General Industry

Ryanair Records Its First Summer Loss Since 1990

By Dave Simpson
Ryanair Records Its First Summer Loss Since 1990

Ryanair has recorded its first loss for the key summer period in 30 years as a result of the COVID-19 pandemic, which threatens to cut passenger numbers to half of pre-pandemic levels next year.

But a stronger than expected balance sheet bolstered investor sentiment on Monday November 2 as Ryanair chief executive Michael O'Leary said that there has never been a more exciting opportunity for growth than that likely to emerge out of the pandemic.

Shares in the Irish airline were up 6% at 1055 GMT on Monday November 2, while easyJet and British Airways owner International Airlines Group were flat after a new lockdown was announced in England.

Ryanair posted a €197 million loss in the six months to the end of September after COVID-19 restrictions cut traffic by 80% and O'Leary said that a deeper loss was likely in the second half.

That was down from a profit of €1.15 billion in the first half last year and represented Ryanair's first loss in its key summer quarter since 1990.


However, it was less than the €244 million loss forecast in a company poll of analysts, while cash balances increased to €4.5 billion from €3.9 billion in the previous quarter. O'Leary said that he does not anticipate that the airline will have to raise more funds.

"Ryanair has delivered everything investors might have what remains unprecedented negative trading conditions," Goodbody Analyst Mark Simpson said in a note.

Short-term Cuts

Plans to fly 40% of last year's traffic levels in the winter might be pared back further, O'Leary said.

But Ryanair is likely to outperform broader European traffic, which he said could fall as low as 25% of last year's levels, and plans to fly 50% to 80% of its pre-pandemic capacity next summer, depending on how the crisis develops, he said.

O'Leary forecast that Ryanair will emerge from the COVID-19 crisis with a "meaningfully" lower staff, plane and airport costs, and that it is in talks with Boeing for extra aircraft to take advantage of opportunities created by struggling rivals.


"There has never been a more exciting...opportunity for growth, certainly in the European airline industry," he told a conference call with investors. "It's going to rebound very strongly with huge...pent-up demand, and Ryanair will, in my view, be by far the best position."

Boeing Compensation

O'Leary said that Ryanair has yet to finalise terms with Boeing on compensation for the 18-month delay of deliveries of the grounded 737 MAX jet, with the first 30 of 135 jets on order due to arrive by next summer.

But he said that he is in talks about additional jets to take advantage of growth opportunities, most likely the 197-seat MAX 200 due to production delays in the 230-seat MAX 10.

Airbus Talks

Chief financial officer Neil Sorahan told Reuters that Ryanair is also talking with Airbus about a possible order, but said that talks with Boeing for more MAX jets are "more advanced".

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.