Ryanair losses climb as it ups spending in anticipation of recovery

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Ryanair Holdings PLC (LON:RYA) made a €306mln quarterly loss as it flew around 8mln people in the three months to end-December 2020 compared to 36mln a year earlier.

Revenues were just €0.34bn for the quarter, down 82% from the €1.91bn the year before, though operating costs fell to €0.67bn from €1.81bn.

For the full year to end-March 2021, the Irish budget airline said it is cautiously guiding to a net loss of €850mln-€950mln before exceptional items, with “more risk towards the lower end of the range”, increased from the €197mln loss in the first half of the year.

But with €3.5bn of cash still in the bank, the Dublin-headquartered flier is not sitting on its hands, having recently increased its order for Boeing 737-8200 aeroplanes by 75 to 210 of what it calls the “gamechanger” aircraft as it continues to return older planes.

The Boeing 737-MAX was approved by the European Union Aviation Safety Agency to return to flying last week, and the process to approve other MAX variants including the 8200 is expected in the coming weeks.

Ryanair said its cost will ramp up in the current quarter ahead of its March 31 year-end and an anticipated, if slow, recovery, in the spring and summer.

As well as having taken rival easyJet’s seven aircraft slots at Stansted airport and extending its contract at the Essex base for four more years, the company is working with various airports on “recovery/growth incentives”, as well as expanding Paris and Naples and reopening Shannon.

Current coronavirus lockdowns and travel restrictions across the EU and UK has reduced forecast traffic for the full year to 26mln-30mln from the previous estimate of “up to 35mln”.

Looking beyond the vaccination roll-out, Ryanair said it “expects to have a much lower cost base and a strong balance sheet, which will enable it to fund lower fares and add lower cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed”.

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