Customers (m) Revenue (m) Profit after Tax (m) Net Margin Basic EPS (euro cent)
to engage in binding arbitration instead of strikes;
Allow other ATC’s to operate French over-flights while their unions strike; and
Allow airlines to recover their €261 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 and marketing spend, and weaker sterling, which was partly offset by slightly higher staff costs as five-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 average price of €13.48 per share. We have now returned over €4.2bn to our shareholders since 2008. On 27 July 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 30 June, following Q1 CapEx of €381m, debt repayments of €89m and buybacks of €468m.
Brexit
The recent UK vote to leave the European Union 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