Hello, and welcome to the Ryanair FY 2021 results conference call. Throughout the call, all participants will be in [listen-only] training, and afterwards there will be a question and answer session. During the Q&A, in the interest of time and fairness, please limit yourself to two questions per person. Just to remind you, this conference call is being recorded. Today, I'm pleased to present Michael O'Leary, Ryanair Group CEO. Please go ahead with your meeting.
Okay. Good morning, ladies and gentlemen. You are all very welcome to the FY 2021 results conference call. I am joined by the entire team here in Dublin, Neil Sorahan, our CFO, Eddie Wilson, the CEO, among others. We also have the other airline CEOs on the conference line. I am just about to go through the results. They have been up on the ryanair.com website this morning since about 6:00 A.M. They are there for you to read. Neil and myself have done an extensive Q&A, which is also on the website, I would encourage you all to have a look at that, which addresses most of the issues that would be of concern to you. I want to give you some brief commentary though on four key areas. The first is COVID developments, second balance sheet, third the Boeing aircraft order situation, fourth, the environmental ESG agenda.
Touching briefly on each of them. Obviously, the business has been hugely disrupted over the last 12 months by the COVID restrictions and lockdowns. Traffic was down 81%. We have been very pleased and impressed, I think, by the rate and scale of the COVID vaccine rollout program since the turn of the year, particularly in the U.K., which has led the way. Remarkably successful vaccine rollout. Up to 60% of the adult population already vaccinated, and it looks by the end of June, there'll be 80% of the U.K. population fully vaccinated. With the rest of Europe catching up, most of the major European countries are now saying at least 80% of their population will have one dose of the vaccine by the end of June. One dose gives between typically 75%-85% protection against COVID.
We expect there to be a rapid decline in COVID serious illnesses, morbidity, hospitalizations, et cetera. We've seen that in recent weeks, a rapid kind of unfolding of restrictions as vaccines begin to cover the high-risk groups. Most notably, the U.K., which has been leading that vaccine, has been to the fore in reducing restrictions, particularly as it begins to lead into travel. We have seen a very dramatic surge in bookings over the last six weeks. In the first week of April, for example, we took just under 500,000 bookings. Six weeks later, last week, in the second week of May, that had grown to 1.5 million bookings, and over the weekend bookings were again up about 50% on the previous weekend. Bookings are returning in very strong volumes.
It was led originally by the U.K. leisure booking to places like Portugal, Italy, Spain, and Greece. Portugal is now on the U.K.'s green list. Spain, Italy, and Greece are on the amber list, but I think people accept that they're coming. Not much of those bookings were into May, but very strong bookings into June, July, and August. It is the peak holiday period. Over this weekend, for example, there was particular strength into German leisure, Benelux leisure, Scandinavian outbound, and Eastern European beginning to move towards Greece and Italy as well. I think people are looking through the current short-term news.
There was a lot of kind of scare in the U.K. over the weekend about Indian variants, with everybody missing the guidance coming from Hancock the Secretary of Health, which is that the vaccines seem to be, at this point in time, effective against the Indian variants, just as they have been against the South African, the Brazilian, and the Kent variants as well. The underlying message here is that the vaccines seem to be effective against all known variants to date, people are looking beyond that and saying, "Well, it looks like it's going to be fine safe to travel in June, certainly by July and August," when the U.K. school holidays kick in at the end of June. They are booking, and they are booking in ever-increasing numbers. We think we're heading for a very strong recovery in bookings and volumes.
Pricing is lower than it would normally be at this time of year because we've only 20% of July, August, September pre-booked. At this time of year normally, we'd have between 50% and 60% pre-booked. We would happily accept lower pricing for a strong rebound in volumes. We've been keeping the aircraft, the pilots, the cabin crew current over the last year, in many cases flying empty aircraft just to keep the aircraft and crews current. We're very well prepared for a very strong recovery. We carried 1 million passengers in April. We think that will grow to about 1.6 million in May. June, at this point in time, it looks like it's heading for about 4 million, maybe a little bit more than that.
If we get to 4 million in June, I think we're looking very strongly at something like it could be anything between 7 million and 9 million in July, which would be about two-thirds of normal pre-COVID July/August volumes. We think that will grow into August and September, unless there's some very adverse development, either a fall over of vaccine deliveries or some variant that looks like it's resistant to the vaccines. All of the indications are that there's going to be stronger demand than usual for European holidays. Long haul is not going to recover this summer. People are not going to be going to Asia or Latin America on holidays, but families are going to be moving in very large volumes. Scandinavians, Germans, Benelux, U.K. to the beaches of Europe, I think through June, July, and August.
I think if we see that strong recovery, I think that we'll very rapidly see confidence being regained. I think we're looking at an environment around Europe where generally there will be vaccination on demand by September, October, if the schools go back. We think we're looking at maybe 90% of pre-COVID normal volumes for the second half of the year, the December quarter and the March quarter. Still uncertain as to what the yields will be, but I think firstly, we recover the volumes first, and then I think the yield recovery will track the volume recovery. The only market that's kind of slightly out of bed on that is Ireland, where we continue to suffer woeful mismanagement of both COVID and of the vaccination by the government. We still have a remarkably ineffective mandatory hotel quarantine.
We're the only country in Europe with a mandatory hotel quarantine. When they first introduced hotel quarantine here, they required the Israelis, who were 80% vaccinated last stage, to stay in hotels despite the fact that we've no direct flights to Israel. There's been various amendments to that, but it is monumentally ineffective. Having a mandatory hotel vaccination program in Ireland when you've an open border with the north of Ireland is a bit like requiring people to wear face masks but over their eyes instead of their mouths and noses. There have been some changes. We still require the U.K. arrivals. For example, if you fly into Ireland from the U.K., you have to quarantine at home for 14 days despite the fact that you're coming from a country with 66% vaccinations, yet you can drive across the border with the north of Ireland who have no vaccinations.
In fact, we'd probably welcome you in with open arms and a big hug. It is mindlessly stupid. It is completely ineffective. We already have about 20 cases of the Indian variant here in Ireland, despite having no flights from India. We never have had any flights from India. It's probably coming over the open border with Northern Ireland, but none of the minister for health or minister of transport have come up with a coherent policy. We are pushing hard for the lifting of these absolutely absurd and ineffective quarantine requirements. The hotel quarantine should be abandoned straight away because, at the moment, if you have to fly in today from France or Italy, you have to quarantine, but if you drive over the border to Holland or to Spain, you can fly in here with no hotel quarantine, which of course makes it completely redundant and ineffective.
That hasn't stopped the Irish government pursuing it, as they have pursued most redundant and ineffective policies to date. Thankfully, Ireland is a very small part of our overall marketplace, and therefore while Ireland, I think, will continue to lag the traffic and tourism and jobs recovery this summer, as long as we have a minister for transport who's incapable of coming up with a recovery plan. There's been one sitting on his desk since July of last year, and he still hasn't gotten around to reading it or implementing any of it. Ireland will lag, but thankfully, Ireland is a very small part of our overall business. Balance sheet remains very strong. We have been very successful, I think particularly the finance team here led by Neil Sorahan and Tracey, preserving cash over the last year.
It is remarkable that we've seen 80% of our business blown out of the water in the last 12 months but still finished the year with over EUR 3 billion in cash. We have a bond to repay at the end of June, which we have more than sufficient funds for. We also have the U.K. CCFF to repay by next March. Cash flows have dramatically reversed in recent weeks. We've now gone cash positive, having previously been cash negative, and we expect that that will continue through the summer as bookings and volumes continue. Nevertheless, we do see an opportunity there, and we've announced today that we're going to issue another bond hopefully in the next day or two capitalizing on the very favorable recovery story that I think is now apparent, but also on the very favorable financing rates and terms that are available out there.
We would use these funds for the repayment of the existing bonds and also to fund our CapEx and aircraft deliveries. That takes me on to the third theme I'd like to touch on, which has been the very disappointing performance of Boeing in delivering us our Gamechanger aircraft. As you will all be aware, the Gamechanger aircraft was delayed for some considerable period of time, almost two years. It was certified by both EASA and the FAA on the 6th of April last. We had expected then to take deliveries of six aircraft in April and eight in May. Sadly, I'm disappointed to report that eight weeks later, we still haven't seen the delivery of any aircraft. We think the management of Boeing in Seattle have been very complacent.
They have not managed the regulatory relationships with the FAA or EASA well, they certainly haven't managed the customer relationships well. We've been basically kept in the dark for the last eight weeks, constantly changing dates and broken promises about the first delivery. In fact, we had a delivery team with pilots and engineers over there four weeks ago and had to bring them home because Boeing, without any notice, changed the delivery dates by about two weeks. As small problems arise on the aircraft, when you say the electrical wiring, Boeing seem to pooh-pooh it to both the regulators and their customers. "This is not an issue. It's tiny.
We'll have it dealt with in a day or two." The regulators are rightly saying to Boeing, "No, we want to see the data, the detail." Delays which Boeing promised the customers would take a day or two are taking four, five, and six weeks to deliver. We've been very disappointed with that progress. We think Boeing, certainly the team on the ground in Seattle, need to get their act together. They need to treat the regulators with much more, I think, seriousness and address regulator concerns much more efficiently and effectively than they have done in the past. The flow of information to customers has been abysmal. Now, I would notably separate the Boeing management in Chicago, David Calhoun, Gregory D. Smith, who are continuing to do a stellar job in turning around Boeing.
They're being let down, I think, by a very disappointing performance by the team in Seattle who really do need to get their act together. I'm disappointed to say today, on the 17th of May, we still have no idea when the first of these aircraft will be delivered, despite a promise on the first week of May that they would be delivered on the 14th of May, and that has since moved back to the 26th of May. We have no idea whether we're going to get any aircraft in May. We previously said to Boeing we don't want to take aircraft in June because we're dealing with our own recovery and volumes. There's been radio silence from Boeing for about the last week. I think it's disappointing and unacceptable.
If they're treating the regulator with the same radio silence as they're treating customers, I'd be very worried about the delivery of these aircraft. I do believe these are short-term issues. I do believe they will be resolved. We are very confident there we will take delivery of about 60 of these new Gamechanger aircraft in time for summer of 2022. We need these aircraft. We are dizzy at the moment with the number of airports who are actively engaged in growth discussions with us. You'll have seen, I think it's telling in this morning's announcement, the cumulative we've announced eight new bases this summer and into this winter. Some very interesting capital cities, Stockholm, Arlanda, Zagreb in Croatia, Riga, the capital city of Latvia, as well as bases in Billund, Zadar, and we have three bases on the Greek islands as well.
There's enormous demand for these aircraft out there. I think one of the lasting legacies of the COVID-19 pandemic is that when Europe does recover into summer of 2022, there's going to be about 20% less short-haul capacity in the marketplace. Airports are beginning to realize they are going to suffer significant traffic declines, and that Ryanair is one of the airlines that will be taking delivery of 60 aircraft in the next 12 months that can fix some of these challenges. I think that's why we've also, I think much more significantly, been able to significantly extend growth incentive schemes with our bigger bases in Stansted out to 2028, Bergamo to 2028, and now Brussels Charleroi out to 2030.
Which locks away over a longer timeframe, very significant cost advantages over the competitor airports in Heathrow, for example, who as usual with that overcharging monopoly have introduced a customer departure tax of GBP 10 to make up their COVID losses. Never mind the fact that the Heathrow customers have suffered greater losses than Heathrow have. It does indicate the extent to which we will have a pricing advantage over those airlines in airports like Stansted and in Charleroi against Southampton, and Bergamo against Linate. We have very significant demand for new aircraft and for growth in the Italian airports, the Spanish airports, in the U.K., and in Central and Eastern Europe.
Sadly, the only market where we don't have any demand for capacity growth and new routes is Ireland, where again, we have a minister for transport who hasn't a clue as to what he's going to do about encouraging a recovery of traffic and tourism on and off an island on the periphery of Europe. Don't get me started on Ireland. That takes me to the last issue I just want to touch briefly on, and that is the extraordinary progress we've made in our environmental agenda, I think, in the last 12 months under our Director of Sustainability, Thomas Fowler. He may not be pretty, but he's very effective. The new aircraft order will significantly transform the way we grow and the way we grow by reducing our impact on the environment. These aircraft have 4% more seats.
They burn 16% less fuel, 40% lower noise emissions, and a significant reduction in CO2 emissions as well. We're making very significant progress on our already announced green agenda, going plastic free in the next five years. We're 80%. We're way ahead of our target for that. In the last 12 months, we've signed up for a partnership with Trinity College Dublin, a sustainable aviation research center, which we're investing EUR 1.5 million into that research over the next five years. We have become one of the lead members of the CNBC Global Environmental Forum. We have set an independent target for ourselves, a goal to achieve about 12.5% of our flights being powered by sustainable aviation fuels by 2030.
This is a more ambitious target than any other airline in Europe. We're also working with our friends and colleagues in A4E and with the European Commission to advance research and production of sustainable aviation fuel over that five-year period to get to zero carbon emissions by 2050. Also to continue to reduce our fuel consumption and make flying with Ryanair ever more greener than it was before. Every passenger switching to flying Ryanair from a legacy airline in Europe is already reducing their environmental impact by 50%. We are determined to continue to go faster, further with our ambitious environmental targets that will continue to make Ryanair Europe's greenest, cleanest airline. With those four themes, I'm going to ask Neil, is there anything in particular you want to raise on the finance results on the balance sheet, then we'll open up for Q&A.
Yeah. As I highlight, Michael, that I'm very pleased with the progress that we've made on cost long-term savings over the next number of years, particularly on the likes of the aircraft with Gamechangers coming in. We've locked in significant savings for at least the next decade, which will make us significantly more competitive than everybody else. I'm pleased with the deals that we're doing on the airports, particularly the long-term deals and more to be done on that front. Then of course the balance sheet in rude good shape. BBB rated, 85% of the fleet unencumbered at a conservative book value of EUR 7.3 billion and EUR 3.15 billion cash. As Michael alluded to, we've got a debt investor call following this call later this morning, and we would hope over the coming days to potentially tap the Eurobond market.
Okay. Thanks for that, Neil. Okay. Without further ado, let's open up for Q&A. As we said, everybody is confined to two questions, and we try and get them through as quickly as we can. We'll try and pass around some questions to the other team members here and the other CEOs as well.
Thank you. If you wish to ask an audio question, please press zero one on your telephone keypad. If you wish to withdraw from your question, please do so by pressing zero two to cancel. Once again, please press zero one on your telephone keypad if you wish to ask an audio question. There'll be a brief pause as we wait for questions to be registered. Our first question comes from Duane Pfennigwerth from Evercore. Please go ahead.
Hey. Good morning.
Hey Duane.
I wanted to ask you about any limitations you have on flexing back up. Obviously, the travel restrictions and demand pacing, this hasn't been an issue. How quickly could you restore capacity back to 100%? Are there any rate limiters on capacity restoration such as training or fleet maintenance?
Okay. A quick add- on. I'll ask Eddie for-- well, to just comment on the detail from Ryanair. The way we're running the schedule for the next, I'd say six months is essentially we have published about 80% of our normal pre-COVID schedule. We expect maybe to cut back rather than be trying to add up. We are publishing. We probably have a seat capacity out there of about 10 million seats through June, July, August, September. We're looking probably at raising it for October and November, into October and November. The expectation is we're probably cutting back then from that 80% to maybe 75%, 70%, 66%, 65%. At this stage, June, I think we will have to cut back more than that. June could be sort of between 40%-50% of normal.
July, August, September, I would be reasonably hopeful we get to 66%, 70%, maybe 75% at a push as long as there is no untoward development in the next number of weeks, and the restrictions continue to be lifted as vaccines are rolled out. Eddie, is there anything you want to add?
Yeah.
Give us an update where you're thinking?
Duane, the short answer is there aren't really any restrictions at all. If you look at last summer when we got back up to 60% fairly quickly, you've got the issue of pilots on average going out of check, say every 45 days. We've been able to keep 80% of those in check, and that means that the other 20% then just bleed into that. It's really 100% in check, but at any point in time, it's 20% out, but it's only for a period of a number of days. Pilots, no issue whatsoever in terms of scaling up to the levels that Michael talked about and beyond. The aircraft probably causes more problems to keep on the ground than actually keep in the air in terms of moving them around, and making sure that they're all current.
Engineering has done an outstanding job here in keeping all the aircraft current and amending procedures, et cetera. I don't see any issue with that. On the cabin crew side, we have over recruited on the cabin crew side because the workforce there in some markets where you've got people coming from different jurisdictions maybe in receipt of furlough and may not be ready for work. I think we've more than enough redundancy built into that. I don't see any limitations really. It'll be a hard job getting back up, but there are no black holes here or any gaps whatsoever. I suppose the only thing I'd add as well, Duane, is that our pilots are now trained as well for the MAXes for when they start to arrive in, no issues on that front either.
Okay. Thanks, Duane. Next question please.
Okay, thanks. I did have a follow-up if you have the time.
Of course. Yeah.
Sure. Sorry. Just on travel restrictions out of the U.K., can you reflect on what's been surprising so far and how you see them evolving in time for this summer?
I think the most surprising thing is that over the last six weeks, the customer base seems to be largely ignoring the travel restrictions in the short term and booking out in through the back end of June, July, August, September. People are moving ahead of the government restrictions. Just to explain that, the U.K. added Portugal to the green list two weeks ago. There's an expectation that Italy and Greece, which are on the amber list, will get added to the green list at the end of May. Spain is a little bit further behind, probably gets added to the green list around mid-June. Generally, we see a very strong recovery in bookings from U.K. leisure booking out across the Canaries, Balearics, Spain, Portugal, all the holiday destinations through the back end of June, July, and into August. With the U.K. school holidays.
Equal say again, there's less restrictions on people traveling, the Germans, the Scandinavians, the Benelux countries. They're certainly been on the move. Very strong bookings over the weekend. Everybody, I think, seems to be discounting the short-term restrictions. You know, there was an issue in the U.K. over the weekend about this Indian variant, and yet as part of, I guess, the 24-hour news cycle, they have to cover some bloody variant. The health secretary was out there over the weekend saying, "Look, all the evidence suggests that the vaccines are effective against the Indian variants as they have been against the South African, the Brazilian, and the Kent variants as well." People seem to be at, I think in my right, rightly, taking a view that by the end of June, 80% of European adults would have received the first dose vaccine.
The U.K. will be close to 80% fully vaccinated, and they're moving again. There will be very few restrictions. I think that's reasonably fair, as long as there's no untoward development in the next couple of weeks.
Okay. Thank you.
Thanks, Duane. Next question, please.
Our next question comes from Muneeba Kayani from Bank of America. Please go ahead.
Good morning. Can you talk about how we should be thinking about load factors for the July to September period? Would you keep capacity so that loads remain around 70%, or would you target a higher load? Secondly, just looking out a bit further, Europe is looking to kind of replace flights with trains on short-haul. We've seen that from France recently. How are you thinking about that in terms of demand for short-haul travel?
Okay, thank you. Two good questions there. Again, we will be load factor active, yield positive. Trying to make a reasonable judgment. To give you a flavor for that, I think, we clearly don't have enough capacity out there for May. It's likely that the May load factor will jump to, I think could be 74%, 75%. I think we are minded, though, and certainly Eddie, myself here, and DAC, we're likely minded across this, to have more capacity available in June. I would run the risk that the June load factor could fall to low 60s because we want to make sure we have as much capacity out there in June. We certainly won't run any capacity if we think we have a load factor of less than 60%.
It's very important to us that we encourage travel, particularly outbound travel in June, because that then will underpin a lot of what we do in July. I think we'll be trying to aim for 70% + load factors through July, August, and September. Again, going back to the previous answer to Duane, we'll have maybe 80% of normal capacity out there and be trying to cut back four or six weeks in advance. I think the likely load factor evolution is May, low 70%. June, it could fall, but because we're over-stimulating with capacity, and I would take a hit on yield as well into June, in the interest of driving as great a volume recovery into July, August, and September, which are the three key travel months for the year for us. I really wouldn't worry about Europe.
This idea of transiting short-haul onto trains is just another hidden state aid to the legacy carriers. The French are designing this madcap scheme where all short-haul flights will be banned. Unless, of course, you're connecting through Charles de Gaulle, which, of course, you can then do a short-haul flight. The only people who'll be hooking through Charles de Gaulle will be Air France passengers. All it will mean is that Air France will now have a monopoly of short-haul travel connections through Paris. French passengers or connecting passengers will be screwed for even higher airfares by an airline group receiving the second-largest quantum of state aid subsidies from the French and Dutch government. Trains are not competitive with low-fare air travel on anything over 2.5 hours. A lot of what we do is overseas as well.
We're talking, you don't get to the Canaries, the Balearics. You can't get on and off the island of the U.K. or Ireland really on a train. Okay, you have the Channel Tunnel. That's very expensive and really only facilitates travel to Paris and Brussels. The growth that we're looking at out in Europe, I think in the next five years, though, which is fundamentally underpinned by, I think, about a 20% reduction in short-haul capacity, the bankruptcy of Thomas Cook, effective closure of Norwegian as a pan-European airline. It's now a domestic Norwegian operation. Flybe have disappeared. I mean, Flybe alone was 8 million seats a year. These are very, very substantial cutbacks. Alitalia reduced the fleet by 30%. TAP reduced the fleet by 25%. That capacity is not coming back.
Well, it is coming back, but it's going to come back on Ryanair Gamechanger aircraft. We are adding new bases and more frequent new routes in Italy, in Spain, and in Portugal. We're pushing the Portuguese government hard to open Montijo Airport, which is the secondary airport for Lisbon. Really, we don't see trains. I can't think of any routes we operate. The only those markets where trains are really a feature is London-Paris, London-Brussels, and Madrid-Barcelona, and Milan-Rome, and we don't fly on any of those routes.
Thank you.
Thank you very much. Next question, please. Next question, please. Hello? Moderator?
Comes from James from BNP Paribas. Please go ahead.
Oh, yeah. Good morning. First of all, the first question is on the Boeing compensation. I assume there's a very nervous relationship manager today. I was just wondering if your Q4 2021 included any cash compensation. I think you said at your Q3 results it might, maybe just a quantification if you could. The second one is for, I would regard as incredibly handsome Thomas Fowler. I was just wondering if there are any near-term headwinds on environmental taxes coming in by country, i.e., in the next few months. On the flip side, any positives for maybe better air traffic management regulations during the next 12 months? Thank you.
Okay. Just on Boeing, clearly, I think the relationship is somewhat frayed at the moment, but until Boeing starts delivering these aircraft. The difficulty we have is, I wrote to Boeing in Seattle 10 days ago and said, "Can you give me an update before we do our full-year results on deliveries, where we are?" I haven't had a reply 10 days later. They know I'm coming out today with full-year results, but the only reason I can't give you an update is because despite being Boeing's largest customer in Europe, we can't even get them to reply to a letter even over a period of 10 days. Now, it's frustrating. I think it's short-term, but if they're dealing with the regulator, and I think that seems to be a kind of a somewhat complacent attitude to the regulator as well.
I don't think the FAA appreciates being kind of fobbed off with a "Nothing to see here." They just need to get their act together in Seattle. These are still builders of great aircraft. The Gamechanger is a phenomenal aircraft. We have a very good relationship, and I think Boeing have done terrific work at the group level. I think Dave Calhoun and Greg Smith have transformed that company. Having good leadership is one thing, but you need delivery on the ground in Seattle if you're really going to start delivering these aircraft. I think addressing the concerns of regulators. The regulators are rightly nervous about what's coming out of Seattle, and they want all the I's dotted and T's crossed. We, as a customer, want to see that as well. We have received some additional compensation from Boeing for these delays in Q4.
Clearly not going to divulge the figure, but it's not a meaningful or substantive number, because most of our focus in our recent discussion with Boeing has been on getting the aircraft delivered, advancing our discussions on a MAX 10 order. Both the deliveries and discussion on a MAX 10 order have been hijacked by these unexplained and continuing delays in delivering the Gamechanger aircraft to us. We had hoped to have four to use in this summer, and now we don't know if we'll have any. Environmental taxes, I think is a risk. I'll ask Thomas to give you his own views, but I think it's less a risk in the near term, next year or two. If you look at the kind of financial damage that's been done to the balance sheets, particularly of the flag carrier airlines around Europe.
Lufthansa , Air France, Alitalia, TAP, SAS, they're all essentially bankrupt. They would be insolvent without EUR 30 billion of crack cocaine state aid doping. I'm not sure they're in a position to be paying much by way of environmental taxes. It is clearly on the agenda, I think, over the medium term. We think we're very well-positioned with the Gamechanger aircraft coming with our environmental commitments. We are by some considerable distance leading the pack in Europe, but we won't be immune from environmental taxes. I think the risk is less in the short to near term year or two, but more going forward. I think one of the things we've been calling for, there's the kind of remarkable schizophrenia with environmental taxes in Europe at the moment where they're only taxing the intra-European travel and all the travel to and from Europe is tax-exempt.
Despite the fact that the long haul commits to about 50% of Europe's emissions, none of it's paying any taxes because the Europeans can't get agreement from the Americans, the Russians, the Indians, or anybody else on ETS or these environmental taxes. I think we're in favor of aviation paying its fair share, but it's quite clear that that can't be just lumped onto short-haul European aviation. The Dutch, for example, are exempting connecting traffic through Schiphol, which means basically KLM are paying no environmental taxes, but all of the short-haul competitors in and out of Holland are paying ETS. It's manifestly discriminatory and unfair. It's giving a holiday or a relief to the most inefficient, most polluting airlines and penalizing the most efficient, which is the short-haul airlines. Thomas, anything else you want to add other than Europe?
The only big change is obviously the UK ETS scheme now standing alone. There should be no material impact financially because it gets the same. It's just the flights fall out of scope of ETS and into UK ETS. France is talking about a blend ing mandate at 1.5% from January 2021 on SAF. That's the only near-term stuff I see. Most of the rest is more medium-term.
What's our approach to, say, the U.K. announces that aviation will now be included in the U.K.'s overall emissions? What impact does that have for our business?
The impact would be obviously if they put in a blend ing mandate or any taxes, that there is still a risk to us. Us announcing our 12.5% goal on SAF should be well above any mandate that the U.K. brings in. Again, we will work on that over the next 12 months or so. The U.K., as they roll out, it is not due to come into law till the end of June. We will have a better idea then on the implications.
Okay. Thanks, Thomas. Next question, please.
Our next question comes from Sathish Sivakumar from Citigroup. Please go ahead.
Yeah. Thanks, Michael and Neil. I have two questions. Firstly, on the unit cost. With this new aircraft, the delta from 737NG, how should one think about the unit cost in, say, FY 2022 and 2023 versus FY 2020. Then the second one, just more around the booking comments that you made over the last six weeks. Have you started to see any early indication towards extended summer, i.e., booking towards October versus the normal scale?
Okay. Just on these, I'm going to ask Tracey, our CFO, to deal with the unit cost one, and I'm going to ask Eddie Wilson to talk about the booking curves. Didn't quite hear the end of the second half of that question, but I think Eddie did. Okay, Tracey.
Just on unit cost, we will see a modest increase in FY 2022 compared to FY 2020. We have to remember, I think where we start to see the benefit to the cost as we return to fully utilized aircraft and return to normal load factors. I think that's important to take into account. We continue to monitor costs that are within our control. There will be things like EUROCONTROL where there'll be significant increases maybe over the next coming years because of under-recovery of costs over the last two years. Again, staff costs, airport costs, and aircraft and ownership, we will see decreases in.
I think there's a push coming from Europe at the monopoly. EUROCONTROL, some of the monopoly state-owned airports where they say, "Oh, we have our Heathrow. We have our COVID losses for last year." The airlines and cost passengers have to pick up those losses as well as paying for next year's costs. There is going to be a kind of a battle there on EUROCONTROL and some airport charges. Of all the controllable ones we have, aircraft, the larger airport deals we've done, unit cost will fall. Eddie, the question on the booking curve, anything you're seeing in the last six weeks?
What we have done is we've been particularly on the booking curves first, they're much shorter than they have been in terms of reacting to the sort of news flow, the lifting of restrictions. Which you can definitely see now over the last five to six weeks that people, on the basis of what they see themselves in terms of vaccination levels and the news flow on mortality rates and hospitalization, are beginning to book further out. What we have been very reactive on is that in terms of extending the summer and putting capacity where demand is. We've made big adjustments in, say, the Spanish domestic market. Even more adjustments in the Italian domestic market. We've opened three bases in Greek islands to take account of what I think most people believe is going to be an opening up there as well, particularly from the U.K.
We've been very agile on the ground. We believe there's going to be an extended summer, and we're well-positioned for that, and we've reacted to date. We at least have the ability here of flexibility with our crews and aircraft to do that in the widest amount of bases that are out there. We are particularly well-positioned for that.
Any response coming from the opening of bases in Billund.
I think it's sort of instructive while we are doing good base deals in terms of costs and long-term fixing of costs. We did have prior to this, I suppose, sort of Mexican standoff with a lot of airport thinking that everything is just going to bounce back. When they see things like Arlanda Billund to a lesser extent.
Zagreb.
Riga. I've done it in Scandinavia now. We've had some major airports up there like Copenhagen ringing us the next day and saying, "When are we opening in Copenhagen?" We've already got 2 million passengers in Copenhagen. Copenhagen is a good example where they have their largest customer is getting smaller with SAS, and has been bailed out. You've got Norwegian who are trying to make their way out of bankruptcy with a fraction of the capacity that they had previously. We're really the only show in town. I think you can see that places like Arlanda has got some of the major airports in that neck of the woods to wake up to the fact. The same thing happened in Zagreb as well, where we'd never been there previously.
You've got airports that realize that if they don't get someone like Ryanair now and secure that capacity, that they're going to be left out in the cold. Every airport deal that we do makes the next one easier. It is taking, as Tracey says, it's taking longer for that to flow in, particularly on the airport side because you have some airports that are still raising costs and you have the ATC providers increasing costs as well. In the medium to long term, it's only going one way. The exchange for capacity is that airport costs are going to go down.
Okay. Next question, please.
Our next question comes from Jarrod Castle from UBS. Please go ahead.
Jarrod, hi.
Hi. Good morning, everyone. Just exploring the 200 million passengers. Bulk of deliveries would happen before 2026. Could you get there before kind of 2026, Michael? I guess related, where you see extra unit costs? Just secondly, just thinking about the summer, can the airports actually cope with, let's say, 70%-80% of volume if that comes through at the moment? I know you've got a very different network to most, but certainly it looks like some large primary airports with de minimis volumes are struggling at the moment even to cope given queuing time and everything. Thanks.
Two good questions. Yeah, there's a possibility we could get 200 million passengers earlier than 2026. If it's the back end of 2024 or 2025, I don't think it's that kind of significant a number at this point in time. The critical thing here is to recover the 150 million a year we had pre-COVID. I think we will be very strongly into that number. As long as there is no disruption to the vaccine rollout, and we are pretty much vaccinated across North America and Europe by September, October this year, then we think we will be back to pre-COVID numbers through calendar 2022 into our FY 2023. I would be very disappointed if we're not doing north of 150 million in FY 2023, particularly with demand as he's identified from new bases, new airports. 200 million, 2024, 2025, 2026, we could get there earlier.
I think there will be strong demand. I think what really is yet to be felt, particularly by a number of airports, is how much capacity has actually been taken out of the system in Europe. You're going to see significant under capacity in Germany, in Poland, in Italy, in Spain, in the U.K. domestics with Flybe having disappeared. Some of that will have to be replaced. Can the airports cope? Yes. I think the answer to that is, can they cope with 80% of pre-COVID volumes? It depends on the airport. If you're a large connecting airport, the Heathrow, Charles de Gaulle, Schiphol, and Frankfurt Main, I don't think they can. I think they'll be giving Remember, the long haul is not going to recover very quickly, certainly not in the summer of 2021. There's going to be the real risk here is arrival delays.
I don't think you're going to see much by way of departure delays, but arrival delays, documentation, particularly with British arrivals arriving in no longer a part of the E.U. in the non-E.U. queues. Demand for vaccination evidence or negative PCR evidence, a lot of that on arrival, is going to be difficult. If you're a short haul point-to-point airline, really, arrival is not our problem. We'll be still getting people out on departure. If you look at our airports, I think they'll be able to spool, I mean, if we're talking about 10%-15% of normal capacity in May, getting to 25%-30% normal capacity in June, 60% in July, and then hopefully maybe a bit more, 70%-75% through August, September, October. Most of our airports, and I'm thinking Dublin, Stansted, Charleroi, Bergamo, they will spool back up very readily.
The tourism airports in Portugal, Spain, where largely a lot of that would be inbound traffic through June and July. I think you'll see those spool back up very quickly. They do have large infrastructure there, and they're not dependent on a lot of connecting traffic. I think the real problem area will be connectivity and connections across hub airports, but thankfully, we operate none of that traffic, and we operate very few of those airports.
Great. Thanks very much.
Thanks, Jarrod. Next question, please.
Our next question comes from Savanthi Syth from Raymond James. Please go ahead.
Hey, good morning.
Savanthi hi.
Hey. I realize only 20% bookings for July through September, but I wonder if you could share the fare that you're seeing for that time period, just how it compares versus pre-crisis, just from a magnitude standpoint? Regarding the kind of aircraft for the next few years. You're getting 50 to 60 per year, how many do you expect on a net basis to grow over the next few years generally? Along those lines, I wonder what you're seeing from a kind of used 737NG pricing these days? We've heard on the A320 side, it's maybe 20 to 30 below pre-crisis aircraft pricing, wonder if the NGs are holding up better. Thank you.
Okay. Thank you. I'm going to ask Neil to touch on the 737NG pricing. Fares are lower than they were pre-crisis, but pre-crisis, we'd be talking to you the first week of May. We'd have 50% of the bookings in for June, July, August, that high fare. We are lower, materially lower than that at the moment, but building very strongly. I would expect fares to be lower through the summer of 2021. I would expect it to strongly recover through the winter of 2021 and summer of 2022 towards pre-COVID levels. We're driven first by let's repair the volumes first, and we worry about the pricing after that. Repair volumes first, pricing will follow. Net aircraft, Neil. We're adding 60 aircraft. We would still be taking out 10 or 12 aircraft a year.
Yeah. I mean, the plan at the moment is that we take out the balance of the leased aircraft, which includes the C229, A320s, and then we'll opportunistically sell some aircraft over that period of time in probably shifts of five to 10 aircraft at a time. Can't give you the exact fit by year yet, Savi, because we will be somewhat opportunistic. The A320s start to go out from the winter of 2022, and they'll be gone over a kind of four to five-year period out of the lease. On the 737NG, the 737NG pricing is holding up relatively well. The NGs are still seen as the replacement for the 400s for cargo conversion. The A320 doesn't really convert very well over to cargo. We're still seeing interest and demand in getting access to our kind of 15-year-old plus 737NG for cargo conversion.
We'll be interested in disposing some of those aircraft over the next couple of years into that.
Thanks, Neil. Thanks, Savi. Next question, please.
Thank you. Our next question comes from Jaime Rowbotham from Deutsche Bank. Please go ahead.
Jaime, hi.
Hi, guys. Just one from me. I just wanted your thoughts on the cost of these carbon offsets and the EU ETS. I think pre-crisis, you were spending about EUR 150 million on these when the price was around EUR 25 a ton. Price has since more than doubled to around EUR 56 a ton now. Obviously, appreciate the 737 MAXes will bring down emissions per passenger, and obviously you'll be delighted to have enough passengers for this to become a problem again. I think the free allowance.
of these is eroding at around 2% per annum. Without a sudden fall in the price of the carbon credits, looks to me like this line item could be almost doubling from pre-crisis levels towards EUR 300 million. Is that fair? Is there much you can do near-term other than hedging to avoid an even greater headwind if the price keeps rising? Thanks.
Okay. Well, the key thing there, Jaime, is that near-term, we already have this covered. We're sitting on surplus credits that we didn't use in FY 2021. We're effectively covered for FY 2021 and some coverage in place into FY 2023. We would have locked those away at levels under EUR 25 an EUA. I agree with you, post that period, we would anticipate that the cost will go up, and that's something that we will manage through our hedging program over the next 12 to 18 months. No short-term concerns at the moment.
Thomas, do you want to add anything on the cover of it?
Look, obviously, Jaime, the big part is CORSIA is out there now, and we just need to understand how CORSIA and ETS work together from 2024 onwards. That's still up in the air, given the legislation's only gone through. Keep in mind that near term, we're covered. We're covered for the next year or so anyway on the cost. On the upside, clearly there's far fewer ATC delays, rerouting, and that's lower fuel burn. Not insignificant either, massive savings the next 12 months on EU261 cost pre-COVID too, because punctuality at the moment, admittedly within much lower operations, is running at 95% on an ongoing basis. Next question, please. Thanks, Jaime.
Our next question comes from Carolina Dores from Morgan Stanley. Please go ahead.
Hi, good morning. Two for me. First, Michael, you mentioned in the Q&A that CapEx for the second half of this year should be around EUR 1.2 billion-EUR 1.3 billion, and then peaks at EUR 2.3 billion-EUR 2.5 billion by FY 2023 with your current assumption of delivery. How should we think about net CapEx? Is there still going to be some inflow from compensation through the year, or does that stop once you start receiving the MAXes? My second question is longer-term. How should we think about the blending of the sustainable aviation fuel? Is that something that we should readily start adding 1%, 2%, 3%, 4% blending to the fuel, or should we get 15% in one go? If that requires any upgrade on engine.
I'll ask Neil, Tracey, you read the first half, which is the CapEx question, and Thomas maybe will address the second with blending of the SAF. Carolina, the net CapEx will very much depend on whether we sell aircraft or not and when we sell those aircraft. As regards supplier compensation, when the aircraft are coming back into the fleet, then there will be no more supplier compensations. As we said on the pre-record, we've agreed fair compensation in relation to the delays. That's pretty much true at this point in time. The best steer we can give you is as we did on the pre-record, gross CapEx, including maintenance, somewhere between EUR 1.2 billion and EUR 1.3 billion for FY 2022.
Depending on the delivery profile, peak CapEx in FY 2023, FY 2024, which would be in the region of EUR 2.3 billion, EUR 2.4 billion per annum before it starts to drop back. Tracey, anything on that?
No, just what he said. Through 95%, we'll see if we can do better on the aircraft.
Okay. Thomas, the blending of the SAF.
On the SAF blend mandate, Carolina, I think over the next 12 or 24 months, we have ongoing work doing the research for Trinity first. Any SAF that we uptake will be from regulatory. The regulatory side of things I mentioned France may be 1.5% next year. Beyond the next 24 months, we may look at uptaking a couple of % each year as we see an increase in production of SAF. We would stress too that we would be better positioned than almost any other airline in Europe in this. To the extent that we do have the blending mandate, the SAF blending mandate, we will be ahead of the rest of the competition. It will widen the cost gap between us and most other EU airlines.
Thanks, Carolina. Next question, please.
Our next question comes from Hunter Keay from Wolfe Research. Please go ahead.
Hunter.
Hi.
Thank you. Good morning. Hi. Michael, you talked about the unauthorized agents passing bookings. What percentage of your volume comes through these unauthorized agents, both before COVID and now?
Is there a second part to that?
Just kind of curious what percentage of your bookings or your volumes is being processed through?
It's very difficult precisely. We saw, I think, by last gauge, but we saw that pre-COVID, they were running at something like between 10%. I think they're learning out of COVID, they were running higher than that. Some of them are quite sophisticated. We used to look at anybody coming from multiple bookings from one PNR source, so that's an OTA. Some of them are more sophisticated. They're able to give us multiple sources, different multiple ID codes. We think it's higher now. We think it's probably in the run into COVID about 20%, and they have been a real pain in the ass in terms of disrupting our customer service. With most of our customers who were disrupted, we were able to get vouchers, refunds out to customers pretty seamlessly.
We have had a huge problem with a very small core of customers who have made them unbeknownst themselves.
Having made a booking through a kind of unauthorized screen scraper, where we have a fake customer contact detail, a fake customer email, and a fake payment detail, like virtual credit cards introduced by the OTA. They have been a real pain in the arse. It illustrates, re-emphasizes in our mind, the extent to which regulators have failed to tackle these OTAs. The CAA has done nothing about them. The Spanish regulators have done nothing about them. To me, it seems to be just computer fraud, but again, the regulators won't tackle the issue. We are doing as much as we can to encourage customers to book directly with us for two reasons. One, you won't get scammed for a kind of a hidden add-on or a hidden fee by these OTAs.
Two, if there's a disruption or we need to communicate with you get the email or the text message directly from us. We have sent out millions of emails and text messages over the last 12 months that have finished up in some kind of OTA box and never gone any further. Customers complaining that they haven't heard from Ryanair. Well, you haven't heard from us because we only have a fake contact detail from you. I really can't understand why the European Commission and regulators will not tackle this issue where you have people inserting themselves into the transaction between the consumer and the airline, overcharging the consumer, misquoting them for higher fares than actually we're charging, and then scamming us with fake payment details and fake customer contact details. It continues. Eddie, anything you want to add?
Yeah.
Those sort of reasonable 10-
I mean, pre-COVID, I don't think people even understood what an OTA meant. I think consumers now know that there's no contact with the airlines, they're being disrupted. We've got increasingly sophisticated from the labs side in terms of identifying these bookings beforehand. There'll always be a cat and mouse game on this, but as well as that, we brought in a sort of a price checker on the front page now of our website so that people can check how much. Put in your PNR number and you can see how much your fare was and what the OTA is charging you. We've got a verified seal as well so that people can see that they're booking directly with us. I think the tide has changed. You see On the Beach there recently, people have decided not to sell any holidays this summer as well.
I think that's sort of indicative of the fact that they just don't have the background or a lot of these OTAs do not have the sort of back office to deal with this, the disruption that came from COVID. I think we are winning the battle. I think consumers now want to get value and want to be in contact with the airline. I think we're in a good place on that.
Okay. Time for the next question, please.
Our next question comes from Mark Simpson from Goodbody.
Mark, you can go ahead.
Morning, guys. Two questions. First off, you mentioned, Michael, that you're obviously able to take MAX 8 in June. I'm just wondering with that target for 60 by summer 2022, how you intend or would like to phase the MAX 8 deliveries over the next 12 months? Second question, one for Neil. Obviously, you got your bond call later this morning. I don't know if there's an indication of size. In terms of liquidity, I felt that the September 2025, EUR 850 million Eurobond was actually the back-to-back financing for paying off the one in June. Given the fact your next big commitment to the CCFF in March 2022, is there a kind of implicit you want EUR 3 billion of liquidity as some form of benchmark? It just seems you didn't necessarily have to go to the markets now with this bond call.
Okay. Thanks, Mark. Just touch on the MAX 8. The original phasing was we were supposed to get 14. Originally we expected 25 in advance of summer 2021. Because of the successive delivery delays, that was cut back to 14. We're not sure if we get any before the end of May. We're reluctant to take aircraft in June. We're getting back basically flying ourselves. We don't want to have lots of pilots and engineers stuck out in Seattle waiting for aircraft deliveries. It's something we will review with the Boeing team once we hear from them or we get some white smoke on the first of these deliveries. We would like to get some of those aircraft in during the summer to get pilots, cabin crew, customers used to flying on them before we get to next winter.
We have a program of 55 deliveries next winter from September through until April. I see no reason. These are small and irritating delays that have moved from middle of April to the end of May. They will get resolved. I think we will see some deliveries off the Gamechangers this side of the summer. That I think will phase the way. A lot of these aircraft, I think there's 30 or 40 of these aircraft already built. Boeing are ready and capable to deliver them. I see no reason we won't get 60 aircraft for the summer of 2022, and we would expect to have all those delivered before the end of April. We're not taking deliveries in May and June of summer 2022. Neil Sorahan, on the bond?
Yeah, Mark, you're right. We are very liquid, very strong balance sheet at the end of the year, and we've been somewhat opportunistic. We don't need to go to the market, as you said, but the best time to take money is when it's available and when it's cheap. There is a lot of liquidity chasing yield at this point in time. We feel now as we start to get ready to ramp up for deliveries, particularly in the second half of this year and into next year, that a five-year bond benchmark size makes a lot of sense. The maturity profile fits in well, and demand is there. Yeah, we're being somewhat opportunistic in our timing.
I think particularly market demand into what appears to be a strong post-COVID recovery. Fortuitous time, I think, to go to the bond market. Just touch on the longer-term issue. We have net debt of about EUR 2 billion at the end of the year. Historically, we have tried to run the business as kind of zero net debt. Very much the objective of the group in the next year or two will be to repair the balance sheet, to repay debt, and to return, allowing even for an ambitious CapEx program, I want to get back to a zero net debt position in the next two to three years. Anybody looking for share buybacks or dividends, you'll have to wait. The balance sheet repair will be front and center of everything we do in that post-COVID recovery period, absent only CapEx.
With the new deal we've done with Boeing on the Gamechanger, we increased the order size pre-Christmas, in response to a modest further discount for Boeing. These are exceptionally keenly priced aircraft that I think will transform our unit cost base for not just five years, the next decade in Europe. Will considerably widen the cost gap between us and every other airline in Europe, most of whom are taking much more expensive Boeing aircraft, or sorry, Airbus aircraft.
That's great. Thanks. Appreciate it.
Next question, please.
Our next question comes from Alex Paterson from Peel Hunt. Please go ahead.
Alex.
Morning, everybody. You mentioned earlier that you expect Ireland to lag in terms of recovery, but are there any other major markets you think won't be on the green list or similar by the end of June? Secondly, just on the carbon credits, I think you're going to have a surplus this year. Do you sell those or can you roll them over into subsequent years? Thank you.
Thomas, do you want to take carbon credits and then I'll do my Ireland?
On the carbon credits, no, we can hold onto them. We don't need to sell them. That's obviously given where the price has gone, Alex, we'll be holding onto them and using them for exposure over the next 12-24 months.
On Ireland, while it's a small part of our market, we live here. We are, I think, deeply frustrated at the failure of the government to set out a plan for recovery of aviation. It's not just confined to us. Aer Lingus have now moved a significant portion of their fleet to Manchester. They're talking about we're now selling transatlantic and long-haul flights out of Manchester that should be operating from Dublin. We've closed the Cork base. Remarkably, we would like to reopen the Cork base this summer, they're going to close the bloody runway down there for two months or three months in the autumn of this year to do runway repairs. Why they didn't do it in the last six months while nobody was flying is beyond us.
There's a very active aviation community in Ireland, very active, and I think a lot of good work being done by the National Aviation Council that consists of the airports, the airlines, and leasing companies. We put on Eamon Ryan's desk last July, the Minister for Transport, a recovery strategy consisting of airport incentives, removal of taxes, and we've heard nothing back from him. He has been lamentably bad at coming up with a recovery strategy for Irish aviation, at a time when we're still running this bizarre airport quarantine. We have this airport quarantine system that requires you to stay in a hotel at the airport if you come in from 25 European countries.
Over the weekend, you'll be delighted to hear that they released arrivals from Burundi, Guinea-Bissau, and Congo no longer have to quarantine in hotels, despite the fact we have no flights from any of those bloody countries. If you're coming in here from Italy and France and Belgium, you still have to stay in a hotel. If you drive across the border from Belgium to Holland, you can fly in here, not a bother. All those quarantined countries, you can fly into Belfast from France, from Italy, and from Belgium, and drive down across the border where you'll be hailed, you'll be welcomed in with open arms. It is insanely stupid, ineffective, and all it does is it presents an image that Ireland is closed to overseas visitors, despite the fact that they're flooding across the border with Northern Ireland.
I counted yesterday, I was driving from Westmeath to Kildare. I counted in my one-hour drive, I had 16 Northern Ireland vehicles driving in front of me on the motorway. You might go, "Oh, but Minister Ryan is keeping the country safe with a utterly defective hotel quarantine." We are calling again on this government. Look, the government is catching up in terms of vaccines. We now already have about 35% of adults who received the first vaccine. By the end of May, we'll be pretty close to 60% of Irish adults will have received the first vaccine. At that point in time, we need a plan for June and July. Irish people are already booking their holidays now in Portugal and Spain into June and July, but the government hasn't yet caught up with it. We have this myopic and stupid policy. We have no transport.
There's no idea coming out of the transport department of what they're going to do to restart aviation. It's one of Ireland's critical industries. We've been very frustrated. It touches us, Aer Lingus, CityJet as well. The hotel quarantine is absurd. We're the only European country with a hotel quarantine. I've heard our foreign minister saying we're the only country with a hotel quarantine because it's difficult. No, it's not difficult. It's just ineffective and completely stupid, which is why we're the only country in Europe with a mandatory hotel quarantine, mainly from countries that have no direct flights to Ireland anyway. It makes no sense. We live in hope. Frankly, I think we will be forced here to review this hotel quarantine, particularly for European countries. We still require British people. U.K. is 66% vaccinated.
British people arriving in by air to Ireland have to quarantine at home for 14 days, but you can drive across the border from Derry to Donegal, not a bother on you. In fact, the pubs will be open, and they'll shortly open the restaurants for you as well. None of it is any joint of thinking, but it is doing untold damage to Irish aviation. Our tourism industry is going to suffer because we are steeply lagging behind what's going on in the rest of Europe. The real challenge, I think as Eddie Wilson has laid out a couple times before, is that because we have no plan, lots of aircraft capacity has been moved out of Ireland by Aer Lingus, by Ryanair, and also by CityJet. Also has been moved out, and it's not going to come back this summer.
We're not bringing aircraft back to Cork. We moved aircraft out of Dublin to places like Stansted and Spain and Greece, where the recovery is going to be much faster. Meanwhile, we have a transport minister whom still, I don't know what he tells on a daily basis apart from mumble something that because he ran a bicycle tour in Ranelagh 20 years ago, he's an expert in tourism. As far as I can tell, he's a very nice guy, but he's an idiot. Next question.
Oh, next question.
Eddie, anything you want to add on that sort of an argument?
Well, I don't think I have.
Eddie. Eddie, you disagree with my view of the transport minister?
No to the bicycle tourism.
I think we can take Ireland as an outlier.
Yes, I think we can take Ireland as an outlier. We live in hope. Next question, please.
Our next question comes from Alex Irving from Bernstein. Please go ahead.
Hi, Alex.
Hi, good morning. Thank you for taking my questions. First, can you please talk a little bit about the decision to go into new primary airports, which is Riga and Arlanda, where there's some incumbent carriers that wouldn't appear to have the ability to leave that market. How are you thinking about the risk of low profitability if competitors cut fares in response to your entry and are willing to run at a loss?
Alex, hang on a second. Slow down a bit. It's very hard. Your line isn't great. You just slow down, please, and give that question again on Arlanda, Stockholm.
Yeah, sure. Is it clear now?
A bit better. Sorry. Speak a bit more slowly.
Yeah, sure. Sorry about that. On Riga and Arlanda, I was wondering where there were incumbent carriers that wouldn't appear to have the ability to leave the market, how are you thinking about the risk of low profitability if the incumbents cut fares in response and are willing to run at a loss? In other words, how are you planning to avoid a scenario similar to Vienna a couple of years ago? My second question is on how you're managing the various airlines within the Ryanair Group. As you take deliveries of the MAX, what metrics, what scenarios will be used to decide where those aircraft go? On that, is your current set of AOC the right number of AOCs? Or would you want to add some or consolidate some, and under what circumstance? Thank you.
Okay. If I think I got the first part, I'm going to ask Eddie to give you the detail or some kind of color on Stockholm and Riga. Can I just say, if I got the question right, is that the incumbents are not reducing capacity. They are. There has been very significant capacity reductions by Norwegian. Their fleet has gone from 130 aircraft to I think 25, 30. I'm not even sure they'll be able to pay for the fuel for 25 or 30 aircraft. SAS as well have significantly lowered their fleet. Copenhagen, Arlanda, Stockholm, and Gardermoen in Norway are facing very significant capacity reductions. Eddie, maybe you want to give some more detail on that.
We wouldn't be in Arlanda unless we're doing it on the right cost base. As Michael says there's been significant capacity reductions. From talking to Arlanda for the last 20 years, which is why we've been able to conclude a deal there. We're very happy with that. On Riga, it's been a sort of a fairly low-risk base for us because we're able to reverse the majority of the traffic out of there. It gives us a good foundation on which to grow on because we've already been in Riga for outbound traffic into there. We now have a very substantial presence within the Baltic region for joining up those airports. You'll see out of Arlanda, we'll be doing sort of some domestics into Gothenburg and also into Malmo as well.
Also some more longer haul sort of sun stuff out of there as well. We're happy with the deal. There are capacity reductions, and I think we'll be getting the running up there in terms of fare levels and other competitors.
Can you give us a flavor just of Billund? We were there before. We closed the base. Why are we reopening a base in Billund for example?
Billund was always a successful base for us. We would've never closed Billund only the difficulties that we had back in 2015. Prior to 2017 that we ran sort of Irish contracts employment model, which has gone since 2017, 2018. We are gone back in there on a completely different footing. It's always been a very successful base and destination for us. We're happy with it. Delighted to be back there.
I think as Eddie Wilson has said, one of the reasons we're receiving calls from Copenhagen and from Gardermoen as well is because they are suffering very significant capacity. SAS is insolvent. It only survives on enormous state aid being granted to it by the Scandinavian government. I've long held the view Norwegian's a basket case. It's in examinership here, and it's going to reemerge chrysalis-like at about 15% of the fleet it had before the pandemic. Even with that model, it's not going to make any money going forward. It seems they've retreated large to a kind of Scandinavian domestic operation. I would be amazed if it's not merged together with SAS sometime in the next year to make a great Scandinavian champion in the aviation industry. God help us all. Just to touch on the other entities in the Ryanair Group.
The plan on the aircraft, if we took 14 aircraft this summer, eight would be in the Ryanair colors, largely based in Stansted and maybe one or two in Dublin. Right now, the focus would be that the initial aircraft will be based at maintenance bases. We have engineering, we have pilot bases and cabin crew. We have three MAX simulators, so we've trained all the pilots as well on the aircraft. Three of the aircraft will come to Buzz in the Buzz colors. They'd be based in Krakow. Three would come in the Malta Air colors. They're already painted in Malta Air colors. We would base those in Bergamo, in Italy. As you know, Malta Air runs most of our bases in Italy, France, and in Austria. Where else?
Germany. Again, to try to get each of the different AOCs used to knowing those aircraft. Have we enough AOCs? I think we do. We have Ryanair DAC, now largely doing Ireland, the U.K., Spain, and Portugal. Malta Air doing Italy, Germany, France. Buzz doing most of the Central and Eastern European countries with the capacity to grow. We also then have Ryanair UK or RUK, being the U.K. AOC. We know it doesn't get very big, but it could expand meaningfully if the U.K. moves on its promise to reduce APD taxes in the next year or two. I think we would respond by increasing the fleet in RUK. At the moment, we just need RUK to operate the U.K. to third country operations like Morocco, places like that.
We would certainly look at more U.K. domestics if there was a meaningful reduction in U.K. APD, which has been promised for some years, but hasn't yet been delivered. Would we look at other AOCs? I don't think we need any more AOCs in the group. We would always continue to be opportunistic, and I see no reason not to.
Great. Thank you very much.
Thanks. Next question, please.
Our next question comes from Neil Glynn from Credit Suisse. Please go ahead.
Morning. We've been through a lot, so I'll just ask one question. On the customer advisory panel, it seems like a very interesting move and remembering the strength of the commercial performance after you introduced Always Getting Better. I'd like your view on, you've identified a few opportunities already through the call, things like OTAs that you've clearly been focused on for years. Just interested, what does the customer advisory panel advance now beyond what you've already been working on in terms of improving customer service?
Neil, if anyone's here. Neil, having gone through the whole sort of COVID disruption and trying to rearrange and refund flights, et cetera, for 29 million people. We learned a lot during that period in terms of, particularly with the support of our labs team here. We didn't have that. I don't know what we would have done in terms of dealing with the sheer volume of that. We've learned a lot from that as to what we could do in a much slicker fashion. You're going to see a number of initiatives being rolled out over the next number of months. I'm not going to go into the detail of them here, it'll be certainly the sort of for 99% of people who get the lowest fares, get there on time with the widest span of destinations, it goes swimmingly.
For that less than 1% when it goes wrong, we're going to make that much easier to deal with. I see the customer panel as a sort of an offset that sometimes we think here we know all the answers. We're going to start off with that, the first meeting of that in Ireland. We're going to move it around as well over the next year or two to our major markets and places like in Spain and Italy, Germany, to get input there. We are largely run from Dublin, and we don't have a lot of infrastructure on the ground in those places. It'll be interesting to get their feedback on some easy wins.
We already are well advanced on, it's not a wish list, but are well advanced on a number of initiatives on the digital side that I think are going to transform customer service for when things are a time for disruptions and for when things go well.
Great.
Obviously one of the experience of COVID has been transformed the way we process refunds, accelerate customer information, and address customer queries by reducing the time frame, typically from four or five days now to within 24 hours. Next question, please.
Our next question comes from James Goodall from Redburn. Please go ahead.
James.
Morning, everyone. Morning. Two quick ones, please. Firstly, the 1.5 million bookings that you got last week, how does that compare to normal pre-summer booking patterns? I guess, what was that number in May 2019?
Yeah.
Sorry.
Yeah.
Yeah. Secondly, to clarify your comment on being 20% booked for peak summer. Is that 20% of normal capacity or 20% of the published 80% schedule?
Yeah. 1.5 million bookings last week is that normally in pre-COVID times, we'd be doing about 2.5 million. We're running something of the order of, this is just last week. Don't take this as gospel, but that has mushroomed in six weeks from 500,000 to 1.5 million. In a normal summer, we would have 60% of our final for June, July, August booked at this point in time, but we'll be taking about 2.5 million bookings a week. We're running at something about two-thirds of what would be normal. When I say we were about 20% booked through the summer, that's 20% of our what we think will be the final numbers. It's very low. We would normally be significantly better booked for the summer because people, families would have already booked their summer holidays. We don't have that in the system at the moment.
We think, again, that's why you've had such a very strong snap back in bookings over the last six weeks. In many cases, for example, the U.K. to Italy, France, Spain, even before the travel restrictions have been lifted. Now they're all booking with some degree of comfort in the knowledge if certainly you're booking with Ryanair, you can make changes to that itinerary or those bookings without a change fee or without any penalty. It is very strong, but it is still a long way short of where we would normally be at this time of the year, which is why I go back to the answer I gave previously on yield. Those bookings will be made at lower fares than we would have been taking at this time of the year pre-COVID as well.
I'm very happy to accept a yield penalty in the short term while we repair volumes.
Great, yeah. Thank you.
Thanks, James. Next question please.
Our next question comes from Jarrod Castle from UBS. Please go ahead.
Jarrod, hi.
Yeah, hi. I have actually two Germany-related questions. Firstly, here in Germany, we have almost for certain the Green Party being part of the next government, potentially even leading the next government. Over the weekend, they said that they have an agenda of banning short-haul flights altogether. I hear your argument that you have little exposure to routes that can be replaced by the train. For example, there's also new talks about introducing minimum fares for short-haul flights and all that. The political push against short-haul flights seem to gain momentum. Just curious how you deal with that. Secondly, Frankfurt Airport is planning to increase fees by a mid-single digit amount every. Frankfurt, I think, was important for you pre-crisis to attack Lufthansa. Just wondering if those fee increases will change anything in your strategy there.
Yeah, thanks. Firstly, look, everybody kind of regards the Green Party in opposition. It's easy for the Green Party in opposition. We have the Green Party in government in Ireland. Thus far they've been spectacularly unsuccessful in implementing any policies. They're long on talk and short on delivery. Once you get into government, you actually have to deal with the day-to-day issues. Would they want to constrain Ryanair and Lufthansa, which would be a huge challenge for the German government, whether it's a Green government or not. They're not about to bankrupt Lufthansa. Sorry, it's already bankrupt. They're getting EUR 10 billion in state aid and the Green Party in government will continue to give state aid to Lufthansa because Lufthansa is a state aid junkie.
I have no doubt that they would follow the policy of the French in that would be trying to ban short-haul flights, mainly domestics, which is all they can ban. They'll ban domestic short-haul flights with the exception of flights that connect into the long-haul connecting hubs of Frankfurt and Munich. It'll be just another kind of hidden state aid to the legacy interconnecting carrier, despite the fact that connecting flights are the most environmentally damaging and polluting way of traveling around Europe. In much the same way as we have a Green Minister for Transport in Ireland who claims to have experience in the tourism industry, and that he's an expert in the tourism industry, and yet we're waiting 10 months for any response to the tourism recovery program that's been sitting on his desk since last July gathering dust.
Generally, I think the Greens in government are better than the Greens in opposition because the Greens in opposition just talk rubbish, and in government, they actually have to deal with the practicalities of getting people around and how tourism is a huge employer even in Germany. The economy depends upon having low-fare air travel. Would we worry about a ban on short-haul flights in Germany? No, we don't do any German domestics. All of our flights are to largely Germany to other EU short-haul destinations. We see very strong growth in that area in the next couple of years. We will be guarded and wary about increases in Frankfurt Main fees. We think there will be a push at those monopoly airports. Heathrow's already started charging their passengers and airlines another GBP 10 in departure fees to cover their COVID losses.
We think Frankfurt, Charles de Gaulle, Schiphol will follow suit as best they can. There will continue to be this complete myopia, where they'll be finding ways to exempt connecting traffic as they exempt them from ETS fees and from environmental taxes. They'll try to do their best to exempt connecting traffic with Lufthansa across Frankfurt and Munich hubs and try to penalize the short-haul point-to-point traffic. Again, our best defense in all of that is we have mobile assets and mobile aircraft, and we have no compunction on moving them around Europe where there are many more attractive airports. The secondary cities in Germany will be an area of great growth for us, I think, in the next five years.
The places like Bremen and Stuttgart and Dusseldorf, Nuremberg, Cologne, who have suffered a much more steep decline in their point-to-point traffic, will have to respond, I think, with growth incentives. Whereas I have little doubt that Munich and Frankfurt Main will try to increase fees, pass those on to Lufthansa and their customers. Lufthansa will probably look for even more state aid from the German government so they can pay the higher fees at Frankfurt and at Munich, and all the usual German inefficient state aid will circulate around the system and postpone any real reform into the future. We will be nimble and we will find our way around that, and we will still, I think, find significant opportunities to grow in the German market because the Germans love low fares.
They are not about to replace that with all going back on bicycles, because you can't cycle to Palma. You certainly can't cycle to the Canaries, and that traffic will continue to grow very strongly.
Yeah, absolutely. Thank you.
Thanks, James. Neil has just left us so he can do the bond call, but Tracey is still here if anybody has any financial questions. We're going to have to cut this short to the next five or 10 minutes, so if we could speed up the questions, please, and I'll try and speed up the answers.
Thank you very much. Unfortunately, that is all we have time for, so I will hand you over back to the speakers.
Great. Okay. Can I just, Juliusz is here with us as well. Juliusz, do you want to a quick commentary on Brexit and the Brexit post-Brexit and the shareholding and voting restrictions, I think you useful to just touch on those while we have you here? Then I'm going to ask David, Michal, and Andreas to give us a quick contribution from Malta Air, Lauda Europe, and Buzz.
Thanks, Michael. Hi, everyone. With the end of the transition period in December, we activated our Brexit ownership and control solution. Two main changes for our non-EU shareholders. The first one is the suspension of voting rights, which will remain in place until the balance shifts in favor of EU shareholders or there is a relaxation of the rules. The second change is that U.K. nationals are now included in the ban that we have operated since 2002 on non-EU nationals purchasing our ordinary shares. As a result, our EU shareholding is growing and will continue to grow. U.K. nationals, as other non-EU nationals, can continue to invest through our ADRs, which are listed on Nasdaq, but not through the ordinary shares in London or Dublin.
Great. Thanks for that. David, a quick contribution from Malta Air, Andreas from Lauda, and then Michal will finish on how in Buzz you can give us an outlook on the Polish charter market. David.
Okay. Well, just to reiterate really what's been said, Malta Air with 120 aircraft has about 70% of that capacity on sale or ready to operate for Ryanair for the summer, but is capable of ramping up where necessary. Secondly, to add that in our major markets where we have our bases, Germany, Italy, and Malta, we have reinstated C-19 government payroll programs. That will see us through to the end of the year. In France, those payroll supports are in place until the end of the summer. We're well-placed to react to whatever wet lease business comes our way.
Andreas, Lauda, if you might also mention what are the current state of the travel restrictions to and from Austria?
Yeah. The Austrian situation is luckily easing up on the 19th. Austria is going pretty much back to normal. Hotels and restaurants are opening. Entry regulations are changing, which is important, which we see definitely a lot more traffic to come. As David said already, we are ready as well to fill this traffic. Lauda is having at the moment two bases in Vienna and Palma, and we're really looking forward to open new bases in Zadar and Zagreb this summer season.
Great. Okay. Finally, Michal in Buzz. Just give us an update of what's happening in the Polish charter market.
Yeah, sure, Michael. We have 46 aircraft in total in Buzz. Seven of them are dedicated for charters. The rest, I mean, 39 on wet lease. As to charters, we are continuing operating to Antalya in Turkey, the Fuerte, Canaries, and also Greece and Albania. Tour operators still report low bookings due to existing travel restrictions, including PCR tests for arriving passengers. I think it will be the biggest challenge throughout the season as even these vaccinated passengers will be allowed or will be lifted from testing. Children still require providing negative PCR tests in case of charters. Majority of passengers are families with children. Definitely, we expect that for next few weeks, most of European countries will open. Also Turkey, which is a very important market from charter perspective, we expect that to lift all restrictions from Poland in June.
The bookings will accelerate, sales pick up, and we will target at least 50% of our summer 2019 schedule.
Okay. Thanks, Michal. Okay, everybody, that brings us to an end of today's call. We have an extensive investor road show taking place commencing in 10 minutes' time. If you haven't had an investor call and you'd like one, please contact us through Peter, the investor relations team, or through Davy and Citi. We'd be very happy to speak to you, particularly if you're a European national or a European shareholder. We want to encourage more European ownership in the next number of months. Thanks very much, everybody. Hope to talk to you later on this week, and keep the faith. The recovery is coming, and I think it's going to be very strong. Thank you very much. Bye-bye.
Thank you. Let's now disconnect.