Michael O’Leary: Thanks, Stephen. Neil, do you want to take the first one, cost?
Neil Sorahan: Yes. Okay. Stephen, the rebasing of ETFs against 2023, we are starting that at the moment, but we think it will be modestly positive for us. I haven’t got the final numbers on it, yes. As you know, we are very well hedged on carbon in any event, like we have got all of our credits hedged next year at about €76 in AUA, which is down from €81 in AUA in the current financial year. But I do think that ETS reform will be modestly positive for Ryanair.
Michael O’Leary: And I think the pricing situation I’ll ask Eddie Wilson here, CEO of DAC. Eddie, what are you seeing generally by market or in general terms for summer ‘24?
Eddie Wilson: I think it’s very early to say. But I mean you look at our three largest markets, Italy, Spain and the UK, where we have the largest proportion of our growth. So, nothing unusual there or anything different across those markets at all and then we’ve got a lot of growth coming out of a places like Albania, Morocco and Croatia. But like you are still in very small numbers for the summer season and so it’s – there are no – I mean, like the place where we put in a larger amount of growth in places like Albania, obviously, will – but it’s only a small proportion of what we do. So – but I think it’s fair to say we’ve been very surprised at the strength of the – both the load factors and the fares in our new entry into Tirana, which is a market that was dominated by one of the other so-called low-fare airlines.
And we are running 90% load factors having launched on November and the middle of the winter. I mean, the only – from my point of view, in terms of growth is a disappointment that we are going to be somewhere 7 aircraft short, maybe 10 aircraft short for summer 2024. It really is constraining our growth. We have many more airports out there, who were looking for these aircrafts. And that doesn’t even factor in things like returning to Ukraine, if or when they defeat the Russian. We see very strong growth across almost all our airport customers for additional Ryanair aircraft, particularly in markets where they are struggling to recover their pre-COVID volumes.
Michael O’Leary: Next question please. Thanks, Stepehen.
Operator: The next question comes from Dudley Shanley from Goodbody. Please go ahead. Dudley, your line is now open.
Dudley Shanley: Good morning, Michael. Good morning, everyone. Two questions for me as well. First of all, on the higher productivity pay for pilots. You mentioned in the statement that, that brings increased operational resilience. Can you just talk us through what it actually brings for you? And then the second question is to do with the capacity dynamics in Europe at the moment. Obviously, the GTF engine is the kind of biggest new thing this year. How long do you see that market staying as tight as it is and below kind of pre-COVID levels? Thank you.
Michael O’Leary: So just give me the second half of that again, with the GTF engines.
Dudley Shanley: Just in terms of the capacity dynamics being tight in Europe, obviously, it’s going to be tight this summer, but do you see that rolling into next year and beyond?
Michael O’Leary: Yes. I will do the engine and maybe I give Eddie, you can talk about the productivity pay. Yes, if you take capacity generally, Eurocontrol have confirmed last year, European short haul was about 93% of pre-COVID. The question for summer ‘24 is it going to grow or is it going to decline? We think it’s not going to grow. We are not sure yet whether it declines. It depends on which markets the A320 operators ground aircraft or don’t grow. For example, if you take the likes of Weeze, are they going to kind of constrain their growth in the Middle East or are they going to constrain their growth in Europe. I suspect we are going to see more constraints on growth in Europe where they are struggling to compete with us.
But – and we are still waiting to see where – those final kind of scheduled decisions haven’t yet been made or schedules haven’t yet been altered. With the backlog going engine shops around the world, I mean, it seems clear to me that the brand with the engine issue is going to run on through summer ‘24 and again in summer ‘25 may even stretch you to summer ‘26. The OEMs are not going to deliver meaningful aircraft numbers between now and then. Ryanair is very fortunate. Okay, we may get left short to aircraft this with summer by Boeing. We’ll pick them up for the summer of 2025. We are scheduled 30 aircraft in advance of summer ‘25 close whatever they leave us short this year. But really, other than that, there are very few new aircraft deliveries going into short-haul Europe.
We do expect the Asian market will recover more or reopen more for summer 2024 and that will enhance demand across short-haul Europe, particularly if it builds up transfer traffic on the legacy short-haul. So all the indications are at this point in time is that demand – our capacity is going to be constrained in European short-haul for summer ‘24. I see no reason why demand won’t be strong. We are just not sure where that’s going to fall in terms of pricing. I do believe pricing in summer ‘24 will be ahead of summer ‘23. It won’t be up though. I mean, I think it won’t be up 15%, 17% we saw last summer. I think kind of mid to high single-digits, maybe low double-digits is a reasonable expectation at this point in time. But that’s capable of being derailed, if there is geopolitical issues, some adverse developments in Ukraine, etcetera things like that.
But certainly, all the indications are at the moment is that summer ‘24, particularly through the school holidays, the Easter break, etcetera, is strong and pricing is slightly upwards at this point in time. Eddie, you want to give the flavor of what productivity pay, why that sales resilient?
