Stephen Furlong

Stephen Furlong asked for a high-level overview of the turnaround plan's impact timeline and for a reiteration of the sensitivity analysis comparing a potential 10% North Atlantic traffic decline to the projected fuel cost tailwind.

Answer

CFO Till Streichert reiterated that the turnaround plan is gradually building up towards its targets of €1.5 billion by 2026 and €2.5 billion by 2028, highlighting progress in operational stability and the ramp-up of City Airlines. He clarified that the 10% North Atlantic revenue decline versus the €600 million fuel tailwind was a sensitivity illustration to show scale, not a forecast.

Stephen Furlong asked about the path to achieving the 8% adjusted EBIT margin target, its reliance on the turnaround program and fleet modernization, and the group's future geographical focus, questioning if it would be more west-facing or east-facing.

Answer

CEO Carsten Spohr asserted that the group, excluding the core Lufthansa Airline, is already at or above the 8% margin target. He emphasized the turnaround program is essential for the core airline to reach this goal. Looking ahead to 2028-29, he projected the group will become more 'south-facing' to leverage growth and reduce seasonality, while the North Atlantic will remain a commercial backbone.

Stephen Furlong of Davy asked about the path to achieving the 8% adjusted EBIT margin target and the future geographical positioning of the business, questioning if it would become more west-facing or east-facing.

Answer

CEO Carsten Spohr stated that the group, excluding the core Lufthansa Airline, is already at or above the 8% margin target, and the turnaround program is essential for the core brand to reach that level. He projected the group will become more 'south-facing' by 2028-29 to leverage growth in the Southern Hemisphere and reduce seasonality, while the North Atlantic will remain a commercial backbone.

Stephen Furlong of Davy inquired about the potential for European ATC performance to normalize by next summer and whether persistent industry cost inflation, combined with weak pricing, could lead to lower post-pandemic margins.

Answer

CEO Michael O'Leary described the European ATC situation as a "mess" that is worsening due to understaffing, expressing pessimism about near-term improvements. He acknowledged cost inflation but emphasized Ryanair's significant cost advantages, productivity gains from new aircraft, and its strategy to lead price discounting. O'Leary believes that over the medium term, constrained industry capacity will ultimately lead to higher airfares.

Stephen Furlong from Davy asked for management's perspective on the European Commission's increasingly stringent view on M&A and sought confirmation on the repayment schedule for deferred social charges and the long-term strategy for exiting hybrid capital.

Answer

Executive Benjamin Smith described European consolidation as a "must," detailing the complexities of other deals while positioning the SAS transaction as less impactful on competition. CFO Steven Zaat confirmed the deferred social charges schedule (~€500M/year for '25-'26) and stated the plan is to gradually pay off hybrid capital with normal debt after strengthening equity through net results.