Earnings Call: Q2 2019

Oct 22, 2018

Okay. Good morning, ladies and gentlemen. You're very welcome to the Ryanair Half Year Results podcast. We've had an interesting 6 months in which we've reported half loan profits have fallen by 7% to 1,200,000,000 Highlights of the half year include traffic growth of 6% to 77,000,000 passengers, a load factor of 96%. Average There's a fall of 3% to just under €46 Ancillary revenue, though, has grown strongly to 27%, up €1,300,000,000 up to €1,300,000,000 But our strong growth in axillary revenues has not been enough to offset higher costs in labor, fuel and EU261 payment. We've signed agreements with unions in Ireland, the U. K, Italy, Germany, and as recently as last week, Portugal and shortly, Spain. And we continue to make progress on that front. We've increased our Laudamotion holding to 75%. There's an agreement to take that to 100% at some stage over the next 2.5 years. In terms of growth, we've taken delivery of 23 new Boeing 737s in the half year. We've opened more than 100 new routes. And just as important, we've returned $540,000,000 to our shareholders by buybacks. Well, All of this is on our website. You can get the detail of our quarterly press release and the MD and A, and we'll take you now through the share of the presentation. Ryanair continues to be Europe's favorite airline. We have the lowest fare, lowest cost carrier. And through all the noise of the last 6 months, that is the message that we want to communicate. We remain and have a large price and a very large cost advantage over all of the European airlines. With that model, we continue to grow strongly. This year, we're now forecasting 141,000,000 guests. That includes about 3,000,000 Malibu ocean passengers, which is growth of 8%. We are number 1 for coverage, 37 countries, 92 basis. Yes, unionization and that process has added to cost and will add to complexity, but it doesn't or to the fundamental model, which is that Ryanair is by some considerable distance, the lowest cost airline in Europe and will continue to roll out sustained and profitable growth. Oil prices have added to costs. Airfares are falling this winter, but we believe that will speed up the consolidation process, and we've seen a number of failures recent weeks already. Added to that over the medium term is we are the next spring taking the first five of our Boeing MAX aircraft deliveries. These aircraft will arrive with 4% more seats, 16% lower fuel cost per seat and will drive unit cost efficiencies over the next 5 or 6 years. In terms of fares, we continue to reduce airfares in the half year, and our fares are significantly lower than every other airline. In terms of cost, I think it's important because some of this has been lost in the noise of the last 6 months. We continue to have by far and away the lowest unit cost of any airline And it's not just related to labor. In fact, with the 20% pay increase for pilots and pay increase for capital this year, our unit cost of labor has now higher than is for Wizz. Still significantly lower than Easyjet, mainly because we're operating a larger aircraft. But in other areas, airport and handling costs, we are One third part of our passenger base is what Easyjet are paying. And when it comes to aircraft ownership and maintenance costs, we are less than half of what Wizz for comparable traffic growth over the next 5 years. We continue to spread the model all over Europe. For summer 'nineteen, we recently announced our first two bases in France, in Marseille in Bordeaux. We'll open a new base in London at London South End next summer with a very low cost deal there that runs over a number of years. And we will take over the 4 aircraft base in Teigen, Berlin, Teigen and Germany from Laudamotion this winter, and we'll continue to grow that. That will give us 2 Berlin airports, Teigen and Schoelfeldt and help us to continue to sustain our number 2 position in the German market. As I said, we grew this year to 141,000,000 guests with a fleet of 455 aircraft. Our market share is number 1 and number 2 in most of the major EU Mark has said in almost all cases, it's growing strongly. Neil, do you want to take the half one results? Well, Michael, thank you. In the first half of the year, we saw our Yes. So traffic increased by 6% to just under 76,000,000 customers. Load factors were very strong at 96% year on year. Fair, however, as Mike has already said, It was down in the first half of the year. We saw a 3% reduction. Ancillaries, however, performed very well. This drove an 8% increase in total revenue to £4,800,000,000 As a result, our profit after tax, however, due to higher costs, higher fuel particularly kicking in, we're down 7% to 1,200,000,000 This excludes an exceptional one off loss in the automotive motion in the first half of the year. Michael? Well done. Current developments. So the key trend in our sector at the moment is all airlines across Europe are reporting much lower fares into the winter. There seems to be excess capacity growth, something about 8% this winter in European Shorthole. That's all sustainable and will lead to further casualties this winter. That process will be speeded up by significantly higher Oil prices up to $85 per barrel, steeply rising EU261 costs, mainly as a result of a litany of air traffic control strikes and staff shortages that have mainly that have been we have all airlines have suffered from in Europe this year. The stronger dollar and higher oil is accelerating airline failures in Europe. We're making very good progress on the union agreements. We have more to do, but we have made very significant progress over last 6 months, in particular, in recent weeks. Laudamotion will lose an exception of £150,000,000 this year, but it will move very close to breakeven, maybe a very small in year 2. I think the theme of our roadshow this year will be, yes, we're suffering some short term pain. The industry is going to show for short term pain this winter, But Ryanair is and will emerge the long term sector winner because of our low cost basis. Just to put the oil position in some comp, We are 90% hedged out to September 'nineteen, so 12 month hedges in place at about $68 per barrel. We have only 10% exposure to the spot market where oil is currently hovering somewhere close to $85 per barrel. We should look at some other competitors. Wynn, for example, is 60% exposure to the spot market over that 12 month period. And Norwegian, if they survive that long, will have 85% exposure to the oil spot market over that 12 month period. This is going to put enormous pressure on the cost base of those airlines. It will limit their ability to compete with Ryanair where we are already fully hedged, taking advantage of our strong balance sheet. And we are already seeing that process of consolidation accelerating. This is where facing into a very difficult winter. There is very strong capacity growth, as I said, up 8% in EU short haul with a stronger U. S. Dollar and higher oil. In recent weeks, we've seen the failure of Premera, a 20 aircraft operator based around Stanford in Scandinavia. Small Planet in Germany and Azur Air have also failed. Skyworks in Switzerland, VLM in Belgium has gone bust, Cello, a small U. K. Charter airline and lastly, Cobalt, a 6 aircraft Airbus operator in Cyprus, filed for bankruptcy. And underneath that, you're also seeing a lot of consolidation among the major the larger airlines. Norwegian has closed bases in Edinburgh and Belfast. Wizz has closed a base in Poland where they've been unable to compete with Ryanair. Lufthansa is closing its Dusseldorf base. Easyjet has cut 2 aircraft from its Oporto base in Portugal. And Ryanair has announced 2 base toasters: Bremen, a 2 aircraft base in Germany Eindhoven, a 4 aircraft base in Holland And we are reducing our Nederijn base in Germany from 5 to 2 aircraft this winter, mainly We're now expanding a Dooseldorf, which is quite close to Niederhein, and so we have too much exposure in that market. Can we rule out further cuts or closure this winter. No, we can't. If oil prices rise above $85 per barrel or if airfares fall by more steeply than the minus 2% we are forecasting this year, We would not rule out further base closures or further capacity trimming this winter. And I think that's a sensible position for us to adopt. We've made very significant progress with the union front. We now have pilot agreements in the UK, in Italy, in Ireland with both pilots and cabin crew. Last week, we signed our first agreement with the Portuguese pilot union, SPAC. And in Spain, we reached agreement with SEPLA in Spain We expect that agreement to be signed sometime over the next week or 2, which will mean we have almost all of the major pilot unions signed up to agreements with the exception now only of Germany. And we are in active dialogue with the German Pilot Union, German Pilot Union, BC and German capital unit in Verdi. We would hope to make progress with them over the coming weeks. But as you can see, there's more to be done. 90% of our pilots have already agreed to 20% pay increases this year in 2018. So money is not at the heart of these agreements. This is generally local law, local terms and conditions and other issues, seniority based transfers. And we have agreed in almost all countries to those terms and conditions. We continue to actively meet with the other unions. We are moving to local contracts. We're moving to local taxation in other EU countries with the benefit of our FIFO pilot rosters, local seniority list. And I think pilots and our cabin crew and their unions are beginning to appreciate the job security that Ryanair offers at a time when many other airlines are failing. Can we rule out further strikes this winter? No. We're not expecting them, but we certainly can't rule them out. We hope to avoid them in the interest of our customers. But if more if other people want to go on strike this winter, as we've demonstrated during 8 days so far this year, we can manage our way around strikes with very little disruption to our business. Now to Motion, our shareholder increased to 75% in August. Nicky and Lauda and his family continue to be a significant minority shareholder 25%. It's had a very difficult 1st year for reasons that have been well catalogued, late arrival of aircraft for Lufthansa, late release of seats into the market this summer. And so it will make an exceptional loss of about £150,000,000 in the 1st year. It is already announced its summer 'nineteen winter schedule, which will focus around 3 large bases: Vienna, Dusseldorf and Stuttgart. The fleet has been restructured. We are returning by agreement with Lufthansa the 9 expensive aircraft that Lufthansa had this year. We will replace those with currently 19 long term operating lease A320s in summer 2019, and we will supplement that with 4 of our own aircraft, which will see the Laudamotion fleet grow from 16 18 aircraft this year to 23 aircraft next year. That will be sufficient to see the airline grow from 3,000,000 to 5,000,000 passengers and reduced losses from £150,000,000 in year 1 to somewhere between breakeven and £30,000,000 loss in year 2. And the reason we're not so sure is just because we don't know what the outcome on fares will be, but we will have released the summer schedules for many of these big Germans in the Eastern Parliament of New York at 10 months before we get to summer 2019. And we expect that the advanced bookings will be strong and at materially higher yields than Lauda had this year. We're very happy with the management team in Lauda. They're doing a lot of the sets of the things that we would like to see done. They've redone deliveries, new interiors. They're improving the pilots and cabin crew pay deals. And we have the benefit in that emotion of an Austrian AOC, a very significant Vienna base and a huge assembly of very valuable slots at German airports and at Parliament of New York. Ryanair is and will continue to be the medium term, long term winner. The cost leadership in Ryanair, the gap between us and the others has widened. Yes, we've had higher labor costs this year, but so have all of our competitors. In many cases, they've conceded the pay increase is significantly higher than Ryanair without getting our productivity. We're about to start into a 5, 6 year period of Boeing MAX, 200 deliveries, 4% more seats, 16% lower fuel costs. And the key thing here is we bought these aircraft at very low prices. We've hedged the dollar At about €124,000,000 to the euro for the entire 6 years of the delivery period. So we've locked away these low costs from the Steel's unveiling over the coming years. Airport incentives continue to improve as competitors fail. And we would point to the deals we've done in Bordeaux, particularly London South End, which has been very advantageous. We're using the very strong Ryanair balance sheet to have exploit low cost financing for our aircraft, very strong hedge lines on fuel and on dollars, It helps us to continue to deliver strong profits, strong cash flows and shareholder returns. The pilot and cabin crew supply has also improved as competitors have failed. Premier, for example, released 400 crew and Cobalt last week released about 150 pilots and cabin crew to the market. And at the back of all of that, ancillary revenues, thanks to large efforts of labs and our digital teams are rising strongly. Ian, do you want to take guidance? I would, Mark, please. Traffic this year will Increased by 8% to 141,000,000, which includes 3,000,000 customers in Lava Motion this year. We expect fares, as Michael has already said in the presentation, to remain pressure. There's a lot of capacity in Europe that's going to hold at 8%. So we think our fares will drop by approximately 2%. Very limited visibility into Q4, there's no Easter. And we've seen some weaker pricing around it, just 2 weeks from this in October and Christmas. Ancillary, we believe we continue to perform strongly. We've had a very good performance in the first half of the year. The penetration of priority boarding will continue to improve over the back end of the year. However, there will be a bit of an offset for IFRS 15, The new revenue accounting standard, which will be unwinding in the second half of the year, having had a positive benefit in the first half. Our fuel bill will be up €460,000,000 this year. And our unit cost ex fuel, we believe, will be up about 6%, maybe a little bit higher depending on the final outcome of EU261. So as a result, our profit after tax guidance is unchanged from that issue to the market back on the 1st October in a range of €1,100,000,000 to €1,200,000,000 profit after tax in euro. That, of course, excludes exceptional 1st year Losses in that emotion of about €150,000,000 And to celebrate these exceptional results and the lower fare environment this winter, we're launching today a large seat sale, the 1,000,000 seats that we offer across all markets starting from $9.99 for travel in November, December, January February. We are going to lead fares down across Europe this winter. We're going to drive the down for our customers and also going to drive fares down for our competitors as well. It's never going to be a cheaper time to fly either with Ryanair across Europe this winter, Despite the fact that oil prices are rising, Ryanair shares are still falling, and we're growing strongly and profitably because we will be the medium term winner in all of this. Thank you. Thank you. Adrian Ferrer about 3 percent. Will this trend continue? Yes, I think it will. We've seen a lot of capacity coming into the market this winter, so about 8%. So we're guiding fares down at least 2 This winter, we've seen weaker bookings around the school midterms in October, early November and around Christmas. So we would anticipate that we're going to see more fair reductions over the course of the year. Do you expect more consolidation this winter? Yes. We think it's certainly particularly as Neil said, short haul capacity in Europe is up 8%, fares are falling, oil prices are rising steeply, $85 per barrel in recent weeks, we've seen the bankruptcy of Premera, the Skyworks small planet cobalt in Cyprus last week. And I think there will be more and larger failures this winter. Our focus would be on 1 of the 2 major Scandinavian airlines, both of whom are losing money and have a very weak oil hedge position. And we think one or other of those is probably the most likely candidate to fail this winter. Will you reduce capacity further this winter? It can't be ruled out. Ocean oil remains at or above $85 a barrel if there is room pressure, then it would probably be the sensible thing to do is take a look at capacity. How are the airports reacting to this environment? We're seeing longer, deeper, better incentives and over a longer term period. And I think you'll see that with the new basis that we've announced for summer 'nineteen and also some of the incremental growth that we're delivering in markets like Spain, Italy, Greece, Central Europe in particular, but also airports in Ireland and the U. K, who are very nervous about some of their incumbent carriers and are working hard with our new routes team to incentivize Ryanair to allocate more aircraft to their markets in 2019. Where are the growth opportunities for for 'twenty. There's always lots of growth opportunities for Ryanair, but some of the good examples into next summer would be our 2 new bases in France. We're opening based in Marseille and Bordeaux. We're getting into South End in London, one of the few London airports we don't currently fly to. We're increasing capacity in Luton. Dublin will see more aircraft capacity. And of course, Italy and Spain will continue to grow strongly for us. How is Ryanair Sun developing? It's growing very well and very profitably. We From its 1st year of operation, we've been allocated 5 aircraft to the Polish charter market. In year 2, we've already increased that by almost 50% to 7 or 8 aircraft for the charter market. The failure of or the cutbacks by small plants in Poland has meant there's been a reduction in charter capacity in the Polish market. And we're also using Ryanair Sun now. We're transferring some of our scheduled aircraft into Ryanair Sun this year. And by putting those on the Polish GOC. We can offer more advantageous terms to our pilots and cabin crew in Poland by taking advantage of some of the deals that were in place for LOT with its pilots and cabin crew in the Polish marketplace. Is there any update on the group structure and that's about the full year results in May? It's getting down very well. We have Ryanair, which we all know and love very well. Ryanair Sun, as Michael has said, has set it down really well in his first of operations and will expand into next year. Now, the Motion is now a fully owned subsidiary of the group, 75% shareholding in there. And of We have our 4th airline, Ryanair UK, with a UK AOC before Christmas. And so all of these airlines will help us manage our growth over the next few years and also Enable us to engage in any consolidation opportunities that fall our way. What is the latest on Laudamotion? As I covered in the presentation, Laudamotion has traded well this year, but The later release of the aircraft and the inventory to the marketplace, we've used about €150,000,000 in year 1. We've doubled the size of the Airbus fleet at much lower cost in year 2. We're hiring a lot of Airbus pilots and cabin crew who are coming to us from airline failures like Premera and Cobalt. And we expect subject to fairs, peak period fairs in summer 'nineteen, largely between Germany and Panama, that we will trade somewhere between excuse me, a loss of €30,000,000 of breakeven in year 2. Why did you do the Lender Motion deal? One of those things that came our way earlier on this year has a lot of very positives in it, including a very valuable slot portfolio in Hammond, Bjorka, in a number of German airports. And of course, it gets us into Austria, particularly Vienna where we hadn't operated before. It's got strong brand recognition and it's got the ability to grow strongly from next year and beyond. What happened with the lost housing We've now we've our motion has reached agreement with Lufthansa to return the 9 aircraft to Lufthansa this winter. And It has already reached agreement with a number of aircraft lessors to replace those aircraft and in fact expand the Airbus fleet to 18 aircraft for summer 2019. Ancillary is up 27 percent to €1,300,000,000 in H1. Will this strong performance continue? We're delivering strong performance in the first half, and we expect to see An increase in penetration in the likes of our priority boarding and reserve ceilings in the second half of the year. So ancillaries will have a good full year outcome. We're very pleased with the way it's going. We're also continuing to invest heavily in our website. We have a major upgrade on the way at the moment, which will help enhance our personalization for products to our guests and enable us to grow at 200,000,000 customers by March 2024. Next year's unit costs rose 7.5%. What are the drivers of this? It was a year of investment in Ryanair. We're starting to see the pilot pay increase. It's 20% pay increase is coming through, 90% of the pilots, but we already accepted that. That's in first half numbers. We're investing heavily in training costs for our pilots and cabin crew. We're ramping up our engineering headcount in advance, the MAX coming in next year. And unfortunately, we've seen an increase in EU261 compensation costs due to the high level of ATC Will these increased costs continue? I don't think so. I mean, there's still there will be continued to be some cost pressure on the labor line next here. But airport and handling costs will be flat to slightly down. Certainly, aircraft ownership costs over the next number of years as we take delivery of the MAX 200s will be at the unit level will improve. We can't gauge where EU261 costs will go because much of that will be driven ATC Spikes and Disruptions. And sadly, at this point in time, there's no indication that French or German ATC Services will be any better in summer 2019 than the lamentable performance that we have received in summer 2018. Have you increased your fuel hedging? Yes. We're well hedged. We're 90% hedged now for the next 12 months at about $68 a barrel, which is significantly lower and the high spot price is up towards $85 a barrel that we've seen recently. So we've got limited exposure now to spot prices for the rest of the year, in good position to relative edition. And when I look at our euro dollar off hedging for the next year FY 'twenty, we're hedged about 123, which compares favorably to 115 that we had in the current year. Could EU261 costs increase further in FY 'twenty? It's possible it's all driven by the lamentable performance of ATC providers, particularly Germany, Britain and France. Germany and Britain, where they tend to be short staffed, badly managed, particularly weekends. In France, where we had 11 weekends of strikes and disruptions at the Marseille ATC Center. That might be improved slightly if there are more airline failures this winter and therefore there's a reduction in capacity in Europe next summer. So it's a fluid situation, but at the moment, I would be generally pessimistic, both on ATC services and therefore on our eM26 loan costs into next year. When does the MAX delivery start? The first one in the spring of next year. So we're pleased to take 5 in. We've nicknamed this aircraft a game changer because it's the next step change in cost reductions for Ryanair. It's 16% more fuel efficient. It's got 4% extra seats, so we can spread our costs over 4% more customers while also driving our ancillary revenues over that higher number of passengers. So it's an aircraft that we're looking forward to. It's going to drive and widen our cost leadership over the next few years. Given the difficult trading environment, would you consider deferring some deliveries? No, I mean, these aircraft will lower our comps because it was a very difficult trading environment. I think what we would do is take the deliveries of the new MAX aircraft and return or ground some of our older 737NGs or return them off lease. We could trim the fleet that way, but no. Given that these have we have exceptional comps on these aircraft. We've hedged the dollar It is 4% more seasoned, 16% lower. Few will take as many and as much in it as we can. According to the media, Ryanair is right with strife. What has the impact been on customers? Well, they can't believe everything you read will take us. We've had a limited number of strike days over the summer period, and we've handled The operation is phenomenally well on the days of strikes with limited disruptions to our customers. We've operated over 90% of schedule in the impacted markets and reaccommodated the other 10% passengers on alternative flights. So minimal disruption to the operation. And it's important to put that in some context. We've got 8 days over this year, which is less strike days than Lufthansa have had in the last 2 years than the LEO France have had in the current year. And as Neil said, in any of those days, we continue to operate actually more than 95% of the total schedule across Europe. Have I brought the ATC structures in H1? Terrible. It has been the worst year on record for ATC Services. Our H1 performance, on time performance dropped from 86% to 75%. And on that 11 percentage point decline, 13 percentage points was accounted for by ATC strikes, delays and stock restrictions. Do you expect ATC subscription into next summer? Yes. I think it can't be ruled out. We've lobbied hard through airlines for Europe to try and get the which as George has addressed in the ATC before I just brought us here, but I think we're going to have issues into next year. Now we're seeing some capacity come out of the market, some Larger airlines might fall over this winter. That could help. But as things stand, it looks like it will roll into the next summer. How is union recognition progressing? I think we've made very significant progress in a short 9 month period. We've now reached agreements with pilots and cabin crew in Ireland, pilots and cabin crew in the UK, pilots in Carentoo in Italy. And last week, we announced our first agreements with pilots in signed agreement with pilots in Portugal. We've reached agreement with sector of the Spanish Pilots Union. We expect that agreement to be signed sometime in the next week or 2, which leaves us really only Germany and to, as I said, Belgium as the only 2 larger markets where we haven't now concluded agreements. We're in active dialogue with both the Belgium and the German unions, And we will be hopeful of concluding agreements with them this time of Christmas. But if it's not on the set of Christmas, then sometime after Christmas. But I think given the adverse environment that's out there, particularly for airlines and the number of job losses being reported in recent weeks by both pilots and cabin crew, There is a much more, I think, sensible, common sense approach being taken by the unions and also by us. We need to get these So we can focus on protecting the jobs of our pilots or our talent crew and hopefully avoiding any more base closures or base costs, although they can't be ruled out if oil prices continue to rise or fares continue to fall. When do you expect to conclude the negotiation? As Michael just said, we're making good progress at the moment, but I think it would be wrong to put an actual date on it. So we will continue to work through the issues with the unions and hopefully get there as soon as we can. Is there a risk of more strikes? There's a risk. We don't expect more strikes over the coming weeks, but they can't be moved out. It's not within our control. Positively with the unions, we get a sense that the unions are now working positively with us. And I hope you'll see us conclude agreements over the coming months. Is there any change to the €200,000,000 staff cost increase due to the CNA? No. That guidance It's holding 90% of our pilots already taking the pay increases. We're the best low cost payer in our bases across Europe. We offer very good rosters, 5 on, 4 off for the pilots, 5 3 for the cabin crew, great job security. So the negotiations are pretty much around local terms and conditions like local contracts, employment, local seniority lists, more transparency on holiday leave. As Michael said, we've been happy and been able to negotiate CLAs on the base of those TMCs. Would you lose productivity with the local and private contracts? No. We know auto is productivity at all. In actual fact, it's more of a myth. Largely, Irish labor legislation complies fully with EU regulations and standards, which are the same regulation standards that apply across almost all other in countries. There may be some small elements. In fact, in some cases, we've now had feedback both from the Italian cabin crew and from the Portuguese cabin crew that actually they prefer to stay on Irish social legislation, because maternity leave here in Ireland is longer and child benefits are higher than ours. But nevertheless, we've committed ourselves to moving to with contracts, local agreements, local taxation as quickly as we can in early 2019, subject only to reaching agreement with the unions. When is the next buyback? We just finished €750,000,000 buyback. There's a lot of uncertainty in the market at the moment around Brexit and what's going to happen. So I think it's wise to keep our powder dry for the moment. This is something that the Board keep on the review on an ongoing basis. In any event, We've returned over €6,000,000,000 to our shareholders since 2008 under our various distributions. So I have no doubt we'll have more in the future, but the timing is just We need to see what happens to Ryanair. Why has your net debt increased that period, Ed? Because we've gone through a 6 month period now where had enormous amount of CapEx. We spent over $800,000,000 in the half year, largely on aircraft CapEx. We spent almost over 500,000,000 on share buybacks during the half year, and profits are down 7% in the half year as well. Would you consider another aircraft order? We're always interested in cheap aircrafts if we get the right price. That said, we've got very good orders at the moment, 210 Max is on order. We're also we've lined up 19 aircraft on lease for Laudamotion. We understand that Boeing and Airbus' order books are at the moment, that could change very quickly if you see a number of airlines fall over in the next number of months. If the price is right, we look at it, but we're very happy with what we have at the moment. What is the latest update on Brexit? Nobody knows. But clearly, the risk of a hard no deal Brexit in March 2019 have risen appreciably in recent weeks months. In those circumstances, there is a some flights could be grounded. Certainly, flights operating from the U. K. To Europe could be grounded for a period of time in April 2019. We think on balance that's unlikely, but it can't be ruled out. In those circumstances, there is a hard no deal Brexit. The two key issues for us will be flight rights. We expect that the British will welcome flights from Europe. That won't be interrupted, but we are not sure that the Europeans will reciprocate. The other element is that we will move immediately in those circumstances to limit the ownership and control of non European shareholders. For a period of time until we ensure that we are 50.1 percent EU owned. We would expect that would take place in a short period months after April 2019 with those restrictions in place. Once we've restored 50.1 percent EU ownership, we will then release or remove or ease those restrictions on shareholder sales and on voting rights. Do you have contingency plans if Right. Your guidance after March 29th. We have a number of plans, much of the time on the aircraft and ground. If we're Talking a short number of days or weeks, then we'd probably leave the aircraft underground in the UK. However, we have talked to airports across Europe. Very hungry for Ryanair's growth, and they would love to see that accelerated in the event of a heartbreak. And so we've got lots of options out there. We also have our U. K. AOC, which will come online towards the back end of this year, which will secure the flying rights of the domestic U. K. Operation. What's your full year guidance for FY 'nineteen? Full year guidance, profit after tax at Ryanair will be in a range between $1,100,000,000 to $1,200,000,000 That excludes And as we said, Lalor Boucher is on track to make an exceptional €150,000,000 loss in the current year. We think that's driven by excess European capacity growth this winter, A weak pricing environment, we have no element of Easter in this year's Q4, whereas the first half of Easter was in last year's Q4. And therefore, we're guiding kind of second half of the year. Average fares will fall by about 2%. Fuel build will rise by over €460,000,000 Ex fuel unit cost for the full year will rise about 6%. That could be slightly higher depending on the EU261 payments over the winter period. There's excess weather disruptions. But ancillaries are performing strongly, Although H2 will be, as Neil has already alluded to, adversely impacted by the timing differences on IFRS 15 revenue recognition, which issue, which slightly inflated or had a positive effect on the consumer revenues we had in H1 and negative effect in H2. It's led motion in the FY 'nineteen guidance? No, it's not included in the guidance there that Michael just gave. So we're expecting an exceptional First year start up loss of about €150,000,000 due to unhedged fuel and low fares. Michael, Neil, thank you very much. Thank you very much.