Ryanair Holdings plc reported a first quarter loss of €185 million after over 99% of their fleet was grounded between mid-March and the end of June.
The airline said that traffic during the first quarter of the year fell from 42 million to 0.5 million, while noting that cash preservation was a key priority – the closing cash balance was of €3.9 billion.
“The past quarter was the most challenging in Ryanair’s 35 year history”, the airline said.
On 1 July, the Group resumed flights across the majority of our route network. We expect to operate approximately 40% of our normal July schedule, rising to circa 60% in August and, hopefully, 70% in September, they said.
At this time, the Group said that they expect FY21 traffic to fall by 60% (from 149m) to just 60m. The Covid-19 crisis has already seen the closure of various EU airlines including Flybe, Germanwings, Level and Sun Express.
“It has sparked a multi-billion flood of illegal State Aid from EU Governments to their flag carrier airlines including Alitalia, Air France/KLM, Lufthansa, SAS, TAP and others. This illegal State Aid will distort competition and allow unsustainable flag carriers to engage in below cost selling for many years to come”, the airline said in a swipe against the aid received by airlines from governments.
Many other airlines are cutting capacity, with the result that air travel in Europe is likely to be depressed for at least the next 2 or 3 years.
“This will create opportunities for Ryanair (Europe’s lowest cost airline group) to grow its network, and expand its fleet, to take advantage of lower airport and aircraft cost opportunities that will inevitably arise”, they said.
Looking towards the outlook for the rest of the year, the group said that a 2nd wave of Covid-19 cases across Europe in late autumn, in line with the commencement of the annual flu season, is their 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”, they said.
“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.”
Given the current uncertainty, Ryanair cannot provide any FY21 PAT guidance at this time, the statement read.
The Group currently expects to carry approximately 60m passengers in FY21 and expects to record a smaller loss in Q2 (which reflects a gradual return to flying from 1 July) than in Q1, it said.
“However, the Ryanair Group will emerge from the Covid-19 crisis with a much lower cost base, which will be essential to fund lower fares as the Group competes against unlawfully State aided flag carriers. Further updates will be provided at Ryanair’s AGM in September”, they concluded.