Ryanair braced for record loss as pandemic 'wreaks havoc' across aviation industry

Ryanair is braced for “the most challenging year” in its 35-year history and expects to plunge to a full-year loss of almost €1 billion (£880 million).

Ryanair noted that in the three months to December, 8.1 million passengers used its aircraft, compared to 35.9 million in the same quarter in 2019. Picture: AP Photo/Martin Meissner

The low-cost airline said the coronavirus pandemic continues to “wreak havoc across the industry” and is “cautiously guiding an FY21 net loss (pre-exceptional items) of between €850m and €950m”.

However, the Dublin-headquartered carrier said it would be in a position where it could “capitalise on the many growth opportunities” after the crisis, “especially where competitor airlines have substantially cut capacity or failed”.

The group posted a third-quarter loss of €307m, noting that in the three months to December, 8.1 million passengers used its aircraft, compared to 35.9 million in the same quarter in 2019. The loss for the quarter contrasts with an €88m profit after tax in the same period a year before.

The firm told investors: “FY21 will continue to be the most challenging year in Ryanair’s 35-year history.

“Recently announced Covid lockdowns and travel restrictions across the EU and the UK will reduce forecast FY21 traffic to between 26 million and 30 million (previously ‘up to 35m’), with more risk towards the lower end of the range.

“While Q4 visibility remains limited due to uncertain and constantly changing Covid-19 travel restrictions, European government lockdowns, the timing of the rollout of vaccines across the EU and a very close-in booking curve, we are cautiously guiding an FY21 net loss (pre-exceptional items) of between €850m and €950m.”

Adam Vettese, an analyst at investment platform eToro, said: “The budget end of the airline industry is a high cost, low margin game and so carriers need high volumes of passengers to turn a profit.

“Coronavirus means that’s just not possible at the moment, with airlines running at barely a fifth of regular capacity. So they are forced to watch on as they burn cash and much of their fleet lay idle on the tarmac.

“Ryanair has one of the strongest balance sheets in the industry and is sitting on a cash pile of around €3.5bn at the end of last year. But even it can’t stomach quarterly losses of more than €300m forever.

“Airlines need something resembling normality soon or we could see even more of them being swallowed up by this pandemic.”

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