Welcome to the Ryanair Q3 FY 2022 Results Conference Call. Throughout the call, all participants will be in listen-only mode, and afterwards there'll be a question and answer session. During the Q&A, in the interest of time and fairness, please limit yourself to two questions per person. Just to remind you, this conference call is being recorded. I'll now hand the floor to Michael O'Leary. Please begin your meeting. Yeah, thank you. Good morning, ladies and gentlemen. You're all welcome to our Q3 Results Conference Call. You'll have seen a comprehensive release this morning on the ryanair.com website of the Q3 numbers, our MD&A. We also released a video interview of myself and our CFO, Neil Sorahan, which should have dealt with most of the major issues. Couple of quick themes. We've taken as read that everybody's read, seen the results. I think the strength of the numbers here was the recovery in traffic during the third quarter up to 31.1 million passengers. That was significantly faster recovery than any other airline in Europe. Also, dramatically higher load factor than any of the other low-cost so-called low-cost airlines who also have load factors in the mid-70s. We delivered an 84% load factor. That would've been significantly higher, as would the yield, if we hadn't had the sudden emergence of the Omicron variant in the last week of November and the first week of December. I think we should be just a little bit cautious going forward. We were heading for a very, very strong Christmas and December last year. As Omicron broke out and governments started imposing or reimposing travel restrictions, we got hit. It probably cost us about 2 million passengers in December. Also that's about 2 million passengers of people who tend to book later. So it had an impact on both passenger volumes, we fell to 9.5 million in December, but also critically on yield. We took out about a third of our January capacity, again, because bookings just collapsed. We did hang on to some of that Christmas return traffic in the first week of January, but other than that, the rest of January was a washout. As we said, we would've originally expected to do about 10.5 million passengers for January. Taking out a third of the capacity, we reduced the passenger target to between 6 million and 7 million. We're probably taking out about 15% of February capacity as well. You know, there's a misconception out there that these lockdowns just hit passenger volumes. They don't. They hit passenger volumes, and they hit passenger yields and revenues. We think therefore that the impact of Omicron was quite damaging on the December numbers and therefore in those the Q3 numbers, despite the fact that we still did 31 million passengers and an 84% load factor. It'll also continue into Q4. As I said, January will be somewhere between 6-7 million passengers. February will be down about 10-15% on what we would normally have expected. Again, I think we're heading for something over 8 million, about 8.5, something 8-9 million passengers. March we're hoping to maintain that very strong recovery, probably back up to something between 11-12 million passengers. If there are any more sort of surprising variants or anything else emerges and governments again start to kind of panic as they did in early December, we will get hit for Easter. Easter's in the middle of April. All the indications are at the moment there will be a strong recovery into Easter and into summer 2022, but it is hugely uncertain if there is any other kind of COVID development. With that as a backdrop, I think the highlights of the third quarter is we continue to invest heavily in our environmental strategy. Our climate disclosure project rating, an independent rating move from B minus to B, which is industry-leading. Traffic rebounded very strongly in Q3 despite the impact of Omicron on the December traffic. Close-in bookings in yield to December and January and into February were badly damaged by those Omicron restrictions. We are aggressive on pricing at the moment to recover traffic and load factors into February and into March. The balance sheet remains strong. We repaid the CCFF EUR 600 million loan in October, five months earlier than scheduled. At the end of December, we've taken 41 Gamechanger deliveries. We expect that to rise to 65 aircraft before the peak summer of 2022. To accommodate that additional capacity, we've announced 720 new routes, and we're opening 15 new bases, all of which will operate in the summer of 2022. We are very well hedged on fuel, and it's something that separates us from some of our competitors. We're very strongly hedged at prices that are a significant discount to the current spot. We see Brent Crude open up this morning over $91 a barrel. We're very strongly hedged 100% into Q4, 80% into H1 of FY 2023, and 30% into H2 of FY 2023. That's a mix of swaps and caps, and the reason we're using caps is that, you know, we don't want to take a risk. We don't want to commit to having kind of buying fuel for 80%, 90% of our capacity in case there are further kind of repetitions of COVID restrictions or such as the things that disrupt travel. We think we have a very good balance. Again, we see it. I think it's hard to believe that we won't operate at 60% or 50%, 60% of our scheduled capacity through the summer of 2022 and into the winter of 2023. The caps at least are a modest cost way of giving ourselves further insulation, taking us up to about 80%. It means that for the remainder of this fiscal year and for much of the next fiscal year, we will benefit from significantly lower than spot price oil costs. That will give us yet another significant cost advantage over all other competitors in Europe. Our summer 2022 capacity is now on sale. We're offering 114% of our pre-COVID capacity. That's essentially the Gamechanger deliveries, less a couple of NG that aircraft we've delivered off-lease. We are committed to stepping up our five-year growth, which, as you'll be aware, has accelerated from an end target of 200 million passengers. It's now 225 million passengers, because we think and expect there will be strong recovery post-COVID into summer 2022. Certainly, there is a huge gap in the market out there. I think we do not believe some of these analyst reports who expect capacity will be flat in summer 2022 pre-COVID-19. It won't, it will be down. I think it will be down by a double-digit percentage, but maybe it will be a high single-figure percentage. When you see the legacy airlines out there desperately trying to hang on to the slot waivers. They're desperately trying to hang on to those slot waivers for a reason. They do not want to operate a large proportion of their short-haul traffic, their short-haul schedules. A lot of that is driven by the fact that about 50% of their short-haul traffic is connecting to or from long haul, and there's no doubt that long haul will be slower to recover in summer 2022, and I think into summer 2023. We think there will be a meaningful reduction in short-haul capacity in Europe in summer 2022. We will be by far and away the fastest growing airline in terms of absolute traffic numbers and capacity in that marketplace. We are deluged with airports and governments who are besieging or beseeching us and also besieging us, trying to get us to allocate more aircraft to their markets. We're doing very effective COVID recovery or post-COVID recovery, traffic growth recovery deals with both airports and governments all over Europe. I don't want to add too much more to that. Neil, do you want to take us through MD&A then? Or a couple of highlights Yeah. I'll quickly run through that. You've covered the fuel already. We're equally well hedged on carbon as well for the next year. We're about 100% hedged for FY 2022 at 24 EUR in EUA. We're 80% hedged into FY 2023 at 45 EUR in EUA compared to current prices of 90. The balance sheet remains in a very strong position with cash just under EUR 3 billion at the end of December, after having paid off the UK CCFF five months early. Indeed, net debt despite EUR 800 million of CapEx is down modestly at EUR 2.1 billion at the end of the quarter. There'll be a big focus on the balance sheet over the next couple of years to get that back to a broadly net cash, net debt position. Then the final thing that I was pleased with in the quarter was the unit cost ex fuel development, where we saw unit costs get back to EUR 32 per passenger. Okay, thanks, Neil. We'll just open up to Q&A now. As I said, everybody's limited to two questions. Can I deal with the first question that comes from everybody? What will the yields be like for summer of 2022? We don't know. Our focus, unlike most of our competitors, will be on recovering volumes quickly and restoring loads, trying to get load factor back up to 90%. If there is no further Omicron or COVID restrictions, then we think there will be a reasonably strong traffic recovery through the second half of February into March and certainly into April. Forward load factor, forward bookings are running significantly behind for summer 2022, where they would have been on this day in advance of summer of 2019. While bookings have jumped, bookings have recovered very strongly in the last two or three weeks. That needs to continue uninterrupted, I think, for another eight, 10 weeks so that we can get not just April, which has Easter in it, but also the peak summer months forward bookings back to the level where they would have been this time two years ago pre-COVID. We will, as always, remain load factor active, yield passive. I think that was demonstrated in the Q4 numbers where we delivered an 84% load factor. I smiled to myself as I listened to a number of our competitors last week claiming to be load factor active and yield passive, yet they only delivered a 77% load factor in their Q3 compared to our 84%, and they were only delivering about 25% of our seat capacity. Nevertheless, lots of them claiming to be Ryanair while not actually delivering what Ryanair delivers. We don't know what the yields will be. We're not going to speculate on this morning's call as to what the yields will be. You're all big analysts out there. You can guess as well as we can and have a look at it yourself. I think what we will see, though, is a very strong... If there is no more negative COVID developments, and I would be cautious on that front, you'll see very strong traffic recovery, not in February, because we've taken out about 15% of the capacity in February. You should see a very strong load factor recovery into March and then Easter or April, which will be the first month of the new year. In the new year, we're aiming for or targeting 165 million passengers. We would want and expect to see a very, very strong traffic and load factor recovery in April, and then that would set us up well for the summer. If however, there is another Omicron variant that emerges in the middle or the end of March, then Easter will get wiped out the way Christmas got wiped out in December, and we will put us back two or three months. I think the sensible thing to do at the moment is to be cautious. I think we should expect some more COVID negative news flow somewhere. We don't know where it will come from, but I think it would be sensible just to be cautious, and I think that's what underlies our message here today. Okay, just go ahead with the Q&A, please. Thank you. Just as a reminder to participants, if you do wish to ask the question, please dial zero one on your telephone keypad now. If you find your question is answered before it's your turn to speak, you can dial zero two. As mentioned before, please limit yourself to two questions per person. Our first question comes from the line of Mark Simpson at Goodbody. Please go ahead. Your line is open. Mark, go ahead. Good morning. Yes, two questions, if allowed. First one, you mentioned in the preamble that you're gonna pay down debt over the next two years in terms of the presentation on the website. I'm just wondering if there's an update on CapEx we can have behind that statement. And then secondly, while we're not looking for specific overall guidance on the summer, there are two areas that kind of stand out in terms of competition. One is domestic Italy, the other is Vienna. I'm just wondering, can you give us an update of how you see the strategy of managing those markets, particularly where one of your competitors, you know, has put a statement down in the domestic Italian side with their increased commitment to capacity? It's really between you and Wizz being played out in Italy and Austria. Be interested to have your take on that. First off, maybe a CapEx update from Neil. Sure. Just before I hand to Neil to ask the complex topics today, and I might ask Eddie just to give his views on domestic. I think it's important, again, you know, there is an unnatural view out there generally, maybe amongst I think some unions across Europe and labor, that, "Oh, we're out of COVID, and, you know, we're recovering from it. It's all behind us." It isn't all behind us. We're still repairing load factors. We're still repairing bookings, and we still need to get our forward bookings for the summer up to where they were before. Even when that does repair, we went into COVID essentially with a zero net debt position, and we will emerge with effectively a EUR 2 billion net debt position. The foremost in the board's mind at the moment is returning that net debt position to zero as quickly as we possibly can. Our primary uses of cash in the next, I think, 18-24 months will be pay down that debt to return us to a net zero debt position. Neil, net debt on CapEx. Okay. On CapEx markets, no change from our previous guidance, so about EUR 1.2 billion CapEx in the current financial year to March 31, 2022. That includes maintenance CapEx. That'll increase to EUR 2.3 billion next year, which is our peak year of CapEx. It starts to pull back, although the next year after that one starts with a two, and then you'll see a drop-off thereafter. Okay. Eddie, domestic Italy and Vienna, are we noticing anything from, or do we even notice, competitors in those markets other than Alitalia? I think on particularly on Italy, we've had a huge investment in Italy over the last 12 months. We've gone from, for the summer this year, 67 based aircraft to 92 based aircraft. We've got three additional bases opened up, and we've got just in comparison to, you know, there are gaps there that have been left by Alitalia and easyJet as well. But we now have well over 100 domestic routes. Wizz have got less than 30 routes there. And we have the frequencies. And we are, I mean, particularly as we flew pretty much our entire schedule down there throughout the whole sort of COVID crisis. We are the sort of go-to airline for domestics in Italy at the moment. We know that some of our competitors down there are less than maximum sort of load factors, certainly in around the 50%-60% mark and sort of desperate fares there at the moment of €299 and €499. We have grown by almost 40% in terms of based activity in Italy. I'm pretty confident we are going to, or more than confident that we're gonna have the lion's share of the domestic traffic in Italy. On Vienna, again, we will have just close to 20 based aircraft there this summer, as against Wizz Air, which has gone sort of backwards there. They were going to do nine. They're back down to five, talking about going back up to six. We've got significantly more capacity. They've recently canceled 14 competed routes out of there. Notable ones will be Madrid, Cologne, and Warsaw. I think we are certainly more than grabbing market share and frequency build. On competed airlines or on competed routes, we see them pulling away from us. Just a follow-up. Do you think that your fuel hedging gives you a massive advantage this year in being able to actually take on the competition in being able to manage your prices with a decent return, take that to an airline which is unhedged? I don't think fuel would ever give us the idea. We don't hedge fuel here to maximize returns. I mean, the returns will very much depend on the speed and depth of the recovery. I think what's important with our fuel hedging strategy is that we can deliver cost certainty to our shareholders for the next 12-18 months. I mean, we have seen some spectacular deviations by some of our so-called competitors arguing that they now will be unhedged because they've never made money hedging. Well, they're about to lose a shed load of money by not hedging with particularly with spot prices up at $91 a barrel. You know, to be fair, all we see from them in some of those, as Eddie said, some of those maps that easyJet, you know, they've struggled for a 50% load factor, and we've seen desperation pricing recent weeks. We've seen some seat sales of €2.99 and €4.99 in domestic Italy, although nobody in domestic Italy seems to notice them. You know, I think most of the other airlines, certainly, easyJet, the other well-known sort of, airlines, local airlines in Europe are hedging. You know, we don't always. We're not hedging, but hedging gives you cost certainty for your shareholder and investor base for the next 12 months. It would, you know. It really takes a spectacular, I would say, leap of mismanagement to be looking at a post-COVID recovery where I think all of the pressure on oil will be to the upside on the back of economic recovery and also political uncertainty over Ukraine. We would want to be certainly, I think it is a sensible strategy to be hedged. The real challenge for us in hedging was, you know, would you kind of hedge up to 80%-90%? We didn't think that was sensible, which is why we've got a, I think, a very clever and sensible mix of jet swaps and caps, you know, which insulates us from on the upside, but there's still some benefit from us with the caps on the downside if there was some kind of collapse in oil price. It won't affect the returns. It just gives our investors cost certainty. That's great. Much appreciated. Thanks, Mark. Next question, please. Thank you. That comes from the line of Sathish Sivakumar of Citigroup. Please go ahead. Your line's open. Yeah. Thanks, Michael. Got a couple of questions here. Firstly, if you could actually give an update on the recent ICAO report on Minsk regarding the Belarus airspace. Secondly, on the ancillary revenues, if you could actually share some color on the quarterly momentum that you are seeing on priority boarding and reserved seating. Are you expected to normalize in the coming quarters? Thank you. Thanks. Good questions, Sathish. We welcome the ICAO report on the Minsk diversion in May 2023. I think it is clearly. We think it could have gone further, but at least it has certainly highlighted that it was inappropriate state actors who essentially engaged in an act of modern-day aircraft piracy. I think we are calling on ICAO and on the aviation and the government authorities of Europe to ensure that there are appropriate undertakings given by certainly the Belarusian state this will never happen again. It is fundamental to air travel going forward that both airlines and our passengers can expect to overfly even rogue states free from any interruption or dishonest diversion or piracy of aircraft. We certainly welcome and we fully support the action now being taken by the U.S. Department of Justice against the four named officials in Belarus. We will, as the airline involved, be seeking to support any actions taken against those actors. I think it is fundamental to the future of air travel that we do not have a repetition of what, to my mind, was the first case since the Chicago Convention in 1945 of a state-sponsored act of international piracy. There should be no overflights of Belarus unless appropriate guarantees are obtained from them that this won't recur. In the meantime, we continue to fly around the Belarusian state. It's generally on our North-South flight from the Baltic States down to Greece and those kind of destinations where we might overfly Belarus. We believe all the EU states should show solidarity and avoid Belarus until appropriate assurances are given. Eddie, do you want to give us some color on ancillary revenue development? Yeah. I mean, on ancillaries, I suppose the big call-outs really for us internally here are duty-free sales, reserved seating, and priority boarding. You know, as we have been working our way through the sort of shutdown on COVID-19 with our labs people over the last two years, we've been doing a lot of work in terms of dynamic pricing, particularly on the priority boarding side, and that is continuing to show build. We've also put in some dynamic pricing in terms of the number of price points for baggage as well. I think we'll only see that more close in as we get into the summer. We still have some way to go, I think, on dynamic pricing on seats, which we have yet to tap in the way that we've done with priority boarding. Very pleased with what's happening there. Obviously on duty-free out of the U.K., we're continuing to build on that. Again, into the summer, I think we really only see how solid that is when we get those volumes back up. Very pleased with it. Roughly what proportion of our flights operate to and from the U.K.? It's a big, just under 30%. Okay. Thanks, Sathish. Next question, please. Thank you. That comes from the line of Savanthi Syth at Raymond James. Please go ahead. Your line is open. Hey. Good morning, everyone. Just two questions. Just on the non-fuel passenger per passenger performance, as Neil pointed out, it's a very strong showing there. Just curious if you expect that to slip here in the fiscal 4Q, given, you know, how much close-in capacity you've cut here in January and February. And just some of the early thoughts on, you know, where that can go in fiscal year 2023, just in terms of kind of upper and lower bounds, perhaps. And then for my second question, just curious, you know, if you can provide some color on how you're thinking about the opportunity in Germany relative to perhaps kind of what your ambitions were pre-COVID. Thanks. Okay. Well, Tracey McCann, you want to take that, the non-fuel, passenger cost development and, where we see that going, and then I'll ask Eddie maybe to comment on the opportunity in Germany. Okay. We've seen a very strong performance in the non-fuel costs in the quarter, EUR 32 per passenger. That was driven by increased load factors, increased aircraft utilization, a lot of work done on the variable costs on renegotiating a lot of our airport deals, and we continue to benefit from the staff pay reductions. Where we see it probably coming over the next year is, as we slide forward, I suppose we'll start to see an increase in Eurocontrol and ATC costs, which are pretty much out of our control. So that'll probably give us about EUR 1 passenger, I'd say, next year. We hope to get to the pre-COVID levels as we return to increased load factors. Okay. Eddie, you can talk on your development in Germany and particularly the closure of the Frankfurt main base. Yeah, I think, you know. Go on. Our view on Germany would be that, you know, there's a structural problem with airport costs in Germany. That's evidenced by what's happened in Frankfurt recently, where, you know, practically every other airport in Europe that we dealt with was looking to lower prices. In Frankfurt, they were looking to not only higher prices but to look for higher thresholds passengers. I suppose Germany is really a story of two types of airports. The secondary airports are still very competitive in terms of, you know, the smaller airports like Baden, Memmingen, Niederrhein, places like that, where we've been able to sort of put additional capacity in there. You know, Germany is the one country that we have significantly reduced based aircraft if you compare it with summer 2019, and it's all down to pricing security taxes. We didn't recover fully to the amount of based aircraft that we had previously had in Berlin. Something needs to happen in Germany on pricing, particularly where you've got less capacity in Europe, and you've got more choice with other airports. Frankfurt was the big casualty there. What about Nuremberg and Hahn? Yeah. That's what I'm saying. The more sort of secondary airports, I mean, Hahn has its own difficulties at the moment being in administration. They're looking for a buyer at the moment. Nuremberg came back with a published deal that was open to everyone on a non-discriminatory basis and made sense for us to go back in there. Originally, we went out of Nuremberg because of the non-delivery of the MAXs. Places, like I say, like the smaller airports, the Badens, the Memmingens, and the Niederrhein and places like that are the only ones that are at least trying to lower costs when they know that the international competition for them on movable aircraft with LCCs is going to tend to go elsewhere. Yeah. I think also, from my piece, I think Germany is an example again of our cost discipline. As Eddie has said, Frankfurt Main were coming up with a ridiculous price increase into a post-COVID recovery. I think what's interesting is you see kind of essentially the big hub airports. I mean, Heathrow came up with a ludicrous, I think GBP 15 per departing passenger, GBP 15 sterling per departing passenger. You know, one of the richest airports owned by the richest shareholder in the world. Their first response to a COVID catastrophe and the need to recover was to put up charges again. Frankfurt Main is doing the same because they can. They have a very large connecting hub there. We're happy to grow in Germany. We are growing at a number of smaller airports. Frankly, we have better uses of our aircraft this year, this summer and into 2023. If an airport doesn't want to work with us to stimulate or use price to stimulate an aggressive traffic recovery, then frankly, we have 200 other airports elsewhere in Europe where our aircraft are better deployed, and we'll deploy them elsewhere. We will not give up on Germany, but like frankly, I think the German market is in for two or three years of very difficult times for the airports, where they're increasingly reliant upon the state-subsidized Lufthansa Group. Lufthansa have no interest in returning traffic volumes. They're leading the charge on slot waiver on the waiver, the slot, of the use it or lose it slot rules. Certainly the large German airports are going to see a significant decline in traffic, materially higher airfares, while it becomes a kind of a Lufthansa monopoly. There's kind of a mood in Germany there around supporting the national champion. It all seems to be about propping up Lufthansa, not just with EUR 12 billion of state aid, but also eliminating competition. We think that can be a reasonably short-term phenomenon. We're very happy to redeploy aircraft into growth markets in Central and Eastern Europe, where we're growing far more, growing much more at a much more accelerated rate than any other airline. We have growth opportunities in Italy, in Spain, in France, Ireland, and the U.K. If some German airline wants to put up fees, good luck. We'll see you when you change your mind in two or three years' time when you have about 20% less traffic than you do pre-COVID. Next question, please. Thank you. That question comes from the line of Alex Irving at Bernstein. Please go ahead. Your line is open. Alex, Hi. Alex, if your phone's on mute, you'll need to unmute. Okay. Let's just move on to the next one. Okay. The next question comes from the line of Stephen Furlong at Davy. Please go ahead. Your line is open. Yeah. Hi, Michael. Two questions. One for you, Michael, and then one for Neil. Michael, just to talk about what's going on with Boeing, and obviously the performance of the new aircraft, but also in terms of MAX 10s and new orders beyond 2025, 2026. Neil, I would like to talk about carbon credits and costs. I just haven't seen that much with other airlines where you actually hedge this, and you might just talk about how that came about in the market because I think that's quite interesting. Thank you. Okay. Well, the kind of key event with Boeing in the last Q3 is we took delivery of twenty-five aircraft in the quarter. We were up to 41 aircraft at 31 December. I noted Boeing's results of last week, they delivered 99 aircraft in the quarter. So we accounted for one in every four Boeing aircraft deliveries in that quarter. We expect to take another 24 aircraft from them, six aircraft a month in January, February, March and April, and that gets us up to our 65 aircraft for summer 2022. Performance of the MAX aircraft has been exceptional. I mean, admittedly, some of this is because we're operating with lower than normal load factors. We're operating with an 84% load factor in Q3 as opposed to more normal 90% load factors. The fuel consumption is better than the original 16% promise. The noise performance has been noted by almost all passengers. They're exceptionally quiet aircraft on board. I think our initial concern, which was that there would be crew or passenger reluctance to operate the aircraft, absolutely none. We still, despite the fact we're offering to customers, you can offload off the aircraft and travel on the next NG if you want. Not one passenger has sought to offload. In fact, if anything, more and more people want to fly on the new quieter aircraft. On the MAX 10s, I think, you know, they've been disappointing. The sales operation in Boeing has been asleep. They've been disturbed, I think. I think worrying from a kind of as Boeing's largest customer outside of the U.S.A., it's been worrying to see a trend in recent months of Boeing customers converting to Airbus. We saw Jet2 order Airbus, Qantas order Airbus, and even KLM, who for nearly 100 years have been operating short-haul Boeing equipment now look like they're moving towards Airbus as well. Certainly the Airbus sales team are performing very well. Boeing doing nothing. We haven't heard back from the sales team since, I suspect, about last October. You know, they know where we are. I think the good news is we don't need any aircraft deliveries or orders from Boeing until 2026 or to 2027 or 2028. For an OEM that's losing so many customers to its Airbus opposition, it's remarkable that they haven't been camped outside our offices here trying desperately to restart our discussions on the MAX 10. We live and wait in hope. In the meantime, Neil, carbon credits. Sure, Stephen. Carbon credits, where did that come about? Well, Michael talked about our desire for certainty on fuel. Carbon's becoming a bigger cost than it has been for the last couple of years. We took the decision to line up our counterparties and develop a forward market for EUAs. We're able to do that thanks to the BBB rated balance sheet that we have, and I think wisely locked in carbon exposures out to the end of FY 2023 in a market that is rising. I think the spot's trading about 19 EUR per EUA today. We're hedged out into next year at 45 EUR for 80% of our requirements. that boils down to our desire for certainty and the balance sheet that we have, which convinced counterparties to set up this market, which traditionally wasn't there. Okay. Great. Thank you. Thanks, Stephen. Next question please. Thank you. That's on the line of Muneeba Kayani at Bank of America. Please go ahead. Your line is open. Thanks for the call. One follow-up question on Ukraine. What's your exposure there? You've added some new routes there, and kind of what have you seen more recently with the kind of political tensions? And then secondly, on the cost side, have you seen kind of salary pressure for cabin crew and pilots? And kind of how does that impact your strategy to get back to unit costs pre-crisis levels? Okay. On Ukraine, we have you know a reasonable-sized operation to Ukraine, but mostly it's centered on Kyiv and airports in the west of Ukraine. Our plan this year is to grow from about 1 million passengers last year to close to 4 million passengers to and from Ukraine this year. Again, absent there being any sort of negative developments, we will continue to operate to that plan. We have no aircraft based in Ukraine. You know, if there was a Russian invasion or there was some kind of political disruption up there, we would pivot those aircraft away from Ukraine into the summer. We can fill those aircraft readily going to other destinations, any of the other 200 destinations we have across Europe. We remain committed to Ukraine as long as, you know, Ukraine is looking westward. There are huge economic workflows of people traveling to and from Ukraine, working in Central and Eastern Europe. There's a very large migrant workforce in Poland, in Germany. You know, we see no reason why Ukraine won't continue to grow. It is certainly one of the countries, you know, absent if it's not invaded by Russia. It's a country we would expect to open a couple of bases in Ukraine sometime in the next. I would have said two or three years subject to agreement on cost and prices. We did have the new routes team. We're down in Ukraine visiting the Ukraine airports. Again, this is about our third or fourth visit in January. I think it was understandable, really, that the Ukraine authorities weren't in a position to discuss kind of new routes and bases. They were somewhat otherwise distracted. We hope the situation in Ukraine gets resolved diplomatically. And if it is, it remains a very exciting growth opportunity for us. I mean, it's the same population base as Poland with the same kind of propensity for travel to and from the EU. Just on the cost of the salary pressure, I mean, we don't see much salary pressure at the moment. The vast majority of our people would be pilots and cabin crew. We are coming to the end of the second year of four- and five-year multi-year pay deals. I might ask Eddie just to give you some flavor on it. We're coming, you know, this is the first year, we're committed to kind of pay, starting up, the first of two or three years of pay restorations in July. We've begun to start having discussions with some of our unions and our people about maybe we'll bring that forward from July to April, or we may restore instead of three years of restoration, maybe do it over a two-year period. You know, we would want a year or two tacked on to the end of those agreements, if we're going to accelerate those kind of pay deals. We have to be careful because I think, you know, we still don't think we're out of the worst of the COVID. We think there is the potential for further negative COVID surprises. You know, if we do better over the next year or two, the two things we wanna do is pay down our EUR 2 billion of net debt, and two is to restore the pay of our people in a kind of sensible and sustainable fashion. However, the backdrop to that is, you know, there are literally thousands of unemployed pilots out there. We are, I think. At last now, we have about 900 cadets coming through our cadet training program across the system. We have seen no shortage of pilots for the coming number of years. Again, similarly with cabin crew, we're running a lot of cabin crew training this year for the growth across Europe. There would be one market, the U.K. would still be, I think, an area where there are some pressure points, particularly on the cabin crew side. You know, there's a lot less freedom of labor in the U.K., I think, where the many sectors, particularly some of the people who are most vocal in calling or in supporting Brexit, who now want the government to issue work visas for bar staff, fruit pickers, and God knows what else. But I think, you know, we, our cabin crew are reasonably relatively well-paid, certainly well above hospitality, kind of supermarket workers or entry-level workers in the U.K. If there's going to be a pinch point on salaries, I think it would be likely to be in the U.K. and in certain spots in the U.K. around cabin crew. Other than that, we don't see much salary pressure, upward salary pressure. I should say, obviously, labs and IT is an area where there's an ongoing salary pressure there. You know, we have four centers across Madrid, Dublin, Wroclaw, and in Portugal. You know, we're continuing to attract very. You know, we're continue to recruit very attractive graduates. There is a relatively high rate of turnover in the labs and IT area. Eddie, do you want to have. Juliusz, did you want to have some, anything on the Ukraine side? Eddie, give us some flavor on this, what you think on the salary pressure side. Juliusz first, Ukraine. I think, Michael, you've covered Ukraine comprehensively. I mean, we hope that the conflict will not take place, that the standoff will be resolved diplomatically. We look forward to investing in Ukraine. Eddie? Yeah. I mean, I think you've covered most of it there, you know, except to say that, you know, we tend to think of financial results obviously on a quarterly basis. With the restoration of pay, I mean, you've got to look at not just this summer, but what's gonna happen next winter and whether there's a reoccurrence next November of some other sort of Omicron-type variant. On that basis, like this isn't over where we don't have a clean pair of heels just yet. We do want to, you know, clearly people made sacrifices here to keep the business on track. Pilots agreed through their unions for pay cuts of 20%. The cabin crew largely around 10%. You know, we have to have an orderly way of doing that, and we're in negotiations at the moment to do that with a number of unions. If we can do some of that earlier, we can do some of it earlier, but only on the basis that we've got cost certainty over a longer period of time. Yeah. Okay. Thanks, Eddie. Thank you. Next question please. Thank you. Sorry about that, just one second. Sorry. The next question comes from the line of Jarrod Castle at UBS. Please go ahead. Your line is open. Jarrod, hi. Hi. Morning, everyone. Just coming back, you know, to growth, you know, over the next two to three years. I mean, you know, the biggest markets at the moment are Italy, followed by Spain and the U.K. I mean, if you look out two, three years' time, should we see more concentration in terms of revenue mix in those markets, or do you think, you know, it will become more balanced? And then just secondly, on summer, I mean, obviously, you know, the Northern Hemisphere's in winter, but, you know, there's been much-publicized stoppages in the U.S., you know, not enough SAF and people getting sick. How do you plan to kind of, you know, we'll hopefully be a period where there's less people getting infected. How do you plan to kind of manage something like that in summer should you see things spike in terms of, you know, planes at hand to fulfill schedules and SAF shortages potentially if they arise due to people being unfit to travel? Okay. Let me touch briefly on both. I mean, growth over the next two years. Again, in all cases, you know, for the last 35 years, growth here has always been opportunistic. You know, the growth will go wherever, you know, we see the best deals. I think we do comment because of the scale of the markets. You know, we're seeing very substantial growth opportunities in the U.K., in Spain and in Italy. You know, this summer we will grow from about eight- 20 aircraft in Vienna. Budapest, for example, which is the home airport of one of our competitors, will see us this year grow to nine aircraft? 10. eight. We'll grow to eight aircraft based in Budapest this year, which will be one more than Wizz, who I think will be at seven aircraft this summer or this summer there. We're growing faster in many Central and Eastern European markets than the incumbent carriers. Our growth will always be opportunistic. You know, it's not some Napoleonic invasion of Russia here. It is whoever comes up with the best deal will get the next four or five aircraft. I think it's fair to say, you know, the new route team are absolutely inundated with requests for meetings, negotiations at airports. You know, one of those that I would drop into the business, you know, if we saw a resolution of the political uncertainty in Ukraine could take 15, 16, 20 aircraft at five different airports over the next two or three years. I think the critical opportunity or the thing to focus on is not so much the actual, you know, the geographic areas. Focus more on the fact that Ryanair will take delivery of some 60 aircraft a year each year. By the way, with 65 into the summer of 2022, there'll be another 60 for summer 2023 and another 60 for summer 2024. We could allocate all of those aircraft this summer, if we wanted to airports and governments who are engaged in putting in place very predictive incentives. A good example of that would be the Irish government. I mean, we had no plans to grow in Ireland in summer 2022. In fact, we were going to cut the fleet. The government has come up with a very innovative COVID recovery incentive scheme. I think the total value of the scheme is about EUR 90-EUR 100 million, which is passed through by the government through the airports onto those airlines who are delivering growth. As a result of that, we've gone from cutting our planned airport capacity in Dublin, Cork and Shannon compared to pre-COVID to now running our largest ever schedule out of Cork, Dublin and Shannon this summer, entirely in response to a very enlightened you know and an innovative, I think, government COVID recovery program, which is available to all airlines who grow. It's not kind of just designed for Ryanair. You know, we have the flexibility to deliver far more growth than any other airline. We will always be opportunistic. How we handle staff? Again, I think we handled the staff situation better than any other airline in Europe during COVID. We kept all of our aircraft current. We kept all of our pilots and cabin crew current. Even in some... By the way, there's this myth out there that we operated lots of ghost flights to protect blocks. We have never in our lives operated a ghost flight. In fact, we're usually criticized for the opposite, "Oh, we just cancel flights when we have low load factors." Which we don't do that either because we don't have low load factors. We did operate flights during the 18 months of COVID, where we sent a plane up there to keep the plane current, filled it full of pilots and cabin crew to keep them all current, because they all had to operate one flight a month. We didn't operate any empty flights. Some of the flights we operated were full of pilots and cabin crew to keep them all current. We are going to deliberately over-recruit this summer. I don't see us having the same issue in the U.S. with staff calling in sick. You know, there's a huge proportion of our staff are now vaccinated. There's a huge vaccination uptake across certainly Europe and Continental Europe. In some countries, Austria, Germany are talking about mandatory vaccinations. I'm not sure whether they'll be able to make it mandatory. Across most of Europe, you see very, very high. In Italy, Spain, Ireland, U.K., 90%-95% vaccination thresholds. There is much greater resistance in the U.S. to vaccinations. You know, you have a very strong and idiotic anti-vax kind of a group, which seems to be about 40%-45% of the population. We don't see that happening here in Europe. You know, our view of life is if you were... You know, we always roster significant staffing pilots and cabin crew. We build in sickness and routine sickness into that. We have roster significant standbys on a daily basis, and we would expect us to continue to run through. We've had no difficulty with that in the last three or four months into what has been a very strong post-COVID recovery. The one couple of pain points we did see over Christmas was, you know, security staff at airports, at a number of airports and handling staff at a number of airports. Strangely, some of the bigger airports like Berlin and Frankfurt, where I think they were being opportunistic, but they were not showing up to work on Saturdays. They all seemed to get to be close contacts on a Saturday and Sunday, and then remarkably, they all returned to work on Mondays. You know, I think that will even itself out. We don't think that will be a significant issue into Easter or into summer, as long as there is no negative COVID development, if there isn't. You know, I don't think we're out of the woods yet. We expect there to be other variants. You know, we hope that there won't be any other variants that will result in the kind of mass hysteria that was caused by Omicron in the first week or two of December, where European governments were closing down. Despite that, and even then, the South Africans were telling people, "Look, you know, it does seem to be more transmissible, but a lot less virulent. Staffing, I think we've managed well to date, and we will continue to manage it well. We don't believe, given the high rate of vaccinations in Europe, that we'll have similar kind of sicknesses as they have suffered in the U.S. Thank you, Michael. Yes, go ahead. Can I just add on to that on the labor side? I mean, we have absolutely no issue with the supply of pilots. On the cabin crew side, as we have. Don't forget, while we were flying all of our aircraft over the last two years, we kept up the sort of wheel of recruiting, so in terms of the cabin crew side. We've no issue with cabin crew. We may have some pockets in the U.K., but if you look at it on a macro level of the amount of cabin crew, there isn't an issue for this summer given the sort of run rate that we have in terms of applications and the number of courses running. We're not coming from behind at all. We are coming from a steady platform of training. That's a good point. I mean, in the U.K., you know, I mean, our cabin crew generally are earning between GBP 30,000 and GBP 40,000. You know, it's significantly ahead of hospitality. It's significantly ahead of retail. It's probably double or triple what the fruit pickers are earning now. I know that's a different issue, but you know, we would. We don't expect to see any issues there, and I think again, I come back to the point, I think the high rate of vaccinations will hopefully protect us from the experience of some of the U.S. carriers on labor shortages. Great. Thanks very much. Thanks. Next question please. Thank you. That's from the line of Jaime Rowbotham of Deutsche Bank. Please go ahead. Your line is open. Jaime, hi. Hi, Michael. First, you flagged your superior December quarter load factors versus peers. Provided there are no further COVID curve balls, and if the forward bookings curve continues to rally, what do you think is the best case for load factors in Easter and peak summer? Can you get back to pre-crisis type levels in the mid-90s? Secondly, your environmental targets are front and center in today's statement. You hope to power 12.5% of flights using sustainable aviation fuel by 2030. What are the main constraints to achieving that? And will that level be quite consistent across the network, or will it be skewed perhaps depending on where the SAF is stored? Thanks. Thanks, Jaime. I know it's Thomas Fowler, our Director of Sustainability, to address the environmental issue. Just to add to the load factor issue first, I mean, we would've gone. I think we would've had a load factor in the third quarter if we hadn't had Omicron that would've been in the high 80%. We won't get there in February, and we won't get there in March. I would be hopeful that we will get close to 90% through April as long as there is no COVID negative development. I'm not sure we get over 90%, but we certainly are. I think our thinking going forward is that once we get into the peak summer months, and that would be sort of June, July, August, September, that we would expect our load factor to be back up over 90%. Now, word of caution, that's because we'll be load factor active yield passive. We will drive load factors up over 90%, but maybe at the cost of yields. We'll be aggressive on pricing. We're not expecting, and you know, we're working on our budgets for FY 2023 at the moment. We don't expect to get back to kind of 95%-96% load factors that we were at pre-COVID this year. I think we are budgeting for a kind of low 90% load factor through the year, and we will take it on. If we have to be aggressive, we'll take the hit on yield rather than on the load factor. I think close to 90% for Easter, April, and then I think over 90% into the peak summer months. Thomas, environmental. Yeah. Thanks, Jamie. Obviously the 12.5% target is aggressive. Like the biggest constraints we see today is the availability of SAF. At the moment, less than 1% is produced in Europe today. Obviously the current Fit for 55 proposal has put a mandate on fuel producers to produce 5% SAF by 2030. We've seen some of the major oil companies come out with statements in the last few months to say 10% of their aviation production will be SAF by 2030. That gives us confidence that we should meet the 12.5% target, but if not, we'll be very close by 2030. And then the price. Like so obviously the price is a lot higher today, but we think as production ramps up, the price comes down. Obviously we have been calling for some incentives to be given to producers to produce it. Regarding the pickup, I think there'll probably be more pickup at some of the main locations initially because that's where most of the fuel will be sent to. But over time, we see an even distribution across all airports in Europe under the mandate from Europe. Okay. Thanks, Thomas. Thanks, Jamie. Next question please. Thank you. That's from the line of Neil Glynn at Credit Suisse. Please go ahead. Your line is open. Morning, all. Just following on from that, question firstly just on Easter. I realize the forward booking curve is later these days. Can you give us some kind of a sense as to just what proportion of Easter bookings are actually in place this year versus 2019 to help us understand the increased reliance on late bookings towards Easter? Then a second question, maybe a bit more left field. Obviously the subject of the 737 popularity has been topical, and we're all clearly wondering about your future fleet plans. The fewer non-Ryanair 737s that are actually operated in Europe, following the recent decisions from KLM and Jet2, it prompts a question for me in terms of the availability of engineers, maintenance facilities. Maybe even type-rated pilots to an extent. Is that something that's a concern for you, or are you very much in control of that situation and it's irrelevant? I think it's a good question. I mean, I'm not gonna give you obviously a proportion of Easter in advance. I mean, to give you kind of a flavor what's normally happening here. Pre-COVID, we would enter into a month, on the first day of the month, we'd have about 80% of the kind of the bookings for that month or the expected target for that month already pre-booked. Currently, at the moment, it bounces up and down. Omicron did some damage. We're running at about 60% pre-booked. You know, that's built strongly. It went up from 45 through 50, 55 as we went through kind of August, September, October, November. Then it got a big hit. It kind of rug got pulled out from under it in December into January. Which is why we took out 33% of the capacity in January, 15% of the capacity in February. So we would typically now expect to enter a month, at the moment with about 60% of the final target in the bag. Some of that is also a reflection too, though, that we now have a much bigger domestic operation in places like Italy and in Spain. So where they do and will book later, but we know they're going to book because that kind of domestic short haul stuff generally books later. So we're running about 20% behind. We monitor it on a daily basis. You know, we open up, close off, open up, close off, if we think, you know, the weekend bookings, or bookings on Monday, or bookings on Tuesday. We do some tactical stuff, like we ran a 24-hour EUR 9.99 seat sale last, I think it was Wednesday, with essentially the availability in the first half of February. I mean, there's no doubt that February, as we move into it, with about 50% of the capacity cut, we're weaker in the first half of February. We have the school midterm in the third week of February, and then there's the fourth week of February is reasonably well booked as well. It, it's again, a question of growing back the bookings. That it's very hard to shift a lot of bookings in the first two weeks of February during the month of January when, you know, so much of the media was still focused on Omicron, and developments, and lockdowns, and everything else. It's getting there, and we think that will. If there is no negative COVID development, it will repair very strongly into March. Easter and April will be critical in that if there are no negative developments and lots of people travel, families travel for the Easter holidays, Easter break, and it all goes well, and, you know, we don't have negative PCR requirements on returning back to Blighty or these islands, then I think that will put a lot of confidence into summer. We'd see a big surge in summer bookings as well. We keep making the point at the moment, not only is it later than it. They're booking late, but it's very fragile. Any negative development, as we saw during December, will have an immediate and very damaging impact, not just on volume, but also on yields as well. 737, it's a very interesting situation. I think if anything, the lack of Boeing customers or the flight of Boeing customers in Europe to Airbus is indicative firstly of a sales failure on the part of Boeing. I mean, you know, it's one thing not attracting new customers, but to lose your existing customers to your direct competitor, Airbus, seems to me to be, you know, a failure of their sales force. You can argue that Air France-KLM are the airlines who are receiving massive volumes of state aid were probably inevitably going to be nudged in the direction of Airbus. To lose Jet2, you know, a reasonably well-run Boeing customer to Airbus. I don't know whoever it was said. The Oscar was to lose one or two customers is probably careless, but to lose kind of four or five of them is stupid, and whatnot. I forget what the quote is, but it's something blindly stupid. What's interesting though is that we see going forward, certainly in the next year or two, there's going to be much more upward pressure on pay for Airbus pilots and Airbus engineers. You see people, the likes of at the lower end of the pay scale, the Volaris of this world, probably losing some pilots to Wizz and to easyJet. Wizz Air and easyJet losing pilots to Airbus, and Air France, and, you know, all the Airbus operators who are paid more. I think you're gonna see a lot of much more pay inflation on the Airbus pilot and Airbus engineer side. What's interesting on 737s is there's a lot less demand and a lot less, I think, rotation or job opportunities for 737 pilots and engineers to jump ship across Europe. We're training upwards of about 1,000. We've almost 1,000 737 cadets in training at the moment. Interestingly, pre-COVID, you know, when Norwegian were running around doing all the madness that they were doing in 2017 and 2018 and causing a pinch point on pilots that they've now blown themselves up as was inevitably going to happen. We've seen a lot of 737 pilots returning from Asia and from the Middle East. We have reintroduced the payment for our cadets. They are now paying us what? About 25, 30,000, like EUR 30,000 for their cadet training, and we have nearly 1,000 of those in cadet training at the moment. I think the job opportunities for 737 pilots across Europe in the next number of years will largely be confined to Ryanair. Now, we do pay well, and we are very productive and beneficial five-four rosters and stuff like that. I think actually because we have such scale, that's why we're investing in new training facilities. We opened a EUR 50 million training facility in Dublin. We'll operate another one somewhere in the Iberian Peninsula and probably somewhere in Central Western Europe or Eastern Europe in the next two or three years. We have the capacity to train all of our own engineers, our own pilots, and our own cabin crew. Given the cost of trying to retrain the 737 pilot onto an Airbus, I think if anything, there will be a lot less turnover of pilots here in Ryanair. Certainly a lot less turnover of engineers, because we'll train our own, but we will essentially be the only significant, I would say, 737 operator here in Europe in the next couple of years. I would argue the counterfactual is that actually it's a strength to our cost model here in Europe. Whereas I think all the Airbus operators certainly, if you look at the Volaris, easyJets, Wizz, BAs, Air France's, KLMs, there'll be a lot more turnover and stealing of each other's pilots because they're all Airbus qualified. Great. Thank you. Next question. Thank you. Thank you. you. The next question comes from the line of James Hollins at BNP Paribas. Please go ahead, your line is open. Hi. Morning. Yeah, the first one's for Neil. I think in your last call you talked about H2, or fiscal H2 costs being about EUR 35 per passenger. Obviously, Q3 you've done 32. I was wondering if you're beating that number or whether we should expect some pretty significant ramp-up costs. Obviously, most airlines talking about that. The second one, now, I'd like to caveat, this is not a question about summer yields, and I do recognize you're load active, yield passive. But just following in your comments, Michael, calling out effectively a lot of operators not having enough SAF into the summer to operate full schedules. Calling out us analysts as idiots for thinking that capacity might actually be quite high intra-Europe. You call it down maybe a double-digit percentage. Just wondering how that plays into how brave your revenue management team would be at this stage of the year and sort of coming through the next couple of months as you call out that capacity outlook for the summer, hopefully a surge in bookings, et cetera. Thank you. Neil, you gonna take the first on the H2 cost? Sure. James, there's no change. On a full year basis, we're expecting to come in somewhere around EUR 35 per passenger ex-fuel. You'll recall we were well over 60 in the first quarter of this year, and that's been ramping down into Q2 and Q3. Blend is about EUR 35 on a full year basis. On the second one, I mean, perish the thought that I would ever call an analyst who we respect and value highly, idiot. But yeah, I've seen some kind of pieces recently talking about, you know, we dispute Ryanair's view that capacity will contract in Europe this year. I don't know how you dispute it. You know, the legacy airlines have spent inordinate amount of lobbying and resources trying to extend their soft labor scheme, you know, and expressing deep unhappiness that it's gone from 50-50 to 63-64. I know of no legacy airline that proposes to operate its full pre-COVID short-haul operation this summer. They're all talking about cutting it back. Alitalia's fleet is 50% less than it was pre-COVID. TAP's fleet is about 35% less than it was pre-COVID. If you look around the piece, even easyJet's fleet is now less than it was pre-COVID. We are the only airline with significant additional capacity this summer. To a lesser extent, Wizz have a bit of growth capacity. Because they have a much smaller base, it looks like a higher percentage. You know, in general terms, I cannot see where. Particularly when you don't have the long-haul, the Asian traveling across Europe this summer, and they won't be. There are still travel restrictions on them. I think the U.S. will partially recover, but they'll be slow to travel outside of America again. There is going to be nobody to fill the short-haul flights of Lufthansa, Air France, IAG, Iberia, you name it. That's why, you know, if they could fill them, I mean, Lufthansa's out there whining on about operating ghost flights. Well, you know, to which we said, "Well, the obvious solution to your ghost flights was introduce some low fares and sell them to the traveling, the people who've been giving you EUR 10 billion or EUR 13 billion of state aid." They have no commitment to doing that. Now, I would certainly, I wouldn't die in a ditch over whether the declining capacity this year was going to be a high single-digit 7%, 8%, 9%, or whether it was going to be 12%, 13%, 14%, 15%. I don't think it matters that much. It is certain, in my view, that the capacity will be meaningful. Short-haul European travel will be meaningfully down this summer into a marketplace where oil prices, spot oil has gone above $90 a barrel. It's at a seven-year high. You have airports, most notably Heathrow, Frankfurt Main, and inevitably Gatwick, that will shortly follow with significant cost increases. Therefore, you know, it is in my view. How brave would our revenue management team be if that? They wouldn't be brave at all. I mean, what we tell our revenue management team is you must hit the passenger traffic. Your load factor active, yield passive. Now, would we take a chance and hold out for a higher yield? We absolutely wouldn't. I would always give away yield here in return for more accelerated recovery and higher load factors. You see that demonstrated in the third quarter. Both Wizz and easyJet, with much smaller operations, delivered a 77% load factor. We delivered an 84% load factor with 31 million passengers. That was more than almost three times higher than easyJet traffic and four times more than Wizz traffic in the quarter. Our revenue management team here don't have to be brave, they just have to hit the. The only time they would get brave is if they failed to hit the passenger volumes or the load factors, and then they'd have to be very brave. I think it's inevitable that with less capacity in Europe, I struggle to see, and certainly with less a combination of less capacity short haul and higher oil prices. I struggle to see why, particularly with inflation running rampant across Europe in the short term, there won't be a strong pricing recovery, certainly into the peak summer months, as long as, and I keep going back to the point, as long as there is no negative COVID development in the next couple of months. We're expecting or worrying that there will be at least one or two more negative variants emerge. Does that answer the question, James? Yeah. I appreciate the thoughts. Thanks. Thanks. Next question, please. That's from the line of Alex Paterson at Kiltearn. Please go ahead. Your line is open. Alex, hi. Hi. Morning, everyone. Two questions, please. Firstly, you've got a lot of new bases and routes coming through. Should we expect those to perform as your existing do, or should we expect and perhaps because you've got plans for big marketing spend and price stimulation, or should we expect them to perhaps mature over a season or two? Secondly, carbon costs are clearly gonna become quite significant in a couple of years' time when the hedging drops off, unless the carbon price falls. It's not obvious that there's a lot of costs that you can reduce to mitigate that. Should we therefore look at those being passed through to passengers, or are you planning to perhaps have lower margins? Okay. Thanks, Alex. I'm gonna ask Eddie just to take the new base performance, and then maybe Thomas give his review on carbon costs, and I'll ask Neil maybe to speak or come in with his view after Thomas. Eddie? Yeah. No, no is the simple answer because, like, largely when we open new bases, they are one or two aircraft bases, and we tend to reverse traffic into those which has already come from non-based activity. And even in bases that we hadn't been in previously, like places like Arlanda, we've actually gone from two-four aircraft there. Like, we've been doing this for years, no different from in the COVID-19 times. You reverse the traffic in, you take less of a risk, and then you build from there. Thomas, the carbon cost, will you be able to pass them through? Like, on the carbon side, like we have seen big increases in the last 12 months. I think this will run like fuel because we're load factor active and yield passive on the booking side. There'll probably be a 12-month lag between whether we recover the increased carbon costs. And it'll run that way as we've seen with the fuel price, previously. Obviously all indications are carbon will remain at the level that is today between EUR 90 and EUR 100. Neil, the ability to pass that through? Well, we're already seeing the likes of Air France who don't think of any carbon at this point or any SAF at this point in time adding on surcharges for their customers. I think there will be an effort with the industry to try and pass this through. I also think that, you know, aircraft are gonna become more efficient, where we're taking on more game changers, 16% lower fuel burn, 16% lower CO2s, which will help. We're well hedged for the next two years as we already talked about. It's really an issue from kind of FY 2024 onwards. I think there will be an effort, as has always been the case in the past, that the legacy guys will try and recover and we'll, you know, hopefully track up behind that. Okay. Thanks, Neil. Thanks, Alex. Next question, please. Thank you. The next question comes from Alex Irving at Bernstein. Please go ahead. Your line is open. Alex, hi. Hi. Good morning, gentlemen. Two from me, please. First of all, on the strength of demand. We've seen some increase in the cost of living. Wondering how that affects Ryanair on the demand side. Thinking about, say, consumer budgeting, whether or not there's enough travel going on to benefit at the lower fare alternative. Then second, just want to follow up on some environmental initiatives, please. Can you maybe talk about where you think we are with the Single European Sky? Is this getting more likely, or do we sort of remain stuck as we have in the past? Thank you. Thanks. You know, what we've seen, Alex, once the EU issued the digital COVID cert on the first of July last year, demand has been incredibly strong. I think there's huge pent-up demand. There's lots of people there. We saw it particularly in the October bank holiday or the October midterm school break last year. Very strong demand at high yields. The British, the Irish, the Germans all moving with their families. We thought that then again was good. That was good to build for a very strong Christmas. If we had a very strong Christmas, frankly, we'd be back to pre-COVID volumes by into January, February, March, all the way back to normal. Then the rug got pulled out from under us in the first week of December with the Omicron kind of panic and hysteria and COVID. Again, absent there being any negative developments on COVID, we think there will be a very strong recovery into Easter in April. The schools, that's traditionally a time where lots of schools go on school tours, families take the first of the kind of summer breaks. I think the other kind of just. Again, this is slightly sort of not based on fact, but just something. I think a lot of families generally at Christmas and New Year are booking their summer holidays. Again, they're sat at home over that Christmas, New Year period worried about Omicron and restrictions. People had to have negative PCRs to get back. Could they go skiing? They couldn't go skiing. They could go, but they mightn't have been able to get back if they had tested. It's huge uncertainty. We see that repairing itself now, but again, we need to have a strong Easter booking period, a good experience of travel over Easter. I think you'll see that kind of flood of Christmas or of summer booking. We think the potential demand is very strong because of the pent-up demand. Also remembering families and huge numbers of families have been sitting at home or working from home, haven't been able to spend money for the last two years. There are huge pent-up savings there. One of the first things they'll spend that money on will be travel and holidays. Again, as long as there's no negative COVID developments, we think Easter will be strong. If there's a strong Easter, that will lead to a very strong recovery in both load factor volumes and then hopefully yield into the peak summer months of June, July, August, September. Environmental, like I've long given up on the Single European Sky. It is, I think 20 or 30 years they've been talking about it. They never make any progress on it. The idea that the European Commission is going to override the very powerful national air traffic control union is a myth. It is never going to happen. The technology has moved beyond the Single European Sky. Like, I think what we should have now is simply deregulation of ATC across Europe. You have multiple national providers, you know, and again, we keep making the point Ireland could provide, for example, overflights over France on a day when the French, those regular days when the French air traffic controllers go on strike. What it means is deregulation and breaking it up, not, you know, a 20-year failed project of a Single European Sky. We're never going to see a Single European Sky. The unions won't kind of bend to it. These are very small but very powerful unions. What tends to happen over time is very small and powerful unions like, you know, the typesetters and the print workers in Fleet Street. Eventually, the technology moves beyond them, and the airlines should be freed up to purchase air traffic, those air traffic control services from whichever national provider want to provide them. What we need is a commitment from Europe to say, "You're not gonna close the skies over Europe. If the French want to go on strike, somebody else can provide the ATC services that keep us moving." I would be all in favor of deregulation and competition, which is what has delivered such benefits for consumers in the airline industry, and that needs to be applied to the air traffic control industry as well. Juliusz, you want to add anything on that? Maybe just that we keep pushing obviously for reform. The more environmental arguments we hear in Brussels, airlines having to make an effort, the more obvious it becomes that governments and the European Commission are not doing enough. Various studies indicate that if European ATC was reformed, between 10%-15% of fuel could be saved. That is more than any of the commitments made by anyone in European aviation for the next five-10 years. That could be fixed immediately with a little bit of good will. We keep pushing for it. I kind of share Michael's pessimism as to chances of success, but we are not giving up. Yeah, I think that's a good point. I mean, the environmental upside of having reforming air traffic control. Like, remember, you'd eliminate 90% of flight delays, if you had an effective air traffic control provision and with a huge reduction in fuel consumption, fuel cost, and also environmental waste. Next question, please. Thanks, Alex. Currently there are no further questions in the queue at this time. Okay. Folks, thank you very much for joining the call. We're not doing a roadshow obviously on the Q3 as we generally don't. Neil and Peter are here in Dublin. If you have any follow-up questions or want to call, please contact him. We'd be happy to get to talk to you individually. Other than that, I think, you know, looking forward, let's kind of keep being, I think, cautiously optimistic. There is a strong recovery underway, but we need to get through Easter without there being any further negative COVID developments. In those circumstances, we would think we would be set fair for a very strong summer recovery. Our costs are well under control. The fuel hedge position, I think gives us a very strong cost base going forward. We have a much lower cost base than any other airline in Europe. We will deploy that cost base over the next six months in a load factor active, yield passive manner that will put kind of traffic and load factor recovery ahead of short-term pricing advantage as we seek to rebuild. The aim is to deliver 165 million passengers in the year to March 2023, which would be 14%-15% ahead of where what we carried in pre-COVID, the 149 million we carried pre-COVID in the year to March 2019. Thank you again for your support. For those of you who have stuck loyally with us during the COVID, we hope to vindicate your judgment with superior returns over the next 12 months. We look forward, hopefully, to seeing you all. We'll be doing a full year roadshow. Our full year results at the end of May. End of May, we do a full and extensive roadshow across Europe, the U.S., during that. Thank you very much, everybody. If anyone wants a follow-up, please contact Neil or Peter here in Dublin. Good to talk to you all. Bye-bye. Thank you. Thank you. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.