Airline sees record annual loss before ‘dramatic’ summer recovery

DUBLIN: Ryanair expects to lose close to 1 billion euros ($1.2 billion) in its current financial year, by far its worst ever performance, but Chief Executive Michael O’Leary forecast a “dramatic recovery” this summer on vaccine roll-outs.

The Irish low-cost airline, Europe’s largest, forecast a loss of between 850 and 950 million euros in its current financial year, which ends on March 31, around 5 times larger than its previous record annual loss posted in 2009.

Group Chief Executive Michael O’Leary in a statement described the year as the most challenging in Ryanair’s 35 year history.

But he told Ireland’s national broadcaster RTE to expect a “dramatic recovery” this summer on widespread vaccine roll-out, particularly in the United Kingdom.

The recovery should accelerate in July and September, the second quarter of the airline’s financial year, before returning to 70% and 90% of normal levels between October and March, said Chief Financial Officer Neil Sorahan.

“We hope to be getting back to some kind of normality” in the winter, Sorahan said.

COVID-19 restrictions slashed Ryanair passenger numbers by 78% in the last three months of the year, the third quarter of its financial calendar, pushing it to a quarterly loss of 306 million euros ($371.06 million). That compares with a loss of 300 million euro forecast in a company poll of analysts.

Ryanair’s 82% fall in revenue in the quarter compared with falls of 88% at rival easyJet and 77% at Wizz, which both reported results last week.

Ryanair is widely seen as one of the best-placed airlines in the world to weather the COVID-19 crisis due to its large cash balance and lack of long-haul and business-class.

It said it had cash on hand of 3.5 billion euros at the end of December, compared with 4.5 billion at the end of September.

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“The ‘in-line’ Q3’21 and the strong cash balance sheet of the company may be enough today to buoy investor sentiments after the volatility of last week,” Citi analyst Mark Manduca said in a note.

Ryanair’s share price was flat at 14.30 euros at 0845 GMT, down 15% from its pre-COVID peak of 16.9 euros on Jan. 10 last year.

The airline said it would fly between 26 million and 30 million passengers in the year to end-March compared with 149 million in its previous financial year. It could fly anywhere between 80 million and 120 million passengers in the year to end-March 2022, O’Leary said.

Ryanair in December ordered an additional 75 Boeing 737 MAX jets in what was the largest order since the plane was grounded in early 2019 following two fatal crashes. The jet was cleared in January to resume flying in the European Union.

Ryanair expects its first delivery in March with at least 24 of the 210 it has on order arriving in time for its peak summer season.

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