NewsWorldRyanair posts first summer loss in decades

Ryanair posts first summer loss in decades

Ryanair on Monday posted a loss for its key summer period for the first time in 30 years as COVID-19 restrictions pulverized demand and warned it may only carry half its normal passenger numbers next year.

But a stronger than expected balance sheet bolstered investor sentiment and the Irish airline avoided a sharp drop in share price seen by British rivals in the wake of the announcement of a 4-week lockdown in England on Saturday.

Shares in Ryanair, Europe’s largest low-cost carrier, were down 1% at 0825 GMT, while British rivals easyJet and British Airways owner International Airlines Group each fell by over 5% on the UK lockdown.

COVID-19 restrictions slashed Ryanair passenger numbers by 80% in the six months to Sept. 30, the first half of its financial year and the period when it typically makes most of its annual profit, pushing it to a 197 million euros ($230 million) loss.

That was the first summer loss recorded by the airline since 1990. It recorded a profit of 1.15 billion euros in the same period last year.

The loss was less than the 244 million euro forecast in a company poll of analysts.

Ryanair did not give a profit guidance for the full-year, but Chief Executive Michael O’Leary said it was likely to post a deeper loss in the second half of the year, which would make it the airline’s first annual loss since 2009.

O’Leary, who in September described the upcoming winter as a “write-off”, said the airline still planned to fly 40% of last year’s traffic levels in the winter, but said European traffic could fall as low as 25% of last year’s levels.

The airline expects to fly 38 million passengers in the year to end-March compared with 149 million last year, but warned that the number could fall further “if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions”.

Ryanair is planning to fly between 50% and 80% of its pre-pandemic capacity next year, depending on how the pandemic develops, Chief Financial Officer Neil Sorahan told RTE radio.


Ryanair, which has one of the airline industry’s strongest balance sheets, said its cash on hand grew to 4.5 billion euros at the end of September from 3.9 billion euros in the previous quarter, bolstered by a 250 million euro supplier reimbursement from Boeing. It also owns aircraft worth over 7 billion euros.

Goodbody Analyst Mark Simpson said the balance sheet was stronger than expected.

“Ryanair has delivered everything investors might have wanted from the release in what remains unprecedented negative trading conditions,” Simpson said.

Ryanair said it had yet to finalise terms with Boeing on compensation for the 18-month delay of deliveries of the grounded 737 MAX jet and on a possible new plane order.

Sorahan told Reuters that Ryanair was also talking with Airbus about a possible order of the A320 or A321, but added that talks with Boeing for more MAX jets were “more advanced.”

Ryanair expects to receive its first MAX jet in late January or early February and expects to have at least 30 in time for its peak summer season next year, Sorahan said.


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