Ryanair Holdings insisted an “unprecedented” backlog of Covid refunds had been processed as the carrier blamed pandemic travel restrictions for a €815 million full year loss.
The plunge into the red for the 12 months to March came against a profit of more than €1 billion the previous year.
Passenger numbers fell 81% from 149 million to 27.5 million, forcing cost cuts across all the group’s budget airlines in a year described as the most challenging in Ryanair’s 35-year history.
The Irish airline group said it responded “promptly and effectively” to the crisis, “by working hard to assist millions of customers with flight changes, refunds and changed travel plans.
“We minimised job losses through agreed pay cuts and participation in government job support schemes, while at the same time keeping our pilots, cabin crew and aircraft current and ready to resume service once normality returns.”
Looking forward, the company warned that the current financial year “continues to be challenging, with uncertainty around when and where Covid lockdowns and travel restrictions will be eased”.
European air travel capacity is expected to be to be “materially lower for the foreseeable future”.
However, this will create opportunities for Ryanair to extend airport growth incentives, as the group takes delivery of 210 new lower cost Boeing 737 Max aircraft.
“We are encouraged by the recent release of multiple Covid-19 vaccines and hope that their rollout will facilitate the resumption of intra-Europe air travel and tourism this summer,” the group added.
“If, as is presently predicted, most European populations are vaccinated by September, then we believe that we can look forward to a strong recovery in air travel, jobs and tourism in H2 of the current fiscal year (FY22). The recent strong increases in weekly bookings since early April suggests that this recovery has already begun.”
The group expects traffic in the three months June to be “heavily curtailed” to between 5 million-6 million passengers.
“With a very close-in booking curve, visibility for the remainder of FY22 is close to zero although bookings have jumped significantly from a very low base since week one of April,” Ryanair said.
“It is therefore impossible to provide meaningful FY22 guidance at this time. However, as recently announced, we think that FY22 traffic is likely to be towards the lower end of our previously guided range of 80 million to 120 million passengers.
“We also cautiously believe that the likely outcome for FY22 is currently close to breakeven – assuming that a successful rollout of vaccines this summer allows a timely easing of European government travel restrictions on intra-European traffic in time for the peak travel period of July, August, September.”
The company added: “As we look beyond the Covid-19 crisis, and the successful completion of vaccination roll outs, the Ryanair Group expects to have a much improved cost base and a very strong balance sheet.
“We will also benefit from a reduced fleet cost for the next decade as we take more deliveries of our B737 ‘Gamechanger’ aircraft which will materially improve revenues with 4% more seats while substantially reducing unit costs, especially fuel.
“This will enable the group to fund lower fares and capitalise on the many growth and market share opportunities that are now available across Europe, especially where competitor airlines have substantially cut capacity or failed.
“The group expects to benefit from a strong rebound of pent up travel demand through the second half of 2021, and looks forward to returning to pre-Covid growth in summer 2022 with the help of the Gamechanger aircraft and new bases, including those recently announced in Billund, Riga, Stockholm, Zadar and Zagreb.
“Ryanair is committed to delivering this growth in an environmentally sustainable manner, which reduces both fuel consumption and CO₂ emissions per passenger, while at the same time improving its industry leading customer service and customer experience.”
Jack Winchester, analyst at City research firm Third Bridge, said: “This morning’s results from Ryanair come with little surprise. For an airline which was consistently making considerably over a billion Euros of operating profit pre-Covid, this loss shows how devastating Coronavirus has been for the air travel market.
“Ryanair, like its ultra-low-cost peer Wizz Air, weathered the crisis far better than its legacy counterparts. It also stands ready to hoover up the pent-up demand for foreign holidays we’re about to see as rules on international travel finally ease.
“While Lufthansa, IAG and Air France KLM all struggled under the weight of huge hub-and-spoke airline operations, Ryanair’s point-to-point model meant it was able to adapt faster and more fully to a historic year of low demand.
“Where Ryanair has lost out though is in access to state funding, something legacy flag carriers have gained a material advantage from and [group chief executive] Michael O’Leary is challenging in the courts.”
“Ryanair, never one to waste a crisis, is now going on the offensive, seeking to gain further market share and utilise the 210 new Boeing 737 Max aircraft it has recently ordered.”