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TOURISM POLICY WORKSHOP November 2017

Confronting Challenges and Seizing Opportunities . . . . Role of the Public and Private Sector

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I ’m go ing to ta lk about …

Ryanair (Role of private sector)

Tourism trends / opportunities

Role of public sector

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Ryanai r –

Growing ever yw here , dr iv ing down pr ices

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Europe ’s Favour i te A i r l ine

Lowest fare/lowest cost carrier – gap widens

No 1, Traffic – FY18 129m (+8%)

No 1, Cover – 87 Bases/208 apts/430 a/c

240 a/c order = grow to 200m p.a. by FY24

Rapid recovery of rostering failure in Sep

Slower growth in FY18 & FY19

H1 profits up 11%; FY guidance unchanged

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Avg. Fare Change % > Ryanair

Ryanair €41 -13%

Wizz €51 -11% +24%

easyJet €77 -15% +88%

Norwegian €78 -3% +90%

Air Berlin €115 -7% +180%

IAG €198 -14% +383%

Air France/KLM €215 -7% +424%

Lufthansa €218 -4% +432%

Avg Competitor Fare €136 +232%

Europe ’s Lowest Fares

(Source: Latest FY results/Annual Reports)

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(€ p pax ex-fuel) RYA WIZ EZJ NOR AB1 LUV

Staff 5 5 9 15 22 49

Airport & Hand. 7 11 21 17 28 9

Route Charges 6 6 6 7 8 0

Own’ship & maint. 6 15 8 26 40 18

S & M other 3 3 7 8 33 18

Total (PY) 27 (28) 40 (40) 51 (55) 73 (73) 131 (116) 94 (92)

% change (reptd.) -5% +1% +3%(stg) +2% +13% +2%

%> Ryanair +48% +89% +170% +385% +248%

Europe ’s Lowest Costs

(Source: Latest FY results/Annual Reports)

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87 bases

208 airports (111 Prim)

33 countries

1,800 routes

129m c’mers (FY18)

430 x B737 fleet

240 x B737s on order

Europe ’s No. 1 Coverage

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Europe ’s No. 1 Mar ket Share (15%)

*(Source: CapStats intra EU Depart capacity Apr 17 – Mar 18)

Country (Cap m)* No. 1 No. 2 No. 3 Share

UK (139) easyJet BA 17% Monarch

Spain (132) Vueling Iberia 18%

Germany (131) Luft AirBerlin 9%

CEE (105) Wizz Aegean 15%

Italy (96) Alitalia easyJet 27%

Greece (29) Aegean easyJet 11%

Portugal (28) TAP easyJet 20%

Poland (21) LOT Wizz 29%

Ireland (18) Aer Lingus BA 47%

Belgium (17) Brussels Air Jetairfly 28%

= Bankruptcy

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Cur rent Developments

Lower fares & AGB drives growth (129m)

Customer initiatives succeeding (97% LF)

Alitalia (24m), AB1 (29m) & Mon (5m) bust

Pilot rostering failure in Sep

Acted to recover in Sep – slow W18 growth

Unchanged FY guidance €1.40bn to €1.45bn

Brexit Apr 2019 disruptions more likely?

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Lower fares AGB dr ive g rowth to 200m p.a .

73

93

101

109

120

129

138

152

162

175

189

200

60

80

100

120

140

160

180

200

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

FY18 cut 131m 129m (+8%)

FY19 cut 142m 138m (+7%)

FY20 unchanged

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Customer In i t iat ives Succeeding

MyRyanair over 30m members, (40m by y/e)

50% (approx.) customers select preferred seats

Plus Products 7% (approx.) in year 3

Flight connections at Rome & Milan going well

Ryr Rooms – over 250,000 hotels & 7.5m rooms worldwide

Travel credits for Ryr Rooms in December

© Ryanair 2014

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Summer 17

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Summer 2017 – 57% g rowth on top 4 mar kets

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W inter 2017 – 70% g rowth on top 4 mar kets

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Bases – Standar d ised , E f f ic ient , E f fect ive

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Tour ism –

Trends , oppor tun i t ies , cha l lenges

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Wor ld Tour ism Heal th

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European Tour ism Changing

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Saturat ion

European tourism can be overweight in popular hubs & major cities

Why?

- Good product offering

- Airline connectivity

- Marketed well

- Human nature to repeat visit

Requirement to promote diversity

- Regional

- Seasonal

- Customer

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Popula The Need to Diversify tion v tourists City Population Tourists Ratio

Barcelona 1.6m 8m 1 : 5

Paris 2.2m 16m 1 : 7.2

London 8.7m 32m 1 : 3.7

Berlin 3.5m 12m 1 : 3.4

Amsterdam 800k 5m 1 : 6.2

Dublin 1.3m 8m 1 : 6

Populat ion v Tour is ts

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Promot ing d iver s i ty

Wild Atlantic Way perfect example of regional/product diversification

Attract new segments, e.g. students and silver surfers, in shoulder periods

Build repeat visits – weakness for Ireland, excluding VFR

77% inbound vs. 23% outbound customers

95% leisure vs. 5% business traffic

Top markets: UK, IT, PL

Example: Ryanair in Malta

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Airports & Government attract airlines through low charges & taxes

Airlines deliver customers through low fares and connectivity

National, regional, local tourism bodies develop alternative product

Keep costs of tourism, including accommodation, low

Promote destination, joint marketing very effective

Simple model o f d iver s i f icat ion

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Summar y o f I r i sh Chal lenges / Oppor tun i t ies

• Over-dependence on UK market

-40% of 2016 visits, High proportion of VFR, Down 7-8% in 2017

• Germany, Scandinavia, Italy, Spain present opportunity

-Superb connectivity with Ryanair, Target Hamburg, Berlin

• Dublin as transatlantic hub

-Dublin more intra-EU destinations than Heathrow

• Relentless cost focus (airports, taxes, accommodation and visitor costs)

-Sterling weakness a double competitive threat

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Dubl in S18

5 new routes:

RAK, MUC, NAP, PFO, STR

90 routes

27 based a/c

12.9m c’mers p.a.

9,675 on-site jobs

€1.2bn savs p.a.

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I r e land S18

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4 bases

7 airports

130+ routes

14.9m c’mers p.a.

11,175 jobs (ACI)

€1.4bn savs p.a.

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Role o f Publ ic Sector

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2008 2009 2010 2011 2012 2013 2014 2015 2016

APD Rest r icts Growth ( Pax M) - I r i sh Example

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27 23 23 24

Travel Tax Intro. JAN ‘09

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Brexi t : Potent ia l fo r mar ket d is r upt ion

?

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Hard Brexit automatically triggered by Art 50 if no deal

No fallback for aviation market access in WTO

New UK-EU27 Air Services Agreement required

Transitional agreement would provide immediate solution

Timing becoming critical

Brexit

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Global hub for aviation business and innovation

Lead reforms at European level

Tackling French ATC strikes

Creating Upper European Air Space

Aviation cost is a tourism issue (airports, taxation, intrusive regulation)

Ireland Inc. to champion aviation competitiveness

© Ryanair 2014

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European Airspace Today

Constrained ATCO productivity

Too many Control Centres

Lack of Service Continuity

Not Integrated

Not Standardised

Not Efficient

Fragmented Airspace restricted by national borders

Restrictive Air Traffic Controller Licencing and Training

Based on fixed lines of flying

Not taking advantage of modern air ground technology EU Airspace Architecture ICB Sept 2017 – A4E Initial thoughts

Monopoly domination of European air space

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Oppor tun i t ies for co -operat ion

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Joint adver t is ing : T he W i ld At lant ic Way

Tourism Ireland - WILD ATLANTIC WAY Aug-Sep 16 - DE market

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Ger many ’s Most V is i ted A i r l ine Webs i te

(Source: Similarweb.com, airlines in January 2017)

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Wor ld ’s Most V is i ted A i r l ine Webs i te

2.5m visits a day in 2017

In August, we had more visitors worldwide than

BA, Lufthansa, Air France and KLM put together.

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I r e land – Ger many: 12 Ryanai r Routes

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Ryanair supports this EU initiative

Opportunities for regions & cities

Start planning now

Eur opean Capi ta l o f Tour ism

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THANK YOU

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Sep P i lot r oster ing fa i lu re – W hat happened?

S17 peak schedule (400 a/c) fully crewed in Jul & Aug

9 month FTL transition period 1 Apr to 31 Dec 2017

Over 50% crews have full month off in Sep/Oct/Nov/Dec

Canx 2,100 flts (2%) Sep/Oct – 300,000 c’mers disrupted

Ground 25 a/c (6%) Nov to Mar – 400,000 c’mers affected

98% of c’mers reaccom/refunded in 18 days + €40 voucher

Fixed rosters, change Ops mgt, better planning

Pay increase & improved T&C’s for pilots

Attract Mon, Nor & Jet2 B737 pilots