Deployed early. You are very welcome. A warm welcome to the second hour of the program. Ryanair says a slowdown in europe might even be a good thing for the airline. Ryanair is raising its profit and 700 70etween 750 million euros. Here to talk about it is Michael Oleary. Thank you for coming to spend time with us. Tell us what underlines this conflict with some of the european airlines. Reflection ofis a what we started 12 months ago. Much stronger forward bookings. Always Getting BetterCustomer Service improvements is a dream. As we expand across europe, the airports are becoming more desperate for our traffic growth. Time whenanding at a business is booming. Those airports you are talking to, who are you having the strongest conversations with, and who is hungry for your business . Lufthansa, you have transactions. We announced alone that will open in march. We have just opened a new base in glasgow, where they are even flat either flat or cut capacity. Youre going to give Significant Growth this winter. Are you emotionally attached to the further out airports you have been using previously . More central . Be it is about getting those slots at a good price. I think it would be both. We have stepped up the growth profile. With a calf the growth will come at primary airports. Half, secondary airports, it which keeps our unit costs very low. We have raised the profit forecast. Profit will rise by 45 . We are keeping fares down at a time when most airlines are trying to raise prices and customers are switching to us for the lower fares. What are you taking those costs from . Running a veryor efficient airline. Where you going to pull those costs out . Writes oil prices are falling. We are hedged out to march 16 at 93 a barrel. Up bye have taken factors four percentage points. It helps spread the costs across more passengers. That is the key to lowering costs. Much stronger demand across most markets in europe. How is the industry benefiting from this . Is it benefiting as much as it could have with hedging products . We could give you cost certainty. Uncertainty locked away, stock prices were lower. Frankly, as long as we can lock we have seenst, the aftertax margin jumped from 18 to 23 . Only we and ryanair have the cost discipline. See air france and lufthansa and so much turmoil is the fact we are expanding across those markets and customers are switching. Will any of those incumbent airlines set themselves apart and the ability to cope with the pressures they are facing right now . Are they all doomed . Doomed, but it think they are going to get smaller. They are locked in a connecting strategy, which means there is very little concern over airport and handling costs. We are taking the market in europe. They are growing strongly. The new bases are all growing strongly. That traffic is coming directly fromour competitors. How is it the business traveler, the profile of this person you are trying to get to spend more, how is that going . What have you learned . You have turned us what your objective is. What have we learned . What are we going to see . An interesting statistic is 27 of passengers are traveling on business, despite the fact we have never provided anything other than low fares. We have put together a package to see if we can persuade half of those to pay the small yields about 40 euros a ticket. You get reserve seats in front of the planes, fixable tickets. We will change her ticket at no fee. The percentage change. What is the number now . It will still be 27. I think the number is growing. The number who will play a premium. As we move into the winter we have fleshed out big business frequencies, three or four flights daily between the main european cities. We expect that to rise. Hope to getmber we about half the passenger base, about 10 or 11 . Do you see what youre doing with your business models, including those developments . Is it a refinement of what ryanair does, or is this a reinvention of everything without ryanair was . I think it is a fundamental reinvention. We have one the price war. Want to move into the middle ground where we are providing a better experience, the free second carryon bag, where we discount prices for children traveling with parents. We want to move into the middle market. As we get nicer to customers we are finding more customers are increasingly saying, we will take ryanair as the better alternative. I am not saying they were not nice. It is a bit of a shift. It is a seismic shift. The people who want to do it most is the staff. We put the staff in conflict with customers. We have said, we are ending the conflict. We are not going to fight because the back bag is an inch too big. There is a surge of compliments coming back from customers about how nice people are. It is really working. People are coming to us for the prices and coming back because of better customer experience. What are you doing with capacity over the winter . Compared to last winter, how much more flying are you going to do . We expect traffic to rise this winter by about 16 , which is a huge growth. There is demand for ryanair across all markets. We expect the fares to dip slightly as we fill these extra flights. It means over the year traffic will rise by 9 . Unit costs will fall about 4 . Will rise over last year. Youres looking at what going for. Germany, where you dont have a major presence. If you look at these strategies, italy, greece, and germany, is this a longerterm perspective on the recovery in europe . I think it is a bit earlier. It is a shortterm bet that europe continues to be in recession. Its not going anywhere in a hurry. We are expanding very rapidly. I think we are building a huge wesence across europe, and will lead that recovery. As we are lowering the cost of air travel, more Economic Activity is coming. Are leading the Tourism Industry recovering those countries. Recoverysm industry will lead to more job creation, particularly for young people. As we lead that economic recovery, we are the beneficiaries of it. Can i bring it to politics can i ask about u. K. Politics and what your thoughts are on the vote over whether u. K. Stays in the European Union . Airlineof what your does is it benefits from open skies in europe. Evocative i have been alive for 40 years the british have had this in or out attitude to europe. Ultimately if it comes to a vote, i suspect an economic argument will win. Yes europe needs to be reformed. Ultimately, i dont see the u. K. Leading. If they do people will split and italy go to spain on holidays. Nothing is going to not unlikely change, the scottish independent referendum. People will continue to fly on ryanair. Great to have the conversations. It is 10 minutes past seven here in london. You can join our conversation on twitter. I am not sure if Michael Oleary is there. He has dabbled in the dark arts. We look at the investigation of the latest news. Stay with us. Time for company news. The Publicist Group is by the american Digital Marketing company for 3. 7 billion dollars. It is an all cash transaction worth 25 a share. They are planning to raise capital to plug the 2. 1 billion euro shortfall revealed during the stress test. The bank has ruled out seeking state funding. It has been bailed out twice in the last five years. Theyre planning to add a dash of tequila to the drinks. Eo will acquire the 50 in exchange for the bush mills brand. This gives a payment of 408 million upon completion. Say, we are as long way from finding the cause the virginh of crash. The safety board has been hoping a news conference. Ryan chilcote has been watching what they said. What is the latest update . We need to learn about feathering. Effectively the focus of this press conference was about the feather mechanism. Richard branson described it as a part of the aircraft that reenters theas it atmosphere. What we learned today was that it was deployed prematurely without command to do so. Chris is leading the investigation. This is the normal flight. These tailfins are referred to as feathers. After the space vehicle is launched and goes up, when it starts to return to the atmosphere, the procedure is to remove to move the feathers into a position where the entire body rotates to create more drag as the space vehicle is reentering the atmosphere. This is a mechanical process. Ock yous actually a l have to unlock, and then you have to touch another lever. We know nine seconds after the the lock wasnited, engaged or disengaged, so it was unlocked, but there was never a command to actually begin the feather processing, step two in the process. Thats what we know right now. They are not saying the statement of causes a statement of fact. They are saying the investigation could take a yearlong. If you are reading the papers over the weekend, we are looking at something that is a little different from the focus on fuel and the engines. Thank you for the latest on the virgin story. 17 minutes past seven here in london. Another huge story making the papers. The german chancellor Angela Merkel has gone public with her concerns about the possibility of the u. K. Leaving the European Union. Merkel spots are a hot topic. Free Movement Across the eu. Live in berlin with a little more. How serious is this warning from merkel . Cameron are personified as seeing this close relationship in the press. The first thing you have to remember is merkel wants the u. K. To stay in the e. U. She has left no doubt. There is the question of how far David Cameron can push his national or domestic agenda without running afoul of merkel. This is what seems to have happened here. She already made a similar comment after the last eu summit , if you remember last week, and now she presumably to her aid talking kind of rubbed it in. Why is she ultimately interested in keeping the u. K. In the eu . You can see it. Its a big player, and she has always reached out to cameron during these times of stress. This is as much for her own interest really as it is for cameron, isnt it . Yes, in many ways thats true. The way she frames the argument is that a country like the u. K. With its freemarket tradition is something that is direly needed in the eu, and we are partners in certain aspects of reform of the eu, she says, but hashe other hand, cameron been a difficult partner he opposed merkel and everyone else. The choice of Eu Commission president. There have been other runins. Merkel has reached out repeatedly to cameron. This is how she sees it. Now there seems to be a line in the sand, if you like. It almost seems as if we have these moments of great nationalist in thoset rises up antieu, and then it seems to fade away. In juncker government put place was a series of tragedies. Where are we with one europe, one go all togetherness one goal togetherness . That is the 64,000 question. What we do know is merkel in the past, whatever the critics say has stood up for this united europe principal when the chips were down. Exit. Member on greece now we are talking about the u. K. Exit. She says europe can only be a player on the world stage if it holds together. Once the eu starts unraveling through nationalism or policy, its hard to stop. It is always nice to get your perspective. 20 minutes past seven here in london. We are going to be live in an were the oldest enck bank where they have to fill the gap yet again. Stick with countdown. Rexam and anna edwards. The worlds oldest rank is raising capital to plug a 2. 1 billion euro gap revealed by the ecb stress test. That was last week. Bailed outs been twice in the last five years. They say they wont seek state aid this time around. Dan is in milan. Harsher can maybe that the itket is going to embrace willingly how can we make sure the market is going to embrace and willingly . That is a difficult exercise. After a weekend of speculation on exactly what they are going to do, rumors ranging from making another move to try and get some assistance from the state, they finally put out a statement late yesterday from the Bank Headquarters saying the board will meet wednesday to consider a Capital Increase to fill the cabin the gap of about 2 billion euros. They are going back to shareholders to try to fill the shortfall. He also said in a statement they are going to try to sell some nonstrategic assets to help get the Balance Sheet back in order. Shortly how the market reacts to all of this. The shares dropped almost 40 last week. Comments about the ability to meet the gap in a short time is not great right now. Remind us of the timing. This is all happening quite quickly, isnt it . They are on a tight schedule. Meetoard is going to because it has to be presented in november 10. Advisingtment banks them are going to be racing to the guaranteed consortium to get all of the Capital Increase funding set up in time. We are live in berlin as the german chancellor admits the u. K. Might leave the European Union. A full conversation around that topic coming up in a few minutes time. Stay with us here on countdown. Welcome back. It is monday morning. Lets see how Foreign Exchange traders are starting to trade. Theyre looking at the ruble and selling it. This is quite a significant dollaryen trade. Theave the elections over weekend. What will russia do . Will they acknowledge these . Traders are the most bearish since 2011 on this currency. They are saying to the market there is a risk of capital flight in russia. Things could get out of hand. Russia faces the danger of more capital flight. Keep an eye through the trading day. The yen is at a sevenyear low. You begin to understand the perspective of where the dollar yen is. The bombshell was dropped on friday the bank of japan would raise its level of quantitative easing. You are seeing the yen move lower this morning. Have thelong and you aussie dollar. The aussie dollar taking a onetwo punch. Approvals dropped by 11 in september from august. You can see we are just retesting some of the loans. There is in a mosh well the 100 Day Moving Average drops below the 200 Day Moving Average. That could drop the gap to 8650. A couple of big moves potentially on that technical move. Investigators say the engine of the Virgin Galactic spacecraft which crashed was intact with no signs of damage. Iny say the station may have the ploy. One passenger died and the other was seriously injured. We are a long way from finding cost. We still have months of investigation to do. We have a lot we dont knew. Dont know. A former bank of america employee has appeared in court in hong kong charged with the murder of two women. In anwere found apartment. An email account said he was out of the office indefinitely. For the first time german chancellor Angela Merkel voiced concerns the u. K. Might leave the European Union. Merkel is concerned by the british Prime Ministers efforts to reduce free flow of workers from the other 27 countries in the eu David Cameron promises to hold a referendum if he is reelected next year. For more on merkels concerns over a british accent from the eu, we can go to berlin to speak to the Senior Vice President. Thanks for talking to us. No independent confirmation about the content of this article, but it raises some interesting questions, doesnt . How clear is that we have a disagreement over one of the basic principles of the European Union . I think it is pretty clear that anybody who would challenge the fundamental principle of the working of the European Union would certainly be in disagreement with germany and for the majority of other members in the European Union. I think the real conflict is one in which germany has been on the side of the United Kingdom when it comes to streamlining bureaucracy, cutting red tape, and gauging freetrade agreements on a global scale. All that which is seen as ntessential british a dead agenda is something they are supportive of, but if a british Prime Minister goes against the fundamental principles of the European Union, this is where german support stops. Boxes that something, this fallout over immigration, is it something that stops Angela Merkel offering what it might take for britain to vote to stay in the eu if we end up with a referendum . It would first base remind many here in berlin it is important to take another step in the direction of the United Kingdom striking deals over the eu budget. Potentially talking about deals on welfare provision for immigrants from the European Union. That is something where many are probably on the side of David Cameron. There is a perception germany is facing similar problems as the massive there is still room for agreement, but i think if we are starting to talk about the fundamentals of how the forpean union works, constituent freedoms of the market, this is something they would be unable to strike compromise. One of the preoccupations at the moment must be trying to get National Budgets up roof i the deadline approved by the deadline of the 30th of november. You talk about a deal worked by germany and france. What can you expect the deal to be looking like . I think a deal would be along the lines of france and Southern Europe committed to additional structural reform in their National Economies and germany letting paris getaway with another violation of the target under stability and growth. That ties in very well with the u. K. Issue. If the germans feel they are under pressure and europe when it comes in for standing for market reforms. U. K. Is certainly not a member of the euroz