Okay. Good morning, ladies and gentlemen. You're welcome this morning to this presentation of Ryanair's full-year results for the year ended 31 March 2021. I'm Michael O'Leary, the Group CEO, and I'm joined this morning by Neil Sorahan, the Group CFO. As you'll have seen this morning on the Ryanair.com website, we announced a full-year loss of EUR 815 million for the last 12 months, compared to a prior year profit of just over EUR 1 billion. Almost all of this was due to the impact of COVID-19 in our business, which has seen our traffic in the last year fall 81%, down to just 27.5 million passengers. We have been prioritizing liquidity preservation. We're pleased to say that we closed the year with EUR 3.15 billion of cash. We have introduced extensive cost reduction measures across all four of our group airlines.
We have eliminated an unprecedented backlog of customer requests and refunds as a result of the COVID-19 disruptions to our schedules. We've minimized job losses thanks to active engagement and pay cut negotiations with our people and our unions across all of our main EU countries. We've announced an increase in the Boeing 737 Gamechanger aircraft order, which has increased from 135 to 210 units, in return for a modest price reduction on the cost of those aircraft. We continue to invest heavily in our environmental, social, and governance programs. We're pleased that we've received a first ever B- score from CDP, which is the Carbon Disclosure Project, an independent ratings agency, and we've committed ourselves to increasing that from a B- to an A over the next two years.
As a result of Brexit on the 31st of December 2020, we've had to limit the voting rights of non-EU shareholders, and restrict their ability to sell ordinary shares since then. Just turning to a couple of themes over the last 12 months. Clearly COVID has devastated the business, but I think we have worked hard over the last year and effectively to reduce costs, to assist millions of passengers who were disrupted. We've laid a platform, I think, by lowering our cost base and engaging with our airports so that we can recover strongly in a post-COVID environment. The COVID-19 has seen the collapse of a number of EU airlines, including Flybe, Norwegian, Germanwings, and Level.
A number of flag carriers have announced very significant cuts to their capacity, with a result that I think in a post-COVID world, Europe for the next number of years will be operating at about 75%- 80% of its pre-COVID capacity. This is why our Gamechanger order is so important. We'll be taking delivery of 50- 60 aircraft a year, each year for the next four years. That means that we can offer our airports, and some airports who we presently don't operate at, not just traffic recovery, but growth into the medium term. In that regard, we've announced eight new bases for the coming fiscal year, a range of secondary airports, but also new bases at primary airports like Arlanda in Stockholm, Zagreb, Riga in Latvia.
We intend to continue to look for these growth opportunities within Europe where we can, working with airport partners, restore the traffic that they've lost due to the capacity cuts or failures of their incumbent airlines. We've been very heartened by the rollout of the vaccine program in Europe. Clearly, the U.K. has led the way, but most European countries have now confirmed that they expect to vaccinate typically around 80% of their adult population with at least the first dose of the vaccine by the end of June. That, we believe, allows for a removal of many of the travel restrictions into the July, August, September peak travel period, and we expect to see our traffic recover strongly into that period. On environmental issues, we've shown in recent years that we can grow our traffic while reducing our impact on the environment.
Every passenger that switches to Ryanair from a legacy carrier in Europe reduces their carbon footprint by approximately 50% per journey. Our new 737 Gamechanger aircraft order means we will be taking delivery of aircraft for the next four years that offer us 4% more seats but burn 16% less fuel, also deliver 40% lower noise emissions. This will help us continue to lower our CO2 footprint as we expand and grow across Europe. I won't deal on the revenues and cost because we've dealt with most of that on the slides, I'd like to turn now to our thoughts on outlook. The next year ended March 2022 will be challenging. There's considerable uncertainty about the rate and timing of the post-COVID recovery. We are somewhat optimistic.
We think that if Europe vaccinates most of its adult population, and certainly all of its high-risk groups by the end of June, then there will be increasingly very little justification for the type of travel restrictions, home quarantine or hotel quarantines that we've seen over the last year. Q1 traffic will, however, be still heavily curtailed. We expect to carry between five and six million passengers in the June quarter. We're hopeful that the September quarter will see a significant recovery of traffic, and that we'll be able to build on that into the third and fourth quarter of the current year. As a result of that, we're still operating on the basis that our full-year travel figures this year will be somewhere between 80 million-120 million passengers.
We're at the lower end of that range, but there is a possibility that we could get to the midpoint or higher than the midpoint of that range. That at this point in time, on the basis of the costs we've already taken out, and subject to obviously whatever the yields will be, means we think we're operating at somewhere between a small loss to breakeven for FY 2022. Obviously, there's huge uncertainty around those forecasts and that guidance. Subject to the vaccination program continuing to successfully roll out in Europe, to the removal of most travel restrictions by the end of June, and there being no emergence of any unforeseen variants, then we think those numbers are achievable over the next 12 months. Looking further out and beyond the COVID-19 crisis, Ryanair has used the last 12 months to significantly reduce our operating costs.
We're going to expand our ability to grow in the next four or five years with the Gamechanger order. We'll be expanding in a market in Europe where significant capacity has been taken out by airline competitors that have either failed or that have significantly cut capacity. We will be competing in the next number of years with a whole series of legacy airlines in Europe who have received huge quantums of state aid. As a result of receiving that state aid, they've been unable to tackle their high-cost base. They will be unable to compete with Ryanair into the future from a cost perspective, although in the short term, it's undoubted that we will be facing below-cost selling by some of those airlines. We expect to see a strong rebound this summer.
There's significant pent-up demand for air travel from families in particular who've been locked up for the last 12 months. We hope to be able to provide low-cost, on-time, friendly services for those families as the business recovers through the second quarter. We would hope that into the third and fourth quarters of the second half of this year, we'll see a return to 80% or 90% of our pre-COVID traffic volumes. The uncertainty is at what the fares will be, and we'll continue to be load factor active, yield passive. I have no doubt that Ryanair is going to emerge leaner, stronger, and probably with an accelerated growth profile from the COVID-19 pandemic, and that that will in time lead to more secure jobs for our people, lower fares and more choice for our customers, and stronger and better returns for our shareholders.
Neil, you want to take us through the slide presentation?
Wonderful. Thank you very much. Ryanair has the lowest fares and lowest costs of any airline. We're number one for traffic, customer service, and on-time performance. Our environmental credentials have improved with our CDP B- first-time rating, of which we're very pleased. We've 210 Boeing Gamechangers arriving in the next number of weeks. This will help us see us grow to 200 million customers by FY 2026. Our balance sheet, which is BBB-rated by both Fitch and S&P, remains one of the strongest in the industry. This financial strength, coupled with our lowest cost, will make us the long-term winner. As you can see, we're number one for choice and coverage, and indeed, we've already started growing with eight new bases already launched for summer 2021 and into winter 2021.
We've got the lowest cost of any airline in Europe at EUR 31 per passenger ex-fuel pre-COVID, 26% lower than Wizz, over 70% lower than easyJet. The gap is widening. On financial results, last year was one of the most challenging. In fact, it was the most challenging in our 35-year history. We saw an 81% reduction in traffic due to government lockdowns and travel restrictions to just 27.5 million guests from 149 million pre-COVID. Revenue tracked down by a similar amount, down 81%. While we did a very good job on reducing costs, we saw a 66% reduction in costs. This, unfortunately, wasn't enough to offset the lost revenue. As a result, we posted a pre-exceptional loss of EUR 815 million, the exceptionals being a EUR 200 million fuel ineffectiveness charge that we took in the year.
Our balance sheet, which as I've already said is BBB-rated by Fitch and S&P, is one of the strongest in the industry. In a very challenging year, we finished with EUR 3.15 billion cash, which I think was a very strong performance. Lots of liquidity in the business. Indeed, we've got lots of assets available to us as well. 85% of our Boeing fleet, practically all of our fleet, is unencumbered at this point in time. That's on the balance sheet at a very conservative EUR 7.3 billion book value. We're in a very strong position as we look towards debt maturities over the course of the next 12 months. With that, Michael, I'll maybe ask you to run through current developments, please.
Okay. Thanks, Neil. Just touching on current developments briefly, we see a very strong post-COVID pent-up demand with strong recovery of traffic subject to the continuing success of the vaccine rollout program through summer 2021. There's significant growth opportunities for Ryanair in the current year. We've announced eight new bases. Long-term, our EU cost leadership has been extended and enhanced by our experience in the last 12 months. We hope to take delivery of the first Gamechanger aircraft in May of this year, although we are losing confidence in Boeing's ability to deliver within that latest deadline. We've established a clear pathway to 200 million passengers by FY 2026. We're investing, as Neil has already pointed out, heavily in our ESG improvements under a new director of sustainability.
We are taking steps to enhance our EU ownership and control post-Brexit. The FY 2022 outlook is for traffic to be at the lower end of our 80 million-120 million range. In terms of demand, clearly COVID-19 uncertainty continues. Travel restrictions and lockdowns are widespread across Europe in Q1 as many European countries deal with a third wave. The rollout of vaccines will, we believe, replace lockdowns and testing into summer 2021. We've seen a very strong booking recovery in just the last six weeks. As I've said previously, the first week of April, we had only 500,000 bookings. Last week, that had tripled to 1.5 million bookings. We hope to see that strong growth recovery continue. We will be matching capacity with demand through H1, the remainder of H1, and into H2.
We've already are taking steps to make it easier for people to travel with us. We now have a document wallet on the mobile app of which customers can upload their COVID documents, whether it's vaccination certificates or negative PCR tests before travel, and many of our European countries will accept that on arrival. We're continuing, obviously, for the sake of our crews and our passengers, to maintain our healthy flying measures. Touching briefly on cost efficiencies over the last 12 months, we have pay deals agreed with most of our pilots and cabin crew. Pay cuts of between 5%-20% in the first two years, restored over years three to five.
Airport and handling deals are being extended and improved upon, and I would point particularly to the three larger bases at Stansted, Bergamo and Brussels Charleroi, where those deals have now been extended out at various different times, but between 2028- 2030. On the ownership and maintenance costs, I think the new 210 Gamechanger aircraft order, where we're taking delivery of aircraft for the next four years with 4% more seats, but that burns 16% less fuel and also 40% lower noise emissions, is a huge step forward in our cost efficiency. Not just for the next year or two, but for the next decade. We will be selling some of the older aircraft and returning aircraft as they mature from leases.
In terms of sales, marketing, and other costs, Ryanair Labs continues to lower our marketing spend, and we're seeing a significant or steep reduction in our EU 261 costs, admittedly as a result of an artificially high on-time performance over recent months due to COVID. Fuel, we believe, will kick in for the savings as well, particularly as we're 50% hedged into the next fiscal year at about $55 per bbl. Touch briefly on the Gamechanger. We hope to receive the first delivery in late May of 2021. We have been disappointed by Boeing's repeated moving back of the first delivery date. It was originally scheduled in early April when it was certified by the FAA and the EASA, but eight weeks later, we're still to receive the first aircraft.
We are confident that we'll take 60 of those deliveries next winter in advance of peak summer 2022. These are phenomenal aircraft, the aircraft that has 4% more seats but burns 16% less fuel will transform Ryanair's cost base and our economics. They will also make us a much more environmentally friendly aircraft. This is the most scrutinized, most audited aircraft in history. We think now that it's been back flying for almost four to five months, your passenger safety concerns have been ameliorated as it racks up more and more flights across North America, Latin America, and Europe. The lower-cost Gamechanger aircraft will help us to drive market share gains into a post-COVID-19 recovery. As our fleet grows to 600 aircraft over the next five years, we're confident that we can grow our traffic to 200 million passengers. That pathway is already well established.
We have huge opportunities as a result of airline failures and retrenchment into COVID. Airports are actively approaching us, seeking to recover their traffic and to lay down a platform for their own growth into the next four or five years. We have eight new base deals already announced for later this summer and this winter, which shows, I think, the vibrancy of the growth opportunity that's available uniquely to Ryanair. The Gamechanger aircraft deliveries will facilitate this growth, and I think you'll see us capitalize on this pent-up demand with our lower cost of operations, enabling us to make market share gains across Europe for the coming years, and we'll do so all off the back of our very strong BBB-rated balance sheet. We have made enormous strides in our environmental performance over the last 12 months.
I've set out there on the slide briefly 11 initiatives that have been rolled out in the last year, and we're very heartened by receiving an industry-leading B- score, our first-ever rating from the CDP, the Carbon Disclosure Project, and we've committed ourselves to increasing that rating from a B- to an A rating over the next two years. We have set ourselves further ambitious environmental targets. We hope to reduce CO2 per RPK by 10% to 2030. We've now set a goal to use sustainable aviation fuels to power about 12.5% of all of our Ryanair flights by 2030, and we're well on our way. In fact, we're 80% complete on our original five-year plan to be plastic-free on board our flights within five years.
I'm particularly pleased with the new partnership we've recently announced with Trinity College Dublin, where we're funding a EUR 1.5 million sustainable aviation research center with Trinity College to help us to develop new technologies and new fuels to help us reduce our environmental footprint as we continue to grow. We've also made significant progress on our social and governmental objectives in the last 12 months. Jobs have been saved through active engagement with our people and our unions. Pay cuts and furloughs have been a much better alternative to job losses that have been announced by many of our competitors in Europe. We've gone to incredible lengths to keep our pilots, our cabin crew, and our engineers current, even during the COVID lockdowns when we had very few passengers. We continue to make great strides on diversity.
We have appointed more female non-executive directors, and we're very proud of the great strides we've made in promoting more female senior managers within the group. Safety remains our number one priority. The chairmanship of the board and our committees, board committees, have been refreshed over the last year. We've appointed a non-executive director in charge of workforce engagement, Róisín Brennan, who's already commenced that work. All of our non-executive directors are independent, in full compliance with the U.K. Corporate Governance Code. We've improved our communications for customers with disrupted or COVID-canceled bookings.
We have launched our first-ever customer focus panel where we're going to be inviting customers, real Ryanair customers, to come meet with us twice a year, summer and winter. Take on board their advice as to how they'd like to see us improve our services, improve our communications, and improve the way we interact with our customers. We developed a new online cash form that makes cash refunds easier. We've also established an online travel agent verification process, so people who have mistakenly been duped into booking through these unauthorized third-party screen scrapers can now come to us directly to get their refund directly from us rather than having it lost or misdirected through these unauthorized agents.
I think one of the key features of recent months has been our zero change fee initiative, which has given passengers much more flexibility and created much more confidence about bookings during the remainder of the COVID-19 pandemic. EU ownership and control post-Brexit remains a challenge. We're currently about 1/3 EU-owned, although by restricting the voting ability of the non-EU shareholders, we're clearly fully EU-controlled. We will keep effective control in the hands of our EU shareholders. We are enhancing and protecting EU ownership. Non-EU nationals can no longer acquire ordinary shares. They can clearly continue to trade in the ADRs, but not ordinary shares. We've extended the restrictions on the trading of ordinary shares so that even if they're owned by non-EU nationals, they can only be sold to EU nationals going forward.
The board has taken further powers so that we are, in future, in the coming months, going to be able to write to non-EU purchasers of our ordinary shares, asking them to sell down those shares, or if needs be, forcing them to sell down those shares where we have non-compliance with those requests. We intend to grow our EU shareholding back over 50% over the next 12 months, and we're well on our way to achieving that objective. Neil, do you want to finish up on the outlook?
Thanks very much. Yeah, I'll run through the outlook for FY 2022. There still continues to be a huge amount of uncertainty. At this point in time, as we've previously stated, we think our traffic will be somewhere towards the lower end of the range, 80 million-120 million. Closer in in Q1, we're looking at somewhere in the range of 5 million-6 million customers for that quarter. Very difficult to say where yield's going to end up, although we have been encouraged on bookings over the past number of weeks. We will cautiously indicate at this point in time that we may end up somewhere close to break even, possibly a small loss for the full-year. If you look beyond FY 2022 and beyond COVID, our costs are in a very strong position.
We've done great work on cash preservation within the business, and we've got one of the strongest balance sheets out there. We're in a very strong position to deliver on our targets to grow to 200 million customers and 600 aircraft by FY 2026. We have the financial strength, we have the lowest cost, and we are the long-term winner in this sector. With that, I would like to thank you all. We'll be on the road this week. If you haven't got a meeting already, please contact Peter Larkin, our Head of Investor Relations, and we'll try to get you. Thank you. Bye-bye.
Okay. Michael, Neil, can I ask about FY 2021? The guidance was for a recent loss of EUR 800 million-EUR 850 million. You've beaten that, but nevertheless, it's still a loss of EUR 815 million. You might just talk about it, please.
Look, the last year has been clearly the most challenging in our 35-year history in Ryanair. European government restrictions, the COVID restrictions to protect public health have collapsed our business over the last year, as it has every other airline. We've seen an 81% decline in traffic, an 81% decline in revenues. While we had a very strong cost performance, costs were down 66%, it wasn't enough to offset the loss of revenues. Which is why in the prior year, we recorded a profit of just over EUR 1 billion, and this fell to a loss of EUR 815 million this year. Better than we had originally predicted, nevertheless, a fairly traumatic loss for an airline that's been consistently profitable for our 35-year history.
One area that has consistently done well is in ancillary revenues. Again, this year, relatively. Maybe what's behind that?
Yeah. We did have a strong year, Stephen, about just EUR 22 per passenger spend in ancillaries. Standouts for me would be the conversion on reserve seating and the priority boarding. They performed very well, and that nicely offset a collapse in our onboard spend.
Just talking about ancillaries, where do you see this going post-COVID? Clearly there's investments in Ryanair Labs and things like that.
We expect it to recover strongly. The key products, which is priority boarding, reserve seating, has held up remarkably well during COVID off a low passenger base, but we see no reason why that would change. Ryanair Labs continues to roll out dynamic pricing models. We continue to evolve and improve the way our customers select and pay for ancillary products. We think there's an element later on this year whereby the onboard spend will be helped by the reintroduction of duty-free on flights to and from the U.K.
There's a lot of exceptional charges with hedge ineffective, Neil.
Yeah.
Maybe you could talk about them.
We did EUR 200 million exceptional charge in the year. This was all down to, or most of it was down to the traffic declines. We had hedged our fuel on pre-COVID traffic volumes. As a result, a good chunk of our fuel hedges went ineffective. Of course, we had ongoing delays in aircraft deliveries, and we renegotiated slight reductions that again made some of our CapEx hedges ineffective. That's behind us now, and we're moving on.
Can I ask about the fuel hedging position?
Sure.
Actually, the policy around fuel hedging. It comes up quite often with investors. If I ask about the layered-in carbon cost in there and counteract with fuel efficiency. Just generally about fuel, because obviously it's a huge cost item.
Well, the key issue for the next 12 months, we're 50% hedged at about $54 per bbl. Current spot's about $68 a bbl. I think our hedging philosophy will change into the future. With the experience of COVID, I think we'll never hedge 90% of our rolling requirement again. We'll probably hedge between 50%-70% on an ongoing basis. We're also looking at the possibility of hedging some of the carbon, as you rightly point, the carbon exposures going forward. We have a surplus this year, it's not an issue for us. Certainly into FY 2022 or FY 2023 or FY 2024, we'll look to start hedging those carbon tax exposures as well.
In terms of just COVID, obviously, and in terms of the preparing for the ramp-up into the summer, it must be challenging with close-in bookings and just operationally.
It has been very challenging, Stephen. We've remained very flexible. We're matching our capacity against the demand that's in the market. We've launched a number of new bases for this year. We've eight new bases for the summer and into the winter of FY 2022. Since the start of COVID, we've worked on keeping our crews, our aircraft current, which means that when we do get back flying, and there's huge pent-up demand out there, that we're ready to go at almost a moment's notice.
In terms of the booking curve, it must be very close in, Michael.
It is. As travel restrictions are lifted, the booking curve is remarkably close in. I would say, though, over the last six weeks, particularly as the U.K. has lifted restrictions, we've seen a dramatic strike or, if you like, spring back in bookings. The first week of April, for example, we took just over 500,000 bookings. Last week, we exceeded 1.5 million. It's trebled in the space of six weeks. Now, clearly, it won't continue to grow at that rate. It does show that there's a very strong pent-up demand for low-fare air travel, and I think we would hope to capitalize on that, particularly families booking summer holidays through the peak period.
I guess a question that often comes up is in terms of fare levels and with the close booking curve. Maybe you could talk about that?
Well, as you said, Stephen, as Michael already pointed out, the booking curve is hugely close in, so it's impossible to say where the fares are going to end out on this year. Our objective will be to build the loads again. We're load active, yield passive. That strategy hasn't changed. A lot of good reasons for doing that. It helps the unit costs and the business. It helps recover traffic for the airports around Europe. Importantly, it helps us grow our market share. Look, I can't give any guidance on fares at this point in time.
I think it's fair to say we'd expect volumes to recover first and then followed by pricing, and that would be very much the way we'll be running the business over the next six months.
Well, if I could ask just related to that, the whole issue of PCR testing and the cost of that. Clearly, that may affect airfares. Maybe could you review, Michael, on a wider question on the EU green certs or even the U.K. traffic light system and how you think these kind of blockages play out.
I'm not sure. We don't believe it often just gets overtaken by the rollout of the vaccinations. Most EU countries expect to have about 80% of their adult population receive a first vaccine by the end of June. When you have widespread population vaccination, particularly in Europe, we see no reason for testing, whether it's antigen or PCR. It adds nothing. I think we're cautious. I worry about government passports and things that are issued by government. What we've created in Ryanair is you're able to upload to our mobile app either your vaccine certificate or your negative PCR document. That needs to be something simple. It needs to be either paperwork that's uploaded or something, for example, the NHS app in the U.K., which you're able to identify.
Most of the European countries have already announced that they're willing to accept that for entry this year. I think we don't have time, and governments won't get their act together on a kind of a Europe-wide passport. Accepting verifiable vaccination confirmations or negative PCR testing will be fine for this summer.
Okay. Maybe just talk about growth plans and potential. There is a number of new bases and what type of airports you would be looking at.
Yeah. There's huge growth plans out there at the moment and huge opportunities, particularly as we take delivery of the MAX Gamechanger aircraft over the summer and the next four or five years. We've already announced eight bases, including the likes of Billund, Arlanda, and Stockholm, Zadar, Zagreb, and many others. I think there's going to be huge opportunities, particularly with the capacity that's come out of the market. We've had a number of airline failures in the past few months. I think there'll be more. We've seen a lot of capacity come out, and we're the only airline that's actually growing with any significant numbers over the next few years. So we would have good confidence that we'll deliver on our target of the 200 million guests by FY 2026 as we move the aircraft around the various bases in Europe and grow new bases and opportunities.
Michael , can you talk about the cost leadership of Ryanair and what the initiatives that you've done over the last number of years to maintain and indeed enhance that as we go into the next couple of years?
Yeah, I think we've done very good work in the last 12 months on the cost base. The obvious ones, we've negotiated pay cuts, not just with the managers, but most of our employees across all bases. Between 5%-20% pay cuts. They'll be restored through years one and two, and then restored back to them in years three, four, and five. We've repriced the Boeing Gamechanger aircraft order, which will deliver further modest savings in aircraft costs for the next decade. We're seeing a significant uptick in airports out there looking to recover traffic, putting in place growth incentives. The three key ones we point to are at three of our largest bases, which is Stansted, Bergamo in Milan.
Charleroi.
Plus Charleroi. We've now extended low-cost deals at those airports out to 2028 or to 2030. You won't see a lot of these cost savings arriving in immediately, but the fact that we have extended and lengthened those kind of cost deals means we will retain a huge cost advantage over every other airline in Europe, I think for the next decade. There are going to be some cost pressures. We think there's a real risk that the Eurocontrol ATC providers will be attempting to pass on their losses to the airlines as we recover coming out of COVID. Some of the monopoly airports are going to try to do likewise. We've called for regulators around Europe to be wary of that.
We've all suffered huge losses in the last 12 months, but the airlines can't be the insurer of last resort for monopoly providers of either air traffic control services or monopoly airports. Where the market functions efficiently, we're seeing lower costs, airport partners working with us to recover lost traffic and also to look forward for growth. As Neil said, we've announced eight new bases in this fiscal year, including some very exciting primary airports, Arlanda in Stockholm, Riga in Latvia, and Zagreb in Croatia.
Maybe you can talk about the Boeing, the MAX, the 737-8200. It's the raison d'être now going forward of the cost structure. What's the delivery profile? When is it coming?
It was supposed to come in January. It was licensed and approved by the EASA and the FAA on the 6th of April. We're quite upset with Boeing that eight weeks later, we're still waiting for the first delivery. The management in Seattle have continuously missed promised deadlines for the first delivery. We're now being told by them that the first delivery will be in late May. I'm not sure we necessarily believe that. Originally, we had hoped to take delivery of 14 of these aircraft in advance of summer 2021. As the management team in Seattle continues to mismanage that process, I think there's a real risk now that we may not see any of these aircraft in advance of summer 2021.
Over the medium term, we expect those delivery problems to be resolved, and we're confident that we'll take at least 60 of those aircraft in advance of summer 2022. In the short term, there's nothing but problems, and the problems lie not with the FAA or with the EASA, but with Boeing. Over the medium term, we think it's a very exciting aircraft. We're looking forward to taking those deliveries. We will be one of the few airlines in Europe with 60 new aircraft for summer 2022 able to restore traffic or deliver new growth to those airports that are willing to work with us to achieve that.
Talking about growth, where are those aircraft going to be based? Is there already planned? Initially, Stephen, the first number of aircraft that come in, we put them into key maintenance bases for the likes of Buzz, Malta Air, and Ryanair across Europe. Thereafter, the airlines are competing with each other to try and get capacity. They want to grow. They're all very keen to get their hands on these new efficient aircraft, there'll be plenty of opportunities across Europe to place them.
Have the pilots been trained on them with the simulators maybe?
Yeah, we're one of the few airlines. We have three MAX simulators already in Dublin and Stansted. We're actually already putting pilots through the simulators. We already have them trained for the MAX aircraft. What we need now is the aircraft.
Yeah. Okay. What about, Neil, the fleet plans in terms of leases you have or sales process?
The key fleet plans we've just discussed is the delivery of the 210 Gamechangers, and that now enables us to hand back the remaining Boeing 737 leases that we have. We've two, for example, going back towards the back end of this month. We'll also be able to sell some of the older aircraft out of the fleet, which again, had been slowed down due to the delay of the MAXs. That'll help keep the average age young as we move forward. We've got 29 A320s in the fleet. That's pretty much frozen. We start returning the first A320 from the winter of 2022. Over a three to four-year period, that fleet will wind down as well, and we'll be left with about 600 aircraft and 100 million - 200 million passenger per annum at that stage, which will be roughly around FY 2026.
One thing comes up again is the MAX 10, which is the larger Boeing aircraft. That's still in the talk process down the road?
We've already confirmed that we're in discussions with Boeing on a follow-on MAX 10 order. Boeing have committed that we'll be first in the queue. We're not there yet. The pricing isn't yet right. I would be reasonably hopeful that once we get the Gamechanger aircraft delivery issues resolved, we can then focus our energies and those of Boeing on negotiating what I hope would be a follow-on order for MAX 10s, which would take us out into deliveries in the period from 2026 through to 2030.
Maybe you could talk about the different airlines in terms of within the group, whether that's Buzz or Lauda or Malta Air.
Well, they're all performing well. Last year was a challenging year for them, but in fairness, they stepped up to the plate. They cut costs across all of the airlines. They preserved cash as we need it. Now, there's positivity. They're looking forward to delivery of the first aircraft coming in and starting to grow again. Buzz have just under 50 aircraft in their fleet and keen to add to that. We have 120 Boeings now in Malta Air, and Lauda, as we already discussed, have 29 A320s and would hope to get their hands on some Boeings in due course.
One question that comes up a lot, of course, is the balance sheet and liquidity and where that is going forward. Obviously, you have a BBB-rated balance sheet. Obviously that's a significant issue at the current time.
Yeah, sure, mate. As you say, the balance sheet is straight away we're a BBB-rated airline, world industry-leading rating. We, at the end of the year, had EUR 3.15 billion in cash which was a very credible performance in a year when our traffic collapsed by over 80%. I think it demonstrates the strength of our business model. Now, clearly, net debt has jumped, and we'll be very focused in the next number of years about repairing the balance sheet, paying back net debt.
But we continue to look to that balance sheet strength with EUR 3.15 billion in cash and 85% of the own fleet is entirely unencumbered. Unlike a number of competitors, we haven't been out there doing sale and lease backs at distressed prices. We haven't needed to, thankfully, and we will emerge out of this COVID-19 pandemic with one of the strongest airline balance sheets in the world.
The obvious question is in terms of cash burn, Neil, which how has that been lowered during the year? I guess we're all waiting for working capital to turn positive.
Yeah, well, we reacted very quickly at the start of the COVID crisis, and we cut costs right across all of the airlines within the group. That was important. We participated in the various furlough and government payroll support schemes, again which was hugely beneficial. The share buyback, as you remember, was canceled last March, and we deferred non-essential CapEx. Of course, to strengthen the balance sheet, we went to our shareholders in September where we raised EUR 400 million. We did an EUR 850 million bond, and we tapped the CCFF for GBP 600 million, which we've now extended out to 2022. I suppose the cash burn now at the moment, we're seeing the last couple of weeks, thanks to the improvement in bookings, that operational cash flow has gone marginally positive.
We'd be hopeful that as we go out over the course of the year, we will see some improvements there.
In terms of CapEx going forward, obviously with the Boeing deal, maybe you can give some flavor, Michael, of where gross CapEx is at least.
Sure. Obviously, with these delivery delays, the number keeps moving backwards. Subject to taking 60 of those aircraft before summer 2022, we expect kind of gross CapEx in the second half of the current fiscal year of about EUR 1.2 billion-EUR 1.3 billion, including maintenance CapEx. The CapEx will ramp up over the next four years, we should hit peak CapEx in FY 2023 or FY 2024 at between EUR 2.3 billion-EUR 2.4 billion. We're confident that we can actually finance all of that through our own cash generation and debt instruments over that period.
In terms of financing the aircraft, Neil, is like the bond market the preferred route would you say given the rating or?
As Michael just alluded to there, we expect to do some of it out of our own cash resources, but we do have an extremely strong balance sheet, BBB investment grade, 85% of the fleet unencumbered, which means we can be opportunistic in what we do. We're interested in the lowest cost of financing. I think it'll be a combination of cash resources, bonds, bank debt. It could be secured or unsecured, probably more likely unsecured. Indeed, none of the key lessors have exposure to us now on Boeings at this stage for sale and lease back. We have lots of opportunities over the next few years to come up with the lowest cost of financing for the fleet.
Obviously, very topical is ESG. You got this CDP B- rating. Environmental, maybe you can go through that and SAF. It's again, obviously very in front of people's minds at the moment, Neil.
Since we appointed a director of sustainability earlier on this year, we've made significant improvements. As you said, the CDP B- rating was something that we're very pleased with, more to do on that front. We've set aggressive targets for ourselves where we want to reduce CO2 per passenger kilometer by 10% to 60 g over the next decade. Key to achieving that will be the Gamechanger aircraft, which we're starting to come into the fleet, 16% more fuel efficient and lower CO2. We're also actively now looking at SAF, sustainable aviation fuels. We've set a goal for ourselves to have about 12.5% of our fuel requirements dealt with through SAFs by 2030.
To help get there and to make sure we've got the right blend, we've invested with Trinity College Dublin to set up a sustainable aviation research center, which will look at this and hopefully make SAF more readily available. Of course, we're leading from the front with a lot of other initiatives as well. We're the launch partner with CNBC on their ESG panel, which includes 35 global leaders. We've been involved in the sustainable aviation research with Trinity, and we're doing a number of other things with Eurocontrol, the EU and various other parties. I think we've made huge progress, but there's more to be done.
Can I just come back on SAF? I mean, the industry. Has been talking about it seems to be now the topic of focus. Do you think the industry is minded to get the cost and the availability of SAF so it's a credible alternative really?
We think so. I think there's a renewed emphasis behind the development of SAF. The European Commission is pushing it very hard. The airlines are working very cooperatively together. The big challenge and the issue for us is can we produce or can we source enough availability by 2030 to replace 12.5% of our own fuel? There's no doubt that's a challenging target, but the technology is advancing at pace. We think the cost of SAF will come down significantly, and so we've set that ambitious goal. Whether we get there or not, who knows, but if we don't start on this journey, we won't get there.
I think it's encouraging. A number of fuel companies have contacted us since we announced our target to see where they can help us to get there, has been huge. I think the industry wants to get there. We want to get there. We just have to work on it now over the next decade. In terms of, just to talk about the unions, which are, and I guess the working and engaging with them through the crisis.
I think it's been remarkable. If you look around Europe at the number of carriers that have gone bust, legacy airlines who have let go thousands of employees, we've managed this process over the last 12 months, largely by negotiation with our people and their unions. We've put in place sensible pay cut arrangements or pay deals with our people, generally around pay cuts in years one and two, but being restored back in years three, four, and five. And they were all reasonably modest, between 5% and 20%, 5% at the lower paid, 20% for the higher paid people. Management have taken pay cuts in the last 12 months. Any bonus payments there's been no, but have been canceled in the current year.
I think we've done it sensibly, working with unions and with our people, and the other thing that we've managed to do is to minimize job losses. We originally set out a target of between 3,000 and 5,000 job losses. I think it's less than 1,000 over the last 12 months. I think the other thing I would point to is we have worked very hard to keep all of our pilots and cabin crew current during the last 12 months, even if in some cases that meant flying empty aircraft.
We've managed to keep people from current, so that they don't have to go back in and do very long simulator retraining or refresher courses. We're ready to go back into service as quickly as we can, as soon as the vaccine rollout allows us to return to service this summer.
In thinking about just the industry in more longer term, do you think when capacity or when post-COVID, the capacity in the market comes back or there's a lot of retrenching, you see Alitalia and others. I'm really thinking the way the U.S. market consolidated and whether the European market can at least accelerate that consolidation.
I think there's a lot of capacity simply can't come back. You've seen if you take the airlines that have gone bust, the Thomas Cook, Germanwings, Norwegian, effectively, there are huge amounts of capacity that simply cannot return. Even within the state-aided carriers, you've seen Lufthansa significantly reduce the short-haul fleet. Alitalia has reduced the fleet by 25%. TAP has taken out 30 aircraft, nearly 20% of its fleet. Those planes can't come back. I think we're looking at a medium-term environment in Europe, certainly for the next three or four years, where at best the available capacity will be at between 75% and 80% of its pre-COVID numbers. I think that's why it's so key that we have, with Boeing, put together this delivery, this order of the 210 Gamechanger deliveries delivered over the next four or five years.
It puts us in the box seat to begin to make up that capacity shortfall, but it will take three or four years at least before Europe returns to the pre-COVID capacity that was there. What do you think?
No, I'd agree totally with you, Michael. In fact, some of the other airlines that are growing are actually moving their capacity outside of Europe as well. We're seeing that with Wizz, for example, where they're going more into the Middle East and down towards Pakistan and India. We'll be the only real airline growing with any numbers for the next few years, which is why I think we'll have no difficulty hitting the 200 million customers and having lots of choice on where we place the aircraft.
Neil, what's the risks of cost increases in the industry, say environmental taxes, for example?
I think there's a number of risks out there. We already talked about, for example, we could see upward pressure on the Eurocontrol, but environmental taxes are something that are coming. I think there's a desire within the EU and among the airline groups to invest more in sustainable aviation fuels, which might reduce the impact. There's a chance that they may be used as some form of state aid, as we've seen already in Schiphol, where long-haul connecting traffic has been exempted. There are real risks, but I think it's important, and that's why the airlines are working hard to reduce CO2 across the industry. There is a real risk in the next few years. There'll be more APDs. There'll be more environmental taxes coming down the tracks.
Obviously, to the extent that there isn't environmental taxes, we would say to the European Commission, "Well, by all means, you're going to have environmental tax. Can we please have back the EUR 630 million in environmental taxes we already pay on an annual basis?" U.K. APD, German APD, ETS scheme. We can't have double and triple environmental taxes. The other big issue in that area is at the moment, the environmental taxes are only levied on the intra-EU travel. The legacy airlines are not paying environmental taxes on their long-haul flights, nor are the non-EU airlines, despite the fact that that long-haul travel is far more environmentally damaging than the short-haul, efficient low-fare carriers in Europe.
There was a very good report out of Eurocontrol back in January, which proved that point, where it showed 7.5% of the traffic, the long-haul, was causing 51% of the emissions. As they design CORSIA and move on, it's imperative that that's included within any scheme that's put in place.
Maybe just talk about the outlook. Michael?
Yeah. Okay. Look, there's huge uncertainty in the next 12 months, Stephen, and much of it revolves around how fast vaccine rollouts across Europe allow for removal of travel restrictions and recovery, particularly into the peak summer travel period. Q1 has been low. We're guiding somewhere between five and six million passengers in Q1, but there's been a very dramatic recovery in bookings in just the last five weeks. If that continues, and we think it will through into the remainder of June, July, then we think we're on track certainly to hit the lower end of our current guidance, which is full-year traffic up between 80 million-120 million. I think as long as there's no recurrence of outbreaks or variants that the vaccinations don't deal with, then I think we can look forward with some degree of optimism into that year.
We, at this point in time, think we're somewhere between 80 million- 100 million passengers. The likely outturn subject to yields, obviously, is that we're looking at something between a very small loss and break even for the next 12 months. There's a lot of moving parts and there's a lot of uncertainty, and most of the uncertainty revolves around the timing of the recovery and the fares that people will pay into the key June, July, August, September travel period.
Okay. Well, thanks, Neil. Thanks, Michael.
Thanks, Stephen. Pleasure.