00:00The overriding trend, Tom, you know, in Europe, I think this year and for the next five years is going to be capacity constraint.
00:05The manufacturers are way behind in their deliveries. In fact, Boeing left us 29 aircraft short this summer.
00:11And, you know, we're the airline that grows, adds more capacity in Europe than any other airline.
00:15So if we're short capacity, we were only able to grow traffic 2% in the September quarter.
00:21But we were able to recover all of our last year fares went down by 7%.
00:25This year they've gone back up by 7%. So we've recovered last year's fare decline.
00:29So kept costs under control, unit costs only up 1%.
00:32And profits as a result are up 20% to 1.72 billion in the second quarter.
00:38What affairs look like guiding into the current quarter?
00:41They look strong. I mean, we're moving into the winter period now, so we cut capacity.
00:45But forward bookies are about a percentage ahead of where they were this time last year.
00:48And, you know, it looks we're growing increasingly confident that we will hold on to or recover fully that last year 7% fare decline,
00:55that that will continue through the year.
00:57Although the second half comps are a bit tougher because last year we saw a fair recovery into the second half.
01:05But we're pretty confident now that we'll keep that we will recover fully last year's 7% decline.
01:10OK. And on passenger numbers, so you're forecasting there's an increase from 206 million to 207 million.
01:15Is that you and the team being conservative, Mike?
01:18No, it's actually, it reflects the fact that, you know, Boeing are doing a remarkable job over recent months of delivering this aircraft.
01:25Now, they asked us to take aircraft in August, September, October, which is, you know, not the, is the wrong time of the year for deliveries because we can't use them.
01:32But we said we'll take them just so we secure them for summer 2026.
01:35So we have taken 23 of the 29 aircraft they left us short in the last three months.
01:41There's two more coming in November.
01:43And then the last four arrive in January, February next year.
01:47So we are confident now we have all 29 of those aircraft delivered well in advance of summer 2026.
01:52So next year we'll grow to from 207 million this year to 215, 216 million passengers next summer.
01:59215, 216.
02:00And that is, you're fully confident you get the full 29 by February of next year for Boeing.
02:05Yeah, yeah.
02:05And the aircraft they're delivering now much better quality.
02:09We're finding no defects in any of the aircraft.
02:11I think Kelly Ortenberg, Stephanie Pope doing a really good job.
02:14I think Boeing are really getting their act together.
02:15And you've guided on a reasonable, you haven't given a specific number when it comes to guidance,
02:20but you've guided on reasonable profit growth.
02:22Yeah, I think so.
02:23What does reasonable profit growth look like?
02:24I mean, look, you know, if traffic is up 7%, you know, in the first half of the year,
02:30our traffic is up, profits are up 40%, but that's distorted because we had a weak prior year comp in Easter.
02:36Only half of Easter was in.
02:37So it's difficult to put a number on because it's so heavily dependent on the close-in bookings
02:42through Christmas and the New Year period and then into the spring.
02:45So we're not willing to put a number on it now other than to say, look, traffic, we're growing faster than we thought we would.
02:52It'll be 207 million.
02:53That's about 3% traffic growth.
02:55Profit, we think there'll be a reasonable profit recovery, but I'm not going to put a number on it.
02:59And the winter number, you've said 1% increase over that, or the current quarter, 1% increase on the same quarter last year.
03:06Is that right, 1% increase in the current quarter?
03:09No.
03:09What are you looking at then for the winter season in terms of booking numbers?
03:12Also, in terms of, we expect that traffic will continue to, there's a reasonable prospect now we're going to be growth 3%,
03:18maybe we might get to 4%, it's from 200 to 207 million now, so we've got 3.5% growth for the full year.
03:25The Max 10 certification, we've got a time frame now, mid-2026.
03:29Max, how confident are you, particularly given the government shutdown in the US?
03:33I mean, the government shutdown will be over well before that.
03:36I mean, Boeing said they're making very good progress.
03:38We've heard that back from the European agencies as well.
03:41YASA are saying that, you know, it looks in good shape.
03:44The critical thing, as long as it gets certified, the Max 7, Max 10 in the middle of 2026,
03:48our first deliveries aren't until the spring of 27, and Boeing have written to us confirming that they'll meet those delivery dates.
03:54So we're pretty confident now that we'll get our first 15 Max 10s in the spring of 2027.
04:01And if that time frame slips, what does that mean for growth?
04:04It just means our growth will slip a little bit.
04:06But I think I'd be more optimistic now.
04:08I think we'll be bringing it forward a little bit.
04:09I think it, you know, we'll do 215, 216 million passengers in summer 26, which is FY March 27.
04:16And then we start into an order book of 300 Max 10s out to 2034 that will see us grow traffic from 200 million, 207 million this year to over 300 million passengers.
04:27So we're at the dawn of a very exciting growth period for Ryanair.
04:31The good news as well this morning is we've hedged fuel out into next year.
04:36So we were able to jump on some of the recent fuel weakness.
04:40This year we're hedged to March 26 at $76 a barrel.
04:43This morning we've announced we're now 80% hedged to March 27, but at just under $67 a barrel.
04:50So about a 10% saving on our fuel costs next year.
04:53We banked that.
04:54It means we can offer our passengers lower fares and really accelerate growth with the 29 new aircraft we now have from Boeing.
05:02OK.
05:02And at a time when OPEC Plus has said that it's going to be putting less oil on the market in early next year, with prices slightly picking up in the session today.
05:08You've been cutting roots in Germany and Spain, adding new roots to Sweden and Hungary.
05:12Is there ability for Sweden and Hungary and other nations outside of the core markets like Germany and Spain to absorb more of those roots?
05:21Does that continue?
05:23I mean, the trend across Europe, Tom, is you have a consolidation going on between the legacies.
05:27So Lufthansa has bought what was Alitalia.
05:30Lufthansa, Air France, IAG are all queuing up to buy TAP.
05:33They're all cutting capacity.
05:35And there's a real, if you like, schizophrenia in Europe.
05:38You have most of the growth economy, Sweden, Croatia, Hungary, Italy, have worked out, are abolishing their environmental taxes on air travel because they're, if you like, a break on growth.
05:50And they're being rewarded with dramatic growth.
05:52We're switching capacity to those countries.
05:54The three countries that don't get it are the dumb Germans, the stupid French, and Rachel Reeves, who, you know, got elected a year ago here in the UK on a campaign to deliver growth.
06:04We wrote her, said, congratulations, abolish APD, if not across the UK, at least outside of London, abolish the APD in regional UK.
06:11And we will give you 50% traffic growth in five years.
06:15What does she do?
06:15She puts it up by two quid.
06:16I mean, she hasn't a rashers how to deliver growth.
06:20She puts up employment taxes, puts up APD.
06:23APD is going up in the UK by two quid.
06:26We wrote to the Treasury and said, this is the dumbest idea even you lot have come up with.
06:30I got back a stupid letter from a Treasury minister saying, a two pounds increase in APD is only a 1% increase on average fares.
06:38Clearly, the Treasury are paying average fares of 200 quid for their air travel.
06:41They must all be traveling with BA.
06:43Our average fare is 45 quid.
06:45APD in April will go to £14, a 33% rate of tax.
06:50We're talking about air passenger duty.
06:52Air passenger duty.
06:53And they are killing the region.
06:55So all of the airlines here in the UK have said, if you put up APD, we will switch capacity out of regional UK, Glasgow, Edinburgh, Manchester, Birmingham, airports that are not full.
07:04And they'll move to those countries like Sweden, like Italy, like Hungary, like Albania, where they're abolishing environmental taxes.
07:11So I guess the Chancellor would say, look, we need to raise taxes from somewhere.
07:14The airline sector, Ryanair, is doing very well.
07:16We've seen that in the results today.
07:18If she raises again the budget November the 26th, if she targets airlines again with increases in duty, what does that mean?
07:26More capacity, more flights, more aircraft and more jobs will move from the UK.
07:30What specifically would you do?
07:31Oh, specifically, we'll take about 10% of our capacity.
07:34We're the largest airline in the UK.
07:35We'll switch about 10% of our capacity, about 5 million seats out of the UK into those countries, Sweden, Italy, reward those countries who are abolishing environmental taxes.
07:44And eventually, even a dumb Labour government will work out that for an island on the periphery of Europe, the way to grow and the way to increase tax revenue is to get tourists onto the island first and then tax them with VAT, hotel taxes, whatever it is.
07:59But the way to grow is not by increasing the entry taxes, which is what APD is.
08:04This is the dumbest government.
08:06I mean, you've had some dumb governments here in the UK, Brexit being the most spectacular economic own goal of the last 10 or 15 years.
08:15So it's not like the Tories were in the right home, but Labour should have come in here with a growth policy, abolish APD.
08:22Maybe not in London, because the London airports are full, but there is enormous growth available in those red wall seats in regional UK, abolish APD.
08:30I'm sure the Chancellor would make the point she's giving in terms of regulatory approval for airport and runway growth.
08:36That's coming through.
08:37And the fact that they had to...
08:38I'm sure the Chancellor would also say that they have to repair the fiscal damage that they would claim the Conservative government inflicted on this economy over 12 years.
08:47And that the options for this current government are limited within the fiscal constraints, of course, that they face.
08:55I'm sure that would be part of the pushback from the UK Chancellor.
08:58There were her fiscal constraints, too.
09:00She got elected on a programme to deliver growth, that the way out of this was to grow.
09:04I'm sure she would also point out that the UK is growing faster than most other OECD countries.
09:08It's actually growing slower than most OECD countries at the moment.
09:11And it will grow even, it will probably grow even slower when she raises taxes on employment and on air travel yet again.
09:17You cannot be an island on the periphery of Europe and decide that the way forward here is tax people coming to the UK,
09:24because they'll just go to Europe instead.
09:26There is a way forward here.
09:27Abolish APD, certainly on the airports outside of London, and you will be rewarded with dramatic growth,
09:32which will be self-financing, because the spend of those tourists in VAT, hotel nights, etc., etc., will pay for itself.
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