Ryanair Holdings PLC (RYAAY) 2024 Q3 法說會逐字稿

Hello, and welcome, everyone, to the Ryanair Holdings plc Q3 FY '24 Earnings Release. My name is Maxine, and I'll be coordinating call today. (Operator Instructions). I will now hand you over to Michael O'Leary, Ryanair Group CEO, to begin. Michael, please go ahead when you are ready.

Okay. Good morning, ladies and gentlemen. You're all very welcome to the Q3 results call. As you see earlier this morning on our the ryanair.com website, we published our Q3 results together with an MD&A and a Q&A session with myself and CFO, Neil Sorahan. A couple of quick themes. As you see, we reported a Q3 profit after tax of EUR 15 million. Traffic and fares were ahead of the prior year, but closing Christmas and New Year loads and yields were softer than previously expected, as we had to lower prices somewhat in response to the very sudden but surprising but very welcome removal of flights from most of the major OTA Pirate websites in early December.

Profit after tax, however, for the 9 months ended 31 December was up 39% at EUR 2.19 billion. Prior year, it was EUR 1.58 billion. Just to touch on some brief Q3 highlights. The traffic grew 7% to 41 million. Revenue per passenger was up 9%. Average fares were up 13%, mainly due to a very strong Christmas and the October bank holiday weekend and ancillary revenues up 2%. MSCI raised their ESG rating on Ryanair from a BBB to an A in December. Our fuel bill rose EUR 320 million in the quarter, up 35% to EUR 1.2 billion. At the quarter end, we had 136 B737 Gamechangers in the total fleet that was significantly behind the original deliveries due to Boeing delays.

More importantly, going forward, our fuel hedging, we've extended fuel hedging. We have 65% of our FY '25 fuel now hedged at $79 per barrel. This year, we're hedged at $89 per barrel. So we've already banked a saving of EUR 450 million into FY '25. And as you will all be aware, we have the first interim dividend of EUR 0.175 per share is payable on the 28th of February. I think just to touch on growth in fleet. At the end of Q3, we've taken delivery of 136 737 Gamechangers. We now expect to have up to 174 of these aircraft in our fleet by the end of June in time for peak summer 2024. That's up 50 aircraft from summer 2023. That would still be 7 aircraft short of our contracted deliveries due to Boeing delivery delays. However, those new aircraft means we have a bumper summer 2024 schedule now on sale. It includes 169 new routes, our first 11 domestic routes in Morocco and our first summer with 23 routes in Albania are in to and from Tirana, the Capital City of Albania.

While travel demand remains high, we expect summer '24 EU short-haul capacity to be behind where it was in summer '23. As a considerable number of our competitors ground the A320 aircraft in Europe due to the Pratt & Whitney engine issues and Boeing delivery delays constrain our growth from 57 to 50 aircraft. We are continuing to work closely with Boeing to minimize delivery delays, and we're investing in additional engineering over -- Ryanair engineering oversight to improve the quality control in both Wichita and Seattle. The recent MAX-9 grounding was a disappointing setback, but we welcome the on-grounding of the MAX-9 last week. Ryanair do not operate any MAX-9 variants. There are no MAX-9 aircraft in Europe, and therefore, it is largely a U.S. issue. However, Neil visited in Seattle in January, met with Boeing's senior management and we urged them and they have agreed to increase their quality assurance resources on the ground in Wichita and Seattle.

We are putting more engineers into Wichita and Seattle to run extra checks on our deliveries, but also on our recent 737 deliveries, we've noted improvements in the quality with fewer delivery defects on the 12 aircraft we got in the fourth quarter before Christmas. However, we do believe Boeing have more work to do to improve quality and reduce delivery delays. But I want to stress this, we are fully supportive of the initiatives that David Calhoun and Brian West are taking to improve Boeing's performance and production. It is critical, we believe, to Boeing's continued performance that we support Calhoun and West. I think they're a good team. I have concerns about the management in Seattle, but I have a lot of confidence in Calhoun and Brian West. I think they're on the right track.

The MAX-9 grounding was an unfortunate event, and it does indicate that quality does need to be improved in Boeing, but we are very supportive and a lot of confidence in what Calhoun is doing under his leadership. We welcome -- on the OTAs. This is a significant event in December. The timing of the OTA taking, as I said, was a bit unfortunate because it was the first week in December. With Christmas coming, you can't just go in and open up and jump seats to counteract that. We think historically, these OTA Pirates generally account for between 10% and 15% of our volume. So a sudden removal of that meant, we saw a sudden -- or a very short-term dip in our bookings.

We would normally respond to that by opening up price promotions, but we didn't want to do that in the run into Christmas. We, therefore, think we'll take a hit of 1% or 2% on load factor in December and January. We will take it in hit on yields during December and January, but we think it will be short-lived, and we are happy with the forward bookings, particularly out into February and March, although March is slightly -- is artificially enhanced by having the first half of Easter in that.

Much more important for Ryanair and our passengers is to convert these OTA pirates into what we now would call kind of approved OTA partners. The partnership agreement we signed last week with loveholidays who are our fourth largest OTA and Kiwi.com this morning, who are our largest OTA -- were our largest OTA Pirates are critical, we think, to protecting customers from OTA overcharges and scams. As part of this agreement, we now give these 2 approved OTAs a direct feed of inventory from the ryanair.com website and they agree as part of the deal, no overcharging of passengers for either airfares or for any of our ancillaries.

The bookings are made directly in the ryanair.com website with the customer's actual and real e-mail address and real payment details so that if we need to send a customer an e-mail or some flight information, it goes directly to the customer, it doesn't get lost in some OTA pirate fake e-mail address and whenever we have to refund to passengers, we can now make the bookings directly to the passengers. We think this is the way forward, and we will continue to campaign to outlaw the illegal screen scraping and the customer overcharging and scamming being undertaken by so many others of these OTA Pirates and converted them to the same system or the same mechanism that we now agree with loveholidays and Kiwi.

Looking forward to summer 2024, we expect airlines will continue to consolidate. We expect capacity will be constrained by both the consolidation by the lack of aircraft deliveries post COVID across Europe. And I think the A320 fleet grounding this summer, we expect about 10% of Europe's A320 fleet to be grounded for the -- while they address the Pratt & Whitney engine issues and that this will mean tight supply for summer 2024. And while we still have 50 additional aircraft into that marketplace, we don't have the original 57 we had hoped for. So we think there's going to be a reasonably strong summer pricing.

Already today, our bookings are running about 5% ahead of where they were. Forward booking in the summer about 5% ahead of where they were at this time last year. Pricing is up by a low single-digit percentage. Again, some of that, I think, is a factor of the fact that the first half of Easter has moved into March. So Q4 is strong. But therefore, there's less of an impact of Easter pricing in April. But much work remains to be done, but we're very pleased with where we are for summer 2024.

In terms of outlook, we're targeting 183.5 million passengers in the current year. That will still be a monumental achievement. The original budget was 185 million. But if you take the ATC -- it's been over 60 days of ATC strike that's cost us over 1 million seats. The Tel Aviv cancellations, which have been running since the end of -- since the end of November, that's cost us about another 600,000 seats and the Boeing delivery delays have meant we've had to truncate both the summer '23 schedule and our winter '24 schedule. So it will still be a very strong performance.

However, as a result of these lower load factors, particularly in Q3 and the kicking in of some higher productivity pay agreements with pilot unions across Belgium, Italy and then the U.K. These are in -- by productivity enhancements that we intend to roll out to most of the other by agreement with the other pilot unions and groups between now and summer 2024, which will significantly improve our operational resilience and reduce pilot attrition. We now expect full year '24 ex-fuel unit cost to rise by about EUR 2.50. That would still leave a dramatically wider cost gap between Ryanair and our main European competitor airlines, 2 of whom reported last week.

Q4, which is traditionally the weakest quarter will also be impacted by the partial unwind of free ETS carbon credits in the 1st of January, but we will benefit from a strong first half of Easter traffic falling into late March, although this is unlikely to offset the weaker than previously expected load factors in yields in late Q3 and early Q4. We're therefore this morning narrowing our full year FY '24 profit after tax guidance to a range of between EUR 1.85 billion to EUR 1.95 billion. It was previously EUR 1.85 billion to EUR 2.05 billion. So we think the number will come in just under EUR 2 billion for the full year. However, this guidance and the full year results still remains heavily dependent upon avoiding unforeseen adverse events in Q4, such as the Ukraine war, the Israel-Hamas conflict and any further Boeing delivery delays, which might damage us in the run into Easter.

We've also given you a full update that we've attached to the release, a full update on the OTA Pirate situation. I think this has been one of the most dramatic victories for Ryanair in recent years. And I would always be happy to take a short-term pain if it's getting rid of OTA Pirate scamming and overcharging our customers and moving those into a more cooperative working with us. It also, I think the new agreement this morning with loveholidays and with Kiwi exposes the falsehood of some of these OTA claims that Ryanair is just trying to eliminate OTA. We're not -- we have, for many years, worked with OTAs like Google Flights who just -- who are an honest price transparency website but who send passengers directly to Ryanair to make the booking.

The reason we have a problem with the OTA Pirate is the illegal screen scraping of our digital -- of our data and then using that to scam customers for excess of airfares, inflated ancillary services and in some cases, charging them for nonexisting services such as refund insurance and/or change fees, while it's a non-changeable ticket. But I think it's been a very good month or 2 months work and is long term very much in Ryanair's interest and in the interest of our consumers that they can get access to our low fares, our low-cost ancillary services without being scammed by some intermediaries.

Neil, I'm finished, do you want to -- anything you want to highlight in terms of the finances, the balance sheet and/or the dividend.

Yes. I suppose just on the balance sheet, ended the quarter very strongly with just over EUR 2.9 billion in gross cash and importantly, a net net cash balance EUR 150 million. We continue to be the most highly rated airline in the world with a BBB+ rating from Fitch and S&P. And a big advantage that we have in these markets are well (inaudible) Boeing 737 fleet, 546 unencumbered aircraft. And so we're generating net interest income in the business at a time when our competitors are refinancing or taking on expensive leases. So that's a big competitive advantage that we have.

You touched on the hedging, but I think we shouldn't underestimate the benefit of the certainty that we have now in our hedging out at the end of March 2025, EUR 450 million worth of savings being locked in while there are very volatile markets at this point in time. And then, of course, we've got our first interim dividend at the end of next month, EUR 0.175 per share, and we'll have something similar again after AGM approval in September. And that's pretty much all I wanted to add, Michael.

Okay. All right. And (inaudible), then we'll open the Q&A, please.

(Operator Instructions)

Our first question today comes from Harry Gowers From JPMorgan.

Two questions, if I can. On just some ex-fuel unit costs. Maybe you could talk through the increase in the crew productivity part and what impact you might see into 2025? And so any latest force direction on ex-fuel cost after tax for March '25. And then the second one, we saw some comments from United, I think last week or so, they were making plans that doesn't include the MAX-10 going forward potentially. I guess if other airlines start to cancel order -- fare orders, would you happily take on some of those slots over the next few years? Or are you quite content with your current plans?

Okay. Neil, I'll ask you to give the ex-fuel unit costs. It's a bit early yet for FY '25. We haven't yet finalized the budget, but I'll ask Neil to give more detail. United, I thought this comment out of United last week was stupid. If they want to hand over or they want to cancel some of their MAX-10 deliveries, frankly, Ryanair will take them. We'd be very happy to take aircraft early. The MAX-10 is a very good aircraft. We can't wait to get it. It offers us 20% more seats. It burns 20% less fuel. The MAX aircraft has now in Ryanair alone, we completed over 1 million flights last year, more than 20% of those on MAX aircraft, great operational reliability. This is a great aircraft.

The MAX-9, the plug was an unfortunate incident. It does highlight the need for improved quality control in Boeing, but they're still making great aircraft. As by the way, our Airbus, who are making great aircraft despite the fact that they have a -- the Pratt & Whitney engine is a major issue for Airbus operators going forward. So -- but I think we have 2 large manufacturers that are both making great aircraft. This stupidity of the United comments last week is that their order books are full out to 2030. So if United isn't going to take the MAX aircraft, now are they going to replace them or substitute them with Airbus aircraft. But if they want to delay or cancel any of those MAX-10 aircraft, Ryanair will be the first people into Seattle to talk to Boeing about taking those aircraft. Although, I suspect there would be a queue of customers waiting to take those aircraft, given how tight the OEM supply is between now and 2030. So I thought the United comments were unhelpful, stupid. But if they want to do something stupid like cancel some of the MAX-10 orders, Ryanair will be very happy to take them.

Neil, do you want to talk?

Yes. Sure. Harry, thanks for the question. In the quarter itself and for this year, as you've seen from the commentary this morning, we're looking at about another EUR 0.50 on unit cost ex-fuel, EUR 2.50 ahead of prior year. Some of that's down to the lower load factor in Q3 in early January. The balance is kind of down to the productivity pay improvements that we're putting through for our people. Those pay improvements will obviously have to then annualize into next year. So you will see a little bit of cost increase as a result of that next year. But our fuel savings are going to more than offset any unit cost ex-fuel increases that we have coming through on a year-on-year basis.

And I think people will over-obsess you on a quarterly basis, Harry, on unit costs. Actually, the key issue here is still Slide 4 in the presentation. While we're not in any way kind of relaxed about unit cost or cost control, the gap between us and other competitors with easyJet in Europe, and in particular, the other airlines in the U.S. is widening dramatically as we -- but we do have to keep our pay competitive. We have fixed -- we have pay agreements in place that cover basic pay and productivity pay with pilots and cabin crew that run for the next 3, 4 years. But if we're -- our earnings are rising dramatically and there is some pressure on competitive pay, particularly for pilots, it's close to do -- to work with our unions and our pilots and keep their pay competitive, which is what we will do.

Okay.

Thanks, Harry. Next question, please.

Next question that comes from Stephen Furlong from Davy.

Michael, 2 questions. I noticed maybe one for Neil, just maybe talk about the headwinds or tailwinds and cost into the next year or 2. I saw there the EU, we're talking about ETS reform and the rebasing of current airline allowances, for example, maybe that's a minor thing, but you might just talk about that and anything else on just big positives or headwinds for cost. And then on pricing, Michael, I know on the pre-record, you said pricing has strong demand, very, very strong. Anything in terms of markets where it's -- I mean, I guess it's a function of capacity where it's better than other places, that would be great.

Thanks, Steve. Neil, do you want to take the first one half on fuel hedging?

Yes. Okay. Steve, the rebasing of ETS against 2023, we're starting that at the moment, but we think it will be modestly positive for us. I haven't got the final numbers on ETS. As you know, we're very well hedged on carbon in any event. Like we've got all of our credits hedged next year at about EUR 76 in [EUA] which is down from EUR 81 in EUA in the current financial year. But I do think that ETS reform will be modestly positive for Ryanair.

And I think the pricing situation (inaudible) Eddie Wilson here, CEO of DAC. Eddie, what are you seeing generally by market or in general terms for summer '24?

I think it's very early to say. But I mean if you look at our 3 largest markets, Italy, Spain and the U.K., where we have the largest proportion of our growth. So nothing unusual there or anything different across those markets at all. And then we've got a lot of growth coming out of a place like Albania, Morocco and Croatia where it's like you're still in very small numbers for the summer season. And so it's -- there are no -- I mean, like a place where we put in a larger amount of growth in places like Albania, obviously, but it's only a small proportion of what we do. So...

But I think it's fair to say we've been very surprised at the strength of the -- both the load factors and the fares in our new entry into Tirana, which is a market that was dominated by one of the other so-called low-fare airlines. We're running 90% load factors having launched in November, the middle of the winter.

Yes. I mean the only -- from my point of view, in terms of growth is a disappointment that we're going to be somewhere 7 aircraft short, maybe 10 aircraft short for summer 2024. It really is constraining our growth. We have many more airports out there who were looking for these aircraft. And that doesn't even factor in things like returning to Ukraine, if or when they defeat the Russians. We see very strong growth across almost all our airport customers for additional Ryanair aircraft, particularly in markets where they're struggling to recover their pre-COVID volumes.

The next question comes from Dudley Shanley from Goodbody.

Two questions from me as well. First of all, on the higher productivity pay for pilots. You mentioned in the statement that, that brings increased operational resilience. Can you just talk us through what it actually brings for you? And then the second question is to do with the capacity dynamics in Europe at the moment. Obviously, the GTF engine is the kind of biggest new thing this year. How long do you see that market staying as tight as it is and below kind of pre-COVID levels?

Sorry, just give me the second half of that again, with the GTF engines.

Just in terms of the capacity dynamics being tight in Europe, obviously, it's going to be tight there, but do you see that rolling into next year and beyond?

Yes. I'll do the engine and maybe I'll give -- Eddie, you can talk about the productivity pay. Yes, if you take capacity generally, like Eurocontrol have confirmed last year, European short haul was about 93% of pre-COVID. The question for summer '24 is it going to grow or is it going to decline? We think it's not going to grow. We're not sure yet whether it declines. It depends on which markets the A320 operators ground aircraft or don't grow. For example, if you take the likes of Vales, are they going to kind of constrain their growth in the Middle East? Or are they going to constrain their growth in Europe. I suspect we're going to see more constraints on growth in Europe where they're struggling to compete with us. And we're still waiting to see where those -- those final kind of scheduled decisions haven't yet been made or schedules haven't yet been altered.

With the backlog going engine shops around the world, I mean it seems clear to me that the Pratt & Whitney engine issue is going to run on through summer '24 and again, in summer '25 may even stretch into summer '26. The OEMs are not going to deliver meaningful aircraft numbers between now and then. Ryanair is very fortunate. Okay, we may get less short haul aircraft with summer by Boeing. We'll pick them up for the summer of 2025. We're scheduled Turkey aircraft in advance of summer '25, close whenever they leave us short this year.

But really, other than that, there's very few new aircraft deliveries going into short-haul Europe. We do expect the Asian market will recover more or reopen more for summer 2024, and that will enhance demand across short-haul Europe, particularly if it builds up transfer traffic on the legacy short-haul for us. So all the indications are at this point in time is that demand -- our capacity is going to be constrained in Europe in short haul for summer '24. I see no reason why demand won't be strong.

We're just not sure where that's going to fall in terms of pricing. I do believe pricing in summer '24 would be ahead of summer '23. It won't be up though. I mean, I think it won't be up 15%, 17% we saw last summer. I think kind of mid- to high single digits, maybe low double digits is a reasonable expectation at this point in time. But that stable have been derailed, if there are geopolitical issues, some adverse developments in Ukraine, et cetera, and things like that. But certainly, all the indications are at the moment is that summer '24, particularly through the school holidays, the Easter break, et cetera, is strong and pricing is slightly upwards at this point in time.

Eddie, can you just give a flavor on the productivity pay, why that feels resilient.

Yes. I mean, like if you go back to where we came out of COVID, like Ryanair was the best prepared of all airlines and in Europe, it's not in the world for having sufficient crews, more than sufficient crews to run the schedule when many of our competitors were floundering. And it's not a lesson that we have forgotten. And as we continue to grow, we will lean into having not just the sufficient crews, but we should build in extra resilience because the reason we need extra resilience is primarily driven by poor ATC performance, and we don't want to be caught out by that.

And that means that if we've got to -- if we've got a -- we have to remain competitive with our crews to attract and retain people, and we'll continue to do that. If that means that we have to adjust pay like we have, then that's what we will do. And it gives us the comfort in the medium term is that when ATC, if it's ever ultimately resolve to get back to the sort of operational efficiencies that we -- that means that we compare that crews in time. But at the moment, we're not going to take any risk on that whatsoever. So it's about having the right crewing ratios in place to run the schedule against the backdrop of a really shoddy ATC environment.

Yes. And I should just say as well in terms of capacity, the Boeing -- we are being short of those aircraft from Boeing, we're finalizing our budget at the moment, but we're walking back our full year traffic figure for FY '25. It's going to come back from EUR 205 million, probably EUR 200 million will be the working assumption. So we're going to have 2.5% less capacity out there through certainly the summer 2024 than we would wish to have at this point in time. So as I said previously, United want to walk away from any MAX-10 aircraft deliveries, we'll be very happy to step into the breach in advance.

The next question comes from Jaime Rowbotham from Deutsche Bank.

First one for Neil, maybe. I don't want to obsess too much on these ex-fuel unit costs. But back in November, I asked whether there were any risks on the unit cost guide and Neil you helpfully mentioned the route charges, which I thought looked a bit higher this morning. Presumably, you've now got visibility on the higher Eurocontrol rates for the next 12 months. I just wondered whether these were also a little bit responsible for the extra EUR 0.50 on the cost per pax guide in '24? And how much of a headwind there is on route charges into '25. At least, I guess this will be the same for everyone.

And secondly, Michael, given the focus on Boeing, you mentioned fewer delivery defects on receipt of recent MAXs. Could you expand a bit on that, describe the sorts of issues you were encountering before the recent improvement?

Neil, go ahead. You want to...

Yes. On route charges, Jamie, yes, we are going to track off this year-on-year. We're just getting the final numbers in at this stage, running the budget, and I'll give you a bit more color when we come out in May. But yes, the working assumption in the budget is that we're seeing route charges tracking up slightly year-on-year.

Yes. And again, I wouldn't obsess with the unit charges in the third quarter, like the bigger driver of it on a quarterly basis was the slight slippage in load factor. We would have expected originally to grow that load factor by maybe 1%. It's down 1%. That will continue into January as well. So on a quarterly basis, it moves to dial a little bit more on an annualized basis, it doesn't have that much effect.

Boeing delivery defects, I mean, we've been jumping up and down with Boeing for about the last 18 months on the number -- rate and number of defects that we're picking up. We now do about a 48-hour inspection of each aircraft on delivery here in Dublin, which again is kind of -- is a sort of a painful process. We pick up also little things. And I don't want to go into the detail, but like spanners under a floorboard, stuff in the cockpit, it shouldn't be there. Those are the kind of small quality assurances we pick up.

The bigger issues were kind of over the last 12 months of the known issues, you can kind of -- issues coming out of Wichita, where both into the tail frame were put in the wrong way, holes in the forward pressure, the seal or whatever -- I don't even know what it is drilled the wrong way. Still it shouldn't be happening on a $100 million piece of kit. You wouldn't expect them if you were taking aircraft or buying cars from Mercedes or Audi, and we don't expect them when you're taking aircraft from Boeing or from Airbus. And some people would say this was probably -- is a consequence of the 2-year grounding of production during COVID.

I think there may be a little bit in that. But it means that Boeing and Airbus both need to significantly improve quality control, both the oversight of the engines and on the airframe during production. Boeing are aware of this. I think they have significantly increased the numbers of engineers they have, doing quality assurance on the aircraft goes through the shop. And the 12 aircraft we got in the fourth quarter or in the December quarter, we found less sort of little silly things on those aircraft on delivery than we had on any of the previous Gamechangers over the previous 2 years. So we think quality is going the right way.

It is very unfortunate, but you know that they had the MAX-9 door panel stuff. Boeing are getting an awful lot of unfair kind of coverage as -- I mean, it was an Air Canada aircraft took off last week and one of the [nodes] fell off. Like that's nothing to do with Boeing. I mean that's a maintenance issue within Air Canada, but it's all -- it's pile on 737. There are 2 large volume aircraft, the A320 family and the 737 family, they carry 90% of the world's passengers on a daily basis. They are terrific aircraft. They are very safe. We are big supporters of the 737 and particularly the new variant, the Gamechanger, which is carrying 4% more passengers and burning 16% less fuel and especially the MAX-10, which will carry 20% more passengers for 20% less fuel.

As Neil said, we expect the MAX-10s to be certified, Boeing believe in the Q4 2024 first delivery to the American Airlines in early 2025. We're not pleased to get the first MAX-10 until 2027. So we are well down the list of deliveries, but we can't wait to take them and pass on the value or the incredible value that those are -- the cost reductions of those aircraft, cost efficiencies of those aircraft will deliver for us. We then pass it on in the form of lower fare to customers.

Thanks, Jamie. Next question, please.

The next question comes from Sathish Sivakumar from Citi.

I've got 2 questions here. So firstly, on the capital allocation. Obviously, you have started the interim dividend today. And what does it mean in terms of share buyback and balance -- given the balance sheet strength as we go into full year results or into 2025? So that's my first one.

And then the second one, obviously, you flagged about the pilots being in terms of labor as such, is being under pressure in the U.K. But are you seeing anywhere else in Continental Europe where the pilots are actually under pressure like in terms of availability is being under pressure?

Thanks, Sathish. So quick ones, on capital allocation, we will continue to pay down debt. We'll continue to fund all of our CapEx from internally generated cash flow. However, CapEx falls steeply in the next 2 years from almost EUR 3 billion down to just under EUR 1 billion a year. That should -- if profitability maintains where it is spring out throw off about EUR 2 billion a year in free cash for the next 2 years. 1/4 of that will be allocated to dividend payments and then I think the Board, subject to all being well with the balance sheet and the rest of the world will be looking to return the additional any spare cash to shareholders.

It will be -- and it will be a case-by-case basis, there will be special dividends or buybacks. And I think that the driver of that will be generally p multiples whenever we come to do it, but we won't promise. We're not going to borrow to do it once we generate the cash, if we have more than EUR 3.5 billion -- EUR 3 billion, EUR 4 billion in cash on the balance sheet, then anything surplus to that will be returned. We have 2 big -- 2 more big debt payments, but one is in -- one is in FY '26 and the other is in FY '27. So I think shareholders should support -- should expect more returns, but what format they would be, we don't know. That will be the matter of the Board.

Pilots, we're not seeing huge pressure on pilots across Europe. There is some pressure in the U.K. There was -- some of the other U.K. airlines were kind of paying out panic pay increases last year because they came out of COVID short of pilots. That does seem to settle down. We are not seeing significant pilot attrition, but I think we did have a gap between our pilot pay and that of competitor for the last year, again, as a result of these kind of panic pay increases that some other particularly 737 airlines in Europe and in the U.K., were paying. We intend and plan to keep our pilot pay competitive. We will never be the best payer, but we certainly will keep it competitive and the rapidity of Ryanair's growth and the rate of promotion like you'll go from being a cadet (inaudible) captain on the 737 typically within a period of 4 or 5 years if you're up to the job. And that is what drives very rapid increase in pilot pay.

U.K., we think we're okay at this point in time. The market is tight because of the inflexibility of U.K. labor post Brexit and we don't have -- we have some growth in the U.K., but not a lot. But we believe that the pay deals we've now agreed with the unions, pilot unions, and we're extending out to cabin crew unions as well, leaves us well positioned with ample pilot and cabin crew resources for summer 2024 but that's heavily dependent upon there not being another meltdown in European ATC. And the things like a repeat of the 60 days of ATC strikes, which we suffered in summer 2023, they really do eat up an awful lot of crew hours at peak period. And it's something that we're building in slightly higher crewing ratios to improve our resilience and that, in turn, reduces some of the productivity elements of pilot pay. Eddie wants to comment on that point.

Yes. I mean it's -- if you look at the U.K., it's primarily really a licensing issue. As Michael says, a particular tightness in that market that you don't have the fluidity of moving pilots around from different parts of Europe that you had pre-Brexit. But what we've done over the last number of years because we don't take people from other airlines, we've been growing sort of our input of Cadet into the U.K. system. So that, coupled with the pay issues that we have dealt with there, that should sort that out. This isn't just -- it's not -- it's the same for engineers as well because it is primarily driven by Brexit until the supply issues are sorted.

The next question will come from Alex Irving from Bernstein.

Two for me, please. First, on the OTAs. Can you please tell me what's your typical level of ancillary spend per passenger is on an OTA booking versus direct booking. Is there a revenue opportunity here from the new deals or a greater share of direct bookings? Also, is there any cost saving opportunities from the OTA change with the reduction in the level of manual post-sales servicing.

Second question is on unit cost. It will be maintenance. You saw maintenance costs up 40% whilst capacity up 89% year-on-year. What's driving that piece? And are there any one-offs we should be aware of?

Okay. I'm going to have Tracey (inaudible) here. We're going to get her too on that maintenance cost question, Neil. And then just so on the OTAs, look, I don't think there's any particular upside on ancillaries. There's a lot of kind of misguided coverage here. We want to take these bookings direct so we can maximize our ancillaries. The big issue with the OTAs is one, we don't want anybody illegally scraping our website. That is digital piracy. It's our data, and we are -- a bit like music piracy or film piracy, it should be outlawed. We wouldn't have such a big issue with it if they weren't scamming customers. And so we have, for a number of years, been chasing down some of these pirates, stop them overcharging. And what they don't do is they don't -- we would have less of an issue with them if they suddenly said to each customer, we are the OTA and here's an OTA fee of EUR 5 per the OTA.

At least, then the customer could decide whether they want to make the bookings through that OTA and pay the EUR 5 or come directly to Ryanair instead. They've been scamming and inflating our airfares. They're scamming and inflating the ancillaries. I think there might be a slightly better conversion of ancillaries if we are able to communicate directly with the passengers or the bookings made directly in the website. And in some cases, we released this on a monthly basis, our OTA Pirate survey. Some of these OTAs are inflating our ancillaries, the bag charges, the seat charge by 300% and 400%, so I think there might be a slightly better conversion of ancillaries if every customer has access to our ancillaries at the published prices on our website. But there's no big jump in ancillaries as a result of getting rid of the OTAs.

I think there may be -- what we're trying to do is to protect consumers from being overcharged by these intermediaries and over the longer term, we don't want a booking.com or some other third party to be able to insert themselves between us and our customer, capture a huge amount of customers as they have done, for example, in hotel distribution, and then turn around to us and reimpose on us what we had 30 years ago when we had to pay 20% for distribution through travel agents and global GDSs. We do not want -- we cannot afford to pay kind of extravagant commissions for distribution, particularly where there's no cost of distribution through the Internet because that would simply inflate the airfares, which would be not in the consumer interest.

So we will continue to battle intermediaries, particularly those who are engaged in digital piracy who want to insert themselves between us and our consumer, overcharge the consumer or at some point in time, in the future turnaround and try and overcharge us in a manner that would inflate the cost of airfares for consumers. But I don't foresee, Alex, if there's any immediate upside in ancillaries, although probably a little bit of a jump in conversion by not overcharging consumers for ancillaries. Tracey, maintenance costs.

For maintenance costs, it's really the timing of the check. So we brought forward more checks following Q4 into Q3. So we won't see -- we see a drop in Q4. We also have late growing of leases in our (inaudible) maintenance facilities, driving up the (inaudible) coming out from A320 handback. And again, we brought forward some of the maintenance of the A320, just in anticipation that the (inaudible) may fold with the GTF issues that (inaudible) they stood out in the next few months.

Thanks Tracey, well done. Next question, please.

The next question comes from James Hollins from BNP Paribas.

Two for me on the OTAs. The first one is, would you expect to do deals with all the OTAs or be some off limits like Booking.com given your history of (inaudible) assume them and are they coming to you for deals? And secondly, you -- thank you for quantifying 10% to 15% tickets historically sold through OTA Pirates, [your words don't mind.] I was wondering how that normalizes so quickly, and that's higher than I thought it would be, and you seem to be implying that this is kind of a December, January issue rather than anything longer than that, can you enlighten as to what that would be.

Okay. I'm not sure. I mean, look -- if you take -- there's about 7 or 8 OTAs account for, we think, more than 50% of OTA Pirate bookings. We're never quite sure what the number is. So I give you 10% to 15% because the only way we can track these is where we think there's a fake credit card or there's a fake e-mail address that's how we chase them down. So we're not entirely sure ourselves. A number of them have come to us since December. In fact, loveholidays were the first ones to come to us. And we were -- I mean, we have offered them in essence. And these are the same offers on the table. We've given them the same terms that were on offer through the GDSs. We signed up deals with the GDSs last year, so the travel agents had visibility on our payers.

And the critical thing again was that we would have the booking made directly in Ryanair.com and no overcharging, no scamming of consumers either for airfares or ancillary. I think that gives these OTA business models a lot of flexibility. But what we're not willing to count in, is that people taking our digitally -- or sorry, they also agreed not to screen scrape our website because we give them a direct feed. There's no need to screen-scrape our website.

Do I think all of them will come on board? Frankly, I don't know and I don't particularly care. I do think the majority will. We have a number of others who are -- we're in active discussions with, almost all I would say of the top 8, top 10. Booking are not in our top 8 or top 10, they're reasonably small. But I do expect -- I don't know what Juliusz is going ask if you want that. We do expect the case of Booking.com to roll on. We're not particularly minded to settle with them. And I think -- but we have so many examples of egregious overcharges by booking on airfares and on ancillaries.

We are -- believe it will be very difficult for Booking.com to go into court and states eventually. We're going to drive it that way. We thought it was remarkable that they wanted all of the Ryanair management deposed and we've all been deposed and yet none of the booking management want to be deposed, they're kind of contorting and kind of wiggling every which way they can to avoid being deposed because the first question, you want to ask them, of course, is why are you overcharging, why are you illegally screen scraping and overcharging customers. But they're reasonably small in terms of volumes, but we're not about to allow any of these people to try and engage in digital piracy or to overcharge consumers.

If they all want to have approved partnership deals where we give them direct access to our inventory and they agree not to screen scrape, not to overcharge. Then we'd be very happy to work with. Why do we think it's a December-January issue? Well, one, because once they come off sale, there is an immediate drop off in our bookings and it took us a number of -- a week or two in December to spot this, but passenger certainly find a way. They find other ways on the Internet back to the Ryanair low fares and also the passenger still mistakenly believe that they're booking in Ryanair, where they're actually booking through eDreams or Sky or eDreams or booking or Opodo or Kiwi via these people. They don't really realize that they're not making a booking in the Ryanair website. They don't be realized they're getting scammed and overcharged. And if Ryanair comes off, fare on some of these OTA pirate websites, people simply find a way around -- or go back to Google Flight or somebody else or some of the other price comparison websites to find the Ryanair prices.

It does look -- and then of course, we always have the ability to open up a bit more cheap seats or a bit more price stimulus, which we're happy to do during January and February. We weren't happy to do it in December because we thought we would trash the close-in bookings over the Christmas, New Year period. And I have always been of the view that if we can eliminate these guys or at least remove the overcharging and the scamming and at least protect ourselves for the long-term risk that these guys would try to become or would have so much of our volume that they try to become a new GDS or a new intermediary charging either us or customers a percentage of revenues, then that's a fact that's well worth taking on.

We're much more vocal about this because we have the cheapest airfares in every market. Therefore, we're much more of a target for these guys than the other higher fare airline. I think the other higher fare airlines are grateful for whatever bookings they get from these OTAs, whereas in our case, because we have such a price advantage, it gives them more latitude for scamming or overcharging passengers. Julie, anything you want to add on the Booking.com side or on the OTA side?

On Booking.com, maybe only the bookings themselves are in trouble with competition authorities throughout the world. They are likely to be added as a gatekeeper under the EU, (inaudible) this year and I think they should consider seriously where they stand in respect to consumers on transparency and the extent of charges that they impose. I think ultimately, they will -- how to come to terms with the fact that [the age] of overcharging consumers with (inaudible) is over and they have to work with us.

Thanks, James. Next question, please.

The next question comes from Savanthi Prelis-Syth from Raymond James.

Just first question for me on the GDS side of things, you've been adding more kind of corporate relationships there. I was wondering if you can kind of give an update on where you -- there's a lot more opportunity there. And if you're seeing any -- an improvement in the kind of the mix of business travel or just any kind of color on how business is recovering.

And just secondly, just with the aircraft delivery delays, is there -- are you needing to change? And just given how constrained the environment is? Are you changing anything in the way you kind of load schedules, in the way you book up schedules given kind of your historical kind of your passive load factor active strategy?

Okay, Eddie, maybe you take the GDS point, and then I'll do the aircraft deliveries and loading schedules.

Yes. I think the GDSs came back, but primarily driven by business travelers. Like as we've grown our base network in particular -- and particularly post-COVID where corporates became much more price sensitive that we weren't available on a lot of the platforms, but we've done a recent deal with Concur, which was a SaaS-based product for people to -- for corporates to manage their expense management. And we fit naturally into that, I assume. And that will go live, I think, probably from when we signed the deal, it will go live and the APIs now will be working from early April. So it's just another channel. GDS is growing, not spectacularly. People still go for the -- naturally gravitate towards our lowest fares.

You look at the recent OTAs that have come through, you can argue they're a channel, one of them is a channel, for those who want to have a package (inaudible) not material in what we do, but we will continue to develop those channels. It's not necessarily going to move the dial. But the one that I really I suppose I'm excited about is Concur because that will get those small and medium-sized businesses and Ryanair will be presented. And obviously, we'll have the lowest fares.

And I think it's fair to say we're also -- I mean, I wouldn't underplay never what underplay. I would underplay the significance of the OTA deals last week with loveholidays and with Kiwi this morning. I mean these deals now give them direct access into Ryanair's inventory. They are capable of moving a significant volume of seats and the fact that they're now doing that without screen scraping, but giving their customers the Ryanair airfares and the Ryanair -- the real (inaudible) Ryanair ancillary prices, I think, could result in a significant boost in their volumes or that volume of bookings.

Turning to aircraft delivery delays, it is very frustrating. We have been very slow to launch the summer 2024 schedule. I think it's fair to say, typically at Christmas, we would have about 85% of the summer schedule launch. This [Christmas], we have only about 75% of it launch. We have some -- and most of that is uncertainty over aircraft. There's still some -- we're still negotiating with some airports as well. Eddie and Jason, their team made a major breakthrough last weekend with a new base in Northern Italy where they (inaudible) region or the Trieste region scrapped the municipal tax, which is the first time one of the big Italian region that strapped the municipal tax 650 per departing passenger.

These are major advances on behalf of consumers and in terms of our comp. So it's fair to say that summer '24, our schedule -- our summer schedule launch has been delayed. We are still at this point in time -- we have only launched with the core summer share, we're also late with the some of the summer schedules that we would have ideally have launched in April and May, don't get launched until June and July because of the Boeing delivery delays.

We were supposed to have 57 aircraft from Boeing at the end of April. We will be lucky to get 50 aircraft by the end of June. And that in itself means a lot of the summer business that we would want to do in May and June has been delayed. And even today, we are still holding back about 15 aircraft. We have only -- what's on sale at the moment is about 35 of the 50 aircraft that we have from Boeing. We need more certainty and more confidence that Boeing will deliver those aircraft to us. And there are still a number of announcements to be made on some new routes and maybe 1 or 2 bases. We're in the final part of negotiation.

So -- and overall, Savi, to answer your question, the aircraft delivery delays is delaying the summer schedule, it is constraining our growth. I mean it would add another 1 million or 2 million passengers, so we will be able to launch these summer routes in May and June as opposed to launching them only at the end of June or in July. That's still enough to hit the summer peak, but it is very frustrating, which is why I think the next year instead of 205 million passengers, we'll probably be running around 200 million will be the number for the full year.

Thanks Savi. Next question, please.

The next question comes from Duane Pfennigwerth from Evercore ISI.

Just a couple of quick ones. On the ETS credits that are expiring, can you just help us think about the magnitude of that relative to the EUR 450 million in fuel savings F '25 over F '24. In other words, that EUR 450 million, how -- what should we subtract from that for the sort of change in the ETS credit recognition?

Yes, Duane, it's Thomas here. So. we'll lose about 20% of the free allowances during next year. So like we had about just under 4 million free allowances. So about 20% of the volumes in FY '24.

What's that in financial terms or deals...

It's about EUR 65 [a tonne] today, so it's probably about EUR 50 million, EUR 60 million.

So the fuel hedging savings are about EUR 450 million and the ETS (inaudible) unwind cost us about EUR 60 million, EUR 70 million. Is it?

Yes.

Okay. And the second question, Duane?

Yes. Just with respect to a tighter OEM market and these lingering constraints, where would you estimate the value of your unencumbered fleet today?

That's a big question above my pay grade. I mean the value of our existing unencumbered fleet is dramatically higher than anything --- it's the big gift in us and some of our competitors in Europe. Remember, we add all of our aircraft at the net purchase price to the balance sheet. And so you get the benefit in lower depreciation -- significantly lower depreciation charges over the next 20 years. I heard one of our competitors last week talking themselves trying to explain how they're doing sale and leasebacks, recognizing a profit upfront, but it doesn't make a lot of difference over time between us and Ryanair. When the (inaudible) the aircraft ownership costs for that airline are more than double that of Ryanair on a per passenger basis, like just complete to negotiate.

The fact is -- and I would say also, by the way, the -- our delivery book of aircraft, which we priced. I mean the last of the, we still have more than 60 or just over 60 Gamechangers to take delivery of over the next 2 years, we could -- they are worth, I would say, probably not far off double what we will be paying for them over the next few years and even the MAX-10 Gamechanger, I would say the market is still constrained. I read a story this morning that Airbus are out trying to buy back some of the delivery slots from some of their A320s from the lessors and some of their customers ostensibly to provide aircraft to United in the States.

So I hope they're very successful, and I hope therefore as a result, United walk away from a load of MAX-10 because we'll be the first ones out there looking for additional MAX-10s for delivery in '26 or '27, if we could get them. But I think it's the reality for all airlines is that we're all short of aircraft. The OEMs cannot -- I mean the more significant thing why we welcome the MAX-9s going back into the year, last week, just so that you just take that as the issue of that, I thought that the most significant intervention by the FAA was Boeing not to increase monthly production. That does represent a challenge for Boeing.

It will leave some dissatisfied customers going forward for deliveries in remainder '24, '25 and '26. We will still get our 40 aircraft next winter. But I think it is inevitable given the quality challenges facing both Boeing and Airbus, that some of this capacity ramp-up needs to be slowed down. And we still haven't even taken account of some of the orders that are still out there from the Chinese airlines, the Middle Eastern airlines, some Indian airlines for additional aircraft. Therefore, I think the world is going to be challenged for certainly short-haul aircraft for the next 5, 7 years out to 2030. Ryanair is one of the few airlines that has a secured a pipeline of reasonably low-cost new aircraft deliveries over that period of time. And these are new aircraft deliveries that will transform our operating costs because they offer significantly more seats, but at a significantly reduced fuel consumption.

So I don't think I've ever been more excited about our growth and the possible profitability of our growth in Europe in the next 3 to 5 years where capacity is going to be meaningfully constrained. And I think if you look at the pricing of air traveling across North America compared to where it is in Europe at the moment, it's clear that pricing in Europe has some considerable way to go to catch up in North America. Will it get all the way to North America? I don't know. Nobody really knows, but certainly, if you were at the lower end of the pricing model, as Ryanair is, I think there's -- we have more headroom for price increases over the coming years to cover higher costs, although we'll be using our low-cost aircraft and improve fuel consumption to keep airfares down.

And I think one of the big difference between us and some of the -- our competitor reported last week is we saw average airfares rise double digit in our Q3, whereas their average fare performance was significantly behind that of ours. And that's, I think, in large measure because we're expanding into a lot of their markets. And we're expanding profitably where they're unable to compete with us and reporting losses.

Thanks Duane. Next question please.

The next question comes from Ruairi Cullinane from RBC.

First question, Boeing delivery delays. I saw the previous expectation would be that you are a bit down around 10 aircraft this summer and it now sounds more likely to be down 7. So I was wondering what potentially drove the slight improvement?

And then secondly, on the modest growth in ancillary revenues per passenger. You previously explained that ancillary revenue should be more stable than fares. But is this driven by you sort of holding back on pricing? Or are you seeing some take-up of ancillary products declining in the current environment?

Okay, Neil, I'll ask you to do the ancillaries, you are (inaudible) here. Just in relation to Boeing, it's a movable fleet here, Originally, we thought we'd be down 5. Then it looks like we were going to be down 10. Now we think our best guess is that by the end of June, we'll be down about 7 aircraft. Now that could be 9, it could be 5. We are working. We have 8 aircraft deliveries due in May, there's 7 due in June, and then there's about 9 in July, and we're hoping that we will get some of those July into June. I mean I think it's fair to say we would also take some deliveries to the first 7 or 10 days of July, but we have said to Boeing that under no circumstance that we take an aircraft after there's a weekend that's 13, 14 in July.

We're not taking aircraft because, frankly, if we're not certain to get them before that, we can't put them on sale. And so I think we are working well with the team in Seattle. There's a big focus on those aircraft deliveries in June and -- or in May, June and the first couple of weeks of July. And we think there's a reasonable prospect that we will get 50 aircraft, might be 52, it could be 48.

The big driver, though, it's certainly not going to be 57, and we accept that. And what we have said to Boeing if we don't get them by that second week, second week in July, we'll not take them until October, which is why, again, our number for next year has moved back from kind of originally EUR 205 million towards EUR 200 million. But it's movable. We would be hopeful that Boeing will do slightly better. But if they have other unforeseen events like the MAX-9 issue, it might move slightly back the other way. Ancillaries and modest growth, Neil?

Yes. Ruairi, we're very much on track to what we said we would do this year. We said we'd be up EUR 0.50 to EUR 0.60 on a per passenger basis. That's exactly where we're going with EUR 23 per passenger in the quarter just to end this. And remember, there's a big step-up in ancillaries after COVID, where we've jumped from about EUR 18 a passenger to EUR 23 a passenger today. Longer term, we think we will track ahead of the growth in passenger numbers. So a couple of percent, 2% to 3% per passenger increase in spend for the next 2 or 3 years. So we're bang on where we thought we would be.

And certainly, I mean, again, and I come back to the OTA point, if we can convert a number of the OTAs into partners who are no longer charging for ancillaries, you might see actually an increase in ancillary conversion and some pricing improvement because the people were originally paying EUR 20 or EUR 30 for a EUR 10 bag. They may well -- we may convert more and with yields, we might get EUR 11 or EUR 12 on average for those bags.

Thanks Ruairi. Next question, please.

The next question comes from Gerald Khoo from Liberum.

More than two, if I can. Firstly, on the balance sheet, looking at current assets on the other assets line which sits just below EUR 1.2 billion, [EUR 1,153 million]. I was just wondering what that line relates to? And how and when that might convert into cash?

And secondly, on the MAX-10, I know your first deliveries also 2 years after the first ones. At what point do you get concerned about certification delays impacting that sort of early 2027 delivery date for yourselves?

Okay, I will take the MAX-10. I'm going to ask maybe Tracey McCann, you would do that current assets or other assets issue. MAX-10 deliveries, the first delivery -- the North American airlines are scheduled to take place at the end of calendar '24, early calendar '25. I don't think we would be concerned about our first delivery that we only take 17 aircraft in the first half of 2027, so I think we will begin to get concerned if they miss the summer '25, if the first deliveries of the MAX-10 run into the winter '25, spring of '26, I think at that stage, we'll start to get a little bit concerned.

We don't honestly foresee there being that kind of a significant delay. These aircraft are -- there are kind of production slots there in Seattle -- in Wichita and in Seattle for them. I think the issue is more certification. They're still hopeful that the MAX-7 will be certified in the current quarter and delivered -- the first one delivered. They're already built and the first delivered to Southwest for summer of 2024, so I wouldn't want to be complacent, but I mean I am reasonably happy that we are not the lead customer for the MAX-10. But given that we're taking our first aircraft 2 years after the first scheduled deliveries to the American Airlines, I'd be reasonably relaxed. And Tracey, do you want to take that point on the other assets.

(inaudible) typically prepayments of (inaudible)

And I'll just add to that, Gerald, over many years, we've got significant discounts from large suppliers by giving them prepayments and some of that will be reflected in the noncurrent asset line as well as I think you might have been referring to.

Thanks Gerald. Next question, please.

The next question comes from Conor Dwyer from Morgan Stanley.

First question is on pricing commentary. So if you're currently running low single digits ahead initially for the summer, and you think you can get to mid- to high, is that just as the impact from a late Easter [hurting] April and May dissipating? Or you think you can get more in the late yields?

And then secondly, assuming certification does happen on the MAX-10 later this year and United doesn't actually take them. How confident are you that you would be able to actually take them and run that capacity? What kind of lead in time would you need for that?

Okay. On pricing, look, I think the biggest driver at this point in time on pricing is that the first half of Easter is in March and not in April. Easter is still a big driver of forward bookings at this time of the year. Q4 is materially stronger than Q4 was this time last year. We are still expecting a loss in Q4. But bookings through the summer are running ahead of where they were this time last year, both in terms of volumes and pricing. But I would believe -- I mean, this time last year, we were in a -- very straight. We had a very, very strong January, but an awful of that was still post-COVID recovery, people getting out there and booking early. So we had a very, very strong first quarter. And then pricing softened into the second and third quarter of last year. I'm not sure this year, we won't see -- pricing at the moment is sort of modestly up. But I would expect it to strengthen further as we go through into calendar Q2 and calendar Q3. I might be wrong, it might -- I might be calling that wrong, but that's the way it feels to me.

And I think what we need to see, that we monitor closely some of our A320 competitors, and they haven't yet in the case of we have taken out as far as we can tell, the 40 are grounded 40, 45 aircraft same with the Volaris and VOLOTEAs. I don't think they've finalized where the capacity is coming out yet. So there may be more to go on that. We don't know. But I think pricing will continue to drift upwards into the summer of 2024. But we haven't -- there's more to run on that. And I think we won't have a better feel for that until we get to May and we are on the full year results road show.

Second point, MAX-10, I mean, if we were to -- I mean I would be very happy to start looking at Boeing and the -- clearly, we'd want to negotiate the price of them. I would be very happy to take MAX-10 deliveries in -- for summer -- in advance of summer '26. I'm not sure we'd be in a position to take in advance of summer '25, but I'm not sure they can manufacture or deliver may even past summer '25. But someone like United want to walk away from those deliveries over the winter of '25 into '26 or we could take more aircraft in for summer '26 and start the increase with 17 aircraft MAX-10 deliveries in the spring of '27. I'd be very happy to take that up from 7 to 30, 40 aircraft over the winter of '26, spring of '27.

We have more than sufficient demand across Europe for these aircraft and the operating performance of these aircraft is dramatic. But I don't foresee despite all of that, what I thought was kind of nonsense commentary out from United last week, I don't see any chances of not taking the MAX-10s. And I'm sure there will be a queue not least of rapacious aviation lessors out there and others looking to get those aircraft if United, somebody else walk away from them. I mean we're still expecting a number of very large orders coming out of the Middle East and China might also step up to the place as well. So if somebody wants to walk away from MAX-10s I think there will be a queue of people who will take them. But to answer your question, we have been very keen on taking MAX-10s for summer '26, not summer '25, that would be too early for us.

Thanks very much, Conor. Next question, please.

The next question comes from Muneeba Kayani from Bank of America.

I just wanted to clarify on pricing for Q4, so fares were up 13% year-over-year in Q3 and kind of what's in your guidance for Q4? And then secondly, just on capital return and the share buyback. Given the share ownership issues post-Brexit like how does that impact your ability to do a share buyback this year?

Sorry, give me -- say the second piece again, Muneeba, and also do share buybacks.

Just in terms of your EU ownership post-Brexit. And how do we factor that into a potential share buyback?

Okay. I wouldn't get into pricing on Q4. We would never break it down on a quarterly basis. But you can work it back from our full year guidance. Yes, we've narrowed the range slightly, but more to reflect the behavior in Q3. We're still somewhere between EUR 1.85 billion and EUR 1.95 billion but detail on Q4 pricing and our cost, we wouldn't get into at this point in time, Muneeba.

On EU share ownership, we continue -- we're the only airline that is very close to 50-50 EU ownership. Other competitors like easyJet and Wizz are way below 50%, but that's a matter for the EU commission, not for us. I do believe, though, that if we did a share buyback, I think we would probably be looking at trying to buy ADRs and ordinaries. I think it would be in our interest to do both. Although it is -- we have -- in the past, we have found it easier to buy ordinaries in Europe. It has been very difficult for us to buy ADRs. One of the challenges we face with the ADRs is they tend to be quite tightly held by a number of very large institutions in the U.S. And when we come looking to do share backs, they all go buy somebody else's ADRs, but if we are unsuccessful in executing share buybacks of ADRs, we would simply buy more ordinaries and then over a period of time, as we've done in the last 2 years since Brexit continue to use the fairly draconian powers we have to disapply non-EU buyers of the ordinary shares.

But I would think the working theory -- my working assumption would be, if we are returning cash to shareholders by way of further share buybacks, we would probably split that 50-50 between the ADRs and the ordinary set, so that we balance the EU ownership rules.

Thanks Muneeba. Next question, please.

The next question comes from Alexander Paterson from Peel Hunt.

I just wondered if you could give any more color on the commercial agreement you've got with the GDSs and now with 2 OTAs. Are they paying exactly what a customer would pay if they book directly on your website? Or are there any fees in between like an API fee or anything else?

And is there a second one?

No, that was it. (inaudible) everybody else.

So I mean, what we're trying to do, there is no -- we don't charge them anything. We are very willing to give people direct access into -- with the GDSs and the OTAs, they -- I mean, the critical thing for us is to eliminate the kind of illegal screen scraping. And if we can kind of eliminate the illegal screen scraping, that makes it much more difficult for these kind of OTA Pirates to exist. They get direct access to our fares and ancillary prices in our website. They undertake. So what we do -- I think what we do is we feed them from the cost of the interdigital piracy by giving them the direct feed. And they in return agreed that the booking will be made and the [payment] in our website -- directly on our website. So we have the contact with the customer, both the e-mail contact and the payment details, and they agree that they will not levy any fees or charges on our underlying airfares for ancillary.

That does not necessarily preclude them from charging some kind of fee for their services as many travel agents now do, but it has to be an identifiable fee for -- say it's the loveholidays for example, they made that they generally do package holidays, they may take something or they may make their money out and what the other elements of the package they sell. But the customer booking with them on Ryanair is paying the underlying Ryanair airfare and the underlying Ryanair ancillary prices without any inflation, price inflation or price distortion.

And we don't, at the end of the day, have a difficulty if -- as with the GDS distribution, travel agencies want to levy a fee for what they serve. As long as the customer knows that that's the travel agent fee, we don't have a problem with it. We think ultimately, over time, it would be difficult, consumers will certainly move away from travel agency fees if the fees are unreasonable, and they will just increasingly book directly in the ryanair.com website. But critical to all this is protecting the consumer from overcharges and then not having some OTA in a position like Booking.com is with the hotels where they control hotel distribution, and they charge them 15%, 20% of revenues for that distribution. It may work for the hotels, but that certainly wouldn't work in a low-margin industry like airline industry for us. Eddie, do you want to add anything to that?

Yes. I mean, it's just like when the APIs are fully functioning out there, you'll see that people -- it will be absolutely clear in the case of somebody, Ryanair package of the elements that they're buying, and they see that they're getting the Ryanair price, the Ryanair ancillaries, and there's no ability within that flow to add on extra charges. So in that sense, it will be very transparent for air consumers because some of the most egregious complaints we get here are from consumers who buy through pirate screen scrapers.

They don't get (inaudible) don't get any e-mails to service e-mails and they're the ones that turn up at the desk and didn't realize, they can get any of the 3 or 4 e-mails, telling him how to check in online beforehand. So when these things are up and fully functioning, we've done the deals and while we're working on them in the background and the APIs are up there, you'll see how transparent it is.

Thanks Alex. Next question, please.

Final question we have time for today is from Neil Glynn from AIR Control Tower.

Just 2 quick ones then. The first one, crew rostering, you mentioned a number of times. And I just wanted to check, I think you're running at 5.8 at the moment versus 5.4 historically. Should that 5.8 continue into this summer? Or is it likely to be higher?

And then the second question, more big picture. Pre-COVID the fourth quarter was generally profitable. And I appreciate this clearly a range of factors driving a heavy loss this year. But to what extent do you think the seasonality of your earnings has structurally changed? And if that's the case, might this have any ramifications for how you deal with unregulated airport contracts, for example?

Okay. Eddie, maybe you want to take that.

I mean the crew rostering isn't -- the crews per aircraft is just one of the inputs there. I mean, where we've made very large inroads is on the support systems that we have here in terms of computerized systems that we have in the operations control center that helps us particularly on meltdown days, which manages hours properly and then spread them more evenly. So the crewing ratio, like I mean, there's no significant increase. We're keeping it at the same levels that we have, which would be -- it would be in the range of 5.4 to 5.8. But it's -- I wouldn't see it going beyond that. There's no need to hit anywhere near 6 or anything like that. But some of this is a function of the number of smaller bases that you have. We're getting much better at managing hours, particularly in the peak.

So don't see any sort of more upside data on crewing. But that will be traditionally higher than where we would have been. And if we didn't have this ATC environment, French ATC strikes and that we would probably -- we should be able to pull that back. But that's some distance away.

Yes, I think it's something we are working towards. We are pushing hard with the European Commission. I guess the European Commission made (inaudible) to protect overflights particularly overflights over France. It would dramatically transform both on-time performance and the ATC disruptions across Europe. And with European elections coming up this year, it's very depressing and that Europe hasn't moved on this. They're great for talking about the single market [north of] underline depending what you're doing to protect the single market, and yet the French shutdown the single market for air travel 57 days last year, complaining about Macron's pension reforms that didn't even apply to them. So we're continuing to campaign for that.

Seasonality, look, it's a seasonal business, and I don't think you can ever get away from that. We make the vast majority of our profits in the first 2 quarters, the first half of our year, which is the June and September quarter. I don't see any reason why the third or fourth quarter shouldn't be kind of breakeven or why they should be -- see -- or why they should be loss-making. But there are a number of issues there at the moment. And we are -- one of the challenges is that we gear up for a lot of summer growth. And with most of that gear up takes place at the end of Q3 and Q4, we have to start the recruitment of pilots and cabin crew, training of pilots and cabin crew, we tend to take a lot of the aircraft deliveries from Boeing in the first 3 or 4 months of the year without having being able to deploy those aircraft or use those aircraft in service.

So there is a disproportionate weighting of cost into that fourth quarter without if you like, the commensurate revenues. And that's why but Q1 and Q2 then tend to be very significantly profitable. I mean again, I try not to get lost in the short term or in the quarterly stuff. I think the key message here is, even with the -- on this morning's numbers, and we are back at where we are at the end of January, we're on track for it to make over EUR 10 net per profit per passenger for the first time since a number of years. I think that EUR 10 net profit per passenger will be the kind of baseline going forward.

I think there's a reasonable prospect plus or minus uncertainty in geopolitical events that, that number might move upwards from EUR 10 towards EUR 11, EUR 12, or EUR 13 over the next couple of years, particularly as we get more and more Gamechangers and MAX-10 aircraft into the system where we are carrying materially more passengers per flight but burning significantly less oil.

And I think what's really -- my key takeaway from this year's numbers is we're about to make EUR 10 profit -- net profit per passenger in a year when our oil bill went up 30%, 40%, we went from being hedged at $65 a barrel in FY '23 to $89 a barrel in FY '24 and yet our customers were willing to pay modestly higher airfares, better performance than ancillaries at a time when most of our competitors are either still losing money or reporting reasonably modest profitability for the full year.

So this is a very impressive model. The costs are heavily controlled. We are widening -- hugely widening the gap between us and our principal competitors in Europe on airport and handling costs, aircraft and ownership costs. And I think that will continue for the next couple of years. So I have -- I think we have a reasonable expectation that the -- despite the kind of the surprise -- or the sudden impact of the OTAs on the Q3 numbers, we'll have a strong year of profitability. And I think a realistic prospect of strong pricing through summer '24, which will deliver another year of strong profitability in the year ended March '25.

Neil, I think that's as much I can add on the seasonality. Any other questions?

We have no further questions. That does conclude our Q&A session for today.

Great. Okay. Thanks very much, everybody, for participating in the call. Neil is going to do a roadshow day through London today, France and our Paris and Frankfurt, trying to persuade more and more. Do I mean?

That's correct, yes.

Yes. I try to encourage more European share ownership here. It's not that we don't love the Americans, we do, but we're going to need more Europeans on the share register. In the meantime, we'll continue to try to execute and deliver. And thank you, we are not doing a road show on the Q3. If you are in Paris or Frankfurt, you want to meet with Neil or me, that's for them. Other than that if anybody wants to come to see us here in Dublin over the next coming months, please feel free to do so. And other than that, we'll see you at the full year results road show in May. Thanks very much, everybody. Good to talk to you. Bye-bye.

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