Ryanair is confronting the most challenging year in its 35-year history as Covid-19 continues to “wreak havoc” across the industry.
Europe’s largest budget airline warned of a loss of between €850-€950 million in the financial year to March as it downgraded its already severely reduced annual traffic forecast from 35 million passengers to between 26-30 million.
The projection came as the carrier posted a loss of €306 million for the Christmas quarter against a profit of €88 million in the same period in 2019.
Passenger numbers in the three months to December 31 collapsed to 8.1 million from 35.9 million in the same period a year earlier.
Flight bans and travel restrictions saw December traffic fall by 83% to just 1.9 million passengers.
“Christmas and new year traffic was severely impacted by UK travel bans imposed at short notice by many EU governments on 19 & 20 December,” the airline said.
Ryanair had previously warned that the latest lockdowns and pre-arrival Covid test requirements would “materially reduce” flight schedules and traffic through to Easter.
Constantly changing Covd-19 travel restrictions, European government lockdowns, the timing of the vaccine rollout across Europe and a very close-in booking curve meant visibility for the three months ending March 31 “remains limited”.
However, Irish airline group expects to be “well placed” to take up traffic recovery opportunities that arise throughout the summer and beyond.
Ryanair revealed that a four-year extension of a “low-cost growth deal” at Stansted has been concluded until 2028 in addition to securing rival easyJet’s seven-based aircraft slot portfolio at the airport.
Cabin crew training will be accelerated to help ramp-up operations for the summer, which will increase staff costs over the next three months.
“As we look beyond the Covid-19 crisis, and vaccinations roll out, the Ryanair Group expects to have a much lower cost base and a strong balance sheet, which will enable it to fund lower fares and add lower cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed,” the airline said.
“We will work assiduously with our airport and government partners to restore routes and recover traffic for the benefit of our airports, our customers and our people as we try to prioritise the jobs and salary recovery of our people.”
Ryanair added: “We take some comfort from the success of the UK vaccine programme which is on target to vaccinate almost 50% of the UK population – 30 million – by the end of March.
EU vaccine rollout call
“The EU now needs to step up the slow pace of its rollout programme to match the UK’s performance.”
The group hopes to take delivery of up to 24 Boeing 737-Max 8 aircraft before the summer peak after European regulators agreed for the new generation aircraft to return to flying in the region.
Ryanair increased an order for Max aircraft by a further 75 to a total of 210 in December to enable traffic growth to 200 million passengers a year by 2026.
“This aircraft, when delivered, will be the most audited, most regulated in aviation history,” Ryanair insisted.
“With an exceptional environmental performance, this 197-seat Boeing aircraft is the perfect sized platform to allow Ryanair expand and grow its low fare services across Europe over the next decade while widening Ryanair’s unit cost leadership over all of our European airline competitors.”
Ryanair pointed out that the Covid pandemic has caused the closure of European airlines including Flybe, Germanwings, Level and Montenegro Airlines, while Norwegian Air has entered a creditor protection examinership and Eurocontrol predicts more EU airline failures in 2021.
“Significant capacity reductions have been implemented by many EU airlines and a flood of unlawful state aid has been committed by EU governments to their flag carriers including Alitalia, Air France/KLM, LOT, Lufthansa, SAS, TAP and others,” the carrier added.
“This illegal state aid distorts competition and the level playing field across EU aviation.
“We expect intra-European capacity to be significantly reduced for the next few years, which will create growth opportunities for Ryanair to take advantage of recovery growth incentives, as it takes delivery of 210 new lower cost Boeing 737s.
“As soon as the Covid-19 virus recedes – and it will over the coming months as EU governments accelerate vaccine rollouts – Ryanair and its partner airports will rapidly restore schedules, recover lost traffic, help the nations of Europe to reboot their tourism industry, and create jobs for young people across the cities and beaches of the EU.”
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