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Ryanair posts first half loss of €48m as traffic rises

Ryanair group CEO Michael O’Leary said it is difficult to give ‘meaningful guidance’ for the full year

Ryanair has posted its first quarterly profit since before the onset of Covid-19, but said it expects to post an annual loss of up to €200m as it would be forced to discount tickets to fill its planes over the winter.

The airline, which operated more flights this summer than its European rivals, reported an after-tax loss of €48m for the six months to September compared to an after-tax loss of €411m the same time last year.

A company poll of analysts had forecast a loss of €43m

While it did not break out its after-tax profit for the three months ended September, its second quarter, the €273m loss it reported in the first quarter implies a second quarter profit of €225m.

That marks its first quarterly profit since October-December, 2019 – before the pandemic disrupted travel.

The budget airline, Europe’s largest, carried 39.1 million passengers in the six months ended September, 54% fewer than in the same period of 2019.

But it marked a 128% increase on the 17.1 million passengers it carried the same time last year.

Ryanir’s chief financial officer Neil Sorahan told Morning Ireland that the group is already seeing a recovery as it emerges from the pandemic.

“We saw a 128% increase in traffic in the first half of the year, and we’ve had the confidence this morning to increase our full year traffic target to over 100 million,” he said.

“Next year we would anticipate that we will see a rebound in growth, where we’ll grow to 165 million customers, which is up from 149 million pre-Covid. So yes, I think the recovery is underway,” he added.

Mr Sorahan said pricing “still seems to need stimulation but I’d be confident that into the summer of next year, we’ll see an increase in pricing which is why we are encouraging people to book as early as possible”.

Revenue for the six month period jumped by 83% to €2.15 billion from €1.18 billion, while Ryanair’s operational costs were up 63% to €2.20 billion from €1.35 billion in 2020.

During the six month period, Ryanair said its average fare was just €33, down 30% on the same time last year.

Fuel costs are up year on year, Mr Sorahan said, but he said the airline is in a better position than its competition as it has 70% hedged on the balance of fuel costs for this financial year.

Ryanair has published its half year results today

“We have very good coverage next year, we’re about 80% hedged into the summer of 2022 which is the peak period of the year, and 60% into the winter.

“We feel we are in a relatively good place though there is some price inflation coming through,” he said.

Ryanair is expected to turn in a loss of between €100-200m for the financial year, which ends on March 31, group chief executive Michael O’Leary said, adding that there was extremely little visibility.

Michael O’Leary has said the pandemic offers the best growth opportunities of his three-decade career.

In September he lifted the Ryanair’s five-year growth target to fly 225 million passengers a year by 2026, from 200 million previously forecast.

The airline reiterated it expects to return to pre-Covid profitability in the year ending March 2023.

It said that it recent weeks, it had seen a surge in bookings for the October mid-term and Christmas breaks and it added that it expects this peak buoyancy to continue into Easter and Summer 22.

Looking ahead, the Ryanair group CEO said the outlook for pricing and yields for the winter will be challenging.

“With the booking curve remaining very close-in, traffic recovery will require continuing price stimulation. This, coupled with rising costs for the small unhedged balance of our fuel needs, means that visibility for the remainder of FY22 is very limited,” Mr O’Leary said.

“It is therefore difficult to provide meaningful FY22 guidance,” he added.

“We believe that FY22 traffic has improved to just over 100 million and (subject to winter fares) expect to record an FY22 loss of between €100m to €200m. This outturn will be crucially dependent on the continued rollout of vaccines and no adverse Covid-19 developments,” Michael O’Leary said.

Ryanair considers delisting from London Stock Exchange

Ryanair also said today it is considering delisting from the London Stock Exchange due to a fall in trading volumes this year after British shareholders’ voting rights were restricted post-Brexit.

Ryanair announced in 2020 that UK nationals, like all other non-EU nationals, would from January 2021 no longer be permitted to acquire ordinary shares.

The move was taken to ensure the airline remains majority EU-owned and retains full licensing and flight rights in the bloc now that Britain has left the European Union.

Ryanair may delist from London Stock Exchange

Ryanair has a primary listing on Euronext Dublin and its American Depository Receipts (ADRs) are listed on the US Nasdaq.

In 2012 it downgraded its London listing from a premium listing to a standard listing.

“The Board of Ryanair is now considering the merits of retaining the standard listing on the LSE,” the airline said in today’s results statement.

“The migration away from the LSE is consistent with a general trend for trading in shares of EU corporates post Brexit,” it added.

Meanwhile, Ryanair also said today that Boeing was “delusionary” for imposing a double-digit price increase for an order for the 737 MAX 10 during talks earlier this year.

Ryanair abruptly ended talks with the US planemaker in September over a new order of 737 MAX 10 jets, worth tens of billions of dollars, due to differences over price.

“Boeing out of the blue sought a substantial double-digit price increase. I don’t understand the strategy. We think Boeing’s approach to this is delusionary,” Michael O’Leary said, describing Ryanair as the only significant customer that Boeing has in Europe.

“Ryanair I think was very close, in active negotiations for a follow-on order for MAX 10 but Boeing walked away from the discussions because they are looking for a price increase at a time when prices should be falling so Boeing can recover its production,” he said.

In a separate release, Ryanair said today that its passenger numbers for October rose to 11.3 million from 4.1 million the same time last year.

Its load factor for October – how many seats it fills on each flight – rose to 84% from 73%, it added.

Ryanair shares moved higher in Dublin trade today.


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