Ryanair reports huge Q1 loss and warns of more job cuts

Low cost carrier, which is currently operating 27 routes out of Liverpool Airport, saw revenues plunge 95% in April to June with 99% of its fleet grounded due to coronavirus. Tony McDonough reports

Ryanair, aircraft
The COVID-19 crisis has sent revenues tumbling at Ryanair

 

Ryanair has revealed the catastrophic impact of the COVID-19 pandemic on its business, racking up losses of €185m in just there months.

And the low-cost carrier, which is currently operating 27 routes out of Liverpool John Lennon Airport (LJLA), said revenues fell 95% in April, may and June, from €2.2bn last year to just €125m, as 99% of its fleet was grounded.

During the same quarterly period last year, Ryanair enjoyed profits of €243m. It is currently operating at 40% of its capacity across 90% of its network, including from LJLA. In May the Irish company warned it would have to cut around 3,000 jobs due to the crisis. On Monday chief executive Michael O’Leary said this figure could rise.

READ MORE: COVID-19 – how safe if is to get on a plane?

And he was scathing of the UK Government’s decision to force people arriving from Spain in the UK to quarantine for 14 amid a rise in new COVID-19 cases in the country. He called the move an “overreaction”. Ryanair is currently flying to Barcelona, Malaga and Alicante out of Liverpool.

He added: “They should have, in my view, controlled arrivals back in from Catalonia, or done it on a regional basis, but to do it on a national basis, there is no scientific basis for a national restriction on visitors coming back from Spain to the UK.

“We wouldn’t expect other EU countries to impose quarantine on all UK visitors just because there has been a spike upwards in Leicester.”

Michael O'Leary
Ryanair chief executive Michael O’Leary

 

Dublin-based Ryanair expects full-year traffic for the 12 months to March 31, 2021, to be 60% lower at 60m passengers. It originally forecast it would carry 149m passengers in the full-year period.

And it renewed its attack on state support for EU airlines, including Alitalia, Air France/KLM, Lufthansa, SAS and TAP which it claims is illegal. The company said: “This illegal state aid will distort competition and allow unsustainable flag carriers to engage in below cost selling for many years to come. 

“Many other airlines are cutting capacity, with the result that air travel in Europe is likely to be depressed for at least the next two or three years. This will create opportunities for Ryanair to grow its network, and expand its fleet, to take advantage of lower airport and aircraft cost opportunities that will inevitably arise.”

Ryanair says its route development teams are working with airports all over Europe who have suffered substantial traffic declines during the COVID-19 crisis. Discussions are ongoing with aircraft suppliers to reduce aircraft lease rates and purchase prices to reflect the new post COVID-19 reality.

The company’s balance sheet remains relatively strong compared to other airlines. Ryanair held €3.9bn in cash as of June 30. Since mid-March, the group has moved quickly to preserve cash, cut costs, cancel share buybacks and defer all non-essential capital spending.

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