Ryanair posts €273m loss but looks to post-pandemic recovery

Irish budget airline is banking on surge in summer travel to bring post-Covid rebound

Ryanair is hoping a rebound in summer travel will be enough to break even after sustained losses throughout the Covid-19 pandemic. Getty

Budget airline Ryanair is beginning to see signs of recovery as it sets a target for halting coronavirus-induced losses amid a surge in summer travel to European beaches.

The region's biggest discount carrier should break even or post a small loss for the year through to March, assuming the distribution of vaccines contains infection rates, it said on Monday.

The Irish company posted a smaller-than-expected first-quarter loss of €273 million ($322 million).

Ryanair's chief financial officer Neil Sorahan said "people are keen to get out and get a summer holiday".

"Bookings have been pretty strong over the last couple of weeks, particularly as the European digital Covid certificate has been rolled out," he told BBC's Radio 4 Today programme. "Confidence is coming back."

Ryanair has been adding seats faster than most competitors and keeping fares low to fill them as travel begins to recover in Europe.

The Dublin-based company said passenger numbers should exceed 90 million in 2022, aiding its bid to win market share, after previously predicting that they would be at the lower end of an 80 million to 120 million range.

Receipts from add-ons such as priority boarding and seat reservations are expected to support margins until prices recover, the airline said.

Ryanair’s loss for the three months through June was slightly lower than the €277 million average estimate of analysts, despite having widened from €185 million a year earlier, as hoped-for Easter traffic failed to materialise.

Mr Sorahan said there was still a degree of uncertainty in the market as passengers remain cautious amid Covid-19 restrictions.

"Traditionally, you would have seen people book three to six months ahead but given the uncertainty in the market, that has become a much shorter window," he said.

However, Daniel Roeska, an analyst with Sanford C Bernstein, said Ryanair's passenger outlook provided evidence that “the recovery is real and happening right now".

Although summer earnings will be vital, limiting winter losses will also be key, he said.

Ryanair said the main focus now is on filling planes. It intends to cut fares to help occupancy return to pre-Covid levels.

The first-quarter load factor was 73 per cent and Mr Sorahan said the objective is to reach 90 per cent or so over the fiscal year, with pricing strengthening towards the end of the period and into next summer.

The airline said this month that it plans to hire 2,000 pilots over the next three years to fly 210 new Boeing 737 Max jets that it began operating in June.

However, Britain, Ryanair’s biggest market, remains a question mark. Frequent changes to travel restrictions, combined with costly testing requirements, have put off many there from travelling this summer.

However, Mr Sorahan said it appeared travel in the UK is “picking up again".

"The UK has been a little bit haphazard with what is on the green list, what is on the amber list," he said. "But over 70 per cent of the UK population are fully vaccinated at this point of time."