Ryanair Expects €200 Million Loss in Q1 and Difficult Return

Photo: Ryanair

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Since the middle of March, Ryanair Group has almost entire fleet grounded. The duration and impacts of the crisis provoked by the pandemic are yet undetermined. However, the Group is determined to “weather Covid-19 and emerge stronger when the crisis passes”.

Dramatically low demand, travel restrictions and fleet grounding reduced Ryanair Group’s traffic by over 5 million guests and cut profits of the fiscal year 2020 by over €40 million.

For the Q1, the Group, consisting of Buzz, Lauda, Malta Air and Ryanair, expects to suffer a €200 million loss. During the Q2 the, the Group also forecasts loss, although smaller than in the Q1.

The Group plans partial return to services in Q2 (July – September), however, it expects to carry no more than 50% of its original Q2 traffic target of 44.6 million.

During the fiscal year 2021, Ryanair Group plans to carry less than 80 million passengers, which is almost 50% below its original 154 million target.

Since March the Ryanair Group has implemented a number of measures to “preserve cash, cut costs, cancel share buybacks and defer operating and non-essential capex spending”. This way the Group’s weekly cash burn has dropped from approximately €200 million in March to just over €60 million in May.

“Unlike many flag carrier competitors, Ryanair will not request or receive State Aid. Consultations about base closures, pay cuts of up to 20%, unpaid leave and up to 3,000 job cuts (mainly pilots and cabin crew) are under way with our people and our unions,” said Ryanair.

The company also revealed the return would be very tough not only due to financial difficulties, but also because of intense competition on the market.

Still Committed to “Gamechanger” MAX Aircraft 

Ryanair remains further committed to “gamechanger” Boeing 737 MAX aircraft. Before the MAX crisis, the first of 737 MAX 200 was scheduled to join the airline over a year ago.

Now, with expected return to service of the type in the US in a late summer, Ryanair hopes to receive its first MAX in October this year.

“We are currently reviewing short-term growth plans and are in active negotiations with both Boeing and Lauda’s A320 lessors to reduce planned deliveries over the next 24 months to reflect slower traffic growth post Covid-19 in 2020 & 2021,” said Ryanair in a statement.