Good morning, ladies and gentlemen. Welcome to the Ryanair Half-year Results Presentation. I'm Michael O'Leary, Group CEO, and I'm joined this morning by Neil Sorahan, the Group CFO. As you will have noted this morning, we reported a strong Q2 profit after tax of EUR 1.72 billion. That's up 20% on the prior year. The H1 profits rose 42% to EUR 2.54 billion, largely by virtue of having a strong Easter in Q1 and a strong increase in fares. Fares were up 13% due to that strong Easter and the weak prior year comps in the previous year. The highlights for the half-year include traffic growth of 3% to a record 119 million passengers. Revenue per passenger was up 9%. Average fares in the half-year were up 13%, and ancillary revenue up 3%. Strong cost control meant that unit costs have risen by just 1% over the half-year.
I'm pleased to say we had 199 of the new game-changer aircraft in the fleet at the 30th of September. That figure has risen now to 204 at the end of October. The jet fuel, we've extended our hedges now into FY 2027, where we're now 80% hedged at just under $67 per barrel. We were added, Ryanair was added to the MSCI Global and the FTSE Russell indices in September, and the board has approved an interim dividend of $0.193 per share payable, which will be payable in February of 2026. Just touching on a couple of these items, fares in the half-year benefited from having the full Easter holiday in Q1 with weak prior year comparables, and we achieved a full recovery of the 7% fare decline we suffered in last year's Q2, and ancillary revenues were solid, rising 6% to $2.91 billion.
In H2, the second half, our H2 FY 2026 fuel is 85% hedged at $76 a barrel, which de-risks the group for the remainder of this year. But we've taken advantage of the recent price dips to extend our FY 2027 fuel hedge cover to 80% at just under $67 per barrel, locking in price savings of over 10% in our fuel costs next year. Some of those will be given back, though, as environmental taxes or ETS taxes rise. On touching on fleet, we're pleased to say that the Boeing deliveries continue to improve. We had 204 Gamechangers in our fleet at the end of October, and we're confident now that the six remaining Gamechangers of the total of 210 order book will deliver by about the end of February, well in advance of summer 2026.
This will facilitate 4% traffic growth to 215 million passengers next year, FY 2027. Boeing now expect the MAX 10 certification will take place in mid-2026, and they are confident that they will meet our contracted delivery dates for the first 15 Gamechangers in the spring of 2027, giving us timely fleet growth for summer 2027 as well. As a result of that, however, we're now beginning to plan over the medium term as we build confidence in the MAX 10 deliveries. We're beginning to plan for the medium term, which will see a surge in the need for captains around 2029, 2030. With that in mind, we're going to accelerate cadet and first officer recruitment over the next three years. This will be a big investment in additional training and growth.
It'll cost us approximately EUR 25 million per annum in increased first officer crewing for the next three years, but it will provide us with a strong pool of homegrown first officers ready for promotion to captains when we get into the peak cycle of MAX 10 deliveries in 2029 and 2030. I'm pleased to say we've also taken advantage of recent US dollar weakness and have hedged approximately one third of our MAX 10 firm order, about 150 aircraft. That CapEx at an average euro dollar rate of 124, which locks in further CapEx savings on these very already low cost aircraft. This winter, we continue to allocate Ryanair's scarce capacity to those regions and airports who are reducing airport fees to incentivize growth or who are abolishing environmental taxes or aviation taxes.
As a result of that, you've seen us churn flight routes away from high cost, uncompetitive markets like Germany, Austria, and regional Spain, and into lower cost markets such as Sweden, Slovakia, Italy, Albania, and Morocco, where governments are abolishing environmental taxes on aviation and airports are incentivizing growth. We expect European short haul capacity will continue to remain constrained until at least 2030 as the big two manufacturers remain well behind on aircraft production. The Pratt & Whitney engine repairs continue to be a challenge for many Airbus operators. EU airline consolidation accelerates, and capacity is withdrawn from markets by low cost, unprofitable airlines going bankrupt, many of whom are just unable to compete with Ryanair's lower costs. We think overall the backdrop is strong, which will facilitate Ryanair's controlled profitable growth to 300 million passengers by 2034.
Within that, however, we're concerned that Europe continues to fail on competitiveness. We remain very concerned that Commission President Ursula von der Leyen has done nothing over the last 14 months to implement the recommendations of the September 2024 Draghi Report. She's great at talking about competitiveness, giving speeches about competitiveness, but then does nothing. Europe's airlines have called for a level playing field on enviro taxes that can be delivered easily by bringing ETS rates into line with CORSIA, which is what the long haul IATA airlines pay, and by delivering urgent ATC reform supported by all of the A4E airlines, which has called for protecting overflights during national strikes and demanding and mandating that Europe's ATC providers are fully staffed, particularly France, Germany, and Spain, for the first wave of daily departures.
These would seem to be simple reforms, and yet Ursula von der Leyen continues to do nothing other than sit idly by. These reforms are urgent, and it's about time President von der Leyen stopped talking about competitiveness and reform and started delivering it. While the Commission stands idly by, the EU Parliament is promoting even more stupid regulations, such as further increasing free carry-on luggage limits, even though there's no room in the aircraft cabin for these increased cabin bags. This can only lead to more delays at airport security, more delays at Europe's boarding gates, higher costs for airlines, and ultimately higher fares for consumers.
Yet again, the European Parliament shoots itself in the foot with stupid regulations at a time which will increase costs for consumers at a time when the Draghi Report has urgently called for Europe to be more competitive by pushing back these stupid regulations. Let's turn to FY 2026 and the outlook. We now expect traffic will grow by more than 3% to 207 million passengers for the full year. That was previously 206 million. And we're thanks primarily due to Boeing's better deliveries and strong H1 demand. We expect only modest FY 2026 unit cost inflation, as our Boeing 8-200 deliveries, fuel hedging, and effective cost control across the group helps to offset increased ATC charges, higher enviro costs, and the roll off of last year's modest delivery delay compensation, which was paid in the second half of the year.
We would, however, caution that we face more challenging prior year fare comps in H2, which makes fare growth over the second half of the year more challenging. Q3's fare outcome, as always at this time of the year, is dependent on the close in Christmas and New Year bookings, and we have zero visibility into Q4. Accordingly, it remains too early to provide any meaningful full year Profit After Tax guidance. We, however, cautiously expect to recover all of last year's 7% full year fare decline, which should lead to a reasonable net profit growth in FY 2026. The final full year 26 outcome remains exposed, though, to adverse external developments in the second half of the year, including conflict escalations in Ukraine and/or the Middle East, macroeconomic shocks, and any further impact of repeated European ATC strikes and mismanagement.
And with that, I'm going to ask Neil to take us through the slide presentation. Neil.
Thank you and good morning. Welcome to the Ryanair H1 results presentation. Ryanair has the lowest fares and the lowest costs of any airline in Europe, and indeed, the cost gap that we enjoy between ourselves and our competitors is widening and will continue to widen for some time to come. We're number one for traffic and expect to carry now 207 million passengers, which is just over 3% growth year on year. We're number one for on-time performance and reliability and recorded a record customer satisfaction CSAT score of 89% in the first half of the year. We continue to perform well on all of our ESG ratings, and we have a low cost order book of 300 MAX 10s, which underpins a decade of growth, so this combined with our financial strength and low costs makes Ryanair the long term winner.
You can see our coverage and choice at 95 bases, over 220 airports in 36 countries. Our 300 MAX 10s will enable us to grow profitably out to 300 million passengers by FY 2034. As always, this is the most important slide in the deck. As you can see, the cost advantage that we enjoy over our competitors continues to widen. And indeed, next year when we become debt free, you're going to see our net finance expense interest become significantly better than everybody else. We already have a very strong position there. Equally, as we start to take the MAX 10s into the fleet, 20% more seats, 20% less fuel, and 20% less CO2, you're going to see significant savings coming true, and that gap will continue to widen. On the half itself, we carried 119 million passengers, a 3% increase on last year.
As Michael said, following on from strong fares in the first quarter of the year, we recovered all of the 7% fare decline in Q2, which meant for the half year fares were up 13%. Total revenue, which benefited from those fare increases, and indeed a 3% increase on per passenger spend on ancillaries, was up 13% to just over EUR 9.8 billion. A very strong performance on costs, rising just 4% or 1% on a per passenger basis, as our fuel hedges helped offset rising ATC and environmental costs, so just up 4% to EUR 6.96 billion, and profitability in the quarter up over 40% to EUR 2.54 billion. On the balance sheet, rock solid. It's a fortress balance sheet. We've got very strong investment grade ratings, BB B+ from both Fitch and S&P.
Uniquely, we've got a very highly unencumbered fleet on the balance sheet, 610 Boeing 737s at the end of Q3 . Gross cash finished at EUR 3 billion, and net cash importantly rose from EUR 1.3 billion at the end of March to EUR 1.5 billion at the end of September. So we're in a very strong position to not only fund our CapEx from our own cash resources, but to also repay our remaining euro bond, EUR 1.2 billion in May of next year, which will effectively make the group debt free at that point in time. Michael, you might take us through current developments and outlook, please.
Okay, thanks, Neil. So current developments, I think we've covered most of this. We now expect full year traffic to grow 3% to 207 million passengers. That was up from a previous 206 million target. We're seeing strong half one fares and cost performance, although we're facing tougher H2 prior comps. Constrained capacity, however, means we're allocating aircraft and that spare growth capacity to those airports and regions who are causing taxes to grow. We are churning out of higher cost countries and higher cost airports. People are asking, why are we fighting with Spain or regional Spain or Germany or Austria? It's because their costs are too high, and unless they get their costs down, they're going to keep losing traffic, tourism, and jobs. Ryanair has been added to the MSCI Global and FTSE Russell indices.
Our fuel hedges have been extended, which means we're locking in very significant FY 2027 fuel savings. 35% of the firm MAX 10 Capex order has now been hedged at $1.24, locking in extraordinary euro cost savings on our Capex program. The EUR 850 million bond was repaid in September, and our final EUR 1.2 million bond will be repaid from our internal cash reserves in May 2026. The board has declared an interim dividend of EUR 0.193 per share, payable in September, and as Neil has said, 25% of the EUR 750 million buyback has been done at the end of September, and we're facing into a decade of low fare. We believe profitable growth to EUR 300 million now that the smoke is clearing on the certification and delivery of the MAX 10s. Touching on the Boeing deliveries, they have materially improved.
I want to compliment Kelly Ortberg, Stephanie Pope, and the team at Boeing. They have transformed the place in the last 12 months. The Gamechanger deliveries are up to 204 aircraft at the end of October. The last six of those aircraft will deliver by the end of February. The quality and the timing of those deliveries is improving, which is partly why we were able to add or raise slightly the full year traffic target. Boeing have already been approved to increase to rate 42 production from October. They tell us that they expect the MAX 7 and 10 certification to take place in mid 2026, which means we will get our first 15 MAX 10s in the spring of 2027. In fact, I think we'll be one of the lead customers or lead operators of the MAX 10.
We couldn't be more excited about these aircraft. They offer us 20% more seats. They burn 20% less fuel. That is a fuel saving of 40% per seat, which will enable us to pass on more low fares to our customers, widening the gap between Ryanair and every other competitor in Europe, which should enable us to deliver controlled profitable growth to 300 million passengers by 2030, 300 million passengers annually by 2034, when we expect to be operating a full fleet of 300 MAX 10s. In terms of outlook, so again, for the full year, we've covered this, but traffic will grow 3% to 207 million passengers. Modest FY 2026 unit cost inflation, mainly driven by fuel hedges helping to offset those higher costs of ATC and enviro costs, most of which are imposed on us by an uncompetitive single market here in Europe.
The H2 fare growth will be challenging because we've tougher prior year comps. We've zero Q4 visibility at this stage, and there's no Easter benefit in Q4. We're now pretty confident that we're going to recover all of last year's 7% fare declines, but it's still too early for full year 2026 Profit After Tax guidance. We can point, though, however, to the fuel and US dollar hedges locking in meaningful cost savings for FY 2027, and Boeing's early deliveries will ensure that we can grow strongly to 215 million passengers in up 4% in FY 2023. Excitement with your results. Ryanair reported Q2 PAT up 20% to EUR 1.72 billion. What were the key drivers?
There's always a number of moving parts, but we saw traffic increase by 2% to just over 61 million passengers, slightly ahead of what we'd anticipated for the quarter, but way behind the normal growth that Ryanair would normally have because we were short aircraft coming into the peak summer period due to the Boeing deliveries, although thankfully they're being caught up now. We were able to recover all of the 7% fare decline that we suffered in the prior year, so pleased to have that in place. We also put in a solid performance on ancillary revenues with cost or sorry, with revenue per passenger up 3%. Also a very strong performance on unit costs up only 1%, as we saw the benefit of our fuel hedges help offset rising ATC and environmental costs.
So when you put all that together with a very strong Easter and week prior comps in Q1, we delivered profit growth to EUR 2.54 billion in the first half of the year.
Ryanair has industry leading hedging positions. What's your current hedging?
Well, fuel hedging for the second half of FY 2026 is 85% hedged at $76 a barrel. The big news this morning is we've now hedged 80% of FY 2027 at just under $67 a barrel, a 12% lower price than this year's fuel hedges. And that will deliver significant savings for us, although some of those savings will be eroded by a continued withdrawal of free ETS allocations. In terms of OpEx, FY 2026 is 90% hedged at $1.11 to the euro, but FY 2027 is now 80% hedged at a better rate, $1.15 to the euro, again delivering significant savings on OpEx as well as on fuel into FY 2027. How are H2 bookings and fares tracking?
Q3 is slightly ahead of bookings from where it was last year, particularly into last week's school midterms and into the peak Christmas and New Year. November, however, needs a bit more stimulation, a bit weaker than this time last year on the fares. So the final outcome for Q3 will very much depend, as it always does, on closing bookings into Christmas and the New Year. At this stage, we've almost zero visibility on Q4, so it's pointless to give guidance on where that's going to go. I would caution, however, that the comps into the second half of the year are more difficult than the first half. You'll recall that we had more or less lapped most of the OTA integration in September just gone. So it will be a bit more challenging to grow fares into H2 than it was in the first half.
Moving to Ryanair's strong balance sheet, what are the key features for investors? Well, the balance sheet remains triple B rated, triple B plus credit rating from both Fitch and S&P. We have 610 unencumbered Boeing 737s in the fleet at the end of September. That figure has risen to 614 aircraft since. Very strong liquidity. We have EUR 3 billion in gross cash at the half year, over EUR 1.5 billion in net cash with EUR 1 billion of an undrawn revolving credit facility. Our final EUR 1.2 billion bond, which is due for repayment, will be repaid when it falls due in May 2026, which will leave us uniquely for a non-government owned airline with zero debt and yet a fleet of 610 unencumbered aircraft.
That financial flexibility means we continue to widen the financing cost gap with our competitors, many of whom post-COVID are exposed to much more expensive long-term financing and rising lease costs. What's FY 2026 CapEx guidance?
Yeah, there's no real change from the guidance that we gave with the Q1 results back in July. We're still guiding somewhere close to about EUR 2.2 billion CapEx this year. That includes the 30 spare LEAP engines that we agreed to buy. We expect to have all of those or nearly all of those in the fleet by the end of the current financial year. Similarly, we expect to have all of the Boeing aircraft in by the end of this year. These are the Gamechangers, the 210 order book. We've nothing in there for engine shops. I don't think there will be any CapEx this year, but if there is, that'll add onto the figure.
On shareholder returns, how's the €750 million buyback progressing? Well, we had a 25% finished at the end of the half year with bought seven million shares at a cost of about €190 million. At the end of October, that's risen to about 35%. But we're under no rush to complete that program. We've already announced that we expect to complete it by the end of calendar 2026. And so we'll continue it at a reasonably modest rate over the coming months out to the end of 2026. When's the next dividend payable?
The board have declared an interim dividend this morning of EUR 19.3, and similar to last year, that'll be paid towards the back end of February.
Shifting to fleet and growth, please provide an update on the MAX 8 delivery program? Well, as we've repeatedly said, we've 204 Gamechangers in the fleet at the end of October. There are six left to deliver. We expect to get two of those in November. The remaining four will be delivered in January or February, which means for the first time in many years, we will have a full fleet complement by the time we switch to the summer schedule at the end of March next year. I think that will enable, facilitate strong 4% traffic growth to about 215 million passengers in FY 2027. What's the latest update on the MAX 10 certification?
Yeah, Boeing continue to expect certification of the seven, the MAX 7 and the MAX 10 somewhere towards the middle of 2026. There could be a little bit of slippage there just due to the government shutdown in the United States, but importantly for us today, and we are very much planning on the basis that we're going to receive our first 15 MAX 10s in the spring of 2027 in line with our contract.
Have you started hedging the MAX 10 dollar CapEx? Yes, we have. Two things have happened in the last month. One, Boeing were able to firm up on the delivery date, which enabled us to start hedging. We've also taken advantage of a weaker dollar in recent months to hedge 35% of the first 150 firm orders at about $1.24 to the euro, locking in very significant euro savings on our CapEx program over the coming decade. If we see further opportunities to hedge at that kind of $1.24 or weaker, we'll do it. And the great advantage is we have the strength in our balance sheet and the strong cash position to be able to take these very strong hedging positions. What's your views on European short haul capacity?
Oh, I think it remains constrained for some time to come, at least out to 2030, if not a bit beyond that. While Boeing and Airbus, the two big OEMs, are making some progress on their deliveries, they're still significantly behind on their order books and their backlogs. We're continuing to see the likes of the GTF issue, which impacts a lot of our competitors here in Europe, rumble on. There's probably another couple of years to go in relation to that being resolved. Consolidation continues with the SAS, European TAP deals now being worked through at this point in time. And we're also seeing more loss-making airlines removing capacity. They don't want to compete against Ryanair's low costs, and they're unable to compete against Ryanair's low costs. So yeah, I think capacity is constrained for a long time to come. Where is Ryanair's scarce capacity being allocated?
Well, we're taking that scarce capacity involved. We're involving in much more churn negotiation with airports now. Some people have commented recently, why are we fighting with regional Spain? We're fighting with Germany. We're fighting with Austria. That's part of our job. It is to try to convince these governments and these airports, you must reduce or abolish your environmental taxation on air travel and reduce your high costs if you want to grow. Otherwise, you're facing steep declines, and they're suffering steep declines in Austria, in Germany, and now in regional Spain as well. We're reallocating that capacity. What people don't pick up is we're reallocating that capacity to those regions or countries who abolished environmental taxation and airports who are reducing fees or at least incentivizing growth. So we're seeing dramatic growth in Sweden, Slovakia, Bratislava, Poland, Italy, Albania, and Morocco. And that's where we're switching that capacity.
Already for summer 2026, we're operating. We've over 2,500 routes on sale, including two new bases, one in Tirana, the capital city of Albania, and Trapani in Italy. We're also adding over 90 new routes next summer to those airports and to those countries and regions where they're abolishing taxation on air travel. Moving to ownership and control in the ESG. What's the latest on index inclusion?
Yeah, we've made very good progress on inclusion this year. We added to the MSCI Global Index back in June, and then in September, we added into the FTSE Russell Index, albeit on a phased basis, 5% weighting in September, but that increased quarterly to approximately 80% over a two-year period. So we're in good shape there.
What was Ryanair's EU ownership position at quarter end?
As Neil has said, that index inclusion on the FTSE Russell and MSCI has significantly increased interest from global investors in Ryanair and the unique Ryanair business model. But however, as of the 30th of September, EU ownership was at 33%, which is significantly above the 20% threshold for potential reintroduction of purchase restrictions. Is there any update on your engine shop project?
It's not much change on the previous update we gave. At this stage, we've got about five locations shortlisted for our engine shops. As you know, we plan to build two. We would hope to make the decision on the first shop in the not too distant future. At the same time, we're actively engaged in negotiations with tooling manufacturers and spare part providers. We're making some progress there, but there's a bit more to go. I mean, the plan hasn't changed.
We hope that the first engine shop operational towards the back end of 2028 into 2029, and then the second shop will come somewhere in the 2030s.
Europe is failing on competitiveness. What needs to be done here? Well, firstly, we need to see action from Ursula von der Leyen and the new Commission. We're impressed with Transport Commissioner Tzitzikostas . He wants to reform, but the dead hand of Ursula von der Leyen presides over the European Commission, and she has failed to take any action in the past 14 months since the Draghi Report issued a whole series of recommendations on how the single market could be made more competitive.
European airlines are absolutely united and calling for a level playing field on enviro taxes that can be delivered reasonably quickly by bringing Europe's ETS rates into line with CORSIA, which is the ICAO system which all the international long-haul airlines are paying. It is indefensible that only Europe's airlines and Europe's citizens are paying ETS on our short-haul intra-European flights while we exempt all the flights coming to and from Europe on long-haul carriers. That is indefensible. It must end. The way to fix it is to bring Europe's ETS into line with CORSIA so that everybody is paying a fair share. The airlines are also A4E's, also united in calling for urgent ATC reform. The Single European Sky has been a 20-year failure. Abandon it, and we're calling for two things: protect overflights during national ATC strikes. The legal mechanism already exists.
They do that in Spain, in Italy, and in Greece today by using minimum service legislation. France should be compelled to do likewise, or the commission should step in and say overflights are a single market competence, and we're going to protect overflights, which doesn't in any way interfere with the right of French air traffic controllers to go on recreational strikes. And secondly, mandate that Europe's ATC providers, particularly the biggest ones, the French, the Germans, the French, the Germans, and the Spanish, are fully staffed for the first wave of morning flights. If you get the first wave of morning flights out, generally flights will stay on time through the day. But frequently we find that they're short-staffed on the first wave of flights. They don't have enough standby air traffic controllers, and that must be fixed. Either they're fully staffed or they should pay fines.
Reform, bring ETS in line with CORSIA, and fix ATC by protecting overflights and ensuring that the first wave of flights are fully staffed. Lastly, on outlook, what's the group's FY 2026 outlook?
Well, as Michael already said, thanks to the improved deliveries by Boeing and strong H1 demand, we're now marginally increasing the traffic target for the full year to 207 million passengers from previously 206. There's no change to our full year cost guidance. We continue to expect modest unit cost inflation thanks to the slower delivery of aircraft, but more importantly, the benefit from our fuel hedges, which offsets double-digit increases in rates in relation to ATC and rising environmental costs. We do expect H2 for comps to be tougher, as we already discussed. So Q3 will very much depend on close in Christmas and New Year bookings.
We've almost zero visibility on Q4, and we don't have the benefit of an Easter in that quarter. So it's too early at this stage to provide meaningful profit after tax guidance. We are, however, cautiously optimistic that we'll now recover all of the 7% further decline that we suffered in the prior year. And I think when you put that together with the strong cost control in the business, we're looking at reasonable profit after tax growth in the current financial year. As Michael said, we're now well placed with the Gamechangers coming in next year to rise to 215 million passengers, and then the MAX 10s will drive growth over the next decade to 300 million passengers per year.
Okay, thank you, Neil. And Lisa, that brings us to an end of this presentation. We have extensive roadshows, senior management on the road all week this week.
So we have present roadshow teams going through Dublin, the UK, continental Europe, and North America, Canada. So if you'd like a meeting with us or you'd like to have any further feedback, please contact us either through Citi, Davy, Goodbody, Jamie, who runs our IR team, and we'd be very looking forward to meeting you at some stage this week or at some stage in the future. If anybody wants to come and visit us in Dublin over the coming months and discuss the longer-term exciting growth plans we have, you'd be very welcome to come and visit us here in Dublin. Thank you very much. Look forward to seeing you this week.