DUBLIN (IRELAND) – For the first time in three decades, Ireland’s Ryanair posted a loss for its key summer period on Monday. This comes as coronavirus curbs have decimated demand and it has warned that it will carry only half the normal passenger number next year.
Investor sentiment was boosted by a stronger-than-expected balance sheet and the airline has avoided a sharp dip in share price after a four-week lockdown was announced in England.
Shares in Europe’s largest low-cost carrier dipped 1% at 0825 GMT, while those in Britain’s Easyjet and British Airways owner International Airlines Group dropped by over 5% each in the wake of the announcement of strict restrictions.
COVID-19 restrictions slashed Ryanair passenger numbers by 80% in the six months to Sept. 30, the first half of its financial year and the period when it typically makes most of its annual profit, pushing it to a 197 million euros (178.2 million pounds) loss.
That was the first summer loss recorded by the airline since 1990. It recorded a profit of 1.15 billion euros in the same period last year.
The loss was less than the 244 million euro forecast in a company poll of analysts.
Ryanair did not give a profit guidance for the full-year, but Chief Executive Michael O’Leary said it was likely to post a deeper loss in the second half of the year, which would make it the airline’s first annual loss since 2009.
O’Leary, who in September described the upcoming winter as a “write-off”, said the airline still planned to fly 40% of last year’s traffic levels in the winter, but said European traffic could fall as low as 25% of last year’s levels.
The airline expects to fly 38 million passengers in the year to end-March compared with 149 million last year, but warned that the number could fall further “if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions”.
Ryanair is planning to fly between 50% and 80% of its pre-pandemic capacity next year, depending on how the pandemic develops, Chief Financial Officer Neil Sorahan told RTE radio.
Ryanair, which has one of the airline industry’s strongest balance sheets, said its cash on hand grew to 4.5 billion euros at the end of September from 3.9 billion euros in the previous quarter, bolstered by a 250 million euro supplier reimbursement from Boeing. It also owns aircraft worth over 7 billion euros.
Goodbody Analyst Mark Simpson said the balance sheet was stronger than expected.
“Ryanair has delivered everything investors might have wanted from the release in what remains unprecedented negative trading conditions,” Simpson said.