08.50 – KEYNOTE SPEECH. HOWARD MILLER, CFO, Ryanair HOWARD: Good morning ladies and gentlemen. My name is Howard Miller. I am Finance Director of Ryanair and yes, I have been with Ryanair since the end of 1991 and I’ve got all the lines to prove it. Maybe I’ll just take you through our experience. Ryanair is Europe’s largest low fares carrier. We have 45 routes, 11 countries with 7 million passengers in this current year. We are surprisingly the UK’s second largest airline after British Airways and we’re the 9th largest airline in Europe. What’s unique about Ryanair? Well we offer the lowest fares in every market that we serve. In many cases when we launch to a market, we’re between 70-80% lower in increasing the original incumbent carriers. We’re the lowest cost operator and we have the highest margins in the airline business. Unlike a lot of our dotcom and dot co UK competitors, we actually make money, which is a surprise for the industry. We’re in our 10th year of profits and very importantly for an airline business; we’re in our 15th year of safe operation. We are, for these reasons, the Sell West airlines of Europe. Those of you who are experienced in the travel industry will know about Sell West. And that’s really where we modeled ourselves. There’s nothing really new in the world. We didn’t invent low fares, but imitation is the greatest form of flattery and we copied the Sell West model and adapted it to suit ourselves in Europe. And just like our colleagues in Cell West, they’ve been profitable for 30 years; we’ve just been profitable for the last 9 years. And we’ve consistent growth, 20% plus per annum. Just like Sell West, we use a single aircraft type which is Boeing 737, 200 and our new aircraft 737 800. We have very high utilization, amongst the highest in the industry. That’s because, unlike most carriers, we fly for an hour and we turn around our aircraft in 20-25minutes. If you look at many of the major flight carriers, they fly for an hour and they spend an hour sitting on the ground. So, not particularly great use of a very expensive asset. We operate mainly to secondary airports. We find secondary airports are firstly cheaper to operate, but also, in many cases, are less congested and give you access to the local region. And as somebody who recently asked a question, ‘well, why do you fly to secondary airports?’ We’re not flying to the main airports in a lot of cities. Nobody ever goes on his or her vacation to an airport. It’s used as a gateway and that’s how we see many of these secondary airports. Unique for, I suppose, low fares would probably be synonymous with low pay but that’s quite the opposite. We have high pay and high productivity. About 70% of our employees are on an incentive scheme and this means that they’re also on a profit share and involved in a share option scheme. So, this is very, very important to incentivise employees. We’re number one or two carrier in every market that we serve. And what we’re trying to get is dominance in each of these markets, just like the other airlines. Once you get to be a dominant player in the market you can set the fare, set the seat capacity and ultimately generate profits. We roll out what we call the Ryanair effect into each route. This is a graph of the (end of side). …and is still growing. Now what happened in this market is that in 1986 when Ryanair started we launched a set of low fares that were 50% lower than the incumbent carriers and as a result the market expanded very, very rapidly. And Ryanair has taken the lion share of the growth in that market. Just like our friends in the US we also have a Texas, which is our kind of home market which is between the UK and Ireland. We are the dominant carrier in every route we serve here which means we set the seat capacity, control the fares and ultimately generate very substantial profits and cash flow from this area. Going forward to our European strategy, from 1997 we’ve started to grow from Stansted, just outside London and we now have 25 routes across Europe. We are launching 8 new routes this year. We’re the dominant carrier after British Airways into the Italian market. We have 9 routes now to Italy. We have 6 routes to France, 5 routes to Scandinavia, we have 2 routes to Germany and we have 4 routes to the Western part of Ireland. So, our objective here, if you take a country like Italy, we’re now larger than Alitalia Air from the UK to Italy. We’re second to British Airways. So you can see the impact of low fares. Low fares are just not a UK, Ireland phenomenon. It has rolled right across Europe and there is an insatiable demand for this type of low fares. We went into the Scandinavian market, we were 80% lower than SAS and people right across Europe had been paying very high fares for a long time. And when a low fare carrier such as Ryanair comes into the market, the market explodes but it’s driven on the back of very, very low fares. This is also our development. We’re developing a mini hub, ex Scotland. We’re flying from Scotland, Glasgow to London and Glasgow to Frankfurt, Paris and over to Dublin. So, we can prove that not only can we develop out of a London market but we can also develop out of other locations where Ryanair has never been know, and many of these markets are only in their 3rd year of development. I just want to talk to you a bit about money. I know this is for the dotcom, something they don’t like to talk about because they don’t make any money. But we’re quite happy to talk about it. We’ve been growing at a rate of 20-25% for the last 8 years. This is for our 4th quarter to the 31st of December. Our results are out the 20th June, but just to talk about the kind of growth. Operating revenues up 25%, net profit up 33%, past year volumes up to 17%, which will allow us to keep on target to get 7 million passengers this year. And you can see earnings per share growing by 32%. I think the most important thing for most people is margins. We’ve an average 20% margin. That’s imperative in the airline industry. Even our friends in South West in the US in their best years can do about 10% of that margin. So, we have proven that consistently for the last 6 or 7 years, that an awful lot of money can be made in low fares, provided you have the right product and the right prices and you can drive volume into destinations and locations that people wouldn’t think you’d ever fly to. Not only that, we’re generating lots of cash. Our turnover in our coming year will be about £300 million, about $340 million. Of that we have almost all of that money in cash. And unlike Boo.com or Boohoo.com as it’s been known in the UK, we won’t be going backs to market for money. We’re very well financed and we have 25 new aircraft coming to meet our growth targets. Just going forward to our balance sheet and we have a lot of assets. We own every aircraft. We’re unique among airlines. We have very little debt. And as I said, we have £300 million in cash now. We’ve nearly £300 million in aircraft and very little debt. So, we’re very, very strongly financed which means that in the coming global market, or the European market, and the competition that’s out there, we’re very well financed to move forward and continue to grow the airline at a very fast rate. What’s going on in the market? Well, the market is really in turmoil at the moment. British Airways are reducing seat capacity. They’re talking about kicking off all those people at the back of the aircraft, and anybody they want to kick off, we’re quite happy to take because they’re paying such high fares, they’ll be paying, if they fly to Ryanair, they’ll pay about half the fare they’re currently paying. What’s happening right across the European airline industry is a lot of the airlines have lost and are going to lose an awful lot of money this year and are cutting back capacity. And that gives enormous opportunities, for particularly those carriers who are continuing to expand and grow. These people, even if they’re thrown off the back of the aircraft, aren’t going to sit at home at the weekend and watch TV; they’re going to want to travel. So, with the kind of growth of low fares right across Europe you’re going to see even more passengers flying. So, we’re been gifted all of these passengers by all of the major airlines. In terms of the competitors on most of our routes, all of them are attracting or indeed withdrawing from the routes. On the Pizza Turin route both Alitalia has just closed down and gone elsewhere. They don’t seem to like a little bit of competition. And Denmark and SAS and Oslo SAS have just closed down and stopped competing with us. And they’ve learned a lesson, that they can’t really compete with low fares and are better off to stick to their own market which is generally the business type market. Go, which was British Airways low fare subsidiary started about two and a half years ago and in it’s first 17 months succeeded in losing two thirds of it’s turnover. On a turnover of £30 million, they succeeded in losing £20 million. Not really going anywhere, contracting and finally withdrawing from routes. It’s not really any longer in the low fares market because it’s introduced a Saturday night stay and for those of you who travel frequently will know that the Saturday stay generally means that the fares are going to be very, very high. Our other main competitor and probably the best of the other low fare carriers is Easy Jet and they’re not expanding very rapidly this year. They’re in dispute at Luton Airport. They’ve got no fuel hedging place. Fuel prices have almost doubled in the past 12 months and they’ve only got one new route for the year 2000. So, you can see right across the European airline market, an awful lot of airlines are in difficulty. A lot of contraction and the only ones who are growing by 20-25% are we at Ryanair. According to Veltman’s of Ryanair, well, we’re fully fuel hedged and we’ve decided a number of years ago we weren’t going to take any risk in this element of our business, so we hedge for between 12-18 months ahead. So, we’ve got our fuel locked in. We’ve also been buying aircraft since 1994 and a lot of our aircraft are now fully written off so there’s no charge to profit and loss. I hate to harp on about profit but it’s something that’s very important to us. We have 5 new aircraft delivering this summer for June and July which means we’ve got the fleet in place now to continue to grow the airline. We’ve 8 new routes launched this year which will deliver a further 1 million passengers. We’ve traffic growing from then from 5.7 to 7 million passengers. And I suppose really what you’re interested in is what are we going to do at Ryanair.com. We really launched that in January and it’s now Europe’s largest low fares web site. Some very interesting statistics about the kind of growth in the market. This is not our own information but from DLJ: Donaldson, Lufkin, Jenrette. There’s $5 billion we’ve spent on travel sites in 1999. 75% of internet users either visit travel sites regularly, are spending lots of money on these travel sites and the market is really set to explode and also, the previous speaker from Expedia, the growth in WAP technology is really going to push the market forward to a new level. It’s estimated that $20 billion will be spent on travel sites in 2001. So, we’re in a very dynamic and growing market. I suppose really, what have we done? We really launched our Internet strategy. We had a small web site last summer but we launched a new system from January and the growth has been absolutely explosive. I would say honestly, beyond our own expectations. We thought on a year basis we might get between 15-20% of our business. This slide is actually slightly out of date. We’re actually over 20% on a daily basis. At some points while running promotions, we can get in excess of 50% of our bookings on the Internet. I think really you’re seeing a lot of people going home at night are at work during the daytime, looking for low fares and there is a huge demand for travel. And the Internet facilitates people traveling and searching themselves. We’re already the biggest travel site in the UK. We’ve got 44.4 million hits in March; up from almost zero in January. We start on the 11th of January. We’re getting at the moment in excess of 1.5 million hits a day. And we did 9 million page impressions in March. I was just listening to Expedia there and we come to it in the next slide. We’re already doing $11 million a month and I think Expedia said it was £12 million for an entire year. So, we’re doing that really every second month. So you can see the growth of airlines in this regard. One other thing I should say at this point is that we are not hosted on Expedia or Travelocity because we’re actually manufacturing the product. We’re actually manufacturing seats. We’re taking aircraft on board. A lot of these other Expedia and Travelocity, don’t make anything. All they do is sell other people’s products and we believe fundamentally that we’re not going to give them any product because we want to sell it ourselves. We want to cut out the middleman. Our business has changed radically over the last 4 years. About 4 years ago, 25% of our sales were direct and about 75% was true travel agents. By the end of this year we’ll be doing 70% of our business direct. Well in excess of 30% on the Internet and about 35% over the phone. And then travel agents, as I said, down to 30%. So the business is changing rapidly, the market is changing rapidly and at the moment we want to continue to bring people into our own site to offer them the lowest fares in the market. And we just recently set in place a ‘double the difference’ guarantee. And if anybody can find and you’re all welcome here to try, anybody who can find a lower fair on a competitive route with Ryanair, we will double the difference between our price and whatever they’re charging. And this is what we believe is one of the ways we’re going to drive our site forward. We’re going to guarantee that we offer the lowest fares on the Internet. And unique, again, I suppose from day one we’ve been profitable because we actually make profits from this business and we have very low costs for conversions. We did a lot of the work ourselves. We have a fantastic team on our Internet site and also on our reservations. So, we’ve changed the whole business model and are making money from it. This example is some of the fares I just took a snapshot off. You can see £2 return. So, it won’t be hard to give too many of those away. Looking at some of the other sites, we’re also giving very significant discounts off already very low fares and this deal was £15 off a wide selection of our routes. For those of you from Germany, we had a 50 Deutsche Marc return fare from Frankfurt to London, Stansted. And this has spear headed our development into the German market. We have already 2 routes into Germany. Both of them very, very profitable from day one. And we’re going to launch a 3rd route very, very shortly. So, again, dramatic leap into the market. People in Germany have a very strong appetite for very low fares. Going forward in terms of page impressions. A number that everybody loves but nobody really understands. We’ve really got close to 9 million. We’ve seen this growing and the initial couple of months were very, very rapid. Doubling within 2 months. And we see that’s going to, again, grow a little bit more slowly. Somewhere between 15-20% per month. And these will be our competitors in our domestic market and the biggest one will be the Irish Times with 7.2 million. So, from a 3-month start we’re up to bigger than everybody else in our domestic market. Going forward, looking at our competitors. Well, it’s very interesting. You hear an awful lot about e-bookers, but weekly bookings, not very many, just 2000. We’re doing this everyday. Everyday of every week we’re doing what they’re doing in a month. Annualized sales $23 million. Travelocity, 20 000 weekly bookings, $273 million turnover. Lastminute.com, that famous share price, well they’re only doing 1000 weekly bookings with $4 million annualized sales. We’re doing 50 000 weekly bookings and $130 million. In fact, if we were selling long haul seats and had high fares we would be bigger than everybody else and as we saw from the previous speaker, I think it was $400 million for Expedia on a global basis. And £12 million in the UK. So, we’re really running an awful long way ahead of the rest. So, despite what everybody thinks about a lot of the kind of the booking sites, really they’re not that large. And I suppose looking at the major airlines, when they really get going, most of these sites are going to be, really be in a difficult position particularly selling airline seats because unless they can do a good deal with them, for us we’re not going to do that. We want to continue to drive volume into our site. Well, the marketing trends of Ryanair, and whilst the pulling power of low fare promotions, I mentioned to you the ‘double the difference’ guarantee. We’re already offering the lowest fares of any Internet site. We’ve got a huge advertising budget. In many cases it’s our basic internet budget is £5 million, plus we have another £5 million indirect, so, we’re spending about £10 million sterling each year in advertising. We’ve halved our distribution costs. We are allowed to announce, although there are sponsors of this conference who are going to close down, Galileo. We’re going to be left. We’ve recently been hosted by Saber. So, we’re going to be distributed by Sabre, Worldspan and Amadeus and we’re closing down Galileo and the reason we’re closing down, it was too expensive. It’s not competitive with the market. And there are now an awful lot of low cost, alternative, including Internet, you can distribute for practically nothing on the Internet. You don’t pay travel agent commission. We don’t have any middlemen. So, in many cases it doesn’t make any more sense for us to distribute to expensive GDS’s such as Galileo. So, we’ve decided that we’re going to terminate with Galileo and we just announced that last week and from the 1st of July they’re no longer going to be part of the team. This is the way we’re going to drive down our distribution costs. We have signed low cost deals with Worldspan and Saber and this is the way GDS’s are going to have to go forward. The airlines were, I suppose, really caught by these GDS’s and, I suppose, the circle has turned full circle and we’re not going to pay these high costs anymore. And I think you’re going to see this increasingly from the major airlines. Just the costs of these distribution systems are unacceptable particularly when you’ve got an awful lot of lower cost alternatives. What are we going to make? I was going to say £10 million in a full year. That’s true. Reduction in travel agents commission costs. Elimination or reduction in GDS’s, so we’re going to add an awful lot of value to the business. What we’re not going to do is we’re not going to increase our margins. Our margins are already amongst the highest in the airline industry at 20%. We’re going to re- invest in our development of our Internet site, also in additional advertising to continue to push low fares right across Europe. We just also signed up a deal in January with Sky. So, we’re on 25 times a day on Sky Weather and this is part of the initiatives we’re going to be driving into the market. We’re going to get our name up in lights in as many places as we can. What’s been the impact of Ryanair.com? Well, as I said it’s going to reduce our host system costs. We previously hosted it on a British Airways system called BABS. We’re onto a system called Open Skies and the cost is reduced by 66%. We reduced our agency commission and also reduced our CS fees by getting a larger proportion of our sales direct. We’ve gone direct bookings from 40% to over 60%. We’ve eliminated, we’ve gone ticketless since January. So, we’ve eliminated all those problems that everybody has. You’ve got to get your ticket. You don’t need a ticket anymore. All you need is your reference number, so all of that trouble of sticking tickets in the mail, sending it out to you, making sure you’ve got it. If you don’t have it, you’re lost. All you’ve got to remember is a simple 6-letter code. So, it’s radically improved the distribution within the airline and also reduced a huge amount of cost because all that paper had to be manually pushed around the place. So, it’s inefficient for people to be doing that. We’ve also reduced travel agents commission. Travel agents, a couple of years ago we were the leaders in Europe, where travel agents commission we were 9%, we went to 7.5% and a lot of the other airlines followed suit and went down to 7%. So, we’ve gone again down to 5%. We do see there is a place for travel agents but really and truly it’s at the right cost level for us. 9% was way too expensive for what was a very simple seat to sell. We only sell point to point. We’re not talking about long international travel, complicated itineraries, we’re selling a very, very simple product and therefore we feel that 5% is the appropriate charge. Travel agents are a smaller proportion of our business now. By the end of the year it will be down to 30% of our total business. Also, the whole Internet side has fast-forwarded clash flows. No longer do we have to wait a month and a half after a booking has been made through a travel agent to get our money. We get our money every day at the end of the day through a credit card settlement. And it’s allowed us to develop ancillary sales and advertising. Our objective this year is to have £1 million net profit just for our Internet site advertisements. We’ve signed up a number of deals which I’ll just talk to you about now in a second. We’ve radically improved the design of our sites. Like everybody else out there we’ve been learning the best way to develop it. We’ve started off, we had 2 school leavers developing our site so we’ve put a bit more effort into it recently and our internet site cost about $8000 to launch. We’ve spent a bit more than that since then, but not a whole lot more. So, we’re going to invest money in terms of developing, making it easier for people to use. We’re also going to get into what we call destination service. So, for every country you fly to, every city, we’re going to have a list of activities, hotels, restaurants, so it becomes, if you like, almost a travel, a rough guide to each individual place. We’re also looking at putting a lot of effort into development. We’ve appointed a commercial director. We have e-partnerships we’re negotiating. With Jay we have a unique deal with Hertz available on our Internet sites. You’ll be able to book a flight, book your Hertz car rental and then move on to then be able to provide you with hotel accommodation and other things such as travel insurance. So, we’re starting to develop an awful lot of business and wrapping it around the actual sale of the low fare. We’ve just recently signed a deal with Air Cell, which is our local mobile operator in Ireland, and we’re going to have a WAP enabled site available from the first week of July. So, we’ll be the first low fares carrier in Europe which will allow people to be able to book all their fares on the WAP site. We believe this is going to be the next wave. The Internet hasn’t really penetrated in certain countries such as France and Italy and in some countries, even though there is quite a lot of Internet penetration there are not many people actually using it. They generally use it to find information, find what the fare prices are and then they book. And in some countries, just don’t seem to really be able to take it on. But an awful lot of countries, particularly say the likes of Italy where mobile phone usage is enormous, we feel that it will actually leap frog and we will get a lot of benefit from having a WAP site. And again, we’re going to have first mover advantage on this to offer an awful lot of very low fares on WAP technology. So, I’ll come forward to answer questions if you want. What’s the summary of Ryanair? Well, one, we’re the lowest cost operator. We’re the lowest cost operator in business. We’re not a start up airline. We’ve been at this business 15 years. We’ve been profitable every year for the last 9 years. We’ve proven that low fares not only work in the US but works in Europe and we’ve translated that right across 9 European countries. We’ve established a track record of profitability. We’ve high and stable margins, amongst the highest in the industry and we have outstanding balance sheets and we don’t need to go back to the market, we have nearly $400 million in cash. So, we are well funded to continue to grow our business and to develop the Internet side of our business. All our major competitors are in trouble. Many of them are going to suffer huge losses. British Airways are probably going to announce £300 million of losses next week. Many of them are either consolidating or reducing their seat capacity in the market, which is very good for us because it means that all these passengers are being pushed off aircraft, have got to go somewhere and we’re just ideally placed to accept them. We’ve got the airports in place. We have deals with a further 20 airports right across Europe to continue to grow the business. And we have a further 2 new aircraft to come over the next 4 years which will allow us to rapidly grow the business. And we’ve recently put in a Ryanair.com strategy which has already substantially reduced distribution costs and will allow us to become leaders in e-technology, particularly in WAP technology as we move forward into the end of this year. That’s my presentation and I’d be quite delighted to answer any questions that you have. PAUL: Thank you very much Howard. Can I ask you a quick question, Howard? I had the pleasure of traveling Ryanair last year to Dublin on a couple of occasions before you had your web site in place. I actually found it quicker then, booking on Expedia rather than holding on for your call center. But times have changed. Can you tell me, to reach where you are now with Ryanair.com, how much you’ve invested in reservations and distribution technology and how much you might invest in the coming year? A: Well, as I said, we’ve developed the front end of our Internet site for $8000 and we haven’t spent a huge amount more. We’ve taken on 2 web designers. But not a huge amount of money. But we have signed up with a company in the US called Open Skies which has a host reservation system. PAUL: Which Easy Jet in Europe is pioneering, hasn’t it? A: Yes, Easy Jet, most of the low fare carriers have it in Europe. Easy Jet, Go, Virgin Express, and Latterly Bowes in the UK. So, it’s an ideal vehicle really for a low fares carrier. Not a huge amount of money to run it and it’s a very, very good system. And it’s really designed for low fare carriers, point-to-point sellers. So, we believe it’s going to give us a very strong platform for pushing the business forward. For us it was a major jump because unlike a lot of the other low fare carriers we actually want to sell through travel agents, we want to continue to distribute to travel agents and the system had to be specially designed for us so that we can continue to allow travel agents to access to our major distribution system, Amadeus World Span, largely Galileo. PAUL: Thank you. First question. Q: Luc Carton, Tourismnewsletter.com. I understood that it was very powerful thing, Internet, for your company. As we can see your figures. My question is simple. Why were you so late to come on Internet? Because since 4 months it’s something atypical in the Internet business? A: Yes, we were late coming into the Internet business basically because our existing host reservation system was a legacy system. I think it had been designed in the late ‘60’s, early ‘70’s and it just really didn’t have the capability to have an internet development layer on it. And so what we had to do was to source a new host system and we developed a system that could accept reservations from travel agents as well and we developed this with our American partners. So, really we didn’t have the technology base, although we had some kind of a web site last summer. It really wasn’t good enough to enable us to deliver these numbers. So, once we turned on the tap in terms of getting our new system in place, well you can see the kind of explosive growth we’ve got over the last couple of months. I think you’re going to see this more and more as you get some of the other major carrier who also have legacy systems as well, driving their business as they move forward onto whatever platforms they’re moving on or in some cases, spend a huge amount of money developing an internet site. You have in the UK; a number of airlines are coming together to develop the kind of major system. I think you will see explosive growth by other carriers. I don’t think that we’re unique in that. I think you will see other carriers coming along and having the same explosive growth, which goes back to what I was saying at the start. If they continue to do that, it means that some of the other distribution systems will eventually be substantially reduced and you will get more and more direct sales. I think that’s the way the business is going. PAUL: I think that the big leap here, Howard, is moving out of BABS and into Open Skies by the sounds of it. HOWARD: Yes, I think that certainly gave us the platform to do it. Q: My name is Jim Steinhart, with PlanetWare. I just wanted to ask you, you’ve given us the number of hits on the site. Can you give us the number of individual visitors to the site and also you gave the number of tickets or bookings that you have. Was that 50 000 bookings per week including, was that a round trip or was that each leg of booking? A: That’s one way. So, it’s 25 000 round trips, approximately QUESTIONER: So, how many visitors came to translate into that 25 000 round trips? A: We don’t have those kinds of statistics because, as I’ve found recently in the kind of business, unique visitors, if you take say a corporation like Ryanair, we would have 800 PC’s. But if I went into somebody’s, because we’re all under the one ISP number, when you go onto somebody else’s site, even though 50 people have visited, or many people have visited from the company to other people’s site, they’re still beyond a one number and therefore be counted as one visitor. So, using that kind of method is not really a good guesstimate. We have, what we find a more accurate number is we have a look to book ratio. Very, very high, about 100 to 1. So that means, for every time we get somebody onto our booking engine, we only get 1 out of 100, which means that there are an awful lot of people actually shopping out there. The difficulty for us and a challenge for us is that we’ve got to convert from every 100 people who actually look through your internet site and get to your booking engine, we’ve got to get that down so that we’re getting a better conversion ratio. And that’s, if you like, the challenge for us. We’ve got to figure out a way of getting from 100 to 1 to 50 to 1. Because that means that we’re going to at least double the number of bookings per week. So, I’m sorry I can’t give you a direct answer to your question because the numbers really don’t make any sense. And as you know with page impressions and hits, some of the basis of this is questionable. But they’re the standards. These have been externally audited, they’re not our numbers, but as you know, depending on where you design the front of your web site, you can have 40 or 50 hits by just looking at one page. So, some of the numbers really here, I think what you’ve got to get down to is how many people actually bought something on the site rather than how many people visited. I think that’s the number we’re focusing on. At the moment we’re at 50 000, we think that’s going to double in the next 3-5 months. PAUL: I think we were trying to get your look to book ratio. So, your look to book ratio is 100 visitors to one booking? A: Yes. PAUL: Okay, thank you. Any more questions at all? Just one last one for me then Howard. If I was an online intermediary, an online travel agent, I’d be feeling very nervous listening to your presentation. Is there any advise you could give me to help my business survive and make money? A: That’s a difficult question to answer. I think there is, if we wanted to we could have, I suppose, moved forward very, very rapidly and decided that we were going to sell direct. The fact that we’re publicly saying, we believe that there is a place for the travel agent. In certain markets within Europe, you take Italy for example, there’s a very, very close relationship between the travel agent and the people buying tickets off them. It is very difficult in certain markets to see that people will maybe move to WAP technology or move to Internet technology. They will still have a close relationship with their local travel agent. That’s a fact, that’s reality. We can’t really change that in a very short period. But we certainly believe that as we fly to more and more new countries with more and more destinations, that to put the infrastructure in place in all of these countries such as call centers have done, aren’t going to use WAP or internet is going to cost an awful lot of money. So, we do feel there is a place for travel agents. Certainly 5% commission, we feel that it is a fair price for a very simple ticket to book. So, our plan is that we will continue to work with travel agents. We will continue to promote them, but the reality is that market has changed very, very significantly over the last year or so for us. And they also have to reflect it as well. I think travel agents are going to find themselves more as they are in the US, like travel consultants. Maybe on the kind of very easy fares to book like our own, they won’t make much money but we will be the business that brings people through their door. Maybe they’ll buy very cheap fare. They only get 5% commission but that person maybe will buy hotel accommodation, travel insurance, car rental and other products. So, we maybe see ourselves as maybe a way of getting traffic through their door but there may be other ways to make more money out of actually the whole travel process. PAUL: Thanks for the advice Howard. Howard thank you very much indeed. Let’s take a break now until 10:05.