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Ryanair expecting worst financial year in its history

Credit: Belga

Ryanair is expecting to experience the worst year in its history due to the drop in traffic caused by the coronavirus pandemic, the low-cost airline announced on Monday.

The airline suffered a net loss of €306 million between October and December, the third quarter of its postponed fiscal year, while it had made a net profit of €88 million in the third quarter of its previous fiscal year.

Ryanair’s quarterly sales fell by 82% to €340 million euro. The airline carried 8.1 million passengers, which represents a 78% drop over a year.

“We had expected that things would continue to recover in Q3, but in the week before Christmas, the emergence of the UK and South African variants led to severe travel restrictions,” said Michael O’Leary, the group’s managing director, in a video on Ryanair’s website.

The latest coronavirus measures in place for air travel are expected to “materially reduce flight schedules and traffic through to Easter,” Ryanair said.

It maintains its forecast of a traffic between 26 and 30 million passengers for the fiscal year 2020-2021 which will end at the end of March. Before the pandemic broke out, the group hoped to carry 155 million passengers this year.

As a result, the current fiscal year “will continue to be the most challenging year in Ryanair’s 35 year history,” according to the statement.

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The group forecasts an annual loss of between €850 and €950 million, while specifying that this is a cautious goal.

Ryanair had recorded a net loss of €197 million in the first half of the year (ended end of September) and had already forecast an even greater loss in the second half of the year.

The company has been forced to take drastic measures to get through the air transport crisis, such as cutting 3,000 jobs (15% of its workforce), or lowering staff salaries to avoid layoffs.

In addition, Ryanair benefited at the height of the health crisis from the short-time working scheme and a £600 million (more than €681 million) loan from the British public authorities.

The group believes that the health situation will improve in the coming months thanks to the deployment of vaccines, but expects flight capacity in the European sector to remain limited in the coming years.

Ryanair believes that it is strong enough to emerge from the crisis in a position of strength and take advantage of the setbacks and bankruptcies of other airlines.

The Brussels Times