Good morning, ladies and gentlemen. Welcome to the Ryanair H1 results press conference. I am joined this morning, as usual, by Neil Sorahan, our Group CFO, and we will run you briefly through a slide presentation and a quick Q&A. As you can imagine, all of the results today are dominated by the COVID-19 crisis, which has bedeviled our industry for the last six months and covers the full six months of this period. However, throughout that crisis, the key fundamentals remain unchanged. Ryanair remains Europe's lowest fare, lowest cost airline. Prior to COVID, we were on track for 150 million passengers. We cover more airports, more bases than any other airline. We have successfully, and in a very healthy way, returned to service on the 1st of July, complying fully with the ECDC and EASA health guidelines for our people, our passengers, our crews.
We have a very strong BBB-rated balance sheet, we believe that strength will see us through this unprecedented crisis in the airline industry. It is that financial strength of our balance sheet, combined to not just having the lowest cost base, but a cost base that is now reducing, will make Ryanair the long-term winner. As you are aware, our coverage, we operate from 72 bases. We have closed some bases, most notably this winter, Cork and Shannon in regional Ireland are closed. Stuttgart and Düsseldorf has closed, and we've also closed Toulouse for the winter period. Nevertheless, we still operate across 40 countries. We operate to 242 airports. We are still opening one new base, Beauvais outside Paris, will open in early January. Hopefully next summer we expect to operate about over 2,000 routes.
For the full year this year, our best guess at the moment is 38 million passengers. If there are continuing lockdowns and travel restrictions across Europe this winter, that figure may have to be lowered as well. What's key in all of this is not just that Ryanair has the lowest cost base, but that lowest cost base is being further improved. In terms of staff efficiencies, and we'll take you through this later, we have lower pay and more productivity. Airports and handling, we're negotiating lower cost deals at airports, particularly those airports who want to return or snap back to growth quickly as we emerge out of the COVID-19 crisis. Airports and handling, where also route charges will remain largely unchanged. Ownership and maintenance costs has been a huge advantage, competitive advantage for Ryanair over all of our other competitors.
That gap is going to widen in the next number of years. We see competitors like EasyJet and others doing very expensive aircraft sale and leasebacks. Many other airlines canceling aircraft deliveries, orders or deliveries, or postponing them. We will be bringing them forward. We hope before the end of this year to be announcing a new deal with Boeing. It can't be concluded until we have a return to delivery date confirmed for the MAX 800. We can then agree a new delivery schedule with Boeing. Sales, marketing and other, we're seeing a dramatic decline in our EU261 cost, for example, as a result of the few flights that we are operating are operating at very high rates of punctuality, 97%-98%.
Not alone does Ryanair have a huge cost advantage over every other airline in Europe, but that cost advantage is going to widen for the next number of years. I'm now going to ask Neil to take us through the results for the half year.
Michael, thank you very much. The key issue in the first half of the year, as Michael said at the start of the presentation, was COVID-19 and the various government restrictions and lockdowns. Our fleet was grounded for the first three months of this year, and we only had about 50% capacity in the second quarter. Traffic was down 80% to 17 million customers. That fed through to lower revenues, despite the fact that ancillaries performed well. We saw a 78% reduction in revenue to EUR 1.18 billion. While we performed well on our costs with a 67% reduction, this unfortunately wasn't enough to offset the lower revenues. We reported a EUR 197 million pre-exceptional loss in the first half of the year. Our balance sheet remains one of the strongest in the sectors, BBB rated balance sheet.
We had EUR 4.5 billion cash at the end of the half year. We also have the balance sheet underpinned by very strong ownership of our fleet. 80% of our Boeing 737s are unencumbered, debt-free, with a conservative book value of EUR 7 billion. We do, however, have significant debt repayments over the next 12 months, and our recent financing of EUR 1.25 billion back in September helps remove the refinancing risk in relation to the UK CCFF GBP 600 million loan next March, and our seven-year bond, which will be repaid in June 2021. We did take an ineffectiveness charge on hedges in the first half of the year. This was related to the reduction in our H2 capacity guidance, where we've dropped it from 60% of prior year capacity to 40% of prior year capacity.
As a result, we now are overhedged in the second half of the year and took a EUR 214 million ineffectiveness charge in the first half of the year. 70% of our hedges this year have already been settled, much of it has already found its way through to cash flow. As we look into next year, we would anticipate with the low levels of hedging that we have, that we will not have hedge ineffectiveness next year and will benefit from the lower spot prices that we see in the market. I'll hand over to Michael again for current developments.
Let's run through a list of current issues. Clearly, Ryanair fully supports getting intra-EU short-haul air travel back flying. We support the EU traffic light system. That system should be rolled out across Europe, uniformly across Europe. It would allow those countries or regions who are green and amber to travel without restrictions. I think its regionalization is the most important element of that. Today, for example, from the U.K., you can fly to the Canaries, you can fly to the Greek islands, which have very low rates of COVID. From Ireland, you're prevented, because Ireland adopts a national blocks people going to Spain and to Greece on national rates. This is the wrong way forward. We need regionalization, and we also need to allow people to move freely within Europe where there are low rates of COVID or where those regions have green or amber.
We're lowering Europe's lowest cost base, staff, airports, aircraft, other. As Neil said, we've strengthened our liquidity significantly, and this is a management-led equity raise in the last month. Management have stumped up. We believe in the future of this airline and the growth opportunities that exist. We have the MAX 200 deliveries. We would expect to start sometime in the first quarter of the calendar year, our fiscal Q4. That is subject to the MAX 800 being certified to return to service in North America this side of Christmas. A no-deal Brexit remains a real risk in January 2021, although we would hope, even in those circumstances, that there will be a bilateral trade deal for aviation, as was previously announced during the last round of Brexit talks. Post-COVID-19, I believe there's a huge growth opportunity for Ryanair across Europe.
There will be a very strong snapback of air travel as soon as the COVID-19 threat recedes or the availability of effective vaccines become more widely available, hopefully in Q1 or Q2 of next year. In the meantime, we continue to make continuous improvements in our ESG performance. The critical thing is to get Europe back flying. We went back safely flying on the 1st of July. We've carried 17 million guests in the half year. Most of that was in the second quarter. We have demonstrated that we can do so safely with mandatory face masks, hygiene, sanitary or cleaning of aircraft, et cetera. H2, clearly, we think we're running at around 40% capacity. We may have to pull that back further if there are further lockdowns across Europe in November, December or into the first quarter.
The extensive health measures already promoted by the ECDC, the European Centre for Disease Prevention and Control, and EASA, have shown themselves to be effective. There is almost no evidence of any transmission on short-haul flights where everybody is wearing masks, et cetera. We support the EU traffic light system. It is based on weekly ECDC data. It is regionalized rather than national. It does allow for the buildup of consumer confidence, and we strongly support testing as a better alternative to quarantines. Quarantines are completely ineffective and unimplementable across Europe, whereas pre-departure testing, and we would go for pre-departure rather than airport testing, does deliver certainty that people who are flying are free from COVID-19. The EU must work together, and EU states must work together if we're to rescue the summer 2021 tourist season on which so many of Europe's economies depend.
Just to touch briefly on the good work we've done on lowering Europe's cost base. In terms of staff and efficiency, we were first out of the blocks, not with job losses, but what we've been negotiating with our unions and our people has been pay cuts, increased productivity as a better alternative to job losses. We have minimized the number of job losses we have suffered. We would hope to continue to do that even during this winter. Although we can't rule out further job losses at some of those, the small number of bases where cabin crew agreements still haven't been reached in Belgium and in Portugal. Those pay cuts will be restored over the next four to five years as hopefully the business and the economy recovers. We've completely restructured Lauda. Laudamotion has now been closed in Vienna.
Ryanair has taken over all the flying in Vienna. Lauda will continue in the future as a Maltese-based airline with a much lower cost base and a more productive, favorable rosters for crews. There have been some base closures and some job losses, most notably in regional Ireland and in Germany. We're working hard with our people to minimize those job losses, to put them on pay for those where available, so that we keep them current and we keep them qualified for the return to service. On airports and handling, we're in extensive negotiations with airports all across Europe, all of whom have seen huge traffic declines, and all of them want to bounce back quickly. I think it will be the low-cost airlines led by Ryanair that will bounce back quickly, whereas the charter airlines will be much slower to respond.
Those airports who are willing to work with us to incentivize that growth will see their traffic return first. Some of the slower-moving airports will be last. Route charges, we're continuing to work with Eurocontrol, have done great work on easing the burden on airlines during the EU261 crisis, and we would hope that will continue. The critical thing, though, is that we're seeing much shorter flight times at the moment, much fewer ATC delays, and as a result of that, much lower EU261 costs. On the ownership and maintenance side, the MAX Gamechanger is the Gamechanger. We look forward to taking our first deliveries, hopefully in the spring of next year. Remember, through all of this aircraft has 4% more seats. It burns 16% less fuel.
It is not just greener and cleaner, it will significantly lower our aircraft costs at a time when many of our competitors are engaged in very expensive sales and leasebacks that will penalize their cost base for a decade to come. In terms of sales and marketing and other Labs continues to do great work to lower our marketing distribution costs, EU261 costs are collapsing. We've strengthened the liquidity. We have a very strong balance sheet, as Neil has said. It was led by an equity raise of EUR 400 million, which was management-led, multiple times oversubscribed, we're pleased to say. We also raised an EUR 850 million bond unsecured.
We are paying just under 3% coupon on that, but it means that we have taken away all the refinancing risk of the debt repayments we have across the entirety of 2021, and we have no other major debt repayments until 2023.This facilitates therefore a strong bounce back by Ryanair in a post-COVID-19 world, and there will be very significant growth opportunities which we and our people, I think, will be able to exploit. Just to give you a flavor of that, on the day last week when the U.K. added the Canary Islands and the Greek Islands back to their green list, we had estimated we would take about 2,000 bookings that day from the U.K. to the Canaries. We took 28,000. 14 times more than we had budgeted. There is huge pent-up demand there.
The minute countries are added back to green list, the minute people are allowed to return to fly, they will do so in huge numbers. Only Ryanair has the spread of operation, the flexibility of the fleet and its people to be able to respond quickly to those demands. Where the Canaries boomed like that, clearly the seats sold out very quickly. We added extra flights, and we have continued over the last two weeks to see much stronger than budgeted forward bookings from the U.K. to the Canaries, and we would hope that that will continue. We will however, in those other markets, particularly in regional Ireland and elsewhere in Europe, where we have to cut capacity, we will cut capacity to match demand.
Our aim is to maintain about a 70% load factor, which is, I think, the best way this winter of us minimizing operating losses, preserving cash, but still keeping our people and our aircraft current and operating. We continue to focus on preserving cash. Quick update on the 737 MAX. We expect the return to service for the MAX 800s, the grounded aircraft to take place in North America, probably towards the end of November, early December. We then expect the ungroundings in Europe to take place either immediately this side of Christmas or immediately after Christmas. That, we believe, will allow the FAA and the EASA to certify the MAX 200s, our aircraft, hopefully for first deliveries to us maybe in late January, early February.
We would hope to take those aircraft in time for the summer 2021 season, which again means that as we emerge out of the COVID-19 crisis, as vaccines become more widely available, hopefully into December 2021, we uniquely will be the airline sitting there with more aircraft and more fleet able to offer airports dramatic or quick return to growth. The Gamechanger is terrific technology, 4% more seats, 16% lower fuel burn, huge environmental savings. It is 16% lower emissions, 40% reduction in noise emissions. This lower cost MAX aircraft will drive Ryanair's EU market share gains in a post-COVID-19 world. Boeing talks on compensation and things like that can't yet be finalized. We can't finalize them until Boeing can finalize a reasonably credible delivery schedule to us.
Again, we hope that we will finalize those discussions with Boeing, and have something maybe to announce this side of Christmas or maybe early in Q1. Just to touch briefly on the Brexit. No deal risk intensifies. The U.K. has left the EU in January 2020. Transition agreement runs to December 2020. We do expect there to be a deal, but if there isn't, we do expect the U.K. and the EU will agree a bilateral deal to cover air travel as they had done prior to December 2019. As an EU registered group, however, Ryanair's AOCs will be less affected than U.K. AOCs. If necessary, we will restrict the non-EU voting rights of our shareholders if there is a hard Brexit and no deal.
We must maintain our EU ownership and control to give us the freedom to fly all over Europe as we recover from the COVID-19 crisis. The Ryanair U.K. AOC will protect our very small U.K. domestic business and third country routes from the U.K., mainly to countries like Morocco. Okay, let's touch briefly on the post-COVID-19 growth opportunities. As we've seen a string of airline bankruptcies this year, there's been 40 across the globe in total. A number in Europe, including Flybe, LEVEL, Virgin Atlantic, have been rescued. What you may not have noticed has been the huge capacity reductions by competitors. Not just short-term capacity reductions, but also meaningful delays in aircraft deliveries are bringing forward retirements of older aircraft. We've seen that in Air France, KLM capacity down 20%. EasyJet have significantly postponed their aircraft deliveries. Have IAG.
Lufthansa have retired 150 aircraft by 2025. Those aircraft will not come back. You see someone like Norwegian who have canceled their entire Boeing order and are essentially in hibernation, and we believe will not return with their bases in Gatwick or Spain or Italy. They will confine themselves to being a small and largely irrelevant Norwegian domestic airline. Eurocontrol themselves have said that they expect winter capacity to be cut from about a reduction of 20%, with that cut will increase from 20%-50% of prior year traffic. I think that's light. I think the reductions will be greater, probably 60, 70, maybe 75%. A lot depends on how we see the second wave of COVID and what restrictions break out across Europe over the coming months.
I think what's interesting, though, is that the second wave of lockdowns, we are seeing European states keep the schools open, keep retail open, and they're also allowing flights to continue. Mainly because they recognize that there's lots of people who do need to move for essential services, healthcare workers, politicians, and others. We don't see ourselves being locked down completely as we were in the Q1 of this year. It does mean, however, that we will see much smaller flight schedules this winter, fewer traffic, but we will keep going. We will keep the aircraft, pilots, and cabin crew moving wherever we can. The EU slot waiver has been extended out to March 21.
We expect that to be extended into summer 2021 as well, although we oppose any extension of slot waivers because frankly, it's just a way of the incumbent state aid junkie legacy airlines in Europe sitting on unused slots, and we think they should be returned to airlines like Ryanair and others who will want to use them as we emerge out of the COVID-19 pandemic. I cannot emphasize enough how there is a huge long-term opportunity for Ryanair to grow using a lower cost base for the next number of years with new and lower cost aircraft emerging into a market where airports are working very actively with us to stimulate return of traffic. You can see there, we continue to significantly improve our ESG performance.
We're addressing all those issues, and we were heartened and pleased with the significant improvements we had in the AGM voting this year. We are engaging with ISS, or trying to engage with ISS, who to date have failed to engage with us and issued recommendations, many of which were based on false or inaccurate information. We would hope that they will have a better awareness of Ryanair's industry-leading ESG performance by the time we get to next year's AGM. Neil, I turn to you for the FY 2021 outlook.
Thank you, Michael. Huge uncertainty in the market, which means it's not possible for us to give profit after tax guidance for the full year. Much of the final quarter into next year will really depend on the timing of when we see a vaccine. We have recently reduced our traffic target for the full year to just 38 million, There's more risk to the downside than the upside in relation to that. It'll be a challenging winter for us. We're trying to operate schedules that will deliver at least a 70% load factor across the network. We're working very hard, however, within the business, as we already said, to reduce costs. We've got a very strong balance sheet, and we believe that there'll be huge opportunities when we come out the other side of COVID-19.
We've got the right aircraft coming at the right time with the right cost base and the strongest balance sheet. We think we're well-positioned to capitalize on that and grow into the future. Why did you report a H1 loss of EUR 197 million?
We did 80% decline in traffic to 17 million due to the COVID-19 travel restrictions. We had zero traffic in the first quarter. 99% of the fleet was grounded for that first quarter. We operated about 50% of our normal schedule in Q2, but with a reduced 72% load factor compared to our normal kind of 93%, 94%. schedule revenues therefore fell by 80%, although ancillary revenues per passenger performed well, and operating costs fell 67%, which was a very good and credible performance, but not enough to offset the revenue loss.
Explain the EUR 214 million hedge charge.
This is all due to reduced capacity in the second half of the year. We've recently reduced our traffic target from 60% capacity to 40% capacity, which means that we've got too many fuel hedges. We've taken an ineffectiveness charge on that. There's also an element included in there in relation to the delayed capital expenditure, primarily late delivery of aircraft. There's an ineffectiveness charge on that as well. Could there be more hedge ineffectiveness H2?
There could if there are further lockdowns this winter and capacity drops further, but the hedge ineffectiveness will be much smaller in the winter than it was in the summer. We've, I think, covered about 70% of the hedge ineffectiveness year to date.
Which ancillaries performed best in H1?
The standouts for me are reserved seating and priority boarding, where we've seen conversion increase significantly. Spend per passenger is up. The dark cloud on ancillaries is the onboard spend, which not surprisingly is down. We would hope to see that improve over the next 12 months or so.
What is Ryanair Labs working on?
Continues to drive improvements in customer offers and personalization. It's helped to eliminate unprecedented volumes of refunds and flight change requests from customers throughout the last six months of the COVID-19 lockdown, and it is significantly improving and reducing the cost of back office systems for our other group airlines.
How is your half year cash position and balance sheet?
Very strong. We had EUR 4.5 billion cash at the end of the half year. We've got a BBB rated balance sheet with 80% of our Boeing fleet unencumbered with a conservative value of about EUR 7 billion. We also boost the cash on the balance sheet with a management-led equity placing in September, EUR 400 million, and a euro bond for EUR 850 million at a very competitive 2.875% coupon.
What cash preservation measures have you implemented?
Well, we've been cutting costs across all line items. We've participated in various EU government payroll support schemes where we qualify. We've canceled all share buybacks and non-essential CapEx. We raised EUR 1.25 billion in September, EUR 400 million equity or a share placing and an EUR 850 million bond. That eliminates the refinancing risk on our 2021 debt repayments, which is the U.K. government GBP 600 million loan due in March and the June 2021 bond repayment of EUR 850 million.
How is your cash burn? Are you at break even?
No, we're not break even at the moment. Q3, even in a good year, would be a negative cash burn for any airline. We have recently cut back our capacity for the winter from 60% capacity to 40%, and bookings are tending to be very close in, so we don't have the usual forward curve that we would normally have on the bookings. Not at break even at this point.
What is the update on refunds?
We've largely eliminated the backlog of cash refunds. We've spent more than EUR 1.5 billion in cash refunds and vouchers. There's a tiny rump of passengers still stuck in the system who booked through OTAs. The OTAs have given us fake passenger contact details, false credit card details, we can't refund those passengers. We've set up a mechanism by which those consumers can apply directly to us for the refunds and to bypass these unlicensed screen scraper OTAs. In the meantime, we're continuing to clear the small residual of those OTA cash refunds. We have no backlog of cash refunds at this point in time. One of the notable things that's happened during COVID-19 is we're now down to very close in booking, we have no large tail of flights out there or of refunds to make, even if there are further flight cancellations.
What are your capacity plans for winter 2021?
We've recently cut back our capacity plans from 60% of prior year capacity to 40%, which should see us carry about 21 million customers in the second half or 38 million on a full year basis. This, of course, is heavily dependent on COVID-19 restrictions, with more risk to the downside than the upside. We do hope to operate a schedule that will target 70% load factors over the second half of the year.
What health measures did you apply when flights resumed?
Yes, since we went back on the 1st of July, we've complied fully with the ECDC and EASA health guidelines on air travel. Mandatory face masks at all stages during the journey, in the airport and on board the aircraft. That's for both passengers and for our cabin crew. All of our aircraft are fitted with hospital-level HEPA filters, which clean the air on board. We have extensive cleaning and daily disinfecting of all aircraft surfaces on board the aircraft. We have been heartened, I think, and surprised at the extraordinary compliance and support we've received from both customers and crews in maintaining these strict health preservation measures while we have successfully returned to flying over the past four months.
You called on EU governments to adopt the EU traffic light system. Why?
I think it's hugely important to have some kind of a coordinated approach to travel across Europe. We've had an ad hoc mishmash approach since the start of COVID. Something that's coordinated based on real data from the likes of the ECDC, which will be published on a weekly basis, will help build confidence for our customers, will help give certainty to airlines. It's based on regional travel as opposed to country by country travel, which again, is more up to date and more realistic, and it sees quarantines replaced by testing, which again, we think is the correct way to go. We're very keen to get something coordinated in place.
What are the growth opportunities post COVID-19?
Well, clearly we have the industry leading lowest cost base, and we're lowering that further during the COVID-19 pandemic. We have the strongest balance sheet. We have seen competitors significantly retrench or fail across Europe. Huge capacity has been removed from the marketplace. We intend to fill those gaps and those opportunities as a vaccine emerges, hopefully in early 2021. Airports are looking to us for growth and to snap back quickly to fill the deep traffic declines they've suffered this year. We believe that the new delivery of the MAX aircraft, the Gamechanger, which will give us new seat capacity into summer 2021, but with lower seat costs, significantly lower fuel consumption, will enable us to grow back to 200 million passengers per annum over the next, I don't know, five or six years.
What is the group doing to lower its cost base?
We've been extremely busy on this front over the past number of months, and it's an ongoing process. On the staff side, for example, we've already agreed pay agreements with our pilots, our cabin crew, and our engineers, which see modest pay cuts ranging between 5% and 20%. This will be restored over a four to five-year period, but importantly gives us great flexibility in operating over the coming months and into next year and beyond. We've totally restructured Laudamotion, taken a lot of cost out of the business there. As Michael said, we're actively engaged with airports across Europe who are hungry for growth deals, particularly at a time when we're the only airline that's going to be growing. We've got the MAX Gamechanger aircraft coming in, hopefully from the spring of next year.
4% more seats. We'll be spreading the cost over 4% more passengers, 16% lower fuel, and 40% less noise, which will help on the EU 261. We're making great strides in EU 261 with 97% on time performance. That's significantly down within the business. We've also negotiated improved deals with our lessors, with our maintenance providers, and labs are doing great work on keeping our costs down on the marketing and distribution side. A lot of work done within the business, and indeed, we would hope and expect that our fuel bill will be down next year as well with our effectiveness and lower spot pricing.
How are the union negotiations progressing?
I think we've done enormous work and great work, both our HR team and our union partners and our people in the last six months. We've put in place extensive agreements with all of our pilot bases across the entirety of Europe and with the vast majority of our cabin crew bases. Those agreements allow us to slightly reduce pay, but as a better alternative than having mass job losses, as many of our competitors have suffered. We've agreed pay cuts improve productivity. We've set out a pathway by which those pay cuts will be restored over the next four to five years as hopefully our business and the economy of Europe recovers. Discussions are ongoing with a small number of remaining cabin crew unions, mainly Belgium and Portugal, where they are still in sort of denial that there's a COVID-19 crisis out there.
We can't rule out further job losses in those countries if an agreement can't be reached in the coming weeks and months.
Are group airlines closing bases?
Yes, they are. We've recently seen Ryanair DAC, for example, close its regional Ireland bases in Shannon and Cork, and in Toulouse in France. As part of the restructuring of Laudamotion, their management team closed their bases in Stuttgart and in Dusseldorf. We would hope not to have to close any more bases, but we can't rule it out. If there's more capacity cuts, then there'll be more base cuts and more reductions over the winter.
What is the current status of the state aid appeals?
The first appeals have been heard. That was the SAS cases and the appeal against the refund of the French government taxes to the French AOCs only. Those cases have gone well. We expect decisions to come from the European Court of Justice sometime pre-Christmas, we would hope in early or mid-December. We think it's vital that we pursue those cases, because we see no other way of maintaining a level playing field in air travel or in airline competition across Europe.
One of the things that would be with us for many years to come is, as we recover from the COVID-19 pandemic, we'll be competing with massively state-subsidized airlines like Lufthansa, Air France, KLM, who have received tens of billions of EUR of state aid to allow them to engage in below-cost selling to compete with airlines like Ryanair, who don't have the benefit of state aid, who have a much lower cost base. We'll be competing with two hands tied behind our back into the future.
What did the recent restructuring in Lauda involve? Their management completely overhauled the business. They reduced their growth from 38 A320s to just 29. They renegotiated labor agreements with their staff, cut a number of bases, and are moving a lot of their operations to a new AOC over in Malta, which will see them provide wet lease operations to Ryanair Group. How are the other group airlines developing?
They're in the same situation as Ryanair DAC is, dealing with the COVID-19 pandemic. Buzz now operates 50 aircraft. Malta Air now has 120 aircraft on the Maltese AOC, mainly operating our bases in Germany, Italy and France. On a daily basis, all group airlines are reviewing costs and preserving cash. We're working closely together to try to minimize job losses and keep our people in employment, which is our primary concern through this COVID-19 pandemic.
I'm now going to raise a few questions about the Boeing MAX aircraft and the fleet. What is the latest update on the MAX?
Things are coming along well. We would hope that the FAA and EASA will have certified the MAX 8 for return to service in the final calendar quarter of 2020, so hopefully sometime in November or into December, which means we're in a good position to see the MAX 200 certified and delivered to Ryanair in the first quarter of calendar 2021. We would hope to have 30 odd aircraft in the fleet for peak summer 2021. We're keen supporters of this aircraft. It's got 4% more seats. It's got 16% lower fuel burn and 40% less noise emissions.
It'll be a key element of our cost leadership over the coming years and help us grow to 200 million customers over the next five or six years.
Where are your compensation discussions with Boeing?
The discussions are ongoing. Clearly they can't be concluded until Boeing can produce a credible delivery schedule for us for the MAX 200 aircraft, and so we can actually define what the delays are. We would hope to conclude those discussions whenever the MAX 800 returns to service, maybe before Christmas of this year. When then we'll agree a delivery schedule with Boeing for the MAX 200s that will underpin our growth and our low-cost growth for the next four or five years.
What are the group fleet plans?
Well, we would hope to have 30 + MAXs in the fleet for the summer of next year, which would be important because we're seeing a number of retirements from the fleet this winter. We're handing back about 13 737-800s between now and the end of May. We're disposing another four Boeing 737s from the fleet between now and Christmas, which is the balance of the 10-aircraft deal that we announced back in 2018. If we start to see MAXs coming into the fleet in numbers, that will also give us the ability to start disposing some of the older aircraft from the fleet, which will presumably go into cargo conversion in the Asian markets.
What are the schedule plans for summer 2021?
It's really too early to say yet. Clearly this will be driven by the availability of a vaccine. There seems to be a general view that a number of vaccines will be licensed this side of Christmas. The question is how widely available they will be. Can they cover sufficient of the risk groups at the end of Q1 or end of Q2 next year? If they do, I think we'll respond with a very strong summer schedule. We don't expect at this stage that we will return to kind of the full summer '19 schedule. We have different plans that would vary anything from 50% of 2019 up to 80% of 2019. I think what's key, though, is we will respond faster and more flexibly than any other airline. A good example was the one I raised earlier.
When the U.K. added the Canary Islands to its green list last week, we took 28,000 bookings in a day, showing the scale of pent-up demand. Also we were able to flexibly add flights pretty quickly from the U.K., many airports in the U.K., to the Canary Islands in the run-up to Christmas, at a time when a lot of the charter airlines who would have been in that market prior to us are unable to respond that flexibly or that quickly. We hope to see more of that traffic bounce back into the summer of 2021 once there is a reasonably widely available vaccine. I also think the availability of vaccine will make it harder for European governments to just lock down their economies.
People will refuse to be locked down when there is a vaccine readily available, and a vaccine that will hopefully protect healthcare workers, vulnerable people in older age groups. That will eliminate the need for younger people to restrict their movements or to be denied travel.
What is the latest Brexit update?
I think the risk of a no-deal Brexit remains high. We would hope, as was done during the transition period, that there'd be an aviation deal agreed between now and the back end of this year. As a European group, with AOCs in Austria, in Malta, in Ireland, and in Poland, we believe we'll be able to move freely in a hard Brexit situation across Europe. We also have a U.K. AOC, which means to the extent that we want to fly domestically in the U.K., we'll be able to continue to do so. We'd also be able to participate in third-party bilateral agreements negotiated by the U.K. post-Brexit. Importantly, our board have moved and passed a resolution some time ago that in the event of a hard Brexit, we will remove voting rights from non-EU shareholders.
This is important because it'll enable us to maintain our majority EU ownership and control, and will have no impact on our operating license across Europe. Brexit coupled with COVID-19 will have an adverse impact on the U.K. economy, and that can't be understated.
Can you talk about your environmental initiatives?
Sure. Ryanair has the lowest carbon emissions of any major EU airline due to a younger fleet, high load factors, and our new fuel-efficient engines. We plan to cut our emissions by 10% to under 60 grams by 2030. Passengers are switching to Ryanair from other major airlines to cut their emissions, and in doing so, they cut their emissions by 50%. We participated in the 2020 CDP environmental survey and expect the results will be published sometime later in December.
What is the Group's guidance for FY 2021?
Well, the balance of the year is going to continue to be very challenging for the Group. We have already given some guidance on the passenger side, where we've dropped our capacity from 60% down to 40% in H2, which means we would hope to deliver about 38 million guests this year, although there's more risk to the downside, where we're trying to operate schedules where we're targeting 70% load factors. When I look towards the P&L, it's just not possible or appropriate at this time to give any guidance on PAT, as there's just too much uncertainty in relation to COVID-19. We are working very hard here within the Ryanair Group to keep our costs down and to improve our balance sheet.
We think that this will put us in a very strong position to capitalize on the opportunities that will exist when we come out the other side. We think that's the winning formula to be the long-term winner in this space.
Michael, Neil, thank you.
Thank you very much.
Thank you.