Ryanair posts Q3 loss of €306m as lockdowns hurt traffic

Europe’s biggest discount airline forecasts an annual loss of up to €950m in the year to March 31

A Ryanair Boeing 737-800 aircraft approaches Paris-Beauvais airport in Tille, northern France. The airline reported a third-quarter loss of €306 million as passenger traffic slumped 78 per cent. Reuters.Show less

Ryanair, Europe's biggest discount carrier, posted a third-quarter loss of €306 million ($371.06m) as Covid-19 travel restrictions and lockdowns hurt passenger traffic.

The loss for the three months ending December 31 compares with a profit of €88m in the same period a year earlier, Ryanair said on Monday.

The airline carried 8.1 million people during the third quarter, 78 per cent fewer than the prior-year period. In December alone, traffic slumped 83 per cent to just 1.9 million passengers due to bans placed on UK flights by European Union governments seeking to curb the spread of a new virus strain.

Quarterly revenue fell 82 per cent year-on-year to €340m as traffic shrank and load factors – a measure of how well an airline is filling available seats – fell to 70 per cent from 96 per cent a year ago.

"Covid-19 continues to wreak havoc across the industry," Ryanair said. "Christmas and New Year traffic was severely impacted by UK travel bans imposed at short notice by many EU governments on 19 and 20 December."

The Dublin-based carrier held €3.5 billion in cash by December 31.

Looking ahead, Ryanair forecast a net loss of up to €950m in its current financial year ending March 31 as travel restrictions curb traffic.

While fourth-quarter visibility remains limited due to uncertain and constantly changing Covid-19 travel restrictions, European government lockdowns, the timing of the rollout of vaccines across the EU and "a very close-in" booking curve, the airline gave guidance for a net loss of between €850m and €950m.

The low-cost carrier expects to transport between 26 million and 30 million passengers in the full year, down from previous forecasts of 35 million.

"FY21 will continue to be the most challenging year in Ryanair’s 35 year history," the airline said.

In December, the airline ordered an additional 75 Boeing 737 Max aircraft, increasing its firm order to 210 jets. This was the biggest order that Boeing received for the model since it was grounded following two fatal crashes. Europe's safety aviation regulator cleared the jet for commercial flights in January.

Ryanair expects to take delivery of up to 24 new aircraft before its peak summer season. Deliveries will start over a four-year period between spring 2021 and December 2024, it said.

"As we look beyond the Covid-19 crisis, and vaccinations roll out, the Ryanair Group expects to have a much lower cost base and a strong balance sheet, which will enable it to fund lower fares and add lower cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed," it said.