Ryanair ‘hopes to clear majority of refunds’ by end of month

Ryanair expects to clear “over 90%” of cash refund requests by the end of July.

The forecast came as the low cost airline group plunged €185 million into the red in the last quarter as Covid-19 grounded almost all flights with a collpase in passenger numbers.

The airline’s customer service teams returned to the office in June and are working through an “unprecedented volume” of customer emails and other communications related to flight changes and Covid-19 cancellations, while clearing a record backlog of refunds caused by almost four months of EU government-imposed flight cancellations.

“This process has been delayed by unauthorised screen scrapers providing falsified customer details at the time of booking,” the carrier added.

The three months to June 30 were “the most challenging” in the Irish airline group’s 35-year history after bookings came to an “abrupt standstill” in the initial weeks of the pandemic.

And Ryanair Holdings warned: “It is impossible to predict how long the Covid-19 pandemic will persist, and a second wave of Covid-19 cases across Europe in late autumn, when the annual flu season commences, is our biggest fear right now.

“Hopefully EU governments, by implementing effective track and tracing systems, and EU citizens by complying with recommended face masks, rigorous hand hygiene and other measures, will avoid the need for further lockdowns or restrictions on intra-EU flights.

 “It is vital that European economies begin the process of recovery this summer to minimise the damage arising from the Covid-19 pandemic and this recovery can only be led by intra-EU air travel which is the engine of EU growth and economic activity.”

A gradual resumption of flights from July 1 means the group hope to trim losses in the peak three summer months.

But annual carryings are expected to fall by 60% from 149 million to just 60 million.

Many other airlines are cutting capacity, with the result that air travel in Europe is likely to be depressed for at least the next two or three years, Ryanair warned.

 However, the carrier added: “This will create opportunities for Ryanair to grow its network, and expand its fleet, to take advantage of lower airport and aircraft cost opportunities that will inevitably arise.”

The airline expects to take delivery of its first Boeing 737 Max aircraft before the end of 2020 and potentially up to 40 of the type ahead of next summer.

It is more than a year since the group was due to take delivery of its first 737 Max after the aircraft was grounded following two fatal crashed in Indonesia and Ethiopia. Boeing has indicated a return to service in the US late in the third quarter of this year.

Ryanair also warned that the challenge of Brexit, and in particular a no-deal Brexit, “remains high”.

The carrier added: “We hope, before the end of the transition period in December, that the UK and Europe will agree a trade deal for air travel which will allow the free movement of people and the deregulated airline market between the UK and Ireland to continue.

“As an EU airline, the Ryanair Group should be less effected by a no-deal Brexit than UK registered airlines. We still, however, expect adverse trading consequences to arise.

“Ryanair has put the necessary measures in place to ensure that the group remains majority EU owned, including restricting voting rights of non-EU shareholders, in the event of a ‘hard-Brexit’.

“We therefore expect the group’s AOCs [Air Operator Certificates] in Austria, Ireland, Malta and Poland to continue to operate freely.

“In addition, Ryanair’s UK AOC (Ryanair UK) will be able to benefit from any bilateral agreements negotiated between the UK and non-EU countries while facilitating the operation of domestic UK flights.”

Nigel Frith, a senior market analyst at City firm Asktraders, said: “Ryanair reported a whopping €185 million loss as the cost of grounding its fleet in the coronavirus crisis becomes apparent.

“The alarming drop in passengers to just 500,000 for the quarter down from 41.9 million the year before highlights the unprecedented impact that the pandemic and lockdown measures have had on the aviation industry.

“The biggest fear is a second wave and those fears were legitimised over the weekend as the British government announced that Spain was no longer on the “safe” list. France and Germany could also be removed soon.

“As international travel resumes it will become even more challenging to contain the virus raising the possibility that travellers will be put off and find alternative destinations and means of travel.

“Ryanair hasn’t provided guidance for the year indicating just how uncertain the outlook remains without a vaccine. Whilst the low-cost carrier forecasts passenger numbers to return to 70% by September, this is starting to look a little optimistic given the number of flare ups in Covid cases appearing across Europe.”

Share article

View Comments

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.