Q1 (IFRS)	30 June, 2015	30 June, 2016	% Change
Customers (m)	28.0	31.2	+11%
Revenue (m)	€1,653	€1,687	+2%
Profit after Tax (m)	€245	€256	+4%
Net Margin	15%	15%	–
Basic EPS (euro cent)	17.90	20.01	+12%

Ryanair’s Michael O’Leary said:

– This modest 4% increase in Q1 profit to €256m is in line with previous guidance. The absence of Easter in Q1 and on-going market volatility arising from terrorist events, and repeated ATC strikes (particularly in France) weakened fares on close-in bookings and caused almost 1,000 flight cancellations. We remain committed to our load factor active/yield passive strategy which is why Q1 fares fell 10% to under €40. Traffic rose 11% and load factor improved 2 points to 94% as our Always Getting Better (“AGB”) customer experience programme continues to win new customers and new markets. Ancillary sales rose to 26% of revenues (24% in PY Q1). Cost control remains core which is why unit costs reduced 9% (ex-fuel down 4%).

Highlights of Q1 include:

-          Average fares cut 10% to €39.92

-          Traffic up 11% to 31m (LF up 2% to 94%)

-          Unit costs down 9% (ex-fuel -4%)

-          Profits up 4% to €256m

-          16 new B737-800’s delivered

-          Share buyback programme (€886m) completed in June

New Routes and Bases:

– Our 4 new S16 bases in Belfast, Corfu, Ibiza and Santiago are performing well with strong advance bookings. We announced 8 new bases (Bucharest, Bournemouth, Hamburg, Nuremburg, Prague, Sofia, TimiÈ™oara and Vilnius) as part of our W16 schedule which will also see our Berlin base grow from 4 to 9 aircraft and Luxembourg become our 33^rd country. We will open 133 new routes during W16. Sadly, the introduction of an NOK80 (€8.50) air travel tax in Norway has led to 16 route cancellations and the closure of our Oslo Rygge base in October.

AGB Customer Experience:

– Year 3 of AGB was unveiled in April and continues to improve our customer experience through service, digital and inflight developments. In addition to lower fares and wider destination choices, our customers now enjoy new initiatives such as Leisure Plus, improved Business Plus (with more flexible ticketing) and one-flick payments on our mobile app. In June, we simplified and cut checked bag fees for 92% of our customers.

– Our industry leading on-time performance fell in Q1 from 91% last year to 87% due to adverse weather (thunder storms), and a succession of unjustified ATC strikes in Belgium, Italy, Greece and especially in France. UK NATS has also mismanaged its staffing rosters leading to repeated slot capacity restrictions and delays at London Stansted.

On-time	Apr	May	Jun
FY16	90%	92%	91%	91%
FY17	91%	89%	81%	87%

– French ATC unions alone, have engaged in 53 strikes over the past 7 years during a period when Irish & UK ATC suffered zero strikes. Ryanair and other airlines have called on the European Commission to take 3 simple measures to alleviate the impact of these ATC strikes on Europe’s citizens as follows:

1. Require (French) ATC unions to engage in binding arbitration instead of strikes;
2. Allow other ATC’s to operate French over-flights while their unions strike;
3. Allow airlines to recover their EU261 costs from these ATC providers where mismanagement permits repeated strikes.

Lower Costs:

– Our cost advantage over competitors increased in Q1 as unit costs fell 9%. Fuel fell by €42m to €518m in Q1. Ex-fuel unit costs were cut 4% due to lower cost aircraft, cheaper financing, discounted airport growth deals, lower sales & marketing spend, and weaker sterling, which was partly offset by slightly higher staff costs as 5 year pay deals kick in across our 84 bases and our headcount rises in line with fleet growth.

–  FY17 fuel is 95% hedged at $622 per tonne (c. $62bbl) which will (allowing for additional volumes) deliver fuel savings of c. €200m. Almost 55% of our FY18 fuel is now hedged at just under $500 per tonne (c. $50bbl). We expect to pass on most if not all of these fuel savings to customers in lower air fares as we continue to grow traffic and routes strongly.

Shareholder Returns & Balance Sheet:

– In February we announced an €800m share buyback programme. After the Brexit vote, the Board increased this programme to €886m and completed it in late June at an ave. price of €13.48 per share. We have now returned over €4.2bn to our shareholders since 2008. On July 27 we hold an EGM to seek shareholder approval to give the Board discretion to engage in further selective share buybacks, if it’s in the best interest of shareholders to do so over the next 15 months.

– Despite these buybacks our balance sheet remains strong, with net cash of €162m at June 30, following Q1 CapEx of €381m, debt repayments of €89m and buybacks of €468m.

Brexit:

– The recent UK vote to leave the European Union (“EU”) was both a surprise and a disappointment. Ryanair, as the UK’s largest airline, had campaigned actively for a “Remain” vote. We expect this result will lead to a considerable period of political and economic uncertainty in both the UK and the EU. This uncertainty will be damaging to economic growth and consumer confidence and we will respond as always with our load factor active/yield passive strategy. Until some clarity emerges over the next two years about the UK’s long term political and economic relationships with the EU, we will be unable to predict what effect it will have on our business and regulatory environment, but we have contingency plans in place for all eventualities.

– In the near term we expect that Brexit uncertainty will lead to weaker sterling, slower growth in the UK and EU economies and downward pressure on fares until the end of 2017 at least. Over the longer term, if the UK is unable to negotiate access to the single market/open skies it may have implications for our 3 UK domestic routes and UK nationals on our share register but these risks are not material and will be manageable. There may also be some opportunities if our UK registered competitors are no longer permitted to operate intra EU routes, or must divest their majority ownership of EU registered airlines.

– In the meantime, we will pivot our growth away from UK airports and focus more on growing at our EU airports over the next two years. This winter we will cut capacity and frequency on many London Stansted routes (although no routes will close) where we are already significantly ahead of our multiyear traffic growth targets.

Outlook:

– We see many growth opportunities for Ryanair’s lower fares and AGB customer experience across Europe. We are, on average, 1% better booked for Q2 than at this time last year albeit at significantly lower fares. We expect load factor will be similar to last year at 93%. We now believe our FY traffic will grow by 10% to 117m customers (up 1m on previous guidance).

– Average fares on close-in bookings have been adversely impacted by ATC strikes, terrorist events and weaker sterling post Brexit. As a result, we expect Q2 fares to fall by at least 6% (H1: -8%). This outcome remains heavily dependent on close-in bookings for August and September. We have little visibility over W16 fares but see no reason-yet-to alter our guidance of -10% to -12% in H2. If there is any movement in these numbers it is more likely to be towards the downside.

– Ex-fuel unit costs should reduce by approx. 1% in FY17. Much of these savings will be delivered in the first half of the year, due to slower traffic growth this winter (particularly Q4) compared to last year. Our fuel bill will fall by approx. €200m as lower euro pricing is offset by volume growth, but it is now likely that most if not all of these savings will be passed on to customers in lower fares.

– At this time, we maintain our guidance, that full year profits will rise by approx. 12% to a range of €1,375m to €1,425m but we caution that post Brexit there are significant risks to the downside during the remainder of the year.”