the new aircraft. I think we will be very strong supporters of Boeing and the other American Airlines kind of campaigns with Congress that Boeing do have to get an extension on the MAX 10 certification.

Nobody -- It is not in anybody's interest if you have 2 different cockpits on the kind of -- the existing MAX aircraft and the new MAX 10. We need to have similar cockpits. We do not want to have pilots trying to learn 2 different type of cockpits. And I think, we would strongly -- we're very strongly supportive of Boeing's calls for Congress to extend the certification program for the MAX 10s out to maybe the end of 2023. We are not anywhere -- we're nowhere close to price -- agreement on pricing. I think we're not at anywhere in terms of new aircraft discussions, but we don't need new aircraft until 2026. Anyway, we're very comfortable where we are at the moment.

We are receiving some modest compensation from Boeing for these delivery delays, but really compensation is not that attractive to us. We take compensation payments through the balance sheet. It does help to reduce CapEx, but we would much prefer to take the aircraft and be able to deliver headline growth in scheduled revenues and ancillary revenues. But I think the Boeing relationship is [froze] at the moment. It is difficult because they are continuously failing to meet their delivery obligations to us. But I think we're at a stage where we recognize we have to work with Boeing as best we can. We have to help them get those aircraft delivered to us. In some cases, we're going to provide them with some of our spares so they can deliver some of our aircraft. And we're both working towards delivering -- getting 40, 45 aircraft to Ryanair by the end of June of 2023, which will be sufficient for us to, at least try to hit our 185 million traffic target for FY '24. We might finish 1 million, 2 million passengers short of that. But to the extent we finish short on traffic, I think we'll see some uplift or benefit on payers and yields.

Next question, please?

That comes from the line of Sathish Sivakumar, Citigroup.

I got 2 questions here. So first maybe on the working capital into Q3 and Q4. Is it fair to say that you will go back to the similar seasonality levels that we've seen in -- before pandemic? Or is there anything that should we think about into H2?

And second one is around the Italian market. Given your market share gains there, are you seeing better pricing power, i.e., that the pricing within both domestic and intra-Europe, part of Italy, is outperforming your entire network? Any color on that would be helpful.

We'll -- I'll give the working capital question to Neil Sorahan. I might add one of the treasury team, John Norton, maybe add a word or two on the Italian market. Again, Edddie, I might ask you to lead off, and then I'll get Jason here to add a couple of words at the end of your -- so Neil?

On the working capital, bookings are still a bit closer than they would have been pre-COVID. Which means at this time of the year when our cash would normally be dropping back, it's not dropping back as extremely. And in fact, as Michael has said, bookings are [already] strong open to Christmas. Very limited visibility into Q4. But barring any COVID shocks or -- on -- towards geopolitical events, we would hope that we'll start to see a more normalized booking curve at that stage with people starting coming back in January and February and booking their Easter and their summer holidays at that point in time. But it's a little bit too soon to say that we're seeing that, yes, with limit visibility to Q4 at this point in time.

John Norton, do you want to add anything on that -- on working capital?

Just liquidity is still proving very strong [today]. As we build into Q1 during the January period, we start seeing the bookings for the summer and the cash starting to come back as part of the cycle for Q3.

And Eddie, maybe followed by Jason, on the Italian market, market share and pricing power?

Yes. I think, like, on the Italian market, particularly like post-COVID, we had a sort of a rush of Italian airports. (inaudible) we'll be able to fill those capacity gaps, except Ryanair, and we were to sort of go too early on that. And that has reflected itself in higher frequencies, better schedules. And that does sort of lead into some pricing [bar] on certain routes, but domestics are still very competitive. And we have seen that on those where we come up against competition, that's -- like in the first instance, we've seen over the last several years where you even have sort of [melted] the way, from a lot of those core routes. And then, more frequently you see where -- or more recently we have seen wins come on some of the routes, and now pulling back out of places -- like my plans to make those in Palermo on those domestic groups. And that -- with less application on that, that's going to reflect into higher pricing in the medium term.

And Jason, do you want to add anything on that?

Yes. We're very happy with the Italian market. Load factors are very strong across this summer and into winter. We're operating some well over 600 routes, 100 of those are domestic routes. Our overall market share is 40%, but we're probably closer to 50% on the domestic market, and we're by far and away the #2 airline in Italy. easyJet is on 12%. So we're by far and away the dominant carrier in Italy. I'm very happy with how the market is performing at the moment.

Particularly in off-season, we see that very strong domestic traffic continues, and we're continuing to see competitors cut capacity be at [ways], and we would like to roll in Catania, accounting that route. easyJet pulling back in Dennis and Naples. So we're very happy with the Italian market and the growth that we've put in there over the last 2 years.

And we plan to grow there again next year. Next question, please?

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

So just a clarification on fares mid single-digit to high single-digit in the year. So how much of that is based on the bookings you're seeing? Or is that what you're seeing in bookings right now? Or is that your kind of assumption for the year? That's my first question.

And then secondly, fuel hedging on Slide 18. The disclosure is different from what you had before, which had caps and stocks broken out. So have you changed your strategy here?

I'll do the -- you do the fuel hedging, Neil. So I'm not going to give any more guidance or breakout what we're seeing at the moment. We think it's reasonable for the full year to expect mid to high single-digit fare and yield growth. I guess it's fair to say at the moment we're seeing better than that, but we're not sure whether this will continue through to Christmas and into Q4. And that we continue to be very wary at the risk that this will get derailed by an adverse COVID or Ukraine development. And we're [starked] by the experience of last November and last February which derailed at very short notice, what seems to be a very strong post-COVID cover. So mid single -- mid to high single-digit for the full year, I think it's optimistic enough. We don't want to be any more optimistic than that. But if there's a risk, I think there's a risk to the upside. And Neil, the fuel slide?

Yes. I mean, Muneeba, there's been no real change. So we haven't added meaningfully. In fact, we haven't added to caps at all, and a lot of them have been exercised at this stage. So if that's more meaningful to give the blended Jet figure on the understanding that we will be exercising what's left of the caps, which is why you're seeing 87% at approximately $700 a metric ton. We continue to hedge Jet as the key item and then into next year. We're only using Jet swaps at this point in time to $900 -- $930 a metric ton. To make life easier for yourself and other analysts, I think, that struggled on some of the splits between the caps and the Jet in the past.

It's reasonable -- somebody had asked me this morning, why are we not more hedged for next year. I think we're genuinely concerned into next year. I think 50% hedging is a sensible place to be. We think there's as much risk to the downside or the upside on oil into next summer. If recession is as deep and dark as predicted by the Bank of England, and if China continues to struggle with [COVID] and economic demand, if the Shell guys who are materially increasing rigs, there's a risk that oil prices could fall into next spring, next summer, if Ukraine situation resolves itself. So we want to kind of stay where we are at the moment. 50% into next year is enough, and then see which way fuel is, if it rises into next summer, because the geopolitical situation is fine. We'll be facing higher oil, but we'll have hedged 50%. And if it falls -- and again, one of the challenges there is that our competitors are -- have inferior hedges to us. We don't want to see -- we don't want to be hedged 100% or 90% at $92 a barrel and see them pick up lower oil prices than us into a declining marketplace. So I think we're sensibly hedged with the risk -- as much risk to the upside is to the downside on oil into next year. And difference is that we're one of the few airlines that has the balance sheet to be able to hedge fully, both on the dollar and on oil.

Next question, please?

And that comes from the line of Mark Simpson at Goodbody.

Two questions. One, I'm just wondering within the target of 0 net debt by March '24, what's the assumption of the unearned revenues within that? Obviously, back in, say, 2019, it was at EUR 1.9 billion. So I'm wondering if there is sort of guidance around that? And on the ancillary, one of the good things we saw Q-on-Q was another step-up in the ancillary per the pax number. With better loads anticipated over the next 18 months, can we expect further leverage on that ancillary per pax performance?

Just a point on both answers here. I mean, look, I think it's enough there that we say we set a target that by the end of FY '24, we'll be back at 0 net debt, and we will be -- we will have paid down to EUR 1.6 billion worth of bonds. We will still have funded most of next year's CapEx out of our own cash flows. But we're not going to break down guidance of what's in on our -- I think -- but as long as we're back in normal, we haven't had a negative COVID or Ukraine, you would expect there to be a normal build of [unearned] back to where it was similar to pre-COVID levels.

Ancillaries per pax, again, I've already answered -- I think I've answered the question. We expect there to be very modest low single-digit growth in ancillary per pax for the next year or 2. Some increase -- I don't think a high or low -- I mean, we're talking about a low [time] to maybe going up by 1% in the peak of next summer. It's not material. We still think we get a little bit of upside on conversions, a little bit of upside in yield management. And then, certainly, the duty-free sales on routes to and from the U.K. will be a feature of our ancillary revenue next year.

It's certainly a very prominent -- I mean the discussion we're having at airports at the moment where a number of airports reporting a very significant rebound in their airport retailing and commercial income as a result of the restoration of duty-free on U.K. services. I mean, as the U.K. government is struggling to find -- we [haven't] identified any benefits of Brexit. But certainly, the return of Q3 sales to -- on duty free sales, both for airports and airlines outside to and from the U.K., is been one of the very few and singular benefits of Brexit.

Next question, please?

And just want to follow-up, I think. The reason I'm asking that is just the application of dynamic pricing on ancillary. I'm wondering if there's anything you can tell us about that within the lapse projects?

Not really. I mean, we're working on it, but I don't want to kind of overpromise here. It's -- we are continuing to work on conversion, yield management, and there's a little bit of dynamic pricing. But unlike many of our competitors who are promising the data, would provide everything that the future lay (inaudible). We'd rather deliver first, and we'll talk about it later.

Next question, please?

That comes from the line of Jarrod Castle at UBS.

Just some clarification of the first question, if you don't mind. I mean, the question was asked about the pricing that you're seeing. But you did say, I think, in the release that you got most of summer on sale at the moment. So any color relating to the summer? But also, is there a concern that you might be in a situation where you're mismanaging -- sorry, mismanaging is wrong -- is a mismatch rather, between what you're currently selling now for summer versus what you've hedged on fuel? So what happens if the reverse happens, the fuel price spikes and you've sold based on today's prices for the summer?

And then the second question, for someone -- or at least a company which historically hasn't done much M&A -- there was a lot of conversation during this result season about M&A. So I'd be interested to get your view on how you see the landscape currently, Michael?

I mean, look, at this point ever, we have most of -- we've got about what, 80% -- or 80%, 90% of summer '23 on sales. But forward bookings will be down at low single digits. You're talking through the summer months of next year, 1% and 2% of the seats sold.

Fuel could move against us. But to the extent that fuel moves against us, remember, we've already hedged 50% to $93 a barrel. Current jet fuel is on spot, about [$110]. So we're still saving money there. And fuel will move against our competitors much more violently than it will against us, because we have the balance sheet to be able to take very long-term fuel hedge positions.

I think our concern was the opposite, is that we don't want to get caught having hedged 80% or 90% of fuel next year at $92 a barrel, and then find the spot has fallen to $75 or $80 a barrel. We want -- I think we have plenty of insurers that will -- half of our fuel bill next year hedged. And if it goes up, we're covered on the hedges we have. And if it falls, we pick it up on the gain so that we might -- we're never going to beat the market with hedging, but we should certainly be able to eliminate the volatility, and that's as much as we want to do.

I think -- and fares next year would be driven much more, I think, by rational capacity discipline this winter, and that's -- every sign of that continuing through the winter period. And I would want to emphasize again, Q4 would be challenging because there's no [issue] here, but Q1 next year will be all the better for having a full Easter in the middle of Q1, leading into what I think would be a strong Q2 because of Transatlantic visitors coming to Europe with a strong dollar, Asian visitors returning, and the Europeans continuing the holiday.

Even in a recession and with their price inflation, you try booking, look, getting accommodation. The tour operators are reporting very strong bookings in the next summer. Flights into accommodation next summer in Europe, I think, will be materially higher than they were this year, despite where this year was -- I mean, certainly in our case, 14%, 15% ahead of where it was pre-COVID. So I would -- there may be a mismatch, but I think on balance, I like where we're positioned, and I think that the prospect is, if there's going to be a mismatch, it will be to our upside.

M&A, we have more than sufficient organic growth for the next 5 years to go to 225 million passengers a year. We do not see ourselves participating in M&A. Although we may work with others, I think, others would be challenged in M&A, and they may need to find kind of somebody to work with them for -- to go competitive, what's the [phrase] duties, competition revenues are pre -- competition revenues, we could help assist some M&A in there. I have no doubts. I thought the -- this result season was interesting, that both IAG, Lufthansa, Air France, KLM, were all beginning to talk on M&A again.

Not -- none of them are -- all of them putting their hand in the ring for TAP, Alitalia. Even extending the disclosures or not denying an interested with our easyJet, both of which we think would be candidates for M&A over the next couple of years because they're not -- they're both well run airlines, but they are stuck in a space where they are mid airfare, mid cost. They're not able to compete with us on cost or on pricing. EasyJet are -- have built a very good business where they have very much a fortress position in expensive airports like Gatwick, Charles De Gaulle, Switzerland, but really retreating in airports in Italy, Portugal and others where -- in Berlin where they're largely not able to compete with us.

Wizz, increasingly under threat from us in Central and Eastern Europe. I think they have shown in the last year or 2 with their expansions in Vienna and Italy that they're not able to compete or enter markets where Ryanair -- the Ryanair Group of airlines have a lower cost of lower fares. But I think with a sensible strategy of expanding into the Middle East, I like the idea that they're going to grow the market in Saudi Arabia, in Dubai. They may well find some additional equity or debt out in those markets as well as they build their presence out in those markets. So I think everybody is behaving rationally.

And I think if there is -- it is inevitable in the next 3 to 5 years that Europe will consolidate further. Alitalia and TAP will get taken out because they can't continue with the stating that they presently have. And I think there's -- it's a much more likely a rational outcome that Wizz and easyJet will participate in some way in that M&A process, and that Europe is inevitably moving towards a similar outturn as North America, where you will have 3 very large, somewhat higher cost, high fare connecting carriers and one very large low-cost carrier, except in Europe, that low-cost carriers is going to mean materially lower cost and lower fare than Southwest in the United States. I think we're now in that [intangible] process. People may say otherwise, but I have been predicting this for a number of years, and COVID and certainly the Tsunami at (inaudible) has postponed the timing of that, but I think it's an inevitable consequence.

Next question, please?

That comes from the line of Johannes Braun at Stifel.

Two questions from me also. Firstly, if I did the math right, I think free cash flow was slightly negative in Q2, which I think would also explain why net debt is slightly up to the EUR 0.5 billion from the EUR 0.4 billion that you reported at the end of Q1. I think that's a little bit at odds with other European carriers that still reported positive free cash flow for the quarter. I can see your CapEx was EUR 500 million in Q2, slightly higher than Q1. But any other reason why free cash flow was negative for you? Is it maybe the working capital impact from the slightly weaker yield growth that you expect for the winter versus the last quarter?

And then secondly, the pay deals that you mentioned, which were prolonged until, I think, 2026 or even 2027. Can you just remind us what the pay deals imply? My last information was that it's a 2% to 3% wage increase per annum, but is this still the case?

I mean, that's the correct on the paid deals. There was restoration in April and -- April '23 and '24, brought forward to April '23, now brought forward to December '22, followed by a multi-year kind of secured pay increases of 2%, 3% a year. Neil, negative cash flow, I mean, I assume most of that is CapEx. I mean, I don't get where you're...

Well... The prime reason for the difference is, Johannes, first that there is -- we've extended, Johannes, the '18, '20 leases now to 2028. So under accounting rules, IFRS 16, we have to capitalize or take the extra years of the deemed debt onto the balance sheet. So it's that kind of notional debt on leases that makes up the delta that you're trying to reconcile there.

And I would say, I think the strength of the balance sheet, that we've reduced the net debt from EUR 1.45 billion to EUR 0.5 billion over the half year. I mean, I would not recognize your presentation there in terms of negative cash flow or declining yields, if [everything] is the opposite. But it is what it is.

Next question, please?

That's from the line of Gowers at JPMorgan.

Just 2 quick ones, if I can add. I mean, first one, just on the visibility post-Christmas, now you can give us an insight what percentage of Jan to March is good currently? And is that very different from what you would expect at this point pre-COVID?

And then just second quick one, any difference in bookings between the U.K. in terms of point of sale versus Continental Europe currently operating equal pattern in terms of demand?

Yes, I'll do go forward. Eddie, you can do the U.K.

Yes.

At the moment, January to March -- as of today, we are sitting with just under 10% of the seats sold January through to March. That would be marginally behind where we would have been in previous years. But again, some of that was because we have no Easter in March. The fact that Easter has moved into is in April or Q1 of the following year. Very limited visibility into Q4. Limited bookings and the profile is slightly behind where we would have been pre-COVID. U.K. market at the moment is remarkably strong. U.K. outbound is strong to Europe, short-haul weekends and business travel. Eddie, anything you want to add on that?

No, there's like no difference. I mean, it would seem like we've been putting extra capacity in for next summer into the U.K. So nothing to add to what you said there.

And particularly in provincial U.K., that we've already had very strong growth in Stansted, but we're adding capacity in Birmingham, in Bristol, in Manchester, in Liverpool, and we have a new base, [Edinburgh], we have a new base coming in Belfast as well. So it's a market -- despite the challenges of Brexit, it is a marketplace where there's still significant growth. And it's one of the markets where there's been a lot of capacity that's been taken out of the system, the failure of Thomas Cook, Fly BE, easyJet, cutting back their capacity or trimming their capacity, and be a significant shortening on the short-haul side capacity cost.

Next question, please?

We have one further question in the queue. That's from the line of Duane Pfennigwerth at Evercore ISI.

Just one for me. Could you talk a little bit, does the MAX situation change your thinking about the pace of retirements or actually going into the market and acquiring new 737?. Are you investing in maintenance overhauls on aircraft that you'd otherwise be kissing goodbye?

No. I mean, I think -- so well, the answer to the question is, we have so much growth at the moment. I think we had thought we would be using some of our -- the Gamechanger deliveries to retire older aircraft. But actually, we have so much growth opportunity out there. We're growing fast er than we originally thought we would at this time because we're not retiring older aircraft. In fact, I use the example, one of the aircraft we returned off an operating lease 2 years ago has now been offered back to us at a very significant discount. And we will opportunistically add aircraft in ones and twos where 737 sort of NGs, where there's a kind of a financial intent to do so.

We're not looking to the secondhand market though. There isn't much of a secondhand market out there at the moment on NGs. A lot of those aircraft have gone back into cargo conversion programs, et cetera. We have 200 -- sorry, we have another 150, 160 aircraft deliveries to take from Boeing over the next 3 years. We are -- that gives us plenty of headline growth of -- And these aircraft -- remember, one of the key efficiencies of these aircraft, they're 4% more seats but burning 16% less fuel. So not alone are they much more financially from an operating point cost view, much more efficient to fly, but they are also environmentally much more efficient as well. And I would continue to focus on those aircraft.

I think it's inevident by the time we get to sometime in 2024, '25, we would like to be back at disclosures with Boeing on a new aircraft deal, but Boeing have to sort out their own kind of manufacturing challenges at the moment, and they're going to deliver what they've committed to first before we can actually start negotiating new aircraft orders with any bit of -- any sense of confidence that Boeing -- in the meantime, Airbus are marking up huge amounts of Boeing's market share. They're now grabbing -- converting a lot of Boeing customers in China and the U.K. Jet2 has gone to Airbus from Boeing. I have no doubt that once they sort out the current production problems, they will -- Boeing will want to recapture market share. And when that timing comes about, they know where -- we'll be there working with them, but only on pricing that makes it economic for us to continue to grow as Boeing's principle is kind of standard there -- here in Europe.

Any other questions before we wrap it up?

No, that was the final question.

Okay. Neil, I'm going to be wrapping up. Why don't you give us a couple of closing thoughts on balance sheet, cash flows, pay down of debt, and then I might ask Eddie Wilson to give us a couple of closing thoughts on summer 2023.

Okay. On the balance sheet itself, as I previously said, it's performed pretty well. We recovered quite significantly, but we do have 2 big years of CapEx ahead of us. While we spent EUR 900 million in the first half of this year, we do have a EUR 2.3 billion CapEx program in the current year. That will drop to somewhere in the region about EUR 2.1 million to EUR 2.2 billion next year. But I think the strength of the balance sheet is core, and it's enabling us to pay at a time when interest rates are rising to pay off maturing debt and to form theirselves from our own resources. So that's usually important. It's also giving us the ability to have a rock solid BBB rating, which enables us to put hedging in place for both the dollar and for the fuel, particularly on the CapEx, where we're extremely well hedged out at EUR 1.24 at the end of the Boeing order book, which means we're locking in aircraft in euro terms at very attractive levels, which enables us to grow over the next number of years.

Cost in great shape, as Michael has already said as well, unit costs having come down quite significantly in the first half, guiding full year unit cost of EUR 31 ex-fuel, and then we hope to start seeing some reductions as we take more Gamechangers in fleet over the next couple of years.

Thanks, Neil. And Eddie, maybe if you could have last thoughts on summer '23 and kind of generally commercial development?

Yes. I think I'll start off by just talking about the operation, Michael. I mean from what we learned this summer is about being prepared for next summer as well. And we've had the backdrop of ATC this summer which really gets into sort of crew out, and we're ahead of everyone else. But we've got to ensure that we have -- where we're fully prepared, particularly with third-party providers in advance in next summer so that we can we can deliver what we promised.

So I would always like to be able to say that we've got the people, the airports and the aircraft, and the only one that -- and some (inaudible) is the aircraft, but that we believe will be temporary in nature. We look at where we've got our fares, particularly the strong Q2 first. And you look at the capacity that's coming [hedged] -- I mean you looked at places like Germany this summer where the market shrunk by about 25% in July and August. And where those gaps will be filled by Nexon. I think that's going to reflect itself hoping in higher fares. So let's get the operation right, make sure we got all our partners at the airport when you go for next summer. We're not going to sell ATC by next year. And then -- but I think it's a good environment in terms of capacity reductions in the market for fares in December '23.

Thanks, Eddie. Okay. I'll just leave you one final thought to be the [part in cooper]. We have recovered very strong. We've had a very good first half of the year. We are still though forecasting a loss for the second half of the year. We're looking at something up to about EUR 200 million loss between Q3 and Q4. The absence of Easter will hit Q4. That could be worse if there is -- I mean, again, I want to keep reemphasizing the risks we face as we experienced last year with an adverse COVID development in November and with the Ukraine in invasion in February. This recovery is strong, but it is fragile and it could still fall over. But if it doesn't fall over, I would be reasonably optimistic that we're heading into a strong summer of 2023.

Our first priority will be to restore the pay -- or is to restore the pay of our people, recruit another couple of thousand pilots and cabin crew to service the summer 2023 growth. The next priority will be use the cash to pay down $1.6 billion worth of – EUR 1.6 billion worth of debt next summer. And then we have -- we need another EUR 2 billion just to continue to fund the CapEx. So these are challenging times, but I think, the management team at Ryanair and our unions, and the people -- and our people have demonstrated a resilience through COVID, a flexibility through COVID that leaves us very well positioned coming out of COVID to grow strongly. If there is a recession, it will be good for our business. We will continue to grow much stronger into a recession than any other airline in Europe because of the widening cost and fair gap we have over every other European airline.

And with that, can I say thank you to everybody who joined in this morning. We have extensive roadshows on the road all week here in the U.K., in Europe, in the U.S. If anybody wants a meeting or a one-on-one, please contact [Davy's] or [Citi] and we'd be happy to fit one in. And in the meantime, I hope we'll see you all individually at some stage during the week. And if not, feel free to come to Dublin in November, December and boost the load factor all on your own. Thank you very much, everybody. Good to talk to you. God bless. Bye-bye.

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