Ryanair warned of continuing Covid-19 disruption and an “uncertain outlook” for pricing despite forecasting a “strong bounce back” in traffic following the UK government’s announcement that it is lifting travel restrictions.
Speaking as Ryanair announced a group loss of €96 million for the three months to December, chief executive Michael O’Leary said: “Yields were badly damaged by Omicron in December.
“We saw a collapse in close-in bookings and an effect on Christmas yields. That continued into January which is why we cut the January programme by 33%.”
He said: “We’ll see yields impacted in February when we begin to see a recovery in passenger numbers. The first half of February will be weak. The second half which contains the school half term will see a strong recovery in bookings but at lower fares and that will continue into March.”
O’Leary said: “We expect a strong bounce back in traffic for summer 2022, albeit at lower yields.” But he argued: “It all depends on there being no more negative Covid developments. We would be wary that there will be other variants and challenges arising out of Covid. Traffic will recover strongly, but I would caution that it will be subject to Covid variants.”
The Ryanair chief took issue with forecasts of “a huge recovery”, arguing: “The EU slot waiver extension belies some of the more optimistic reports that there will be a huge recovery in traffic in Europe this summer. There won’t. Long haul will be significantly constrained. People will be holidaying more at home.
“We see traffic recovering in February and March but remain nervous about the yield. We will spend money to fill our planes in the near term because that gives us the best platform for summer 2022.
“We expect a strong recovery in April, May, June but I’m wary that there will still be Omicron disruption.”
He insisted: “We may not be out of the Covid woods yet. Passengers remain sensitive to any negative news. Pricing will remain sensitive to the news flow. We’re selling aggressively to recover traffic – selling lower fares than we would [otherwise].”
In its results statement, Ryanair noted traffic in the current quarter “requires significant price stimulation”. It also noted: “We would caution all shareholders to expect further Covid disruptions.”