Earnings Call: Q2 2021

Nov 2, 2020

Hello and welcome to the Ryanair H1 FY 'twenty one Results Conference Call. Throughout the call, all participants will be in listen mode only And afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present Michael O'Leary, Group CEO. Morning that we have released the half year results on the website. There is a comprehensive slide presentation and a Q and A on the website, so I would take all that as read or seen. And then I'll just give you some Comments on top of that. So as you've seen, the results this morning covered the 6 month period to the end of September. 1st quarter, we were essentially grounded, Successfully returned to service in the 1st July, we've run with about 60% of that capacity through the summer season following all the ECDC and Yes, health measures, and that has been successfully implemented. Conscious of the need to prioritize the balance sheet and cash, In September, we raised €1,250,000,000 a €400,000,000 equity placing, which was led by the management team. And we've also raised €850,000,000 bond. That means that today, we've got the half year, we've closed in cash position just over 4,500,000,000 At euros, we will need that because in the next 12 months, we'll have over €1,500,000 of debt repayments due. The UK government's €600,000,000 loan is Due for repayment in March, and we have our 2014, the first of our commercial bonds, the 2014, €850,000,000 Issue is due for repayment in June. Some of the key challenges over the last 6 months, the Ryner customer service teams and labs Have cleared an unprecedented backlog of customer flight changes, COVID-nineteen cancellations, refunds and voucher issues. All of that backlog has now been eliminated. We have refunded our voucher, dollars 1,500,000,000 worth of of bookings. We have no backlog in refunds now. And if there are customers out there who still haven't Received a refund because they haven't requested it or they're one of that small number that are stuck having moved and made bookings through screen scraper, unlicensed screen scrapers Where we have fake customer contact details and fake payment details that we've set up a procedure whereby they can apply directly to us and bypass the Overcharging scam artists, screen scrapers and obtain their refund directly from us. COVID-nineteen quite Joe has clearly caused the closure of a number of EU airlines, huge long term capacity reductions at many of Europe's legacy carriers who are receiving unbelievable Quantum of state aid, Air France KLM, Lufthansa receiving over €10,000,000,000 each, Italia Over €3,500,000,000 and similar sums are equivalent sums in SAS, TAP and others. We believe this illegal state will Distort competition for many years to come and allow those flag carriers, failed flag carriers to engage in below cost selling for many years. We have already initiated the first two legal cases in Europe against the SAS state aid and the French Refund of aviation taxes, but only to French Airlines. We expect to receive decisions on those cases this side of Christmas. However, I think it's important today we don't get stuck in the details of the short term kind of details of the current situation with Europe moving back into crisis to radically restructure our cost base. We have now reached agreement, I'm pleased to say, with almost all of our pilots and cabin crew That will involve paid for pay cuts and productivity pay reductions through the winter period, But it's a much better alternative than job losses. We have minimized the number of jobs losses we have. We can't rule out further job losses, Particularly at some bases in Spain and Portugal where Belgium, where the chemical unions frankly have their head in the sand And are still trying to insist on not taking pay cuts or opposing pay cuts. And in No circumstances. I think it's inevitable we will have job losses at some of those in some of those smaller countries. We're also looking to in extensive negotiations The airports about growth incentives, returning or where we can return traffic quite quickly. I think we took great, I think comfort from the recent experience with the UK Canaries market when the UK added the Canaries to their green list 2 weeks ago, our daily target of 2,000 bookings was 14 was exceeded by a 14 fold to 28,000 bookings in the 1st day, 25,000 in the 2nd day. And I think if anything confirms our view that there will be a very strong snapback, There is huge pent up demand for air travel across Europe, particularly short haul European air travel. We think the long haul recovery will take longer. But the short haul snapback will be strong and it will be immediate, and we are well placed to cater to that. Again, we saw, for example, tour operations and charter airlines Being slow to respond to that reopening of the Canaries where we were able to add extras for Christmas travel almost immediately And responded strongly to that. A couple of other key themes. We are clearly in continuing dialogue with our partners, Boeing. We are now confident, as are they and the FAA and the asset that the MAX 8 will return to service probably sometime in late November, early December. That we believe will lead to our aircraft, the MAX 200, the game changer being certified probably in early 2021. We are hoping to take the first delivery of those aircraft at the end of sometime in February. That would allow us to take I mean, we have a limited capacity Take new aircraft deliveries at about 8 a month. It will allow us to take something of the order of about 30 aircraft between February early summer. That figure might fall to 25 or so, but it depends on when we can get the first one. We have extensive MAX Simulators up and running and extensive training programs for our pilots. We still think this is a great aircraft. All of the pilots who have flown it and have flown the same think it's a Terrific aircraft. Operationally, they understand it well. It's light and hands very well. But from a financial perspective, it gives us 4% more seats and a compelling 16% lower fuel consumption per seat As well as delivering 40% lower noise emissions. We think that the game changer aircraft will be a key component of us Significantly lowering our aircraft ownership cost base for the next number of years. And I contrast that with many of our competitors who are Engaging in sale and leasebacks of their fleet at distressed prices and paying high financing costs, Which will significantly widen the cost gap between us and all other EU airlines for the coming over the next, I think, 5 or 10 years, Widening the gap between Ryanair and our competitors across Europe. We will, therefore, I think, respond to our remerge of the COVID-nineteen crisis with a lower cost base With a compelling growth model with significant incentives in place across many airports, many of whom want to recover their lost traffic Quickly, those that are come up with the best incentives will recover their traffic faster than others. And in a marketplace in Europe where structurally a huge amount of capacity has been taken out and will not return, we aim Particularly with the game changer aircraft order to be able to fill those gaps and deliver or restore traffic in many of Europe's airports. At the risk of a no deal Brexit remains high, we hope before the end of the transition period, the U. K. And Europe will at least agree a trade deal to cover air travel. They had a bilateral arrangement agreed before the end of 2019, which was at the first Brexit, but we believe that there will be a trade deal, at least one that will cover air travel that will allow the free movement of people And the deregulated airline market in the UK and Europe to continue. In terms of outlook, and I know we'll have lost the question, it is impossible in the current climate To give you any kind of outlook for the remainder of this year, you would have seen over the weekend the U. K. Returning to a second lockdown. Ireland has was already entered a second lockdown 2 weeks ago. We draw your attention to the fact that lockdowns are completely ineffective. And I would quote the WHO who have said, governments should do everything possible to avoid brutal lockdowns Because it doesn't actually get rid of the virus. We've already learned that from the first ineffect of lockdown, and we'll learn it again from the second ineffect of lockdown. Nevertheless, I remain an optimist. I do take my lead from Doctor. Fauci in the U. S. Who has predicted that there will be 1 or more Vaccines are probably approved by the health authorities this size of Christmas. The key issue then is when will there be Commercially available, our widespread availability of a vaccine at least to cover the high risk groups, the over 70s, the people who are working in the health service and in nursing homes. And we would hope that, that will be by the end of Q1 or Q2 of next year. That would allow us at least to rescue most, but not all of the summer peak travel period. And hopefully then we see finally leave the COVID-nineteen crisis behind us. But at this point in time, as you know, our last guidance we gave out in October was for Traffic of €38,000,000 for the remainder of this year. I think that will probably get paired backwards, But not by as a result of the 2nd wave of lockdowns, we've been asked frequently this morning, will we be canceling more price to it from the UK? The answer is we don't expect to. We had already done severe surgery to our November and the first half of December flight schedules. It is likely though that we will not be able to run a 70% load factor through that period. We might see the load factor fall to 60%. There might be some judicious capacity calling within that, but We're talking maybe a couple of 1,000,000 passengers below the 38,000,000, but and we will continue to manage that on a weekly basis. FY 2021 will continue to be usually challenging. And for that reason, we can't provide any updated guidance. We do expect to still carry 38,000,000 or slightly less, so maybe it's between 38,000,000 35,000,000 passengers in FY 'twenty one. A lot depends on how strong the Christmas is. And there is reasonable bookings there for Christmas, but it depends on whether European countries are out of lockdown At that point in time, we're not. We do need an end to these failed lockdowns. We are calling on European governments to be much more aggressive Test and tracing. For example, in Ireland, we're already testing. We have a capacity to test 100,000 people a week. We should be testing 1,000,000 people a week. And that's what this government in Ireland should have done during the 1st lockdown back in the spring. But unfortunately, in Ireland, we're being run by a bunch of doctors and not by a government here. And the doctors continue to mismanage everything from nursing homes to big factories to face masks as well as lockdowns. But nevertheless, we are where we are. And as an airline, we'll have to continue to try and manage our way around it. Our key objectives during this period have been to conserve cash, strengthen the balance sheet, preserve as many jobs as possible, Even if the price of that job preservation will be pay cuts for management for our frontline people, Less flying hours for our frontline people. It is better that they are less busy during this winter, but still in a job so that together we can all respond aggressively and grow strongly once we emerge out of the COVID-nineteen pandemic. The Ryanair Group will emerge from this period with a lower cost base, a stronger balance sheet. We will be able to fund lower fares and add new lower cost aircraft to capitalize on these growth opportunities, which will inevitably emerge once we emerge from the COVID-nineteen pandemic. Neil, do you have anything you want to add on the MD and A? I don't want to add. Michael, I'd rather than emphasize the work that we saw on the cost savings over the past number of months. I I think that came through in the half. We saw operating cost down 67%, albeit not an up sell session, a 78% reduction In revenue, we worked very hard to improve what was already the lowest cost base of any airline in Europe. The balance sheet Also underpinned by the equity raise and the euro bond that we did last month, put us in a relatively good position as We will be in the next 12 months or so, all the refinancing risk now removed. I would flag that there was some more hedge and effectiveness In the quarter, we took an after tax charge of €214,000,000 which is primarily due to the fact that we pulled back our winter capacity From 60% of prior year to 40% of prior year capacity. So effectively moving what would have been a charge in Q4 or Q3 into Sorry, in the first half of the year, we're probably coming near the end of the hedging effect. And particularly as we look into next year, We're relatively under hedged. We wouldn't anticipate any hedge in the next year. And from a cash perspective, we've already settled about 70% of the adverse hedging this year. And so balance sheet in good shape, the cost base getting better and MAX is Hopefully, coming next year, we should improve the cost base further. Okay. Thanks, Daniel. We'll open up now for Q and A, please. We're going to restrict everybody to 2 questions. And the obvious one, the first one, which would be what will the yield be like and the traffic be like next year is we don't know. Go ahead, Our first question comes from Jarrod Castle from UBS. Please go ahead with your question. Thanks and good morning both. Just kind of slightly new answers on some of the stuff you've already said on the Q and A on your website. But you obviously had some good cash control over the summer. And obviously, we'll burn through cash as you normally do over the winter. But can you potentially give some kind of range on what you're thinking this Will do to the balance sheet as you progress through winter. I'm not asking for an exact number, but just any color that you can give, Neil, Michael. And then secondly, just again, not asking on yield, otherwise I know you're going to get cross with me. But In terms of your willingness to achieve a 60% to 70% load factor, as you said, this pent up demand. But Would you be prepared to cut aggressively on yields to achieve that load factor? Or is it a case of Being conservative in the current environment at the moment and maybe some people you can't even motivate to fly given the current environment. Thanks. Thanks, George. Two quick responses on that. It is I mean, the difficulty for us is it's impossible to give you any guidance on cash flows through this winter. The challenge there is normally in a normal year, we would have a huge surge of bookings and cash coming through in January, February, March as people make their Easter holiday bookings, there's summer holiday bookings for that Christmas onwards period. And we have just no idea. I mean, I think it will be Strong, but we have no idea if there is a 3rd loss down going on in January or February, will we see that normal surge of cash flow and Summer bookings coming through. There is no doubt at the moment that the booking profile is incredibly late, which is why we think there will be very little impact on us from the government announcement over the weekend. November is already reasonably well booked. But and I think it's a judgment issue there. Normally, what we've done through this crisis Signed reasonably successfully, we said we will run with a 70% load factor. And if we don't think we can achieve 70% load factor, we'll cut the capacity. We will use pricing to deliver those. But we're not giving away 2019 at €1,000,000 airfare. We're not doing sort of free travel. There's no point. And the ancillaries are strong. So where there's reasonable pricing and we think there's a reasonable prospect of operating to 70% load factor, we will do so. In fact, this week, we'll announce our October traffic statistics. The load factor in October was 73%. So, you know, it that is a reason that the reason we do that is, 1, obviously, to keep the aircraft, the pilots and the cabin crew flying. But 2, it also means operating in those kind of load factors. We are about as close to breakeven and as close to kind of cash neutral as it is possible in the current climate, mainly allowing for the fuel hedge unit effectiveness. So that's a reasonable way to go forward. We have a decision to make in November, which is why I think we will let the load factor probably decline to about 60% in November just because the bookings in November are so weak. We don't want to collapse the business entirely. We would like to keep that kind of those skeleton flights operating. And we are down to kind of skeleton flight levels across Europe. But there is demand for those flights. People are moving for work reasons. People there are lots To work in the health services across Europe who are traveling to and from commute using Ryanair services and that we think that will continue. So Will we continue to are we dumping prices to maintain a 70% load factor? No. We are clearly below our budget yield though for the month of September October. But we are it is reasonably sensible. Where we don't think we can get to that 70% load factor, We would take out that capacity. That's why we've already cut or we've already announced we're only doing 40% of our normal winter capacity. That is less in November. It's a bit higher around the Christmas period, but it is a very moveable feast. And the real challenge is we've no idea what will happen to the bookings Over Christmas and into the January, February, which is normally one of the high points of the booking period. I mean, our busiest week for bookings Annually, it's always that second or third week in January. And we just have no idea yet what that will look like when we get there in January. Next question, please. Thanks, Michael. Thanks, Eric. Our next question comes from Daniel Rosca from Bernstein. Please go ahead with your question. Thanks very much. Good morning, guys. Hi. Hey. In your comments this morning, you highlighted the opportunity growth as other airlines retreat over the next couple of years. Why haven't you announced any new bases or specific growth plans yet kind of compared to others? And then staying on that topic of growth, could you comment how you're currently thinking about deploying that growth in the upcoming years? Is it more strengthening existing bases Or new basis? And if it's new basis, kind of which geographic focus do you think can yield the most attractive return for you? Okay. Thanks, Daniela. We have announced one new base, which is Bouvet outside Paris opening in late January, but it's only a 2 or 3 aircraft base. I mean, the reason we haven't announced more is because we haven't concluded negotiations with airports yet. I mean, there are extensive negotiations going on really across the piece across Europe. In a lot of cases, those airports don't know how much capacity they're We're going to lose. I mean, European airlines are allowed to hold on to their slots. They use them or lose them has been suspended For this winter, it will probably be suspended in the summer 2021 as well. But if you look at some of the legacy airlines like Lufthans, KLM Air France, To have retired a huge amount of their capacity, up 25%, 30%. We think a lot of that won't reemerge or won't be restored. And there will be enormous growth opportunities for us. Now clearly, those airports have already been most affected by closures, for example, the Flybe, The Germanwings level, they're already quite aggressive, but there's more to do. And how will we deploy the growth at the Ampac will be opportunistically. We will deploy the growth to those airports who want to grow or return their restore their traffic fastest. And that will be from our largest airports at Dublin and Stansted down to our smallest airports and many new airports who where we presently don't fly. The more the airport works with us to have a return or an incentive, even if it's a short to medium term incentives, That's where we will deploy that capacity. We will be opportunistic and entirely flexible. But it will spike back very quickly. I think the experience we had with Canaries traffic 2 weeks ago is an indication of the level of pent up demand there is, particularly for short haul European air travel. I I mean, I think any people who have been locked up for the last or have been locked up for the last 9, 12 months, there is an enormous Desire for them to go traveling again or to bring the kids on holidays, go back to the beaches of Europe, I think that will be reflected in very strong Travel patterns into next summer as long as there is a number of vaccines are announced and there is some reasonable availability of Vaccines by the end of Q1, Q2. You talked about the hub and spoke carriers. In principle, is the hub or the spoke more interesting for you? In principle, Daniel, what's more interesting to us is those airports who want For us, the lowest cost base. We don't really care. I mean, we're at home airports and we're at spoke airports, but we are very minded To grow back very and I know I'll give you an example. For example, you take Stansted, which is our largest airport. I feel no great compulsion to To restore traffic growth very rapidly, as Stan said, if, for example, there's a unique opportunity in Spain or in Italy or in Germany, Particularly in the Central and Eastern European airports. Will we return and reopen it? Yes, of course, we will. But whether we snap back from prior to the shutdown, we're nearly 30,000,000 close to 30,000,000 passengers at Sanddep. Whether we go back there, I use it only as an example, It's not the nature of a discussion with Stansted. But whether we go back to 25,000,000 passengers in the 1st year or just 15,000,000 passengers in the 1st year, we entirely depend on the The nature of the discussions we have not just with Stansted, but also with the other airports across the piece. And we're certainly seeing quite aggressive Negotiations are offers on the table to us from particularly a lot of Central and Eastern European airports Who've been very badly, I mean, devastated by much more on cranking cutbacks and lockdowns by their local governments. Got it. Thanks very much. Thanks, Anja. Next question please. Our next question comes from Savi Syth from Raymond James. Please go ahead with your question. Hey, good morning. Two questions. Assuming you get the 30 MAXs planned, Curious what your CapEx for kind of second half will be and maybe generally what the next couple of years might look like? And then just Given the near term lower cost and if you and assuming you get the MAXs as expected, just curious what level of operation you need to get back to in order to achieve the Kind of 30, 31 per packs cost you achieved in prior to this crisis? I'll come back to Neil and answer the CapEx question. I mean, I'm not particularly worried about there isn't an absolute number on cost per passenger at 31. Like I think when we emerge out of this crisis, our cost per passenger will be meaningfully lower than it has been historically. We will have lower pay, Lower wages. You will certainly have much lower fuel. We will lower aircraft costs, lower airport costs. And I think we have higher yield Because there is no doubt that there will be constraints on capacity coming out of COVID-nineteen. If there is a vaccine available in Q1, Q2, There will be a very strong summer period next summer. Now I know that's a big issue, but there will be a very strong summer. And we the airlines across Europe would not be able to respond or restore that capacity quickly. Again, I go back to the example 2 weeks ago when the Canaries opened up. We were back there. I mean, it's incredible. We filled flights within I mean, we didn't even know before the Canaries Development had announced Canaries, as we see the huge spike upwards in bookings, we were adding extra flights into the Canaries for the Christmas period within 24 hours. Tour operators, charter airlines and some of the legacy carriers were scrambling around not able to add flights. They've already cut their schedule. So I think you will see us respond very quickly, but I think pricing in a recovery environment will be much stronger than we have had historically Because so much capacity has been taken out of the system. But are we is it 31 or 35 or 27? No idea. It would just be lower than we had in the past. Neil, CapEx. Yes, Savi. There won't be a huge amount of CapEx in the second half of this year. In fact, most of the CapEx will be really maintenance Related and even at Sash where we're doing less line, so it's less on the maintenance side. It's too soon to give numbers on what the Boeing CapEx might be because We haven't finalized delivery schedule. So I'm not going to give CapEx for the next few years. But hopefully, in the next few months, we We'll go into some kind of conclusion with Boeing and we'll start giving guidance at that stage. Thanks, Neil. Next question, please. And this question comes from Mark Simpson from Goodbody. Please go ahead with your question. Hi. Yes, morning. Two questions. You're obviously not giving some firm guidance, but you have talked in the Q and A about a 50% to 80% of summer 2019 capacity potentially being your targets for the summer 2021. I'm just wondering what the variables are between that range and is 80% a MAX that we should assume. And then talking about MAX, obsessed by the idea of you taking MAX 10 in the future to further drive down your unit costs. Can you maybe comment around your view of the MAX 10 and what kind of ambitions you might have behind that. And I'm sorry to squeeze one last quick clarification. Neil, CCFF, you've got it down as a March for payments, but Is it likely that the government will roll that out for at least another year? Okay. And Neil answered the last question. Let me use the first one. We're giving a very wide range, 50% to 80%. The real bear that what drives that is availability of a widespread availability Multiple effective vaccines and how that will impact government's ability or willingness to lock down economies or reopen economies. There's clearly the European many of the continental European economies are hugely dependent on travel and tourism. Even Ireland, which This is an island of the periphery of Europe, which usually depends on travel and tourism, but that hasn't stopped our government basically shutting the entire cutting the entire island down. It's It's easier to get out of North Korea at the moment than it is off the island of Ireland. So the wide range of 50% to 80%, which is that's over the full year that we're talking like something like 75,000,000 passengers to maybe 100,000,000, 120,000,000 passengers It's entirely dependent upon the timing and availability of widespread vaccines in Q1 or Q2 next year. Is 80% our max? We think so. I mean, we think even if there was a virus that may or not a virus, A vaccine available by the end of Q1, we would still struggle. I mean, there's just because of the obligation of layoff capital, recruitment and trading, Promoting pilots, having enough line flying this winter to complete all the trading we need to do, we think that it would be tough To get Honey, higher than 80% of our 2019 MAX. Now we could over weekend that extra and things like that. But We don't think that there's any prospect next year that we would carry more than 120,000,000 or maybe 130,000,000, 25,000,000 passengers All being if there was a vaccine widely available in the Q1. But clearly, the earlier a vaccine is available, the higher that number will go. And We're guessing. We're stabbing in the dark, but that's the best we I thought we can give you. On Boeing on the MAX 10, we continue our intense Discussions with Boeing around compensation, pricing of our existing MAX order. We are looking at additional aircraft orders. Most I would focus around the MAX 200, the game changer, which will significantly lower our operating costs going forward for the next number of years. We are not in a position to engage in discussion on the MAX-ten at the moment. They have pushed back production and deliveries of the MAX-ten by Anything up to 2 years. I think, Neil, is it about 2 years? And so they're not really at a point where they can give us any deliveries of MAX 10 or Gross pricing. We have though and we've agreed with Boeing that we will be first in the queue when it comes to a discussion on MAX 10 availability and pricing, and it's certainly something we would be looking at going forward. But we were already the lead operator, lead customer for the MAX 200. We have incredibly favorable pricing from Boeing as a lead customer of the MAX 200. And the fact that they give us 4% more seats At no extra cost, at 16% lower fuel, we'll transform our cost base for the next number of years, competing as we will be with airlines who've been doing Sales and leasebacks, selling aircraft at distressed prices and leasing them back at what are very Disadvantageous financing costs in the current climate. And Neil, then on the Yes, the CCIFRS mark, our intention at the moment is to pay that back In March, but you're right. We don't have to make that decision until we get into kind of the back end of March. And there is a possibility if we want That's rolling over for the year. Okay. That's great. Very clear. Thanks guys. Thanks, Mark. Next question, please. Next question comes from Stephen Furlong from Davy. Please go ahead. Hi. I presume revenue management systems Pretty redundant at the moment, but I was just wondering how the importance of Ryanair Labs and the work it's been doing During the crisis, we just might talk about that. And then maybe just go back on the competitive landscape into next year. It seems that So the huge chunk of capacity permanently out of the market, I don't know if that's your view, Like the way it's maybe growing Gatwick or domestic Norway maybe, but beyond that, would you agree that A lot of the capacity coming out will be permanent or do you think it's more or you think it would come back post crisis? Thanks, Michael. Okay. I have Eddie Wilson here, the CEO of DACH. So I'm going to ask him to just give his view on the revenue management systems and pricing. Just on the competitive I mean, if you look around the system, we think at best we'll only be able to operate 80% of our capacity through next summer. Air France KLM already now has 20% capacity cult. And Italia are focusing strongly on long haul routes, massive short haul capacity cult. EasyJet will have 51 less aircraft by September 2021, no growth thereafter until 2025. IAG 68 less deliveries over the period 2020 Due, their winter capacity cost is 70%. And it's all across the piece. If you look across who has aircraft orders into next year, Most have been deferred out of 2021 into 2022. With as far as we understand, we have about 19 aircraft. So it's reasonably small compared to us. We'll take delivery of something of the order of about 30 aircraft. We will be the airline with the Largest additional or spare capacity into 2021. We are certainly, I think, the airline that most The European airports are looking to offer traffic restoration pretty quickly. And we will be delivering that traffic restoration on Meaningfully lower cost aircraft with much lower operating cost lines. And I go back always to the Slide to go on our investor presentation on aircraft ownership costs. We keep hearing from Joe Verandi at Wizz that they'll have lower aircraft cost Ryanair, every time he adds an aircraft, the gap between Wizz and Ryanair gets wider and wider. We will be taking lower cost aircraft. He's taking Higher cost aircraft and the gap between us gets bigger and bigger. Eddie, given rig count on revenue management systems and what's our philosophy in terms of pricing and bookings going forward. Yes. I mean, I think if you look just as Stephen, you're talking about last before I get into that. I mean, like we've had Our ability to leverage labs during this crisis has been phenomenal, particularly on the customer service side and our business intelligence teams. They were able to sort of Be very flexible in actually coming up and managing that amount of refunds and the ability to get ventures and things like that out. But Clearly, we are the curves on the revenue side are completely different now. I mean, there's an awful lot more closer in bookings because We're concerned about whether there's going to be lockdowns or whether they can travel or not. And we are working with our revenue management and people in labs on that as to how we're going to Adapt that going forward because it's going to be particularly when bookings start to come back in, how they are traditional sort of curves Won't necessarily be applicable. So there's a lot of work going on that at the moment. The good news is that the ancillaries are still robust particularly on SEAT compared We've already been less so on the in flight. But having that amount of people here and being able to use them has been a real benefit for us and we're learning a lot from this as to how people are the different profiles of bookings. Yes. To be fair, Ryanair Labs has done a remarkable job. We had a backlog of nearly €1,500,000,000 of refunds and they have now eliminated that backlog. We We issued refund vouchers to all of the customers who were affected by COVID-nineteen cancellations. You will repeatedly hear quotes on the BBC talking about when we'll eliminate the backlog. It's done. The only people who are left out there are people who haven't applied to us Directly for refunds, but it's been done and lab has done a remarkable job. John Hurley is here smiling furiously at me, But they've done a terrific job. And going forward, as Eddie said, it is the nature of the beast. We now have a very narrow booking window, It should be about 28, 30 days out. But we are much more flexible in the way we can deploy the aircraft. If we think We're going to be below 70% load factor more than 2 weeks out we take out flights. The challenge for us in most cases is actually one of the flights 1 flight of the 2 flights, that rotation will have a load factor of higher than 70%, and so it needs to operate. Next question, please. Our next question comes from James Hollins from Exane BNP. Please go ahead with your question. Morning. Yes. Just wondering on redundancies themselves. I know you're talking about mainly focusing on pay cuts and 5% to 20%. I was wondering, I think your Staff base was 18,000. What we should be thinking about for, I guess, the end of this fiscal year? And secondly, probably for Neil, On the Boeing side of things, I know you're not talking about compensation. Obviously, you've started that process, dollars 250,000,000 coming in already. Is the best way to think about CapEx next year the same as Southwest? You basically said it will be net 0. On the CapEx, the discussions are ongoing. Some of that includes timing of cash flows, but also We're finished on that. It's very difficult to give you numbers, but we will be trying to keep as much cash in the business for as long as we can, James. I don't think it's much more clear. I can give you this side of announcing what we finalized. We're following on that front. Yes. And on the headcount issue, I think it's not helpful to focus on job losses, although there is likely to be more job losses This winter at those number of bases, our cabin crew bases in Portugal, Spain and Belgium, where we haven't got agreements, where we have reached agreements with all of the pilot bases Across Europe with the vast majority of the country basis, we're reasonably confident there won't be any more job losses. We are participating in furlough schemes Where they are available. In some cases, in the U. K, for example, the furlough scheme is punitive because the employer has to pay, I don't know, the first 3rd of the salary, we simply can't participate in those. We won't fund those kind of salaries. But we are keeping pilots and TAMACRU flying, admittedly, on the basis of paying them less. But that's better than sitting at home on the door in the U. K. This winter. It's more helpful, I think, to look at it in the round. And that is In the half year, the staff costs decreased by 60%, which was due to flight hours, recruitment fees, Some job losses. I mean, more of the job losses have been in head office and in overhead functions rather than in pilots cabin crew and engineers I'm participating in the government support schemes, and I think that will continue to be the case. We are very conscious. If anything, our utmost priority here is to Keep the aircraft fleet flying. Even if there are the planes already doing 1 or 2 flights a day through the winter, keep as many pilots of Cap Crew current as we can So that we can pounce on these growth opportunities and return quickly to more normal scheduled levels of flying As soon as there's a vaccine or they where we emerge at the end of this COVID-nineteen crisis. And an awful lot of our competitors, for example, who have grounded aircraft for 6, 9 months. Their pilots would have gone out of hours. Their cabin crew would have gone out of hours. Their aircraft will need a Heavy maintenance shop visit before those planes can come back in the air, whereas we're keeping everything ticking over, while still delivering 60% to 70% Reductions in our total payroll costs. So James, I guess the question is don't focus on the headcount for the moment. Focus on the payroll Cost savings, while still keeping us there, giving us a very flexible and keeping our pilots in Canada current. All right, Glenn. Thanks. Next question, please. Our next question comes from Jamie Robuston from Deutsche Bank. Please go ahead with your question. Jamie, hi, guys. Good morning. So just you've alluded to the UK government, one minute it puts Canary Islands on the safe list and you take a load of bookings. The next, It imposes a national lockdown and tells people not to travel unless for business purposes. Is there anything more you can just say in terms of what you're going to have to do now to manage this Latest development in Q3 in terms of capacity and also things like refunds. 2nd thing, a more simple boring one. In terms of the Brexit related risks you've highlighted, could you just remind us what percentage of your current shareholder base is UK, please? Thanks. Yes. Okay. Let me add the first one first. I think Q3 will manage it on a day to day basis. Yes. The UK government is a whiplash for the numbers of U turns they're performing, not just on COVID, but on Brexit As well. We think that the capacity, we've come to go out into 40% to prior year. The close in bookings are reasonably Strong, but anything out 6, 8 weeks or more than that is weak. That means we don't have a big refund Liability out there. It's not like we were back in March this year where we lost the bookings through the summer there for a huge contingent liability. We don't have that at the moment. There is a spike over the bookings at Christmas. When they add the Canaries to the list, we saw a big surge in bookings to the Canaries, but it was largely for people Who would normally go to Canaries with their families at Christmas and New Year. There isn't a lot of people out there booking on travel with holidays booked in the middle of November because schools are open. No, there's no. So what we have booked for November is largely business or essential travel anyway. And we will expect most of that Travel, but I would be perfectly open. The $38,000,000 could fall, dollars 36,000,000 it could fall $35,000,000 We don't know, but We're down at pretty much rock bottom levels of traffic and capacity at this point in time. But if If there's any kind of error or any changes, there would be changes to the slight downside. On refunds, we have almost no refund liability Less because we have no forward bookings out there. And I've made clear this morning in the PR, whatever flights we're operating will operate. People do not have a refund entitlement on those flights. Flight is operating and you don't travel, you don't get a refund, although you can take advantage of our change. We've waived change fees for any of the bookings that have Made recently, that was out there at the end of January of this year, which is one of the reasons why we might have a slightly lower load factor in November. It might fall, say, 60% from 70%. If it begins to fall in less, now we'll take out some capacity. So we have a very flexible Cost base at the moment, we have a very flexible capacity base. And I think if you look at everything we've done since we went back flying on the 1st July, Ryanair is the only airline that's delivered a 70% load factor every month since the 1st July. We look at EastJet load factor about 54 We have delivered exactly what we say we will, And we have a very flexible capacity and cost base going forward. On Brexit, who the hell knows? I mean, the best thing we can say is, look, There was a unilateral agreement to cover flying announced between the European Union and the UK government before December of last year. It obviously wasn't needed because there was a transition agreement. We suspect there will be some kind of agreement that will be cobbled together because Johnson and GOL will U-turn again, having lied on just about every aspect of their Brexit policy. But if there isn't, I think we don't factor in our the EU UK or the EU non EU is still running at about 54.46. We do have the provisions in place to dis to remove the voting rights from non EU shareholders in a hard Brexit if there is a trade deal Aviation, we expect to be well covered, but we're not breaking out what our U. K. Shareholding is. It's not a big we've ever given out And nor will we start now. I just got to say, Julius, anything you want to add on the Brexit dimension? Julius Cormark, our group CLO. Just one thing perhaps, which is that if there was no deal between the U. K. And the U27 post January 'twenty 1, we will activate our Brexit ownership and control solution, which Michael described, essential element of which is application of Voting rights for non EU shareholders and that will protect our EU licenses, which we have in Ireland, Malta, Poland and North Korea at the moment. And we would hope that this application will be a temporary solution until the number of EU 27 shareholdings Exceed 50% again. Okay. Thanks for that, Julius. Next question, please. Our next Question comes from Muneeba Kiani from Bank of America. Please go ahead with your question. Hi. Can Can you talk a little bit about how you're thinking about hedging? You said 40% for fiscal year 2022, kind of what's The assumption base assumption for that 40%. And just a clarification on ticket refunds, the €1,500,000,000 Was that largely all in 2Q? Sorry, Bahiyi, you broke up there, Dean. Just repeat that last question. So what $5,000,000,000 refund was it? Yes. So the ticket refunds, the $1,500,000,000 was that Almost all in 2Q or was there a portion in 1Q as well? Okay. I'll ask Neil to answer the second part. Hedging at the moment, look, we would be reluctant to do any more hedging into next year, not because we don't fundamentally believe in hedging, but simply because the volatility in oil prices Means we really should I mean, I think we should hold out and hope that low oil prices will remain reasonably low. We are about, what, 40% hedged into next year already. So, which would be the upper end of our tax forecast. Pardon me? That would be based on the upper end of our PAX forecast. No, 40% hedging. The forecast is at 50% to 80%. Correct. So let's look around at that. No. Sorry. We have got 40% of fuel hedging. We don't see any circumstance in which we won't be operating about 40% of our capacity Through next year. We're already operating about 40% this winter despite the fact that there are more lockdowns in place. So We certainly don't see any further fuel hedge ineffectiveness into next year. Would we be willing at this stage to increase that hedge position? No. 1, because we don't want to take a risk. 2, the balance sheet, while strong, we don't want to put any under any further strain by extending our hedge lines. And 3, frankly, I think when some economic activity resumes, we will see continue I think the Continued heavy oil supply and hopefully that over the medium term oil prices will remain reasonably low, which will allow the airline industry as a sector to recover. And on the second part, Neil, on the hedging into Q2 or the results into Q2? Yes. Most of that was into Q2. We got our people back in the office from the 1st June. So we started processing the backlogs at that point in time, and we've done a huge amount of work, as we already said, with labs and the customer Service team getting through that over the past 3 or 4 months. Okay. Thanks, Maniba. Next question, please. Hello? Our next question comes from Alexandra from Kepler Cheuvreux. Please go ahead with your question. Yes. Good morning. Two questions, please. First, a follow-up on the airports, please. The basis that you closed this winter are primary airports. Bouvet is a smaller airport. With a weaker balance sheet and before the crisis, will you continue to focus on primary airports where we are in direct competition with Airlines that have received huge state support or do you expect at least temporarily to focus again on smaller airports? And second, I'm asking a lot of people. It might be a coincidence, but I do not know any person in Germany That asked to be reimbursed and has already been reimbursed for canceled trial and error flights. You mentioned in the press statement this morning almost all non OTA refund requests have now been dealt. Could you please be more specific on what you mean with almost all? And is Germany a country where the refunding process This has been slower than the rest of Europe. And considering the OTA refunds that still have to be done, how high do you estimate the total cash at risk to be reimbursed Thank you very much. Okay. Thank you. Let me touch on the airports first. I mean, again, don't get distracted by the primary or secondary split on airports. We have closed some airports, I would hope temporarily for the winter, Cork, Shannon, Toulouse. We've closed Stuttgart and Dusseldorf, but they will be permanent closes. They're not reopening. We would expect Call, Shannon, to move to reopen for next summer, but that all depends on whether Ireland has reopened its connectivity to the rest of the world Or whether we're still being strangled by a bunch of doctors mismanaging the economy here for the next over the next period. Again, I go back to we are overly indifferent as to whether our growth will be at primary or secondary airports. It will be at those airports who need the growth most Because there'll be the airports who'll come up with the best deals. We are already indifferent as to who the competition is at any of those airports Because we have much lower cost base than all of them. Even Lufthansa and Air France KLM, yes, they're all engaged in below cost selling, But we'll still be able to under cut their prices because we have a, I don't know, a seismically lower cost base than they have. And eventually, they'll run out of their €10,000,000,000 a day, if I think they'll run out of the €10,000,000,000 a day pretty quickly anyway. There is no Honestly, on the German situation, I have no idea where you get that. You'll need to get out more, Roxanne, or meet more people. We have refunded all of All of the German customers whose flights were canceled during the COVID have either received cash refunds that they requested or they received vouchers. There may be some there who are expecting the refund to fall in the doors, but if they have a voucher, it's up to them to either use the voucher or request a cash refund. There is no backlog at all of refunds in Germany or any other EU country at the moment. In fact, our current People who applied to us last week for refunds or the cash refund requests that came in last week have already been processed. There is a small and I would emphasize a small number of participants out there who go through OTAs. I suspect it's Probably, it's a single bigger percentage of our total customer base. And the challenge we face with those is because the screen Scrapers are scamming those customers by adding hidden handling fees or inflating the price of the Ryanair Fares. They don't want the customer, they do, to be in direct contact with the airline. They don't want the airline to refund the money directly to the customer, even though under EU261, that's what we're advised to do. We have put in place a procedure where those customers can actually apply directly to us through the website, and we will give them the refund directly to them. The reason we haven't done it so far is Because we have a fake e mail address for that customer that usually sends the e mail directly to the OTA who sit on us or we have a fake A virtual credit card from the OTA, and we won't issue refunds to a virtual OTA credit card. We have Littered with examples of where we've already processed refunds to people who we thought burnt OTAs and you have these screenscrapers have been sitting on that cash 2 or 3 months keeping their business models going, whereas otherwise they would have gone bankrupt. But there is if you have somebody in Germany waiting for a refund, Ask them to send us an email straightaway requesting the refund and it will get processed in the next 4 or 5 days. We have, as we said, processed over $1,500,000,000 in refunds and vouchers. And there is nothing there is no backlog left in the system Either in Germany or any other EU country. Thank you. Next question please. Our next question comes from Carolina Dores from Morgan Stanley. Please go ahead with your question. Hi. Hi, good morning. So two questions. One, If you have to reduce your flight significantly, is the €60,000,000 cash burn guidance that you gave us In at year end results, is still a good estimate for your fixed cost base? And my second question is how are you thinking about minimum liquidity? You have €4,500,000,000 at what point would you Looking to raise more funds. And initially, you chose a mix of through the summer of equity and debt. Would that be your preferred option or you would look at leaseholds? I guess, what do you think would be most attractive at this point? Sorry, Kenny. Can you just repeat the first question? I wasn't clear. You said a figure of €60,000,000 or something, but I can't pick it up. €60,000,000 per week of cash 1 was the guidance during the 1st lockdown. If you look at capacity going down significantly, is this your fixed cost base? Let's put it this way. Okay. So let me come back on those points. So firstly, I mean, we have no idea. Again, the cash flow is impossible to foretell through the winter period because we have I mean, generally speaking, You have very weak bookings in the road to Christmas, very, very strong bookings recently after Christmas. We have no idea whether those strong bookings are going to emerge or not. Clearly, it will be assisted, I think, strongly assisted if there's announcement of the vaccine licenses this time at Christmas, but without Some kind of insight into what the spring booking season will be like. We have no idea what the cash flows will be. Minimum liquidity, I think you will have to take it based on what we've already done. We have €4,500,000,000 in cash at the moment. We have €1,500,000,000 in debt refunds next That gives us a minimum of €3,000,000,000 at the moment. I mean, we're certainly not going to go below €1,000,000,000 in sort of cash. But it is very difficult to foresee that we would need to go back to the market for more equity or more debt given where we are at the moment. But clearly, there's all sorts of scenarios. There's no vaccine and COVID continues for the next 5 years, we will have to go back to the marketplace. We don't think that's likely and nor do any of the medical experts from Doctor. Fauci to most of the Euromaid, the ECDC. There seems to be a reasonable cadence. There are any number of vaccines already in Phase III trials. It looks like they will be a number will be licensed pre Christmas. And the question is how Widely available, those vaccines will become in Q1 or Q2 next year. And there was a third element. Oh, yes, on terms of aircraft financing, no. We have generally been always very conservative in aircraft financing. We, as you know, have about 80% of our fleet is unencumbered. We would continue to believe that we'll use a mix of equity and bond, our low comp bond debt financings To fund our aircraft orders, we have the backstop of AG SIM out there as well for a kind of a crisis Eventually. And we also have some flexibility built into the order with Boeing that we can postpone deliveries if kind of COVID-nineteen continues. But the price we're buying these aircraft, that is well factored into our cost base. And as Neil has said, we have No cash outflows on CapEx between now and the end of March 2021, even despite that we have, what, 30 or Up to 30 aircraft deliveries in the first half of next year. Next question please. Our next question comes from Neil Glynn, Credit Suisse, please go ahead with your question. Hi, there. Good morning. If I could ask 2, please, also. The first one, just following up from your last answer there based on aircraft financing. I guess based on that, given the leased aircraft that are due to go back To lessors, am I right in thinking that you might actually get to a point over the next 12 months where you don't actually have one operating lease at the moment At that time, I just wanted to check that. It was quite interesting. And then the second point, I appreciate you don't have a crystal ball and I understand your point with respect to Canary Islands demand, but just interested in terms of how you think about the next few years on leisure travel to cities, The recovery of that segment of the market and how that might influence your network strategy over the next couple of years. Do you think that there might be a structural change there where which may not happen, for example, in beach demand? Okay. I mean, let me tell you, it's unlikely that we won't have some of these aircraft. We do have aircraft coming off lease in the next year or 2. In all those cases, we're having discussions with the lessors. If there is a significant reduction in the lease rates or the monthly lease rate, we're happy to extend those leases. If there isn't or the lessor has some other use of the aircraft, then we're happy to let the aircraft go back because we're now into the or into the spring of next year, we're into the MAX, the 200 delivery. So we are again opportunistic. Where there's an opportunity to significantly reduce leased costs, then We would extend leases where the reasons we would end or allow those leases to end. But no, I think it's unlikely in the next 12 months to get this issue where we have no lease Aircraft. Open next year, again, you're getting into this with respect. I think you're making the same mistake is that, oh, it will be demand led where Our growth is never demand led. Our growth is always opportunistic. It's where we see opportunities to where there's Large growth incentives are where there's big discounts on published charges. That's where we place the capacity and then we stimulate the demand. Clearly, we think there will be a huge return, I think, to the beaches of Europe short haul in the summer of 2021. If we are emerging out of the COVID-nineteen crisis and we are there's a widespread vaccines available, city travel will Continue to be strong, one, because that's where the business travel will start from and will go to. And secondly, a huge amount of Kind of work related travel, people commuting to jobs, commuting to work. I mean, lots of people, for example, people who live in Dublin who work in London, That will return very quickly. And then I think into next autumn, you will see a very strong return. 8 is in no small part because you'll see lots of city based hotels Corting hotel room rates, lots of advertising in Christmas markets and reasons to go to Amsterdam or Madrid. These cities are hugely dependent on tourism. Rest they need to see the restaurants, the hotels and their kind of leisure industries, concerts, venues, etcetera, recover their business. And I think you will see significant price stimulation by hotels Tourism destinations, which is why I think the city traffic will return very strongly as well. I mean, I have no doubt, I listened to all this kind of Sage analysis. I don't mean Sage is in the U. K, but this analysis, oh, it will take 2 years, 4 years, 5 years for travel to recover. Bullshit. It will recover very rapidly within about, I suspect, 12 months Because of the huge price discounting that will go on by the hotels, the airlines, the providers, pricing will stimulate a very rapid recovery. The question is how long then it will take. Is it 2, 3, 4 years for pricing to recover to 2019 levels? And That is a much more I think that is a much more likely outcome. There will be very rapid volume recovery very quickly, But it would be price driven. The advantage in the case of Ryanair is that price pricing would be driven by A materially lower cost base across all the major cost items, wages, Fuel, aircraft costs, airport costs, we will have materially lower costs going forward across those, which will enable us to fund Very aggressive pricing strategies. And I think then in terms of the city break market or the beach market, the hotel, the accommodation providers will actually also play their role because they will dump Next question comes from Alex Patterson from Hill Hunt. Please go ahead. Hi. I'm not asking for yield forecast, just to be clear. But is there any color you can give on the impact of later booking patterns? So does that have a negative impact? Or actually, given pent up demand and lower capacity, Will it make no difference? Or is it too early to tell? And just secondly, on the ineffectiveness charge, I think it was GBP 214,000,000 You say 70 percent is settled, which would be about €150,000,000 But on the cash flow, it's showing as €97,000,000 Are you saying 53 was paid out in the Q3 to date. And when would you expect the rest to be paid out, please? Okay. Thanks, Alex. I'll let Neil answer the ineffectiveness, The second question. Let me see with the late bookings issue. I mean, what we're doing at the moment, clearly, we are pricing into enhanced price through September, October, November at lower Then the budget and lower than we did in the previous September, October, November. But we're not in desperation pricing. Like we've taken constant We don't price down close in. Within 14 days, if we're getting a booking, people have to travel. And we've seen some of our competitors, We've allowed them to price below us in certain markets where they're not well known. Like for example, Wizz were out doing 1 euro airfares in Italy Last, I think, a week or 2 ago, I mean, to mention the desperation of wins who don't have much of a presence in the Italian market anyway, we didn't bother matching it. And normally, we would always match and undercourse our competitors. And the reason we're not matching it because, frankly, we have 70% load factors close in. If somebody's booking closes, there's a reason and they have to travel. We are still being reasonably aggressive on pricing with 30% off, 50% off $9.99 to $49,000,000 But that's all typically beyond 2, 3 weeks out. We're not aggressive on pricing at the moment for Christmas because there's too much uncertainty. So The advantage of late bookings is you're generally dealing with people who have to fly, and therefore, we're not being that aggressive on pricing. Although we are considerably below where we would be pricing this time last year for those chosen bookings because this time last year, the load factor was 92%, 93%, Currently, it's at around 70%. So while I mean, what we need to do with close in booking is to maintain be very flexible in terms of capacity 3 or 4 weeks out. We need to be certain. If we're not going to get to that 70% over, take out our rotation or take out a flight. It's generally a rotation because taking out one flight with Strand passengers. And we continue to manage that judiciously. And all I can again come back to the same point. We have managed a 70% load factor every month from July through to October, and no other airline has delivered that. Neil, the ineffective discharge? Yes, the $214,000,000 in effectiveness charge, as I said earlier, Alex, that's just front loading from Q4 and Q3 into The first half of the year, we've already paid about 70% of our mark to market on hedges that have gone in effective For the year to date, not putting the exact figure out there, but we're well through at this point in time. Thanks Alex. Next question please. Thank you. Our next question comes from James Goodall from Redburn. Please go ahead. James, hi. Good morning, everyone. So 2, please. So first, On the renegotiation with employees, I'm just sort of trying to get a gauge on how the share of variable and fixed pay shifted. Are you able to give us a gauge on what percentage of staff costs are now variable? And then secondly, on the MAX Compensation from Boeing. I mean, how are you thinking about this? Are you looking to reinvest all of that into lower priced aircraft? Or are you potentially going to take some cash there, Okay. Thanks. I'll do the second half first. I might give Eddie just give you general terms. We're not going to get the specifics, but we'll give you general terms of the employee compensation. In terms of MAX, look, we are obviously in discussions with Boeing about the MAX aircraft. Compensation is not uppermost in our minds. We are much more focused on the pricing of the aircraft order. We are talking to Boeing about additional orders. And so but it is a complicated there are 3 elements to it. There is clearly compensation for the delayed deliveries and we're now running 18 months behind. There is also some sort of the pricing of the existing order, and we're also looking at the possibility of adding to that order In the current environment, Boeing need orders and we are we believe we have very strong growth prospects for the next 2 or 3 years Well, there will be, I think, a very sizable snapback in air travel post COVID and not that many airlines in Europe who can You have the capacity to be able to deliver that or to carry that traffic. But really, I would postpone a lot of the discussion on MAX Until first time as the MAX returns to service and we have a credible or realistic delivery schedule from Boeing, we really can't conclude those Discussions, which are pretty advanced but not concluded. Eddie, do you want to give a flavor for the BHR handoff? Yes. I mean, The key to this was that we were very early with our people and also with the unions with a very clear message. And Those deals were out there like and what we've got is that we've got a 20% reduction for our pilots and up to 10% of our cabin crew and 100 percent of pilots are covered in that. And the key as well was that there was pay restoration over the next 5 years. So it was a simple message And our people, I suppose, realize it's better to have jobs to hedge their bets on job security in the long term I'll take the pain of fraud. So it is a measure of how they went about this. It took a while for the message to sink in, but eventually, it's about job security, reductions in pay, Pay restoration and have a very like in other words, our pay rates are variable to our activity With the 20% reduction in the case of pilots. So it's a good deal for our people in the longer term, I would say, and they have Taking the pain of that credit to them. And I would contrast that if you take some of the legacy airlines around Europe, but there's a real problem building in some of those legacy airlines where They have all of their pilots and capital group up on government furlough schemes, which is all fine until the government furlough scheme unwind. And I think when The vaccine emerges and governments no longer lockdown. The governments are going to be under intense fiscal pressure to end furlough schemes. And then you're going to have these airlines, the Lufthansa, the Air France's KLM is going, oh, shit, the furlough scheme is ended. We now start paying these people, but we can't That make them redundant because that's part of the terms of the state aid they get. They are going to be very and nor will they have gotten any they have not negotiated any pay cuts. So we are in a very strong position going forward. It has been painful for our people. It has been Painful for the entire management team. We've all taken deep take off. But we will be much more flexible and much Faster to reemerge from this with a restructured cost base at a time when we'll be competing with the Los Santos and the Air France KLMs and The Spanish Airlines, all of whom are receiving these kind of job scheme furlough doping, but that's going to go to an end very quickly because European government can't afford it to continue adding to item. And I think the challenge with those areas at that point in time will be, oh, now we need pay cuts. And the unions are going to go, go ahead with your pay cuts. You've had furlough support. And a lot of these furlough schemes are based on no pay cuts, no job cuts. So we've restructured and most of our competition happens. The notable exception that would obviously be IAG who have kind of followed us, but we were out first and faster and we have the deals done. Next question, please. Thanks, James. Thank you. There appears to be no further questions. So I will hand back to the speakers for any other remarks. Okay, everybody. Thank you very much for your attendance on the call. Clearly, this has been a very challenging 6 months for Ryanair. It's been a very challenging 6 months for the industry. I think it's important to finish on a more positive note. The coronavirus will end. Opaxdines will be found. I hope it will be in time for a reasonably strong summer 2021. But all I would assure you is that in the meantime, we have taken a lot of the painful decisions. We have restructured the cost base. We have a strong balance sheet. We are actively engaged with our partners, Boeing, in restructuring the aircraft order. I think there has never been a more exciting period or opportunity for growth, certainly in the European airline industry. And that's going to be the one market I think that's going to rebound very strongly with huge suppressed or pent up demand. And Ryanair will, in my view, be by far and away the best positioned airline with the lowest cost base and with a new aircraft order coming through over the next couple of years to take up the challenge of that recovery and it will lead to superior returns over the coming years. For the next couple of months through after Christmas and maybe after Christmas will be difficult and challenging, but rely on us, we'll continue to manage it as best we can. Thank you very much, everybody. We have an extensive roadshow taking place over the next 2 or 3 days. We are priming everybody into Meeting a minute, our meeting 30 minute meetings rather, which means we can get through huge numbers of investors over the next 2 days. If you'd like a meeting or some kind of Zoom or online video meeting that happens, please talk to Peter, to Davies or to Citibank or to And we will set something up for you in the next couple of days. Thanks very much, everybody. Good to talk to you. And I hope to see you soon when we have all returned to traveling and The poor oppressed North Korean people of Ireland will have been allowed on and off the island once more. Thank you. Bye bye. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.