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How Sweat Shares, if Rana Rebounding and Irish Training. The company Canton gets passenger growth target for next year because of delivery delays from aircraft supplier Bow Inc. MICHAELA. Larry, the CEO, John Sarana Taible, Michael Komonic.
John, good morning, Great to be back in New York.
Good to see you, sir. Have you spoukls Kelly out back.
I've poked to Stephanie Pope on Friday afternoon, so she's reasonably hopeful that the vote on the new pay deal will be approved tonight. It doesn't make a lot of difference to us one way or another because we're gone into the winter now. Anyway, the big issue for me was how's the certification of the Max seven and Max ten going. I think the good news the strike hasn't
delayed that certification. Work Manager's still working certification. She still expects the Max seven to get certified first half of twenty five, Max ten second half of twenty five. So I think we're still good to go on the first of our Max ten deliveries in spring of twenty twenty seven. And that's what really takes us from our two hundred million now to three hundred million pastures by the mid twenty thirties.
How are they stelific? Delight setting your company? Just give us an idea.
I mean, they're they've been very frustrating.
All we were supposed to get grow to two hundred and five million pastures this year, we'll do about one nine to nine and change next year was two hundred and fifteen million pastures. We now cut it back to about two hundred and ten, might get two eight two oh seven. So it's frustrating, but in a bizarre way, it might actually help our earnings next year, because you know we'll be heavily constrained in terms of our capacity growth. We had a bit of a disappointment on pricing this summer.
After two years of twenty percent fair increases, this year we're down ten.
Percent in the first half of the year.
But with real capacity constraints next summer, with interest rates easing, inflation no.
Longer a worry.
I think there's a reasonable rebound in consumer spending next year, and we hope to see that reflected in modestly upward fares, which with Ryanair's very stable cost space will flow largely through to the bottom line, so you could.
See another ten percent maybe a fair increase next year.
I wouldn't want to put a number and put I mean, I think off a ten percent decline this year, I think it's reasonable to expect next year that you know, affairs will be up. I would hope we'd recover most, if not all, of this year's ten percent fair decline.
So why were fares down earlier if there still is all this pent up demand for people to travel, why has that been such a soft patch for airlines across the world.
Well, I think this year, I mean, certainly the first half of this year. This consumers under real pressure. In Europe.
You had high interest rates at the central banks really squeezing down on inflation.
First half of the year.
We had an unusual event ourselves, so we had this dispute with the online travel agent started last November. They boycotted us from November December. I think that hit us this year on pricing. We lost a lot of the kind of the advanced bookings of summer holidays, people who book well in advance using those OTAs.
They moved towards the tour operators.
We've now signed up approved OTA deals with about ninety percent of the OTA customers, and we're seeing very strong forward books into summer twenty twenty five.
Hours result, there's a larger question here. If you're depending on going to come up with some planes, you're reading the news about the strike, You're talking to executives finding out the blow by blow about when they can actually get back to the floor and produce again, do you have an alternative?
Orre you looking at alternatives?
So you're thinking to yourself, really, am I really doing this again?
I mean, the honest answer is no airline has an alternative. There's two manufacturers in the world. You've got Airbus and you got Boeing. Boeing gets all the negative pr they have, the strike, they've had the max grounding.
Airbus are and as much of a mess as Boeing r. I mean, Airbus are way.
Behind them their monthly production, the engines, the protect with the engines on the Airbos aircraft are dud, so they're taking them off the wing. They're going through twelve month repair processes. And you know Europe is an airbus marketplace, so Airbos are just as bad as Boeing are. I'm very happy to be a Boeing customer. I think the Boeing aircraft is a better aircraft. The newer aircraft we're
taking now the game changes. We're carrying four percent more pastors, we're burning sixteen percent less fuel.
That's transformation into our numbers.
You look at our numbers this morning, and in a year a summer where we carry nine percent more pastures uster flat.
We're the only year that.
I would flat unit costs in North America or in European this year.
Yes, we've taken a bump on fares.
I think that's good if your passes are getting lower prices. Yes, we'll take a hit in the short term on profitability, but we're taking huge amounts of market share of everybody else. And next year, if I think we see a bit of a bump upwards in airfares, I think it'll come straight through to our bottom line.
Michael, do you think there are times of charm? Well, this deal that's on the table right now get through.
I mean again, I think bows call on might call on Friday they think it's fifty to fifty. I mean, very hard to see how any labor group turns down a thirty eight percent pay increase with the ridiculous sign on bonuses. I think on bands, I think they probably will turn it down. I think they'll hold out for forty, but it's a short term.
This is a frustration Boeing go to forty. If they turn down thirty eight, I don't know where else do you go.
They're not going to go backwards towards thirty, I think, I mean, I hope it's resolved to seeing whether it's thirty eight or forty. I think we're at where at the endgame. It doesn't make much difference to us. I had nine deliveries in November and deceventh. They're going to get pushed out into February and March. The big issue for me, Boy is supposed to deliver me twenty nine aircraft before June next year. I think now we're looking only getting half of those, so about fourteen of the
twenty nine aircraft. So I've had to walk back my growth next year. Instead of two hundred and fifteen million pastors, it'll be two hundred and ten million, and that number might creep slightly downwards. So it's frustrating, but really over the medium turn, the big issue for me is bowing when you can get the Max seven certified, when are
you going to get the Max ten certified? If they get those certified in twenty five, we're looking taking delivery of an aircraft in twenty twenty seven that carries twenty percent more pastors with birds twenty percent as fuel. I just blew up the entire competition in Europe. No airbus aircraft will be able to compete with me.
I want to ask you about the competition in the UK. I used to live in the UK, used to fly on Ryanair. Now you're reviewing your schedule out of the UK because the government is charging two pounds more person.
I mean you with this Bonker's labor government. You know they got elected on this kind of pro We're.
Going to be pro growth. We're going to grow whatever is we're going to grow. And the first they do on an island of the Europe, we're going to put up travel taxes. You can't grow, So will you've cut capacity?
We're going to switch along. I mean, we do about fifty five million pastores a year to the UK. We're going to switch about five million of that capacity, which maybe takes place on aircraft that are based in Europe to fly into the UK. We're going to move that now next year to Italy, Sweden, Hungary where they're abolishing travel taxes, so we have the flexibility to move that capacity around. And again I think it'll be good for my pricing in the UK next year. Bad for growth.
I mean, the UK has no chance of growing if this idiot Chancellor thinks that the way forward is going to be increasing.
Tax on air travel. You want to grow, scrap air travel taxes.
The Italians get it, the Swedes get it, The Irish God of the bridge will eventually work it out. But you know, these guys haven't been in powerful about fifteen years, and I think they're going to learn some very harsh lessons in the next year or two.
I asked you if you Spikin's calliop, but have you spouken to Chancellor Race now?
And I suspect the chances of me having a conversation with her in the next couple of weeks will be are diminishing rapidly, you know, Like I mean, this is a girl who you know, her background was in the Treasury. She should understand that the way to you know, you really want to deliver growth in the UK, particularly in the regions, tourism is the one industry you can turn on turn off at the drop of a hat. And her first measure is to increase travel taxes.
You've got to be insane to do that.
When you do that, Micaelde, two pounds on showhold travel per passenger, grand scheme of things. You step back your site. Two pounds might not sound back a lot from your perspective, you're fantastic with the numbers. Walk us through how two pounds changes the game for you? How does that ripple through the system.
See the point is it's two pounds up in the UK. But in Italy at the moment they're reducing the municipal tax. There's scrappy municipal tax which is a reduction of six fifty so.
On all of it. The move now is ten euros.
So do I put another flight into Italy next year or do I put another flight into the UK? I move capacity out of the UK into Italy. Sweden, they've bought Sweden, the home of travel, the home of flight shaming. Greta Tonberg where she got her limited education up there have now scrapped aviation taxes. There's a new right Wing Transport minister se who gets it. Greta was wrong. She should go back to bloody school and stop boycotting school.
They're scrapping the traffic. So if I move an aircraft from the UK next year, it's.
Not a too quid differential, But if I move that up to Sweden, it's a ten euro differential and that's transformative. If I can lower my fares to Sweden next year by ten euros, I will carry many more passages to Sweden.
I'll carry fewer in the UK.
Airfares in the UK will rise, Regional traffic and tourism in the UK will fall, Sweden will boom, Italy will boom. Until Ratio re works it out that this is not the way forward.
Michael A. Larry continue the conversation if you like, if you want to stick around it because.
Nay love you see you all come back to Europe.
We need you the Ryan Essa Michael Alarry