Earnings Call: Q2 2021

Nov 2, 2020

Good morning, ladies and gentlemen. Welcome to the Ryanair Page 1 Results Press I'm joined this morning, as usual, by Neil Soren, our Group CFO, and we'll run you briefly through a slide presentation and a quick Q and A. As you can imagine, All of the results today are dominated by the COVID-nineteen crisis, which has bedeviled our industry for the last 6 months and covers the full 6 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 150,000,000 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 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, and we believe that strength will see us through this unprecedented crisis in the Aeron Industry. And 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 We'll make Ryanair the long term winner. As you're aware, our coverage, we operate from 72 bases. We have closed some bases, most notably this winter, Cork and Shannon in region, Ireland have closed, Stuttgart and Dusseldorf has closed, and we've also closed Toulouse for the winter period. Nevertheless, we still operate across 40 countries. We operate 242 airports. We are still opening 1 new base, Bouvet, in outside Paris. We'll open in early January. And hopefully, next summer, we expect to operate about over 2,000 routes. But for the full year this year, Our best guess at the moment is 38,000,000 passengers. But 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 lower cost base is being further improved. In terms of staff efficiencies, I will take you through this later. We are as 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-nineteen crisis. Airports and handling were also 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, but it can't be concluded until we have a confirmed return to delivery date or the return to delivery date confirmed for the MAX 800, and we can then agree a new delivery schedule with Boeing. Sales marketing and other, we're seeing a dramatic decline in our U261 cost, for example, as a result of the few flights that we are operating are operating at very high rates of punctuality, 97%, 98%. So 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-nineteen and the various government restrictions and lockdowns. As a result, Our fleet was grounded for the 1st 3 months of this year, and we only had about 50% capacity in the Q2. So as a result, traffic was down 80 percent to just 17,000,000 customers. That fell through to lower revenues despite the fact that ancillaries performed well. So we saw a 78% reduction We've seen revenue to £1,180,000,000 And while we performed well on our costs with a 60% 67% reduction, This unfortunately wasn't enough to offset the lower revenues. And as a result, we reported a €197,000,000 pre exceptional loss in the first half of the year. Our balance sheet remains one of the strongest in the sectors. BBB raises balance sheet. We had €4,500,000,000 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 £7,000,000,000 We do, however, have significant debt repayments over the next 12 months. And our recent financing of €1,250,000,000 Back in September, Helps removed the refinancing risk in relation to the U. K. CCFF 600,000,000 loan next March And our 7 year bond, which will be repaid in June of 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 over hedged in the second half of the year and took a €214,000,000 ineffectiveness charge in the first half of the year. 70% of our hedges this year have already been settled, so much of it has already found its way Through the cash flow. And as we look into next year, we would anticipate with the low levels of hedging that we have that we will not have hedging effectiveness Next year, and we'll benefit from the lower spot prices that we see in the market. I'll hand over to Michael again for current developments. So 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 who are regions who are green and amber to travel without restrictions. And 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. But 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 era and the growth opportunity that exists. We have the MAX 200 deliveries. We would expect to start sometime in the Q1 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 trade deal for a bilateral trade deal for aviation, as was previously announced call during the last round of Brexit talks. Post COVID-nineteen, 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 threat recedes or The availability of effective vaccines becomes more widely available hopefully in Q1 or Q2 of next year. And 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 July. We carried 17,000,000 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, sanitary or cleaning of aircraft, etcetera. 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 Q1. However, the extensive health measures already promoted by the ECDC, the European Centre For Disease Control, and EASA have shown themselves to be affected. There is almost no evidence of any transmission on short haul flights where people are everybody is wearing masks, etcetera. 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 to for pre departure rather than airport testing, does deliver certainty that people who are flying our free from COVID. 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 job losses, we have minimized the number of job losses we have suffered, and 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 4 to 5 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. Call. And Lauda continues Lauda will continue in 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. But 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 in Hamblin, 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. And 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 game changer It is the game changer. We look forward to taking our first deliveries hopefully in the spring of next year. And remember, through all of this, this aircraft has 4% more seats. It We're in 16% less fuel. It is not just greener and cleaner, but 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. And in terms of sales and marketing and other labs, continues to do great work to lower our marketing distribution costs and EU261 costs are collapsing. We strengthened liquidity. We have a very strong balance sheet, as Neil has said. It was led by the an equity raise of €400,000,000 which was We're led multiple times oversubscribed, we're pleased to say. We also raised an €850,000,000 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, Our strong bounce back by Ryanair in a post COVID-nineteen world, and there will be very significant growth opportunities, which we and our people, I think, would 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. And 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. And 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 2 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. And we continue to focus on preserving cash. Quick update on the MAX 737. 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 first the on ground in Europe to take place either immediately this Saturday Christmas or immediately after Christmas. And that we believe will allow the FAA and the asset to certify the MAX 200s, our aircraft, hopefully for delivery 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-nineteen 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 our quick return to growth. The game changer is terrific technology, 4% more seats, 16% lower fuel burn, huge environmental savings. It's a 16% lower emissions, 40% reduction in noise emissions. And this lower cost MAX aircraft will drive Ryanair's EU market share gains in a post COVID-nineteen world. Boeing talks on compensation and comp. Things like that can't yet be finalized. We can't finalize them until Boeing can finalize a reasonably credible delivery schedule to us. But again, we hope that we will finalize those discussions with Boeing and have something maybe to announce this side of Christmas or maybe in early in Q1. Just to touch briefly on the Brexit. No deal risk intensifies. The EU 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. And the EU will agree a bilateral deal to cover air travel as they had done prior to the December 2019. Con. 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, then no deal. We must maintain our ownership EU ownership and control to give us the freedom to fly all over Europe as we recover from the COVID-nineteen crisis. And the Ryanair U. K. AOC will Protect our very small U. K. Domestic business and 3rd country routes from the U. K, mainly to countries like Morocco. Okay. Let's touch briefly on the post COVID-nineteen 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. But what we you may not have noticed has been the huge call. Capacity reductions by competitors. Not just short term capacity reductions, but also meaningful delays in aircraft deliveries our bringing forward retirements of older aircraft. And we've seen that in Air France KLM capacity down 20%. Easyjet have significantly postponed their aircraft deliveries, So of IAG, the plans have retired 150 aircraft by 2025 and those aircraft will not come back. And 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 increase from 20% to 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 2nd wave of COVID and what restrictions break out across Europe over the coming months. I think what's interesting though is that the 2nd 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, health care workers, politicians and others. So 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 growing. We will keep the aircraft, pilots and cabin crew moving wherever we can. The EU slot waiver has been extended out to March 'twenty We expect that to be extended into summer 'twenty one as well, although we expose any 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-nineteen pandemic. But 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 I'm 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 and issued recommendations, many of which were based on false on 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'll turn to you for the FY 'twenty one outlook. Thank you, Michael. Huge uncertainty in In the market, it means it's not possible for us to give profit after tax guidance for the full year. Much of the final quarter and into next It 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 38,000,000 and there's more risk to the downside and the upside in relation to that. So it will be a challenging winter for us. We're trying to operate schedules that 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. And 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-nineteen. We've got the right aircraft Coming at the right time with the right cost base and the strongest balance sheet. So we think we're well positioned to capitalize on that and grow into the future. Why did you report a H1 loss of €197,000,000? Well, we did 80% decline in traffic to 17,000,000 due to the COVID-nineteen travel restrictions. We had 0 traffic in the Q1, 99% of the fleet was grounded for that Q1. 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 credit performance, but not enough to offset the revenue loss. Explain the €214,000,000 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 Too many fuel hedges as we've taken an ineffectiveness charge on that. There's also an element included in there in relation The delayed capital expenditure primarily late delivery of aircraft. So there's an effectiveness 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 hedging effect will be much smaller in the winter than It was in the summer. We've I think they've covered about 70% of the hedging effect this year to date. Which ancillaries performs 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, but we would hope to see that improve over the next 12 months or so. What is Ryanair Labs working on? It 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 6 months of the COVID-nineteen 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 with CHF 4,500,000,000 cash At the end of the half here, we've got a BBB races balance sheet with 80% of our Boeing fleet unencumbered with a Consider the value of about €7,000,000,000 We also boost this the cash on the balance sheet with a management led equity placing in September €400,000,000 And a euro bond for €850,000,000 a very competitive 2.875 percent 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 nonessential CapEx, and we raised €1,250,000,000 in September, €400,000,000 equity or share placing and €850,000,000 bond. And that eliminates the refinancing risk on Our 2021 debt repayments, which is the U. K. Government's €600,000,000 loan due in March and the June 2021 bond repayment of €8 €50,000,000 How was your cash burn? Are you off breakeven? No, we're not breakeven at the moment. Q3, even in Goodyear, 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. So not at breakeven at this point. What is the update on refunds? We've largely eliminated the backlog of cash refunds. We've spent more than €1,500,000,000 in cash refunds and vouchers. There's a tiny rump of passengers still stuck in the system who booked through OTAs. The OTA's have given us fake passenger contact details, false credit card pay false credit card details. So 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 have 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. And one of the notable things that's happened during COVID-nineteen is we're now down to very close in bookings. So we have no large tail of Flights out there are 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 we see us carry 21,000,000 customers in the second half or 38,000,000 on a full year basis. This, of course, is heavily dependent on COVID-nineteen restrictions with more risk To the downside than the upside, but 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 July, we've complied fully with the ECDC and EASA health guidelines on Air travel, mandatory face mask at all stages during the journey, within 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 onboard the aircraft. And 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, why we return to flying, why we have successfully returned to flying over the past 4 months. You called on EU governments to adopt the EU SafaGlide system. Why? I think it's usually 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. So some of 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 It's the correct way to go. So we're very keen to get something coordinated in place. What are the growth opportunities post COVID-nineteen? Well, clearly, we have the industry leading lowest cost base, and we are lowering that further during the COVID-nineteen pandemic. We have the strongest balance sheet. We have seen competitors significantly retrench or fail across Europe. Huge capacity has been removed from the market place. And we intend to fill those gaps and those opportunities as a virus or 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. And we believe that the new delivery of the MAX aircraft, the game changer, 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 200,000,000 passengers per annum over the next, I don't know, 5 or 6 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. But 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 Costs ranging between 5% 20%. This will be restored over a 4 to 5 year period. But importantly, it 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. And as Michael said, we're actively engaged with airports across Europe who are hungry for growth deals, particularly the time when we're the only airline that's going to be And we're making great strides in the U261 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 who are doing great work on keeping Our cost down on the marketing and distribution side, so 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 without ineffectiveness and lower spot pricing. How are the union negotiations I think we've done enormous work and great work, both our HR team and our union partners and our people in the last 6 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, but those and we've set out a pathway by which those pay cuts will be restored over the next 4 to 5 years as hopefully our business and the economy of Europe recovers. Discussions are ongoing with a small number of remaining cabin crew unions, mainly in Belgium and Portugal, where they are still in sort of denial that there's a COVID-nineteen crisis out there. And we can't rule out further job losses in those countries if an agreement can't be reached in the coming weeks 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 and France. And as part of the Restructuring of Laudamotion, their management team closed their bases in Stuttgart and in Dusseldorf. We can't We would hope not to have to close any more base, 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 stay date appeals? Well, 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 come from European Court of Justice sometime pre Christmas, we would hope in early or mid December. And 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 will be with us for many years to come is as we recover from the COVID-nineteen pandemic, we'll be competing with massively state subsidized Airlines like Lufthansa Air France KLM who have received tens of 1,000,000,000 of euros 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, but will be competing with 2 hands tied behind now back into the future. What did the recent restructuring in Lauda involve? Their management completely overhauled the business. They reduced their growth from 38 A320 is just 29. They renegotiate 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 we'll see them Provide wet lease operations to Ryanair Group. How are the other group airlines developing? They're in the same situation as Ryanair. AirDAC is dealing with the COVID-nineteen pandemic, but Buzz now operates 50 aircraft. Malta Air now has 120 aircraft On the Maltese AOC, mainly operating our bases in Germany, Italy and France. But on a daily basis, all group We're reviewing costs and preserving cash, and 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-nineteen 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 YASA will have certified the MAX 8 For return to service in the final calendar quarter 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 Q1 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. So it will be a key element of our cost leadership Over the coming years and help us grow to 200,000,000 customers over the next 5 or 6 years. Where are your compensation discussions with them? The discussions are ongoing. I mean, clearly, they can't be concluded until we can come up with a credible 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. But we would hope to conclude those discussions whenever the MAX eight hundred returns to service, maybe before Christmas of this year. And when they will agree a delivery schedule with Boeing for the MAX 200s that will underpin our growth and our low cost growth for the next 4 or 5 years. What are the group fleet plans? We would hope to have 30 plus 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 730seven-800s between now and the end of May. We're disposing another 4 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 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 scheduled plans for summer 2021? It's really too early to say yet. I mean, clearly, this will be driven by the availability of a vaccine. There seems to be a General review that a vaccine a number of vaccines will be licensed this side of Christmas. The question then is how widely available they will be? Can they cover sufficient of the risk groups con 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 2019 schedule. But we have different plans that would vary anything from 50% to 2019 up to 80% to 2019. I think what's key though is we will respond faster and more flexibly than any other airline. And a good example was that the one I gave raised earlier, when the U. K. Added the Canary Islands to its green list last week, we I took 4,000 or 25,000, 28,000 bookings in a day, showing the scale of pent up demand, but also we were able to flexibly add flights Pretty quickly from the U. K, many airports in the U. K. To the Canadian airlines for the next 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. And we hope to see more of that traffic bounce back into December of 2021 once there is a reasonably widely available vaccine. I 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 health care workers, vulnerable people in older age groups. And 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. However, we would hope, as was done during the transition period, that would 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 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. And we'll also be able to participate in 3rd party bilateral agreements negotiated by the U. K. Post Brexit. And 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 will enable us to maintain our majority EU ownership and control and will have no impact on our operating license across Europe. But Brexit Coupled with COVID-nineteen 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 2,030. Passengers are switching to Ryanair from All the major areas to cut their emissions, and in doing so, they cut their emissions by 50%. And 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 38,000,000 guests this year, although there's more risk. It's the downside where we're trying to operate schedules where we're targeting 70% load factors. When I look towards the P and L, it's just not possible or appropriate at this time to give any guidance on PAT as there's just too much certainty In relation to COVID-nineteen, but we are working very hard here within the Ryanair Group to keep our costs down and to improve Our balance sheet. And we think that this will put us in a very strong position to capitalize on the opportunities that would 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.