Ryanair Group CFO Neil Sorahan: We could see weaker airlines fail over the next few months

Yeah. Well, as you said about the last quarter, we did see the impact of the Middle East crisis on unhedged fuel. I mean, Ryanair is very well hedged. 80% of our fuel bill is hedged out to the end of next March at $67 a barrel, but the 20% unhedged doubled to almost $150 a barrel in the quarter just ended. That said, you know, you mentioned Boeing. We've got the last of the Boeing 737-800 game changers into our fleet over last winter. So thanks to having all of those 200 aircraft or 210 aircraft with a fleet of just under 650 aircraft and grew traffic by 6% in the first quarter of the year, we'll grow overall by about 4% this year to 216 million passengers. I think, interestingly, you're going to see a shakeout in capacity in Europe as a result of what's going on in the Middle East. There's a lot of carriers out there don't have the cost base that Ryanair had. Ryanair has a balance sheet; we paid down our final bond, 1.2 billion in May. So we're now effectively debt free. And we own all of the assets. And so I think once you get into the kind of winter period, some of the weaker carriers are going to find it very difficult. And we may see some failures over the next number of months.

No, I'm not particularly interested in buying any other airlines. Reason being, they all tend to not own their aircraft, have very expensive leases, have pension deficits and all kind of stuff that we wouldn't want to take into Ryanair. What we do is we buy aircraft at the right price, you know, 300 MAX 10s due to start delivering from January of next year. We bought those aircraft at prices during COVID. So very good pricing on that aircraft type. That's going to see us grow to 300 million passengers per annum over the next decade. So by March 2024, we'll be carrying over 300 million passengers across Europe every year.

Oh, we have over 715,000 people flying with us today. No shortage of bookings, no shortage of people traveling. They're just booking that little bit closer in. I think there was some hesitancy back early in the first quarter where there was some concerns around fuel supply. We all know that's not an issue. Lots of fuel to get people out and back home. Again, just good value for consumers in the market at the moment.

Well, I think you're going to see, as we just discussed, you're going to see capacity coming out of the market. M&A is continuing across Europe. There's going to be failures. Capacity comes out. That means there's more risk to the upside than the downside on fares. So I think when you kind of look beyond this year into next year and beyond, pricing one way, and that's up. At the same time, our cost advantage over everybody else continues to improve. The next nearest competitor to Ryanair in Europe, their unit costs are some 80% higher than ours. And then the number two are at 150% higher than Ryanair. And we're seeing more and more airports coming to us on the basis that they don't see the longevity of competitor airlines. They want to make a return on their car park, their hotel, in their shopping mall, and they know that Ryanair can deliver the volume. So we're locking in very good airport deals. And then of course, the MAX 10 aircraft is going to deliver significant savings. It's 20% lower fuel burn, 20% more passengers, which drives productivity, volume, growth opportunities and more ancillary revenue.

Oh, well, we're not having discussions now anymore around when the aircraft gets certified. We're having discussions around entry into service. When do people, when do Boeing need galleys and seats in Seattle? So we have a high level of confidence. Boeing tell us that the MAX 7, the smaller of the MAX aircraft, will be certified in the near term. Lear was out last week saying that. We spoke to Boeing last week, and they're expecting the MAX 10 to be certified in the late summer. It might slip into October, but.