Ryanair lockdown losses hit £169m
Ryanair’s first quarter revenue fell 95% to €125m (£114m) as passenger numbers fell 99% to 0.5m. The airline had sales of €2.3bn (£2.1bn) in the same quarter last year.
Despite reducing costs by 85%, the airline made a net loss of €185m (£169m) compared with a €243m (£221m) profit last year.
The airline described Q1 2020 as “the most challenging in Ryanair’s 35-year history”. It prioritised cash preservation prioritised, with a closing cash balance of €3.9bn (£3.55bn).
Covid-19 grounded the group’s fleet for almost four months as EU governments imposed flight or travel bans and widespread population lockdowns.
During this time, Ryanair’s planes repatriated customers and operated rescue flights for various EU governments, as well as flying a series of medical emergency/PPE flights across Europe.
Ryanair began flying again in July and expects to cover 40% of its usual schedule, rising to about 60% in August and 70% in September.
The airline said it had implemented “extensive health measures” through the travel journey, especially on-board aircraft, to comply with EU guidelines to ensure that planes maintained the health of passengers and crews while minimising the risk of Covid-19.
Ryanair predicts full year passenger numbers to fall about 60% to 60m. The group’s “biggest fear” is a second wave of Covid-19 infections in late autumn at the start of the normal flu season.
Ryanair’s said its customers service teams returned to the office in June and are working through an “unprecedented volume” of customer emails and other communications related to flight changes and Covid-19 cancellations.
It blamed coronavirus refund delays on “unauthorised screen scrapers providing falsified customer details at the time of booking” and said it expected that more than 90% of customer cash refund requests will be cleared by the end of July.
Ryanair’s shares fell 6% following the announcement.
Adam Vettese, analyst at multi-asset investment firm eToro, said: “Coronavirus has caused a level of disruption and destruction the likes of which we have never seen in aviation’s century-long history before.
“The problem for the industry is that there is seemingly no end in sight, with a worrying rise in cases in countries such as Spain, France and Germany threatening to turn into a deadly second wave.
“Shareholders in airlines will have to get used to depressed profits, lower passenger numbers and share price uncertainty for the foreseeable future.
“One positive for Ryanair is that it has a large level of cash on its balance sheet. But if passenger numbers are down for an extended period of time, then this financial safety net will soon disappear.”