Michael O’Leary: Mark, good.
Mark Simpson: Yeah. Hi. Good morning. Just one broader subject in matter. ESG had a very successful conference in Dublin in December, probably more a question for Tom. Just wondering what sort of key developments we could expect this year to further that? Is that kind of additional staff offtake agreement as an example? And then a second part, a second question. Are you as yet seeing cost benefits of this improvement in terms of negotiation with airports in order to kind of further embed your unit cost advantage or do you think that will become an increasing feature in future years.
Michael O’Leary: Okay. Tom, do you want to take the first half? I give an update on our ESG and .
Thomas Fowler: Thanks, Mike. Yeah. Look, I think the one big thing we did December in fac that retrofit of the winglet 1.5% saving on the NG fleet. But I think as we roll forward, looking at more staff offtake MOUs in a couple of more key regions over this year. And obviously, game changer aircraft coming in as well. There’s a benefit over the next 12 months, but to be close to the retrofit of the winglets and the safe .
Michael O’Leary: Great. I think cost benefit efforts, I mean, look, we are seeing across Europe, we are in active negotiations with a huge number of airports who have suffered dramatic traffic declines as a result of COVID, either their incumbent carriers that failed or their incumbent carriers that cut capacity and are not restoring. I would point in particular to the airports in Italy, airports in Central Europe where with are coating capacity or not growing is growing. We have a huge number of Weeze customer airports who are now talking to us, I think recognizing that Weeze are not growing or not able to grow in their markets. The U.K. has been a particular source of growth as well. I mean, we’ve done very good extension.
The core deal, which is with Lufthansa, was done during COVID now runs out to 2029. But across UKPs, we’re seeing meaningful growth in markets in Birmingham, Manchester, Bristol, Belfast, Glasgow, Edinburgh, all of whom are struggling to recover their pre-COVID traffic and are turning to Ryanair to deliver that growth. In Spain as well, we’ve seen a €“ Ed, do you want to add any…
Edward Wilson: I mean, like if you see what’s happening in Spain, particularly in post recovery there, whereby the Spanish government, there’s no doubt are leaning on AENA (ph), with their pushing then charges. But like AENA as ever, are already signaling that they’re going to increase them by 2027. But there are — when you look at what the Spanish government are saying, they’re saying, look, Ryanair is potentially valuable in the regions. Not just for tourism, but for connectivity. So you having that pressure downwards. You see what’s happened in Portugal, whereby we have had a sort of a — where the regulator intervened on there. And we saw reductions in charges at Faroe and Porto and Ryanair, we pitch and put extra aircraft in those places, but also then you see in places like Madera and the Azores and Lisbon charges rising where there’s no growth going into those.
So I think it’s happening at not just at an airport level, but also at a national level. But you do see some outliers there in airports that are just hoping that things are going to bounce back and have no idea where that’s going to come from because the legacy carriers are not coming back. EasyJet is not growing and it has moved further east. So I think there’s still a shakeout to come on some of those airports as well, whereby they’ll realize that the traffic is coming back, and they’re going to have to stimulate or incentivize Ryanair to come in and fill those capacity gaps.
Michael O’Leary: Okay. Thanks, Eddie. Next question, please.
Operator: Thank you. That’s from the line of Johannes Braun at Stifel. Please go ahead.
Johannes Braun: Yes. Hi. Just one question from me. You mentioned those impressive market share gains in many European markets, Italy, Spain, U.K., Ireland. Obviously, two of the largest markets in Europe are still missing in that business, France and Germany. And obviously, totally aware that you allocate capacity in, let’s say, opportunistic way. Those two markets are obviously high cost, but they are also high-yielding markets. So especially in Germany with Lufthansa being so restrictive on capacity. I mean, you mentioned that. I’m still wondering when we are kind of nearing that tipping point when the high yield environment in those markets would compensate for the higher costs. And therefore, it would make it worthwhile for you to start allocating more growth to those markets.
Michael O’Leary: Yeah. Good question, Johannes. Two points I’d make on that. Firstly, we allocate capacity where the airports are in those airports who want most, which is the airports who are going to kind of bid for it with efficient growth incentive schemes. And at the moment, that’s taking place in bigger markets like Italy, Austria, Poland, Ireland, to be fair to Dublin Airport, who I’ve been a long-term critical, I had a very good COVID recovery scheme last year, and they’re working on an extension of that into this year. And in the U.K. as well, these are major markets where we are taking extraordinary lump sum market share gain. France, we’re growing in, but France has always been a particularly peculiar market. It’s a market that there isn’t much outbound travel.
We have increased pasta-based in Beauvais, Marseille to Toulouse. But it’s too small to put in there. And our market share gain, while we’re gaining market share, it’s small. Not back — we’ve no huge desire. I think unless you do something significant in Paris or domestic France, you’re not going to have a significant market share in the French market. And I have no desire to be in either charge to goal or orally or in the French domestic marketplace. Germany is much more interesting. I mean, we have — you see the kind of the outgo date, what happens as a result of the lobbying might of Germany, the great German National Champion recipient of EUR13 billion in stage eight, because there was a bit of a COVID crisis. So the German government immediately gives them everything they want.
The competition rules are suspended for all German M&A. If Lufthansa wants to buy something in Germany, they’re way through Phase 1, no remedies nothing at all. And what you get now is, in the last two years, the EasyJet has significantly reversed out of Berlin. We reduced capacity in Berlin. We closed the base in Frankfurt, Main. And for no reason then Frankfurt Main were unable to extend the five year low-cost growth deal we had with them because they haven’t managed to open the low-cost T3 in Frankfurt. I think what you’ll see in Germany this year is traffic will remain at about 70%, 75% pre-COVID. A number of the bigger German airports with a notable extension of the tool of Munich and Frankfurt will see meaningful traffic declines. And I think what will happen is after a year or 18 months of that, the German airports will finally — some German airports will wake up and realize that Lufthansa is never going to grow at their airport and they’ll need someone like Ryanair in there to grow.
They will come back to us with growth incentive fees.. But it is very difficult in Germany for airports to do that because German rules and regulations, which are largely written by Lufthansa, make it difficult for airports that are underserved to discount and to engage in low cost or in growth incentive schemes. But it will come because the market will continue to suffer. German consumers will continue to suffer because we’ve got to keep being screwed by Lufthansa for extraordinarily high airfares. But like if the German suffer for one year or 18 months, that’s not the worst thing in the world. At that stage, we’ll have completed our growth in Italy. We’ll have based on our growth in Spain and others, and we will have additional aircraft. And we’ll probably return to looking at growing in the German marketplace.
But for the moment, we’re very happy to leave it to Lufthansa and Lufthansa to do what it does best, which is crew German consumers wherever they have a monopoly. And I think in 12 or 18 months’ time, that will encourage more German airports or a change in the German regulations that will be much more outward looking and a lot less about protecting Lufthansa at some kind of national champion of high fares. But there’s lots of growth out there. And we certainly — Central Europe is a market that is growing very strongly for us. It did get disrupted, and it was the market that was most disrupted by the €“ invasion of Ukraine. We are very committed to returning to Ukraine as soon as it is safe to do so. We’re hiring quite a number of Ukraine pilots and cabin crews specifically so that we can reopen — we can restore basis in Ukraine if or whenever it’s safe to do so when hopefully, the Russians are successfully repulsed from Ukraine.
But we have far more growth opportunities that we have in front of us the next four or five years. We could readily deploy all of the 130 additional aircraft we are taking from Boeing over the next three years this summer if we needed to. We don’t, obviously. And where there’s more and more airports coming to us looking or coming to Eddie on the new routes team, looking for additional growth. So France and Germany can wait. And while they’re waiting, I think they will sow the seeds of a much more favorable growth environment for Ryanair expansion there in the next couple of years once they’ve had 12 or 18 months of stagnation or high fares.
