Ryanair reports €1B loss, braces for “the most challenging year”
Ryanair expects to lose around €1 billion ($1.2 billion) in FY2021, which ends on March 31, 2021. Having reported a severe loss of €306 million ($369 million) in Q3 FY2021, compared to a profit of € 88 million for the same period in 2019, the low-cost carrier says that the current financial year will continue to be “the most challenging year in Ryanair’s 35-year operating history.”
Due to newly introduced travel restrictions, Ryanair indicates that it will face a significant decrease in overall traffic and will fly only between 26 million and 30 million passengers until the end of March 2021. However, the company points out that there will be “more risk towards the lower end of the range.“ In comparison, Ryanair carried 149 million passengers during the same period of 2019.
Furthermore, the low-cost carrier’s passenger numbers dropped by 78% in the last three months of 2020. Taking into account the uncertainty and changing operating rules in Q4 FY2021, the company expects to suffer a net loss of between €850 million (around $1 billion) and €950 million ($1.1 billion) in FY2021.
Despite the fact that revenue fell by 82% in the last three months of 2020, Ryanair said that its balance sheet remained strong with €3.5 billion ($4.2 billion) of cash as of December 31, 2020.
Furthermore, the airline continued with its expansion plans and added two aircraft to its Paris Beauvais Airport (BVA) base and four planes to its base in Naples International Airport (NAP) while having increased the route network from its Venice-Treviso Airport (TSF) base.
Ryanair also announced that it concluded a four-year extension of its “low-cost growth deal” in the London Stansted Airport (STN) base to 2028.
Meanwhile, shortly after the Boeing 737 MAX was ungrounded in the U.S., Ryanair ordered 75 additional Boeing 737 MAX planes, increasing its firm order number to a total of 210 aircraft. The airline hopes to take delivery of up to 24 new 737 MAX aircraft before the peak summer season of 2021.
“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 Boeing 737s,” read the airline’s statement.
“As soon as the COVID-19 virus recedes [...] Ryanair 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,” added Ryanair.
In addition, the carrier is still reducing its cost base. Ryanair has returned 14 older Boeing 737 aircraft to lessors as their leases have expired. Besides, the airline has recently concluded the delivery of seven older Boeing 737NGs, which were pre-sold in 2019, for cargo conversion.
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