Ryanair will plunge €200 million into the red in the current quarter with losses continuing into the summer peak.
Europe’s largest budget airline group warned that passenger carryings for the 12 months to March 2021 will be down to less than 80 million – 50% below its original target of 154 million.
“Active discussions” are also being held with airports over capacity allocations for this summer’s flying and beyond.
On refunds for cancelled flights, chief executive Michael O’Leary told the BBC it would take months for the large volumes involved to be processed.
Ryanair stressed that it “will not request or receive” state aid and reiterated an attack on European flag carrier rivals such as Lufthasa, Air France-KLM, Alitalia SAS and Finnair for receiving billions in bailouts together with Tui Group.
“Ryanair’s return to scheduled flying will be rendered significantly more difficult by competing with flag carrier airlines who will be financing below cost selling with the benefit of over €30 billion in unlawful state aid, in breach of both EU state aid and competition rules,” the carrier said.
The impact of Covid-19 flight bans and restrictions saw most of Ryanair’s fleet grounded from mid-March and the group expects to carry no more than half of its original summer 2020 target of 44.6 million passengers.
“Bookings will be impacted by public health restrictions – temperature checks and face coverings for passengers and staff – and quarantine requirements,” Ryanair added.
“When group airlines return to scheduled flying from July, the competitive landscape in Europe will be distorted by unprecedented quantums of state aid in breach of EU rules under which over €30 billion has been gifted to the Lufthansa Group, Air France-KLM, Alitalia, SAS and Norwegian among others.
“We therefore expect that traffic on reduced flight schedules will be subject to significant price discounting, and below cost selling, from these flag carriers with huge state aid war chests.”
The current financial year “will be difficult for the Ryanair Group as its airlines work hard to return to scheduled flying following the Covid-19 crisis”.
No 2020-21 full year profit guidance can be provided “given the uncertainty over the impact and duration of the Covid-19 pandemic, coupled with no visibility on what customer behaviour and demand will be following a return to service”.
The group expects to record a loss of more than €200 million in the three months to June, with a smaller loss expected in peak summer quarter “due to a substantial decline in traffic and pricing from Covid-19 groundings”.
However, looking further ahead the Irish airline group added: “As we look beyond the next year, there will be significant opportunities for Ryanair’s low cost, growth model as competitors shrink, fail or are acquired by government bailed out carriers.”
The forecast came as Ryanair warned that its Austrian offshoot Lauda faces more than 300 job cuts with the closure of its Vienna base on May 30 if it fails to agree “meaningful cost reductions” in restructuring discussions on Wednesday.
Overall profits for the year to March 31 rose by 13% to more than €1billion despite the coronavirus pandemic, with passenger numbers up 4% to 148.6 million as sale rose 10% to €8.5 billion.
Ryanair voiced its commitment to the Boeing 737 Max and revealed that the manufacturer was currently guiding towards a late summer return to service in the US for the grounded aircraft.
However, Ryanair added: “We believe it will be at least October before we receive our first Max-200 aircraft.
“We remain fans of, and committed to, these ‘gamechanger’ aircraft with 4% more seats and 16% lower fuel burn, which will transform Ryanair’s cost base for the next decade.
“We are currently reviewing short-term growth plans and are in active negotiations with both Boeing and Lauda’s A320 lessors to reduce planned deliveries over the next 24 months to reflect slower traffic growth post Covid-19 in 2020 and 2021.”