Ryanair reported a loss of 96 million euros in the last three months of 2021, but said it hoped competitors’ cuts in production capacity would help drive prices up in the key summer season.
The result was in line with a consensus estimate of a loss of 101 million euros in a company survey of analysts.
The airline lost 306 million euros in the same quarter of 2020 and made a profit of 88 million euros in the last three months of 2019.
Ryanair, Europe’s largest by number of passengers, reiterated its projected loss for the full financial year, which ends on March 31, between €250 million and €450 million.
Group CEO Michael O’Leary said that while there had been a « very strong bounce » in bookings in recent weeks as concerns about the Omicron variant began to fade, the outlook remained highly uncertain.
“While recent bookings have improved, following the relaxation of travel restrictions, the booking curve is still very late and close, so fourth-quarter traffic requires a major price stimulus at lower prices,” said Michael O’Leary.
He added that the outlook for the fourth quarter is still « highly uncertain ».
« We will warn all shareholders to expect further disruptions for Covid before we finally announce here in Europe and the rest of the world that the Covid crisis is behind us, » he added.
Ryanair also reiterated its forecast that it will fly just under 100 million passengers this fiscal year.
Michael O’Leary said last week that he expects to carry 165 million passengers in the 12 months to March 2023.
The airline carried 31.1 million passengers in the three-month period, a significant increase from 8.1 million at the end of 2020.
Load factor – the number of seats you take on each flight – increased to 84% from 70% in the same quarter the previous year.
We need your consent to download this rte-player contentWe use the RTE operator to manage additional content that can set cookies on your device and collect data about your activity. Please review their details and accept them to upload content.Manage Preferences
Competitors EasyJet and Wizz both said they expect strong summer vacation demand, but Wizz said excess capacity in the coming months could affect profitability.
Neil Sorahan, Ryanair’s chief financial officer, described the three-month period as « a quarter of two halves ».
He said he started off strong with a mid-term interval providing load factors of up to 86%, but then hit the Omicron variant of Covid.
« Omicron has had a huge impact on Christmas and New Year bookings. We lost between 1.5 and 2 million high-return customers and reduced about a third of January capacity, » he explained.
He told Morning Ireland that the airline is eyeing growth opportunities as it has come out on the other side of the omicron wave as the company aims to operate at 114% of its 2019 summer capacity in the summer of this year.
Surhan said air travel was of great value in the coming months as the market required what he described as « price stimulus ».
However, he did not rule out fare increases down the routes as demand returns and airlines with reduced capacity.
« Fuel is going up. I think that will put more pressure on prices, especially for our competitors who are not hedged, » he said.
Ryanair says it hedges 80% of its fuel needs in the summer with another 70% hedging in the winter period.
Hedging is a practice whereby airlines insure their future fuel needs at a fixed or specified cost, thus protecting them in the event of a price increase.
However, they can effectively end up overpaying if the price of fuel drops in the meantime.
Airlines love the certainty that hedging gives them.
Neil Sorahan said tensions between Russia and Ukraine had not affected Ryanair’s performance.
“We have a small company in Ukraine. I think in time it will be an interesting growth market, but as things stand, we will not have any rules. We have operations inside and outside Ukraine and we are putting them under review,” he explained.
Earlier, Surhan told Reuters the airline was « nowhere close » to a new deal with Boeing over a new order for 737 planes.
Ryanair in September abruptly ended talks with the US planemaker over an order for 737 Max 10 planes worth tens of billions of dollars due to disputes over price but said it was still in contact with Boeing, its main supplier.
Ryanair shares closed lower Dublin trade today.
« Spécialiste de la télévision sans vergogne. Pionnier des zombies inconditionnels. Résolveur de problèmes d’une humilité exaspérante. »