Europe’s largest low-cost carrier, Ryanair, is feeling the effects of the Omicron variant of the COVID-19 virus, issuing a Christmas profit warning and cutting flights.
The Irish airline says travel restrictions linked to the new variant have dented demand over the busy Christmas travel period, prompting it to revise down its expectations for the year in terms of earnings, as well as slash flying plans for January by one-third.
“The Omicron Covid variant and recent Government travel restrictions across Europe have notably weakened close-in Christmas & New Year bookings,” the airline said in a statement on December 22, 2021.
Ryanair Group CEO Michael O’Leary had warned in November that a fourth wave of COVID-19 across Europe would make for a tough Christmas.
In its latest statement, Ryanair highlighted travel restrictions between Britain and France and Germany, plus flight suspensions from Morocco to Europe.
The airline said December passenger numbers are now expected to be between 9-9.5 million, down from a planned 10-11 million. It is cutting January capacity by 33%, which means it now predicts it will carry 6-7 million passengers, down from previous expectations for around 10 million.
“In light of the current uncertainty about the Omicron variant, and intra Europe travel restrictions, no schedule cutbacks have yet been decided for February or March 2022,” Ryanair said in the statement.
The busiest airline in Europe
While other carriers have been more cautious in adding back capacity, Ryanair has been operating more flights than before the crisis, hoping to gain market share. Ryanair chief executive Michael O’Leary has repeatedly said the carrier’s strategy is to stimulate demand by selling tickets at rock-bottom prices.
Eurocontrol data published on December 23, 2021 showed Ryanair operated 2,176 flights between December 16-22, 12% more than the same week in 2019 and making it the top aircraft operator in Europe. Budget rival easyJet took the second spot, with 1158 flights, although that is down 19% compared to 2019.
Extra holiday traffic at present – notably @easyJet (up 41% over 2 weeks ago to become the 2nd busiest airline over the last week) and @wizzair up 75%@Transport_EU @ECACceac @A4Europe @IATA @eraaorg @EBAAorg @ACI_EUROPE @CANSOEurope pic.twitter.com/V2rjiOtidz— Eamonn Brennan (@eurocontrolDG) December 23, 2021
In terms of earnings, Ryanair had been expecting net losses of between €100 million and 200 million ($113-$226 million) for its fiscal year to March 31, 2022. Now, though, it is forecasting that could double, to between €250 million and €450 million ($283-$509 million).
Its passenger number forecast has also taken a hit. The Irish carrier now expects it will carry just under 100 million passengers in the fiscal year, compared with a previous prediction for just over 100 million.
Ryanair cautioned that these numbers could change further, depending on developments in the pandemic. The airline said it would provide more details when it publishes third-quarter results on January 31, 2022.