Earnings Call: Q1 2021

Jul 27, 2020

Hello, and welcome to the Ryanair Q1 FY 'twenty one Results Conference Call. Will be in listen only mode and afterwards there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present Michael O'Leary, CEO. Please begin your meeting. Okay. Good morning, ladies and gentlemen. You're all very welcome to the Viner are joined in Dublin with most of the team led by Eddie Wilson, the DAC CEO, Neil Florihan, Shane, are new Head of Investor Relations, Peter Narken Nihael and Julius joining us from both in Warsaw, David O'Brien and Andreas Glueber from Vienna Okemiede Okanile from Malta Air. As you'll have seen this morning, we released the quarterly results. There's a will detail of the quarterly results, the MD and A and a prerecord Q and A all online. So I propose not to go through all that again this morning. Will touch on a couple of brief themes and then we'll open it up for the Q and A. Obviously, the COVID-nineteen situation has been extraordinarily challenging. We've never come across anything like within our 30 years of operation. And we think we're recovering will be well from the lockdown. We started flying at the end of June. We've restored about 40% of the share tool in July. We expect that to rise to about 60% in August. Operationally, the return to service has gone very well. We expect to report just about a 70% load factor for July August. We are challenged, however, and we'll continue to be challenged with various, that some countries, most notably Morocco, Jordan, continue to ban flights, are generally speaking at short notice and therefore, we're continuing to suffer cancellations that are outside of our control. Israel continues to permit only Israeli citizens to travel to and from Israel, which means we continue to have have an ongoing cancellation and refund issue for non Israeli citizens there. Over the last couple of weeks, the Irish government has, we believe, mismanaged will be able to take the return to service and not certainly the return of the economy. We continue to call for the opening of flights and free movement to people between Ireland and the EU 27 members plus the UK and Irish government has instead produced a green list of 14 countries, 4 of them which have no flight from Ireland, and we don't believe there's any scientific basis for that. We'll be challenging that in the court And later on this week, most of you will have seen over the weekend. The we for the last week have been dealing with a More publicity negative publicity around an outbreak or a spike in COVID around Barcelona and in the Kanata region generally. There's been very little upward movement in COVID around the resort, the Lyrics and the Canaries, and yet the UK government over the weekend panicked And we imposed a 14 day quarantine on all returning business from Spain. For a country that has already locked down, Leicester, seems to me to be a badly managed overreaction. They should have, in my view, have controlled arrivals back in from maybe Catalonia, I don't know, on a regional basis, but to do with it on a national basis. There's no scientific basis for a national restriction on visitors coming back from Spain to the UK in much the same way that we wouldn't expect other EU countries to ban all or to hold quarantine on all U. K. Visitors just because there's been a spike up in semester. However, we have become used to the U. K. Government mismanaging COVID, and it's something that we simply have to continue to deal with. We've reduced the full year traffic guidance from We're originally running the figure of around €70,000,000 to €75,000,000 We now think it will be lower. We're guiding around €60,000,000 because we think we'll continue to see occasional spikes and occasional restrictions continuing, I think, throughout the throughout the summer and into the winter period. I think the biggest challenge for most European economies will be to manage have successfully managed the return of the schools in September. And to the extent they successfully manage the return to schools, we think there will be some will return to some level of normality of business travel. If that doesn't happen, then we think business travel will also be badly affected through September October, and therefore even the €60,000,000 will be a challenging figure. However, I think looking to the upside, I think what the last 3 or 4 months have demonstrated, certainly in Reiner's modules, we have an extraordinary ability to manage our costs. We have done an exceptional job, I believe, in managing our cash flows. And despite the fact that we are are spending a lot of money on passenger refunds. We now think we'll have almost eliminated, in fact, we'll be up to about 90% of all Cash refund requests from customers will have been processed by the end of July, which will be an extraordinary performance given that the office were essentially closed until the 1st June. We still have a large liability in vouchers out there, but increasingly as we return to travel, We see more and more customers, both accepting vouchers or pre moved, and that's reducing the burden and the burden on cash refunds. Other than that, clearly, revenues were devastated for the last 3 months. We have done an amazing job, I think, of managing costs. The fact that we've taken brought the cash burn down to almost 0 and we as we reopen in July and into August, we are operating without any cash burn. In fact, it's a very small or modest cash inflows coming from daily sales as they increase. But again, that will be choppy, I think, over the next couple of months depending on what happens with Touching a couple of other points. Boeing continued to make progress on the MAX return to service. They've completed the flight tests in North America, which seem to have gone well. Reviewing the data. There looks like there will be some delays though in the other regulators, the Canadians, the Europeans and the Brazilians are doing their flight tests, mainly because of restrictions on travel to and from the U. S. We are still hopeful, but I would say hopeful, more than confident that the MAX will return to service in at the end of can be in North America. That would our most optimistic outcome, but then we'd get the first of our MAX deliveries before Christmas. If not, it will be after Christmas. And the difference between the 2 of those will be our ability to take, we think, deliveries of up to 40 aircraft. And if the deal is first deliveries after Christmas, that may be reduced, we mainly take 20 or 30 aircraft for summer 2021. This is a great aircraft. We remain very committed support the Gatomax aircraft. And there are extraordinary growth opportunities out there in December 2021 across Europe. We've seen the collapse of a large number of EU airlines, including Flybu, Germanwings level in Austria, SunExpress in Germany. There will clearly be more, and we believe that there are extraordinary opportunities out there for those airlines. And Ryanair, I think, will be one of the very few airlines will be able to grow, assuming that there's some sort of recovery from COVID-nineteen by summer 2021, and that would depend on a successful vaccine being identified sometime towards the end of this year or the early part of calendar 2021. We would then expect to return to some level of growth in summer 2021. And we are one of the few airlines left that has any reasonable volume of aircraft have deliveries through 2020, 2021, mid to 2022. Most of our competitors in Norwegian have canceled most of their orders. Have pushed back a significant volume of theirs. We don't have many orders through the next year or 2. And we think there would be very significant opportunities for us to grow and to grow profitably. But obviously, That all depends on how the COVID situation develops over the near term. And in the near term, I think you have to be more pessimistic than optimistic. But over the medium term, we've demonstrated our belief that we have a very flexible cost base. We have have an exceptional ability to manage cash flows, and we are gearing up for a period, I think, of very strong growth in traffic and profitability, but only once we're through or identify be through the COVID-nineteen pandemic. As long as the COVID-nineteen pandemic continues, it is going to remain very difficult. We cannot rule out that there will be further pay cuts and or job losses. If things get worse this winter and better, we have gone I think we've made significant progress with our people across Europe, are negotiating pay cuts as an alternative to job losses. But if the COVID-nineteen crisis continues into this winter and certainly into the summer 2021, that we will have to revisit the job loss issue. I think our objective that was to minimize job losses by agreeing pay cuts with our people. And to that extent, I think we have done significant made significant progress in that respect. Balance sheet remains very strong. We closed the quarter with almost CHF 4,000,000,000 cash, we continue to own over 330 unencumbered 737s, booked value of approximately €7,000,000,000 So we don't see any need or reason to look to raise other equity and nor are we seeking to do so, nor do we believe we need to raise any additional debt. Although we have some debt repayment challenges in the mid year of summer of 2021, we have to repay the U. K. Government the €600,000,000 loan and we have our 1st bond. We think we can meet all of that as long as there are no unforeseen further events relating to the COVID-nineteen and there's some monitor reasonable recovery in traffic this winter and in particular into December 2021. This year will continue to be a challenging year for our group. Each of the individual Airends is performing well and expanding its fleet. Lauda has had some cutbacks in its speak in order to deal with the exceptional and extraordinary situation in Austria and Germany. I think the big challenge for us in the next 12 or 24 months is going to be hopefully seeing some level of economic recovery from COVID-twenty 1. But even as we see that recovery, we find ourselves competing with flight carrier airlines all over Europe with extraordinary amounts of state aid: Lufthansa, are in the range of $11,000,000,000 Air France KLM, almost $11,000,000,000 10,600,000,000 Alitalia, and Air End has never made a profit in 75 years is receiving 3,500,000,000 despite the fact it only accounts for 20% of Italian traffic. 2E Group, dollars 32,000,000,000 and TAP, dollars 1,200,000,000 It's inevitable, in my view, that If or when we get through the COVID-nineteen pandemic, we will be facing below cost selling from a large number of those Thank you, Airlines. In my view, that's probably good for our business model, and it means that traffic will return sooner rather than later because it will be But it will be stimulated by very low pricing. That will mean further casualties within the European airline sector. But the strong that will emerge through that, particularly those airlines who are not dependent on Phase 8, but who have a low cost base will recover strongly. But that recovery could be 2 or 3 years away at the moment. I can't emphasize for obvious reasons that its biggest fear at the moment is a second wave of COVID-nineteen cases across Europe and how governments will respond to or try to manage that. Given the current uncertainties, clearly, we have cannot give you any guidance on FY 2021 outturn, the best we can come up with at the moment is we think a 60,000,000 passenger traffic is a reasonable expect to see the impact of the year, assuming that there's no other widespread lockdowns as a result of the second wave of COVID-nineteen. We will make a small loss in Q2, but we have no idea what's going to happen in the winter or in the H2BS. We will, however, emerge in the COVID-nineteen crisis with a much lower cost base. We will have a pipeline of low cost aircraft for Boeing, which we believe will enable Ryanair to lead the recovery and certainly to take advantage of growth opportunities that will be there, But we will need that lower cost base because we're going to be competing with a wide number of enormously State subsidized flag carriers will be doing stupid things with government money as they always do for the next couple of years. Other than that, Neil, a couple of comments there. I won't go through the MD and A, but maybe talk about the balance sheet and cash generation, please. And then we'll go over to Q and A. Yes. Thanks, Michael, for that. You covered off on the cost quite well. The balance sheet, As Mike has said, very strong, dollars 3,900,000,000 in cash at the end of the quarter, which is up from $3,800,000,000 at the year end back in March, very high number of unencumbered aircraft, 333 Boeing 737, with conservative book value of €7,000,000,000 on the balance sheet. So lots of scope there if we want to do anything in relation to those, whether it's sale and need of tax, Secured debt although we don't need to look at that at the moment. The balance sheet remains with a high investment grade BBB, both Fitch and S and P and cash burn in the business is well under control as we ramped up operations were slightly better than breakeven cash flow at this point in time. So I think it's important to be aware of the cash preservation measures that we put in place and the strength of the balance sheet because that €3,900,000,000 will be important as we move into winter. Michael, I think that's it on the balance sheet. Okay. Thank you. Welcome to Q and A. And as usual, we're going to limit everybody to no more than 2 questions. And please don't ask us what the outlook for fares is going to be because we haven't Our first question comes from the line of Daniel Roesch of Bernstein Research. Please go ahead. Your line is open. Good morning, gentlemen. Daniel, hi. Hi. First one on unit cost. On Slide 5, you're €31 per pack right now. If you had to set out a stretch goal, Michael, on unit cost For the organization to achieve, let's say, 3 years, what amount of reduction would you personally consider an excellent job by that time? And And then the second one, maybe a little bit more on the group structure. How is managing the company right now different from the group structure compared to past crises, let's say, 2009, for example, what are the advantages and improvement areas you've experienced over the past 3 months would be interesting. Okay. Thanks, Daniel. I'm not going to get into forecast on where unit cost will be in the next 2 years other than to say if you look at each of the major lines, obviously, that side excludes fuel. Fuel, we think, will be clearly down for the next number of years. There will be Significant oversupply and given the weakening demand. Staff costs will be lower, Aircraft and ownership costs will be lower, airport costs will be lower, sales and marketing costs will be lower. So we see a very strong rebase of the cost base going forward, but there's no way I'm going to put any numbers on at this point in time. I was mentioning the company different. It isn't hugely. We continue as we did before the COVID. We have a strong team of CEOs. They're delegated to quite significant autonomy. Lehigh in Warsaw, German in Malta, David and Andreas as joint CEOs in Vienna and Eddie Wilson in Dublin. I would say most of the work of what would normally be the work of running the airline has been clearly distracted by the last number of months managing COVID. And I think if you look at the dramatic cost reductions, the dramatic cash preservation record that we demonstrated over the last 3 months, I think, it augurs very well for a Successful group managing a number of disparate airlines well. I think I would point in particular to the unique challenges faced by Lauda during COVID. I It is competing in Germany and in Austria with Lufthansa and Austria and Lufthansa subsidiaries in Austria, Both of them below car selling, all of them getting extraordinary amounts of additional state aid from not just the closed the Vienna base on the 29th May because it couldn't get agreement with the unions down there. Thankfully, the staff, the pilots and the cabin crew overrule the union, demonstrated publicly in Vienna and then finally agreed or forced the union to agree to the new are in the terms and conditions, which has allowed the base to reopen on the 1st July, but it is now a smaller base. It will have 30 aircraft this year instead of 38. Vienna will have 10 aircraft instead of 18. There are painful redundancies still being processed in Vienna. And traffic in order of issue will be 5,000,000 instead of 10,000,000 But they've done an exceptional job. So I think the managing the company is marginally more complex, but I think the record of what we've achieved in Q1 in the period with 0 sales and 0 revenues and isn't impressible. Next question, please. Thank you. The next question comes from Duane Pfennigwerth of Evercore ISI. Please go ahead. Your line is open. Duane, hi. Hey, good morning. A couple of questions for me. One is you assess The state aid that's been awarded to your competitors, obviously, the headline numbers are catchy, but how much time do you think they've actually bought for themselves? And what do you think the appetite is for more state aid if they needed to get through the winter? Okay. I mean, the issue with state aid, state aid is a poison pill. I mean, what it ultimately means is that there will be very little reform of the cost base in Anatolia, Lufthansa, Austrian or the others. But it means that these guys, it's like giving monkeys machine guns. They will engage in very aggressive below cost selling for the next year or 2 for as long as the €1,000,000,000 last. I think ultimately, they would put intense pressure on Ryanair and other new airlines, there will be facing unfair competition, which is why we think this state aid is entirely illegal. Most of it is being associated with dressed up environmental commitments that were already in place before they receive the state aid. So it's a complete ready up. And I think we've been very disappointed by the failure of the European Union, who are quite happy to pursue and torture American companies like tackle and Google and others. But when it comes to maintaining a level playing field in European Aviation, they turn a blind eye every time. I take particular delight in the we have these frugal 4, which is The Dutch, the Austrians, the Swiss and the Danes, putting themselves forward, certainly at European level, it is frugal for careful management economies, need for rigor and compliance with EU law. And yet, they were the first people over the barricade bailing billions into SAS, KLM Air France and Austrian Airlines. I mean, they're marketing about the Austrian government bailing out of Austrian Airlines. As you said, and the subsidiary, it's a German company, which must be surely the first time you have seen state aid in Europe to a non national operation. But they can't, thanks for that. And I think, therefore, they will put intense pressure on not just Ryanair, but other airlines. The one I feel sorry for most is IAG, who would be trying to compete in the long haul recovery space with Air France at Lufthansa. I've seen about €10,000,000,000 of state aid, but it will be equally difficult in the short haul market as well, and that's why we'll be challenging and are challenging all of these Candid as always. Just on the range of outcomes for summer 2022, calendar 2022, Can you speak to how much bigger could the airline be if you get your MAXs? And even if you don't get your MAXs, how much bigger could the airline be relative to pre COVID levels? Thanks for taking the questions. You mean summer 2021, FY 2022 there or do you mean summer 2022, FY 2023? Correct, sorry. Calendar 2021, correct. Yes, sorry. Okay. I think given the uncertainties, at best, we'll take about another 40 aircrafts, 40 new aircrafts are from Boeing for summer of 2021. We have probably another 2025 aircraft that were are coming off lease or sale presold aircraft that we have to deliver. So at best, I think you'll see a turn to our pre COVID volumes in summer 'twenty one, FY March 'twenty two. So we're looking at maybe €150,000,000 at best. And I but I would caution that, that recovery and that is the best outcome. That recovery would be on the basis of much lower airfares, a lot of price stimulation and intense price competition with stated competitors who would be below cost selling. That would be the best outcome. I think it's more likely that the recovery, and again, it depends on what the emerge of a vaccine, it's more likely to be worse than that and that whatever happens this winter, they maybe have some flow through into the summer of 2021, and therefore, you're talking, I mean, it's impossible to know somewhere within the range of 60,000,000 to 150,000,000 passengers. The sooner a vaccine, an effective vaccine is found and there's a return to some kind of economic normality, Then the faster I think the volumes will recover, but we won't have much additional capacity even if we get 40 aircraft from Boeing, We really won't have enough additional capacity in December of 2021. Thank you. Thank you. Next question, please. Thank you. That comes from the line of Savi Syth of Raymond James. Please go ahead. Your line is open. Have a question. Hey, good morning. Two questions from me. First, if I can ask Daniel's question in a slightly different manner. Just Wondering as you kind of go and attack your costs and have discussions with your partners and labors, What's the kind of world view that you're using to kind of get to certain targets? Just as demand stabilizes, what Fares do you return to profitability or cash breakeven or maybe even get back to kind of double digit margins? And then kind of second question, I was wondering if you provide a little bit more color on your ATL in terms of the makeup of refunds in there versus credits versus new bookings? Sorry, let me get the second one again. What's the ATO reassurances? What's that? Air traffic liability. Oh, so refunds? Yes. Versus credit. So that's in the book versus how much is maybe gains. Okay. The first half of the question, there's no absolute on cost. I mean, as in all cases, we will try to reduce cost by as much as we can. Need to give you a flavor. We are obviously in advanced discussions with Boeing about compensation for delayed delivery of aircraft. We're also having discussions about repricing the MAX order. None of those are we're in the middle of those discussions and no one near concluded. In terms of labor, we have now about 75% of the pilots and cabin crew have agreed to pay costs. That ranges from, say, 20% for the captains down to 5% for the junior cabin crew. So there's a range of numbers there, but the average is about 10%. There's been significant headcount attrition in the Dublin offices. We've all taken pay cuts. And we would expect there to be a material downward movement in airports, but mainly as a result of growth incentives, But they really won't emerge until the summer of 2021. And we think fuel will be materially lower for the next number of years. It's very hard to see oil prices rising back above $50 a barrel. In fact, I suspect that when there's some economic recovery and OPEC starts producing again and U. S. Shale starts producing again, we think oil would be modestly in somewhere around $40 a barrel for the next 2 or 3 years. So there's going to be very significant cost savings. But again, I emphasize we will need those cost savings because I think the while I think the traffic will recover strongly through 2021 into covered summer 2021, summer 2022, it would be on the back of very substantial price discounting as we compete with hugely subsidized state aid flying carriers in Europe. On the refund situation, again, there's not that much more I can give you, we have a we had a significant backlog of customers demanding cash refunds. We would have worked our way through 90 attended those by the end of July, so the end of the next week. There will still be a significant volume of and I won't break it out, but people who are out there who have either accepted vouchers or are taking free moves. So the liability is still there. And the only area where we will have still have a significant challenge is we have a reasonable rump, maybe I don't know, 10%, 15% of our passengers are out there who have booked through OTAs at least on license screen scrapers The booking.coms, Kiwi dotcoms, all of these chancers. The difficulty we have there is we can't make refunds directly to those passengers because in most cases, to protect the fact they've been overcharging and misleading consumers, the screen scrapers give us false email addresses and have a good day to day care. And so and we have a liability directed to the consumer, not to the unlicensed intermediary. So what we're trying to do is to set up a direct communications data, direct communication vehicle where individual consumers, Many of whom don't even realize that they booked through or have been booked through or scanned by an unlicensed screenscraper have been overcharged by them. Still think they're waiting for a refund from Ryanair, whereas in actual fact, we can't refund them until we get them to communicate directly with us. The legal liability we have is the account that won't refund discrete. Yes? Yes. The question I guess, Yes. And the question I have more is just your cash breakeven right now, which is pretty impressive. And I'm just wondering how much of the new cash in is From your revenue standpoint, how much of it is being used for credits and things like that? Because does that mean that cash should kind of continue to build because you're probably using up a lot of vouchers today. I see. As long as there is a need to be uninterrupted recovery of air And that's, I know, a very wide statement. But as long as we can suffer occasional interruptions like the Spanish quarantine in the UK is limited for 2 weeks are then lifted again. As long as there is a reasonable recovery of air travel, 40% in July, 60 spent in August 70% September onwards, then we would expect our cash will continue to be flat or slightly build until we get to the middle of next year where we have the UK 600,000,000 to repay and the first of our own bonds. So it all depends on bookings and cash flow, the strength of bookings and a continuing increase, a recovery in bookings. That's helpful. Thank you. Next question, please. Thank you. The next question comes from the line of Jarrod Castle at UBS. Please go ahead. Your line is open. Hi, good morning everyone. Yes, 2 of course for me. I'm not expecting you to give us a number, Michael, but I just want to ask you 2 things around pricing. 1, if you're also experiencing Kind of an inversion of the normal booking curve with most of the bookings happening in the last week or 2 and whether or not those tickets tend to still be are more expensive than the far out bookings. And related to that, obviously, is kind of what you're doing on promotions as it currently relates And then the second question, I don't know if it relates to you, but certainly has implications is around the EU with the slot constrained rules around airport slots being basically abolished. And your views What it means over winter if the EU does or doesn't decide to carry on with that, how that will or won't impact Ryanair? Thanks. Okay, thanks. I mean on pricing, there's a degree of inversion. Now I break it into 2. The recovery in July August has been reasonably strong because July August tend to have a lot of forward bookings in them. I mean, I think we are facing And whereas we think we're confident of getting 70% load factors in July August, I would be much more wary and cautious at this point to end up September, October, assuming the schools go back, the annual holidays are done. We would have less forward bookings in the system through September, October, November. And therefore, We are, I think, subject to there will certainly be pricing inversion. I wouldn't rule out that we would be taking out more short haul, more capacity if we think bookings will remain weak in order to preserve cash and reduce costs. And yes, there is a degree of pricing inversion in there that is accentuated where you have things like the Irish Green List or the Irish 40 date. And Ireland stands out as a loan among the EU states. Most of European states have allowed intra EU travel to return, and Ireland still has this bizarre 14 day quarantine where In many respects, you're in more danger of catching COVID in Port Liege than you are in many other European countries. That will continue. And therefore, we are in the lap of the gods. That's why I think, again, I can't continue to caution. I think the Volume recovery will be strong, but the pricing will be weak, and we will be aggressive in terms of price stimulation through September, October, November, if we need to be. The EU slot rules really doesn't matter that much to us. Remember, we still have this image that's outdated that we're some sort of secondary carrier at are in the secondary and tertiary airports. We are operating at most of Europe's biggest airports. We have all the slots we need. I don't see there being any issue with getting additional slots. I do believe the European Union will extend the flop holiday and they're waiving effectively the use of or lose them 80 20 move through the summer of 2021. That's likely to continue into the winter of 'twenty one. Whether they extend into summer 'twenty two doesn't really matter. There will be airports who have lost have significant capacity reductions, who will be, I think, engaging in growth incentives are going to get some of the pioneers to deliver them growth where others are cutting back. And I don't think slots will be a major issue or a challenge for us in that respect. There are huge gaps opening up, and I don't think the slot issues are slots will be a major challenge to that growth will be returned to growth. Julius, I don't know if you want to add anything more on the kind of on the regulatory side on the stock situation. Michael, the only thing I would say is that there is a growing unease on the part of the European Union will be able to extend the waiver of the A220 rule into summer 2021. And I think that is are probably sensible in the context of several airlines announcing that they will be smaller in 2021 than they were in 2020 or 2019. The question arises, how long does the stop waiver need to last to accommodate Lufthansa's plan to only come back to the 2019 level in 2020 are ready for 2025. It surely shouldn't last forever because it would deprive other airlines from of opportunities to grow. So we are also going uneasy, I think, about the prospect of extending the wafer indefinitely. Thanks very much, Gerard. Thanks, Jarrod. Next question, please. And that's from Neil Glynn at Credit Suisse. Please go ahead. Good morning, everybody. I'll also ask a quick 2. The first one, you've obviously talked plenty about staff costs and the labor deals you've done. But just interested, have those labor deals in the U. K. And Ireland and the ones that you're negotiating at the moment, any incremental have the visibility contained with them to help you cope with the 2nd wave and such an uncertain outlook over the next 12 months or so? And then second question, just interested to what extent have airports and local authorities been keenest around Europe to secure your traffic beyond the pandemic? And is there any obvious relationship between their appetite and stay there for the actual operator in certain countries. Okay. Thank you. Two good questions. I think it gives me an opportunity. I'm going Gedi Wilson will take the staff cost 1 wearing his DAC hat, but also with the back coming from the people that he's working closely to our Hughes. And then I might ask David O'Brien, who is no longer our Chief Commercial Officer, but is closely involved in that to take the I'll give you a flavor of the discussion with the airport. So Eddie, staff cast incremental flexibility. Good. Neil, good morning, Eddie here. Just on the staff cost field, we are now covered for 85% of the pilots and 75% of the cabin crew. And those deals do give additional flexibility because what we've been able to do is that The roster rules within those have been essentially suspended and there are additional sort of Demarcations or inflexibilities that we had previously that have been relaxed. So we're able to flex our rosters. Spread the work that's available within those bases and most of the crudes that are there and all those deals are signed off. And like what has happened here is that like we looked at it on a sort of a unit cost basis, the pay has come down by 20%, say, for the pilots and up to 10% for the cabin crew. But then we're able to flex the actual amount of people that are there in spreading the work around. And do you want to mention the German situation? Yes. I mean, the German world, that's probably Michael with the Basically, the Germans, the BC had rejected the deal last week and we're not quite sure what was going on there. They said it was a vote, but then they said Over the weekend, remarkably, they have changed their mind without the need for a ballot. I don't know what that says about voting for pay deals in Germany or not. But anyway, they've signed up to the original deal that was put to them last week. So The pay adjustment downwards of 20% would go ahead in Germany as part of what's called the BGB agreement there and all the agreed. Again, they came under huge pressure from the pilots. I mean, when it comes down to it, the pilots realized that when you look at Lufthansa with 22,000 job analysis, SunExpress, Ghan, Pilot Demonstrating Industry for Berlin over the last number of weeks. And here, we had a deal whereby We were going to flex down by the to keep as many people in employment as possible, use redundancies as a last and last resort. Just curious people who wanted that in the BC were hope at the Executive Board, we're hopelessly out of touch did a handbrake turn over the weekend and accepted the deal on behalf of the pilots without the need for further balance. It's Galvest, German Democracy. It's okay. David, you want to try to briefly on the airport? Yes. First of all, there is no clear link between the state aid recipients and their associated airports on the airport appetite. If you take France, for example, part of the state aid in France actually requires Air France to do less flying into certain airports, Particularly on domestic, which opens up opportunities then for us, with the airports becoming more are hungry for alternatives. So in the case of France, it could work it works in our favor. In the case of Germany, I mean, Lufthans have already declared that they're cutting back on capacity. I think until such time as they actually demonstrate which airports are taking that capacity from. We won't see as much movement as we will inevitably see from specific German airports, but already are coming in our direction. Beyond that, airports are scrambling in the first instance to get as much of their share of a return to service as possible. So there are a lot of short term deals out there, most certainly the waiving of any sort of volume targets and so on. And discussions are now on into summer 2021, whereas Michael said, our capacity growth is low, even at its highest, it would be at highest potential, it's low, which means some airports will lose and some will gain. And those discussions are going on right now. And as you can imagine, they're becoming increasingly urgent from an airport point of view. Great. Thank you all. Yes. I think the only thing Good. I'd add to that is the one negative in that is also the tendency of European governments to raise taxes in response to the The German government, while they're throwing €10,000,000,000 at those times, are raising their environmental taxes. I think they're up 50%. The Austrian government has remarkably rebalanced its environmental taxes. It was €12 on a long haul ticket and €3 on a Short haul ticket. They're now from September, it's going to be €12 on every ticket despite the in car the kind of contradictory Nature of that environmental treaty short haul site has been as proven as a long haul site, but it has never stopped European governments are making idiotic decisions on certain when it comes to environmental taxation. But I think as we move through the winter this winter and turning into December 2021, As European airports begin to realize the scale and the extent of the capacity of traffic loss that they're facing, we think there's going to be Very significant growth incentives out there. And that's why we would be it's not just the overall growth in fleet will also be closing more bases into December 2021 and reallocating aircraft to those airports where there are significant growth incentives and growth agree. So we will be very flexible and very opportunistic. And as Eddy has demonstrated, over the weekend, on the German pilots rejected the payment last week. We closed 3 German bases. Now they may be we look at that now. Have accepted the deal over the weekend, but we will continue to be fairly flexible in the way we deploy the fleet across the group airlines. Next question, please. That comes from the line of Stephen Verlon at Davy. Please go ahead. Your line is open. Hi, Michael. Just on in terms of the network this winter and next summer, presumably you're are operating a smaller schedule of winter. I'm just curious about the shape of the network. Presumably, it's like more weekday and things like that won't be operated, and it will be, let's say, smaller frequency. And then into the summer, obviously, it's dependent on the Boeing deals as well. But will you be mindful of What competitors are doing, I think there could be large scale pullbacks, as you mentioned, in certain markets. So that's just on the network. And then just finally, you might just talk about ancillary revenues because I think some of them like allocated seating or priority boarding will be doing well, but I assume your onboard sales may not. So thanks, Mike. Thanks, Salveen. Yes, I think you're pretty much right on the network outlook. I mean, what we tried to do with return in July was to cover about 90% of the network, but with much reduced frequencies. And I think that will continue to be the now we'll be flexible through the winter. But again, we'll try to cover as much of the network as we can. But with the added flexibility that where, for example, if some government include as the Mohawkans and the Jordanians and the Israelis are doing where they are imposing severe restrictions. We said we will withdraw capacity have reasonably short notice. We pulled out of Eelas entirely. We're back just to Tel Aviv. I wouldn't rule out that we may significant E returns in Tel Aviv this winter Well, because there seems to be these kind of arbitrary decisions. Morocco continues to make arbitrary decisions on just banning everybody traveling to and from. But there will also be opportunities then that does give us the opportunity where some airports are incentivizing growth. We will try to deliver them growth. I think that would be continue to be the watchword for summer 2021 as well. We have a very flexible model at the moment. Eddie has explained the new deal with the pilots of the Canton Crew gives us are producing the flexibility. And we will try there'll be a longer route this winter where we will probably only fly Thursday through Monday And move to roster so that we have people just working 5 days on, 2 days off and not operating the aircraft on things like Tuesdays and Wednesdays. On ancillaries, again, it's too early to say. Clearly, there's been a disruption to the in flight sales, but in flight sales are a tiny proportion of our overall ancillaries at the moment. Certainly, in the recovery in the return in July August, Things like priority boarding, allocating seating and carry on bags, the revenue there is strong. Obviously, no reason why that won't continue. But are too early for us to give you any kind of guidance or outlook on ancillaries for the remainder of the year as it is on the scheduled revenues as well. We simply don't know what the Underlying traffic will be, and we have no idea what the airfares would be. Okay. Next question, please. Thank you. That's from the line of Jamie Robotoome at Deutsche Bank. Please go ahead. Hi, Michael. One for you, then one for Neil. The one for you. Some smaller Eastern European carriers seem to be are getting into trouble, unsurprisingly, I think most recently Blueair in Romania. Is that a good source of opportunity for you as well as with, of course, at this time when COVID issues in core Western European markets are still proving a headache. And second one for Neil. If you carry around 60,000,000 passengers over the next three quarters with load factors broadly in line with your expectations, presumably, there shouldn't be much more by way of charges for fuel hedge ineffectiveness. And if that's fair, with the price of almost all the fuel you'll use fixed by hedging. Could you perhaps give us a rough steer as to what you think the fuel bill might be this year after just EUR 9,000,000 in Q1. Thanks. Okay. Thanks, Jimmy. I'll take the first and then Neil do the second. On the smaller use I mean, yes, it's no different in Eastern Europe than it is in Western Europe. There are extraordinary opportunities out there in both Western Europe and in Eastern and in Central Europe. And typically, the moment is trying to work out where that capacity is going to be cut. I mean, I'll give you a couple of examples. The FKLM France KLM has already said they're going to reduce 2021 capacity by 20%. We just are not aware yet. Alitalia are talking focusing strongly on long haul routes and severely cutting short haul routes. Now how much of that is true? We don't know. Easyjet, for example, now 51 led aircraft by September 2021. I think Easyjet will actually see a cracker decline next year. Have reduced their Berlin fleet from 32 aircraft to 60 new base aircrafts. And we're seeing those. And What we're seeing is more airlines like Wizz talk a lot about expansion, what they don't talk about is there's a huge amount of cutbacks In routes and bases in Central Europe, there are countries where we're competing with them. I think our response to that is we don't really care or concern ourselves about competitors where we're doing expansion. We are very aggressively or actively negotiating with the airport. There's almost no airport that doesn't suffer a loss of traffic or a failure of the competitor that we're not on the phone to on the morning of. And we have far more opportunities at the moment that we know can handle for starting into summer 2021, into summer 2022. I think what we're trying to do with almost all airports across Europe is explain to them, look, in your entire universe have an order book of 200 aircraft over the next 5 years, which is the guts of another 50,000,000 or 60,000,000 passengers. And where the airline you need to be talking to if your service is about recovering Your traffic loss are recovering or return to growth. And I think we all get that message, but it will be a very competitive airport environment for us, I think in December 2021 and certainly to 2022, as long as or whenever a vaccine is identified that kind of finally puts a nail to call. Neil, do you want to take a few more questions? Yes, of course. Jamie, good morning. If we assume 60,000,000 traffic and I hope we've delivered that, then we would be looking at fuel bill Approximately half of what it was last year, so you're looking somewhere in the region about €1,200,000,000 to €1,300,000,000 Again, if we stay with 50,000,000 passengers, then I wouldn't expect any additional fuel and effectiveness, but there will be some revaluations and mark to market on the ineffective hedges throughout the various quarters. We had a charge of about £10,000,000 in the current quarter related to that. But if there was to be a major shock and traffic was significantly down, then we would be looking at more ineffectiveness out over the balance of the year. Thank you. Next question, please. Thank you. That comes from the line of James Hollins at Exane. Please go ahead. Your line is open. Good morning. The first one is on whether you've seen any spike in cancellations in the last 48 hours given the Spanish move both to and from Spain as well as other destinations. And secondly, Spain and Italy are the 2 biggest markets. You talked about base closures in both. Perhaps give us a little bit more detail on whether you think the Spanish pilots and crew will ultimately accept your pay deals and those closures won't happen. And secondly, we talked on your video about Italy. I probably should know this, but it's Alitalia or linked to Alitalia pay restrictions. Perhaps just run us through those details on where the closures are coming there. Thank you. Okay. Thanks, sir. I think, again, to talk about the spike in cancellations, we don't have cancellations. All our bookings are non cancelable. What we tend to see though, and I think what's new in the COVID system, is we see are jumping in no shows. Now I think 2 things come, and we've seen this over the last week in the Spanish market. There's a dip in bookings into Spain for the next 2 or 3 weeks, and that's I think would be pronounced over the weekend, particularly when the U. K. Was traveling well. Will not it's a bit early to say yet, but I suspect what we'll see is a drop in bookings, U. K, Spain bookings. You may see an uplift in Spain or U. K, Portugal, U. Will be in U. K. Greece bookings, but too early to say. There will also be an uptick in no shows, but the fares are not refundable. And there will be and we will continue to offer some changes. So we have free changes or free moves during the month of July, August September. So some British people who have bookings, if they can have the benefit of a free move into later on in August or September, and hopefully, the quarantine will be lifted. Many people will still fly. And it's only a 14 day quarantine. They will come back from their annual holiday and will simply quarantine the U. K. Or not quarantine as the case may be. In terms of Italy, I think we are in advanced discussion with the Italian with the unions in Italy. We are would expect to arrive at the same outcome as we have in most other EU countries. To the extent that there's resistance there, there will be Italian based closures. It is I mean, and the choice, I mean, it's not kind of a the choice has been in almost all countries between either you set the pay cuts, so there will have to be base closures and there will be job cuts. And I think it will be we've seen have a growing acceptance and realization across Europe, certainly among our pilots and our capital cruise. This is in there. This is the sensible outcome. And as Eddie has said, in Germany last week, where our pipe and chemical clearly supported the pay cuts, but the unions didn't. The unions pretty quickly retreated from that position over the weekend. I think the unions were kind of are trying to resist pay cuts for any airline in Germany, whereas our people support them. The other issue in Italy is the Italian government, in addition given the Alitalia 3,500,000,000 of state aid are also trying to impose Alitalia's pay rates and CLA on other airlines based in Italy. Now, are paid in most cases, in most cases, if we would be ahead of that of our Italian because we pay better, but we get much better productivity. But it is indicative of the extent to which certain European governments are not concerned with just providing state aid for the sale of land carriers, but they're also doing their utmost to try to damage competition and lower cost carriers through a combination of rising taxes, whether that's environmental or airport taxes and or trying to impose Higher costs on more efficient competitors. And again, I think the I take great comfort from the European Court ruling in the APO case, you know, is that the European courts will not roll over in the way that the European Commission has on some of the more egregious Examples of unnecessary state aid. Again, we'd point to Lufthansa in that case where even Tarson's board admitted The 10th being not worth more than he was expecting with everything he asked for, and he didn't expect to get everything he asked for. One of the key elements of state aid for it to be legal is it has to be the minimum necessary. And it's quite clear even Lufthansa have admitted that they've received far more than the minimum that was necessary. So day aid will continue to be a challenge. We will challenge it legally. And I but in the meantime, we'll continue with the have negotiations with the Italians on pay cut as an alternative to significant job losses. Next question, please. And that comes from the line of Carolina Glares of Morgan Stanley. Please go ahead. Your line is open. Have your line. Two questions from me. I guess, 1, Michael, given your view of lower fuel, Are you looking into changing your hedging policies to reduce the level of hedging going forward? And my second question is, the European the Environmental Commission of the European Union has have guided a consultation about how to deal with Corte and ETS. Do you have I know you are a critic are in the ETS system. But do you have a view on whether Coker will be on track to start in 2021? And what do you think will be the policy going forward? Okay. Julius, I'll ask you to maybe comment on the ETF on the second part of the question. On the first part of the question, the short term, no, we're not are doing any hedging, I mean, because there's just too much uncertainty out there. I would expect when again, My best guess is, if we have a vaccine sometime in around late 2020, early 2021, there will be some return to normal volumes By December of 2021, I would expect it at that point in time to return to hedging. Again, not because we beat the market, but hedging gives us cost certainty over a sort of a rolling 12 month budget free cycle. But we would expect oil prices to remain reasonably constrained for the next 2 or 3 years as the world economy recovers. I'm not sure how much the OPEC plus countries will continue to constrain or fiscally continue to constrain production are and clearly the U. S. Shale producers who have significantly reduced their capacity will spool up again reasonably quickly. But over the medium term, we would again we would generally speaking be supportive of fuel hedging. I think what we might change, Neil, the learning from this is maybe instead of being 90% hedged going forward, we might be 80% hedged going forward, but we would still be Fans of fuel hedging to give us certainty through a fiscal year. But we have no plan to reenter hedging, I think, until we're are clear of COVID-nineteen and that our traffic recovery will not be are subject to further pandemic lockdowns or cutbacks. Julius, on the Bureaucrine ETA side? Thanks, Michael. So there is a technical issue there over using 2020 calendar 2020 as a baseline year for the new core Sierra system, which clearly wouldn't be good for airlines because we would be measured up against the year That didn't truly reflect the shape of European Aviation. So I think that the consultation that was referred to in the question It's about that issue about using not 2020, but possibly 2018 or 2019 as the baseline year, Which we would support, as does the rest of the industry. Okay. Thanks, Giulio. Next question, please. Thank you. The next question comes from Manipal Kiani of Bank of America. Please go ahead. Your line is open. Hi, Michael. On yields so far, I think I realize it's early days and lots of uncertainty, but what are you seeing in terms of fares currently and what's the competitive environment? And secondly, Going on, on fares, you talked about likely competitive fares going forward. How do ancillaries then fit into this? What's your strategy there? And do you have any tools to kind of incentivize spending on ancillaries? I mean, thank you. I'll resist the temptation to discuss fares currently, and in part because fares currently are a mix of have a lot of forward bookings into the month of July August that predated the COVID case and were at the peak period, But lower fares for close in bookings for overstimulating reasonably close in traffic. It is impossible to know going forward Because I think, again, while we could do some stimulation and build forward bookings and ministries, I think we'll take a hit in the Spanish market this week because of the, I think, the U. K. Lockdown, the U. K, the return of quarantine. Ireland, for example, if you could persuade the Irish government to add the EU 27 to the green list, which is what they should have done last week, I think you'd see a recovery in traffic to and from Ireland. But it's impossible to know and anything I say would be I mean, I've got the risk of misleading you on fairs. Other than to say in general terms, we expect when we pass through the COVID-nineteen crisis that volumes will recover strongly, but on the back of lower pricing in lower yields. Ancillary's continued to perform strongly in many respects among the passengers who are traveling, if anything, there is a higher proportion or percent. I mean, we're trying to actively encourage people to select their seats. And to bring carry on bags, I mean, there is a I think a new advice coming from some of the European countries led, I mean, I would like to say by IASA, who should know better, but recommending that passengers check-in bags. In actual fact, the check-in bank passes through up to 8 different sets of hand and is therefore less safe in our view carry on luggage, which you keep with you in your hands at all times. And so we would be actively encouraging carry on baggage And for health reasons, as opposed to check-in bags, despite that we make more money from check-in bags. But that would probably be helpful towards ancillary revenues. But again, there is no point in us at this time giving you any guidance or any insights on either fares and years are on ancillaries because it is so variable and it is so volatile and that we expect to continue to be very volatile will be in the next few months. Probably until the end of this calendar year until there is some reasonable expectation of an effective will be coming available hopefully in the Q1 of next calendar year. Next question please. That comes from the line of Mark Simpson at Goodbody. Please go ahead. Mark? Yes, morning. Two questions and one housekeeping. The housekeeping, can you just give us the specific number for the revenue earned in Q1 as opposed to the total revenue, which included revenues, for example, from those shows in the previous quarter. So I wonder if you could give us that breakdown. Have questions. First off, just on the winter capacity, the change in passenger guidance, given where we are in the year, obviously, impacts that second half more substantially. Can you give us what, as a percent of your previous schedule, you expect to fly in Q3 and Q4? And the second question, talking about opportunities, markets opening, airports looking for growth, Can you talk about Gatwick? I mean, what is the opportunity do you see there? And what level of appetite do you have to maybe develop Gatwick if slots are available as opposed to continue to grow at Stansted. Okay. Thanks, Mark. Housekeeping, no, we won't break out the percentage of the revenue earned in Q1. 2, on the passenger guidance for the second half of the year, I mean, if you remember our last outing on this, we our general guidance was we were sort of hoping for 40% July, percent August, 70% September, October and then we thought maybe 80% through normal rigid capacity. I think at this point in time, we will be stepping that back to kind of 40% July, 60% over, 70% September And then maybe running 70% as being the operating number through the remainder of the year, but with huge flexibility and a lot of volatility. I mean, the 60% the 60,000,000 passenger figure for the year is a stab and a guess. It could be higher than that and it could be lower. I think what we've been focused on doing for the last number of months is having very flexible are offering very flexible pay deals with our people so that we can spool up and spool down as the case may be. But The €60,000,000 figure is a very general target number rather than a kind of an accurate forecast of guidance. On market opportunities. Gatwick is of limited interest to us. East Jes, I think, Norwegian will clearly be much smaller and Gatwick can be a maybe much more on Gatwick. Gatwick is an expensive airport that's heavily soft constrained and therefore needs to be inefficient. I think we would have a look at Gatwick as we always do. I think we fly about 4 or 5 routes into Gatwick Dublin at our biggest one. We do some sun stuff back in there middle of the day. I think we'll be much more interested in growth opportunities at Stansted, where, for example, it looks like Easyjet are closing there. I think have an 8 aircraft base there. We're already talking to Mag about growth opportunities in Stansted and about extending out our I think we have a 10 year growth deal there, extending that out longer. And I would not also rule out There's a possibility at East General to closing South Bend Airport. South Bend is of limited interest to us again. But At a price in that incentive, there's always an opportunity, and we've certainly something we'd look at. Gatwick, I mean, yes, if we got some reasonable offer from Gatwick, but we don't see the Gatwick would be very unless there is a real cut backed by BA. And I don't think there will be. I think BA will talk about it, but not actually deliver. I think they put We don't see there will be huge opportunities in Gatling. But certainly to the extent that there are growth in Gatwick, there will be downward pricing in the London market generally in Gatwick. Certainly, we would will be happy to aggressively grow again in Stansted and in South End, but only if there's an appropriate incentive, gold incentive in place. David, I know you are Eddie maybe. I mean, do you want to add anything further on the GAAP effect? No, not really. I mean, like it will I think there has to be a big opening up there for us to actually consider anything. And I think you're right as well on the South End that EDGED are likely to go out there. And it's still one of the bases for us that's under threat at given a more seamless opportunity for growth there depending, of course, on whether we can get this nice deal expense. That's great. Thank you. I mean, I think to add to that, there will be sort of opportunities, particularly in provincial in UK, Well, you've seen Flybe go both and Egypt, we think, will continue to I think Egypt will reduce capacity at some of the UK regional airports as they and some of the European airports as they've already done in Berlin in order to protect their base or maybe expand in gas leak and in Paris. And we would certainly be I think that would create further opportunities for us to grow in regional U. K. And elsewhere in Europe, where Easyjet will be, I think, reducing capacity. We're also looking at some of the airports, 2 in Central Europe with reducing capacity Because underneath a lot of the noise of Wizz expansion is actually they're just moving dead chairs around. A lot of places to get away from competing with us, and we think that will continue. Next question, please. That's from the line of Johannes Braun of MainFirst Bank. Please go ahead. Your line is open. Johannes, hi. Yes, hi. Just two questions around Cash burn, CapEx, free cash flow. Firstly, you previously said that cash burn might be are breakeven or even slightly positive until mid next year. But shouldn't we expect that free cash flow and also cash burn will become are quite negative going into the winter as you have to pay all the pre delivery payments to Boeing that you have held back so far. And then the second one, can you just give us a rough CapEx guidance for the next years based on the current expectations for the MAX delivery schedule? Okay. Now, obviously, the CapEx, I mean, obviously, the CapEx is heavily qualified by where we are with Boeing and on deliveries of the MAX. On the cash burn, again, let me I want to reemphasize the point. To the extent that we continue to see a recovery in traffic and volumes, we would expect have the cash bar to be reasonably cash neutral going forward even through the winter. I would factor out the Boeing PDP payments from that. That is part of the ongoing discussions and the continued discussions with Boeing. We already have a significant PDP position in place with Boeing for aircraft that have been considerably delayed. So I think if there was a resumption of deliveries there with Boeing, we already have a significant PDP position in place. I would not expect there to be a we would not agree to any resumption of PDP payments that would adversely affect our cash flows, I think, for the next 12 months. But again, we will continue to work very much in partnership with Boeing on aircraft deliveries and restoring the PDP situation. I wouldn't want to add any more to that. And then our big focus would be The 2 debt repayments in the early part of next year, the UK government loan, which comes out in March and the first bond payment in June of 2021. And the new hotel that cabinets are obviously heavily qualified with the Boeing cabinet? It does actually highly qualify. So We don't have a final delivery schedule from Boeing. We don't have a final delivery schedule from Boeing on a good time as they return to service, and we finalize our discussions with them. So Johannes, it's probably not realistic to give CapEx guidance at this point in time. Previously, we've guided €2,000,000,000 CapEx FY 2020, euros 2,000,000,000 to 2021. Clearly, they're not going to happen at this point in time. So I think it's better to come back can take an update on that when we've finalized our disclosures with Boeing running and putting meaningless numbers out at this point in time. Will be answered. Fair enough. Thank you. Thanks, Neil. Thanks, Jonas. Next question, please. And the last question in queue so far comes from the line of Melter Schultz of Commerzbank. Please go ahead. Hi, good morning. Two questions from my side. In terms of your future positioning, do you plan to transition a little bit more like an easy jet strategy or let's focus on the main airports at each city and cut further basis in secondary airports as you have done now with Francorchamps. And maybe the second question would be also on terms of staff seniority where you have made cuts. Did it affect your seniority? Do you have now a much more senior crew? Or does the average need not change? We can't quite deal with that. I mean, I would hate to think at any point in the future, it will become more like Easyjet. Again, We will continue to be opportunistic. We are in most of there is almost none of the major airports that we're not in any significant partner of now with the sole exception of Heathrow, Charles, good morning. We're in Frankfurt, Maine. We're in all the main airports in Brussels, Madrid, Barcelona, Rome, you name it, we're there. Are in the range of our focus going forward will be to be opportunistic. We will be we will allocate very Significant growth to those airports who need it most, and they'll be the ones who will discount most. And I wouldn't be excluded. That would be at the major main airports as well. I mean, if you look at Sabanton, for example, in Belgium, if Brussels Airlines goes ahead with its plans cut capacity by between 30% 40%. There will be a huge hole in Davenport. Will we still grow in Charnewa? Yes, we will as long as there's incentive to grow there. How much of the Alitalia shortfall will get cut from Alpenda, Linate and roam for Macino. The answer again is we don't know, but we will certainly be there to pick up that those opportunities. So Our focus would not be I mean, if I was to describe the Easyjet strategy, Easyjet strategy is to be big at heavily slot constrained airports because that's where they are least exposed to competition for mine. But it's more defensive strategy on their part, but Easyjet has already now gone ex growth and is reducing the fleet Presumably so that it can start off for the next year or 2. Our strategy would be exactly the opposite. I would accelerate have delivered as soon as Boeing can deliver us Max aircraft. And I would aggressively accelerate growth in the next year or 2 once we could see our way through to the end of the COVID pandemic, the opportunities are going to be, I think, extraordinary, and I will put them up on the same I think we're seeing same opportunities this time around that we saw after the nineeleven terrorist attacks in New York. And that's why we are doing so much work on the cost base so that we can take advantage of those kind of opportunities. On the staff costs, no, there's really very little impact on seniority. We don't have a lot of seniority issues. I mean, where we have negotiated pay cuts, they are across the board with the captains, FOs, are senior first flight attendants and flight attendants. I think where we have had significant job losses, I would point, for example, allowed emotion in Vienna. All the pilots and cabin crew who agreed to the new CLA, We're trying to keep them employed. We will try to avoid job losses with all of our team. But any of the pilots and cabin crew who refuse to accept the new CLA or the new terms and conditions document. They are being let go regardless of seniority because there's only going to be one lost her and won pay terms in Vienna. And if you don't agree it, frankly, you're gone, and we're not that interested in how senior you were. I'm sure they will argue that on seniority basis, they should we should fire or we should let people go who were who have accepted the new CNA. But I think in the COVID-nineteen crisis, we're in a new world of hearing seniority. It's not something we would pay too much attention to. Eddie, is that fair? I'm sincerely with your No. I mean, given that in most of the markets that we've been in, we haven't executed any of the sort of base closures just yet. We're still in a review phase. And It doesn't really we haven't got into sort of the selection criteria, the material at all in terms of cost, given We have the service of the people that we have. So it's not material the way it would be in some mainline airlines or one of the legacy airlines where You have hundreds of people and you have stark differences between paying conditions between people who are there for 25 years and those joined in the last number of years. So I don't think it's that material. Okay. Thanks, Ashford. Next question, please. Thank you. And that was the last question in the queue. I'll hand back to Michael for the closing comments. Okay. Thank you for that. I mean, I thought it was useful this morning. We let the I want to let it run on as long as we cancel with each everybody has the opportunity to ask questions. Clearly, COVID will continue to be challenging. The message I would leave with you though is what the last 3 months or the morning's results demonstrate is we can manage these challenges. We are doing extraordinary work on the cost base, and it's not just labor across all elements of the cost base. We are working actively with Boeing to take delivery of the MAX aircrafts, which will and will transform the cost base going forward. These are aircraft with 4% more seats and 16% lower fuel burn, 40% lower emissions. So I think we will hate to have a very robust, flexible platform going forward. The COVID crisis will pass, whether it's in 6 months or 10 months or 12 months or 18 months, we don't know. But we will be one of the survivors and we will be by far and away the most flexible, lowest cost survivor coming out of it. And I believe when we do come out, We will rebound very strongly. But and the recovery will be in volume terms will be Rapid and dramatic because we'll it will be stimulated by much lower prices. How long pricing will take to recover is anybody's gift. I presume it will take 2 or 3 years. But when it does come, it will be strong. And I would hope that Ryanair by making the right decision this business takes now to reduce costs to be flexible, will rebound very strongly, and you'll That reflected hopefully in the next 3 or 4 years in a profit and share price recovery even if the next, I think 6 or 12 months are going to be grim and will remain challenging. But rest assured with the new team in place with the Group Airlines in place were doing everything we can to take advantage of this crisis and to position Ryanair for very strong growth once we recover from the crisis. Okay, everybody. Thank you very much for your time and attention this morning. As I said, if anybody has any follow-up questions, Neil and the team in Dublin, the Investor Day team are happy to take them. And if anybody wants an individual for the 1 on 1 call going forward over the next week or 2, will be happy to locate that as well. Thanks very much everybody. Thank you. Bye bye. This concludes the conference. Thank you all very much for attending. You may now disconnect your line.