Ryanair has warned it is heading for an annual loss of nearly €1bn (£880m) as the budget airline struggles through the “most challenging’” year in its 35-year history.
The carrier said traffic had fallen by 78% in the final three months of 2020, comparedwith a year earlier, pushing the company to a €306m third-quarter loss. It partly blamed fresh restrictions and UK travel bans introduced in the week before Christmas, which meant passengers who would usually fly to see friends and family over the holidays stayed home.
Ryanair said it was experiencing its toughest year, as ever-changing travel restrictions, European lockdowns and the slower vaccine rollout put it on track for a full-year net loss of between €850m and €950m. It would be the airline’s first annual loss since 2009.
While the airline said it was comforted by the success of the UK’s vaccination programme, which aims to offer jabs to all adults in the UK by September, the EU was not keeping pace, putting bookings at risk. “The EU now needs to step up the slow pace of its rollout programme to match the UK’s performance,” Ryanair said in a statement.
The Ryanair chief executive, Michael O’Leary, is banking on a boom in summer bookings following the successful vaccination of elderly and vulnerable populations, and said he expected a revival of European beach holidays this summer.
“Ninety-three per cent all of the deaths arising from coronavirus are in people over 65. Once you eliminate that risk through vaccinations in the UK and in the EU, then frankly we don’t see any need for travel restrictions,” he told BBC Radio 4’s Today programme.
“We think, certainly, intra-European travel will resume with strong pent-up demand so we expect to see a very strong return of British families travelling to the beaches of Spain, Portugal, Italy and Greece in relative safety this summer, thanks to the vaccine rollout programme.”
Ryanair’s bullish stance on the vaccination programme means it has already fallen foul of advertising standards authorities, who took issue with its “jab and go” campaign in January for encouraging people to book flights immediately on the promise of a coronavirus vaccine.
Most of its flights from the UK and Ireland have been withdrawn until lockdown restrictions are lifted, and it expects to fly 26-30 million passengers over the 12 months to the end of March – less than a quarter of pre-Covid traffic.
Despite its troubles, with Ryanair’s revenues down 80% or €5.8bn year on year, the airline is confident it will rebound and said there would be more opportunities, with rival carriers set to fail during the pandemic, following the likes of Flybe, IAG’s Level and Lufthansa’s Germanwings.
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The airline said: “We expect intra-European capacity to be significantly reduced for the next few years, which will create opportunities for Ryanair to take advantage of recovery growth incentives.”
Ryanair retains more than €3.5bn in cash and in December extended its Boeing 737 Max order to 210 planes, with a view to restarting its ambitious growth towards 200 million passengers a year by 2025. The airline hopes to be operating 24 of Boeing’s recently recertified planes by this summer.
Rival easyJet last week announced an 88% decline in revenues year on year but also reported a surge in summer bookings, significantly ahead of normal patterns.