Ryanair sees €200m first quarter loss from Covid-19 groundings
Budget carrier Ryanair said coronavirus travel bans would lead to a €200m first quarter loss as it pulled guidance for 2021.
Ryanair Holdings (CDI)
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17:14 17/12/21
Travel & Leisure
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10:44 25/04/24
The company on Monday reported full year post-tax profits of €1bn, up 13 per cent. Revenue rose 4% in the 12 months to March 31 to €8.5bn.
“The group expects to record a loss of over €200 million in quarter one, with a smaller loss expected in quarter two (peak summer) due to a substantial decline in traffic from Covid-19 groundings,” Ryanair Holdings said.
More than 90% of the company's fleet is grounded and Ryanair said it hoped to start flying around 40% its original schedule from July 1.
However, the company said it raised €600m from the UK's state coronavirus financing facility and had cut its average cash burn from €200m a week in March to €60m.
Along with severe cost cutting and cancelled share buybacks, the group now had €4.1bn in cash.
"This liquidity will enable the Group to weather Covid-19 and emerge stronger when the crisis passes. Our focus will remain on cash preservation/generation and the repayment of maturing debt over the next 24 months," the company said.
The group said it expected to carry fewer than 80m passengers in 2021, almost almost 50% below its original 154m target and slammed what it called "unlawful" state aid to flag carrier airlines which would make its return to scheduled flying "significantly more difficult".
Ryanair said those airlines who had been given government bailouts would be "financing below cost selling".
"When group airlines return to scheduled flying from July, the competitive landscape in Europe will be distorted by unprecedented quantums of State Aid (in breach of EU rules) under which over €30bn has been gifted to the Lufthansa group, Air France-KLM, Alitalia, SAS and Norwegian among others."
"As we look beyond the next year, there will be significant opportunities for Ryanair's low-cost growth model as competitors shrink, fail or are acquired by government bailed-out carriers," it said. "Unlike many flag carrier competitors, Ryanair will not request or receive state aid," it added.
The company is set to cut 3,000 jobs, around 15% of its workforce, as it deals with the impact of the coronavirus crisis.
Hargreaves Lansdown analyst William Ryder said the airline had "done a good job reigning in its cash expenses during the lockdown, but €60m a week is still a lot".
"When furlough schemes start winding down costs may balloon again, but the group’s formidable cash pile and relatively strong balance sheet gives it time to restructure.”