Hello, and welcome to the Ryanair Holdings plc H1 FY 2024 earnings call. My name is Maxine, and I'll be coordinating the call today. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to your host, Michael O'Leary, Group CEO, to begin. Michael, please go ahead when you are ready. Okay. Good morning, everybody, and welcome to the Ryanair half one results analyst call. You'll have seen this morning on our website, we loaded the half one results. There's a full MD&A and a Q&A with myself and CFO Neil Sorahan. Just to focus on some highlight pieces. Obviously, we've had a very strong Easter and record summer traffic that has resulted in a very strong half-year profits rising to EUR 2.18 billion. And we expect over the full year now that a profit after tax of about EUR 10 per passenger is likely to be achieved, and we've declared our first ordinary dividend. It's not a first dividend, but it's certainly our first ordinary dividend has been declared this morning. Highlights of the half one, traffic grew 11% to EUR 105 million. We maintained a very strong 95% load factor through the summer period. Again, I keep coming back to the point, you know, we're operating in a constrained market in Europe, and that is good for traffic, it's good for load factors, and it's certainly been good for average fares. Revenue per passenger is up 17%. That's a combination of average fares up 24% and Ancillary revenues up 3%. We opened three new bases and 194 new routes in summer 2023. We've now the fleet of Gamechanger is now up to 124 aircraft. The total fleet at the end of September is 563 aircraft. Our fuel bill rose sharply because we were so well hedged in the prior year. So in the half year, our fuel bill rose EUR 600 million. That's up 29% to EUR 2.8 billion. However, we've continued to judiciously extend our fuel hedging program. We remain 85% hedged for FY 2024 at about $89 per barrel, well below the current spot. And, but we're happy to report that we're now about 53% hedged for FY 2025 at about $79 per barrel, locking in a saving of about $300 million on the first half of the fuel we need for FY 2025. Net cash at the half-year end stood at EUR 840 million. That was up from EUR 560 million at 31st of March, despite the fact that we've repaid over EUR 1 billion in debt during the six-month period. We remain committed to Boeing. The new 300 Boeing MAX- 10 order will, we believe, underpin low-fare profitable growth for a decade to 300 million passengers by FY 2034. And this morning, the board has announced a EUR 400 million maiden ordinary dividend and has also rolled out a dividend policy, which I'll ask Neil just to comment on further in this call. Turning briefly to growth and fleet. This winter, we'll operate six new bases: Athens, Belfast, Copenhagen, Barcelona, Girona, Lanzarote, and Tenerife. We're returning to bases in the Canary Islands. We will operate over 60 new routes, including our first 17 routes to Tirana in Albania, which opened last week with some success, high load factors and strong customer impact. To date, over 90% of our summer 2024 capacity is already on sale, including over 180 new routes. While Boeing are suffering delivery problems, particularly with their fuselage supplier, Spirit, we're continuing to work with them to minimize these delivery delays ahead of 2024. Boeing have contracted to deliver us 57 Boeing MAX aircraft between now and the end of April. We're not sure they'll deliver all 57, but we're certainly confident that we'll get about 45-50 of those aircraft by the end of June, which will be in time for the summer peak in 2024. And that will be critical to our traffic growth next year. We continue to see a constrained supply situation across Europe, and I think that's fundamental, not just to Ryanair's strong results in this half year, but also the very strong results reported by many of our competitors in recent weeks. Eurocontrol have confirmed about Europe is operating short-haul. Europe into Europe is operating about 94% of its pre-COVID capacity. We see no danger that it will return to 100% of its pre-COVID capacity for the next two or three years. Consolidation continues to be a theme in Europe. We see Lufthansa closing in on the takeover of ITA. TAP in Portugal is now up for sale, and the SAS refinancing, or sale, is already underway, and it looks like Air France-KLM will take a 20% stake in a refinanced SAS, leaving fewer and fewer independent players out there. I continue to believe that Europe is inexorably moving towards a situation that has prevailed in North America for the last decade, of having probably four large airline groups, each of them capable of carrying about 200 million passengers a year. And, three of the big legacy guys, Lufthansa, Air France- KLM, and IAG, and Ryanair being the large low-fare point-to-point carrier, much like Southwest in the States. Now, added to that capacity constraint story, though, with the continuing inability of the OEMs, the manufacturers, both Airbus and Boeing, to accelerate delivery. They remain challenged on their existing deliveries. Both Airbus and Boeing are running materially behind because of supply chain challenges. Boeing also with their production issues with Spirit. I think also the Pratt & Whitney engine issue is a large and as yet, not well factored into capacity story for summer 2024. Europe is the home of A320s. Ryanair is the only significant, 737 operator across Europe... and the fact in which the engine is fundamentally an A320 issue. We expect there to be material groundings of competitor capacity through the summer of 2024, and we think that will run into 2025 as well, due again, because of the pressure on engine shops. We see very little prospect of Europe returning to its pre-COVID capacity between 2024 and 2026. We think therefore that will continue to show to underpin strong pricing, even if consumer demand is challenged, there will be less capacity than there was pre-COVID, and I think the price of that capacity will be higher. We've certainly seen that amongst the legacy airlines in Europe, Lufthansa, Air France- KLM, and IAG, materially increasing airfares. They're already high airfares, and that puts quite a high ceiling over which Ryanair is seeing passengers trade down towards Ryanair, but at higher fares. And that's reflected in our outlook and guidance, where in the third quarter, for example, the end of December, we are seeing average airfares currently running at mid-double or mid-teen ahead of prior year. And we're clearly growing strongly. We're carrying out of traffic, costs are well under control, and that takes the... Our cash generation is strong. That means the board is now begun to again look at capital allocation policy. We set out a clear policy since COVID, that as we recovered from COVID, the first priority was pay restoration and multi-year pay increases for our people. That's now been done. Secondly, we set out to pay down our remaining debt, and we paid down two bonds of over EUR 2 billion over the last two years. We have two bonds left in 2025 and 2026, of about EUR 2 billion, and we intend to pay those down in their entirety, which will make Ryanair remarkably a debt-free company in Europe in the next two years, at a time when the higher for longer interest rates or bond yields looks like it's going to drive up financing costs for our competitors, most of whom have very significant net debt positions in Europe. Once that's done, we also then want to continue to fund our aggressive capital CapEx program, and we're taking delivery of 50, we hope 57 aircraft, between now and summer of 2024. And that'll lead to then to another 30 aircraft in time for summer of 2025. The plan is to maintain a strong balance sheet and investment grade rating. The MAX- 10 order book will deliver annual traffic growth to 300 million. We think we'll do that largely out of internally generated cash flows, but we will continue to be opportunistic. I think it's interesting that between FY 2008 and FY 2020, Ryanair has returned EUR 6.74 billion to shareholders via buybacks and special dividends. We're returning now to an ordinary dividend policy, as well as today returning the EUR 400 million by way of dividends to our shareholders, which is the EUR 400 million they invested in Ryanair during the peak of the COVID crisis. I'll ask Neil just to comment on the dividend policy in his remarks. In terms of outlook, we continue to target approximately 183.5 billion passengers in the year to March 2024. That's up 9%. The final figure might vary a little bit. It depends on Boeing meeting some or most of its delivery commitments between now and the end of April, and they are running behind. We had hoped to have 20 of these aircraft delivered before Christmas. We are now thinking it looks like we'll only get about 10 of them. As previously guided, ex-fuel unit costs will increase by about EUR 2 this year, but that still means that we will have a materially wider cost gap between Ryanair and competitor airlines across Europe. Forward bookings, both traffic and fares, are robust over the late October mid-terms and into the peak Christmas travel period. And with the benefit of this constrained EU capacity this winter, Europe, we currently expect average Q3 average fares to be ahead of the prior Q3 by about a mid-teens percent. Unhedged fuel costs will be significantly higher, but that's only 15% of our fuel for the remainder of this year. As is normal this time of year, we have very limited Q4 visibility. Q4 is traditionally the weakest quarter, and this year will be impacted by the partial unwind of free ETS carbon credits from January. Although it will benefit from the first half of the Easter period at the end of March. Despite uncertainty over Boeing deliveries, a significantly higher fuel bill, very limited Q4 visibility, and the risk of weaker consumer spending over the coming months, we now expect that full year 2024 pre-profit after tax will finish in a range of between EUR 1.85 billion- EUR 2.05 billion, assuming modest losses over the second half winter period. This guidance obviously remains hugely dependent on the absence of unforeseen adverse events, for example, such as the war in Ukraine or in Gaza, between now and the end of March 2024. As I said, I think we're on track to return to what we believe is our normal profit after tax of about EUR 10 per passenger carrying 183 or 183.5 million passengers. This is a very strong performance, but while the number looks big, a profit of EUR 10 per passenger is reasonably modest, given the capital and the human resources that go into delivering an exceptional service to our customers, high on-time performance, and a very low cost base, which enables us to continue to pass on markedly lower airfares to our customers at a time when, due to capacity constraints in Europe, our competitors are all pricing upwards very aggressively. Neil, do you want to add some remarks on dividend and take us through the MD&A, please? Yeah, sure. Thanks, Michael. Well, as you pointed out there, we're well along the road on our path to achieving all of our capital allocation priorities. The next step is to look at some form of a dividend. In the past, as Michael said, we engaged in kind of ad hoc distributions, buybacks, and ad hoc one-off dividends. We're now at a size and scale, and I think a maturity, where we can sustain an ongoing dividend policy. And the board have this morning agreed that the first maiden dividend will be EUR 400 million, which is marginally above our long-term prior payout ratio, but reflective of the EUR 400 million which our shareholders contributed in the depths of COVID, which enabled us to raise that EUR 850 million bonds and come out of COVID strongly. So that's approximately EUR 0.35 per share. Half of that will be paid in February as an interim dividend, the balance will be paid after our AGM in September. And then when we look into next year, FY 2025 onwards, we're looking at a payout ratio of approximately 25% of prior year profit after tax. Again, split roughly 50/50 interim, final dividends, in February or March of each year, and after the AGM each year. So I think that underpins the board's commitments to return funds to our shareholders, but they've also left the door open. So to the extent that we continue to have a very strong balance sheet, lots of liquidity, and we're meeting all of our other commitments, if there is surplus cash, then the door is left open to look at other forms of distributions, be that buybacks, and/or ad hoc dividends, depending on where the market's at, at that point in time. Just to briefly build on a couple of the other points that Michael touched on. Balance sheet is in phenomenal shape, BBB+ rated, over 530 aircraft, unencumbered, at period end, which gives us huge flexibility in what we do. And importantly, thanks to the strong cash in the business, we're in a unique position where we're paying down debt rapidly. We paid down EUR 1 billion alone in August, just gone, EUR 750 million maturing bonds, and EUR 260 million, our revolving credit facility. So that gives us a huge competitive advantage over everybody else when they're extending leases at high lease rate factors due to the Pratt & Whitney GTF issue, and indeed refinancing themselves into rising interest rate environments. We're paying out of our own cash resources. So balance sheet's in great shape, and as it enables the board this morning to engage in that dividend policy. I've nothing further really to add, Michael. Okay, thanks, Neil. Maxine, we're going to open up to Q&A now, and if you can ask everybody just combine themselves to two questions. What I'll try and do is pass it around, the questions around to members of the team, so we can get as many of the management team on the call. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you do change your mind, please press star followed by two. When preparing to ask your question, please ensure that your line is unmuted. Our first question today comes from Jamie Rowbotham from Deutsche Bank. Please go ahead. Your line is now open. Jamie, hi. Morning. Hi, Michael. Morning. Thanks for the presentation. Two questions. So, very encouraging to hear that your third quarter fares could be up in the mid-teens. I know the visibility is limited for Q4, but could you give us a feel for the range of outcomes you've considered in coming up with the full year profit guide in terms of fourth quarter fares, please? And then on the non-fuel unit costs per passenger, which I calculate were up about EUR 2.5 in the quarter. I know this still leaves you a country mile below your peers, which is the critical thing. But could you perhaps just talk about where there might be any flex, any risks up or down to unit costs rising by around EUR 2 year-on-year in the second half, please? Thanks. Okay, thanks, Jamie. I'll do the first part, Neil, you might do the non-fuel unit cost. You know, it doesn't at this point in time, I think the very fact that we've given you full year guidance this morning separates us from the rest of the industry, despite the fact that we're six months out. We are seeing strong pricing at the moment in Q3, but it's very fragile. That pricing is largely driven by a very strong midterm break at the start of October, and strong forward bookings into Christmas. We are and have cut out significant midweek loss-making capacity. I think we are flexing that schedule. It worked well for us in the last two years, and we continue it again this year. It is just too early to focus on Q4. Our yield ambitions are modest. We do expect that Q4 will be a loss. I think we lost about EUR 150 million in Q4 of last year, the prior year. And I think we're looking at something maybe similar, maybe slightly bigger. We have the unwinding ETS will be a bit of a penalty in Q4, and a lot of Q4 will depend on the strength of the Easter traffic. We get the first half of Easter in the last seven days of March. But, you know, if there are adverse developments in Ukraine, there are adverse developments in Gaza, and the situation in the Middle East is very fragile. You know, all of these forecasts could be thrown off kilter. So I think the very fact that we've given you a range of full year guidance is a strong signal today that we think we're in good shape for the winter, but we recognize that it could be thrown off by some adverse developments. Neil, non-fuel unit cost, you want to take that? Yeah. Jamie, how are you doing? We've stuck fairly close to the two-year guidance on a full year basis since we came out in May. Happy to stick with that, despite the fact that we're gonna be a few aircraft shy of where we thought we would have been to spread the costs over more passengers. Where are the risks? There's a risk that you could see higher spike ups in the likes of route charges in the first quarter of calendar 2024 than we're anticipating. There's a risk that we get left significantly shy on aircraft, and then we're handling more crews over less aircraft. But I think we're comfortable with the EUR 2 that we have. I think we'll be, give or take a couple of cents, either side.... close to that number on a full year basis. It factors into, you know, the increase in the crews that we would typically have in Q4 ahead of the peak summer. It factors in the inflation we would've seen on some of the handling and maintenance side of stuff over the course of the year. And then, of course, it factors in the lower cost G ame changers coming into the fleet over the next number of months and the airport deal. So I'm fairly comfortable that we'll be close to that EUR 2 on a full year basis. Super. Thanks. And Jamie, as you recall from slide four of our presentation, you know, as you rightly say, it is a country mile ahead, and the gap is getting ever wider between us and our competitors, many of whom are in a net debt situation, facing rising financing costs and rising aircraft leasing costs. Next question, please. Thank you. The next question comes from Jarrod Castle from UBS. Please go ahead. Your line is now open. All right, thanks. Hi. Morning, Michael and Neil. Michael, dare I say you sound rather proud of Ryanair's performance over the summer and indeed over the last few years. And, you know, you're now speaking about a small loss over winter, but if you made a small profit, I mean, effectively you could achieve your incentive scheme target. Now, I guess besides being very incentivized by the share price, I mean, do you think the board needs to then look at a new scheme, or do you think existing schemes are fit for purpose for yourself and senior management? And then just secondly, you spoke about new routes opening up over winter. Can you talk a little bit about how much of that's been impacted by your thinking around your exposure to MENA and moving capacity around, you know, given the current situation and, you know, potential for people to chase the winter sun elsewhere? Thanks. Okay. I might ask Eddie Wilson just to do the new routes for the winter commentary. Just looking at the various share option schemes and the LTIPs from Jarrod, I'd come back and think that, you know, there's a possibility we could get close to the enhanced profit target this year. At the moment, I think we'll fall just short, but who knows? But I think those schemes are still appropriate. Like, you know, while we... If even if we hit the target this year, myself and the rest of the senior management team still, we have to remain in full-time employment with Ryanair until I think it's 2028 for those to vest. I think it is important that somewhere, you know, during the previous five years, the management team were enabled to hit the share options due to a combination of COVID and the war in Ukraine. It is important, I think, for management, and not just me, but the wider management team, that the share options or LTIPs are achievable. They're working their asses off to deliver these kind of numbers. I think it's important that there's some... You know, we've set the bar at very ambitious targets, a profit after tax of EUR 2.2 billion, or a share price of EUR 21. But even if we hit those, management team will still have to remain in full-time employment until 2028 for those, for them to vest or for them to benefit from it. So, not alone is it important they're achievable, but they also mean that we're tying into management. We get immediate long-term commitment from the senior management team, toward, to, to continue to deliver the impressive performance and results. Eddie, new routes for the winter. Do you want to give us a commentary on kind of new routes and maybe Jason McGuinness might come in on that as well? Yeah. I mean, I think, like, our growth is demonstrated by the agility that we have in terms of what has happened in the Middle East. For example, we would've had just north of 100 weekly frequencies into Israel, working very closely down there. I mean, the airspace is well managed, but obviously, the conflict has escalated there, so most of the European carriers aren't flying in there. But we're able to flip that out in terms of 95% of that capacity we can reallocate because it comes from 23 different bases, so it's relatively straightforward for us to do that. There is some softness in places like Jordan, but again, we've got the ability to flip that capacity around. On the other side, of course, we continue to grow strongly in the Canaries. We've two new bases there from winter on winter. It's a new base, but we've had it there since summer of this year, both Lanzarote and in Tenerife, both going up by one aircraft. And then you look at what we're doing in Morocco. You'll have seen our recent release, where we're meeting with the head of government down there who see Ryanair in terms of developing not just summer sun, but certainly year-round traffic into that market, which is a mixture of VFR and also winter sun. And we continue to grow strongly in the, you know, like in Southern Europe, where people still go to Malaga, Alicante, Seville, Southern Italy, Sicily and Sardinia. So we take a very conservative approach in terms of how we spread those routes, and we always have the ability, I suppose, to reverse routes and reallocate capacity, as we did at the start of the conflict in the Ukraine. Jason, we're opening 17 new routes into Tirana in Albania- Yeah. during in November, in the winter. Are we mad? Yeah. So they started last week. They've all started very strongly. I've been very surprised at how quickly all the seats are filling, and we'll certainly be growing in Tirana in summer of 2024. Like, I think we will be close to 2 million-2.5 million passengers in Tirana over the next 12 months, and it's certainly a base candidate over the next 12-18 months. I think Tirana is crying out for a low-cost carrier, and we've seen that in terms of reaction from consumers. But generally, across this winter, demand is strong across CEE. Scandinavia, Italian domestics are very strong, and I think that's helped by what we've done in the schedule. As you alluded to earlier, 70% of our capacity now for winter 2023 is at the weekend versus- 65% last year and 60% prior to COVID. So there's been a lot of work done by the revenue schedule team to deliver that, and it's paying dividends across Q3. Thanks very much. Okay, thank you. Next question, please, Maxine. The next question comes from Stephen Furlong from Davy. Please go ahead. Your line is now open. Morning, Michael. Hi. Yeah, two questions, please. Maybe if Thomas is there, he could talk about any updates on SAF and also how the winglets are performing in terms of fuel efficiency. And then kind of in that vein, I just want to ask Neil about the. I know it's the first quarter in the Q4 is going to be at the unwinding of the free allowances on ETS. And just can you just talk about that and that overall scheme? And obviously, you've been paying ETS for 10 years, but the free allowances go over the next couple of years. That'd be great. Thank you. M-maybe Thomas- Yeah, Stephen, just on the, on the SAF side. So obviously, in recent weeks, we've done some fuel with OMV in Vienna. We've picked up some SAF, so it gives us more access to different feedstocks. And we're working hard with another one of our fuel partners to hopefully sign an MOU with them to increase our, our target, like, our percentage target. We're at 9.5% today. With this if we get this MOU over the line, we'll be above 10% of our, our SAF will be done through MOUs. And on the winglets, we've been happy with what's installed today. We're seeing close to the 1.5% savings that we disclosed on, on the winglet side. So yeah, it's going well, and we hope to roll out another 100 over the winter to get to 130 by the end of maintenance season this year. So we'll see more of an impact come through as more go on the aircraft. On the ETS side, Stephen, so yeah, as you said, the allowances start rolling off in Q4, which is an impact. So, like, we have about 25% of our allowances compared to Q4 last year will be gone under ETS this quarter, which will impact on Q4 profitability. And also, our hedge rate has gone up from about EUR 57- EUR 80 quarter on quarter, compared to FY 2023 and FY 2024, which is the impact Neil and Michael have been talking about in ETS and Q4. I would add into that, too, like you also, free ETS allowances, even unwinding for the legacy guys who had far more- Yeah. of their fleet, their traffic covered by the free ETS. So I think, again. Yeah, sure. That's one of the reasons why we're seeing some aggressive pricing from the legacies on short-haul all across Europe in a constrained marketplace, driving up the headline fares, particularly in countries like Germany, where Lufthansa has a near monopoly. Air France- KLM, same in Holland and in France. And I think that's driving up our airfares, the extent to which competitors are dramatically increasing their airfares. Next question, please, Maxine. The next question comes from Dudley Shanley from Goodbody. Please go ahead. Your line is now open. Thank you. Morning. Morning, everyone. If I could ask two slightly longer- term questions. First of all, if we think about the Pratt & Whitney GTF issue coming on top of the delivery delays from Airbus and Boeing, how do you see that playing out in terms of the outlook for fares over the medium term? And then switching to consolidation in Europe, which seems to have picked up recently, obviously there's a lot of deals going on. Which deals do you think will happen? How do you see the end game here, and how does Ryanair position to take advantage of it? Let me see. Well, add that to, instead of me, I mean, medium-term fares. Eddie and Jason McGuinness might add on to that, and, but I'll come back in on the consolidation. So Eddie, Jason, medium-term fares. Well, I mean, we've seen already that we've guided sort of for mid-teens in terms of Q3. But I think a lot of what's going to happen at a micro level with the GTF issue is going to be where some of our competitors are going to allocate that capacity in particular markets. And we've seen, you know, we've seen a lot of announcements of based aircraft that just don't add up to the total fleet. With some of our competitors, we've seen a retreat in places like Italian domestics, which Jason said, like, where fares are actually becoming more robust. I wouldn't like to sort of call it on a sort of a micro level, where fares are going to—where fares are going to go to, but, but certainly at a micro level, it's going to be where, where that, capacity is allocated with our, with our competitors. But with reduced capacity and no new aircraft coming online from the, from the OEMs, I think we're still going to see... I think we're going to see, like, like fares continuing, to rise against that backdrop, where economies continue to grow and there isn't the capacity there to match it. So I think fares still in the, in the, like certainly over the next 12 months, are going to continue to rise. Maybe Michael? Jason? Jason here. Sorry, I didn't hear you there, Michael. Give you a sort of guess- Hi on our fares. So not in that sense, but the general trend over the next couple of years. Yeah two, three years. So I think the general trend is upwards over the next number of years, and that's entirely based on the capacity environment. Like, if you look at this summer, the market was recovered to 94%-95%, but that includes Ryanair growth. Without Ryanair growth, the market this summer has only recovered to 90%. And I think the market isn't going to recover, our competitors that is, much above 90% into S24, S25 for the issues we've outlined. So that leaves a market that hasn't grown for the last four years, and I think you're seeing that across certain countries, be it Austria, Germany, Belgium, which are all significantly low where they were prior to COVID, and that's all helping the pricing environment at the moment. And it is, In terms of our growth then, we are, we are growing, we are growing in the likes of Italy, U.K. and Spain, which is delivering solid fares, and I think they'll be solid over the next number of years. Okay, thanks for that. In terms of consolidation, you know, I, I've long believed Europe is moving inexorably towards four large carriers. If you look at what's going on at the moment, Lufthansa look like they're going to acquire what's left of Alitalia in ITA. The Portuguese government has put TAP up for sale. Lufthansa, Air France-KLM, and IAG all are interested. I think longer- term, it probably belong, would fit better in IAG because of the Latin American carrier, the Latin American kind of influence of IAG. But the Portuguese are always wary of the Spanish, that they'll somehow close the TAP base and move to Madrid. I think if you look what IAG has done with Aer Lingus, they've demonstrated they can continue to grow transatlantic business to Heathrow and Dublin, IAG successfully. SAS is a crock, but I expect to get probably stuck together with Norwegian, and you've got a bigger crock up in Scandinavia. Air France-KLM looks like they're gonna take a 20% stake in that refinancing. That really leaves only two sort of smaller independent players left in Europe, which is easyJet, focused around Paris, Switzerland, and Gatwick. I don't believe in the next five years they'll be an independent airline. I think they will be, they'll be subject to M&A activity, and will probably a mix of Air France-KLM and IAG. And at least Wizz, I would have said Lufthansa would probably buy Wizz and give it a footprint back in central Eastern Europe. Increasingly, I think as Wizz grows in the Middle East, perhaps, it may be a way for these Middle Eastern interests will be able to acquire, but Middle Eastern will be able to get access to aircraft. But I think if we return in five years' time, I think you're going to see a European market that looks remarkably similar to North America today with four large substantial airline competitors. Three legacy guys, Lufthansa, Air France- KLM, IAG, and one very large low-cost point to point. Ryanair would be the Southwest of the U.S., except that Ryanair's fares would be materially lower than those of Southwest. After 10 years of consolidation in North America, Southwest average fare last year was about $140. Ryanair's average fare across Europe was under EUR 50. which does show we are materially lower, cheaper and lower cost than Southwest, but it gives us significant headroom for us to grow our business and I think modestly grow airfares in a consolidated capacity-constrained market over the next three to five years, in a manner that will enable us to pay down our debt, refund our aggressive CapEx, and be able to continue to put in place multi-year pay deals for our people. Next question, please, Maxine. Thank you. The next question comes from James Hollins from Exane BNP Paribas. Please go ahead, James. Your line is now open. Hiya. Yeah, morning, many thanks. Just a couple for me. On unit cost, I know you don't like to work full year 25, but, Neil, perhaps the way you're thinking about unit costs, maybe this will give us some indications on, on trends. I'd probably be mainly thinking about wages and whether the pilots, in particular, start agitating for, for a bit more from their deals. And then secondly, what, what is it you know that, that the rest of the airlines don't know? That everyone seems pretty sanguine about their Pratt & Whitney issues, but you, you're calling it out as, as, as very significant for them. Perhaps just run us through your thinking on why, why it's so much, bigger than, than some of the airlines are letting on. Thank you. Okay, James, you take the first bit on unit cost, and I might ask maybe Neil Sorahan to come in on what we give us our update on what we think about the Pratt & Whitney issues. Okay, James, it's a bit early to be talking about FY 2025 unit costs and that we haven't done our budgets at this stage, but what I am sure about is that we'll continue to keep the gap that exists between ourselves and everybody else on unit costs. We have multiyear agreements in place with our unions. There is modest inflation coming through on the back of those, but that's something that we will cover through other areas of the business. For example, we've already locked in about EUR 300 million worth of savings on our fuel bill based on the hedging that we have into next year. But it'll be likely May before I start to give you color on unit costs for FY 2025. I need to get the budget over the line with the board first. Neil, what we got on the Pratt & Whitney issue? And I'll- For particularly in Europe. Yeah. So we know that Pratt & Whitney have significant issues with their GTF engines, which will affect up over 20%, for Wizz and kind of 5%-10% for other carriers around Europe. The reason why we think this is significant is, we know that MRO slots are already full for this winter. This is an unexpected issue that wasn't planned into the maintenance schedule for the engine, for the engine shops, and therefore, we're likely to see delays, or our competitors are likely to see delays, for engines to come out of the shops. This will increase the lease costs. We already know engine lease costs have increased, so airlines who are looking to lease in engines are seeing prices soar because there's the scarcity of lease engines. And we think that this is gonna have a significant impact on capacity for FY 2024. Might not be baked into other airlines' numbers yet, but I think as we go through the winter, they're gonna see that the turnaround times for engines are gonna be significantly slower and that's gonna materially impact capacity for FY 2024. Yeah, I mean, we take the view, James, that there's anything between 5%-10% of the European short-haul A320 fleet is going to get grounded through most of next summer. Which again, will further constrain capacity. Some competitors, excuse me, like Wizz will be more affected than others, although they have some new aircraft deliveries this winter. But this is an issue that affects Lufthansa, Air France, IAG short-haul fleet. And, you know, if Europe is operating at 94% of pre-COVID capacity today, there's consolidation continuing, which will mean more capacity will be taken out. The OEMs are running behind. Both Airbus and Boeing are running behind on their deliveries. I mean, Boeing is likely to leave us up to 10 aircraft short of our 57 deliveries this before the summer of 2024, and you add this Pratt & Whitney issue on top. Again, I think there's going to be a real challenge on intra-European capacity next summer. We will add maybe 40, 40, 45, 47 aircraft, but overall, there's no chance of Europe returning to its pre-COVID capacity next summer. We will see more Asian visitors, I would hope, next summer as well. I think that under... gives us a reasonable prospect of another strong summer of traffic and pricing, and I think that's already reflected in strong forward booking. Forward bookings already for winter next and summer 2024, even at this early date, are running significantly ahead of where they were this time last year. Next question, please. The next question comes from Alexander Irving from Bernstein. Please go ahead. Your line is now open. Alex, hi. Hey. Morning, gentlemen. Two for me, please. First, on capital structure. So how much liquidity do you see is required on an ongoing basis? Thinking about this with reference to the announced dividend, which suggests your net cash position will continue to grow. Is that in line with your expectations? Second, drilling into cost a little bit more. So your airport and handling cost per passenger was up 11% year-over-year in Q1, 13% in Q2. What's driving that, please? And should we take the current levels per passenger as a rough indication of what's stable? Thank you. Thanks, Alex. Tracey, maybe you might take the second part of that question. I'll deal with the capital structure, and, Neil, come in if there's anything you want to add. Sure. I mean, I think we're, you know, historically, we want to be in a zero net debt position as we pay down debt aggressively. I, I think the board is of a view that we should keep a reasonably sized, reasonably sizable chunk of cash for the inevitable crises that hit this industry and whenever we think we can do aircraft deals. So I think moving forward over the next number of years, we'd want to keep EUR 3 billion-EUR 4 billion of gross cash on the balance sheet, which is the number we've been operating at for about the last five or six years. We will, though, pay down the last EUR 2 billion of debt in 2025 and 2026. We are going to go through a two- or three-year period through 2025, 2026, and 2027, where there's a material dip in CapEx because of the gap between the last of our MAX, the Gamechanger deliveries, with the last of which is due in December 2024 or summer 2025, and then the first of the MAX- 10s, which is not due to deliver until the spring of 2027. So there's likely to be a strong upward pressure on free cash flow over the next two or three years, as long as trading isn't disrupted by adverse events. And again, I think our comments this morning is that we intend, firstly, to use that on employee pay, secondly, pay down debt, third, fund CapEx, and then anything that's spare or left over will be returned to shareholders. We're setting out this morning an ordinary dividend policy. That would be 25% of net profit after tax. So, for example, this year, we're now guiding somewhere just under EUR 2 billion in net profit. We would hope to be carrying a dividend of somewhere close, just under EUR 500 million for next year. But if there's a surplus over that over the next two or three years, we'll be opportunistic. There might be special dividends, there might be share buybacks, but we have to be conscious of the fact that we will start aggressive CapEx again through FY into 2026 and the start of 2027. Peak CapEx will be around on the MAX- 10 order, will be around 2028, 2029. But hopefully traffic will continue to be strong. Profitability with very low cost base and widening cost gap between us and the competition will continue to be strong. I think capacity constraints in Europe means that pricing will be strong, and that should leave us in a position to be able to fund modest reasonable shareholder returns. Tracey, will you talk to just comment on the airport and handling costs, please? Yeah. So there's, there's two things driving the airport and handling. So higher ATC costs are included in that, so local air traffic control costs at airports. We've seen an increase in them, and we have the termination of some of the COVID reliefs that we were getting the benefit of last year. And probably the other driver in that is handling, and that's a little bit of, labor inflation in, the handling costs across Europe. But I think again, that cost increase, Alex, is so less than half of the airport and handling cost increase some of our competitors have been reporting in recent weeks. So there's materially more airport and handling cost inflation at the main airports that are being operated at by our competitors. Yeah. Therefore, widening the gap again. Next question, Maxine. The next question comes from Harry Gowers from JP Morgan. Please go ahead, Harry. Your line is now open. Harry Gowers. Yeah, morning, guys. Just two questions. I mean, average fare's up 15% in Q3, looks very strong. So are you somewhat surprised by the strength of the fares, given concerns over the health of the consumer more widely? I was wondering if there was any potential one-off benefits in there in Q3, for example, from the, from maybe the Rugby World Cup? And then just any comments as well on Q3, on, on where you expect the ancillaries per passenger, just in absolute terms or, or year-on-year. Thanks a lot. Okay, Neil, I'll ask you to come in to consider it. Average fares, Harry, they're strong into Q3. Again, I think the critical driver of fares here is not individual events like the Rugby World Cup, you know, which were nice, but, you know, not material in a compound. You know, we're carrying over 500,000 passengers a day. The Rugby World Cup would make barely a blip on it. What's really driving airfares here is the consolidation capacity constraint story in Europe. The material, the dramatic increase in pricing that is being leveraged by the likes of competitors like Lufthansa, Air France- KLM, and IAG, who are starting with average fares that are four, five, and six times those of Ryanair. Particularly if you take the German market, where Lufthansa, you know, is seen as the national champion, has seen off a lot of capacity. You know, easyJet and ourselves have removed a lot of capacity from the German market in the last few years in the face of ludicrous airport cost increases, mad German government taxation, security charges, et cetera. Lufthansa, the German market is the one that is weakest. It has recovered only about 80% pre-COVID. But short-haul airfares in Germany are more than double. And everywhere you go in Germany, people complain about Lufthansa's pricing. But, you know, that's what you get when you get a national champion like Lufthansa, you get screwed. And I think that is going to continue to play itself out. Lufthansa, Air France- KLM, IAG are going to... are losing more in percentage terms. Their free ETS reduction in from January next year is much more meaningful on their short-haul traffic than ours. There's much greater upward pressure on their costs and their ability to increase airfares. And this capacity constraint story, which has largely been playing out in North America for the last decade, is beginning to roll out across Europe again. Europe is entering a period where airfares are going to be modestly higher. You know, you have a combination of governments imposing ludicrous environmental taxation. We have our own ETS transport minister in Ireland, you know, has done nothing to push back against ETS, done nothing to push back against French ATC strikes. Yet happily wrings his hands, despite the fact that we're an island on the periphery of Europe. So airfares across Europe are moving, I think, upwards. And the really dramatic but not well understood capacity constraint story, I think will continue to play it out, not just this summer, but through the summer of 2024 and into the summer of 2025 as well. We see no easement in these capacity constraints. And what really drives Ryanair fares is the extent to which Lufthansa, Air France- KLM and IAG are driving up their airfares, and they are driving up their airfares to an eye-watering extent at the moment. And Neil, ancillaries. Yeah, Harry, as we've been kind of saying all year, we expect on a full year basis, ancillaries are up kind of EUR 0.50-EUR 0.60 per passenger year-on-year. So you, you're probably looking at similar to the first half, about a 3% increase over the second half, and then thereafter, it's kind of a 3%-5% per annum growth area, depending on John sitting here beside me, what he can do for me on dynamic pricing and other things. But, you know, we've had a phenomenal step up from EUR 19.70 per passenger pre-COVID to EUR 23.70 per passenger now, and it's growing at a relatively steady state of kind of 3%-5%. All clear. Thanks a lot. Thanks, Neil. Next question, Maxine, please. The next question comes from Savanthi Syth from Raymond James. Please go ahead. Your line is now open. Savanthi, hi. Hey, good morning. In terms of investing for resiliency, I would imagine that you're kind of keeping the buffers that you've put in place currently. But as you kind of head into summer 2024, are you planning on kind of making any additional investments or additional buffers? And then secondly, just kind of curious, on the MAX, you know, with the MAX delivery delays, I'm guessing you're not going to be able to take advantage of this, but what does the NG pricing look like these days in case you wanted flexibility? Sorry, Savanthi, you broke up at the start there. I didn't get the first half of that question, and I missed that. The second half is MAX delivery delays, but I wasn't sure what the question was. You could repeat it again, please. Sorry. Yeah, just, just on the, more so on, on kind of NG pricing. Like, what are you seeing today if you, if you want to take advantage of it? Not that you probably can, given the delays. Sorry, you said NG pricing, is it? Yeah, I, Yeah. I can take that, Michael. Okay, sorry, I didn't hear it again. But please, if you heard it, please, will you answer it, please? And the first half as well- Yeah, sure about summer 2024. Okay, well, just on resilience, Savi, I don't think air traffic control are gonna be much improved, but I'll ask Eddie to deal with that. I'll talk about the NGs first. I mean, the market for NG is very hot at the moment. The phone is ringing off the hook with people trying to buy NGs off us. The leasing companies, lease rate factors have increased quite significantly, so wouldn't be minded to go out and try and lease anything from them. So I think we're very happy just to operate what we have and to continue to work with Boeing to accelerate and speed up the pace that we're getting the MAXs into the fleet. But yeah, NG is holding values very well. I think Eddie's gonna answer the question on resilience. Yeah, just I think what has marked us out on operational resilience is coming out post-COVID, where we were just better prepared than all of our competitors by keeping everybody employed and keeping everyone current. our crews and our aircraft current. We've tried to, you know, work really, really hard to sustain that advantage. You can see that, I think, in a lot of the recovery or lack of recovery from our competitors who appear reluctant to, you know, to get back to full recovery. Some of that, I suspect, is driven by, you know, sort of meltdown days where ATC drops everybody, drops everybody in it. What we've tried to do is have additional crews built into the system, and that gives us, I mean, we're able to lean into that because we're still a growing airline. As ATC hopefully will recover in terms of its capacity, over the next number of years, we'll be able to, you know, pare back crewing levels to what you would need in a normal, busy season. But, you know, those of you who are at the capital markets today will have seen what John's team, along with Neil's team, and Darrell as well, in terms of building IT solutions to make best use of those crews so that we can get through those parts of the, like on meltdown days, that are happening more frequently. But, like, it's something that we're not crowing about. There's a lot of hard pedaling under the surface here to keep that operation going, and we've invested heavily in technology, heavily in manning, not just in terms of crews per aircraft, but also in our ops control center. But we'll have to continue to invest. We're not being complacent in any way about that. Eddie, just to clarify. Yeah. So just the incremental investment won't be that much greater than what you're seeing today, right? I mean, it's not gonna be a, another big headwind into the next year. No, I think what you're trying... Like, we have to look at all of these things on a sort of a micro level. Don't forget, we're spread over 93 separate bases, and there's always room for improvement as to how you crew that. And given the data that we have now, that will inform our decisions. But I don't see a step up. But my instinct would be to have to increase that slightly, but I don't think it's anything material, just because we're going to get into, you know, we're on a long-term growth trajectory here, and that means then that you can always sort of fine-tune your, your crewing ratios as you take delivery of aircraft as well. So it's, I'd rather have slightly more than slightly less, but not material. Yeah. Thank you. Okay, thanks, Eddie. Savi, I'm sorry I couldn't hear the question properly. Next question, please, Maxine. The next question comes from Ruairi Cullinane from RBC Capital Markets. Please go ahead. Your line is now open. Ruairi, yes, good morning. So it looks like relative to Q1, your hedging position on fuel has advanced, but not so much on FX. So I was just wondering if the FX hedging was paused or what drove that? And then secondly, a longer- term question, and you've got two years of slower fleet growth, you know, around 2025, 2026. Do you think that could be a more difficult period to restrain unit costs? And as a result, is there a silver lining to Boeing delivery delays? Thank you. Fuel, you wanna, Neil, you wanna take the fuel hedging? I mean, you or Thomas, take fuel hedging, and I'll do the two years of slower fleet growth. Yeah. On hedging, we're very pleased with the level of hedging that we have in place, just under 89% for the second half of this year, at about $89.8, $190 a metric ton, and well hedged into next year, over 50%, in fact, close to about 56% in the first half of the year, at savings of $790 a metric ton. What's changed in our hedging policy? Not a huge lot. We're possibly not going out with as high a percentage as we would have done in the past, but that's a factor of our competitors' balance sheets not being as strong and them not being able to get access to hedging lines. So that's why we had a number of options this year where we effectively capped out the worst-case scenario and then had the downside participation. So you may, over time, see us doing a little bit more on options, but we continue to have a kind of 12- to 18-month rolling policy. We're well hedged out to now the end of March 2025, and we'll continue just to build up on that over the next number of months. Similarly, on the currency side, we continue to run a very active OpEx book. We were hedged at 1.08 the current year, and euro-dollar, we're hedged at about 1.11 into 1.11-1.12 into next year. And again, we'll continue to build that up over time. So no, we're continuing to execute on it. We continue to have huge hedge lines with our counterparties, and the treasury team have never been busier, so no, we're pushing on. Okay, two years of slower fleet growth. I mean, if anything, we're facing almost three years of slower fleet growth. If Boeing can meet their delivery commitments, we get 57 aircraft for summer 2024. We get another 30 aircraft for summer 2025. I think they'll miss some of the summer 2024, and therefore, it'll even itself out. We'll pick those up for summer 2025. We will have nothing then for summer 2026, very little for summer of 2027. I think we'll take 18 or 17 aircraft from January to May of summer 2027. So it's not by choice, but I think the two or three years of slower fleet growth does have, it gives us a bit of a pause in the organization before we start a decade of aggressive growth. It does take some of the pressure off recruitment and training over that period of time. It may create some challenges, but I think, you know, we're facing challenges, I think, on the labor front anyway, in the next year or couple of years. You know, I think we've reflected that in what has been the pay restoration and generous pay, already generous pay agreements in place with pilots and cabin crew across Europe. But that is inevitably the upside of the silver lining of that is, you know, it further constrains capacity. I mean, the only airline delivering material capacity growth across Europe in the summer of 2022, summer of 2023, and summer of 2024 is Ryanair. And we ourselves will be capacity constrained through the summer of 2025, 2026, and 2027. Now, I think we'll continue to see significant churn of our operations during that period. We will continue to do aggressive growth deals with ambitious airports, and therefore we will churn more aircraft out of expensive airports like Dublin, for example, where, you know, again, they're planning to build a waste EUR 250 million on a tunnel to going nowhere. It's just, again, regulatory game playing. They just want to desperately waste CapEx on something that none of the airlines there, Aer Lingus, Ryanair, none of us want this stupid tunnel that only goes across to where the cargo aircraft are parked. And even this, they're talking about spending EUR 230 million on it, a time when they admit themselves that Dublin Airport has a planning restriction, a traffic cap of 32 million passengers. So the idiots running Dublin Airport have done nothing about this planning cap for the last decade, while traffic has risen to 32 million passengers. And so Dublin is now capacity constrained. We may well have to take aircraft, churn aircraft out of Dublin, but Dublin is kind of exploiting by coming up, and they're looking for about a 17% cost increase over the next year or two in passenger charges. So airports like that, that are badly run, badly managed, and are unjustifiably inflating costs, we'll see. I think we'll churn some capacity out of places like Dublin, and put them into other, much more growth incentive markets like Spain, Italy, across Central Europe at the moment, in Poland, Romania, Slovakia, Czech Republic, the Baltic States. We're seeing ambitious airports putting in place very enlightened discount schemes for growth. Morocco, as Eddie said, Albania, are going to be areas as you know. So there will be more churn in our business, over those couple of years, and I think that's good for the, for the, the business. You know, it keeps us on our feet, it will keep us aggressive, and it will also help us to keep put pressure on mismanaged airports like Dublin, who continue to exploit the regulatory regime, to unjustifiably increase costs at a time when they should be lowering fees and trying to drive growth. Next question, please, Maxine. The next question comes from Muneeba Kayani from Bank of America. Please go ahead, Muneeba. Your line is now open. Muneeba, hi. Good morning. Two follow-up questions, please. The first one, just on the dividend for this year. Can you talk about why you have a EUR 400 million dividend instead of a payout for fiscal 2024? And just to clarify, so in the scenario that you think there is surplus cash, could there be a special divvy or share buyback even for next year? That's the first question. And then secondly, on your pricing comments for fiscal 3Q, do you think that your pricing trends are better than the overall market? Do you think the market is also seeing similar mid-teen pricing and or you're benefiting from the trade down that you talked about earlier? Thank you. Okay, dividends this year for what? Why EUR 400 million? Well, if we paid out a 25% of last year's profits, which were EUR 1.54 billion, it would have been about EUR 350 million-EUR 360 million. And the board felt that it sent a strong signal to the market and also the shareholders, that if we rounded that up to EUR 400 million, it would repay the shareholders, including myself, I might add, who put our hands in our pockets during the depth of COVID, and invested EUR 400 million at a time when nobody was able to raise equity, in the airline industry. And I think that's an important signal. You know, the shareholders who stood by us during COVID, and who wrote those difficult checks during the very difficult COVID period, are seeing that return. Is there a prospect of special dividends or share buybacks next year? I mean, the answer is yes, but it all depends on trading. It all depends on how the cash flows develop, and it will depend on what the board decides to do. I mean, you know, we will continue to be conservative and judicious, but you have our assurances that, you know, excess cash will be returned to shareholders whenever we're confident that we can meet our payroll, commitments, our, debt repayment commitments, and our CapEx commitments. Do I think Q3 will be better than the overall market? Yes. I think what's driving in the overall market across Europe, very aggressive price increases by Lufthansa, Air France- KLM, IAG, easyJet, and others. And they're all pricing materially above Ryanair. Their average airfares are, in the case of easyJet, more than double Ryanair's. In the case of the legacies, they're three, four, five times higher than ours. And if they're going up, seeing average fares rise by a high single digit, this winter, and I think they are, because the capacity constraints. They are driving more and more people, more and more customers and their families in the direction of Ryanair, seeking, low-fare air travel. And we're seeing strong forward bookings and strong pricing. And I think that's why, off a much lower base, we're seeing a strong, and I think that will continue. Off a much lower base, we'll see stronger pricing in the Ryanair model as Europe consolidates or continues to consolidate over the next two, thee, four years as capacity continues to be materially constrained. And I think into summer of 2024, as many of our competitors will be grounding aircraft because they've no problem with the engines to operate them. I don't know, Eddie, you want to add anything on the Q3 better than the normal— Is our airfares better than the overall market? Not really. I think you sort of covered it off there. I mean, like, it's what we've seen before where I hate to use the phrase, but sort of trade down, but when... As people become more price sensitive, they I think you're quite right in what you're saying, that migration of people. And in a lot of cases, given our size and scale, we have better, we've more frequencies and to more airports as well. That gives us that little bit extra, I suppose, in terms of uplift. But, yeah, I have nothing really to add on it. Yeah, and I continue to be amazed. I mean, you know, the amount of hand-wringing going on, particularly among the analyst community, you know, consumers under pressure, and they are under pressure, inflation is rising. You know, people don't stop flying. In other sectors, people trade down to Lidl and Aldi. They buy their furniture in IKEA, not in some department store. And as you know, they are very strong performance over the last two years, and we're now carrying 22%-23% more traffic than we did pre-COVID. In an industry across Europe that's operating at about 94% pre-COVID capacity, people are trading to the lowest cost provider, which in every market in Europe is Ryanair. And we're also happen to be probably the best on-time performance, you know, so we're delivering great service at lower prices. We're now doing that on aircraft like the Boeing MAX, where we can carry more passengers, but burning less fuel, and delivering very material operating cost efficiency. So I think this is now a time for expansion. We are desperately working with Boeing to try to get as many of those 57 aircraft we can in time for summer 2024, 'cause if we don't keep that expansion going, then consumers across Europe really will be screwed by the Lufthansa, Air France, and the high-fare national champions, all of whom received billions in subsidies during COVID from the European taxpayers, and their gratitude is demonstrated by now scalping those taxpayers for extraordinary, eye-watering airfares. Next question, please. The next question comes from Sathish Sivakumar from Citi. Please go ahead. Your line is now open. Thank you. I got two questions here. So firstly, on the forward booking curve, and you pointed out that saying it's actually much better than last year. How does it kind of like evolve, as we went into this quarter for the Christmas period as well as into the winter and Easter next year? And then the second one, any update on the potential risk from the Italian government on the price cap? That'll be helpful. Yeah. Thank you. I missed... I didn't get the second half of that, Sathish. I got the first half I'll deal with. You know, look, we see at the moment, all of the forward bookings into the Christmas is strong. The February school midterm break, ski is running bookings and fares are running ahead of the prior year, and we have the first half of Easter in the last week of March. So I think, you know, we remain reasonably optimistic on pricing for the second half of the year and into Q4, although we always have to qualify that we have very little Q4 visibility. And I didn't get the second half of the question. If Neil or Eddie did, please feel free to answer it. Yeah, or we might get Julio, if he wants to answer it on the price cap. Thanks, guys. Julio. Sathish, Sathish- Yeah, on the, Pricing. I think I got your question, but you can correct me if I answer a different one. I think we've had freedom of pricing in Europe, guaranteed in EU law since 1997, and all governments recognize that it's there and that it's an integral part of the success that European aviation has enjoyed over the last nearly four decades. What the Italian government has done over the summer, I would not take it too seriously as a serious, well-considered step. It was part of a decree which was passed, I think, on the last day before the government checked out for the summer break. And the same decree talked about a tax on Italian banks, which the government then had to walk back from, and some measures about the taxi industry, which apparently is a mess in Italy today. The European Commission, which we often criticize in those calls for maybe not being quick enough, in terms of sorting out ATC in Europe or air traffic control strikes and so on, was actually incredibly helpful in the context of this Italian situation. They stepped in and put a lot of pressure on the Italian government to reverse that decree when it comes to attempted price controls between mainland Italy and the Italian islands. And I think this is a very good lesson for all the other governments that might have ideas of similar sorts, you know, feeding populist agendas. Don't go there because you will end up before the EU court and not prosecuted by airlines, but by the European Commission. Okay. Yeah, that's, that's helpful. Thank you. Thank you. Thanks, Sathish. Next question, please, Maxine. The next question comes from Duane Pfennigwerth from Evercore ISI. Please go ahead. Your line is now open. Hey, hey, good morning. Good morning. It's been a very comprehensive call, just one for me. So, air traffic control constraints are really not new in Europe. It's something you've been dealing with for several years, even pre-COVID. We're hearing much more about these issues in the U.S. And so just curious, how do you design your network to achieve high utilization, low unit costs, despite the constraints that you lived with? I mean, if there was a moment, maybe five, 10 years ago, where you said: Look, we have to operate differently because of this. You know, what are the changes you made from a network design, network planning perspective? I mean, I think, Duane, to answer that question, you know, ATC has been a much greater problem, challenge for the industry in Europe than it is in the U.S. Europe's ATCs are fundamentally mismanaged, underproductive, and ridiculously expensive compared to North America. The biggest challenge continues to be not just the cost of that, but the environmental impact of flight delays, long flight paths. We've been campaigning aggressively for now two or three years. At least the simple issue is during ATC strikes, which you tend not to have in North America, thanks to Ronald Reagan, but in Europe, we've been bedeviled with them, particularly the French, about 64 days of ATC strikes this year so far. We're calling for the protection of overflights because of the geographic location of France. If they France uses minimum service legislation to protect its domestic flights and cancels all the overflights, and we think it should be reversed the other way. Europe should be protecting the overflights and cancel French domestic flights. That one initiative would probably remove some 70%-80% of the impact of ATC strikes, and would have a very significant impact on the environment, on the environmental impact or the environmental damage done by European ATC today. I think we're seeing some movements on that. Europe itself has been kind of, you know, has spent billions over the last 30 years on a Single European Sky project. They have made not one millimeter of progress on it. It's been a complete waste of time. It's shambles. I personally believe Europe should deregulate their air traffic control. Each individual, like, like they do with the airlines, they should allow the air traffic control providers to compete against each other to provide services. That would be a much more efficient way, force them to compete against each other. But as long as very small ATC unions have a disproportionate power, and you have weak European governments who are unwilling to stand up to these people, the way Reagan did with the American Air Traffic Controllers back in 1980, I think we will continue to be bedeviled by ATC delays, inefficiency, and screw-ups in Europe. I don't know, Eddie, you want to add anything further on that or Neil, maybe in advance? Um, just- Yeah, go ahead, Neil. Sorry, Eddie. Just in terms of design, there's been no fundamental change in design, but it has resulted in we've had to increase resilience, so crewing resilience. Because we have to now factor in there's going to be more ATC delays than there would have been five, 10 years ago. And if we just use the example of the U.K., the NATS collapse on the 28th of August, which resulted in the closure of U.K. airspace and widespread cancellations. Because of the increased resilience we had. That was on the Monday, and by lunchtime on Tuesday, our operation was fully back to normal, despite having 20 aircraft in the wrong position the night before. So I think that's where we're seeing there's an increased resilience, higher crewing ratios to factor in, rather than an airspace redesign or a network redesign. Thank you. Okay, thanks, Duane. Next question, Maxine, please. The next question comes from Alex Paterson from Peel Hunt. Please go ahead, Alex. Your line is now open. Morning, everyone. Two quick questions, please. Firstly, just on your October traffic, your load factor was slightly lower than the prior year. That's the first time year for a long time. Were there any anomalies in that month, anything to cause that? And secondly, just on the 737 MAX- 10, obviously there's been delays to the MAX- 8. There's been problems with various engines and so on. What if that isn't certified, built, delivered on time? What would you do, run existing fleet for longer? Are there any other levers you can pull? Thank you. Okay, thanks, Alex. October traffic was off 1%, a rounding issue, and there's nothing material in there. We could have engaged in seat sales that would have artificially driven it back up. Just for the sake of it, I think that's the wrong thing to do. We're happy to let the load factor go up 1%, fall 1%. As you know, we hit our target for the month. The only thing I would point to, though, is that there was a very steep fall off in loads on the flights to Jordan, and also obviously the Israel situation, the Israeli-Hamas conflict. At the start of the month, we were operating flights to and from Israel. There was a dramatic increase in no-shows, and a collapse in bookings. Much the same way we had in the Eastern, Central, and Eastern Europe, when Russia illegally invaded Ukraine in February of 2022. I don't think there's anything untoward in that. There's nothing we would call out, but we expect to... We're running slightly ahead of where we are year to date on load factor and expect to hit the full-year load factor target. On the 737 MAX- 10, remember, our first deliveries aren't until January 2027. It's Boeing expects the MAX- 7 to be certified either this side of Christmas or early first quarter of 2024. We think that then rolls on. They expect that will roll on, with the FAA will certify, I think. The MAX- 10, sometimes towards the second half of 2024, it might slip into early 2025, but we are a long way behind the lead customers on that. So I don't think there's any particular risk to our first deliveries of MAX- 10 aircraft in January 2027, given that it'll be three or four years behind the original aircraft. If what would happen? Yeah, we would simply... I mean, again, it would further constrain capacity if there's any delays to our MAX- 10 deliveries in 2027. It would further constrain capacity across Europe, where, again, Airbus and Boeing seem to be challenged on their delivery positions. But I would be reasonably confident that we'd get those deliveries on time in the first half of 2027. Neil, anything you want to add on the Boeing side? I would just add that if there was a delay, and I don't anticipate, because as Michael said, they're on track to hopefully deliver the first seven and 10 to the lead customers next year. But if there was a delay, we'd sell less of the NGs. You know, we've penciled in 150 NGs due to exit the fleet as the tens come in. So, you know, we just manage that within the business, but we've every expectation that we'll be getting the tens in in early 2027. Thank you. Thanks, Alex. Next question, please. The next question comes from Gerald Khoo from Liberum. Please go ahead. Your line is now open. Morning, everyone. Two for me, if I can. You've talked about some, 90% of summer 2024, capacity being on sale. I'm just wondering, why is it 90%? Are you holding some back, for potential Boeing delays, or there, is there another reason for that? And secondly, there's a big gap between the increase in average fares and the increase in Ancillary rev, passenger. I was sort of wondering why you're taking so much of the current shrinking demand in fares rather than Ancillary revenue. Thanks. Okay. The summer 2024, Jason, you might add some comments on this. Like, we're at 20%. That's about normal this time of the year. In fact, it's more. Normally, we do only about 18% of summer 2024. A couple things happened there. One, we're not sure about the last of the Boeing 10 aircraft delivery. Two, there's still airport negotiations ongoing about new bases, new routes, and we're still playing off, so we haven't yet finalized those allocations of the existing fleet. But at 90% already on sale, that's higher than it would have been in previous years. Is there a big gap between average fares and Ancillary? Yes. But you know, we are, we're price passive load factor active. What's driving the strong growth in average fares is the strong upward pricing being delivered by our competitors across Europe in a constrained market. And again, I would point to, look, France and Germany has only recovered to 80% of the pre-COVID capacity, and airfare is double. You know, the two are not the same. Ancillary, we will tend to, you know, with a very well-advanced Ancillary revenue business, it does tend to clip up a couple of percentage points ahead of traffic growth. It's up 3% per passenger in the half year, you know, but it is subject to far less pricing fluctuation or pricing volatility than underlying airfare. In a crisis or a downturn, average airfare, like I said, will fall. You know, in a capacity-constrained, consolidating market like Europe, we believe that in the next couple of years, underlying airfare will rise, but ancillaries will continue to, you know, trundle along, doing what they do. And it's a much more reliable source of income, as long as we use the average fares to make sure that we hit the load factors and fill all our flights. Okay, thank you. Jason, anything on summer than 90% S24 on sale? No, like, you covered it off there. 90%, we're actually ahead of where we would have been previously, so more capacity percentage-wise on sale for S24 than we would have previously. And like, there's two other factors at play. There's the potential for two or three new bases next year, but that will depend on how the negotiations progress over the next couple of weeks. And likewise, where we feel there's unjustified cost increases into 2024, we're keeping some of that capacity off sale while we negotiate with airports. So we will not be accepting unjustified airport cost increases into next year. So that covers off the 10%, sure. Thanks very much. Okay, thanks. Sir. Next question, please. The next question comes from Conor Dwyer, from Morgan Stanley. Please go ahead, Conor. Your line is now open. Hello, Mike. Thanks very much. Hi, guys. So the first question is regarding the excess cash and how best to give it to shareholders. So before you've expressed a preference for the special dividends, but this morning seems to be a bit more of a balance between these and buybacks. So I'm just wondering if that is just because the decision hasn't been made officially yet, or if cheap valuation is making a buyback a bit more attractive now? And the second question is just around pricing growth. It's been very strong for this period and sounds as though it's benefiting from the headroom you've built up over the last few years. So just thinking, do you think that can extend beyond this period and that you can probably pace market fare growth over the next few years? Because you're already talking about an overall market environment where fare growth should be pretty, pretty attractive. Thanks. You might ask usually the pricing growth over the next two years come back up. But I mean, I think we are the board, you know, we had a meeting last week. I think we are slightly changing dynamic. I had expected we'd be looking to return surplus cash through special dividends for the next year or two if we had surplus cash. But, you know, the way our PE has derated, you know, historically, we've been on a 15 times PE multiple. We're now down under 10, you know, at eight or nine. I joke. I looked across the states and Southwest at 15 times PE, but with less profit, higher cost, less growth. But it is what it is. But I think if, you know, if, our multiple continues to be, as insipid as it is, or has, to have derated over the last number of, over the last 12 months, I think it's, it, it's incumbent on the board to reassess whether we return cash, fair cash by dividends or share buybacks. And I would be very strongly in favor of, restarting share buybacks if our PE multiple continues in single digits. I think we're vastly undervalued for the, performance we're delivering, in a market in Europe that's consolidating. And maybe Neil, pricing for the next few years? Yeah, well, I think in fairness, Jason and Eddie covered it fairly well recently. But capacity is gonna be a key driver of pricing for the next couple of years. The market remains constrained, likely to remain constrained for a various number of issues, including the Pratt & Whitney engines, the lack of availability of new orders this side of 2030 and the consolidation play. So look, I mean, nobody knows exactly what's gonna happen, but I think there's more risk to the upside than the downside as we look out over the next year or two. Great. Thank you. Okay, thanks. Maxine, I think it's 20 past. We've done an hour and 20 minutes, and I have to go to a TV interview in 10 minutes. So we'll do two more questions, please, and then I'm gonna cut it off. That does conclude our Q&A session for today. So I'll hand back over to Michael- Oh, very good. For any closing remarks. Okay, thank you very much, everybody. I think we've done an hour and 20 minutes, and which is fairly exhaustive coverage of the results. Thanks to the team for what I think has been a very strong six-month performance. Thanks to our customers who continue to support, as we continue to do everything in our power to pass on lower fares. Exceptional on-time performance in a European marketplace, which will continue to be challenged by capacity constraints for the next couple of years. Consolidation, OEM delivery delays, and I think the Pratt & Whitney engine will become a much bigger and more challenging issue for our competitors in the next, in summer of 2025. We have an extensive roadshow, I think about 12 or 14 different teams on the road. I'm in the States, Neil, I think, is also in the States for the rest of the week. Eddie and the rest of the team are covering off Europe. If you'd like a meeting or a one-on-one with us, please feel free, contact Goodbody, Davy, or Citi, and we'd be happy to try and fit in a meeting. If anybody wants to come and see us in Dublin over the coming weeks, please feel free to do so. Peter Larkin, Head of Investor Relations, be happy to take the call to set that up. With that, thank you very much, everybody, for joining us this morning. Look forward to seeing you over the next week. Let's hope, you know, that there will be a peaceful outcome of the current situation in Gaza and in the Ukraine, and that we can all get back to carrying more passengers at lower fares than our competitors across Europe, and hopefully rewarding shareholders for their support during the very difficult COVID period. Thanks very much, everybody. Hope to see you later on this week. Thank you. Bye-bye. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.